Good afternoon. My name is Ian and I will be your conference operator today. At this time, I'd like to welcome everyone to the Fiscal Second Quarter 2016 Earnings Call. At this time, I will now turn the call over to Mr. Jonathan Doros, Head of Investor Relations.

Good afternoon and thank you for joining our call to discuss our second quarter fiscal year 2017 earnings results. We've posted the earnings materials and prepared remarks to our Investor Relation events webpage. Speakers on today's call are Greg Clark, Symantec CEO and Thomas Seifert, Executive Vice President and CFO. This is a live call that will be available for replay via webcast on our website. I'd like to remind everyone that all references to financial metrics are non-GAAP unless otherwise stated. We provide year-over-year constant currency growth rates in our prepared remarks for revenue. All non-GAAP revenue and expenses exclude the impact of Veritas. However the continuing operations deferred revenue on the balance sheet includes a portion of Veritas deferred revenue from Symantec and Veritas bundled contracts entered in to prior to operational separation. The Veritas deferred revenue from those contracts will amortize into discontinued operations. As a result, implied billings growth calculated from the change in deferred on the balance sheet will not be representative of standalone Symantec's performance, as it will include an impact from Veritas. Please note, non-GAAP financial measures referenced during this call are reconciled to their comparable GAAP financial measure in the press release and supplemental materials posted on our website. Today's call contains forward-looking statements based on the environment as we currently see it. Those statements are based on current beliefs, assumptions and expectations, speak only as of the current date and as such involve risk and uncertainties that may cause actual results to differ materially from our current expectations. Please refer to the cautionary statement in our press release for more information. You will also find a detailed discussion about our risk factors in our filings with the SEC and in particular on Form 10-K for the year ended April 1, 2016. And now I'd like to introduce our CEO, Greg Clark. Go ahead, Greg.

Thank you for joining us today. We were pleased with our performance during the second quarter as our results exceeded our guidance across all metrics. Our cost savings and synergy initiatives are tracking ahead of schedule. Within the first 10 weeks of closing Blue Coat, we've made multiple meaningful product improvements and integrations. The feedback on our product roadmap from customers, partners and third-party influences has been overwhelmingly positive. Product integrations are already having a significant impact on our ability to better protect customers and further validates the rationale and power of our combination. In my prepared remarks today, I will review some of the key product integrations, highlight the exciting innovation underway within Symantec, discuss some market validation in our enterprise segment and review our Consumer Security business. Protecting customers in the cloud generation against a multi-faceted adversary requires an integrated cyber defense platform. Symantec is best positioned in the cloud generation as one of the only vendors to deliver cyber defense solutions across users, information, web and messaging. In support of that effort, I'd like to discuss significant advancements delivered since closing the Blue Coat acquisition on August 1. First, I'm particularly proud of the value we are providing our existing customers by integrating artificial intelligence with two of the largest threat databases in the world. This integration has improved our existing products, which are now blocking an additional 500,000 attacks per day across the endpoint and network. In a press release last week we provided the market with insight into two attack campaigns that had we not innovated in this way, may have remained hidden. The first of the campaigns is a cyber espionage group called Buckeye, which targeted Hong Kong political organizations leading up to the elections. And second, we discovered a campaign impacting approximately 100…

Thank you, Greg, for the kind words. And good afternoon, everyone. It's been an honor to serve as Symantec's CFO during such a pivotal time in the company's history. I joined Symantec in order to lay the groundwork for our strategic and financial transformation. And I'm proud of the incredible progress we have made over the past two and a half years. Symantec is now the leading pure play cyber security company and in a strong financial position, and this is the right time for me to take on my next challenge. I'm confident Nick will be a strong CFO for the company and echo Greg's sentiment. I look forward to continuing to work with them over the next month and in an advisory role for the company until March of next year. Before I move to our second quarter results, I want to express my gratitude for the support of our board, our executive team and, of course, my finance team. I look forward to maintaining our strong momentum throughout the transition process. Now turning to our results. Today I will provide an overview of our second quarter results, update on our $500 million cost efficiencies and Blue Coat integration synergies and conclude with our financial outlook. Additional details are provided in our CFO commentary, which is available on our Investor Relations website. Our second quarter non-GAAP revenue was $1.015 billion, $25 million above the high end of our guided range of $960 million to $990 million, driven across both Consumer and Enterprise Security. Non-GAAP operating margin for the second quarter was 29.2% and 520 basis points above the high end of our guided range of 21% to 24%. The upside was driven by top-line leverage and faster than expected realization of cost savings. Fully diluted earnings per share…

All right, operator, please open the call for questions.

Certainly. Our first question is from the line of Andrew Nowinski. Andrew James Nowinski - Piper Jaffray & Co.: Okay. Thanks. Thomas, just want to start off by saying it's been a pleasure working with you. I thought you did a great job navigating the acquisitions and the spinoff and the cost cutting initiatives.

Thank you. Andrew James Nowinski - Piper Jaffray & Co.: All right, so first question, I guess Blue Coat has been integrated now. It's essentially complete, and you've got a comprehensive security platform covering network, endpoint and email, which is similar to a few other vendors like Palo Alto and Check Point. I guess, can you give us your high level views on how you'll differentiate from those other platforms?

Yes, I think that's a good question, Andrew. There is a substantial number of differences. One is that the threat telemetry that is sitting behind the Symantec threat platform is gargantuan. It comes from well over 100 million endpoints that are in production across the consumer threat telemetry as well in the enterprise, in addition to 15,000 Internet egresses coming in from the Blue Coat network points. That gives us telemetry and some of the examples that I mentioned earlier in the call. It gives us telemetry into things that we believe we are unique in our ability to detect cyber problems from that. In addition to that, I'd like to point out that for cloud generation, you can get the Symantec threat platform and a pure cloud instantiation, which means if you are a company that is using a bunch of cloud applications that are out there, whether it be Salesforce.com, SuccessFactors, all the things we know, that you can instantiate the cyber defense for the users that are using that, the data that's in it and get that without even purchasing an appliance or running a wire. And that's really differentiated between what you could get from the vendors that you mentioned. And so we really also have spent a ton of time in making sure that we keep the platform open. Our customers do rely on best-of-breed products and being able to integrate those into the Symantec integrated cyber defense platform is a huge competitive advantage. And so that's something we're committed to with our ISV partners as well. Andrew James Nowinski - Piper Jaffray & Co.: Okay got it. And then digging in a little deeper on the products side, I saw the integration of DLP with your CASB is now complete. Can you just give us any color on the proprietary advantages that that product will have over the competition and why others can't replicate that?

Yeah, that's a good question. Our CASB has a piece of it called Content IQ, which goes out into the cloud properties that an organization is using in shadow IT, and using machine learning techniques, can actually detect the data that is inside of the cloud applications that may have compliance problems. We then use the data protection technology from the Symantec side to go after those problems and cure them so that that data can be allowed to still be in the cloud but be protected in a way where you don't have risk of compliance problems or other data loss. In addition to that, we have integrated the CASB technology with the product called VIP, which allows us to add a second factor of authentication to the cloud properties. And what that means is if you are logging into Salesforce.com and you're worried about making sure that it's Greg logging into Salesforce.com, I have a second factor application on my phone or a fob that I use and plugged into my computer, and then it adds that factor of authentication to all of those cloud applications without the organization's IT having to do anything. This is extremely powerful as a lot of the password and key loggers breaches that happen across these technologies is solved by that problem. So we've integrated those two things. And I'd just like to point out that that and the threat telemetry integration that we've been talking about, we closed the acquisition on August 1, and our engineering teams are working together extremely well. We've got some rapid delivery there and real proof points in the market. Andrew James Nowinski - Piper Jaffray & Co.: Okay.

Thank you. Next question.

And our next question is from the line of Shaul Eyal. Shaul Eyal - Oppenheimer & Co., Inc. (Broker): Thank you. Hi, good afternoon, guys. Congrats in the upside to quarterly results. Let me also extend best wishes to Thomas going forward, was a pleasure working with you.

Thanks. Shaul Eyal - Oppenheimer & Co., Inc. (Broker): So I want to start and ask on the endpoint front, what's the early feedback you are hearing from customers on Symantec Endpoint 14? An in what way is it differentiated from a next-generation provider say like a Cylance, some of the other players out there?

So that's a very good question. So we've been working very hard on SEP 14. It's a real major advancement for us over here at Symantec. We have tested it with over 400 beta customers that are using it already. And we announced a GA for it this week. It contains the advanced machine learning and behavioral analysis technology that you hear about from what the market calls nex-gen endpoint or signature list endpoint technology. So we have definitely delivered all of the defenses that work on zero-day attacks and signature list things, the machine learning behavioral analysis, reputational detection technology. So we believe that we have now leapfrogged the current advanced endpoint competition. And one of the major advantages of ours is ours has a very low false positive rate in the space and think of it as converged endpoint that includes all of the stuff that you need from traditional endpoints with the next-generation capabilities. And we really have dramatically reduced the footprint size, bandwidth usage, and we're very optimistic. Feedback on the initial use of SEP 14 is extremely positive. So we think that this will definitely have a major impact in the market. Shaul Eyal - Oppenheimer & Co., Inc. (Broker): Got it. Got it. And just as a follow up, so also encouraging upside to the Consumer division results. Can you talk to us about some of the trends you're seeing on that front? What's driving the upside? Is it the shift to subscription, the turning on of auto renewals, progress with telcos, moderating PC declines or just all of the above? Or any unique reason behind the positive result?

So that's a very good question. So it is a mix of all of the above. We actually have performed extremely well in our consumer sector. We have finished the transition to a subscription and auto renewal framework in the Norton business. This has definitely helped with the traction. In addition to that, we have a very strong set of results coming in from some of the new offerings. In the last 30 days, we brought out our Wi-Fi protection for mobile users. That has seen a substantial uptake and great feedback from that. In addition to that, our mobile platforms, as Thomas mentioned in his remarks, have been growing at strong double-digit period compares on units. We've seen the service provider market really start to produce some fantastic deployments of the mobile side of what we're doing. So those are a couple of proof points where we're executing well in the PC space. Again, we won the Editor's Choice for the most effective malware protection on the PC again, and the auto renewals is helping. The move to subscription is helping. So we feel good about maintaining our position in there. And then moving to markets that are off the PC, we have some exciting pure mobile endpoint growth and also we have some things that we'll be launching in the future that will continue to move us into addressable markets that are off the PC value proposition. So we feel good about our future prospects on the Consumer side and the value that we're bringing. As many of us are aware, there is plenty of malware on mobile and there is plenty of malware on Apple platforms, and so we feel good about the future of our Consumer business.

And our next question is from the line of Matt Hedberg.

Yeah, thanks, guys. Thomas, I'll offer my congrats as well. It was certainly great working with you over the years, and best of luck on your next endeavor. Greg, I think it was actually maybe in Thomas' prepared remarks, talking about a change in the product mix in conjunction with the integration. I'm wondering if you could you expand on that a little bit more? What are you seeing in the pipeline and how might this impact revenue going forward?

Yes, very good question, Matt. Thanks for asking it. We've brought together two of the broadest portfolios in security software and we're going to package our products in the manner in which our customers want to buy it. If you think about what we would do walking into a large enterprise, we would offer with the combination of products, different bundles and different packagings of our products. When we do that, this could result in less upfront revenue recognition and, therefore, we're being conservative in our guidance.

Okay. That's great. And then maybe one more on the Consumer side. I'm wondering if you can just give us an update on some of the consumer telco deals. I think you started in India, Germany, maybe Japan. And any thoughts about rolling that program out to other geos?

Yeah, so we've had great results with our mobile defense platforms in some of the markets that you mentioned. India is a particular standout. We also have, I would say, outstanding interest in our capabilities for most of the world's Tier 1 service providers. What we've seen I think this year with all of the wallets and easy to charge on peoples mobile platforms, we've seen malware showing up there in significant quantities. And I think Symantec is very focused on protecting our customers in this area. And service providers are definitely very interested in it. We will be addressing that route to market in a much more aggressive way in the coming quarters. Early results are very promising.

And our next question is from the line of Sarah Hindlian. Sarah Hindlian - Macquarie Capital (USA), Inc.: Hi. Thank you so much. Congratulations on your first quarter, Greg. And, Thomas, thank you for all the help you provided us. We really appreciate it. I had a couple questions for you, Greg. One of the things we've been focused on is the partner ecosystem, given how important it is to the business. So we'd appreciate hearing from you a little bit about how partners are reacting to the integration, and what opportunities you're seeing there to potentially drive revenues to the partners. And then second, how are you thinking about protecting IoT in light of all these recent (34:16) denial of service attacks? Do you think consumers are going to start to protect their IoT and where do you see yourself playing into that market?

Yes, they're two very good questions. Sarah. So let me start off with the partner one, yeah, we are very focused on maintaining our strong relationship with the channel. I think myself and Mike Fey have great reputations as taking care of what is that very large, extended sales force we have around the world at the Tier 2 VAR and also in the excellent Tier 1 value added distributors that we use. Nothing is going to change there. And we had an excellent partner conference earlier this month where we recommitted to the channel. I think we have a good trusted relationship there and right now we're doing the same thing in APAC and also in EMEA this week. So we feel good about our relevance to the VARs and resellers out in the world, whether it be in the small/medium-size business, the mid-market, or in the enterprise. And we continue to be a substantial element of the economics in the channel. We are the largest pure play security vendor and the combination between Blue Coat and Symantec really does make this a very meaningful part of the channel economics. And I think without very strong middle-market story – we released a product in the last quarter which was called SEP Cloud. That is extremely powerful for that middle-market, SMB part of the world, and we feel good about that. And we think we continue to deliver market relevance to the part of the market where those VARs and resellers are essential, which we think will drive up interest in continuing to do business with them and more revenue for both them and us. Moving on to your next question, which was about the IoT situation. IoT is, as we saw a couple of Fridays ago when some of…

And our next question is from the line of John DiFucci.

Thank you. I have a question, Greg, about the Consumer business. Can you just sort of give a refresh on how you think about this strategically? On one hand, it's a really high margin business, but on the other hand we've seen this, continual revenue declines for some time here. Is this something where you're going to focus on? I know you talked a little bit about trying to turn that business in some way, but if you do that, is it going to have a material effect on profitability if you really start to invest there?

Yeah, so it's a really good question, John. And I think this is something that we work on a lot because we have a strategy that we believe can turn it around and return it to growth. And that strategy is really anchored in moving the value proposition that we have from PC malware to a larger super set of PC malware, which is really Internet safety. The consumer is really interested in safety while using the Internet, safety for the family, a piece of which is the malware on the endpoint. So we are going after all endpoints, whether it be Apple endpoints, mobile telephone devices, tablets and PCs. And we're also going after other value propositions that a consumer, when they're using the Internet, considers necessary. And we have some announcements coming out on that soon. I won't announce them on this call, but we are definitely working hard on real P times Q, based on real market data that can turn that business around and return it to growth. There are elements that are off the PC declines, which are kind of the natural forces happening in the industry. So everybody who wants to mark us down because Consumer's going to melt, we're working really hard to make sure that around so it doesn't melt. And we have very strong brand recognition in Norton. People trust us, and we think we can deliver substantial value to the consumer through that brand for things that are adjacencies to the PC malware decision. So, hang on.

Would this?

It's going to get better.

Yeah, okay.

Our guidance is conservative, John. Our guidance is conservative on the Consumer guide.

Okay. But the kind of investment that that might require, you've already done some, but is this something we should continue to expect, similar profitability in that business going forward at least for the foreseeable future? Or would this kind of, if in order to turn around the top line, could it have a material effect, a negative effect on the margin? Yeah.

Yeah, so a couple of examples. We already have released a pretty substantial Wi-Fi protection capability under the Norton brand. We did that while maintaining the margin contribution that we have in the business already. That was a not insignificant R&D investment. One of the things about Symantec is we have many thousands of engineers, so we can move 50 of them around to a problem like that without any issues. So we feel good about our ability to continue to deliver that at the margin, and we are reaffirming our margin commitments in the guidance that we're putting out for FY 2018 with those plans on board, okay. And our EPS range in 2018, that's with the engineering efforts and marketing efforts planned in Consumer.

Okay.

The answer is I think we're going to be okay, and being able to do that at the margin we're at.

Next question, please.

And our next question is Brent Thill.

Greg, the Enterprise Security did very well during the quarter, I think we all look at that business and see there's a lot of opportunity both on top line and bottom line. Where do you see the nearest opportunity just on the revenue side when you look at the joint Blue Coat/Symantec team? And then on the bottom line can you just talk a little bit about the margin structure at 12%, clearly a lot of the peers are a lot higher. Where do you think you can drive that to over time?

So let me just clarify something I said answering John's question. I think you have the FY 2018 guidance is EPS only on the $1.70 to $1.80 range. And my comments around the FY 2017 margin guide were doing those things with the plans we have in Consumer baked in. Coming back to your question, can you ask it for me again, just to make sure I got it right?

Yeah, just as it relates to the Enterprise Security business, the low hanging fruit that you see in front of you just on the top line and then on the bottom line at the 12% op margin, your competitors are considerably higher. Where do you think you can drive that margin to over time?

So the opportunities on the top line, as we talked about on prior calls, we have not really cooked a whole bunch of revenue synergies, cross-sell and up-sell, into our thinking. Where they live is we do believe that in the network area where we're selling the gateway technologies that are highly adjacent to email and to DLP, we have a great opportunity for cross-selling the combined solutions there. Also, the power that you get when you hook up our networks with endpoint results in substantial enhanced cyber defense, and we do think that there are a bunch of cross-sell and up-sell opportunities. We mentioned on the prior remarks a couple of examples of DLP customers where we were strongly advantaged with the network technologies and endpoint technologies, that we're strongly advantaged from the network technologies. We feel good about what we can put together in terms of product bundles that the market's going to like, customers are going to like. And in outlying years, I think we'll be able to lead the market with the enterprise solution set for cyber defense. Margin-wise, I think at this point in time we are committed to taking out the $550 million of sustainable run rate expenses. We've given you guidance on the FY 2017 margin numbers. And at this point in time, it's too early for us to guide the top line for 2018.

But I think it's fair to say that all the additional cost take-out is primarily going to benefit the Enterprise business from a profitability perspective. So we are not at $100 million run rate improvement so far. We said we're going to be north of $200 million by the end of the fiscal year. Still there's plenty to be implemented until we get to $550 million, and the delta really primarily towards the Enterprise margin.

Exactly. Next question, please?

Our next question is from the line of Keith Weiss. Keith Eric Weiss - Morgan Stanley & Co. LLC: Thank you, guys, for taking the question and nice quarter. Two questions I wanted to ask. One about distribution in terms of how far into the integration of Blue Coat sales people are we? And vice-versa, how well are we into the integration of the Symantec sales guys? Or who's proper being able to sell the Blue Coat portfolio? How much further do we have to go on that side of the equation?

So we've made a ton of progress there, Keith, and we've picked the leadership for those organizations across the world in the channel, in the mid-market, in the enterprise. And that is going extremely well. We have had our integrated sales force kick-off. We brought them all to Las Vegas and had a week's worth of getting everything lined up and planned out. And the regional teams are out now executing. We feel really good about where we're at on the integration of our go-to-market teams. Keith, I'd also like to point out that the initial results from Q1, if we were going to have problems, we'd be seeing them. And we feel really good about that integrated sales force and how we're coming out of the blocks on that. Keith Eric Weiss - Morgan Stanley & Co. LLC: Got it. And the second question is more along the lines of how should we track the business on a going-forward basis. You're talking a little bit about mix shift in terms of revenues, more coming through as attrition versus perpetual. At times, we've looked at Symantec on a billings basis, looking at billings growth as an indicator of overall growth. That's hard right now with the acquisition accounting. Maybe just looking for some guidance from you guys in terms of, what do you think is the best indicator of the underlying demand trends? Is there some adjusted billings number we should be looking to? Or is it just we have to fall back on revenues and just take into account the subscription versus perpetual adjustments that are going to be going on?

At this point, Keith, I think we want to stay on the revenue reporting that we have and we give you the cash flow information and the balance sheet, and I think you'll be able to put it back together. We do feel that that's a good question for as we get into Q3 and Q4.

Operator, next question?

And our next question is from the line of Walter Prichard.

Hi. Thanks. Question for Thomas on the Blue Coat contribution, the $124 million that you saw in the quarter. Can you talk about the delta there between the $100 million you were expecting? Was it just simply timing of business that came in? Or was that business indeed better than expected if you look at it on maybe a full quarter basis or whatever makes sense to calibrate?

Yeah, I'm not even sure we want to be this granular. First of all, we are really pleased that our sales team was able to provide that in the short period of time we had to close. I think there for sure is a combination of both elements in that number. But overall I think what we said in the prepared remarks holds true. We are encouraged by the momentum that we see and by the momentum that the sales force brought into our first combined quarter from an execution perspective. But it's one data point and that's why we think it's still prudent to be very conservative in the outlook we provide.

And then, Thomas, just similar to that question on the billings from Blue Coat. Could you help us understand, did the billings exceed the revenue for the $124 million in the quarter or were they less? Or any sort of color you could give us around that would be helpful as well.

Yeah, as you know, we've got a lot of moving parts, and that's why we wanted to stay away from giving that granular business guidance. We have to digest the integration. We still have some noise in our billings numbers from a Veritas separation perspective. From an overall billings performance, I think if you look for a proxy, look at our GAAP revenue and the change in deferred and that gives you an approximation of how billings have performed quarter-over-quarter for the combined company. If you do your math, it's going to be approximately 12%. But for the time being in the short term, we'd like to focus and less the attention on revenue, on margin and EPS.

And ladies and gentlemen, this does conclude today's conference call. We thank you for your participation today, and you may now disconnect.