Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Full-Year 2017 Stratasys Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. I would now like to introduce your host for today's conference, Yonah Lloyd, Vice President of Investor Relations. Sir, you may begin.

Thank you very much. Good morning, everyone. Thank you for joining us to discuss our fourth quarter financial results. On the call with us today are Ilan Levin, CEO; and Lilach Payorski, CFO of Stratasys. I'll remind you that access to today's call, including the prepared slide presentation, is available online at the Web address provided in our press release. In addition, a replay of today's call, including access to the slide presentation, will also be available and can be accessed through the Investor section of our website. Please note that some of the information you will hear during the discussion today will consist of forward-looking statements, including without limitation, those regarding revenue, gross margin, operating expenses, taxes and future business outlook. Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in Stratasys' Annual Report on Form 20-F being filed with the SEC today, along with the associated press release concerning our earnings for the fourth quarter and full-year 2017. Stratasys assumes no obligation to update any forward-looking statements or information which speaks as of their respective dates. As in previous quarters, today's call will include GAAP and non-GAAP financial measures. The non-GAAP financial measures should be read in combination with our GAAP metrics to evaluate our performance. Certain non-GAAP to GAAP reconciliations are provided in the table contained in our slide presentation and in today's press release. Now, I would like to turn the call over to our CEO, Ilan Levin, Ilan?

Thank you, Yonah. Good morning, everyone, and thank you for joining today's call. We are pleased with our Q4 and full-year results, which demonstrate traction in strengthening customer relationships and deepening penetration in our target vertical markets. Throughout 2017, we experienced positive market reaction to new product introductions, including the F123 Series, our recently commercialized H2000 Large Part FDM 3D Production System and J700 Dental Solution, and our certified specialty resin materials for advanced aerospace applications. We are also observing positive results from our strategy of investing in specific go-to-market initiatives in our target verticals of aerospace, automotive and healthcare, resulting in deepening customer relationships and further penetration into key accounts. Operationally, we continue to drive operational focus and cash generation, driven by our focus on execution and alignment of resources to support our strategic roadmap. I will return later in the call to provide you with some exciting details on these important initiatives, as well as other key developments. But first, I will turn the call over to our CFO, Lilach Payorski, who will review the details of our financial results. Lilach?

Thank you, Ilan, and good morning, everyone. Total revenue in the fourth quarter was $179.3 million, compared to $175.3 million for the same period last year. GAAP operating loss for the fourth quarter was $6 million, compared to a loss of $29.2 million for the same period last year. Non-GAAP operating income for the fourth quarter was $13.5 million, compared to $11.6 million for the same period last year. Product revenue in the fourth quarter increased by 2.5% to $129.8 million as compared to the same period last year. Within product revenue, system revenue for the quarter increased by 1%, compared to the same period last year, driven by continued demand of our F123 Series targeting professional rapid prototyping application, as well as initial sales of our new J700 Dental Solution and our H2000 Large Part FDM 3D Production System. Consumables revenue increased by 4%, compared to the same period last year. Service revenue in the fourth quarter was $49.6 million, an increase or 2% compared to the same period last year. Within service revenue, customer support revenue, which includes revenue generated mainly by maintenance contracts on our systems, increased by 7%, compared to the same period last year, driven primarily by growth in our installed base of systems and improvement in our service contract attached rate. GAAP gross margin increased to 48.7% for the fourth quarter, compared to a GAAP gross margin of 47.3% for the same period last year. Non-GAAP gross margin decreased to 52.5% for the fourth quarter, compared to 53.6% for the same period last year, driven by product mix. Non-GAAP product gross margin decreased slightly to 58.8%, compared to 59.5% for the same period last year, also driven by product mix. Non-GAAP service gross margin decreased to 35.9%, compared to 38.3% for the same period…

Thank you, Lilach. As an established global leader in the application of additive technology solutions, we remain focused on advancing our customers and their industries through complete 3D printing expertise and solutions. Our expertise in additive manufacturing is evident in the deep knowledge base and talent and team that we have cultivated at Stratasys, coupled with the largest installed base of industrial printers in the industry, enabling us to develop industry- and application-specific solutions, as well as service offerings that include our recently launched Expert Services. Technology development at Stratasys is rooted in a process of purposeful innovation driven by our efforts to bring the promise of additive manufacturing to new addressable markets, as well as the development of solutions that address specific high-value applications meeting our customers' needs. The positive market reception to such products, as our F123 Series, targeting professional workgroup prototyping applications and our recently announced J700 Dental Solution, are a testament to the impact that developing a product around a specific market need can have. Our leadership in the additive manufacturing industry is reinforced by nearly 30 years of experience, a commitment to R&D spending resulting in over 1,200 additive technology patents and patent pending, and a deepening focus on customer relationships that has resulted in strategic partnerships with some of the largest and most ambitious companies in high-requirement industries. Our commitment to investing in R&D has resulted in two of the additive manufacturing industries' most versatile, stable and highly proliferated technology platforms Fused Deposition Modeling, or FDM, and PolyJet. FDM technology, invented by Stratasys nearly 30 years ago, is the most prominent additive manufacturing technology on the market, with use cases that range from the simplest personal desktop 3D printing experience to high-end systems and materials used for production applications that include aerospace and automotive.…

Thank you, Ilan. Our guidance for 2018 is as follows. Total revenue in the range of $670 million to $700 million; non-GAAP net income in the range of $16 million to $27 million, or $0.30 to $0.50 per diluted share; GAAP net loss of $41 million to $25 million, or $0.75 to $0.46 per diluted share; non-GAAP operating margin of 4.5% to 6%; capital expenditure is projected at $40 million to $50 million. Our guidance reflects increased investments in R&D, tools, materials and additional resources aimed at expanding our addressable markets by accelerating our development efforts for the new metal additive manufacturing platform, further advancements based on our FDM and PolyJet technologies, and specific go-to-market initiatives in order to deepen our customer engagement. We believe that this ramp-up of operating expenses, as guided, will provide the basis for long-term growth. Non-GAAP earnings guidance excludes $32 million to $34 million of projected amortization of intangible assets, $17 million to $19 million of share-based compensation expense, and $7 million to $9 million in reorganization and other related costs, and includes $4 million to $5 million in tax expenses related to non-GAAP adjustments. We maintain a relatively high estimated non-GAAP tax rate for 2018, given the ongoing non-cash valuation allowance on deferred tax assets we expect to record throughout the year. These deferred tax assets have expiration dates many years into the future and we do anticipate being able to ultimately recognize their value to offset prospective tax liabilities. Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on our net income loss, as well as significant quarter-to-quarter variability in our non-GAAP tax rate, the company believes non-GAAP operating profit would be the best measure of our performance in 2018. Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in the table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures. Operator, please now open the call for questions.

Thank you. And our first question is from the line of David Ryzhik of Susquehanna. Your line is open.

Hi. Thanks so much for taking the question and congrats on the metals announcement and the return to systems revenue growth. Ilan, can you elaborate on the competitive differentiation of this new metal solution relative to existing metal solutions? You mentioned that it will overcome some of the limitations, and would love to get your thoughts on how it's differentiated against SLS or some of the other jetting technologies such a Single Pass Jetting? Thanks. And I have a follow-up.

So, I think, in general, the additive – sort of the promise and opportunity that's represented by additive manufacturing of all the good things that a lot of us have been talking about for a good number of years of geometric freedom, weight reduction, the way you can unify assemblies for some of the key industries that we've been looking at for years. So, on the one hand, we have that promise, and when we look at currently available metal applications, I think they're more focused on the high-end of those markets, and that's primarily due to, I think, certain limitations with respect to the technology around the types of materials that can be used, the specialty nature of those materials, some of the complex pre- and post-processing associated with that. And so, it's driven those systems to the higher end of the market, where throughput and cost maybe are a little bit less important in the initial adoption stage. With our new technology that we've revealed today, as we've alluded in the remarks earlier, it was from the outset, designed for powder metallurgy that is commonly used in industry. We're starting with aluminum and that was certainly a market-focused choice, not a technology limitation driven by the system. And we're very much focused on conventional techniques being used currently for short run metal manufacturing and believe that we can offer something that would – could seriously displace that type of manufacturing. And as such, I think it represents a very large new opportunity for Stratasys in a new addressable market. I think some of the things that we would be looking at in terms of application would be short run production in automotive, highly customized parts for high-end automotive and aerospace industries, things that are printed or built today that are not suited for mass production. And I think that would be our sweet spot with this new technology.

Thanks so much. And how would this impact your strategic relationship with Desktop Metal? And I had a quick follow-up. If you can just touch on the H2000, did you guys recognize any revenue from that in Q4 and what expectations for the H2000 do you have for 2018? Thanks so much.

This, I don't believe, affects our relationship as previously announced with Desktop Metal. The first product to market with Desktop is more of a prototyping product in nature, and we're working with our reseller network to bring that to market. With respect to the H2000, yes, we have recognized the system. We had a nice large order that we received in Q4 and we're able to ship, install and have that accepted by the customer. And so, we recognized that revenue in the quarter.

And for 2018, does 2018 guidance assume a pipeline for H2000, a certain amount of units, or does not?

Yeah. So, in general, it's a different type of product than certainly our lower end products where we've very strong analysis on the unit count and of how we launch that product. Here the product launch is a little bit different in nature. The commercialization of a system of this size is more on a crawling basis. But absolutely, we're deep in customer engagement with the idea that we would continue to place systems on a regular basis now going forward.

Great. Thanks so much.

Thank you. Our next question comes from the line of Jim Ricchiuti of Needham & Company. Your line is open. James Ricchiuti - Needham & Company, LLC: Good morning. Thank you. Question I have is, just I wonder if you could maybe define a little bit how you view the short run metals market. It sounds fairly clear that you're not going after necessarily the higher volume segment of the market. How attractive is this short run segment of the market? And I don't know if you could give us a range of maybe parts that you might be focusing on?

So, we believe that it is a very sizable market and a large addressable market from our perspective. I think we would be looking specifically at auto. We're getting very strong, very positive feedbacks from customers that we are revealing the technology to and have been, I think, for the past several quarters already, looking at parts, they've had access to the technology in our premises and have been very positively excited about it and are guiding us in how to develop it in that way. And I think a good application there would be pre-production of vehicles that they're looking at, making metal parts that are currently put on vehicles in a short production series. We're looking at small-scale manufacturing in general. Some of that is in mobility or vehicles where the typical quantities might not be fully mass produced like in commercial auto. We're looking at lightweight complex parts that we could do and we're looking, of course, at the customized parts as well and consolidation of parts. So, I think as we move down and people understand how to design for AM, I think we could broaden the opportunities, but certainly out of the box we will be looking at the applications that I mentioned. James Ricchiuti - Needham & Company, LLC: Okay. And you're guiding to higher R&D spending, and I'm wondering is this a – clearly you've been investing in this area for a few years now. To what extent is that is the investment in metals, additive manufacturing in 2018 contributing to the increased R&D, or is it more broadly based across different technologies?

So, it does include a number of technologies, but certainly the new metal technology is a prominent element in that. And as we move past the incubation phase and into – as we move through the product development cycle and where we are today, a lot of that – a lot of those incremental investments will be made around materials and tools, some resourcing as well. So, certainly the new technology will receive a healthy portion of this increase. James Ricchiuti - Needham & Company, LLC: Okay. And one final question for me, if I may, Ilan. You seem satisfied with the way the vertical market strategy is unfolding at the company, and I'm wondering if you can give us – I don't know if there's any additional color you can give about the progress in either healthcare, aerospace, some of these verticals as you look at what took place in 2017 and what you are anticipating for 2018?

So, you said it well in terms of the different markets that we're looking at. We're certainly taking an increasingly more market segment approach than ever, which is not only on the go-to-market side, on account management, which is certainly a part of that, but also a little bit on the development cycle, some of the new products that we're bringing to the market, which we mentioned in our earlier remarks, specifically address the markets that you've mentioned of healthcare and advanced manufacturing. Each of these markets obviously react differently. In both cases, however, from a go-to-market initiative perspective, we're adding a lot of application engineering and account management around these two sectors. And in terms of traction in general, so as an example, in advanced manufacturing, I think we have the customers that we need with a high level of engagement, they understand the technology, I think, very well. But we need to realize that the qualification periods and that's what we're working with them on together, the qualification needs for those industries are lengthy, often independently done within each of the OEM manufacturers that we're selling into or their supply chain. And so, it's very much of a mutual relationship and I see actually very good traction there, very good engagement. And once we exit and where we exit those qualification periods, we see an increase in business. I think over the coming years, we will see more of that. And then, obviously, that would lead to our longer term growth in a sector like advanced manufacturing. On healthcare, I think, we've added – we have a lot stronger clarity today where our technologies fit in within the landscape. And once we identify those areas, we're much better able to create go-to-market initiatives solely around those areas. I think we're getting a lot – we've made a lot of improvements there. And so, I'm very pleased with that. And as a result, once we identify those areas and put the resources around it, I think, we quickly see, let's say, in healthcare a very positive reaction on the business side as well. James Ricchiuti - Needham & Company, LLC: Do you feel you're getting more early momentum in the healthcare market?

I believe, yes. I believe in the specific areas that we're focusing in some of our – our Dental Solution which we just recently launched, yes, I think we're getting very good traction on that, primarily because of the language and the specificity that we can approach the market with and put the proper go-to-market initiatives around it leading us to a better traction. James Ricchiuti - Needham & Company, LLC: Thanks very much.

Thank you. Our next question comes from the line of Troy Jensen of Piper. Your line is open. Troy D. Jensen - Piper Jaffray & Co.: Hey, congrats on the fourth quarter results.

Thanks. Troy D. Jensen - Piper Jaffray & Co.: So, if I could just follow-up on the metals. Just a question on the underlying technology. I'm curious if this is going to be jetting a green part that needs to be cut like in x-jet (00:30:51) or is this actually producing an end part with no post-processing?

So, we're not really disclosing the specifics of the process. It does incorporate, like we mentioned in the earlier remarks, our jetting capabilities and proprietary technology. We have mentioned powder metallurgy. So, it's obviously dealing on that side with powders. On the post-processing side, I think, what we're offering in the system are more a standard, familiar, post-processing techniques in manufacturing that hopefully will be well received by the market and well understood by the market, hopefully reducing adoption cycles and perhaps the qualification processes that we see in other AM technologies. Troy D. Jensen - Piper Jaffray & Co.: So, correct me if I'm wrong, but if it's a powder metal, by definition, doesn't need to be cut?

So, we're not revealing the process and its details at this point.

Thank you. Our next question is coming from the line of Wamsi Mohan of Bank of America. Your line is open.

Yes. Thank you. Good morning. So, when you look at 2018 guidance, you're guiding to about 2.5% growth at the midpoint for revenues. Can you give us some sense of how much of this growth is coming from new products? And secondarily, if you see, you're exiting here with a pretty decent growth rate both for consumables and for maintenance. And I'm wondering if that trajectory is maintained, does that imply in your guidance that you're expecting systems to decline in 2018? And I have a follow-up.

So, we're not anticipating a decline in systems. Q4 represented a growth in our hardware business or system business and we anticipate that that will continue to grow going into 2018. The first part of your question, sorry, I answered the second part. Could you repeat – could you just repeat in the first part, please?

Yeah. What the contribution that you're expecting to growth from new products is?

So, we've introduced a number of products in 2017. I think, in general, with our space and certainly in the current environment where we're going in terms of manufacturing processes and tooling, adoption does take time. So, I do anticipate that the products that came out in 2017 will continue to contribute positively in 2018. Their growth story is certainly not over and ramp-up times, in many of the industries that we're looking at, takes longer than that. So, we're looking for growth from there. In addition, we do have our products coming out in 2018. But again, once – when do we focus on the specific markets that we're looking at, it isn't the kind of consumer out-of-the-gate adoption that you would see as a slower paced adoption. So, I think, most of the growth reliance would be coming from products that we've launched already, but get better and better traction from them throughout 2018.

Okay, that's helpful color. And Lilach, if I could ask, what are you expecting for operating your free cash flow in 2018? And can you talk about the incremental CapEx, what specifically you are targeting with this incremental CapEx? Thank you.

From operating perspective, as we guided, we're expecting to have operating income between 4.5% to 6% for the year. Regarding CapEx, we guided between $40 million to $50 million. The incremental CapEx, as we can see this year, is coming to support our construction projects here in Rehovot, our headquarter promises, required additional investment. And so, this is the incremental costs that you can see year-over-year.

And how about free cash flow?

Yeah, from free cash flow perspective, specifically, we do not provide this metric. We do focus on cash, and we were very pleased with cash generated in Q4 and the entire year, we generated $62 million for the entire 2017. We continue to focus on that going forward and looking for area to increase cash. But specifically to free cash, we are not presenting this – we're not providing these metrics.

Okay. Thank you so much.

Thank you. Our next question comes from the line of Brian Drab of William Blair. Your line is open. Brian P. Drab - William Blair & Co. LLC: Hi. Thanks for taking my questions. On Evolve, I'm not sure if I have missed it this morning, but I was wondering if you could provide us an update on progress that you're making within the Evolve subsidiary.

So, we're continuing to make progress there. It's a technology that we've been working on for several years. I think, it also represents a significant opportunity to displace the plastic injection molding conventional techniques. And so, we're still working on that development process and the systems related to that. Brian P. Drab - William Blair & Co. LLC: Okay. And then, also something, I'm not sure if I missed, but I'm looking for more detail on – I mean, if you could rank order the largest projects that are contributing to CapEx? I know you've listed some items here, but just those that specifically fall within CapEx spending and largest [Technical Difficulty] (00:37:01)? Thank you.

CapEx spending. Could you repeat the question again? We got a bit of an alarm here in the room that distracted us, so if you could repeat the question. Brian P. Drab - William Blair & Co. LLC: Sure. This isn't the first time this has happened. Sorry.

We're in a different room this time, but I don't know what happened.

We were expecting that (00:37:27). Brian P. Drab - William Blair & Co. LLC: $40 million to $50 million in CapEx, just what are the biggest items contributing to that?

$40 million from next year you're talking about? It's really hard to hear. Yes, that is the main element that impact – this is our continuous investment in our construction project here in the headquarters in Israel. Brian P. Drab - William Blair & Co. LLC: And anything – what are you constructing is what I'm curious about, if you don't mind giving us some sense of what...

We're building – we have a facility, we're building our headquarters here, in Israel. Brian P. Drab - William Blair & Co. LLC: Is it manufacturing facility for particular technology, or consumables, or all of the above?

It's our main premises for offices in R&D activities. Brian P. Drab - William Blair & Co. LLC: Okay. All right. I'll follow-up more later. Thank you.

Thank you. Our next question is from the line of Greg Palm of Craig-Hallum Capital. Your line is open.

Yeah. Good morning, or good afternoon. Thanks for taking the questions here. I guess, first, there's been a lot of chatter on the competitive landscape, HP's entrance impact on the industry. So, I was hoping you could just kind of address the broader competitive landscape and just tell us if it's an impact that you've seen directly or if you feel like it's maybe them specifically going after different use cases, applications than you are?

So, certainly the competitive landscape is evolving, as the market is maturing, a lot of new entrants from multiple different directions, certainly, you mentioned HP. I think, as leaders in this business for over 20 years, we are maturing as well with the market and we're – as I mentioned earlier, we're increasingly looking at our business according to market segments. When you look at the different market segments, different technologies specifically catered to different elements of the market. So, at Stratasys, we have a number of technologies. Each of them are catering or covering one or more of these markets. I think, many of the entrants are coming in with a singular technology at this point and typically, obviously, will cater or lend themselves more to a specific market segment. Not all of them do we play with in. So, not – isn't necessarily looking – looked at as in a competitive landscape as – in a traditional sense. I think, from an additive manufacturing perspective, this is very good for the industry. I think, it adds validation to the concept of additive manufacturing and the general qualification and how it's applied to manufacturing. And so, in that sense, I view it as a positive. And it's all up to Stratasys when it views its markets how it can lead the sub-segments of the market the best way it can.

I get the sense that you're one of the only ones that are – that is approaching the market by use case application. I mean, can you just talk about what the feedback is from customers? I mean, do you feel like you get sort of more deeply ingrained and that could maybe not accelerate sort of near-term adoption, but longer term, in terms of building relationships, I got a feel like that's a pretty good thing, right?

So, I think, it even goes beyond the relationship, which is key to continuing the business with such a customer. I think, the reason I'm saying it goes beyond is that, when we look at where we're at, let's say, in advanced manufacturing with aerospace customers or in auto, we do sell to and have for years to many of the OEM manufacturers, as well as many of their supply chain. Now the question is, how do we get beyond prototyping, how do we get beyond some tooling applications, the initial manufacturing and work with them for qualification, for education within an organization to work on the design, and therefore get more applications running through the systems. When you're in those discussions – I think, I've mentioned this in previous calls as well, when you're in those discussions, it's not a question of competition. It's a question of moving the qualification process along, moving the design process internally within an organization and education with respect to a specific technology for specific group of parts. And so, that's what I view as the long, fruitful, hard work that we're doing today regularly and not so much selling the attributes of either FDM or PolyJet versus other technologies. Those industries need to – we need to be patient. They're used to this level of patience, that's what they do. I recently visited customers in some of our sectors where qualification periods can take two to four years. And so, we just need to be there and that's what this customer engagement from our perspective is all about.

Understood. And, I guess, as it relates to R&D and the increases there, I mean, is it safe to assume that some of the increase is related to commercialization of the Evolve platform? You mentioned other technologies outside metals, but just want to confirm that.

So, we're not commenting right now on the commercialization of – timing of commercialization with new technologies in general. But as we move them along in the development process, certainly, the expenses related to the development process, particularly in materials and tooling, as well as in resources, becomes more substantial, and that's what that uptick is all about.

Okay. All right. Thanks for the color.

Thank you. Our next question is from the line of Ananda Baruah of Loop Capital. Your line is open.

Hey. Good morning, guys. Thanks for taking the question, and congrats on the progress, and putting together a – what feels like a pretty compelling product pipeline here. A couple for me, if I could, Ilan. So, do you feel given the progress that now you guys are sort of entering into what can be a revenue sort of accelerative dynamic? So, you have your guidance for this year, but would it be possible to sort of see those levels kind of increase for the next couple of years given new markets, given mix, given new platforms?

So. I do feel very comfortable on the customer engagement side. I think, we're putting the right things to place on that side. We're developing, I think, a very nice roadmap, a technology roadmap and a product roadmap that's more diversified than we have perhaps in the past, that's going address new addressable markets. As I previously said, some of the sub-segments where we're getting actually larger and larger orders, multiple machine orders, the qualification periods still take time. We're through those. Stratasys can be a full partner to them, but we are dependent on specific processes within companies. But we're only seeing an increasingly strong level of engagement with those customers that lead us to believe that we're on the right path in terms – that will lead us to the growth.

Awesome. So, would that be – so, if I can kind of ask the question in a different way given that. Would that be what you guys would sort of see all things being equal as the impediment to greater and greater growth kind of in subsequent years would really be customer process, and sort of deal completion process to kind of encapsulate that. Is that really what it is? But do you feel like you have the right product in place and the right degree of customer engagement in place such that if the process can get handled in the right amount of time, you could actually see yourself entering into a dynamic where you have stronger and stronger growth in subsequent years?

Yes, I would agree with those basic elements of customer engagement and a comfort level that we have good products, the right products today, and as we've alluded in this call, in terms of new technologies that would absolutely lead to our growth.

And with regards to the incremental investing, my hunch is that you're probably going to maintain the incremental investing at least over the next couple of years. So, can you sort of provide, I guess, sort of like, I guess, a road – well, I don't know if a roadmap, but like give us some signposts of, for what would allow you guys to increase the operating margins in subsequent years? Is this operating margin expansion past 2018, is that entirely predicated on revenue growth, so you're just getting leverage and scale from that, or would there be other things that could take place that would allow the operating margin to expand past 2018?

So, I think, in general, over the past year to two years, we've focused on our internal focus on what we need to get done, and that's obviously resulted in bringing down our OpEx significantly and, I think, making our financials healthier. When we're looking forward, I think, what we've done over the past several months internally was, gain a certain level of comfort of where we want to invest, where do we want to play from a technology and product perspective, and the incremental investments are around that. And so, we want to see this through. We're not now looking at how to tweak it and perhaps make our OpEx suitable to a given top line on a given day. What we're trying to do is, focus very strongly on longer term projects, see them through fruition because we do believe that they will lead us to stronger growth. And so, we're very focused on that right now.

Okay. So, it's really more of a growth focus. I just want to make sure that my...

Yes.

...I interpret that accurately. Okay, thanks. And just one last one for me quickly. Can you just repeat what we should expect, what the tax expectation should be? I seem to have missed that.

Sorry, which expectation?

Tax, for tax.

For tax expectation, so in 2018, we still remain a U.S. cash flow situation. And we have a full evaluation allowance. As such, the tax rate, you could not really tell much from the tax rate. It's not really indicative of how much tax is equivalent to the specific operating income that we have. Therefore, we do believe that operating margin is probably the best measure for us to measure the business. Therefore, we do not provide any specific measures around taxes.

Got it, got it. Thank you very much. I appreciate it. Good luck.

Thank you.

Thank you. Our next question is from the line of Ben Rose of Battle Road Research. Your line is open.

Yes, good morning, Ilan and Lilach. A few questions. I know that you have made some changes in the Far East in terms of management and so on, and, excuse me, I was just wondering how things are progressing in the Far East and what your expectations are for the coming year.

So, we have – in general, as we go deeper in customer engagement globally, we've endeavored to do the same within the Asia Pacific region and are specifically focused currently on China and Japan as two markets that we believe warrant our increased focus. But not – I mean, those are the primary ones, but not exclusive, it's not that we're not doing anything else in the other regions. And looking at that, we are bringing more or adding customer-facing activities to both of those regions in order to make it customized, in a word, or more suitable for those two specific markets. Certainly, the competitive landscapes for each are very different, and the opportunities are also – in terms of adoption cycles, are different for both those markets. And we felt the best way to do that would be to address them in a very specific way and not in a unified global or cross-regional manner.

Okay. And I know that in the past you've discussed sort of the lag between systems sales picking up and seeing kind of a follow-through on consumables sales. And I'm wondering, with the pickup in systems this quarter, how you're feeling about the sale of consumables, kind of broadly speaking, coming into the rest of 2018?

So, that really depends on who we're selling to and for what application. So, a sale that we would expect a higher rate of consumables coming out of the gate would be a system that is going into an existing customer who's using it, is ramping up usage and needs more of our systems, and then, we are very comfortable that usage will be very strong coming out of the gate. If it's customers who are trying to sort of get an organization to adopt it and sometimes we get those kind of top-down decisions, then adoption can be very dependent on departments or specific organizations certainly within an industry. A great example of that might be an F123 Series sale where we've seen organizations come in and – design organizations or engineering organizations come in and place many different systems across the organization either to drive innovation, to drive product development cycles a little bit quicker. So, the consumable or consumption of each of those systems is something that is very difficult to scale out, say for maybe just a statistical model that we would have working for many years. It could be very different across either product mix or specifically use cases in customer base.

Okay. And, sorry, just one final question for me. Thinking about the cash level that you have now, was curious to get your current thoughts, number one, on the prospect for acquisitions going forward, it looks like there's been a bit of a lull here vis-à-vis the last year or so in contrast to previous years in terms of the scope and the magnitude of acquisitions that you've done. So, I guess, really the first question is, should we expect additional acquisitions in addition to the R&D ramp-up that you have, and then also, if I could get your thoughts on a possible share back going – share repurchase going forward.

So, in general, on – I think, we're very much interested in building an ecosystem through partnerships, through investments by extending our reach in a multitude of ways. And some of that might be on the technology domain, some might be on the application domain, some might be on the go-to-market domain. I think, we're very focused on doing those types of relationships. That doesn't mean we don't look or wouldn't look at opportunistic acquisition opportunities that are out there. But our primary focus is on building relationships, again, not only on the customer side, but in a variety of different ways and we would seek to make investments that would be able to enhance that ecosystem. And we do not have any plans for any buyback at this point.

Okay. Okay, thank you very much.

Thank you. Our next question is from the line of Christopher Van Horn of B. Riley FBR. Your line is open.

Hi. This is Dan Drawbaugh on the line for Chris. Thanks for taking our questions. Just to start, you have recently announced some additional solutions targeting the dental market and, I think, you noted earlier that the J700 has been seeing some positive reception trends. So, do you – focusing on that market in particular, do you see a share gain opportunity there or is the opportunity for you more just an overall expansion of the market?

So, we believe that we could do – we could effect in a share gain. It's a high-end system, the J700. So, we believe that it does not appeal across the entire universe in healthcare. And, I think, I mentioned it in some of my earlier remarks. I think over the past year, we've gained a lot of clarity as to where we want to go in terms of application fit, where we want to go in terms of go-to-market efforts, so we're pretty clear internally. And within that universe, we believe we can gain market share and also, I think, develop long-term relationships for the future, which is what we're trying to do across all our businesses and not necessarily place many units with many, many different customers.

Okay. Thank you. Very helpful. And then, turning to the guidance, I think, in previous quarters, you'd flagged a bit of a shift towards some of the lower cost systems and sort of that mix had been a headwind to revenue. How are you contemplating that in 2018? Does that sort of flatten out at some point this year or is that continuing?

No. So, the F123 which specifically appeals to kind of a personal desktop workgroup sub-segment of the market, we believe, is very – has a lot of growth in front of it, is widely untapped or only tapped partially at this point. It's all a question of the right exposure and the right product line in order to serve that market. I think, it's still evolving as a sub-segment and still has a lot of growth ahead for.

Okay. So, it sounds like there's positive volume in the future for F123?

Yeah. We believe it still has – we only launched in February, March of 2017. So, we still have room for growth.

Great, thank you very much for the questions.

Thank you.

Thank you. Our next question is from the line of James Medvedeff of Cowen. Your line is open. James Medvedeff - Cowen & Co. LLC: Good afternoon, guys and gals. Can you hear me?

Yes, we can. Good afternoon, or good morning. James Medvedeff - Cowen & Co. LLC: Hello? Okay, great. Well, most of my questions have been answered. But I just had a couple of – housekeeping bases here. What was CapEx and depreciation for the full-year of 2017?

It was about $22 million, between $22 million to $25 million, something like this, yes.

We can drop you a note.

We can drop you a note, yes.

And we'll give you a specific number. James Medvedeff - Cowen & Co. LLC: Okay. So, CapEx and depreciation, right?

No. I mean, yes, we will definitely give depreciation. James Medvedeff - Cowen & Co. LLC: Thank you. Okay, thank you. Then the – I do have a question on gross margins going forward. Mix currently is dragging them down. I guess, let's start with probably on the services side, where you have so much growth in the support relative to the regular production of parts. Is that sort of a new level of gross margin for the services business, or [Technical Difficulty] (00:59:04), how should we think about that?

So, gross margin on the service side is also dependent on a little bit of technology and product mix, within the service revenue, we have our parts business as well as our system maintenance revenue within the parts business, which is primarily coming out of Stratasys' direct manufacturing, has a variety of technologies, not only our FDM and PolyJet technologies as a service. And so, the gross margin there is, when we say product mix on the service side, it depends both on the system maintenance and FDM side; and then within FDM, the different technologies in a given period that are being provided. Naturally, we would, I think, like to see a higher gross margin coming out of service, and so we're working on improving that continually. James Medvedeff - Cowen & Co. LLC: Okay. I just noticed it's been running 36% plus or minus for several quarters now, and I just wondered if it's at sort of a level we could be thinking about [Technical Difficulty] (01:00:04)?

You're breaking up a little bit on the line. I think we got your – I'm not sure I got your question, or maybe it was a little bit about the gross margins to-date on the service side. We can speak offline a little bit in terms of just making sure that we're aligned in terms of the way we're looking at it over the past number of quarters, if you wish. James Medvedeff - Cowen & Co. LLC: Great. Okay. Thank you. That's all for me right now. Thanks.

Thank you.

Thank you. Our next question is from the line of Hendi Susanto of Gabelli & Company. Your line is open. Hendi Susanto - Gabelli & Company, Inc.: Good morning and thank you for taking my questions. Ilan and Lilach, if we just ask on materials growth and support growth in Q4, should we use that as a baseline? Or in other words, what should our expectation be for 2018 support and materials growth?

So, we don't break up the specific growth on the different, if I understood you correctly, on the consumables side on the growth going forward. And if Q4 – the line was a little bit choppy – and if we can be – if we should be using the Q4 metrics as a baseline going forward. So, we don't break out those growth rates as – again, those -the performance in general between systems and consumables, very highly dependent on product mix. Certainly, the hardware side could be a little bit lumpier as we move into larger and larger orders. So, I'd be a little bit cautious to take any specific period as a benchmark for future forecasting. Hendi Susanto - Gabelli & Company, Inc.: Got it. Thank you.

Thank you.

Thank you. Our next question – I do show that we have no further questions at this time. I'd like to turn the call back over to Ilan Levin, CEO, for closing remarks.

Thank you for joining today's call and we look forward to seeing you at the RAPID + TCT 3D Printing and Additive Manufacturing Conference in April and to speaking with you again next quarter. Thank you.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.