Greetings, and welcome to the RingCentral First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host.

Thank you. Good afternoon and welcome to RingCentral's first quarter 2018 earnings conference call. I'm Paul Thomas, RingCentral's Senior Director of Investor Relations. Joining me today are Vlad Shmunis, Founder, Chairman and CEO; David Sipes, Chief Operating Officer; and Mitesh Dhruv, Chief Financial Officer. Our format today will include prepared remarks by Vlad, Dave, and Mitesh followed by Q&A. Some of our discussions and responses to your questions will contain forward-looking statements. These statements are subject to risks and uncertainties. Actual results may differ materially from our forward-looking statements. A discussion of the risks and uncertainties related to our business is contained in our filings with the Securities and Exchange Commission and is incorporated by reference into today's discussion. RingCentral assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. I encourage you to visit our Investor Relations website at ir.ringcentral.com to access our earnings release, slide deck, our non-GAAP to GAAP reconciliations, our periodic SEC reports, a webcast replay of today's call and to learn more about RingCentral. For certain forward-looking guidance, a reconciliation of the non-GAAP financial guidance to corresponding GAAP measure is not available as discussed in detail in on the slide deck posted on our Investor Relations website. With that, let me turn the call over to Vlad.

Good afternoon and thank you for joining our first quarter earnings conference call. First quarter results were excellent. Q1 showed outstanding revenue growth, operating profit and EPS performance. Our core subscription business accelerated as mid-market and enterprise customers continued to adopt our industry leading cloud communication solutions. Our channel partners delivered another strong quarter of growth and we set the stage for continued growth by announcing innovative new products. So let me begin by covering some of the key highlights of the quarter. First, total revenues for the first quarter grew to $150 million. This is a 34% year-over-year increase, up from 30% in the year ago quarter and above the high end of our guidance range. Second, our core subscription business excluding AT&T accelerated even faster. In Q1, our core subscription revenues of $125 million, grew 37% year-over-year, up from 32% in the first quarter of last year. Third, our mid-market and enterprise business had another outstanding quarter. We define mid-market and enterprise as 50 seats or greater. This is now an over $200 million business, that grew 77% year-over-year. Now for something really exciting. Last quarter we introduced a new enterprise business metric. We define enterprises as customers with $100,000 or more in annual recurrent revenue or ARR. This quarter our enterprise business ARR crossed $100 million and it grew more than 110% year-over-year. It is clear that the cloud is winning and RingCentral is winning in the cloud. The legacy players struggles are mounting. They're consolidating, they are going private. Legacy systems simply cannot effectively meet the modern communication and collaboration needs of mobile and globally distributed workforce. Nowhere was this more apparent than at last Enterprise Connect, the leading conference for enterprise communications and collaboration. We believe many of you, who attended the conference would have…

Thank you, Vlad. We definitely had great results across our business. This was led by mid-market and enterprise customers. In our enterprise business, we saw triple digit year-over-year growth and crossed the $100 million milestone in ARR. The keys to our growth have been the investments we're making in our technology platform, the field enterprise salesforce and the channel partner network. We continue to expand our channel reach this quarter by signing up additional partners, including another major Avaya reseller. Our global expansion continues as well. In this quarter, we opened a new sales office in Australia where we already signed new channel partners. Our success begins with our commitment to innovation. Our market leading product suite helped us close numerous significant deals in the quarter. Let me give you some color on just a few of our wins. For example, Citizen, a global watch manufacturer and distributor was using multiple communication and contact center systems to manage their business. The company wanted to unify this to a single-cloud platform. They chose to deploy our integrated RingCentral Office and RingCentral Contact Center solution. A key differentiator for us in this win was our recently announced Collaborative Contact Center featuring our innovative RingCentral Pulse technology. We won this with a channel partner and replaced two legacy vendors and one cloud vendor. This quarter, one of our most significant wins came from Corporate Travel Management North America, a leading corporate travel management company. They chose RingCentral for its best-in-class communication and contact center on a unified platform with unified support. Our integrated team messaging capability sets us apart in the marketplace. It was key to an enterprise win with a leading company in the education space. They chose RingCentral and plans to standardize on Glip as the primary communication application for seamless…

Thanks, Dave and good afternoon, everyone. Before I begin with the results, I want to ask that you refer to the slide deck posted on our IR website that provides the key points in our call today and some supplemental information. We have adopted ASC 606 starting January 1, 2018 under the full retrospective method and have provided comparative numbers for comparable periods for 2017 in the slide deck and press release. Unless otherwise indicated, all measures that follow are non-GAAP with year-over-year comparisons. A reconciliation of all GAAP to non-GAAP results is provided with our earnings press release and in the slide deck. With that, let's move on to the results. We had a solid start to 2018 with all our key financial metrics beating the high end of our guidance. Our performance was driven by our mid-market and enterprise customers and continuing momentum with our reseller partners. Our core subscription revenue growth accelerated and we translated that momentum into strong profitability. In Q1, our subscription revenue grew 32% year-over-year to $137 million, up from 30% a year ago. Normalizing for AT&T, our core subscription revenue grew 37% up from 32% a year ago and up from 36% last quarter. For more historical data on our core growth trends, see our earnings slide deck. Total annualized exit recurring subscriptions or ARR grew to $589 million, up 31% year-over-year and 8% sequentially, up from 6% sequential growth in Q4. ARR for RingCentral Office grew to $509 million, up 37% year-over-year and 9% sequentially. Our mid-market and enterprise business led the way again. It is now over a $200 million business and grew 77% year-over-year. Our enterprise business represented half of this business over $100 million growing in triple digits. Mid-market and enterprise business also contributed over 50% of new sales…

Thank you. At this time, we will be conducting a question-and-answer session. Our first question comes from the line of Kash Rangan from Bank of America. Please proceed with your question.

Hi, guys, thanks for taking my question. Congratulations on a spectacular start for the year. One question for you Vlad and one for you Mitesh. One for you Vlad, you've seen a lot of changes to your competitive landscape, Mitel went private, at the same time Avaya emerged from bankruptcy, they're now a public company, what does this pose in terms of a change or not so much of a change for RingCentral's strategic position and your ability to continue to win business? And one for you Mitesh, we've rarely seen the company beat earnings by this kind of magnitude, I wonder what we should make of this beat as it pertains to investors' perception of operating leverage for the company in the future? Thank you so much.

Great. Hi, Kash. Yeah. So, no, great questions. Short answer is, we haven't seen much change in the competitive landscape with the Avaya bankruptcy and then the emergence, and the Mitel news. And it really has to do in our minds with the fact that none of these machinations really change the fact that neither is really a cloud provider. And we continue seeing very high win rates against both, these are call it 75% – 80% range. And at least for now, we are not seeing any change in those rates to the negative for us. We don't see any strengthening for those two particular companies or frankly anyone else in the field. I mean, our numbers continue speaking for themselves.

Yeah. Hi, Kash, it's Mitesh. And to answer your question on leverage here, so yes, it was a strong quarter. Most of the dominoes fell our way this quarter. We did beat the street estimates by about $5 million-ish on top line and about $2.5 million – $2.6 million on the – fell through the bottom line. And so the upside flow through from the revenue beat was north of 50%. That's really sort of speaks to the leverage or the inherent leverage in the business model, where treat this 50% incremental revenue margin as a proxy for your install based recurring margin. And so the playbook is going to be similar with the way we have been executing in the past, which is we will be thoughtfully deploying this upside over the course of the year in adding capacity to our GTM and our innovation. And then that will further fuel the growth, so it's a virtuous cycle here, and that basically led us to raise our revenue guidance, operating margin guidance, and the operating profit dollars over and beyond the beat in Q1.

Congrats, guys. Thank you so much for taking my question.

Our next question comes from the line of Bhavan Suri from William Blair. Please proceed with your question. Bhavan Singh Suri - William Blair & Co. LLC: Hey, guys. Congratulations. I just think, Kash there, nicely done there. I guess, Mitesh, first I just wanted to touch a little bit on your upmarket metrics. Last quarter, you provided sort of that net retention rate for the upmarket business was 130%, just some color on that and sort of the drivers behind that? And then I've got a quick one for Vlad.

Sure, Bhavan. So, on the upmarket metric, yes, we did not provide this exact number this quarter, it was not meant to be a quarterly metric. But since you asked the question, yes, the number was over 130% again, the net expansion rate. And the drivers are sort of twofold, one is we did experience record low churn, gross churn and we saw one of our strongest quarter for up-sell into the existing install base. Now just addressing both those in the same order on the lowest gross churn which was the record low churn we saw was because of two things, one is organic low churn in each segment along with the mix shift. This mix shift also is driving positive churn for us because 40% of our ARR and about half our bookings comes from the upmarket segment, so that's one, on the churn. On the upmarket side, the theme we are – on the upsell side, the theme we are seeing from customers is that people – customers want to reduce the number of disparate solutions or discrete solutions into one unified application and they're simplifying the IT stack for business communications for higher productivity and lower costs. And so what we are seeing as a result is customers adding more seats domestically, more seats globally and they are also adding more products to their portfolio. So, if you just take one example in the last quarter is Pac Dental, which we've had the fourth quarter in a row of upsell in that – with that customer, the seat count now is north of 5,000 and the total potential seats for Pac Dental is more than, almost like 2x of that. So 10,000 call it. And they have really adopted a slew of our products and they're adding more seats. So you're seeing a combination of all these factors resulting into high net expansion rates. Bhavan Singh Suri - William Blair & Co. LLC: Got it. It's helpful. And then maybe one for Vlad here. So when you look at the partner channel, you obviously have a team of guys who go out there and sort of recruit partners, but you've also started to see an inflow of partners saying hey, we want to partner with you because our customer is looking for sort of a flexible cloud solution. Has there been any change in that, have you seen sort of more partners coming to you, has there been sort of any change in that trend or inflection in that trend from the partner sort of acquisition side?

Yeah. Hi, Bhavan. So, our COO, Dave Sipes is here, so can maybe provide a little bit more color. But I'll just say at the high level, we certainly are seeing markets come to us more than in the past, and that applies across the board, both direct business, as well as indirect in the VARs. It's really now most folks are recognizing that cloud is here to stay. That if you are a VAR, if you are an enterprise, you have to be – to consider a cloud solution. Obviously we're well-positioned there. And if you're a VAR, your customers are asking to be presented cloud alternatives and we are the undisputed leader. So, I think at the high level, yes. Dave, if you can add to that.

Yeah. This is Dave Sipes. And our largest channel show that we were at a month ago, the Channel Partner Show, that one of the biggest themes was that for all the partners, unified communications as a service, has become probably their number one focused product. So we're seeing a shift in the market as the customers are shifting that they're looking to that this is their number one selling aspect going to market and that we're benefiting from that as we sign on new partners and ramping up our current partners that we sign. Bhavan Singh Suri - William Blair & Co. LLC: Got it. Thanks, guys, appreciate it. Congrats.

Thank you.

Our next question comes from the line of George Sutton from Craig-Hallum. Please proceed with your question.

Thank you. This question is probably best directed at Dave. With the growth rates accelerating, your win rates it sounds like remain the same at least against the competitors you talked about before. That would suggest that your funnel is substantially larger and I just wondered if you can give us a picture into the funnel relative to how that has been built over the past couple of quarters clearly in an accelerating way?

Yeah, I think, as we made a focus on mid-market and enterprise, and we see that shift in the marketplace. We've made those investments on a go-to-market perspective. I think, you're seeing that in our growth rates in those sectors, now over $200 million business growing at 77% year-over-year. We still see and as far as pipeline, we measure that out six months to nine months ahead of time, and track the growth in that ahead of the growth that we're putting in the market from a sales perspective. We still see a lot of opportunity to continue growing that very aggressively, both we talked about covering major cities, but there is further saturation of major cities as well as looking at even larger segments of 10,000 plus employee bases and international growth with our UK market. So all of those are creating – we see the opportunity to continue to expand and we are. There is also and – we're getting 40% of our new business from the existing base as they – as Mitesh mentioned as they're adding new users domestically, internationally and on new products.

Perfect. One other question relative to your Collaborative Meetings offering, you are offering that on a standalone basis in addition to other ways. But it surprises me a little to see it as a standalone offering. I wondered is that meant to fuel additional pipeline for the future, is that part of the logic?

It is, and we – it's Collaborative Meetings that combines Glip and team messaging collaboration with meetings. It allows organizations that we've seen in the marketplace sometimes they'll move that product first to the cloud and then later the PBX. And we wanted to make sure that we could satisfy that desire for them and it allows us to get into those accounts and then utilize cross-sell across the integrated product suite by then selling the PBX and Contact Center.

Understand. Perfect. Thank you.

Our next question comes from the line of Jonathan Kim from Goldman Sachs. Please proceed with your question. Heather Bellini - Goldman Sachs & Co. LLC: Hi, guys. It's actually Heather. I wanted to ask two questions. You mentioned that 40% of your business comes from partners. Can you share with us, how the partner network has been expanding in terms of like feet on the street or number of partners. And also are you starting to see some of the larger SI partners build practice groups? And then I just had a follow-up. Thank you.

Hey, Heather. It's Mitesh. So, one clarification, what we mentioned is that 40% of our business came from upsell into existing customers. But that said, so that metric is a little bit – we do not disclose that channel contribution, we did say on the partner side that our partner ARR was over north of $115 million business growing close to 100%. So that's the metric we gave out. In terms of the – your question was on the ramp of the channel partners in the build out, I think look, it is in the early stages of ramp. We are signing up partners for Avaya and Cisco and we are seeing a lot of traction within capturing the install base for the legacy players currently and then there's more deeper efforts within the channel partners to further fuel the fire there. Heather Bellini - Goldman Sachs & Co. LLC: Okay, great. And then just the follow-up was related to obviously your mid-market and enterprise ARR build looks very strong. I'm just wondering you were just talking about the sales footprint ramp that you've seen. Is there any data you could share with us about the pace of that sales footprint ramp in the last fiscal year and give us a sense of what you expect it to ramp at in comparison this fiscal year? Thank you.

Sure. I'll take that as well, Heather. So we don't exactly give out the sales – exactly the sales head count in ramp, but what I will tell you is that our sales head count capacity in the mid-market and enterprise is growing slightly slower than the 77% growth rate we've had. And that is a result of productivity gains we are seeing from this segment. As these segments mature, we are seeing the benefit of or tailwinds from incremental ramp, the overall ramp sales force. Heather Bellini - Goldman Sachs & Co. LLC: Okay, great. Thank you.

Our next question comes from the line of Terry Tillman from Raymond James. Please proceed with your question.

Hey, good afternoon, gentlemen, and I'll echo the congratulations on the quarter. I guess, maybe, Mitesh, first question for you is just related to an update on metrics or guidepost as it relates to the Global Office business. I'm assuming that's ARPU accretive, but just anything that – some more color on Global Office and how that's trending?

Sure, Terry. We've not given that color in a while. So it's a timely question. We have about 1,000 customers on Global Office now and the good thing about Global Office is this is a entry or key for us to win multinational accounts in the U.S. and the UK. The other factoid on Global Office which is interesting is that for every one Global Office user we have across the globe, they actually pull in four to five new seats for the headquartered customer. So, if there's one customer employee in France there will be about four or five employees in the U.S. So that's sort of a reverse pull through we are seeing for Global Office. In terms of our footprint on Global Office we cover about 37 countries. The footprint covers that which is a significant portion of the GDP and what we are doing that's on the technology side and on the go-to market side what we're doing is with our usual deliberate and methodical approach we are doubling down on certain geographies where – like Europe and Australia where we are now building out our go-to-market presence in terms of direct sales force and channel partners.

Awesome. Thanks for the factoids on that. I guess I don't know if this would – who this would be for, but I'll just throw it out there. So all the color you provide is helpful in terms of the upmarket business in total, then kind of peeling back the onion it looks like obviously the enterprise business is growing well over 100% on ARR. Our calculations would say the mid-market like 50% to 60% growth and hopefully I'm right there directionally but I'm curious with the two growth opportunities in both of those segments and there is probably a different kind of sales motion or GTM, how you'll think going forward about incremental investment. How much would you apply to enterprise to go after that versus mid-market? Just would love an update on how you think about splitting up those investment between the two?

Yeah, so I think question is do you – are you going after the mid-market or enterprise more aggressively. They're both large growth factors for us. The enterprise is even more greenfield, as more customers are now opening up and moving to cloud. So you would see incrementally faster investment in the enterprise over the mid-market what you've seeing, but both are achieving growth rates that are well above the corporate growth rate and provide acceleration opportunities for us.

Thank you.

Our next question comes from the line of Meta Marshall from Morgan Stanley. Please proceed with your question. Yuuji Anderson - Morgan Stanley & Co. LLC: Hi. It's Yuuji Anderson on for Meta. Thanks so much for taking my question. I think most of them have been answered but maybe one on AT&T. I understand you're being pretty conservative on your assumptions there as they make those transitions. But how should we think about incremental business there? And like what is the opportunities that you're seeing there and maybe what is the company doing?

Sure, Yuuji. Hey, it's Mitesh. So yeah, AT&T, you're right, we are still dialing in very conservative assumptions, which is normalized churn rate plus one-time churn as well as no incremental business. But what I will tell you is, we are in a relatively early stages of the innings here. The migration has – is progressing well and for the customers that have migrated we are seeing very high level of satisfaction from those customers because they are now able to choose from a set of portfolio which they did not have access to before. So, so far so good, but again it's one quarter so I would not – three-fourth of the year is left, so I would just keep the estimates very conservative, so because you don't know what you don't know. Yuuji Anderson - Morgan Stanley & Co. LLC: Okay. Got it. And then maybe a quick one on just the product roadmap, I appreciate some of the new stuff that you have out there now. So looking forward, what is the view on continuing to build things internally versus perhaps going out to the market buying?

Yeah, Vlad here, I guess, I'll take this one. Look, we are a technology first company, where we were founded by a team of engineers and we retained our product orientation from day one and to now. So majority of what we have now as part of our portfolio is our major technology and we like it that way very much because it actually is a very good differentiator from some other folks in the market where to be blunt they don't owns their stacks and that creates issues and competitive disadvantage for them. So we continue out-investing our direct competition, we tend to out-invest the next company in this space by about two to one, we've been doing this for a number of years now. So I think cumulative gap now is maybe approaching triple digits, $100 million or so, and growing. So having said all of that, look, we can do it all, there are lots and lots of good companies, younger companies, good ideas out there, we're always on the lookout. As you know, we had one acquisition so far, it was immensely successful for with Glip. It's provided a very clear differentiation. It's winning us major accounts, brands that frankly would be harder for us to get, if we didn't have it. So given the success, we are looking, but we are – and we're open, but we're prudent and I can tell you that people are calling on us a bit regularly these days and as you can see we haven't pulled the trigger yet. Not to say that we will not. We do want to expand and extend and enhance the portfolio. But again in a very prudent manner and something that we'll be moving the needle if we can find it like Glip did for us.

Our next question comes from the line of Brian Peterson from Raymond James. Please proceed with your question. Brian Peterson - Raymond James & Associates, Inc.: Thanks, gentlemen and congrats on the quarter. So I don't know who wants to take this one. But I wanted to hit on the pricing in the enterprise market. Clearly that's been really strong. Is there anything that you guys can say qualitatively about how price per seat or price per user trends have been in that market?

Sure, Brian. So ARPU trend are strong across the board. We saw a flat to up ARPU across all segments. On enterprise specifically, we also saw ARPU holding steady. And again as we've mentioned before when we go and win larger accounts, there is of course pricing pressure and we do give concessions to larger customers than smaller. But at the same time, given the differentiation in the SKUs we have larger customers are adopting the higher SKUs especially with Glip and some of the advanced open API and platform capabilities that's driving the overall SKUs up. So, net-net... Brian Peterson - Raymond James & Associates, Inc.: Got it. Thanks.

...yeah, pricing is better, yeah. Brian Peterson - Raymond James & Associates, Inc.: Good. Good to hear. And may be one more for you, Mitesh. Just on the deferred revenue, that's been increasing pretty steadily over the last few quarters. Any hope on what's driving that? And how should we be modeling that going forward? Thanks, guys.

Sure, Brian. Yes, deferred revenue has been perking up a little bit over the last couple of quarters. And if you sort of ex-out the impact of ASC 606, it grew over 40% this quarter, which is sort of a leading indicator in a sense that for enterprise – our proxy for enterprise segment. Now not every customer prepays us annually which sort of drives the deferred revenue up, but we are seeing an expanded portion of customers trying to – who want to pay us upfront because these guys are enterprise customers, so that's sort of being the driver for the deferred revenue of perking up. In terms of modeling, I would say, model conservatively, but no, being tongue in cheek here. But I would say there would be a steady acceleration I would say over the course of multiple years where this metric will start perking up and show up in the operating cash flow overtime. Brian Peterson - Raymond James & Associates, Inc.: Understood. Thanks, Mitesh.

Our next question comes from the line of Sterling Auty from JPMorgan. Please proceed with your question.

Yeah. Thanks. Hi, guys. So, relative to the growth in revenue that you showed for the mid enterprise customers, I was wondering if you could give us a characterization, what was the growth in the number of customers? And what I'm trying to get at is just wondering how much of the growth in that business is coming from the expansion as you've gone deeper in some of these bigger and bigger accounts versus how much of the growth is still coming from adding new logos within that part of the business?

Sure, Sterling. I'll take that. It's Mitesh. So the one metric we did give out, I'll answer it in a different way, which is our – actually, two ways, I'll answer it. One is, so both metrics new logos are very healthy, growing at a healthy clip along with – we had – did have a record almost like a record quarter for upsells into the installed base. We did say that about 40% of our business came from upsell into the install base and the net retention from our entire installed base in the upmarket was north of 130%. So if you put these together what you're seeing is sort of a two-pronged approach when we are landing bigger and bigger logos and when we are landing these logos, it's not wall-to-wall. So and they do give us the – we do get a chance to go to the well multiple times. So you're seeing the benefit of both those vectors playing into this quarter.

All right. Great. And then on the solutions that you announced that Enterprise Connect in terms of the new solution, what portion of those are based on partner technology where there might be a revenue share, but just as important which ones have kind of partner relationships where maybe you get exposure to their channels and maybe even more reach into their customer base.

Yeah, Enterprise Connect, we announced Collaborative Meetings, we announced Pulse. Pulse, for example, is a technology based on our own stack that allows us to integrate the contact center experience with the team messaging and collaboration experience by identifying key metrics and creating notifications into the broader organization. We also announced Collaborative Contact Center which does agent synchronization of teams with collaboration teams. And the last one we announced was RingCentral Collaborative Meetings which we discussed earlier. In the Contact Center ones, I think your question is have – are we able to tap a broader distribution to deliver those solutions against. And there we do have both channel partners and direct, and that are selling Contact Center solutions and with the uniqueness and differentiation of those products with like Pulse built on our own stack, that creates uniqueness that you can't achieve anywhere else and drives new business to us.

I will maybe add to that a little bit, Vlad here. So yeah, so what Dave said of course, but I just want to point out that at this point in time, we have the only fully integrated communications as in cloud PBX collaboration, Glip, Contact Center, and state-of-the-art video meetings, all under one umbrella. And while it's true that we do use third parties for some of this, obviously majority, the trunk of the tree, which is we think is the hardest lift is communications piece, that's entirely ours as well as the collaboration piece. But in any case we are the only ones that are able to offer this type of product today. So, you can probably imagine that in as much as our providers, our suppliers are running into opportunities that require an integrated solution, there's only one place to go which is RingCentral.

And one example of that is with the Pulse and the Contact Center was influential aspect in Citizen Watch becoming a RingCentral customer.

That made sense. Thank you.

Our next question comes from the line of Will Power from Robert W. Baird. Please proceed with your question. William V. Power - Robert W. Baird & Co., Inc: Yeah, great, thanks. Yeah, maybe just coming back to the contact center comments, I know Dave in your prepared remarks, you alluded to the fact that – that was a key part of some of the enterprise wins, maybe just any updated color as to contact center revenue, what the growth rate looks like, and just how important is that to enterprise versus you know bid market. Is that a key selling piece, and do you feel good about the pieces you have there now?

Yeah, Contact Center has become – because the buyers view it as – there's many buyers that want an integrated solution, both Contact Center and UCaaS. It becomes a critical element for many contact – many enterprise deals. We talked about Corporate Travel Management, very large deal, over 500 Contact Center seats. And these are becoming more and more common in our largest deals, and are probably more likely than not to be included in our largest deals, as we move forward. William V. Power - Robert W. Baird & Co., Inc: Okay, all right, and then Mitesh I just wanted to ask you a question too. I mean, it's great to see that operating margin expansion. I guess, if I look at the full-year guidance, it implies I think (50:42), and I just want to kind of, understand is that just conservatism or is that just a function of wanting to invest in some of these growth areas, through the balance of the year?

No, if you look at the operating margin and operating profit, well, we actually took up the operating margin and actually the operating profit more than we beat in Q1, so you know despite – so we will actually invest all the upside, or at least part of it – of the upside thoughtfully in go-to-market and further fuel the fire for growth and innovation. But, despite that, we're actually raising the operating profit guidance for the full year more than the Q1 beat. So actually it is a virtuous cycle, and I feel – we feel pretty good about that. William V. Power - Robert W. Baird & Co., Inc: Okay. All right. Thanks.

Our next question comes from the line of Catharine Trebnick from Dougherty & Company. Please proceed with your question. Catharine Trebnick - Dougherty & Co. LLC: Yes. Thank you for taking my question and congratulations on the quarter. Mine is around the APIs in – could you discuss where you are or give us more background on where you view your leadership is in this area, and then how important is this to landing new enterprise accounts? Thanks. Just more background on your philosophy and where you are in that? Thank you.

Yeah. The open platform is something we've been investing in for several years. It's more than doubling year-over-year. It's unique in the marketplace. Obviously, against legacy solutions, but even amongst all cloud solutions. We have over 10,000 developers now on the platform, 1,000 certified apps and the only one in the marketplace with an app gallery that you can see on the RingCentral site over 140 apps in the app gallery that become critical for linking enterprise business workflows with communications in the organization. And we see that it becomes a key requirement in the vast majority of our deals – of our large deals. So it's something that's catching on in the marketplace. Obviously, you can see it in the app gallery, but it becomes a critical decision factor for new accounts also. Catharine Trebnick - Dougherty & Co. LLC: All right. Thank you.

Our next question comes from the line of Brian Schwartz from Oppenheimer. Please proceed with your question. Brian Schwartz - Oppenheimer & Co., Inc. (Broker): Yeah. Hi. Thanks for taking my questions this afternoon. I got one question and a follow-up for Mitesh. One question I just wanted to ask you on the solutions side, didn't hear too much commentary on the industry solutions, but certainly commentary was very positive on the upselling motion for during the quarter, so I'm just wondering if you can give an update on how the industry solutions, how their performing faired?

Hey, Brian, just to clarify, when you say industry solutions is what exactly does that mean? Brian Schwartz - Oppenheimer & Co., Inc. (Broker): Your vertical solutions for the enterprise mid-market segment, the healthcare financial services.

Yeah. So if you look at -we are targeting certain verticals like retail is pretty strong for us, financial – FinServe is very strong for us, the tech sector is very strong for us. And at this time we saw very similar results across all these verticals and we are doubling down on the sales segmentation over time which would attack some of these verticals even more. Brian Schwartz - Oppenheimer & Co., Inc. (Broker): Thank you. And then Mitesh, following up with you here. Question on, is just thinking about the leverage in the business and really just thinking about more the leverage within the infrastructure of the operations, certainly understand the mix shift is great economics, and there's leverage there. But are you doing anything internally there or are there opportunities that you see for efficiency as you scale out the infrastructure? Thanks.

Yeah, sure. So we have been if you look at the – you've been following the stock for a long time, Brian, so you know when we went public our gross margin profile was sort of mid-60%s, our subscription margin profile now is kind of 83% plus or minus. So we have been seeing enormous benefits of scale over time. You can only go up to 100% and so we are there at 82%, 83%, which is best-in-class SaaS companies. If you now exclude the transportation layer of the business, our gross margin or the pro forma gross margin on the subscription line item would be close to 85%, 86%. So I think we are there best-in-class. Yes, can we eke out some, some more efficiencies over time? For sure. But keep in mind over time in gross margin, it's a story of puts and takes here, right. We also are going to be building our infrastructure over time to grow even faster over time, so that will also have a neutralizing effect that's one. And number two, as Contact Center takes share that has a lower gross margin profile, so if you net it out, I would, I would hold the gross margin sort of steady over time. Brian Schwartz - Oppenheimer & Co., Inc. (Broker): Thank you.

Our next question comes from the line of Jonathan Kees from Summit Insights Group. Please proceed with your question.

Great. Thanks for taking my questions, and I'll add my kudos to the – for the quarter results. I have two questions. One is more strategic, the other one is housekeeping. And Vlad kind of started touching on it, but didn't answer the question that I have directly. Relative to your Collaborative Contact Center, it sounds like you're going to be pushing that more than your inContact solution, right, going forward or is that just still a very viable option in terms of what your sales force are going to be pushing out in terms of direct – the direct effort? I guess I'm trying to see how that fits with your inContact partnership?

Yeah. So, I think the question is on the Collaborative Contact Center which we mentioned earlier and announced last quarter. The Collaborative Contact Center is our current Contact Center solution that we partner with. But, it incorporates the team messaging and collaboration. So it's really bringing an integrated suite together and allowing that team messaging and collaboration to be accessible by agents, as well as elements of that Contact Center being accessible to the broader organization. So it's really an enhancement of our current relationship and enhancement of that product. So that's how we continue to differentiate our offering and provide this interest that customers really have in the integrated suite across all our products. We see this combination happening more and more with team messaging, PBX, video and web meetings and Contact Center.

Okay. All right. Thanks. That was helpful. That clarifies in terms of the role and – yeah, how the PBX partnership plays in terms of what you're offering now. The other question I have is just more housekeeping, I guess. It's a reflection in terms of the traction that you're getting with the mid-market enterprise. Can you update us in terms of the number of seven figure deals that you had for the quarter and then, also like the Contact Center as a percentage of mid-market enterprise new business.

Sure. Sure.

Did I miss it, you did that?

No. We can – we did not. But, I can take a shot at that. So seven figure deals we've actually flagged and signaled that we are, Jonathan, moving away from the seven figure deal because it's a choppy metric and we actually gave a more relevant metric which is our ARR metric for enterprise and that ARR metric was $100 million business, grew triple digits. But, to sort of give you color on the TCV deals, we saw no slowdown in these deals even despite the Q1 seasonality, so that's one. And in terms of the Contact Center, we've not given the exact percentage out for the mid-market, but it's sort of – may be in the high teens of booking is the way to think about it.

Okay. Great. Yeah. That's what I have last a couple of quarters too. All right. Thanks a lot guys, and again congrats on the quarter.

Thank you.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to management for closing remarks.

Hey, thank you all for joining and hope to see all of you at our Analyst Day on June 14 in New York. Thanks a lot.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.