Bracken Darrell - President and CEO Joe Greenhalgh - VP of IR and Corporate Treasurer Teresa Thuruthiyil - Senior Director of IR

Alexander Peterc - Exane BNP Paribas Paul Coster - J.P.Morgan Michael Foeth - Bank of Vontobel Andreas Mueller - Zurcher Kantonalbank Andrew Humphrey - Morgan Stanley Tavis McCourt - Raymond James John Bright - Avondale Partners Andy Hargreaves - Pacific Crest Felix Remmers - Credit Suisse Vikram Kumar - TT International

Good day and welcome to the Logitech's first quarter financial results conference call. At this time, all participants are in listen-only mode. We will be conducting a question-and-answer session and instructions will follow at that time. This call is being recorded for replay purposes and may not be reproduced in whole or in part without written authorization from Logitech. I would like to introduce your host for today's call, Ms. Teresa Thuruthiyil, Senior Director of Investor Relations at Logitech.

Good morning and good afternoon. Welcome to the Logitech conference call to discuss the company's financial results for the first quarter ended June 30, 2013. The press release, our prepared remarks and slides, as well as the live webcast of this call are all available online at logitech.com. As noted in our press release, we published our prepared remarks on our website in advance of this call. Those remarks are intended to serve in place of extended formal comments today. They will not be read on this call. During the course of this call we may make forward looking statements including forward-looking statements with respect to future operating results that are being made under the Safe Harbor of the Securities Litigations Reform Act of 1995. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated in the statements. Factors that could cause actual results to differ materially include those set forth in Logitech's annual report on Form 10-K dated May 30, 2012, and subsequent filings, which are available online on the SEC EDGAR database and in the final paragraphs of the press release and prepared remarks from Logitech's reporting first quarter financial results for fiscal 2014. The forward-looking statements made during this call represent management's outlook only as of today, and the company undertakes no obligation to update or revise any forward-looking statements as a result of new developments or otherwise. This call is being recorded and will be available for replay on the Logitech website. Joining us for the today from Zurich is Bracken Darrell, President and Chief Executive Officer and Joe Greenhalgh, Vice President of Investor Relations and Corporate Treasurer. I'd now like to turn the call over to Bracken.

Thanks, Teresa. And thanks to all of you for joining us. Our first quarter results demonstrate that our turnaround is on track. We grew sales for the first time in seven quarters and improved profitability significantly compared to the prior year. The overall performance in Q1 reveals many positive indicators. Let me briefly share some of them with you. At our Investor Day in May we identified tablets accessories, pc gaming peripherals and wireless speakers as categories of strong growth potential over the next several years. Those three were in fact our strongest growing categories by far in Q1. In total they grew by nearly 90% over the prior year, which with much of the growth driven by products that we launched this quarter in Q1. We are pleased with the initial selling for these new products, but it's premature to draw conclusions of our consumer demand especially in PC gaming and tablet cases. Our first quarter has historically been a relatively quiet period for new product introductions, but we changed that for several reasons. As I've said before making Logitech faster is one of my top priorities. That means taking a more aggressive approach to when and how frequently we refresh our portfolio in growth categories. We launched a relatively large number of new products in the quarter. This helped us achieve our first Q1 with sequential sales growth in well over a decade. To be clear, our new product roll on Q1 wasn't the result of just moving our launches up earlier in the year though. It reflects the progress we've made in shortening the product cycles for key products and the speeds with which we can drive process improvements across the organization. We will continue to introduce new products in high potential categories such as tablet accessories and PC gaming as we move through the fiscal year. Our next major product launch for tablet accessories is dependent on the release date for new tablets. I am pleased to report that our faster and more aggressive product development approach to tablet should enable us to ship our initial line up of new product shortly after the next big tablet release. Note that should that release be later than plan, a significant portion of our Q2 tablet accessories sales would likely move in to Q3. I was encouraged that our sales in pointing devices and keyboards and desktops categories once again outperformed the PC market. We continue to plan for a depressed PC market but we believe our mice and keyboard sales should be better than that market as we look forward to delivering innovative new products in the coming months. Our Americas region delivered very strong performance in Q1 with sales up by 12% despite the significant decline in sales in product lines that we earned the process of exiting. While we will plant for sustained growth of this magnitude, we believe the outlook for our business in the Americas is as strong as it's been in many quarters. And let me give you an update on our Harmony Remotes after exploring a number of unattractive offers for this business, I concluded the retaining ownership is in the best interest of our shareholders. I was pleased to see a return to growth in the remotes category in Q1, although we are planning for that growth to be sustained. Our short term strategic priority with Harmony is to improve profitability over the course of the fiscal year. Speaking of profitability, I was very pleased with the strength of our gross margin Q1, especially given the quarter's retail product mix, two of our fastest growing relatively low margin categories, tablet accessories and wireless speakers significantly grew their share of the overall mix. The dilutive impact on gross margin from this mix shift was offset by a number of factors. With one of the most important being product cost reduction that we delivered across all of our PC related products. Profit maximization is our primary goal in categories such as mice, keyboards, webcams and PC speakers. And our Q1 results demonstrate the progress we are making. The performance of our LifeSize division is falling short of our expectations during the last year. With this Q1 being a particularly disappointing quarter, LifeSize is facing a variety of challenges including a changing industry landscape. The impact of an evolving product line and weak execution, under the circumstances, I determined that we need to make a leadership change. We've initiated an external search for a new LifeSize CEO, while we conduct our search Craig Malloy, who served his LifeSize's CEO, from its inception through the end of 2011 will return in marketing capacity, Craig has been a member of LifeSize Supervisory Board from last 18 months and is well positioned to provide interim leadership. We believe we have the right strategy for LifeSize. We have a combination of compelling new room systems, scalable and rich software infrastructure and a promise of a highly differentiated cloud solution. As we execute our strategy, our top priority for this business continues to be giving LifeSize the profitability by the end of fiscal 2014. I'm pleased with the momentum we established in Q1 and with the [proof points] in our turnaround strategy is working. We're on track to deliver against our fiscal year 14 targets of $2 billion in sales and $50 million in operating income. Our plan to achieve our operating income target as soon as we will opportunistically manage the mix between the gross margin and operating expenses, if we see gross margin upside, we may increase our spending to drive sales growth. If our gross margin tracks closely with our 34% outlook, we will manage our spending accordingly. Improving our profitability remains my top priority and I look forward to updating you on our progress in the coming quarters. Joe and I are available now to take your questions. Please follow the instructions of the operator.

Thank you. (Operator Instructions) Your first question comes from the line of Alexander Peterc, Exane BNP Paribas. Go ahead, please Alexander. Alexander Peterc - Exane BNP Paribas: Yeah. Hi. Thank you for taking the questions and congratulations on a very solid quarter. I'm just wondering, the gross margin mechanics, can you maybe give us a little bit more granularity here. Was this down to mice and keyboards doing just fine versus plan, steeper declines or did you have a good progress in profitability in lower margin categories, such as the new growth ones, tablets, keyboards and wireless speakers?

Yeah, the improved in the gross margin is accommodation couple of different things, we certainly did have better gross margin, we've had in prior year and most of our categories and in pointing devices, keyboards and desktops we had a significant improvement, as we planned. So I think it's a little bit of everything and we saw improvement across both the growth categories and the nine growth categories and we felt good about where we are in gross margin. I wouldn't get over the tips of our skis we say in the U.S., I mean too excited about that because, we will certainly manage the gross margin operating expense equation going forward to make sure, we deliver our profitability commitment. Alexander Peterc - Exane BNP Paribas: Okay, thanks very much.

Thank you. The next question comes from the line of Paul Coster of J.P.Morgan. Paul Coster - J.P.Morgan: Yes, thanks. Bracken, you seem to made a big stride in the right direction here, but you seem a little hesitant to read too much into it, why not, if your product cadence is accelerating why should we really be too concerned, it moving forward and going back to margins, why should they dip significantly from here?

Well, I think margins aside, when I look at the top line, and I think we basically shifted our seasonality from Q2 to Q1 with our new product launches in Q1, those product launches probably would have happened in Q1 and for some of those would have happened in Q2 in prior years. We also have a factor that is the unknown the launch of the new iPad in Q2. So when you put those together our expectations would probably be down in top line in mid single digits could be couple of points higher than that depending on the iPad launch in Q2. So I think if you look at us at the first two quarters taken together that's probably the right way to think about the picture and if we start hesitating but we are not, we are very confident and we feel very good about the first quarter. But I want to make sure that we look at this as the first half, not just the first quarter. Paul Coster - J.P.Morgan: Can you just give us a little bit of color around the tablet accessories, why do they make such a huge leap forward versus this time last year?

Yeah you know this time last year you know, we told you that we were actually, we had just, we are just starting to get into tablet accessories at all. We had a couple of products out there that frankly weren't home grown products, we had just launched the Ultrathin Keyboard Cover and now that's become our number one product and the company is doing very, very well. You will remember last quarter we launched I think in the last quarter or beginning of last quarter we launched the Mini and now this quarter we expanded that into folio covers with keyboards and even some regular folio covers without keyboards. So we've expanded our line up pretty significantly now. We are now attacking a broader portfolio of the market and that's why you are seeing significant growth.

Next question comes from the line of Michael Foeth at Bank of Vontobel. Michael Foeth - Bank of Vontobel: Just a question regarding remotes, you decided to keep it now but you haven't adjusted your guidance for it. Now, I'm bit puzzled why it's a significant revenue contributor over the full year? So is it included in guidance or not?

Yeah, Michael this is Joe. When we set out at the start of the year and provided our guidance while we intended to sell the Harmony business, we didn't know when that would happen or even if it would, so we assumed we have it for the full year. So it's been there from the beginning. Michael Foeth - Bank of Vontobel: Okay, good that's clear, and can you comment whether the remotes business right now is profitable. I mean, you said you are focusing on profitability improvements there but is it profitable or not?

No. It's not profitable and on a fully loaded basis not profitable and our objective is to be profitable as we exit the fiscal year. I want to add a couple of more things about the remotes decision because I think it's important that investors understand that we went into, we had every interest in selling. As I said in opening remarks, we decided not to because frankly the offers just weren't very good. In the meantime, we launched new products. They've done very well. We got new distribution. It looks very promising and we've now after the decision to keep it, we separated key parts of that business so that it's not a distraction on our primary growth focus areas. So I feel good about the decision. I think we're in a good spot and I think we can make this business profitable and ultimately turn it back into something interesting from a growth standpoint potentially. Michael Foeth - Bank of Vontobel: Okay, excellent and then just a last question. Can you update us your search for a CFO?

Yeah, absolutely. You know, the search continues. I don't have names to mention on the call. But we're certainly on the right path and I think we're in a good spot and we'll deliver against the original timing that I mentioned I think in the first call, which is I think it often takes four to six months, I think we will certainly do that.

Your next question comes from the line of Andreas Mueller at Zurcher Kantonalbank. Andreas Mueller - Zurcher Kantonalbank: I've got two questions. Can you give us an update basically on the measures and the success for these measures to get to your medium targets and later on and which measures are still a challenge and then on which year may be more than on track? Then the next question would be on the cost savings programs, are there still any costs to be ahead which we could implement in our models from these cost savings and the last one are there still any restructuring charges ahead of us?

Okay, thanks Andreas, but let me answer this, but first in terms of measures for how we look in terms of not assuming you're referring to the Analyst and Investor Day kind of fiscal year ‘15, fiscal year ‘16 number we've put out there. We are one quarter into a long path. So it's way too early to give you any sense for which measure we forget about which measure we've done. I would just say Q1 we feel good, it indicates we are track, but it's too early to go back and reflect on what's specifically might be different from measures nothing so far. The second thing on cost savings, I think we certainly do have a lot of cost savings completed. They are already in our P&L now you are seeing some reinvestment into the OpEx as we increased the number of activities we had in Q1 versus what we normally do. Those cost savings will show up as we go through the year in OpEx. We continue to have aggressive cost savings in all of our portfolios. And we always have and we are going to do, we continue to do that going forward. In terms of restructuring, this quarter we took advantage or in Q1 we took advantage of an opportunity we saw where we really needed to reduce cost because something wasn't performing well enough and we'll continue to do that if we see an opportunity going through the year. But I don't have any specific plans to mention now.

Thank you. The next question comes from the line of Andrew Humphrey at Morgan Stanley. Andrew Humphrey - Morgan Stanley: I see growth has been very strong in some of the growth areas that you called out. I think what I wanted to ask was whether you kind of been reluctant to highlight, I see a very strong revenue performance in some of the traditional areas that we might view as being managed through cash, I mean you had pointing devices flat year-on-year, keyboards looked better than normal seasonality. So what I wanted to trying to establish was whether do you think we're seeing a bottoming or at least a kind of stabilizing of revenues in those legacy, but to a more conventional segments or whether this quarter was also the result of just a particularly strong product offering in those areas and if that might normalize again over the next few quarters?

Yeah. I would say, first I it's probably best to take them in total and then go through some of the individual categories. If you started totaling of the PC market was down 11%, that's pretty close to what we expected to be. You might remember when we started, we said we expect the PC platforms to decline globally by about 10% over the next three years and that was more conservative and continue to be more conservative than the big kind of experts in the fields would say. But they were just their expectations for this year, I think they probably have more at least for this fiscal year too about that number, I think they are expecting about that kind of decline rate. So that does have an impact overall. Now we also said that we expect to be in a position where we could or should even grow shares in some of those categories that supports us. So PC accessory, you are seeing that in pointing devices, you are seeing it in keyboards. They are two different stories there. In pointing devices, as we said we have a good product offering, we continue to make sure we have a very competitive product offering. At some point, we won't build a game chair anymore, but we think we can continue the game chair here for the foreseeable future. And in the keyboard segment, you might remember that really underneath that two cities I mean on one side, you got a keyboard combo category, it looks a lot like pointing devices. On the other side, you have a keyboard segment its now going in delivering and supporting smart TVs and PCs being hooked up to smart TVs that's growth. So that combination is giving us growth in Q1, but if you look at Q4, we have growth in Q4 too. So we expect that to continue. Andrew Humphrey - Morgan Stanley: May be one follow-up if I may, your previous comments highlights some increase in inventories at channel as in Asia and the US. Is that also contributing to maybe you are starting more cautious outlook comments for the second quarter?

No, not at all. You know, that has really nothing to do with that. At the end of the day we are really looking at our Q1 and saying we shift the seasonality. So we did think in Q1 that we haven't done in the past. We feel good about them. The early feedback in terms of real sell-outs sell through it looks good. So there is nothing about that causes us to pause at all.

Your next question comes from the line of Tavis McCourt at Raymond James. Tavis McCourt - Raymond James: Bracken, couple of questions, it looks like in a lot of the product lines the revenue growth was quite a bit better than the unit growth and I am wondering are you guys taking pricing action on an individual level or are kind of re-jiggering the product mix and that ASP increase is more related to kind of product mix and actual price increases? And then secondly in those more traditional categories mice and keyboards, was there anything in there in terms of new products this quarter that were pushed ahead or is the new product introductions that were pushed into the first quarter here more related to the growth categories?

Let me take that one first. Yeah, we didn't push or pull anything forward from Q2 into any of those categories, so there isn't something we pulled forward from Q2 that we dumped, that we normally would have done before going into Q1 that we normally would have done in Q2 in those categories or in any categories. So the answer to that is, no, there's nothing unusual going on there. In terms of specific products, you know we don't, so in other words I'll get to the rest of the story, we don't have any specific products that I would say you know we launched that are really driving that with the exception of we've done very well in the TV area and that was the product we launched last year and we expect to continue to do well there. On your ASP question, it's a good question. And you know I would say there are two things going on there. First, we've done a few selective price increases to offset currency in Japan, but that's really minor. Overall, no, we are not increasing pricing. We are seeing improvement on product mix and that's driven off a couple of things. First, you remember we've been talking about winter a product line simplification where we got rid of some of our worst performing products at the low end of the market. Guess what, that's now showing up. And the second part is we are focused and we continue to focus on the medium and high end of our lineups. So this you know we like that profile, it's pretty strong this quarter, we will stay that strong, I don't know, but it is, we expect to continue to see an improvement in ASP.

Your next question comes from the line of John Bright at Avondale Partners. John Bright - Avondale Partners: Bracken, you are expressing confidence in the sell-in being higher than sell-through was the concern. What gives you the confidence?

You know, I guess, at the end of the day, we have a decent glimpse in to what's happening at the retail level. And so far we see good signs. I'll give you an example. Our tablet, keyboard business we launched a lot of new products this quarter. The first round of markets that we saw was a 12 point increase. That's real sell-through. So that's what we expected, that's what we're getting and I think that gives us confidence that we're not going to see a channel inventory issue at all. In fact, I would say we're in pretty good shape from that standpoint. John Bright - Avondale Partners: On Harmony, you talked about improved profitability as a goal. Can you talk about how you are going to go about accomplishing that?

Yes, we've already started it. So we did, we reduced the overall operating expense on that business pretty substantially and we will continue to little away at that as we go through the year. You may remember that part of our overall strategy in the portfolio was to introduce or eliminate the low, especially the low end of that lineup up to about the midpoint and we've done that and you can see it in the ASP. So those two steps, along with the continued very focused innovation path puts us in a pretty good spot I think. I would remind everybody on the call, when I said we're going to exit Harmony, I said, one thing. I said, boy, once our business is a business and in many way, we should love. It's got leadership market share by far. It's got intellectual property that nobody else has, which is really impressive. It got technology that is really the state-of-the-art and we are ahead of those we feel, so it's got a lot of things to love and a brand by the way is the leader in this category. So there is a lot of things about that business that are very strong getting it back to a level where it is actually profitable is step one, but there might be a step two and step three beyond that. Right now we are very focused on profitability. John Bright - Avondale Partners: Craig Malloy's return as the new head of LifeSize, is there a timeline for turnaround in that business, it's been struggling for a bit now, kind of give us your thought process on what we should expect as far as that turnaround concerned?

Yeah, we haven't changed our expectation, we announced that our commitment to stay in the LifeSize business and we talked there about the strategy we still do. We still stay committed to the timeline for getting the EBITDA positive as Q4. So that's our game plan and we are excited about having Craig back in even for an interim period and yes a little change there. John Bright - Avondale Partners: Looking forward on new products, have you identified organically or through M&A new products, either categories or potential products that would be a good fit going forward that can help drive growth?

The Logitech brand and the engineering and technology capabilities within Logitech give us more opportunity that we can ever do. Right now we are very focused on the pieces that you see on the board, so we're very, very focused there, but we are looking at other things, so that we announced this quarter, we bought a very small smartphone cover business. It came with a couple of designers and a little design that was an experiment to see how that market works and we are testing and understanding that now. We are also looking at other things all the time and we certainly are looking at some other categories, but I can't talk about it now and I don't want to get anybody excited about that. I think we're going to continue to learn, we'll take our shots when we see a really good strong opportunity, where risk manage them well. And in the mean time, we're going to make sure that we transform the business in the categories that are very obvious to you.

Your next question comes from the line of Andy Hargreaves of Pacific Crest. Andy Hargreaves - Pacific Crest: Just wondering if you dig into the kind of more frequent product launches a little bit more and specifically I guess what are the risks to that strategy obviously just the seasonality a little bit. Is there, well just talk about the puts and takes of that a little bit?

Sure. I think it's probably a little bit deceiving to say that we're shifting, we're changing something, we're actually adding something. So we're not changing our strategy within our core PC peripherals business, it's very much the same. What we're doing is we're adding a strategy to attack the new business area that we'll probably start now. So especially tablet accessories, that's the business that's fast, it's there are frequent tablet upgrades and we need to be in the market, we need to be playing aggressively there and that's our game plan. In terms of risk creates for us, that it is a very different business. So the life of a tablet is significantly, the peripheral, our tablet peripherals so far have been form fitting, and so the life of a tablet is a shorter shelf life. So we have to manage our phase-ins and phase-outs of new products much better. I would say we're learning how to do that, we're getting better and better and I think it's very exciting because that we learned how to do that better and better, we're beginning to apply to the rest of our business. So product line simplification will have to happen once every three or four years in that business. So, yeah, I mean, I could give you more color than that, but I would say higher frequency of tablet accessories for example on choose is something you can expect from us, but we are not going to go crazy with it. We are going to focus on making sure we launch really great products with system on the frequent season the market dictates. Andy Hargreaves - Pacific Crest: Can you just take us to your commentary that the vast majority of the tablet accessory purchases are made essentially at the time of the tablet purchase?

I am not sure that is true, it is pretty, it's really a mix bag. Andy Hargreaves - Pacific Crest: Okay. The only other question I had was a little bit more on the gross margin, should we take then that you guys are really good about where you are in the quarter, it just the matter of imagining the cost and kind of the remote business, tablet business are you guys comfortable with where the margins are and it's just a matter of driving volume there or are you trying to improve margins there as well?

So Andy, I think on the latter point there, one of the things that we talked about on our Investor Day was that the tablet accessories have the gross margin that's little lower than certainly the PC related categories. Our goal is to bring that up over time. We actually are making good progress on that, we did in Q1. So looking just the PC related categories where our margin improved was often tablet accessories. So that's a category where we see our opportunity to continue doing that going forward. It's obviously never going to look like mice, but by the same token we think it could be a very, very profitable business for us. So yes, it can be a combination of PC improvements on the PC peripherals which is in line with what we said about our goal of maximizing profitability in those categories combined with continued improvements with the faster growing areas like tablet accessories.

The next question comes from Felix Remmers at Credit Suisse. Felix Remmers - Credit Suisse: Yes. Hi, thank you for taking my question. Only two quick questions here I was wondering if you want to share sales growth CAGR guidance for the remote business as you did for all the other product categories during your Investor Day. And then secondly, I was wondering how confident are you to reach your OpEx guidance for the year of $630 million?

Let me answer the latter first. So our OpEx guidance as you put it for the year, yeah we are going to be looking at managing OpEx and gross margin in a coordinated way as I said in my opening remarks. So our commitment is we really will make sure that we deliver the guidance of $50 million in profit. So if we have higher gross margins, we may invest more in OpEx to see if we can manage the top line better. If the gross margin comes in about where we gave in the original guidance our OpEx we will make sure we deliver the OpEx commitment. On the remotes, yeah that's a very fair question. We're not going to give you a specific number today, but what I would say is we don't have an expectation of growth this year. We should see -- I expect we'll see some decline this year. We are making sure that we've got the right products in the right places, so we can manage the appropriate level of intensity in merchandising and sell-through. So we're looking at that right now really, we're going to try to make sure we manage this to improve the profitability equation and get this business in position where we want to grow it. So it got to be profitable (inaudible). And so, yeah, I wouldn't expect growth we'll probably see some decline there this year and that will position ourselves for later. Felix Remmers - Credit Suisse: Thank you, very much.

The next question comes from the line of Vikram Kumar at TT International. Vikram Kumar - TT International: Yeah, hi there. Thanks for the time. Just on that point you just made about OpEx. I'm a bit confused about the strategy on that because if you look at OpEx sales basically, whether it's because of LifeSize or because of operational gearing effect, that's the biggest hit to the margin we've had over the last few years. If we now go to a point where a more efficient way we spend R&D and what we get product release right we move towards mid high end and the gross margin blends it up. Why should that necessarily then involve, you guys having any discretion, redecision to reinvestment back in to OpEx? Why don't we let the natural effects of improving gross margin in hot topline defense in some areas attack, drop through to even get that operation average back on the OpEx and sales because it sounds to me as if with your basic capping upside -- if we do a good job, we'll reinvest back in even though it was hard work getting there and if we're doing a good job, well, okay, fine, then maybe we should take some costs out and see what is trade off there?

Yeah, I think that's a very fair interpretation, Vikram. Let me be really clear, any increase or change in our commitment, our guidance for OpEx because we saw how our gross margin would be a temporary thing. So when we talked about fiscal year '15, fiscal year '16 guidance, we're very committed of that and we think we can deliver that. As you might guess, we're always looking at more cost savings opportunity in every line but especially in OpEx. So we're going to continue to guide, but in the short-term basis, we're certainly going to look at whether we should be investing more to drive the topline better and as we see stronger gross margin, we may do that but don't misinterpret it. It's not a conclusion that we should have a higher levels spending in OpEx in the fiscal year '15, fiscal year '16 guidance we gave at Analyst/Investor Day. Vikram Kumar - TT International: Yeah, ultimately we're still talking about business that even your targets we're talking about low mid-single digits even marginal and this year with that the $50 million or $1 million plus EBIT, we were expecting as very low single digit, so from my point of view if we do a good job defending revenue better than the (inaudible) expect, and we get the added kick of the gross margins whether it's mix or price whatever it is still tightening you want to see that dropping through given I guess the inefficient on OpEx to sales my view point more of a statement than a question (inaudible).

I appreciate your view. I guess the thing I would add is if you look at the spilt of our OpEx, G&A, R&D and sales and marketing where you see that, where you are seeing it right now is the sales and marketing line, that's the discretionary line. We make choice and to your point we can choose to do or choose not to do it. It really will be dependent on whether we feel like it's merited over the next quarter two or three. But I think over the mid or long term our expectation is we are going to deliver the kind of OpEx that we should be delivering for business the size we are. So if you look at our Analyst and Investor Day commitments I think those are the kinds of levels of OpEx we think we should be.

Thank you. As there are no further question, that concludes our conference call for today. You may now disconnect. Thank you