Earnings Labs

Akamai Technologies, Inc. (AKAM)

Q1 2016 Earnings Call· Tue, Apr 26, 2016

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Transcript

Operator

Operator

Good day, ladies and gentlemen, and welcome to the Akamai Technologies Incorporated First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded. I would like to introduce your host for today's conference, Mr. Tom Barth, Head of Investor Relations. Sir, please go ahead.

Tom Barth - Head-Investor Relations

Management

Thank you, and good afternoon for joining – thank you for joining us on Akamai's first quarter 2016 earnings conference call. Speaking today will be Tom Leighton, Akamai's Chief Executive Officer; and Jim Benson, Akamai's Chief Financial Officer. But before we get started, please note that today's comments include forward-looking statements, including statements regarding revenue and earnings guidance. These forward-looking statements are subject to risks and uncertainties and involve a number of factors that could cause actual results to differ materially from those expressed or implied by such statements. Additional information concerning these factors is contained in Akamai's filings with the SEC, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking statements included in this call represent the company's view on April 26, 2016. Akamai disclaims any obligation to update these statements to reflect future events or circumstances. As a reminder, we will be referring to some non-GAAP financial metrics during today's call. A detailed reconciliation of GAAP and non-GAAP metrics can be found under the financial portion of the Investor Relations section of our website. And with that, let me please turn the call over to Tom. Frank Thomson Leighton - Chief Executive Officer & Director: Thanks, Tom, and thank you all for joining us. Q1 was a very solid quarter for Akamai and both the top and bottom lines. Revenue in the first quarter was $568 million, up 8% year-over-year, and up 9% when adjusted for foreign exchange headwinds. Excluding the contribution from our two largest customers, revenue in the first quarter was up 15% over Q1 of 2015. Our strong revenue achievement was driven by the continued robust demand for our security services, which grew 47% in constant currency over the first quarter of last year, as well as solid performance…

Operator

Operator

Thank you. Our first question comes from the line of Mark Mahaney with RBC Capital Markets. Your line is open. Please go ahead.

Mark Mahaney - RBC Capital Markets LLC

Analyst

Thank you. You talk about the growth in the Media segment of about 11% ex the two largest contributors. Could you talk about the trend in that growth ex those two largest contributors and how we should think about the sustainability of that growth? Is that a reasonable way to think about that segment ex the two large players going forwards? Thank you. James Benson - Chief Financial Officer & Executive Vice President: Good question, Mark. That – actually that growth rate is consistent with the growth rates that we saw in Q4. We have kind of been in the double-digit range for a while. Sometimes it will be a little bit higher than that. As we shared in the past that sometimes growth rates in the Media business are affected by large software releases, a gaming release, or things of that nature. But I think generally speaking, we expect that we can probably operate in the low-double digits for the Media Delivery outside of those top two customers.

Mark Mahaney - RBC Capital Markets LLC

Analyst

Thank you very much.

Operator

Operator

Thank you. And our next question comes from the line of Rob Sanderson with MKM Partners. Your line is open. Please go ahead.

Rob J. Sanderson - MKM Partners LLC

Analyst · MKM Partners. Your line is open. Please go ahead.

Thank you. Couple of – one for Jim and one for Tom. Tom, a question on cost reduction, many years of high growth and traffic volumes along with price breaks that you have been passing along, but how much has the company been able to cost reduce traffic delivery over the years? Is there a way we could sort of compare cost per bit today to, say, five years ago? And I would think the past is something like Moore's Law, but is there any way you can attempt to quantify that? And how does – do you think this compares to some of the generic CDN or some of the do-it-yourself efforts that you have seen over this timeframe? And then a quick one for Jim. Free cash flow – will Q1 be the seasonal low again this year as in the past or is there something unusual seasonally this Q1 for cash generation? Frank Thomson Leighton - Chief Executive Officer & Director: Yeah. To the first question, we've put a lot of effort in R&D to reduce our internal cost per bit, to deliver more bits per second per CPU, more bits per second per square foot of colo, per kilowatt of power. And then we pass on those savings to our customers. So I think as you look over time, every year we're able to offer significant cost reductions on a per bit basis to our customers. So over five years, the savings are really quite substantial. We are very competitive when it comes to pricing for large-traffic customers, and I think we are very competitive with not only the other CDNs out there, but also the do-it-yourself effort that some of our largest customers have tried to engage in. And you see this where some of…

Operator

Operator

Thank you. And our next question comes from the line of Vijay Bhagavath with Deutsche Bank. Your line is open. Please go ahead.

Vijay K. Bhagavath - Deutsche Bank Securities, Inc.

Analyst · Deutsche Bank. Your line is open. Please go ahead.

Yeah, hi. Yeah, hi, Tom, Jim. Question is on your Security business. We get this question from clients a lot, saying would the law of large numbers start impacting the Security business, because it's primarily selling into DDoS, and web application security versus the broader security opportunity. I'd like to hear your thoughts there. Thanks. Frank Thomson Leighton - Chief Executive Officer & Director: Well, I'm not sure what you mean by the law of large numbers, but the attacks are certainly growing in size and sophistication to the point now where any of the traditional defenses simply don't work. You can't defend yourself by buying boxes and putting them in your data center. You can't even defend yourself by buying a clean pipe from a carrier simply because of the scale of the attacks. And that's why Akamai has been uniquely able to defend a lot of the world's major enterprises against the largest attacks out there. In addition, we're able to defend against the attacks that try to deface or corrupt a website, change the content in a way to embarrass the website owner, and also to – we can defend against the attacks where you try to steal data from the web application, like a credit card, or information about a transaction. Going forward with our Enterprise and Carrier Division, we are developing products that will protect enterprise employees, for example, from phishing, malware kinds of attacks, or enterprise data exfiltration attacks. So it's a – I think a very exciting future potential for us in security.

Vijay K. Bhagavath - Deutsche Bank Securities, Inc.

Analyst · Deutsche Bank. Your line is open. Please go ahead.

A quick follow on, Tom. Is corporate video – you know, we all in big companies have these all-hands meetings, town-hall meetings where tremendous video volumes get generated in corporate networks, which is quite expensive. Would Akamai have a play there in kind of better managing or making corporate video and enterprises more efficient? Thanks. Frank Thomson Leighton - Chief Executive Officer & Director: Yes, absolutely, and in fact we have a product today through the Octoshape acquisition that supports corporate videos to off-load their private network, or their corporate network, and so it gives a very high-quality experience, very secure without flooding the branch office network.

Vijay K. Bhagavath - Deutsche Bank Securities, Inc.

Analyst · Deutsche Bank. Your line is open. Please go ahead.

Thank you.

Operator

Operator

Thank you. And our next question comes from the line of Colby Synesael with Cowen & Company. Your line is open. Please go ahead. Colby Synesael - Cowen & Co. LLC: Great. Thank you. Two questions if I may. The first one, I just have a point of clarification on guidance. I just want – I thought I heard you say that you thought that the top two customers could further decline in the back half of the year. I think the previous expectation was that they would trough at around 6% or – 6% or greater in the second quarter. And I just wanted to clarify what I thought you might have said during your comments on guidance. And then I have a follow-up question. James Benson - Chief Financial Officer & Executive Vice President: Yeah, so on the guidance that – I'd say we're probably appropriately being cautious, to be frank that the – we have good visibilities within the quarter for these top two customers. I would say the visibility beyond the quarter is less, and so what we're trying to do is be cautious in what we're telling you that we certainly expect from Q1 to Q2, as we told you last time, that revenue volumes would decline for these top two customers. And I think what we're saying is that we're not 100% sure on the back half of the year, so we're being a little cautious in our projections that it could decline further. There are things that could stabilize it. There are things beyond that depending upon different features and capabilities for these two customers that could cause it to grow as well, but I'd say what we're trying to provide you is a level of cautiousness. And that's the way we're looking at it internally. Colby Synesael - Cowen & Co. LLC: I guess to some degree that implies that these customers are on some form of month-to-month or short-term contract that they have the ability to turn on and turn off service quarter-to-quarter. Is that a fair interpretation? James Benson - Chief Financial Officer & Executive Vice President: No, it's not. These customers are on long-term contracts, but these contracts are structured in a way that volumes can ebb and flow from period to period. There are kind of minimums that they need to hit, but the volumes can certainly fluctuate to a point. But these customers are on long-term contracts. They are not on month-to-month contracts. Colby Synesael - Cowen & Co. LLC: Okay, great. And then just my follow-up question, I think you had been looking for a head of sales for your Web Division, and I wondered if there's been any update on that? Thanks. Frank Thomson Leighton - Chief Executive Officer & Director: We are in the process of a search there. So, no update. Colby Synesael - Cowen & Co. LLC: Okay. Great. Thank you.

Operator

Operator

Thank you. And our next question comes from the line of Sterling Auty with JPMorgan. Your line is open. Please go ahead.

Sterling Auty - JPMorgan Securities LLC

Analyst · JPMorgan. Your line is open. Please go ahead.

Thanks, guys. Maybe just following up on the Media side, taking the top two customers. Curious about the visibility, you've often talked about talking with the customers around timing of software updates and different items that might move the needle in terms of volume. How would you say your visibility in the rest of the customer base looks at this point of the year as compared to last year? James Benson - Chief Financial Officer & Executive Vice President: Yeah. I think honestly it's similar to our top two customers as well. Our visibility within the quarter is certainly a lot better than our visibility for the remainder of the year. There're certainly things that we know that are going to occur. Things like the Olympics, things like presidential debates and things of that nature that will cause volumes. And there are certainly staged rollouts of software releases and things of that nature, but I'd say we have very, very good visibility within a three-month window. It just lessens in the back half and that's not just for the top two customers. In general, that's just the nature of the Media business.

Sterling Auty - JPMorgan Securities LLC

Analyst · JPMorgan. Your line is open. Please go ahead.

Got it. Thank you.

Operator

Operator

Thank you. And our next question comes from the line of Jonathan Schildkraut with Evercore ISI. Your line is open. Please go ahead.

Jonathan Schildkraut - Evercore ISI

Analyst · Evercore ISI. Your line is open. Please go ahead.

Great. I'm going to try to sneak in two questions too. First, I was just wondering if you'd give us a little bit more color on international. It's obviously been growing very well and it's becoming a much more meaningful piece of your business. You know, it's harder to have visibility into the competitive landscape drivers, et cetera, as we look into the some of the international markets, and I was hoping you might spend a second talking about that. And then I'm curious, because we've been doing a lot of work on Internet of Things. And the more I look at it, particularly around connected car, driverless car, things that require performance sensitive information to make their way into the network, the Internet of Things is looking more and more like a DDoS attack from my seat. And I'm just wondering about your perspective for the role of Akamai and world of Internet of Things? Thanks. James Benson - Chief Financial Officer & Executive Vice President: Let me start, Tom (sic) [Jonathan] (36:46) with obviously your comment on international growth. Our international growth, you're right, has been very strong. We grew 27% in constant currency in Q4. It's growing particularly well in our Asia Pacific geography. So we've seen very, very strong growth across our Asia Pacific markets. And as you know that when we began investing in incrementing the sales force, we were investing more in our sales resources outside the U.S. than actually in the U.S. And as we told you in the past that it takes time for a rep to ramp to productivity. And so I think you're starting to see the benefit of the investments that we've made. And so we're very pleased with that. From a competitor landscape perspective that there's still kind of broad global competitors, that you know who they are and then there are local competitors in different markets. But I'd say that we have fared very well and I think there's a significant opportunity to continue to grow internationally faster than actually in the U.S. Frank Thomson Leighton - Chief Executive Officer & Director: And to the IoT question, the proliferation of devices and the Internet of Things represents really a great opportunity for Akamai. You know in particular, you mentioned connecting cars. We have great relationships with the world's major automotive companies. They are obviously very interested in having fast and reliable communication with their cars and the devices and they are very worried about security, as you can imagine. Not only denial of service, but application layer attacks where somebody might try to gain control of the car, corrupt information on the car, and that's a wonderful opportunity for our security services.

Jonathan Schildkraut - Evercore ISI

Analyst · Evercore ISI. Your line is open. Please go ahead.

Great. Thank you for taking the questions. Frank Thomson Leighton - Chief Executive Officer & Director: Thanks.

Operator

Operator

Thank you. And our next question comes from the line of James Breen with William Blair. Your line is open. Please go ahead. James D. Breen - William Blair & Co. LLC: Thanks for taking the question. Can you just talk about the capital intensity overall, and your team spent a lot of capital in 2015 in anticipation of some of the OTT build-outs. And how that's sort of flowing through the cost structure now and how that would impact spending in the future? Thanks. James Benson - Chief Financial Officer & Executive Vice President: Sure. So on CapEx, you're right that we were above our long-term model in last year, in 2015. We signaled that, that we were about 19% of revenue. It was all driven by incremental network CapEx. You certainly saw for the quarter, that I think $85 million was about 15% of revenue. So I think we're certainly going to be dialing CapEx down in alignment with what we're seeing here, but I expect we'll be back to our long-term model of 16% to 18%. Again, we signaled that if we see demand in the back half of the year that requires us to do more build-out, we'll do that but I expect we should be in the 16% to 18% range with network CapEx, which is the component that has the most variability, dialing back from roughly 10% of revenues last year to probably in the 8% range this year. James D. Breen - William Blair & Co. LLC: Great. Thanks.

Operator

Operator

Thank you. And our next question comes from the line of Mike Olson with Piper Jaffray. Your line is open. Please go ahead. Michael Olson - Piper Jaffray & Co (Broker): Hey, good afternoon. I know you typically suggest that no one major event has an impact on revenue, but isn't there likely to be some degree of favorable impact from the Olympics in Q3, just given the favorable time zone and just increased consumption of these types of events online? And then secondly, you talked a bit about competition earlier. There's been increasing chatter in recent weeks on competitive threats from Google and other players in the space. Can you just give us your take on what we're seeing there and if anything's changing in your view? Thanks. James Benson - Chief Financial Officer & Executive Vice President: Sure. I'll take the first one and then Tom can comment on the competitor landscape, but yeah, I think we definitely said historically that there isn't any one event that is a significant needle-mover on revenue in a quarter. We've never said that we don't garner revenues from those events. And certainly events that last over multiple days, generate more revenues than events that last for a day or a few hours. So you will definitely see revenue volumes as a result of the Olympics in our results, so you will see that. But again, it's not going to be a significant needle-mover over – I would say very, very large software updates tend to be more of a needle-mover than an event like that. Frank Thomson Leighton - Chief Executive Officer & Director: Yeah. In terms of competition, I don't see any real change in the landscape there. You're right. And you mentioned there's been chatter about Google and so forth, but that's I think what it is. The Google service is designed to provide delivery for applications that are on their compute and storage infrastructure. In that regard, they're completing with AWS and Azure, for example. And we really don't see real impact from that. As you know, we have dozens of competitors and always have. And we differentiate ourselves based on our level of performance. So if you want your applications to be faster, whether you're on Google, Azure or AWS, you would use Akamai to accelerate those applications. If you want your applications to be secure, wherever you have them hosted, you'd use Akamai Kona Site Defender and our Prolexic Routed capabilities and that will protect you from DDoS attacks and application layer attacks. And if you want your video and media delivered with very high quality, whether you're using any of those cloud services to store the content or not, again you'd use Akamai to do that delivery for you, to get the high-quality video experience. So no fundamental change in the competitive landscape at all. Michael Olson - Piper Jaffray & Co (Broker): Thank you.

Operator

Operator

Thank you. And our next question comes from the line of Siti Panigrahi with Credit Suisse. Your line is open. Please go ahead. Sitikantha Panigrahi - Credit Suisse Securities (USA) LLC (Broker): Hi, guys. Thanks for taking my question. I just wanted to dig into your enterprise security business, the Enterprise Division now, around $12 million revenue, almost double. And you talked about Bot Manager. So first question is what sort of feedback have you got on Bot Manager? That's pretty interesting product. But also, what's your plan to expand this business? Are you planning to acquire more of this kind of tuck-in acquisition or are you planning to build in-house products? James Benson - Chief Financial Officer & Executive Vice President: Okay. So first let me make it clear that Bot Manager is part of our web security business. And that's in the Web Division. That product is built by the Web Division. And the customer feedback there has been outstanding. The capability to identify the bot type and then tailor the response based on the bot type is really unique out there, and of high value to our customers. We have some customers that see half of their requests are actually from bots, and there's many different types of bots. Some are friendly, some are very much not friendly, and there's those that are in between. So I would say the initial customer reaction is very strong. That is a Web Division product. Now, for our enterprise security products, we don't have any in the marketplace yet. Our first product will be based on recursive DNS. That is the capability that we do have in the market through our carrier partners for home use, and we will be bringing to market for enterprise use later this year. And…

Operator

Operator

Thank you. And our next question comes from the line of Mark Kelleher with D.A. Davidson. Your line is open. Please go ahead. Mark D. Kelleher - D.A. Davidson & Co.: Great. Thanks for taking the question. Just wanted to look at the over-the-top opportunity. It's been a couple of months since your analyst day. We're a couple months further in the year. Can you give us an update on what you're seeing there? I would kind of imply from your guidance on your top two customers that maybe that's still kind of in limbo. But just wondered if you could give us an update on what you're seeing there. Thanks. James Benson - Chief Financial Officer & Executive Vice President: Yeah. The guidance from the top two customers really isn't related to OTT capabilities. I think, in general, there's a lot of interest in the over-the-top space. It was exciting to deliver the first major sporting event in the U.S. in 4K. And that business is growing nicely for us. I don't know of any particular fundamental change in the landscape that would cause a huge overnight increase in traffic, but I expect to have steady and substantial growth over time with over-the-top. Mark D. Kelleher - D.A. Davidson & Co.: So, the top two customers are unrelated to your expectations in OTT? Just to be clear on that. James Benson - Chief Financial Officer & Executive Vice President: Currently, yes. Mark D. Kelleher - D.A. Davidson & Co.: Okay. Thanks.

Operator

Operator

Thank you. And our next question comes from the line of Michael Bowen with Pacific Crest. Your line is open. Please go ahead.

Michael Bowen - Pacific Crest Securities

Analyst · Pacific Crest. Your line is open. Please go ahead.

Okay. Thanks for taking the question. I'm sorry, I got to beat this dead horse one more time, but I'm getting questions over the transom here. So, the 6% for the two DIY customers at the end of Q2, was that a 6% exit rate, or an average for the first half? And then, therefore, are you talking about potential decline from an average 6% or an exit rate 6%? James Benson - Chief Financial Officer & Executive Vice President: Yeah. So, 6% is – we shared that in Q4 that what we had said was that these two customers combined used to be about 13% of our revenues, and they have been declining. And we said that we expected that they'd probably decline to about 6% of our revenues. Now obviously, a percentage implies that you know what your other businesses are going to do. So, to some extent, there is a little bit of variability in 6%, whether it's 6%, whether it's 5%, whether it's 7%. But we expect that the revenue volumes will decline in Q2. And based on this guidance that we provided at the midpoint, that is roughly 6% of their revenues in the quarter.

Michael Bowen - Pacific Crest Securities

Analyst · Pacific Crest. Your line is open. Please go ahead.

Okay. In the second quarter? James Benson - Chief Financial Officer & Executive Vice President: That's correct.

Michael Bowen - Pacific Crest Securities

Analyst · Pacific Crest. Your line is open. Please go ahead.

Okay. And then the back half could be, conservatively, a little lighter than that? James Benson - Chief Financial Officer & Executive Vice President: That's right.

Michael Bowen - Pacific Crest Securities

Analyst · Pacific Crest. Your line is open. Please go ahead.

Okay. Very clear. Thank you.

Operator

Operator

Thank you, and our next question comes from the line of Michael Turits with Raymond James. Your line is open. Please go ahead. Michael Turits - Raymond James & Associates, Inc.: Hey, guys. Jim, also, can you comment on how you said that you would be limiting investments at this point? It does seem like the OpEx guide is pretty light even with EBITDA margins where they are. James Benson - Chief Financial Officer & Executive Vice President: Yeah. I mean, we continue to make the appropriate investments in the business that we think are necessary. But, Tom and I are managing the company prudently. And we think that we want to manage a company kind of in the low 40%s EBITDA range, which means that we're scaling back investments. We're not scaling back investments that would jeopardize future growth and scale for the company, but, yeah, we are scaling back the level of investments, relative to what we were doing in kind of prior years, and you can expect that we'll continue to do that. But, again, we're still making very targeted investments. We're making targeted investments in areas to help scale the network. We're making targeted investments in areas of R&D and things of that nature. So, we are still making investments in the business, but we're just making them at a slower pace. Frank Thomson Leighton - Chief Executive Officer & Director: Yeah. And to be clear, we are growing head count and growing the business. It's just not at the rapid pace that you saw over the last few years. So, there's still plenty of growth at Akamai, in the investments. Michael Turits - Raymond James & Associates, Inc.: I guess, the reason for asking is, it seems, especially with everything you did in NAB just having finished and the BOCC product having rolled out. It seems as if there's a lot that can be done in terms of end-to-end value creation for broadcast. Areas you've dabbled in, I guess, well within, had some participation in the past, whether it's in ingestion, transcoding, digital rights management, content management areas of the broadcast supply chain. And wondering whether or not that's important to invest there now, and if you're ramping that up at all. Frank Thomson Leighton - Chief Executive Officer & Director: Yeah. Now, we are continuing to make investments. That is one area that's very important for us. And we believe there is a very large future in over-the-top video. And so it makes perfect sense to invest in those areas, and we continue to do so. For example, the BOCC is an area that we talked about. Also, obviously, investing in web security, obviously investing in enterprise and carrier products, particularly enterprise products for networking and security. And you will continue to see the investment and growth there. Michael Turits - Raymond James & Associates, Inc.: Thanks a lot, Tom. Thanks, Jim.

Operator

Operator

Thank you. Our next question comes from the line of Heather Bellini with Goldman Sachs. Your line is open. Please go ahead. Heather Bellini - Goldman Sachs & Co.: Great. Thank you. I had a couple questions as well. I guess the first one is, I was wondering, you mentioned software downloads as a big driver. And I'm just wondering, I mean, we saw some of the very large software download last September get about three-quarters smaller than they were in the past. And there seems to be a big focus on people reducing file sizes, there's been a lot of improvements in encoding. I'm just wondering how you think about those initiatives, and how that might impact traffic volume that you might see going forward versus when the files were much larger in the past? And then I had a follow-up question. Frank Thomson Leighton - Chief Executive Officer & Director: Yeah. I think certainly for traffic, the software downloads come in varying sizes. You're right, that in some cases, they're smaller for the reasons that you outlined. In some cases, they happen more frequently. So they're smaller, but happen more frequently. And it's not just software updates that are drivers of traffic volumes, video delivery is a driver of traffic volume, social media is a driver of traffic volumes, gaming is a driver of traffic volumes. So, software download activity is kind of but one of several growth drivers on traffic. And you'll see variability in software traffic volumes, based on frequency and size. And, what was your second question? Heather Bellini - Goldman Sachs & Co.: Well, I mean, I guess just to follow-up on that. Encoding was the other thing I mentioned. And Facebook's Head of Network Engineering actually spoke at F8, and mentioned that because…

Operator

Operator

Thank you. And our next question comes from the line of Ed McGuire with CLSA. Your line is open. Please go ahead.

Ed Maguire - CLSA Americas LLC

Analyst · CLSA. Your line is open. Please go ahead.

Hi. Good afternoon. I'm intrigued by the role that your software on 100 million endpoints is playing in your ability to rein in costs across the network. Could you talk about what you are accomplishing with that footprint of software, and whether that is actually having the desired impact of helping you rein in costs of content delivery? Frank Thomson Leighton - Chief Executive Officer & Director: Yes. When it is actively used, it substantially decreases our cost. And we passed a lot of that savings on to our customer that's making use of it. And the usage today depends on the customer. Also, it helps us a lot with quality. In fact, we used it in the broadcast at 4K, which is very high quality levels. It really helps to have the client side software to enable that. So, it makes quality better and decreases cost. And when we use it, it's a substantial decreasing cost.

Ed Maguire - CLSA Americas LLC

Analyst · CLSA. Your line is open. Please go ahead.

Great. Thank you.

Operator

Operator

Thank you. And our next question comes from the line of Will Power with Robert Baird. Your line is open. Please go ahead. Will V. Power - Robert W. Baird & Co., Inc. (Broker): Great. Thanks. Yeah. Just a follow up on some of the guidance commentary. Jim, I think you had alluded to limited second half visibility. And I guess, I just wanted to clarify, is that more limited this year, or is that fairly consistent with what you would normally see at this time of year as you kind of think about the second half? James Benson - Chief Financial Officer & Executive Vice President: No, it's pretty consistent with what we've told you all along. Our visibility within the quarter was certainly much better than our visibility kind of out beyond that. As I mentioned earlier that we know of specific events, like the Olympics, like a presidential debate. And we know of scheduled activities that customers have for potential gaming releases and things of that nature. But the visibility within a three-month window is certainly much better than beyond that, but it's no different this year than it was historically. Will V. Power - Robert W. Baird & Co., Inc. (Broker): Okay. Okay. That's helpful. And then just maybe quickly on the security business, obviously strong growth again. Any way to quantify how important the new Bot product was to that growth, and any other color on kind of the key drivers within that segment? Frank Thomson Leighton - Chief Executive Officer & Director: Well, we haven't really seen revenue from it yet, because we just launched it. But there is substantial customer interest in that capability, and I do expect it to start contributing to our revenues and revenue growth and security going forward. But the 47% year-over-year growth, that's from the products that we've have had before, and Bot Manager and the other products on the roadmap will help sustain that kind of growth rate going forward and help us grow revenues for the security products in the future. Will V. Power - Robert W. Baird & Co., Inc. (Broker): Okay. Thank you.

Operator

Operator

Thank you. And our next question comes from the line of Sameet Sinha with B. Riley. Your line is open. Please go ahead. Sameet Sinha - B. Riley & Co. LLC: Yes. Thank you very much. A couple of questions. In terms of the enterprise business, you just put a senior executive in place as a General Manager there. Your revenue growth is there, but its revenue levels are still pretty small. What are kind of the key success metrics that you've put in place for this business? Obviously, you've been working on it for a couple of years. At least in my opinion, it should have been, probably could have been bigger than what we had thought a couple of years back. So, if you can elaborate on that. And the second question is, obviously, we're seeing the DIY happening at a couple of customers. What are the applications that are easy to kind of bring in-house? And in that context, can you talk about OTT, and does it have characteristics that make it very difficult to achieve in-house? Thank you. Frank Thomson Leighton - Chief Executive Officer & Director: Yes. On the enterprise business, I think the success metrics would be around the products that we're in the process of bringing to market. So, for enterprise security that would be our recursive DNS service, which will be designed to block malware, phishing attacks and blocking exfiltration of sensitive data from the enterprise. And we'll be launching that product later this year. And so, you would look to see and we'll be looking to see the adoption rate of that capability. We'll also be bringing to market early next year our cloud connected branch product, which is enterprise networking combined with a secure web gateway functionality. And that's designed…

Operator

Operator

Thank you. And our next question comes from the line of Greg Powell with Wells Fargo Securities. Your line is open. Please go ahead.

Priya Parasuraman - Wells Fargo Securities LLC

Analyst · Wells Fargo Securities. Your line is open. Please go ahead.

Thanks. This is actually Priya Parasuraman in for Greg. Just a quick one. Could you talk about the kind of traction you're seeing in the mobile performance solution set? Thank you. Frank Thomson Leighton - Chief Executive Officer & Director: Yeah, very strong traction. And we were very pleased to see that we now crossed the 1,000-customer threshold for our Ion product, which, of course, delivers the best possible performance across all your web access, but is really focused on mobile acceleration. So, very strong traction there. And, of course, that's not surprising because as we talked about today, a lot of our customers have over half of their transactions going to mobile devices. It is a particularly challenging area for performance, particularly when a mobile device is using a cellular network, and ironically that's where users expect to get the best performance. And so, I think, that's why so many enterprises are turning to Akamai and buying Ion for their mobile assets.

Priya Parasuraman - Wells Fargo Securities LLC

Analyst · Wells Fargo Securities. Your line is open. Please go ahead.

Thank you.

Tom Barth - Head-Investor Relations

Management

Okay. This is Tom. I think we have time for one more question, operator.

Operator

Operator

Our next question comes from the line of Jeff Van Rhee with Craig-Hallum. Your line is open. Please go ahead.

Jeff Van Rhee - Craig-Hallum Capital Group LLC

Analyst · Craig-Hallum. Your line is open. Please go ahead.

Great. Just made it. One real quick one for you. Sales capacity at the end of the year, how are you thinking about sales capacity additions for 2016? James Benson - Chief Financial Officer & Executive Vice President: Yeah. I think we've shared before that when we started investing in a very, very significant way in sales a couple years ago, we were providing kind of ongoing updates around how we were doing. And then, I think what we said is that, it's kind of run rate now in the business. And that it's not noteworthy to be talking about investments of a specific amount in any particular area. You can expect that we'll continue to kind of make investments across all areas of the business, including go-to-market capability.

Jeff Van Rhee - Craig-Hallum Capital Group LLC

Analyst · Craig-Hallum. Your line is open. Please go ahead.

Got it. Okay. Thanks.

Tom Barth - Head-Investor Relations

Management

Well, thank you, Jeff. And thank you everyone for actually a very good set of questions this quarter. In closing, we will be presenting at a number of investor conferences and events in May and June, and details of these can be found on the Investor Relations section of akamai.com. Thank you for joining us. And have a great evening.

Operator

Operator

Ladies and gentlemen, thank you for your participation. This does conclude today's program, and you may all disconnect. Everyone have a great day.