Nate Pollack - Symantec Corp. Gregory S. Clark - Symantec Corp. Nicholas R. Noviello - Symantec Corp.

Sarah Hindlian - Macquarie Capital (USA), Inc. Shaul Eyal - Oppenheimer & Co. Keith Eric Weiss - Morgan Stanley & Co. LLC Gabriela Borges - Goldman Sachs & Co. LLC Andrew James Nowinski - Piper Jaffray & Co.

Good afternoon. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2018 Fiscal Earnings 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. Thank you. I'd now like to turn it over to the Head of Investor Relations, Mr. Nate Pollack. Mr. Pollack, you may begin. Nate Pollack - Symantec Corp.: Good afternoon, and thank you for joining our call to discuss our first quarter fiscal year 2018 earnings results. We posted the earnings materials and prepared remarks to our Investor Relations Events webpage. Speakers on today's call are Greg Clark, Symantec CEO; and Nick Noviello, Executive Vice President and CFO. This is a live call that will be available for replay via webcast on our website. I'd like to remind everyone that all references to financial metrics are non-GAAP unless otherwise stated. We provide year-over-year constant currency growth rates in our prepared remarks for revenue. During the call, we may speak to a growth adjusted for acquisitions metric, which includes prior period non-GAAP revenue from acquisitions adjusted for Symantec's accounting policies including quarterization. All non-GAAP revenue and expenses excludes the impact of Veritas. However, the continuing operations deferred revenue on the balance sheet includes a portion of Veritas' deferred revenue from Symantec and Veritas bundled contracts entered into prior to operational separation. The Veritas deferred revenue from those contracts will amortize into discontinued operations. As a result implied billings growth calculated from the change in deferred revenue on the balance sheet will not be representative of standalone Symantec's performance as it will include an impact from Veritas. Please note, non-GAAP financial measures referenced during this call are reconciled to their comparable GAAP financial measure in the press release and supplemental materials posted on our website. We believe our presentation of non-GAAP financial measures, when taken together with corresponding GAAP financial measures, provides a meaningful supplemental information regarding our operating performance for reasons discussed below. Our operating management uses those non-GAAP financial measures in assessing our operating results, as well as when planning, forecasting and annualizing future periods. We believe those non-GAAP non-financial measures also facilitate comparisons of our performance to prior periods and to our peers and that investors benefit from understanding of the non-GAAP financial measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. Today's call contains forward-looking statements based on the environment as we currently see it. Those statements are based on current beliefs, assumptions and expectations, speak only as of the current date and, as such, involve risks and uncertainties that may cause actual results to differ materially from our current expectations. Please refer to the cautionary statement in our press release for more information. You will also find a detailed discussion about our risk factors in our filings with the SEC and, in particular, on our Annual Report on Form 10-K for fiscal year ended March 31, 2017. And now I'd like to introduce our CEO, Greg Clark. Go ahead, Greg. Gregory S. Clark - Symantec Corp.: Thank you for joining us, and good afternoon. I'm pleased to share that both our business segments exceeded their Q1 revenue outlook and have strong underlying growth drivers with attractive profitability. We continue to accelerate our leadership in the Enterprise Security and Consumer Digital Safety businesses, as evidenced by customer success, technological innovation and our financial results. We are on track to achieve our full-year financial outlook and confident of the momentum building in our second half pipeline. At the same time, today we also announced DigiCert's acquisition of our Website Security and related PKI assets. Later in my remarks, I will share a summary of the transaction, impact to customers and impact to Symantec. Firstly, I'd like to touch on the dynamic threat environment and how Symantec continues to protect our customers. As many of you are aware, there were two major malware outbreaks in the past quarter, WannaCry and Petya. Both are stark reminders of why the world needs Symantec more than ever. These attacks spread quickly, infecting many high-profile companies globally and rendering data on victims' computers unusable. Symantec's advanced endpoint security capabilities proactively protected against both WannaCry and Petya. Neither attack had virtually any impact on our customers. While some other security companies failed to protect their customers, Symantec's software has, to date, blocked more than 1 billion attempted WannaCry attacks. This is a testament to our significant presence on Enterprise and Consumer endpoints, as well as the effectiveness of our advanced technologies. We are committed to protecting customers against all forms of cyber attack across all attack surfaces and continue to evolve our Integrated Cyber Defense Platform and Consumer Digital Safety offerings to fulfill that mission. In this regard, I'm pleased to report that innovation is thriving across Symantec. We're now regularly applauded by customers for being on the forefront of innovation based upon what we have developed internally, as well as what we have acquired and integrated. We're accelerating our leadership through both organic and inorganic development. On the organic front, we've implemented releases on the endpoints that are coming soon. By the end of the calendar year, we're releasing the next version of SEP, SEP 14.1, which is a significant new release of our flagship Symantec Endpoint Protection product line and builds upon the highly successful launch of SEP 14 last November. It includes some key innovations that we believe will improve our overall security posture for customers, including actionable intelligence on suspicious files in a customer's environment and aggressive tunable protection that can be adjusted for individual users or groups. In addition, SEP 14.1 is designed to be highly effective even in sites with low connectivity, as it relies heavily on advanced machine learning and other signature-less technologies and does not need frequent content updates. We are seeing good early traction with customers in our beta release. In addition, by the end of the calendar year, we'll also be launching ATP 3.0, the next major release of our EDR solution, which adds Flight Data Recorder capability, recording all activity on the airplane. This will provide valuable contextual endpoint data to incident responders, increasing productivity and delivering cost savings, as well as close one of the remaining gaps in a hyper-converged endpoint. These new product releases further increase the value of our endpoint solution versus traditional antivirus providers and other point providers. On the consumer side, we've now delivered the first shipments of Norton Core, which was built from the ground up by our own consumer team and has received wide recognition. Norton Core is another great example of the innovation that's taking place at Symantec. Core is a secure Wi-Fi router that helps protect home networks from malware using network packet inspection, provides high speeds using an omni-directional antenna, and offers advanced parental controls. All of this is controlled from an easy-to-use mobile app. Pre-orders have exceeded our expectations, and Core is now available at norton.com, as well as other premier retail outlets, including Best Buy and Amazon.com. On the inorganic side, we recently announced two important acquisitions, Fireglass and Skycure, that will bring significant innovation to our portfolio and allow us to introduce new methods to stop attacks. Both transactions closed last week and will leverage our existing sales motion to bring value to customers. First, let me review Fireglass. Fireglass is a leading provider in the fast-growing Threat Isolation security category. The technology reduces the attack surface and decreases False Positive alerts in the security operations center, saving customers time and money. The Fireglass solution represents a significant leap forward in the CISO's ability to keep users safe even when they're visiting risky or uncategorized sites. Fireglass provides a secure execution environment for users, whether they are on the web or on e-mail. Dangerous links and attachments pose no threat to the user as all code is run remotely in isolation and never reaches user's endpoint. In discussions with customers at the Black Hat Conference this week, Fireglass technology was seen as a direct extension of our current proxy environment. We believe that it will act as a natural boost to our existing sales motion, particularly as part of the refresh cycle for our ProxySG franchise. Now, let's discuss Skycure. With this acquisition, Symantec will be the only large endpoint vendor to provide customers with comprehensive Mobile Threat Defense across iOS, Android and Windows operating systems, as well as enable a new approach to BYOD for enterprises and consumers. Skycure's predictive technology uses a layered approach that leverages crowd-sourced threat intelligence, in addition to both device and server-based analysis, to proactively protect mobile devices from malware, network threats and app and OS vulnerability exploits with or without an Internet connection. Existing mobile tools, like Mobile Device Management or Enterprise Mobility Management, do not protect mobile devices and are not able to defend closed operating systems from attacks like Skycure can. We believe mobile security is going to be paramount for our customers and a massive opportunity for our endpoint franchise. Symantec will now provide a comprehensive endpoint security portfolio for traditional devices like laptops, desktops and servers, as well as mobile devices. This is a key differentiator against traditional endpoint and emerging endpoint security vendors who do not protect mobile platforms. We will be in a unique position to integrate mobile with network and our cloud security portfolio to enhance our Integrated Cyber Defense Platform for our customer base. For our Consumer business, we expect Skycure to accelerate traction for our mobile offerings with major telcos who are seeking partners for improving security. Closed operating systems are an attractive opportunity for improving cyber defense. Skycure brings defense in depth to closed operating systems, which is important for iOS and Windows 10 S and differentiates us from competitive offerings. Importantly, both Fireglass and Skycure integrate easily on our core franchise. From an innovations perspective, we have been actively tracking the Threat Isolation and Mobile Threat space for over a year which led to these leaders. From a go-to-market perspective, Fireglass and Skycure bring add-on offerings to existing sales motions, and we're targeting the same buyer. We received very vocal support from major customers and industry analysts on these acquisitions. And they demonstrate our commitment to remain at the forefront of innovation, benefiting our customers and our long-term revenue trajectory. We continue to invest significantly in our organic development capabilities, as well as pursuing new technology acquisitions, where prudent, to accelerate our cyber defense offerings. Now, let me transition to our Enterprise business. Here, our Integrated Cyber Defense Platform is resonating with customers and driving increased pipeline. We are positioned as the clear leader for the cloud generation and are building more pipeline and winning more deals on superior technology and unmatched integration. Our Integrated Cyber Defense Platform is becoming a significant competitive differentiator for us. We are beating or displacing incumbent security vendors on a more frequent basis and seeing more success with the cross-selling of components within our Integrated Cyber Defense Platform, as evidenced by larger deal sizes in the Enterprise and additional customer examples of per user security savings. Let me provide you an example of a customer that consolidated from multiple security vendors to Symantec. In the quarter, one of the largest financial technology companies purchased nearly our entire Integrated Cyber Defense Platform. The main driver here was our best-of-breed integration across the portfolio, which saved the customer millions of dollars per year, while also increasing administrative efficiency and simplicity by standardizing on Symantec, displacing four incumbent competitors and beating cloud security challengers hoping to win new business. This deal would not have taken place without the combination of Blue Coat and Symantec. During Q1, the individual components of our Integrated Cyber Defense Platform showed strong competitive momentum. Our CASB product line continued its growth momentum, winning many large Enterprise customers, either beating or displacing major competitors in the cloud arena. Some of the wins include a 40,000 seat deal at one of the country's largest retailers and a 30,000 seat deal at a mobile payment company. Let me share a final example of our integration and Integrated Cyber Defense Platform winning deals. During the quarter, one of the largest soft drink distributors was an existing Symantec DLP customer, but using a competitor for endpoint security. Our account team introduced SEP 14 and ATP to the customer, who was immediately impressed with our EDR capabilities in the integrated SEP ATP solution. This led to winning the endpoint business and displacing the incumbent endpoint competitor for 20,000 employees, another demonstration of the integration and the platform winning in the market. Now, as many of you know, through the integration of Symantec and Blue Coat, we also made significant improvements in our go-to-market programs and partner simplification. At the beginning of the quarter, we went live with our new combined Enterprise sales organization, substantial improvements to our partner model and simplification across the business. From external-facing collateral to internal systems, changes we made were substantial. I am proud of the work that was done and want to thank the team for executing and delivering strong results for customers and for Symantec. Now, the sales team is leveraging all the work as they execute on our strong and increasing pipeline. Now, I'd like to give an update regarding the recent developments related to our Website Security and related PKI solutions. As you may be aware, earlier this afternoon, we announced an agreement with DigiCert to acquire our Website Security and related PKI assets. DigiCert is a portfolio company of private equity firms, Thoma Bravo and TA Associates, and is a leading provider of scalable identity and encryption solutions for Enterprise web security. DigiCert is solely focused on providing leading SSL and PKI solutions. With this transaction, we believe DigiCert will have the resources needed to lead the next generation of global website security. We're excited about the prospects for the combined company and are deeply committed to its success. We will receive a minority ownership stake in DigiCert at the closing of the transaction, allowing Symantec to continue to participate in the value created by this transaction and ensure a successful transition for the customers of our Website Security and related PKI solutions. Nick will be sharing further financial details of the transaction in his remarks. This divestiture sharpens our Enterprise Security business focus on our Integrated Cyber Defense Platform strategy which, as I've highlighted throughout the call, is a top priority for us. It also positions us for achieving higher growth. As a result of the transaction, we are increasing our long-term outlook for Enterprise Security organic revenue growth to high-single to low-double digit compared to our previous outlook of mid to high-single digit organic revenue growth. You may be aware that we've been in ongoing discussions with Google and Mozilla regarding the shift to a SubCA business model in our Certificate Authority operations. As a reminder, under the SubCA business model, our SSL/TLS certificates would be issued through one or more independently operated third-party CAs until we develop and deploy a modernized PKI platform that is acceptable to trust stores. The DigiCert acquisition accelerates the transition for our customers to a new PKI platform at DigiCert that meets all industry standards and browser requirements, ensuring continuity for our customers and providing a foundation for continued innovation. During our discussion with the browsers, our goal has been to minimize the impact to our customers. And we believe this transaction achieves that goal and commitment. Moving to our Consumer segment. Consumer Digital Safety is an entirely new category that is resonating with customers. Consumer Digital Safety revenue exceeded guidance and grew 1%, adjusted for acquisitions. This is one quarter ahead of our plan. This improvement in growth was driven by number of factors across both Norton and LifeLock. From a demand perspective, we believe recent ransomware attacks drove improved activity across our Norton portfolio. Retention rates for Norton Security and LifeLock exceeded our expectations, and we continue to optimize consumer engagement across installed base. Our new Norton WiFi Privacy app has also continued to perform well globally. LifeLock has performed better than expected since our acquisition. Unaided brand awareness has grown to 40%, our highest in history and more than 5x our nearest competitor. And, to-date, we've exceeded our acquisition plan for consumer growth while simultaneously decreasing our customer acquisition costs. As you know, identity theft is not just an issue in the United States. We're actively working on expanding LifeLock internationally. We have plans to enter in the first international markets by the end of fiscal 2018 and expect to expand into additional countries in fiscal 2019. I'm also pleased to report that we've completed most major elements of integrating LifeLock ahead of schedule. We are encouraged by the initial acceptance of our efforts to create a new Digital Safety category and have received positive response from partners and consumer message testing. We expect to be actively selling LifeLock into our Norton customer base this quarter and offering Norton Security as a highly differentiated feature to all new LifeLock customers, which should result in higher ARPU, higher retention and lower cost of acquisition. In summary, I'm very pleased with the results from Q1 and the hard work from the team and feel great about the opportunity for the rest of the year. The pipeline is strong and we have solid momentum, which gives us confidence in our second half outlook. Profitability in the Enterprise segment has improved dramatically year-over-year. In just one year, Symantec has made a major transformation across both Enterprise, Security and Consumer Digital Safety. I want to thank our employees, customers, partners and shareholders for being with us on this journey. It is evident that our strategy to combine best-of-breed technology with unmatched scale is working and believe will result in long-term market share gains. We expect both our Enterprise Security and Consumer Digital Safety businesses to grow in the low to mid-single digits, adjusted for acquisitions this fiscal year. We're achieving this growth while substantially improving profitability in our Enterprise Security business and maintaining our market-leading margins in the Consumer business. We are now in full execution mode. This sets us up to be in position to realize the full benefits of our transformation in FY 2019. Our agreement to sell our Website Security business and related PKI assets to DigiCert allows us to dedicate more focus towards delivering unparalleled protection for the cloud generation. Let me turn the call over to Nick to go through the numbers. Nicholas R. Noviello - Symantec Corp.: Thank you, Greg, and good afternoon, everyone. Today, I will review our first quarter fiscal 2018 results, discuss several critical achievements we've now completed on our integration and transformation journey, update our fiscal second quarter and fiscal year 2018 outlook, and update our medium-term outlook from Financial Analyst Day, reflecting our planned divestiture of our Website Security and related PKI assets. We have also made additional details available in our CFO commentary, which has been posted on our Investor Relations website. I'd like to remind everyone that all references to financial metrics are non-GAAP, unless otherwise stated. Let me start with an overview of our Q1 financial results. Our first quarter revenue was $1.228 billion, exceeding the high end of our $1.185 billion to $1.215 billion guidance range, driven by outperformance across both our Enterprise Security and Consumer Digital Safety segments. As the dollar depreciated during the quarter, currency tailwinds provided an $8 million benefit to revenue relative to our Q1 guidance. Total year-over-year revenue growth in constant currency, adjusted for acquisitions, was down 1%, which was at the high end of our Q1 guidance of down 4% to down 1%. Operating margin for the first quarter was 31%, above our guided range of 27% to 29%, driven by top line outperformance and continued execution against our cost savings initiatives and synergies. We remain ahead of schedule to achieve our expected net cost efficiencies, as well as our expected Blue Coat and LifeLock cost synergies, which gives us further confidence around our guidance and the significant increase in operating margins we expect this year. As you may recall, we expect to achieve net cost efficiencies and Blue Coat and LifeLock cost synergies of $580 million in the aggregate by the end of fiscal year 2018. Currency tailwinds also provided a $5 million benefit to operating income compared to our Q1 guidance. Fully diluted earnings per share was $0.33, above our $0.28 to $0.32 guidance range. Fully diluted shares outstanding decreased by 3 million shares to 664 million relative to our Q1 guidance of 667 million, partially due to impact from our convertible notes, driven by a lower share price. Please see the dilution tables posted to our Investor Relations website, where you can see the impact to diluted share count from the convertible notes at various stock prices. Finally, cash flow from continuing operations during the quarter was $251 million and CapEx was $47 million. Now, let's review our operating segment performance for Q1 in more detail. First, I'll review the performance of Enterprise Security. Our Enterprise Security segment revenue was $669 million and grew 41% year-over-year. Enterprise Security growth in constant currency, adjusted for acquisitions, was down 2%, at the high end of our Q1 guidance of down 5% to down 2%. As we discussed on our Q4 earnings call, our Website Security products comprise approximately $350 million of revenue in our Enterprise Security business. In Q1, revenue from our Website Security products was down 1%. Enterprise Security deferred revenue was $1.814 billion, excluding the impact from Veritas and adjusting for purchase accounting write-downs, compared to $1.824 billion at the end of fiscal year 2017. Further details are available in our CFO commentary. The amount of revenue that rolled off the balance sheet during the quarter was consistent with our expectation. Enterprise Security operating margin was 17%, up 11 points year-over-year, driven by our cost savings initiatives. Now turning to Consumer Digital Safety. Our Consumer Digital Safety segment revenue was $559 million and grew 40% year-over-year. Consumer Digital Safety grew 1% in constant currency, adjusted for acquisitions, at the high end of our Q1 guidance of down 1% to plus 1% growth. It is important to contrast that to just one year ago, Q1 of FY 2017, when Consumer Security revenue was down 8% in constant currency. Q1 FY 2018 Consumer Digital Safety operating margin was 47%, driven in part by top line growth and a faster realization of LifeLock synergies. Consumer Digital Safety deferred revenue was $1.042 billion, adjusting for purchase accounting write-downs, compared to $1.059 billion at the end of fiscal year 2017. The amount of revenue that rolled off the balance sheet during the quarter was also consistent with our expectations. With respect to this segment, over time, we do not expect deferred revenue to be the best metric to evaluate the business, as we anticipate a shift from annual to monthly billings with our bundled solutions. Further details on deferred revenue are available in our CFO commentary. As we outlined in our Financial Analyst Day, on a quarterly basis, we will provide direct subscribers, direct ARPU and partner revenue for our Consumer Digital Safety segment. We are presenting this on a going-forward basis to give color as to the significant metrics driving this segment. As this is a combination of statistics from businesses, Norton and LifeLock, that had different measurements historically, we will not be providing year-ago comparisons for these metrics. For Q1, direct customer count was 21.1 million at the end of the quarter. Direct ARPU was $7.87 per month. Recall that we expect these direct statistics to represent approximately 90% of the revenue stream at any one point in time. And, finally, partner revenue was $58 million. Further definitions of these metrics can be found in our CFO commentary. Now turning to the balance sheet and capital allocation. During the quarter, we repaid $2 billion in debt, consistent with our deleveraging commentary from Financial Analyst Day. As of June 30, we had $2.3 billion in cash and short-term investments and $6.3 billion in gross debt, including $1.75 billion of convertible notes. We completed our previously announced $500 million accelerated share repurchase during the first quarter and received 2.2 million shares. In total, we repurchased 16.4 million shares under the March 2017 ASR. We have $800 million remaining under our current repurchase authorization. As we mark the one-year anniversary of the Blue Coat acquisition, I would like to recap some of the important achievements and successes in integrating Blue Coat and Symantec. First, as we've discussed, from day one we started integrating products and, to-date, have completed over 12 major product integrations. We continue integrating additional Blue Coat and Symantec products with 10 more planned over the remainder of this fiscal year. These integrations have become a core driver of both customer wins and pipeline growth while creating, we believe, powerful competitive differentiation to uniquely solve customer problems that have otherwise been out of their reach. Second, we remain ahead of plan on our commitment for cost synergies. At the same time, we have eliminated an enormous amount of complexity in the business. We've streamlined our distribution and channel, simplified SKUs and pricing and worked hard to start to modernize back office systems, all of which has benefited customers and our own opportunity. And third, on April 1, we successfully achieved the goal of combining our two sales teams into a single organization. Despite all of the change, our sales team delivered and the systems and process changes were successful. We also rolled out our new secure One Channel program. Our distributors are now on standard contracts and have placed orders without challenges. This outcome is testament to our integration capabilities as a company and the hard work that our team took on. Now, as Greg indicated, earlier this afternoon we announced that we've signed a definitive agreement with DigiCert to acquire our Website Security and related PKI assets. We expect the transaction to close after the satisfaction of customary closing conditions, and therefore expect Website Security to be reported as part of discontinued operations by the time we report earnings in November. At that time, we expect to update our fiscal 2018 guidance to include the impact of the divestiture on our results. You should also expect that we will reconcile our Q2 results between our outlook today and the continuing and discontinued operations we will report as a result of the transaction. Today, I will first provide an outlook for fiscal year 2018 and Q2 excluding the impact of the divestiture; and, second, provide you with a framework to understand the associated impact of the divestiture on our future results. With respect to the outlook, while we are pleased with our Q1 outperformance and are even more confident now in our going-forward pipeline and execution plans, we are maintaining our fiscal year 2018 outlook on a constant currency basis given the substantial transformation and execution still underway. On a nominal basis, including favorability from foreign currency, we expect fiscal 2018 revenue at guided rates to increase to approximately $5.160 billion to $5.260 billion, from $5.1 billion to $5.2 billion previously. We expect approximately 3% constant currency revenue growth, adjusted for acquisitions, at the midpoint. For fiscal year 2018, we continue to expect Enterprise Security growth, adjusted for acquisitions, of 3% to 5%; and Consumer Digital Safety growth, adjusted for acquisitions, of 1% to 3%. We continue to expect operating margins for fiscal year 2018 of 36% to 37%. We expect our earnings per share will benefit, on a nominal basis, from favorable foreign currency by approximately $0.04. As a result, we expect fiscal 2018 EPS at guided rates to increase to approximately $1.79 to $1.89, from $1.75 to $1. 85 previously. We continue to expect an effective tax rate of 29. 5% and fully diluted weighted average shares outstanding of approximately 675 million. We have not built substantial share repurchases into our share count estimates, as our focus from a capital allocation perspective in fiscal year 2018 is on debt reduction. From a cash flow from operations standpoint, we are maintaining our previous guidance provided at our Investor Day of $1 billion to $1.2 billion. This incorporated approximately $500 million of restructuring and transition payments and approximately $600 million of stock-based compensation expense. More than half of that stock-based compensation expense is related to acquisitions, including Blue Coat, where lockup restrictions have now been met. We expect this level of stock-based compensation expense will decline over time. Moving to our second quarter outlook, which also does not include the impact of the divestiture. We expect revenue to be up 25% to 28% in constant currency which at guided rates, including favorability from foreign currency, translates to $1.260 billion to $1.290 billion. We expect Enterprise revenues to increase 15% to 18% which implies growth, adjusted for acquisitions, of approximately 1% at the midpoint. We expect Consumer Digital Safety revenue to increase 40% to 42% which implies growth, adjusted for acquisitions, of flat to up 1%. We expect total company operating margin of 34% to 36%. We expect EPS of $0.40 to $0.44, and an underlying share count of approximately 670 million. Our plan and guidance on each of these measures for the second quarter is consistent with the first half guidance we discussed at our Financial Analyst Day. Now, on to the potential financial impact from the announcement of the acquisition of our Website Security and related PKI products by DigiCert. We anticipate that the transaction will close during the fiscal third quarter following satisfaction of customary closing conditions. At that time, we expect to receive approximately $950 million in upfront cash proceeds and receive a 30% common stock ownership stake in DigiCert. We expect to account for our ownership stake under the equity method of investment. Let me provide a brief background on our Website Security and related PKI products. As many of you may recall, we acquired the Website Security business from Verisign in 2010. Subsequently, in 2012, we purchased the remaining interest in Verisign Japan. Though included in our Enterprise Security segment, our Website Security and related PKI solutions are not marketed or sold as part of our Integrated Cyber Defense Platform. Moving to the financial impact from the divestiture. When we report our second quarter earnings in November, we expect Website Security will be reported as part of discontinued operations. At that time, we will update our fiscal 2018 guidance to exclude the impact of Website Security and related PKI assets. Today, for modeling purposes, I will provide a framework for the financial impact of the divestiture to our ongoing business. As a reminder, these solutions are within our Enterprise Security business segment. Together, and on a full-year basis, the Website Security and related PKI products are expected to contribute slightly over $400 million in revenue, approximately $350 million related to Website Security and approximately $50 million related to select PKI assets; and combined operating income of just over $180 million in fiscal 2018. Given the nature of carve-outs, after closing, we will continue to be burdened with stranded costs of just over $50 million on a full-year basis that were previously allocated to the Website Security and related PKI products, which will not be transferred to DigiCert. We expect the combined impact of the transaction, on a full-year basis, to our fiscal 2018 operating income would be a reduction of approximately $235 million, incorporating the combined operating income of the business and stranded costs. Assuming the divestiture and, again, on a full-year basis, we expect our pro forma acquisition adjusted total revenue growth for fiscal year 2018 would be approximately 0.5 point higher; and our Enterprise Security growth, acquisition adjusted, would be higher by approximately 1.5 points. We expect our operating margin in fiscal 2018 would be approximately 150 basis points lower than our previous guidance of 36% to 37%. And we would expect the Enterprise Security operating margin percentage, excluding the Website Security and related PKI products, to be in the low-20s compared to our current outlook of the high-20s. Again, excluding Website Security and related PKI products for the entirety of the fiscal year, we would expect EPS to be approximately $0.20 lower in fiscal 2018 relative to our original guidance, assuming relatively constant weighted average share count. Finally, we would expect fiscal 2018 cash flow, from a run rate perspective, to be approximately $200 million lower than our current guidance. When completed, we expect one-time cash taxes, fees and expenses of approximately $350 million in the aggregate, resulting from the transaction with DigiCert, although that estimate is subject to change. We expect the transaction proceeds, net of expected taxes and expenses will be primarily used to repay debt. Now, let me talk longer term with respect to the fiscal 2019 and fiscal 2020 perspective we gave at our Financial Analyst Day. For fiscal 2019 and fiscal 2020, we continue to expect total organic revenue growth to be mid to high-single digits. However, post divestiture, we expect to get to high-single digit total company organic revenue growth faster than we originally expected. For this longer term outlook, we now expect Enterprise Security organic revenue growth of high-single to low-double digits, up from mid to high-single digits previously. In fiscal 2019 and 2020, we continue to expect total company operating margin percentage in the high-30s and now expect Enterprise Security operating margins in the high-20s. And we continue to expect low teens EPS growth as we provided at our Financial Analyst Day. Once closed, we will update and confirm all of these impacts for you. In summary, in Q1, we outperformed our revenue guidance across both Enterprise Security and Consumer Digital Safety, and we are optimistic about our sales pipelines which gives us confidence in our second half outlook. Within one year from the closing of the Blue Coat acquisition, we've made significant progress integrating Blue Coat and Symantec products, eliminated an enormous amount of complexity in the business, successfully combined two sales teams and rolled out our new Channel program. Even with all these changes, we remain ahead of plan on our cost savings and synergy initiatives, which gives us confidence in our guidance and the significant ramp up in operating margins we expect this year. Our guidance for the fiscal second quarter is consistent with the first half guidance we provided at the Financial Analyst Day. With respect to our 2018 outlook, we've updated our fiscal year 2018 guidance to reflect the favorable foreign currency benefit. But we are maintaining our constant currency guidance given the execution that is still to come in the second half of the fiscal year. As I discussed, the decision to divest our Website Security and related PKI assets is expected to provide us with greater focus and an improved top line growth trajectory. To conclude, we transformed our business in fiscal year 2017, and this fiscal year is about execution. The execution taking place now will set us up for great opportunity in fiscal 2019 and beyond to achieve mid to high-single digit organic revenue growth, which we expect will come faster as a result of the divestment of our Website Security and related PKI assets and to deliver industry-leading margins from our operational improvements, resulting in low teens earnings growth and strong cash generation to drive shareholder value. Thank you. And let me transition the call to Nate for Q&A. Nate Pollack - Symantec Corp.: Thank you. Operator, we're ready for Q&A.

We would now like to open up for questions and answers. In the interest of time, so that we may attempt to get everyone's questions, please limit your questions to one question and one follow-up question. Our first question is from the line of Sarah Hindlian from Macquarie. Sarah Hindlian - Macquarie Capital (USA), Inc.: Hi, guys. Congratulations on the quarter, Greg and Nick. A couple questions for you. I would love to get some clarity on the rationale behind the sale of DigiCert's business? And what that 30% stake is going to enable you to do and how that's going to impact the Enterprise segment, if at all, going forward? And, Nick, you mentioned using the proceeds of the sale to delever the balance sheet. Is that sort of the entirety of the proceed usage? And then, a follow-up for Greg. I'd love to know how the subscription adoption of web proxies is progressing within Blue Coat as well? Gregory S. Clark - Symantec Corp.: Okay. Thanks, Sarah. So let me start with some of the rationale, and then I'll pass over some of the financial numbers to Nick. So as many of you have followed in the news, the SubCA and Website Security SSL/TLS certificate business has been ongoing. And we feel that this area needs a very focused and dedicated team on it and we think that DigiCert is the right partner for that. As you all may be aware, we were looking through all of the Certificate Authority partners to find the best partner to execute a model where certificates could be minted outside of Symantec also. And DigiCert definitely differentiated themselves in that space, for the global nature of our business, and also I think it's a very well run, excellent business. So we feel that this part of the industry needs an extremely focused management team. And we also are very pro-consumer here at Symantec, and this also removes some uncertainty for our customers and gives a path forward for Website Security. I think this industry needs some investment, and DigiCert is very well set up, especially when combined with Symantec Website Security, to really lead that investment and really drive the state of the industry forward, especially around things like certificate management lifecycle, things like that. So we feel that this a great move for our customers. It's also something that allows us to focus on what our Enterprise core business is which, as we discussed in our prepared remarks, is our Integrated Cyber Defense Platform. And we think that, all in all, this is a great outcome for long-term Symantec growth and also for the certificate cap industry and also a great outcome for our customers. So with that, I'll pass over to Nick to hit a couple of those financial questions. Go ahead, Nick. Nicholas R. Noviello - Symantec Corp.: Hi, Sarah. Let me sum up a couple of pieces for you and a little bit is in the script, but let me walk through it. So on the Enterprise side of the fence, keep in mind, if I look forward to 2019, FY 2018 we have to close the transaction. We've given you a perspective of a full-year basis for FY 2018, but I think it's better for you to look forward to 2019. And if I think about the Enterprise business in 2019, we think this benefits the growth outlook for Enterprise in 2019. So when we talked before about our medium term outlook at our Financial Analyst Day of Enterprise Security revenue of mid to high-single digit growth, that gets benefited. So it's actually a little higher than that. So it's high-single to low-double digit in terms of organic revenue growth for the Enterprise group. On the profitability side, it impacts it a bit the other way because we won't be over 30% in terms of margins, but we'll certainly be in the high 20s. That's a combination of the business itself, which we walked through the profitability of it, as well as those stranded costs. And the stranded costs are really around, as we support the transition services of the agreement and try to do our best to transition the business to DigiCert and help them get it ramped up and going. So we just need to be thoughtful about that. I think, importantly, on those stranded costs, those will fall off over time; and again, that's a $50 million number that will fall off over time. In terms of the overall transaction, the equity, we feel good about this business being managed by the experts at DigiCert. And that equity interest is – they're running the business, so that is equity interest for us and that will show up in other income going forward. We've not put that into any models or thought about that in terms of any models at this point in time. We'll update you once we close and get past those pieces. And then, finally, you asked about proceeds. And certainly this is a business where once we get to close and once we get through determining evaluations and tax liability, et cetera, there will be a set of net cash proceeds and a split of that between domestic and international. And you should expect that the U.S. proceeds, we'll be able to use pretty quickly for debt reduction. And then, on the international side, we have to just work through on our ongoing structures there. But that hopefully sums it up for you. Gregory S. Clark - Symantec Corp.: And, Sarah, just one more comment. DigiCert is very experienced at migrating large web PKIs. So in their history, they have a substantial experience of doing that and we think that that's going to be extremely good for our customers. And I think that's really big shout-out on the call that we think that this is going to land things in a great spot for that very important Enterprise customer and other folks in the (47:13). So moving on to your next question about subscription and Blue Coat. I think one of the things that we are very excited about in the quarter, which was in our prepared remarks, we have had some very nice network cloud success. What we've done in Integrated Cyber Defense is we've put a big effort into integrating our Web Security cloud with our Cloud Access Broker, with our Data Protection technology. So if you're a customer and you're wanting to go all cloud for your sort of Web Security needs, we have that covered. If you have any compliance issues, data compliance issues, that's in the stack through our DLP integration. And then, if you need any multifactor authentication to reduce risk there, that's in the stack. That's all integrated. We had an outstanding quarter in displacing our competitors in that space and winning just net new business. We feel really good about that. From a booking to revenue situation, over the last year and a half, if you think about what that number was like in Blue Coat prior to the Symantec integration a year and a half ago, that number is a lot more to the balance sheet, which is really the effect of selling a lot more cloud in the Blue Coat mix.

Okay. And our next question is from the line of Shaul Eyal from Oppenheimer. Shaul Eyal - Oppenheimer & Co.: Thank you. Good afternoon, guys. Congrats on the solid set of results. Also, thank you for the added color and transparency on the Consumer on some of the ARPU numbers. Greg, I want to start with bird's-eye view type of question. So I know you mentioned bits and pieces of that during your prepared remarks, but WannaCry hit the tape on May 14, Petya took place during the final week of June. Can you share with us whether you've seen that as a headwind or a tailwind? I think, clearly, in your case, it appears to be a little bit of a tailwind. And secondly, Symantec has a sizable European exposure, yet you showed the solid performance in that region unlike many other security players this quarter specifically. How do you see yourself different from some of the other players within that European arena? Thank you for that. Gregory S. Clark - Symantec Corp.: Yes. Let me start with sort of the malware crisis that we had in the quarter. WannaCry, Petya, they were serious things. One of the things that happened here at Symantec was our customers were protected from both of those malware plagues. And I mentioned in my prepared remarks that as of a few days ago, we had blocked over 1 billion attempted infections from that EternalBlue vulnerability and WannaCry. We were out in front of that one. We had coverage in all kinds of pieces of that technology. And that really helped us because some of our competitors didn't fare well in that crisis. We were a good operator for the industry. We shared our information through, I think, what is a very solid alliance that we have the other network security players and other security players through Cyber Threat Alliance and helped the world kind of get around that. I think the fact that WannaCry and Petya didn't get our customers was really a testament to the innovation and R&D that we have put into in our product set over the last few years. SEP 14 was a solid release. It definitely carried a lot of water on that. And also, our threat labs were all over that. You might have seen us on the news really early in that attack. We knew a lot about it and we shared that with all the various enforcement agencies and whatnot. So I think we fared well there. What happened there is, we did definitely saw an uptick in pipeline from some of the very major accounts that were affected by that malware; and that has given us a solid lift in our Enterprise pipeline. Those things are displacements of existing competitors. They take a little while to get tested and deployed. We do hope to see some better outlook in future quarters from what happened there. So that was quite good. Now, moving to Symantec Europe. We're definitely not seeing the same as many others had reported around issues in Europe in our business. I think what's happening there is we have our Integrated Cyber Defense offering. So we're in accounts. We've taken some share. We've got a very powerful story for kind of the higher end of the market, and that is something that is carrying the water for us. And then, I think also in the middle market, our effectiveness around some of this malware was great. And so, if you think about that, we have a very powerful opportunity just mining in the installed base, which is really helping us out as we're bringing a differentiated value proposition to point vendors.

And our next question is from the line of Keith Weiss from Morgan Stanley. Keith Eric Weiss - Morgan Stanley & Co. LLC: Thank you, guys, for taking the questions. I wanted to dig in a little bit on the sales force reorg. It was a pretty significant change that you made in the overall organization. Can you kind of give us sort of a mark-to-market on where are we in terms of implementing those changes? I guess, the overall question, are we out of the woods in terms of feeling comfortable that there's not going to be any further disruption in that business? Gregory S. Clark - Symantec Corp.: Yes. So, Keith, thanks for that question. That's a good one. So we did enter, the beginning of Q1, with a completely aligned sales force. And summary is, it worked, as you can see in the results. And that was where had truly – if you think about it as a capacity at sort of the named account layer, we have had two people in the same account. We started April with having realigned that entire sales force to a few accounts each. And so, that give us a massive capacity expansion in the (53:17) of the market. As you know, from the Financial Analyst Day and other remarks, we had put more emphasis on the back half of FY 2018. We expect that capacity to come into play later in the year and then into FY 2018 and 2019. In addition to that, we integrated a bunch of information systems that we manage the sales force with that went live in the quarter. They held up. And so, we do think that we are underway in a good place on that sales force alignment. We have some more to go in terms of systems and integration and making sure we've got all the pieces right. So I want to give us a health check that that transformation is in a good place. Just a little bit to go in the next couple quarters. And so, we're keeping a real close eye on it. The other thing I'd just like to mention is attrition is extremely low in our sales force, which is always a test of whether or not our folks think we're set up for success in the future. So that was a big change. We were definitely very focused on it as a management team and a sales execution team in Enterprise, and we've got through it pretty well. Keith Eric Weiss - Morgan Stanley & Co. LLC: Got it, and maybe one follow-up for Nick. The $0.20 number you gave for potential EPS impact in FY 2018 from a full year view, just so we're clear, is that just sort of the impact from the operating income that's going to come out of the equation? Or does that also include the potential sort of benefit from sort of the other income? Does it have anything in there for debt repurchases on that side of your ledger? Nicholas R. Noviello - Symantec Corp.: Yes. Good question, Keith. So what we're trying to do for FY 2018 is give you the perspective full-year basis of the business. So the $350 million of the business we talked about in Website Security plus the related TKI assets gets you to the $400 million level. It's the operating income associated with that. It is also a set of the stranded costs. There are some puts and takes otherwise for 2018, but we really have to get to close, which is why I was really pointing at FY 2019 on the business side of the fence. We will expect that there is a result from the JV side of the fence that will show up in other income, though us talking about or guiding to any of that at this point in time is a little premature. So we want to wait until we get to closure and get past close, where we will update with certainty the FY 2018 guidance for you and then be able to roll through those things for FY 2019 for you as well. But the big chunks here are, you've got the business itself. And I walked through the operating income associated with the business, the $400 million issued business, and then the stranded costs which are a good $50 million in stranded costs. And the stranded costs, once we get to FY 2019 and we mostly get out of the transition services arrangements and some of those could go longer. That's when we'll be able to really be thoughtful about going after those stranded costs, which will be beneficial to the EPS side.

And our next question is from the line of Gabriela Borges from Goldman Sachs. Gabriela Borges - Goldman Sachs & Co. LLC: Great. Good afternoon. Thanks for taking my question. Maybe for Greg on the M&A strategy from here. Could you elaborate a little on the process to select Skycure and Fireglass and some of the key inputs that went into your discussion on valuation? And going forward, what are the areas where you think you can still build up the technology? And is there is also a scenario where you would consider divesting other pieces of the portfolio that may not be core to that cloud security umbrella? Gregory S. Clark - Symantec Corp.: So I think, yeah, we are super excited about both Fireglass and Skycure. And these things they stand on their own. Every piece of M&A we do has got a certain case. It's our individual sort of details. So we really like the Fireglass acquisition, because as I mentioned in the prepared remarks, it allows us to isolate potentially risky stuff that's coming from e-mail consumption and also coming from consumption of the web. What that means is, your endpoint is no longer running at risky stuff, its running isolated off in the network somewhere, but the user doesn't really know that that's happening. So it looks like exactly the same user experience without exposing that endpoint to a lot of the risks of that kind of content consumption from the Internet. That is something that is right alongside our endpoint franchise and also our network franchise from the ProxySG franchise, and we can quickly ramp that into the market. And so, we were extremely excited about that. Results at the (58:21) of the security operations center is we're hearing from customers that have been doing this kind of thing, numbers that are a reduction in SOC events that are in very high numbers can't be ignored. And we have run this past a large number of our customers and they're very excited about it. Moving to Skycure, Skycure brings technology to the table that we've been looking for in our consumer and in our SEP franchise. It brings us, in the iOS context, on the Apple phones and iPads and whatnot from, I would say, not number one in the industry, to definitely being right up the top of the industry around effectiveness on iOS and mobile. But even more importantly, Skycure brings a technology approach to malware detection that also works in closed operating systems. And we believe that future will be almost 100% mobile in a few years and that many of the operating systems will become closed like Windows 10 S and iOS, and making sure that we can bring a defense and depth back into the customer base there. Those two acquisitions really play straight into the franchises we've got. Same SEs can sell it, same buyers can buy it, and it's really a really great adjacency for us. And we really like that kind of tuck-in acquisition because we know we've got the sales force and the channel to drive it, and we look for real value really moving the needle at the customer. And so, we think those two are great. In terms of divesting other assets in the business, we announced the DigiCert acquisition of the Website Security business. We are always looking at the portfolio making sure we got it lined up right for the future growth of this new benefit to our shareholders. At this point, we don't have any other plans to do anything, and also we're not on any kind of M&A quota. If we find something, we always got our eyes open, okay?

And our next... Gregory S. Clark - Symantec Corp.: I think we have time for one more question. Then we've got to run. Go ahead.

And our next question is from Andrew Nowinski from Piper Jaffray. Andrew James Nowinski - Piper Jaffray & Co.: Great. Thanks for squeezing me in. Nice quarter, guys. So I just want to ask a question on the Consumer segment. So Consumer revenue exceeded the high end of your guidance. I know LifeLock was above expectations. But can you give us any more color on the growth rates or demand trends you saw for both Norton and LifeLock in Q1? And then, I have a follow-up. Gregory S. Clark - Symantec Corp.: Yes. Nick, do you want to take that one or – you go ahead, yeah. Nicholas R. Noviello - Symantec Corp.: Okay. I think the first thing I'll say is – and we tried to make sure it was in the script – we're seeing a big difference from a business that's growing 1% in the first quarter this year from one a year ago that was shrinking 8%. So that's, number one, something we feel really good about. And the teams on the Consumer side deserve a lot of credit for making a lot of progress. We saw benefit on both the Norton side and LifeLock side. We're bringing together a set of things now and we're rolling out those Digital Safety bundles. We're rolling out Norton Core. There's a lot of positive energy. I think what you also saw is on the operating margin side some recognition of synergies early, which we also feel good about. So all in all, a very different picture than a year ago. Integration is, I would say, almost ahead of schedule in places. So that's good as well. Gregory S. Clark - Symantec Corp.: And I also just would like to comment on the integration. I think that the shot in the arm that Symantec gets from an organization like LifeLock that bring a lot of talent, a lot of passion to the business, that's huge shout out for those guys in the company that are really making a difference and our Norton team. Norton performed extremely well. That WannaCry and Petya outbreak, our Norton customers were protected from that. I think that that part of the business is absolutely on the front foot morale-wise making a difference. And we are very confident that that acquisition of LifeLock is going to do very well. Andrew James Nowinski - Piper Jaffray & Co.: That's great. And then I think you mentioned that you're going to start cross-selling the LifeLock product this quarter into the Norton installed base. Do you intend on adjusting the pricing of the bundled products and what's your estimate for the number of Norton customers you think you can cross-sell that LifeLock into? Gregory S. Clark - Symantec Corp.: We think that that percentage of people that are potential to purchase a combined bundle, we'll call it Digital Safety concepts, are very high. Pricing on each of the different cohorts and the different packaged bundles is a pretty detailed discussion. There's a lot going on there, and we have an excellent set of folks that are working through that and we run a lot of surveys and test. But we are bringing out combined bundles this quarter, as we mentioned in our prepared remarks, and we look forward to that being well accepted. Gregory S. Clark - Symantec Corp.: So with that, I think we need to end the call, folks. Really appreciate your support. Thanks for listening to us today. Thank you very much.

Ladies and gentlemen, thank you very much for participating in today's Q1 2018 fiscal earnings call. You may now disconnect.