Good day, ladies and gentlemen, and welcome to the ServiceNow Q3 2015 Earnings Conference Call. My name is Steve and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Michael Scarpelli, Chief Financial Officer. Please proceed.

Good afternoon and thank you for joining us. On the call with me today is Frank Slootman, our Chief Executive Officer. Our press release, our quarterly IR deck and a simultaneous broadcast of this call can be accessed at investors.servicenow.com. We may make forward-looking statements on this conference call such as those using the words may, will, expect, believes, pipeline, prospects, or similar phrases to convey that information is not historical fact. These statements are subject to risks, uncertainties and assumptions. Please refer to the press release and risk factors and documents filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for information on risks and uncertainties that may cause actual results to differ materially from those set forth in such statements. I would now like to turn the call over to Frank. Frank Slootman - President, Chief Executive Officer & Director: Thanks, Mike, and good afternoon. Our third quarter results were strong across the board. Total revenues for the quarter were $261 million, a 46% increase over last year. Landing new logos, renewing contracts and upselling existing customers continues to be our formula for growth. We now have 605 Global 2000 customers, a net increase of 39 during the quarter. New Global 2000 logos include Humana, Alexion Pharmaceuticals, Express Scripts and The Dow Chemical Company. Additionally, our upsell rate was 37% and our renewal rate was 98%. There are three observations to the quarter worthy of note. First, the CIOs increasingly view ServiceNow as an enterprise platform, not a portfolio of point products. We've been successful providing customers a single platform solution with many options to help them transform a variety of service domains. Many of those services are within the realm of enterprise IT but the scope has no limits and…

Thank you, Frank. During today's call, we will review our third quarter financial results and discuss our financial guidance for Q4 and full year 2015. We'd like to point out that the company reports non-GAAP results in addition to, and not as a substitute for, or superior to financial measures calculated in accordance with GAAP. All financial figures we will discuss today are non-GAAP unless stated otherwise. To see the reconciliation between these non-GAAP and GAAP results, please refer to our press release filed earlier today and for prior quarters previously filed press releases, all of which are posted at investor.servicenow.com. Our total revenues for the third quarter were $261 million, increasing 46% year-over-year and 55% in constant currency, a negative impact of $16 million. Our average contract terms for new customers, upsells and renewals were 31.6 months, 27.8 months and 22.9 months respectively. Total revenues based on geography were $181 million in North America, $62 million in EMEA and $18 million in Asia-Pacific and Other, representing 69%, 24% and 7% of total revenues respectively. Our calculated billings were $286 million in the quarter increasing 38% year-over-year and 46% in constant currency, a negative impact of $16 million. Our weighted average subscription billings term was 11.8 months for the third quarter compared to 11.9 months in the prior year or a negative impact of $3 million year-over-year and compared to 12.2 months in the prior quarter or a negative impact of $9 million sequentially. Subscription gross margin in the quarter was 83% compared to 79% in the prior year. Professional services and other gross margin was 21% compared to 13% in the prior year. Overall gross margin was 74% compared to 69% in the prior year. Operating margin was 15% compared to 6% in the prior year. We ended the…

Standby for your first question, which comes from the line of Walter Pritchard from Citi. Please go ahead. Your line is open, Walter, please go ahead. You may be on mute. Your next question comes from the line of Brent Thill from UBS. Please go ahead, Brent.

Thanks. Good afternoon. Mike, there was just some open questions on the billings this quarter and the deceleration from Q2, I'm just curious if you could comment and I know you don't give out the backlog, but I know billings only paints a smaller picture of the overall momentum of the company, but if you could comment, that would be great.

Well, if you're looking at from Q2 to Q3, as a reminder, Q2 was abnormally high because of the 12.2 months weighted average billings which we disclosed last quarter and we said that's not normal. We're normally running in the 11.7 months to 11.9 months, we're at 11.8 months this quarter and as a result that actually cost us about $9 million in this quarter billings. However, we were expecting that to come down and hence why we are just slightly ahead of where we guided our billings.

Okay. And just as a quick follow-up on operating margins, you exceeded expectations pretty handily this quarter, 15% operating margin yet you're bringing the margin guide down for Q4. Just may be walk through why such overage this quarter and why it will contract by 600 basis points in Q4?

Yeah. So this quarter a lot of it was because of the timing of expenses and a lot of our hiring was backend loaded in the quarter. What's really driving though the Q4 coming down is more so as many people know we're moving our head office. There is a provision in our Q4 guidance where we still have yet to sublease our space here and the move cost us about $10 million in one-time cost associated with moving out of our facility here to our new facility that's running through our forecast. On top of that we're also running our NOW Forums in Europe in Q4 as well as in Asia Pacific and our federal NOW Forum which are kind of mini-knowledge conferences where there is about $2 million in expenses running through that as well. The new lease and some other leases we have that are full quarters next quarter that are partially came on this quarter and will come on next quarter into the future.

Thanks, Mike.

And your next question comes from the line of Keith Weiss from Morgan Stanley. Please go ahead. Keith Eric Weiss - Morgan Stanley & Co. LLC: Thank you, guys for taking the question. I just want to ask a little bit about professional services. It looks like as you are ramping up sort of the partner ecosystem, the growth that we're seeing on the professional services line seems to be coming down and it definitely seems true in Q4 as well. Is this a concerted effort on your part to push out more professional services to the partners and then maybe sort of take out some of that off the income statement for you guys? Frank Slootman - President, Chief Executive Officer & Director: Yeah, this is Frank. It is a concerted effort and we've talked about this consistently over the years that we were not driving our professional services revenue to big numbers. Obviously professional services is always a drag on the margin profile on the overall business and it really exists as a strategic resource and we're sizing it to where it needs to be for us to be able to deliver on our core mission. The good news is that our partner ecosystem which we have very aggressively fostered over the years has grown enormously both in size as well as in capability. There were a bunch of inflection points during the quarter and we highlighted that during the prepared remarks where CSC made a big acquisition in the space. Accenture made a big acquisition in the space. So a lot of our big GSI partners are really putting their money where their mouth is. They are doubling and tripling down our business. That's very, very positive for ServiceNow, because we can sort of retreat from the primary pole position, if you will, in terms of delivering services and really yield to our partners. It doesn't mean we're going to be exiting the business. It just means that in relative terms that contribution will be coming down gradually. Keith Eric Weiss - Morgan Stanley & Co. LLC: Excellent. Thank you very much.

Your next question comes from the line of Kirk Materne from Evercore ISI. Please go ahead. Kirk Materne - International Strategy & Investment Group LLC: Congrats on the quarter. Frank, actually just a follow-up on your point earlier about the acquisition we've seen in some of your bigger GSI – or some of your bigger partners. Longer term clearly having cloud service and Fruition on bigger platform would seem to be a huge benefit from you guys. I guess is there any concern as they get integrated that some of the deals that they might have been working on get caught up or delayed. I think the longer term benefit clearly outstrips any sort of near-term noise. But I was just kind of curious about how you think about that in the near term and if that impacts your, I guess your near-term guidance at all? Frank Slootman - President, Chief Executive Officer & Director: I don't think so. We really have no reason to believe that. I think our market has really very positively embraced that news. We're very happy with these very large integrators stepping up the way they are. This is really good for our customer base. We highlighted the fact that we have an enormous presence in Global 2000 accounts and of course that's where Accenture and CSC and all the others, that's where they are. So this increases the confidence of our customers to really invest more broadly, more deeply in the ServiceNow platform because the ecosystem just growing in size and prominence because this is all good. Kirk Materne - International Strategy & Investment Group LLC: Okay. And just if I could ask a quick follow up for Mike. Just on cash flow obviously incredibly strong cash flow this quarter, I assume some of that just drops down from the margin outperformance. As we think out to 2016, I guess how should we be thinking about cash flow maybe relative to revenue growth next year? I guess does that kind of come back into line with revenue growth, or are they any things, I guess we should contemplate as we're building out our models on cash flow for next year? Thanks.

I expect that 2016 cash flow will outpace our revenue growth for next year and in January we will give you formal guidance around what we're seeing cash flow for 2016. Kirk Materne - International Strategy & Investment Group LLC: Perfect. Thanks very much.

Your next question comes from the line of Matt Hedberg from RBC Capital Markets. Please go ahead.

Yeah. Thanks guys for taking my questions. I wanted to ask another one on the SI movement this quarter. Certainly we like to see that, the mix shift here. Frank, can you talk about the compositions of some of these wins coming from the platform? Do they look more like your classic ITSM or are they more HR or finance just sort of – what are some of the composition of those deals look like? Frank Slootman - President, Chief Executive Officer & Director: Are you asking me about platform deals specifically what they look like?

Well, I guess, maybe more specifically what like Cloud Sherpas or the Fruition, what is the mix of those deals look like, I would assume it would look more like HR, more like sort of non-core ITSM deals, but just wanted to get a confirmation of that. Frank Slootman - President, Chief Executive Officer & Director: Those guys are definitely core ITSM. They've really sort of grown up in their business, whether it's – Cloud Sherpas, obviously, they got into the ServiceNow business through an acquisition as well of one of our long-term partners. And these are all folks that have been in the service management business with ServiceNow going all the way back to the mid-2000. So they're very much meat-and-potatoes type of partners in the core business. It's really the Accentures of the world that are sort of branching out into the higher levels of process design, business process optimization things that are not core service management type applications.

That's great. And then, maybe just a quick one for Mike, maybe sort of a follow-on to the services offloading again here, is there a way to quantify the impact to your Q4 billings guide if you were to not be offloading that revenue component?

Geez. Well, first of all, professional services is not that big a component of our overall billings. As you can see, last quarter, we're guiding $38 million to $39 million professional services. And pretty much what the billings – what the revenue is, that's equal to the billings because everything is done on a time and material basis in general. So I think from where consensus is for the full year, we're taking down our PS revenue, but we're increasing our subscription revenue relative to consensus. And I think subscription is going up at the top end of the range by close to $7 million and PS is coming down about $2 million to $3 million, and so as a result you could say that $2 million to $3 million of our billings is coming out of professional services.

Got it. Helpful. Thanks, guys.

And your next question is from the line of Michael Turits from Raymond James. Please go ahead, Michael. Michael Turits - Raymond James & Associates, Inc.: Hey, guys, a couple of quick questions. First off, Mike, are we now at a point where that 11.9 months does that look stable for the future or should we see any change?

You are always going to see some variability, but on average we've running at around 11.7 months to 11.9 months is what our weighted average billings. I am not going to say we're never going to be above or below that, but in general we should be there. As we get bigger as a company, you should see less variability, but there could one day be a very large customer that wants to prepay multiple years in advance that will skew that and, unfortunately, we don't have much visibility hence why every quarter we disclose what our weighted average billings are and we normalize for that. Michael Turits - Raymond James & Associates, Inc.: Okay. Two other quick ones. One, it looks like you did upside on the subscription gross margin and also it looks like your head count target – head count add target might be a little lower than it was, can you just address that?

Yeah. We've taken down part of our numbers for hiring, most of it is coming out of our support and cloud infrastructure as well as our G&A functions. Our sales and marketing and R&D are pretty much the same from where they were at the beginning of the year. Professional services is one from the beginning, as we've talked about before, that we've taken quite a bit out of that head count add, but that matches with what we're taking down our PS because we want our partners to be doing more of the PS work so. Michael Turits - Raymond James & Associates, Inc.: Okay. And the gross margin (22:33) subscription?

....pretty much. Sorry, what was that? Michael Turits - Raymond James & Associates, Inc.: I didn't mean to interrupt you, Mike, sorry. But I was just going to ask on the upside on the subscription gross margin?

That's really timing on certain assets within our data center starting to depreciate as well as we're starting to see a little bit more scale in our data center and timing with some of those head count starts. Michael Turits - Raymond James & Associates, Inc.: Okay. Great. Thanks a lot.

Your next question is from the line of Sarah Hindlian from Brean Capital. Please go ahead.

Thank you for taking my question, guys, and congratulations on the quarter. I think looking through the numbers, that's pretty clear there is a nice mix shift away from professional services, which looks like we didn't take full account for in our numbers, but it's certainly good thing. I was wondering if you could talk a little bit about the ITOM business, which I heard you comment has grown to 14% of new billings. What are you guys seeing there and how is that shaping up? Frank Slootman - President, Chief Executive Officer & Director: This is Frank, Sarah. We've had a pretty good focus on the ITOM business really since the beginning of the year since we organized our product organization and got a lot more dedicated focus in terms of billing and supporting and marketing those products, so we've gotten a lot more deliberate in terms of our outbound go-to-market motion with these products. And seeing the last of couple of quarters as a percentage of the mix, these things are moving in leaps and bounds. ITOM is a very strategic component of our business because operations management and service management shared the underlying CMDB, the asset repository, they're sort of like two sides of a coin. This is absolutely imperative for us that we are present and that we compete in that business and we're just pleased that we're making the kind of headway that we are. It's exactly the same buyers, the same budgets. So it is extremely compatible with the business that we were already in. It's sort of, if you will, the closest cousin of our core service management business is what the ITOM business is. And the moving parts there are discovery, orchestration. Obviously, the service mapping technology that we acquired last year are all in the mix. We've created ITOM portfolios and a lot of our customers are sort of consuming the whole portfolio now rather than just some of the individual component. So we're looking to put more fuel in the fire in this business and our sales organization is pretty charged up about having these products to sell.

Okay, great. Thank you so much.

The next question is from the line of Walter Pritchard from Citi. Please go ahead.

Hi, thanks. Actually a follow-up there on the ITOM question. I'm wondering given your success, Frank, so far this year and, I guess, late last year to this year, with those ITOM products, does it make you look at potentially expanding the product line more aggressively in ITOM into sort of what we considered in the past some of the manager managers event management APM type areas that you are not in today. And then I just had a follow-up for Mike. Frank Slootman - President, Chief Executive Officer & Director: Yeah. So, Walter, we are an event management because our acquisition of Neebula last year actually having an event management component that we actually combined with our own capabilities. And our next major software release, which is now imminent, has a full blown event manager in it and we already recorded very substantial ACV in Q3 to the event management category, so we're in it. But to answer your question more specifically, absolutely we are evaluating assets continually in terms of things that we want to build, things that we want buy. As you know, we are an acquirer of assets, but we're not ultra aggressive because we have hard time convincing ourselves that we want to own something. But when we do, we move and I think so far our track record on buying assets and converting them to yield has been quite good. But this is a focus area and we see opportunity, we will absolutely be pursuing it.

Got it. And then, Mike, just I'm not sure how much you really talked about this, but from a Q1 seasonality perspective, back in 2014, you had a really strong Q1 with billings actually up sequentially and then last year or this year you sort of had more of a normal kind of company getting bigger seasonality in there. I'm wondering if you could help us just sort of think about Q1 the right way and just so we're not surprised in three months as you guide?

Q4 to Q1 historically has been pretty – you'd expect it to almost be flat, don't expect it to go up. It's really Q4 every quarter when you look at it historically that has the big jump. Remember, a lot of the deals we sign in Q4 have January 1 start date and hence that becomes part of our January 1 billing and historically there is a lot of backlog that gets built in January as well, too, which impacts our Q1 billings.

So flattish more than down is what you're saying?

Yes. And you'll get more detailed guidance in January.

Okay, thank you.

Your next question is from the line of Karl Keirstead from Deutsche Bank. Please go ahead.

Yeah. Hi, Mike. Just wanted to ask you a question about the fourth quarter billings guide at 39% to 41% constant currency. It assumes more moderate growth. I think we understand the 3Q just given the tough compare and that $9 million hit. But on 4Q, it's a slower growth, yet it feels like the momentum of the business is pretty solid. So I'm wondering if you could help reconcile that and let us know whether the Geneva release, assuming it's coming in 4Q, has any impact at all on your guide? Thank you.

The Geneva release has no impact on our billings at all. And we are guiding $370 million to $375 million in billings, which is up from the $286 million that we did just right now. So we think that is a reasonable guidance. I really don't have anything else to add to that. The consensus right now is at $370 million for this quarter for Q4.

Okay. Thank you, Mike.

Your next question is from the line of Abhey Lamba from Mizuho. Please go ahead.

Yeah, thank you. Frank, can you share some success stories of outside of IT where you had the most success and how is your pipeline looking for that? Frank Slootman - President, Chief Executive Officer & Director: I didn't catch that. Tell me again. Success stories in regards to what?

Outside of IT, in HR? Frank Slootman - President, Chief Executive Officer & Director: Oh, outside of IT.

Yeah. And areas where you're having the most success and how is your pipeline looking for those types of implementations? Frank Slootman - President, Chief Executive Officer & Director: Yeah. So one of the things to remember and we keep reminding people sort of every quarter of this notion, right? We don't manage our business sort of IT/non-IT because most of the time we don't even know when people are inside of IT or outside of IT. There are application areas that cross the boundaries of IT, for example, purchase requisitioning apps involve IT because they process IT purchase requisitions, they can also relate to non-IT. The same thing is true with project management. Those work flows are IT and non-IT. So, we don't manage the business that way. These days we talk about service management and the contacts will indicate whether that service management for IT that are known as ITSM or whether it's service management for customer service, whether it's service management for human resources or any other sort of global service domain that you find in the enterprise. It is becoming much more accepted in large institutions, large enterprises to sort of view service management in the context of global business services. Lot of big companies now have global business service executives that are sort of peers of the CIO, sometimes the CIO is the head of global business services. So they are addressing the service domain in a much more global manner versus having systems for IT, systems for HR and so on. So we've come a long way in the last four years and really sort of move into market in terms of how they have to think about service management. As I said in my prepared remarks, we're really not so much trying to measure every single variety of service management. We're really looking at what is the overall investment that customers have in service. Now that really indicates what their degree of commitment to our platform is and it varies quite a lot where it's coming from because some people are very heavy on the ITOM site. We have customers that start out with us in HR and end up on the IT site much later on. We had one customer this quarter who bought one of our partner's application solutions that was built on our platform that actually derived a platform deal for us, but then downstream it's going to yield opportunities for IT. So our business arrives in many forms and flavors and sorry for your long answer, but I just don't have an answer to your question because that's not the way we think about the business not the way we manage and report it to ourselves.

No, thanks. That was helpful. Frank and I'm sorry Mike I know you're not talking about 2016 yet, but can you give some qualitative color on how we should think about your need for investments versus margin expansion? You have a 2020 target of 30% margin. How should we expect the trajectory of your margin from the current level? Thanks.

So, at a very high level, and we'll give more detailed guidance later on. As we mentioned, we expect about a 9% operating margin this year and we expect that to be kind of in the – at a high level right now, somewhere in the 11% to 14% margin, 13% margin. We're still planning our 2016 investments right now.

Thank you.

And your next question comes from the line of Rob Owens from Pacific Securities. Please go ahead.

Hey, guys. Thanks for taking my call. This is actually Ben McFadden on for Rob. I wanted to start with just a question on kind of what you're seeing with the broad macro environment? Was there any, I mean I know you guys are still seeing healthy growth, but was there any verticals or deals where you saw slippage in deals in the quarter? Frank Slootman - President, Chief Executive Officer & Director: This is Frank. Ben, one area that immediately jumps out and I've been in the recent months to Houston, Calgary. The oil patch is brutal. It has come to in a very abrupt halt and basically businesses that are dependent on those sectors are hurting in a huge way. So we felt that as well as is everybody else. It doesn't matter what you do wherever you are. You are not going to escape that trend. So that one is sort of first and foremost. We don't have too much sort of macroeconomic overhang. Sometimes it's even hard for us to sort of know whether something is macro or micro or secular or whatever it is and we don't have too many excuses because I think we have the ability to drive our business sort of regardless of what's going on in the macro because we're driving transformations and optimizations that people are going to need no matter what's going on out there.

So when we think of linearity in the quarter, was it pretty linear or was it – or did you see a shift as far as how that was weighted?

We thought that it was very similar to most quarters. Remember, as I've said many times at conferences, this is no different than any other typical enterprise software company. There is majority of businesses in month three of any quarter and there is a lot of business that's booked in the last two weeks of the quarter. And we continue to see that this quarter like we've done every quarter.

Sure. I just wanted to follow-up real quick with just – any metrics that you can give us as far as kind of what you're seeing with CreateNow and the ServiceNow store? Just something, any metrics you can provide as far as what you're seeing with developer traction there would be great. Thanks. Frank Slootman - President, Chief Executive Officer & Director: Yeah. This is Frank. I think we've given metrics in the past on our cohort analysis. About 85% of our customers have custom applications build. In average they're about, I think it's about six to seven apps now that they have. So that's still something that continues to move up into the right. In terms of our store, we see the amount of content in terms of number of entrees growing sequentially in the 20% to 25% range. Those are some things that sort of come to mind that gives you some character to that.

And your next question comes from the line of Philip Winslow from Credit Suisse. Please go ahead. Joanna Kamien - Credit Suisse Securities (USA) LLC (Broker): Hey, it's actually Joanna Kamien on for Phil. Thanks for taking my question. I was wondering if you could comment at all on the customer uptake of Discovery and Orchestration and if you could give any feedback from customers? Thanks. Frank Slootman - President, Chief Executive Officer & Director: Yeah. This is Frank. It's been very good. Certainly it's helped that we really have combined Discovery with our service mapping technology, which has made that a more integral solution. That's made actually most products more marketable. Orchestration is something where we have built some out of the box applications for in terms of provisioning. That's actually made that easier to sell and more marketable. They are a pretty good size component of the overall ITOM component. And so it's going well and we're pushing on that. They're foundational to the ITOM suite. Joanna Kamien - Credit Suisse Securities (USA) LLC (Broker): Great and congrats on the quarter. Frank Slootman - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Kash Rangan from Merrill Lynch. Please go ahead. Kasthuri Gopalan Rangan - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Hi, thank you very much. I am trying to get a better handle on the guidance. Mike, I appreciate the fact that contract duration came down to 11.8, it was 11.8 months Q4 of last year. So I'm assuming you're using 11.8 months for your Q4 forecast and contract duration is not going to hurt you and I'm looking at ACV for your G2K, it's been steadily going up 10% sequentially, so no problem there. And I'm looking at your customers paying more than $1 million in ACV and the average ACV per customer paying you more than $1 million is up from $2 million to $2.1 million and you added more new customers paying $1 million in ACV this quarter than you did in Q2 or in Q1 for the matter (38:45) in the past four quarters, this is the record high. So help us understand why you're guiding to report a deceleration in billings terms? Are you just assuming some conservatism which I completely respect given that we're living in uncertain times, but otherwise outside of that had a question for Frank, if you get the time to get through my questions on the financial side? Thank you very much.

So, first of all, we're not guiding to a deceleration in billings term because we're still assuming that we're going to be somewhere in that 11.7 months to 11.9 months weighted average billing term that's not changing. In the billings that we are giving guidance for, we think is a reasonable amount of $370 million to $375 million. As we said last quarter, we expect that the number to be in the $1.2 billion for the full year. When you apply that total we just did, I think it comes in around $1.207 billion is what our full year billings guidance is and we'll see December 31 what our actual billings was. Kasthuri Gopalan Rangan - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Got it. And Mike, did you, did I catch you right that we said from Q4 to Q1 you think billings will be flat and not down just to clarify Walter's question?

Right now based upon where we are looking, without me giving full guidance, because once again it depends a lot on the terms of what we sign right now I expect that Q1 will be roughly equal to what Q4 is and you saw that last year where it's slightly up actually last year. Kasthuri Gopalan Rangan - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Got it. Question for you, Frank.

Adjusting for FX. Kasthuri Gopalan Rangan - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Yeah. I got it. ITOM is significant, fantastic statistics here. Are you going to have a specialist sales force and go-to-market changes next year? That's it for me. Thank you. Frank Slootman - President, Chief Executive Officer & Director: We have established a sales team with and it's essentially an overlay function to have. We have hired experts for not just for ITOM but for whole series of product lines. We also do it for Performance Analytics; we do it for human resources; we have it around financial management and DRC. So, we have embarked on really overlaying our sales force with sales experts in all these categories for some time now, which is one of the reasons why we are having really, really strong traction in a lot of these emerging product areas is because of the focus that we have had on it and we're having really good success cross-selling, upselling these products right behind our core platform. Kasthuri Gopalan Rangan - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Thank you very much. Congrats.

Thank you.

The next question comes from the line of Greg McDowell from JMP Securities. Please go ahead.

Great. Thank you very much. Just one quick question. Obviously the 29 new Global 2000 customers is really impressive and that's even more than what you added in your last Q4. My question has to do with the ACV per G2K customer. It looks like it was up 3% sequentially and on a sequential basis that's lower than it traditionally is. Now, I was just wondering what drove that? Is that a function of just the sheer amount of customers you added or does that have to do with the mix of what was sought or was it something else? Thank you.

It's a number of things, but one of the things is the – if you look at the average ACV for most – net 29 Global 2000, it was relatively low amount relative to what our average Global 2000 is. It was somewhere in the mid 250,000. We seeded a lot of Global 2000 accounts. There were a couple of big ones in there but what I will say is then we had a couple deals where we're stepping in as an example. We have one Global 2000 we landed now which was well below our average but that they have a contractual upsell of $4.5 million on December 31. So we did some of those deals that aren't reflected now that you'll see next quarter. So I'm not concerned about the long-term 4% sequential growth, we need to see out of our Global 2000. As a reminder, we did 7% last quarter. And so you will see some variability but long term we think that 4% is very reasonable. And if you look at our cohort slide that is our investor deck you can continue to see that our customers that we brought in in 2014, we've already grown the ACV and those on average by 50%. So, we still have another quarter to go of upsells to those.

Great. Thank you.

The next question comes from the line of Steve Ashley from Robert W. Baird. Please go ahead. Jason Velkavrh - Robert W. Baird & Co., Inc. (Broker): Hi. This is Jason Velkavrh on for Steve. Thanks for taking my question. I was hoping you would talk about the Fuji release, what's customer response been to that and how actively is that being adopted versus past releases? Frank Slootman - President, Chief Executive Officer & Director: It's Frank here. Fuji is already sort of ancient (43:55) history for us because we're literally on the eve now of our Geneva release. So we're about ready to start upgrading our internal systems all those kind of stuff. So Fuji has been out there and people have moved very aggressively towards it because the content has been very compelling. It's been a very good release. We expect the same thing out of Geneva. We have even higher hopes for because there is just a lot of reasons for people to want to move to Geneva. Because our organization has grown so much, I mean, there is ever more and more compelling content in these releases, which keeps our customers moving from one to the other, so it's all been good. Jason Velkavrh - Robert W. Baird & Co., Inc. (Broker): Great. Thanks. And then just one follow-up, to dig into ITOM a bit more, just in general, your senior customers, your IT op customers been able to reduce head count in the wake of adoption of your ITOM products? Frank Slootman - President, Chief Executive Officer & Director: I don't have any real authoritative evidence to say yes/no anecdotally. Sure, we hear about that but a lot of it has to do what organizations really trying to lighten up and modernize this kind of portfolio of tools. I think as many of you know, the tools in the ITOM space are just like they used to be on the service management side, they're quite old. They date back to the 1980s and the 1990s. They're often very expensive; they're really not well suited for modern platforms and architectures. So this is often driven by organizations that really want to go through tool consolidations, tool modernizations. And the big advantage that we have is the single platform orientation and a complete integration with the CMDB. It's an extremely compelling way of going about modernizing this portfolio of capabilities. So that's really what it's about it. People are saving money on the software side and obviously they are after automation in the process as well and so lightening up on staffing along the way. Jason Velkavrh - Robert W. Baird & Co., Inc. (Broker): Great. Thank you.

The next question comes from the line of Alex Zukin from Stephens PH (sic) [Stephens, Inc]. Please go ahead.

Hey, guys thank you for taking my question. Maybe the first one, can you guys talk about the number of new seven figure deals and also mention if there were any elephant-size deals in the quarter?

Sure, we did. I think we did nine deals that were north of $1 million, three were new customers, six were upsells and there were no elephant deals in the quarter, defining, what's – I am assuming what you mean by elephant is more than $3 million in net new ACV. There were none of those in the quarter.

Got it. And then are you seeing any change in the cadence that you are closing some of your larger deals or upsells and maybe also just talk about sales rep productivity and where hiring came in versus your expectations for sales reps?

So, in terms of the cadence of closing deals as we said before, this is a very long sales cycle. This is a 9-plus month sale cycle for large deals. I haven't really seen any change there since the time I have been with the company. In terms of productivity, we saw pretty even productivity in the Americas and Asia Pacific. It was down quarter-over- quarter in EMEA, but remember, Q2 was very high in EMEA unusually high because we had one deal in particular that was very large that skewed that, nothing that gives us any concern this quarter. The pipeline looks good and... Frank Slootman - President, Chief Executive Officer & Director: Staffing.

And staffing, we don't talk about sales reps themselves. We're a few head count behind in our sales and marketing organization but nothing that has us concerned there.

Got it. Thank you, guys, for taking my questions.

The next question comes from the line of Derrick Wood from Susquehanna International Group. Please go ahead.

Thanks. You guys had 35% growth in new customer wins. It looks like that's the highest in three years and, obviously, you had a strong uptick in Global 2000 as well. Could you talk about the new coverage model, how that's playing into driving kind of broader new customer strength and what the key ingredients in the segmentation strategy are right now? Frank Slootman - President, Chief Executive Officer & Director: This is Frank. I don't have too much to add to this. I mean, you remember that the first of the year, we split our Americas organization up in commercial and enterprise, which I think people are still trying to get over. But that actually was a very good thing for us to do because we've had – we made really good progress in the commercial market that's trending really, really well. But it has also made our enterprise organization a lot more focused at the same time. So a lot of the progress that you're seeing that we're making is because our deployment model is just much more precise, much more fine grind, and I actually think we have quite a bit of room up in 2016 in really optimizing the deployment model. How we're taking resources and where we're putting them in is really one of the key things that drives growth and productivity in our organization. So I think we have better runway there to see more benefit.

That's great. And then, Mike, what's the channel contribution right now and do you have any longer-term targets for indirect?

So, first of all, very little of our business goes directly through the channel, it's under 15% of our business goes through the channel. However, the channel does heavily influence our deals. The problem is it's hard to track to what extent they influence and we definitely do not have any target for what amount of our business needs to go through the channel, I don't think it's going to go – I think it will be for quite some time below 20%.

Okay. Thank you.

Your next question comes from the line of Justin Furby from William Blair & Company. Please go ahead. Justin A. Furby - William Blair & Co. LLC: Thanks, guys. Frank, I was wondering if you look at the remaining Global 2000 that you don't count as customers today, what percent of them do you think are using MSPs? And then just how important are some of these acquisitions like CSC and the Dell announcement and Accenture in terms of further penetrating that opportunity? Frank Slootman - President, Chief Executive Officer & Director: It's not the MSPs, that's the GSIs, it's probably what you mean, they are Global System Integrators, they're super important. The Accentures and KPMGs and EY, Deloitte are enormous influencers of these kind of transactions, so that's why, what's going on in their part of the business is very, very good for us. So we still have a long ways to go. We have 30%, but there is a ton of them out there. The saturation now we have and the ones where we have footprint is still long ways in terms of being usurped as business. So the GSIs are very, very important business. I can't overstate the importance of it in the Global 2000 segment of our business. Justin A. Furby - William Blair & Co. LLC: Okay. But, I guess, again like CSC for example a big MSP provider, they acquired Fruition and it sounds like they have aspirations not going into all of these EMC accounts and ripping that out and putting in service. I am wondering like how much of that Global 2000 that's not today a customer are using outsourced ITSM and what do you think some of these deals and the delta (52:08) does for you to penetrate that opportunity? Frank Slootman - President, Chief Executive Officer & Director: Yeah, I don't think they are using outsourced, that's what I meant to say they are not MSPs, they are not using so much outsourced ITSM, but they happen to own their own systems, but they use the GSIs to do process design and do the general consulting and implementation around it. So when it comes time to change systems that have been sitting there for 10 years, 15 years, 20 years, having a very trusted Global System Integrator in the account is very important, to give the account the confidence to go on that journey. It's not easy to turn off systems that have been around for that long and replace them. These are knifepoint transition. They have to turn one off, turn another one on, and having a GSI in the account sort of handhold the account through it, is a big part of making this business happen.

You are correct, Justin, and that the number of CSC have a very big MSP practice but they also have a very big GSI practice as well, but most of the Global 2000 use the GSIs. There are many Global 2000 who use the MSPs, but the vast majority are running around systems they may augment their staff with some of the GSIs, but it's the Global 2000 who are making the purchase decisions not the MSP for them. Justin A. Furby - William Blair & Co. LLC: Got it. That's helpful. And then just quickly on the pipeline. If you look at it today, just curious what the mix of ITSM versus non-ITSM looks like maybe versus a year ago? And then if you think about ITOM and platform those two together, what do you think will be sort of the more meaningful of the two as a growth driver getting you to that $4 billion number over the next several years? Thanks.

So Justin, as Frank said at the beginning, when our customers are buying and the way we sell leads, we really manage our business by the dollars we extract out of our customer and most of our customers are buying service management, not necessarily distinguishing between ITSM and the different service management applications we have. Long-term on that road to $4 billion, yes. ITOM will become a more meaningful piece of our business, but the majority of that revenue will still be coming from service management which ITSM is a part of. Justin A. Furby - William Blair & Co. LLC: Got it. Thank you.

I would now like to turn the call back over to Michael Scarpelli for closing remarks.

Thank you. As a reminder, a replay of this call will be available in the Investors section of our website. Thank you for joining us today.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Thank you very much and have a very good day.