Good day, ladies and gentlemen, and welcome to your Fortinet Q4 '13 earnings announcement. [Operator Instructions] And as a reminder, today's conference is being recorded. And I would like to turn the conference over to your host, Michelle Spolver.

Good afternoon, everyone, and thank you for joining us on this conference call to discuss Fortinet's financial and operating results for the fourth quarter and full year 2013. Joining me today are Ken Xie, Fortinet's Founder, Chairman and CEO; and Drew Del Matto, our new CFO. This is Drew's first conference call with Fortinet, and we all welcome him to the company and look forward to his contributions as we execute against our strategic growth initiatives. In terms of the structure of the call, Drew will open it with a high-level summary of our Q4 results and then turn the call over to Ken who will provide perspective on the market and our business and product highlights. Drew will then review our operating results and conclude with some thoughts on our outlook for the first quarter and full year of 2014 before we open up the call for questions. As a reminder, today, we're holding 2 calls. For those who have additional and more detailed questions, we'll hold a second conference call at 3:30 p.m. Pacific Time. Both calls will be webcast from our Investor Relations website and will be accessible as detailed in our earnings release. Before we begin, let me first read this disclaimer. Please note, some of the comments we make today are forward-looking statements. These forward-looking statements are subject to risks and uncertainties and changes in circumstances that could cause actual results to differ materially from those projected in these statements. Please refer to our SEC filings, in particular, the risk factors described in our Forms 10-K and 10-Q for more information. All forward-looking statements reflect our opinions only on the date of this conference call, and we undertake no obligation and specifically disclaim any obligation to update forward-looking statements. Also please note that we'll be discussing certain non-GAAP financial measures on this call. Our GAAP results and GAAP to non-GAAP reconciliations can be found in our earnings press release and on Slides 15 through 18 of the presentation that accompanies today's remarks. Please refer to the Investor Relations section of our website at www.investor.fortinet.com for important information, including our earnings press release issued a few minutes ago and the slides that accompany today's prepared remarks. A replay of this call will also be available on our website. Note that we routinely post information on our website and we encourage you to make use of that resource. Now let me turn the call over to Drew who will summarize our key financial results for the fourth quarter.

Thank you, Michelle, and thanks, everyone, for joining us today. As you all know, I joined Fortinet just under a month ago, and I'm very excited to be part of the team. Having spent close to a decade in the security industry, I was attracted to Fortinet because I believe it is the best positioned company in the space to benefit from the ongoing demand for network security given our differentiated technology advantage and commitment to innovation, our established market leadership and our broad global reach. With today's increasingly sophisticated cyber threat landscape, the growth in internal and external cloud environment and increasing network bandwidth-intensive requirements, both security and performance are essential. With great products and great management team and a large addressable market opportunity, I found Fortinet to be a very well suited to benefit from these business drivers. Ken will talk about this more in a minute, but first, let me quickly summarize our Q4 financial results. Note that these figures include a positive impact of a patent sale of approximately $2 million that was executed during the quarter. I'm pleased to say that Fortinet had a strong fourth quarter. We executed well and matched or exceeded our guided ranges across all key financial metrics, even excluding the aforementioned patent sale. Our billings for the fourth quarter were $210 million, exceeding our guided range and representing a 20% year-over-year increase. Revenue was $177 million, up 17% and also exceeding our guided range. From a profitability perspective, non-GAAP operating margins were 21% and non-GAAP EPS was $0.15, both above our guided range. Non-GAAP gross margins were 71% which is in line with what we guided. Additionally, our cash generation was strong, evidenced by the $40 million of free cash flow reported during Q4. Finally, during the quarter, we purchased roughly 2 million shares of our stock, returning approximately $39 million back to shareholders as part of our share repurchase program approved in December. In a few minutes, I will give additional financial details. But first, let me turn the call over to Ken for some commentary on our business.

Thank you, Drew. And we are pleased with the strong growth and solid execution Fortinet delivered during the fourth quarter. Our commitment to the product innovation has continued to result in our ability to get market share and beat competition, our strong security and performance advantage, again, resulting in a number of key competitor wins during the quarter that Drew will discuss in his remarks. We continue to win based on the strength, breadth and the flexibility of our security platform that help customer defend against advanced threat and continue to set apart from the rest on the performance we can deliver while our dedicated ASIC and our most recent FortiASIC NP6 gave Fortinet an even more significant performance lead over all others, delivering nearly 5x the firewall performance per second than our previous network processor. We're already seeing strong interest in our FortiGate-3700D and 1500D enterprise appliance, which are the first products to integrate the new FortiASIC NP6. Aside from our significant competitive advantage, there are few main factors that contribute to the very strong fourth quarter. First, from execution standpoint, the investment we made in our sales and marketing paid off. For example, we had a strong performance from Latin American, Canada and the U.S. enterprise and channel team where we benefit from the key sales hire made in previous 3 quarters. Also the investment we made in building up the inventory and shares. We had adequate product fulfill, greater than existing demand. Second, we continue to see an overall improvement in the macro environment, particular in America and EMEA. In addition to the typical Q4 seasonality, we saw a slight recovery in the Service Provider markets and also strong performance by the retail sector. Our Enterprise business also continued to grow. In a few minutes, Drew will…

Thank you, Ken. Fortinet had a very good fourth quarter, which was driven by solid execution, strong demand for Fortinet solutions and a generally healthier spending environment. Investments we made to capitalize on our growth potential end market opportunity are paying off as evidenced by the strong returns on investment achieved during Q4. Let's now dive into our Q4 results, which can be seen on Slide 4. As you'll see, we were able to meet or exceed expectations across all key operating metrics. Billings were $210 million during the fourth quarter, an increase of $36 million or 20% year-over-year and above our guided range of $186 million to $196 million. If you recall, we had a very strong quarter last year so we are very pleased with our execution given the difficult comparison. From a geographic perspective, year-over-year billings grew -- growth -- year-over-year billings growth was 24% in the Americas, 19% in EMEA and 16% in APAC. We are particularly pleased by the momentum in the Americas where we continue to expand our penetration in large enterprises, saw a slight rebound in Service Provider market and also benefited from the investments we made in our sales and marketing infrastructure, especially in Latin America and Canada. In regards to EMEA, we had another quarter of solid execution as all of the subregions performed well and the Service Provider and Enterprise markets also picked up. Last -- lastly, in APAC, we saw good performance in Southeast Asia. Across our business, we continued to succeed in our strategy of growing our share in the large enterprise and high-end segments, which is validated by our large deal metrics. During the quarter, deals over $100,000 increased to 260 from 229 last year. Deals over $250,000 and $500,000 were 96 and 37, respectively, as compared…

[Operator Instructions] So we'll take our first question from Tal Liani from Bank of America. We'll take our next question coming from Keith Weiss from Morgan Stanley.

This is Melissa Gorham calling for Keith. Just have a follow-up on the investments heading into 2014. You definitely provided some good background on why you're investing. But I'm just wondering if you could provide more color on the specific areas that you're focusing your investments. And then related to that, I did notice that gross margins in the quarter downticked a little bit, in line with your guidance, but -- and the guidance for Q1 is implying a further downtick. Just wondering why gross margins are trending down?

Drew, go ahead.

Sure. So the first -- I'm sorry, the first question was basically where are we investing? Yes, I think what we see in the past is that the investments in sales and marketing have paid off, and so we're really investing to expand our sales capacity. But also in marketing in the sense that to develop either better -- to improve our lead generation capabilities and just the overall marketing to sales process. That's the first place. Some investment in new products on the R&D side, and then in the areas of G&A, just light investment. As I mentioned, we're building out our ERP. So we're really investing to scale the company. In terms of gross margins, as we mentioned, we saw a delta last quarter. We really took the 3 large deals that I mentioned, which were enterprise-related activity and still had some higher end products, but some lower-end entry-level products attached to them, which dragged down the margin a bit. We would expect to see the margins get back to a more normal rate. And I think we were calling out 70%, 71% growth for the next quarter. [indiscernible] more closer to normal.

Okay. Great. And then just one additional question. So you saw a good growth in the low-end billings and you provided some color on that, but the high-end billings underperformed despite pretty good large deal growth. Just wondering why that area particular segment underperformed in the quarter.

This is Ken. I think that also relates to some other product launch timing. You can see, we have the new system-on-chip solution announced about 1 year ago starting few quarter multiples to low end in the last few quarters. And then the new NP6 only announced a few months ago, so the first 2 new products just come out last quarter, so don’t have enough time to ramp up yet. And then there's a few more will come off pretty soon. So that maybe has a little bit impact. But also more about the few deal we have, which has a lot of our branch office solutions which is using the low-end product. I think that going forward, we definitely will see this will return to normal and also the high-end product will continue to grow, especially the NP6, which was a huge advantage in the high-end area.

And our next question comes from Gray Powell from Wells Fargo.

So with the introduction of your APT service, how do you think that impacts your addressable market? And then longer term, do you see APT solutions broadening your market into endpoints? And I guess maybe near or medium term, do you think that, that potentially cannibalizes IPS?

I think, APT is still a relatively new area. There's some kind of coverage that come from the traditional like antivirus intrusion, so they probably take some of the market there. But the majority still relatively new to a point behind the firewall. One thing we mentioned in the earnings call and also in the press release early this week, we are one of the best in this proactive or the unknown attacks. So we have highest catch rate for the recorded proactive attack, which has unknown signature. You have to detect based on whatever added behavior ever since.[ph] So we have worked on that one. We won the highest score last year, and we have -- we had perfect score there. So I think that's part of solution called FortiGate. But also there's some additional protection. Some of the garment of big Enterprise, sometimes they have a multiple layer of protection, so APT unit behind the primary firewall. So I think the firewall is still there. But some additional layer could be the port behind the firewall to do the additional detection and prevention there. 200 is most -- $200 million from my -- the data asset.

Okay, that's very helpful. And then maybe just a follow-up question on the increased sales and marketing. What verticals or geographies would you most likely focus that increased spend on?

Probably more in U.S. and some vertical space, which we don't have a lot of dedication in the past. That's where we see it fast growing. And especially in the data center solutions. It's where we see a lot of our demand in high-speed data center requirement, especially the 100 gig, the new high-speed standard in the data center and also leverage our new FortiASIC chip. That's the area that we probably invest more. And also the service provider we mentioned starting with cover is better now compared to last year. So we also are keeping investment in that area also.

And our next question comes from Brent Thill from UBS.

Ken, you had spoken recently at your global partner conference, and I think you had aspirations of 20% growth this year and next year, and I realized that Andrew is new and not giving full year guidance but when you look about -- when you look at that return from last year, there's pretty big acceleration. In your mind, what needs to happen to see that type of re-acceleration in '14 to hit your aspirational target?

That's some of the sales target, it's not a forecast. But also, we believe, if you look at our investment in sales and marketing the return we have. So every additional dollar you invest in sales and marketing, we have a better return, like a return, like a $3 and above in the past. So that's where we feel that if we completely invest relatively more compared to the -- like in the past, we probably can reach better growth. That drives the global partner conference or the partner itself is quite excited. We see a lot of opportunities, and both on the market and also on new products. I think they're quite excited about the potential the company may grow faster. But also we need to keep invest, which we under-invested in the last few years after that deal.

Let me ask you -- let me clarify a little bit, too, Brent. So that statement, there was some confusion there. I mean, the statement in context was made that we have a goal being a $1 billion company. We shared that with our partners. If we were to grow at 20% for the next couple of years, we could get there in 2 years. So that wasn't -- I want to be really clear. It's not -- it wasn't intended to be a guidance statement or anything like that. It was more of aligning to our goals. If we don't grow 20% the next 2 years, it'll take us a bit longer to get there. But $1 billion mark is still our short-term goal.

Right. I would just add that, that's on billing. So if you mathematically took the 2013 billings times 20% for a couple of years, you roughly -- you get to just about $1 billion of billings, and that's all it was saying. If you did that math, you could get to $1 billion over that timeframe. That was the point.

Just a quick follow-up. I know the Service Provider market was a little weak out of the gate at the beginning of last year, and it seems like the strength in that business has come back. When you look forward, was there any one-time events or do you think the Service Provider strength is potentially more sustainable as we head into early '14?

Yes. I think that's where a lot of the mobile secure solution need to be offered by the service provider. And that's where we see we have a very strong position there. And we also had our competitor, lot of testing and whether mobile routing. I think that we feel pretty confident that will be market potential growing area.

And our next question comes from Aaron Schwartz from Jefferies.

I had 2 basic questions. The first is, is there any way you can characterize where sales productivity is for the reinvestments that you made in '13? Are you sort of where you need to be? Would you expect continued ramp, I guess, in the first half as they come online, and I know you talked a lot about incremental reinvestment here, which will take some time to come online. And then the second question I have is, I know you're not giving specific guidance for the year, but if we sort of look at your growth targets here, could you walk through what you need to achieve in, I guess, in both the Service Provider and APAC region to achieve those overall growth targets for the year?

Okay.

Maybe I'll take the first one and then I'll turn this over to you. Sure, Aaron. In terms of sales productivity, we don't really -- we haven't shared numbers publicly. We're not going to do that. But see it like this. I mean, we have been building our capacity and so, quite frankly, as you build capacity, it takes time to get people up to full productivity. So we're probably not at full productivity on what we have on board. And we are continuing to invest because we do see the opportunity. And quite honestly, we've seen the opportunity -- where we do track and where we have invested in 2013, we did see a payoff. And you saw some of that result in Q4. Beyond that, we also believe we can ultimately improve bills, sales productivity over time by spending money also in marketing and areas such as lead generation. And also focusing marketing dollars in key verticals like the Enterprise and Service Provider space.

Also kind of decision in compared to some of the newcomer because like every dollar revenue is spent maybe about 30-some cents on the sales margin compared to competitors spend more than that. Also if you look at the example we gave out in Latin America, in Canada in some U.S. Enterprise, the investment being made, yielded pretty good return and also like last few years we invested in the Europe market, take advantage of the high end. We already see some good return there. So this the macro environment is definitely good, and we have good technology product. If we kind of have good investment in sales marketing, we feel we have pretty good return. I think the second question relates to APAC.

All we need to do to achieve the growth of 2x the market, and he particularly called out Service Provider and APAC because America's doing a little better.

I think Service Provider [indiscernible] long time testing. But once they starting adopt a solution will be pretty long and also more kind of solid long-term benefit. I think that right now, we're still in the early stage, and also with our strong technology background, I think there's a good potential there. But sometimes, Service Provider they just to be take their time because the deployment yield is in a large scale. APAC, we see some growing, especially in the Southeast Asia. But I am not too concerned. I think that overall we have a bigger market share there, and also pretty strong team there. So like I said, from quarter-to-quarter, sometimes, some regions up and down a little bit, but overall, they still enjoy pretty good growth.

And our next question comes from Jayson Noland from Robert Baird. Jayson Noland - Robert W. Baird & Co. Incorporated, Research Division: First question on the COO search. Any progress there? If you can discuss what you're looking for, more internal-focused operations or external -- externally focused in the go-to market?

Yes, those are 2 areas we need improving in our operation. One relate to the manufacturers supply chain management logistic. I think we did some hiring and also study improvement there, especially on the inventory and supply-chain area. On the other side, in the sales operation, on the productivity, on the lead gen, and the how to work, enable sales and marketing more effectively and that's the area we're still looking and we still actually hiring for the VP operations and also COO to help enhance the sales organization area. Jayson Noland - Robert W. Baird & Co. Incorporated, Research Division: Okay. Last topic for me on the NP6. I believe you're kind of yet to be released at the high-end with this new custom ASIC, the FortiGate-5000. Should we expect to see delays in front of that launch later this year?

I think we'll be on time. We'll announce later this year. I don't see any concern. But like I said, we're still ahead of competitor, deliver the high-speed solution, and we announced the 2 products based on NP6 and some other both on the 5,000, 3,000 series space will come out, the few new model will come out in the next few months. Jayson Noland - Robert W. Baird & Co. Incorporated, Research Division: Is the testing cycle expected to be elongated there at the high-end with carriers specifically?

The units take a long time to testing. But consider we're already spending the 5000 for 10 years. And a lot of customer is our existing customer. I think some of the deployment will take place sooner because some of them are already waiting for the 100 gig solution. So we already have some 40 gig solution, but 100 gig is really -- it will come out pretty soon.

We'll go to our next question from Hendi Susanto from Gabelli & Company. Hendi Susanto - Gabelli & Company: First question. So how should we think of the linearity of your operating investment in 2014?

Operation linearity?

Hendi, are you saying in terms -- linearity when we invest throughout the year? Hendi Susanto - Gabelli & Company: Yes, throughout the year. Like how should we think of that linearity?

I think the major part of the investment are in the sales marketing and hiring pretty even smoothly during the year. I don't see any particular area. On the product side, maybe a little bit towards early in the year because there's a few new product that will come out towards the early part of the year. Hendi Susanto - Gabelli & Company: Got it. Ken, in light of the recent incident at Target, how should we think of Fortinet from the end point of sales area? And I also wonder whether you have some like any additional market insights?

Hendi, are you referring to the recent cyber attack, the larger cyber attack? Hendi Susanto - Gabelli & Company: At Target, yes. I mean, I think, that's like underlying the importance of, like, having endpoint and point of sales.

We have the total solution mimic [indiscernible] the gateway, the FortiGate. But we also the endpoint, we also have the cloud solution. And also one of the biggest [indiscernible] we do have a global research team and supporting team we call the FortiGuard, which has about 300 people, which helping customer to really kind of supporting them for any issue they have, and do real-time update and supporting and also provide all the latest update of the whole attack environment. So I think that will -- we have quite a structure around how to supporting the end-to-end solution right now.

And our next question comes from David Kaplan from Barclays.

Yes, I have a couple of questions. First of all, on the NP6 and on the rollout of that, how do you think about your mix of business and your margins? I know you guys didn't give the full year, but how you think that mix of business? Because you'd mentioned earlier in your comments you had a pretty good mix selling on the products side, the more higher margin side. So how do you think about this year going forward with the roll out of the NP6 chipset? And how that's impacting your margins going forward the rest of this year? That's my first question.

I don't -- actually I'll just jump in here for a second though. I mean, without giving -- because we're not giving a full year guidance so there is no use of going here. I mean, the reality is it isn't going to introduce a brand-new product class for us. And we are selling FortiGate-5000, and we do have good traction there in the high end. This will give us a bigger opportunity. But at this point, I think it's hard to forecast what that's going to actually do to the March. And it is true that the higher-end products will bring higher-end margins or higher margins.

The NP6 will enhance the high-end product, which we already sell. So basically we'll be like -- improve the performance a lot. And that will give us more strong competitive advantage. The margin on whether the new one and the current we're selling is almost the same. There's no big change. But definitely, NP6, like I mentioned is the 5x faster than the previous NP4 chip we're using right now.

Okay. And then the second part, I guess, relating to those high-end and data center, in general. Are you seeing spend in the data centers on security, specifically, pick up and catch up to what you would see in a normal Enterprise security as a percentage of spend? Or is it still kind of lagging in the data centers, and do you see that as a catalyst going forward?

I think probably the data center is more eager to waiting for the 100 gig solution than the Enterprise. And that also could be big client for this year and once the 100 gig solution will come out. Because the data center is -- there is a lot of application now more towards the data center cloud-based, and that definitely will help. Enterprise still see that demand is more in the -- they call the APT attack some of the like higher layer security concern, which may boost the performance and also the additional function. But data center, I think more driven by the speed. So the NP6 and also some other new products will come out, the higher speed definitely will help in the data center so that we feel could be strong growing area for us this year.

And our next question comes from Erik Suppiger from JMP Securities.

Have a couple of questions here. In the Service Provider space, when do you think that might get back to that 30% range, 30-plus percent range, that you had been historically? And is LTE playing much of a factor there? Then in the retail sector, I think you were up 1% or so over last quarter. Have you seen the cyber security attacks, the likes of Target, is that going to drive that retail sector as a percentage of revenue? Is that going to drive that up, do you think, for 2014?

Let me answer your last question first. We did see that demand on retail sector started to pick up after the Target issue, and we have the retail trade show early this month. It's a lot of interest in secured retail branch office and also the [indiscernible]. We also made the recent report, so we will see quite a strong area in retail.

Do you think that retail could exceed 10% or 12% or any thoughts where that might go?

Not on retail driven by some bigger deal. We don't want to forecast because sometime the bigger deal may take some time to close. But we see it as one of the strong areas. We see there a lot of demand. Service Provider and LTE, it's still early stage and we just do a lot of testing going on, especially how the mobile routing on internet routing can help solve the mobile security issue from the carrier point of view. It's too early in the game. And also I have to say, among all the network security provider, we are on the top leader in that area, both on the technology and the speed on the customer base. So we feel quite comfortable we're keeping leading in that area.

Okay. Then last question. Your guidance implies about a 19% sequential decline in billings for the March quarter. Is that a normal seasonal downtick? Or that seems to be a little more pronounced than what I would have expected. How are you looking at that 19%?

Yes. Sorry, we're going through this here. Yes, go ahead.

Yes, I think -- I don't have this in sight, but I believe the answer is we had a stronger Q4 than the prior year. And so if you look Q3 to Q4, in both of the years, it probably normalizes.

Okay. So this is kind of adjusting for a bit of an anomaly in the December quarter?

Yes, extra strong overperformance this year or this Q4. I mean, last year, we had a decline of 15% sequentially. I mean that's based on just seasonality, the way our year goes. So it is a bit more of a decline than we would normally expect to see because we're coming off of a very strong Q4.

And our next question comes from Shaul Eyal from Oppenheimer. Shaul Eyal - Oppenheimer & Co. Inc., Research Division: Question on the investment, as we think about the 2014. If we're sitting here in a year time, I know you guys completed the year with about 2,300 headcount. What this number might be in a year time, give or take?

Yes, again, we're really not -- I'm going to take the next 90 days to have a nice look at the business here, Shaul. I appreciate the question. But look, I would say that the investments we've made update us, and we're going to continue to invest. We believe we can grow, as we said. And the right thing to do right now is really figure out what the priorities are for the company, get a better sense and make sure we're investing appropriately in each of those priorities to optimize the growth. And that's what we're going to do. So it'd be really hard at this point to give you any sense from what that number might be.

You can also look on Slide 9 on the presentation about function. I think that's where we say we probably invested in more sales marketing area to help the growth because the percentage-wise, if you compare some competitors, I think there are still some areas to grow in. Shaul Eyal - Oppenheimer & Co. Inc., Research Division: That's fair enough. And, Ken, I know last year, China was a little spotty in quarter 2. What's the current status since these things in APAC and China has been stabilizing more?

China is still a very small percentage of our business, and we really don't comment country by country. But I think overall, APAC is not bad, and we see strong in Southeast Asia, but not in particular countries, and also China is also pretty small percentage wise right now. Shaul Eyal - Oppenheimer & Co. Inc., Research Division: That's great. Michelle, maybe just a final one for you. So next month, RSA conference, I imagine the majority of people on this call are going to be there. Not for the sake of front running the show, the conference, but what should we be expecting, product announcement, partnerships, all of the above, anything you can share with us, and again, without front running the event?

No, I'll just go and tell you what we're going to share. I'm kidding. No, we are excited about what we're doing in RSA. There will be product announcements that are made there. That's probably the only thing I can really say right now. But we will be announcing new things at RSA. I can't tell you what are in the works.

And our next question comes from Rohit Chopra from Wedbush.

I had a question and a clarification. Question is really on the growth rate for revenues as you look into Q1. So on this call, you talked about the macro getting a little better. SP, Enterprise, getting better. And some regional improvement. You talked about your investment in sales and marketing starting to pay off. Yet at the midpoint, your revenue growth is similar to what you did last year. And last year was -- it was a difficult year, the beginning of the year. So I want to try and square all the improvements you talked about with the growth rate that you're actually providing for revenue for Q1. So that's the question.

I'm sorry, the question was a bit long. The question, just so we're understanding is, with the investments that we've made, our forecast for Q1 is in line sort of what it was last year for Q1. Is that what sort of...

Yes, I mean, that's implied. You talked a lot about some improvements you're seeing, but the growth rate for revenue, for the guide, is basically flat at the mid-point with what you did last year. And last year, was a terrible year, overall.

So you're talking about the guidance versus guidance last year?

Yes, yes.

Andrew has been on board less than 1 month so he might still have honeymoon, so that's where. So I think that probably -- I think that maybe later in the year, we'll make more kind of detailed guidance. And probably this is the first quarter, we tend to be tried to -- I think we'll probably we'll take some time to be careful.

I think the guidance that we're giving is based on the -- look at it this way. I think...

I was going to say, the other thing, too, you have to understand is that we didn't have a stellar first half of last year. So what happens with guidance so far as billings, if the billings are slower, which they were slower, especially in the first quarter and the first half, it's going to have less that rolls off into revenue, so that would impact future revenue streams. So I think, to Ken's point, I don't want to put Drew on the spot here, he's sort of brand new here, but I would take that into account. And we do expect to see a continuation of a return or the return on investment that we're making, whether or not that's all going to come in Q1.

Yes, I think that's right, Michelle. I think the other thing I would say, because a bit of a kind of a question about the confidence in the forecast. I would say this, myself included, we did a lot of due diligence on the process. And we feel like we came up with the appropriate number based on what we saw when we checked guidance. We do believe in the business, and the investments will continue to pay off. And some of that -- we'll see some of that in Q1 and hopefully some of that beyond.

And my clarification, Drew, was on the operating margin, I'm going to call it guidance. But you'd talked about 17%. Can you just go through your expectations? Do you expect to get to 17% by Q4? Is that an initial thought? Just go through?

Full year. Yes. So I said 17% give or take 1 point. So first of all, to clarify that, to give a little bit of room there. I think, it's an annualized number. And again, I would qualify all of that by saying we're going to take some time here. I think the right thing to do, as I said, is take a good look at the business, make sure that we are focused on the right opportunities and matching them with the right priorities at the right level of investment. And look, I've been here less than 30 days, and as we go through the next 90 days, we'll have better information on that.

I appreciate that. I didn't mean to put you on the spot, Drew.

That's okay. I just want to make sure you get part of how we're thinking about it or how I'm thinking about it.

So it looks like we do have our final question coming from James Fish from Citi.

I have just a couple of quick questions because I know we're kind of going over the timeframe here. With the strength in Service Provider and data center, do you feel that this is kind of an industry strength or do you feel this is kind of a business as usual, kind of looking at the refresh cycle more or less?

I think the 100 gig to the data center and also the 4G-LTE in the Service Provider definitely is more industry strength there, and I think what drives toward the high-speed secure solution. I think on the industries, I think, sometimes you see some news up and down in the security space. That's what's keeping come back. That's more related to the normal business kind of sense. And also some different kind of vendor may try to -- like a market position sometimes different solutions. But it's definitely, we see the infrastructure sometimes also drives the growth of the high-speed solution.

Okay. And then just -- is this -- I know you guys just recently announced the buyback last over -- for the past quarter. Is this $30 million or $40 million range something that we should expect kind of every quarter, or is it just going to be dependent on X, Y, Z factors?

So the board, as we said, the board authorized $200 million, and we repurchased $39 million. So we have $161 million remaining. I think part of what we'll do as we go over the next 90 days or perhaps beyond is take a close look at our capital allocation strategy. And we are primarily focused on growth, just to be clear. We believe we can grow, and we're going to invest in growth. But at the same time, we'll include some to match to make sure that we're opportunistically looking at opportunities to move into buybacks when it makes sense.

Okay. And does that first quarter kind of include a buyback within it or not? I'm guessing no based on what you said.

The way I would think about it is we'll be opportunistic when it makes sense.

Okay. And actually, we have one final question in the queue, which will be our last question from Erik Oros from Salient Partners.

I just have a quick question about the competitive dynamics, and I know it's something that you guys have talked about in the past, but I just wanted to touch on it and see if you -- anything's changed across the different verticals if we're seeing any pricing pressure, especially on the lower end and with the SMBs?

No, we don't see much in the landscape. And the lower end is that, it's a move that will benefit some from the release of system-on-chip, the second generation microwave typical which we introduced a few product in the last few quarters. But I think overall landscape is still the same.

Okay. And I'm showing no final questions. I would like to turn the conference back to your host for any concluding remarks.

I would actually just remind everybody, we're doing another call at 3:30. If you have more detailed questions, you can call in then. But thank you very much for joining our call. And we look forward to communicating with you in the quarter ahead.

Thank you.

Thank you.

Okay, ladies and gentlemen, this does conclude your conference. You may now disconnect and have a great day.