Greg Klaben – Vice President, Investor Relations Ken Kannappan – President and Chief Executive Officer Joe Burton – Executive Vice President and Chief Commercial Officer Pam Strayer – Senior Vice President and Chief Financial Officer

Dave King – ROTH Capital Partners Nick Altmann – Northland Securities Greg Burns – Sidoti Paul Chung – JPMorgan

Good afternoon, my name is Lutavia and I will be your conference operator today. At this time, I would like to welcome everyone to the Plantronics’ First Quarter Fiscal 2017 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you, Mr. Greg Klaben. You may begin your conference.

Thanks, Lutavia. Joining me today are Ken Kannappan, Plantronics’ President and CEO; Joe Burton, Executive Vice President and Chief Commercial Officer; Pam Strayer, Plantronics’ Senior Vice President and CFO; and Rich Pickard, VP, General Counsel and Corporate Secretary. The information presented and discussed today includes forward-looking statements, which are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The risks and uncertainties related to such statements are detailed in our most recent 10-Q, 10-K and today’s press release. For the remainder of today’s call, we will be providing only non-GAAP metrics related to gross margin, operating expenses, operating income, net income and earnings per share. We’ve reconciled these measures in our earnings press release and in our quarterly analyst metric sheet, both of which are available on the Investor Relations page of our website. After the conclusion of today’s call, the recording of the call will be on our website. Plantronics' first quarter fiscal year 2017 net revenues were $223.1 million. Our GAAP diluted earnings per share was $0.62 compared with $0.55 in the prior year. Our non-GAAP diluted earnings per share was $0.76 compared with $0.67 in the prior year. The difference between GAAP and non-GAAP earnings per share for the first quarter consists of charges for stock-based compensation, and restructuring charges, all net of the associated tax impact, and tax benefits from the release of tax reserves. Please refer to the full reconciliation of GAAP to Non-GAAP in our earnings press release. With that, I’ll open the call for questions.

[Operator Instructions] And our first question comes from line of Dave King [ROTH Capital Partners].

Thanks. Good afternoon, everyone. I guess first off on the strength of consumer. I guess few questions there. Can you talk a bit about what’s driving the double-digit growth in stereo and to what extend I mean obviously back it's been pretty successful but I guess to what extent do you think that share gains versus end market growth? And then as I think about mono, I guess that was the growth there was a little bit better than I would have expected as well just given sort of what's happening with end markets maybe you can touch on that a bit? And then maybe lastly on the consumer – maybe just can you talk a bit about the opportunity in gaming and some of the successes you had? Thank you.

Sure. This is Ken. I’d start out with the answer on these. So first of all on the stereo side, yes, we benefited both from a buoyant market which was growing but also obviously we grew above that with some brand new products doing extremely well in terms of expanding our position in the market. Just to give you a rough sense, I would say probably about half of it represented buoyancy in the market and about half of it represented market share gains. I think you asked about mono side as well, there we don't think that market is doing that well and we think this is primarily market share gains on our side due to a new product. On the gaming side and if we get exactly the question there but because that we had some new products were well received. Having said that we're still at a fairly nascent stage in our business, we will be adding more to our portfolio later this year and continue to ramp this over time. I mean there may have been enough items to your question that I may have missed one or two. So if I missed something. Please let me know what I missed.

Yes. No problem, Ken. I think that was great. Actually I'm switching gears a bit on the SaaS side, congrats on the 50 customers it looks like you've signed up there. Is there anything you can share with us in terms of how to think about the economics of that longer term you think, you need to ramp that?

Sure. Well, first of all let me just say honestly, when you still have heads that right now you get all the revenue right away. In this case we're dealing with this monthly subscription so just to consider the financial impact to be very modest over time and it actually requires, therefore fairly large portfolio. But having said that there's no downside after you sold the initial unit, you're continuing to get revenues and it is an extremely high margin revenues. And as we’ve broaden that out to more and more customers, we do expect to have a very nice addition to our profitability. And of course this is the other part of it adding significant more value to our customers business and being a more valued partner.

Ken, that’s a good color and then one more, if I may in terms of the guidance, I think it's 2% year-on-year growth, if I saw that correctly. Can you talk about how you're thinking about that for next quarter in terms of how that breaks down between you see core enterprise and consumer?

Yes, Dave, this is Pam. I’ll take that one. On our guidance what I would do is our Q2 guidance that we are offering is very similar to our Q1 result, there's only a small dip in revenues and I expect our revenue mix for Q2 to be pretty similar to what we did in Q1. So we will have strong – we do expect to have strong year-over-year growth in consumer for another quarter and growth in enterprise as well, enterprise being maybe flat up a little bit with growth there coming from UC.

Okay. That’s helpful. Thanks Pam and then lastly. Thanks Ken for all your contributions and good luck with your retirement.

Thank you very much.

And your next question comes from the line of Mike Latimore with Northland Securities.

Hey, guys this is Nick Altmann filling in for Mike. Couple of quick ones, are you guys seeing any delays around Skype deployments. Given that there is a little bit more emphasis on the cloud now?

Our actual belief is, this is going to be a positive and let me just explain why? Number one, in fact a lot of the people that are focused on that model whether you call it managed services cloud hosting type of stuff, for them this is a fantastic fit. I think for businesses they’ve learned that Office 365 represents a wonderful scalable flexible opportunity for them to deploy the technology. I think for the Microsoft sales force is represents a kind of like I was talking about with our monthly subscription also a need not to backend load their quarters and their fiscal years, they have to get that out there. I think across Microsoft, they’re really interested in converting some of those licenses which are only active on IM in presence and not yet active on voice. So we actually believe this will be positive, now having said that it doesn't mean that its instantaneous like a switch and going to be a sudden mountain, but nonetheless we think this is going to be positive over the course of the year.

Okay, thanks. And then I guess…

I think if I could mention I mean it also is a perfect reinforcement for our SaaS businesses. Sorry go ahead.

Okay. Thanks. And then yes, I guess nothing has been confirmed yet but there's been some rumors that the new iPhone, potentially might not have a headphone jack and I'm just wondering how you guys are thinking about that and if you expect to benefit a little bit more if the new iPhone doesn't have a headphone jack?

So we do think it's positive, obviously it represents a different replacement. So I think that talk to that a little bit and Joe just have why – because he’s still slightly new on the calls, he won’t conform or deny things that we know, even if they are semi-public.

Yes. Thank you very much for that, Ken. Essentially Ken already gave – already gave the way we feel about that clearly we see the ability to add more value when it's a wireless connection or a digital connection as opposed to an analog connection like a 3.5 millimeter jack. So net-net a move away from a 3.5 millimeter towards something digital and intelligent actually it should be overall positive for Plantronics as an industry direction.

Okay. Thanks.

Your next question comes from the line of Greg Burns with Sidoti.

Good afternoon. I missed the beginning of the call. So forgive me if I'm repeating anything but I just want to dig in on the strength in consumer, was there anything in particular driving the strength as you're seeing in the first and guiding for that into the second quarter. And is this kind of a base level to build the balance of the year off of as we going to the kind of the stronger seasonally part of the year or should we expect maybe a falloff from these levels? And then secondly, do you just give us the mix of the percent of revenue coming from mono versus stereo, we crossed over in terms of stereos contribution yet?

Sure. So let me try to answer both of those questions. First of all, the primary driver was both are great new portfolio products we had. But also a very, very good market for stereo, so clearly the growth was strongest in stereo during the quarter. I think that the short answer to your crossover is ironically we actually had growth in the mono side as well, largely behind a new product, even though new category there is not buoyant. And so we have not yet reached the crossover point even though we did have revenue growth, so mono is still larger than stereo. In terms of what's the model going forward. We actually do expect the stereo business to grow, which doesn't mean that there weren't some initial loads in the quarter there were, unless there's still new products coming and we are seeing very good sell-through. So we’re still expecting to see growth from this level.

Okay, thank you. And then just one on SoundScaping, I was wondering as you look at, can you just give us a sense of how you're looking to price this product, relative to the competition. Maybe not exactly, I'm not looking for exact pricing but maybe there is going to be a premium to what's out there. And how you’re gong to position the products relative to the competition and also how are you going to go to market, is it going to be a direct sales effort or through channel?

All right. I'll try to answer these questions, again we're not going to go too much into this because it's really premature and we're going to share a business model and more on the go-to-market following our fiscal year end conference call which we think will probably be the beginning of May of next year and really will be which I’ll sharing at that point in time. I'll give you a few pieces of color on this right now. And first we do think it is unique technology, we do think it is a dramatically better solution. It is not fatiguing like those other solutions are and at the end of the day for most companies that we have talked to, we represent the only solution that they see, they can really do what they want to allow them to a save huge amount of real estate cost redensification, but in their minds even more importantly improve the productivity of their people in the kind of collaborative environment they want to have for their key talents. So we feel this is absolutely a premium offering and it's much more to it as well, the system is dynamic, it’s adaptive, its self-diagnostic, it's going to be upgraded through additional features. And so we view it as night and day different. In terms of route to market, it is going to go, it is going to have to be not direct, but we will support in the initial phases, we will need channels that are experienced in this sort of thing to install it. And so we will be – we will absolutely be maintaining our channel driven our overall business model.

Okay, thanks. And in terms of the SaaS offering I see you have 50 customers now using that product, what’s the average ARPU of a typical customer?

So, I don't know if we’re disclosing that. I can ask Pam if we disclose, I’m sorry, we’re not disclosing that at this time.

Okay. Thank you.

[Operator Instructions] Your next question comes from the line of Paul Coster with JPMorgan.

Thanks. This is Paul Chung on for Paul Coster. Thanks for taking my question. So my question is on gross margin with product mix shift movement that you see do you expect some pressures on long-term gross margin target and can you give us a sense of pricing flexibility for UC products and the firm increased ASPs on these products as demand increases if you don't mind what’s your traditional content compact assets?

Yes. So I will start, Ken may have more to add on this. But on in terms of gross margins, I think we talked a long time about the fact that our UC products have an average product margin that's right in line with our long-term target of 50% to 52%. So with the percentage of UC revenues increasing over time that should be a problem for us, that should just keep us on track to our long-term target. Pricing and margins and you see have been very steady and we watch that carefully over time. It’s been very steady for us.

Okay, so…

I was going to make an adding comment. I think that what Pam said is true, when we add in businesses like SaaS and like SoundScaping we think those represent a significant high margin additions to our business it over time represent upside.

Okay. And then from our model based on $1 billion cumulative UC sales by 2Q could just similar year-on-year growth rate if not higher and you see if my assumption correct and I know visibilities low longer term, but how do you see UC shaping up in the second half?

Yes. So our guidance would assume that UC growth year-over-year growth rates for Q2 are similar to what we experienced in Q1. And for UC for the rest of the year, Ken do you want to address that question?

Well, I mean as always we believe that you see can be a little bit erratic. So having said that as you say we do think we're in a fundamental secular growth situation. As I commented earlier relative to Microsoft same can be true with other vendors, we’re continuing to see growing ASP since of these sorts of solutions they represent faster better cheaper at the end of the day for companies, better flexibility, lower cost, better contingent performance increasingly easier to manage. And so we continue to expect further increase in adoption which over time again will grow our business.

Great. And just want to say thank you, Ken for all your insight over the years and we wish you the best. Thank you.

Thank you very much.

And there are no further questions at this time. I’ll now turn the call back over to Mr. Klaben.

Thanks everyone again for joining us today. If you have any additional questions, we will be available afterwards. Thanks.

Ladies and gentlemen, that does conclude today's conference call. You may now disconnect.