Good day, everyone, and welcome to the Guidewire Second Quarter Fiscal 2015 Earnings Conference Call. Today's conference is being recorded. And at this time, I'd like to turn the call over to Ms. Karen Blasing, Chief Financial Officer. Please go ahead. Karen Blasing - Chief Financial Officer & Treasurer: Good afternoon, and welcome to Guidewire Software's earnings conference call for the second quarter of fiscal 2015, which ended on January 31. This is Karen Blasing, Chief Financial Officer of Guidewire, and with me on the call is Marcus Ryu, Guidewire's Chief Executive Officer. A complete disclosure of our results can be found in our press release issued today, as well as in our related Form 8-K furnished to the SEC. To access the press release and the financial details, please see the Investor Relations section of our website at www.guidewire.com. As a reminder, today's call is being recorded, and a replay will be available following the conclusion of the call. During today's call, we will make statements related to our business that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks are summarized in the press release that we issued today. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to our Annual Report on Form 10-K for the period ended July 31, 2014, which is on file with the SEC. Also during the course of today's call, we will refer to…

Thank you. And we'll take Brent Thill with UBS.

Karen, you will be missed. Thanks for working with all of us for the past few years. Marcus, I had a question as it relates to the impact of the SIs that you're seeing the ramp. Is that starting to help you see faster sales cycles or quantity of new deal wins as those SIs are being more influential in the channel and helping you weave through the competitors? Marcus S. Ryu - President, Chief Executive Officer & Director: The SI ecosystem is clearly a very important asset in the sales process, and it's one that we've invested in developing over a long period of time, and I regard it as one of multiple enormous barriers to entry that we've been able to construct over the years. They are very helpful in sales in a number of ways. First, they provide a degree of surround sound, if you will, to the people – the folks we're trying to persuade. So it's not just us speaking, but senior representatives of multiple firms that are making the case for legacy transformation and for Guidewire in particular. Secondly, they provide a level of market validation by competing with each other for the opportunity to serve our customers, and that helps validate the costing that goes into what's invariably a major capital investment. And then in aggregate, they provide a collection of case studies of customer success that are also very persuasive to the deciding entities. Right? So for all these reasons, they are very helpful. And especially in mature geographies, they are a key asset. It also highlights one of the challenges we have in newer geographies, as we've had throughout our history, that where we don't have as well-developed a partner community and the partners that are there don't have as established a basis of credentials, it's harder work. So they are a useful accelerant and support in mature markets. In newer markets, we're still earning our way, as we always have.

Marcus, I just want to be clear, are you seeing an acceleration in sales cycles because of the SI community yet, or is it pretty consistent with what you've seen in the past? Marcus S. Ryu - President, Chief Executive Officer & Director: I'd say there are signs of acceleration across deals in select segments and in select geographies. And there are multiple causal factors, one of them that's very helpful are the SIs, but there's also the general maturation of our software, the case studies that we can point to, the testimony of successful customers, et cetera. So it's one of multiple threads that are useful, but it's definitely an important one.

Okay. And, Karen, just the guide down is all as a result of SI in the FX. There's no fundamental deterioration of the pipeline that you're seeing. I just want to be clear on that. Karen Blasing - Chief Financial Officer & Treasurer: That's absolutely true.

Great. Thank you.

Thank you. We'll go next with Walter Pritchard with Citi.

Hi, thanks. You talked, Karen, about some investments, although you are raising the margin guidance for the year. And if I go back about nine months ago, you cut the margins for this year, and I'm wondering if we should think about – still think about this year as a low point on the margin side and we can build from here, or do you expect that you need to make these types of investments or potentially incremental investments as you go into 2016 and could have the margins come down again in that period? Karen Blasing - Chief Financial Officer & Treasurer: So, Walter, gross margins, absolutely we continue to expect those to improve. I firmly believe license and maintenance revenue is going to outpace any kind of service growth there. So we'll continue to get good gross margins. On the operating margin, it will take some continued investments. We haven't provided guidance out into FY 2016 yet. Clearly, expenses will increase, just as we add head count through fiscal 2015. We'll have the 12 months' effect of those. We're working through very carefully with Ali, who is our new engineering head, and developing the roadmap for the pace of those products, as those get released. So you'll hear more from us over the coming months.

Okay, got it. Thank you. Karen Blasing - Chief Financial Officer & Treasurer: And let's not forget, I mean, operating margin is very important to this company, as is cash flow. So we're always keeping an eye on what that bottom line is going to be as well.

Thank you. We'll take our next question from Sterling Auty with JPMorgan.

Yeah. Thanks. Hi, guys. First, let me start with, Karen, congratulations on a great career, not only here at Guidewire but for many years at a number of notable companies through the Valley. You'll be missed, and enjoy your retirement. Karen Blasing - Chief Financial Officer & Treasurer: Thank you.

On to the task at hand, I wasn't quite clear in terms of the professional services revenue in the quarter, was it that what you saw was implementations that went live, so they finished up, but some of the new business that you would have thought that, perhaps, you would have picked up on the services side went to the system integrators or was there anything in terms of some billing around existing projects that fell short in terms of services revenue? Karen Blasing - Chief Financial Officer & Treasurer: So it's kind of a mix actually of all. We had a number of go-lives. I think Marcus mentioned a few of those in his prepared remarks. So they were very, very successful. The second thing is, is we always have an outlook as to how – when we're winning transactions at our customers' site, we have an estimation process of how much of that business is going to go to the SIs. But we do hedge it a little bit to make sure that we've got adequate staff, if the customer have a higher preference for more of Guidewire people. So that's always a consideration we take into our guidance. In this case, the way it came out, our SI partners were extremely successful in winning over the customers and taking the lion's share of those implementation projects. So the programs that we put into place really do seem like they're working.

All right, great. And then, Marcus, can you help us – there was a number of Suite deals that you mentioned that you won. You mentioned like the Tokio Marine transaction, for example. I'm curious, are some of the big multi-nationals, even in Suite starting to buy smaller and smaller chunks, meaning are they taking baby steps more often than big chunkier deals like we saw with Nationwide and Hartford? And how is that, kind of, layered into the growth outlook? Marcus S. Ryu - President, Chief Executive Officer & Director: Right. So, no specific trend there. Every insurer has its own unique situation, both system-wise and in terms of their business. There will be cases where a large multi-national will decide, or a large Tier 1 insurer will decide to implement the full suite for a subsidiary by a line of business or will decide that they have a small group that they want to do a full project for and we'll do it on a smaller scale. It's – there's no – there has been no specific pattern over the years. And in each case, we are often evaluated across the requirements of the full group, or the full enterprise before that final determination is made, which is one of the somewhat vexing dimensions of the business that we -that confounds our forecasting efforts because we can be involved in a very intense evaluation cycle that will be a long time. We can win in that evaluation and be confident of being the platform of choice for a very large insurer, but still have uncertainties leading up to quite close to the final contract as to the scope of that initial license and therefore the revenue that will attach in the early periods. And obviously, we do what we can to to motivate a larger commitment, but we're not willing to forfeit long-term customer value in order to do so. And that's the kind of classic trade-off that we face in all of these big relationships. What we have seen is a very consistent, constructive pattern where once we have that initial relationship, whether it's for one application or for the full suite, that we successfully develop those over time and we have in virtually every single large insurer relationship, we have an upward trajectory of an expansion of use, both for the applications they have licensed and for new applications.

Understood. Thank you.

Thank you. We'll go next to Brendan Barnicle of Pacific Crest Securities.

Great. Thanks so much, guys. Karen, like everyone else, congratulations. You well deserved and are certainly going to be missed. It's been a pleasure to work with you. Just quickly, maybe I missed it. But did you give us what the FX – actual dollar impact was for the quarter? Karen Blasing - Chief Financial Officer & Treasurer: We didn't. We didn't give you the actual impact. It was modest enough that it didn't affect our results and we still had a nice beat on the second quarter, despite the fact that we got a little bit of top end – top end headwinds. Where it hit us more dearly was actually really on the service line than anywhere else because a lot of those service contracts are denominated in local currency. So when translated back, that was one of the reasons that we fell on the short side of the guidance on that – on that particular line.

And maybe I missed it, but I think on the last call you had given us assumption, I think, of 100 basis points to 300 basis points of headwind for FX this year. Did you change that at all for the remainder of the year? Karen Blasing - Chief Financial Officer & Treasurer: We did not. I think we're going to have a slightly higher impact to the full year from that, but we are still comfortable with the full year range that we've given this guidance.

Okay, great. Thanks for that. And then, Marcus, interested in – I know you've had given us a lot of great wins, you got a lot of great progress with Tier 1s in particular, but I'm wondering if there are any in the pipeline now that we might expect to see at some point this year? And kind of following up on Brent's question, how the SIs helped you with those Tier 1 accounts? Marcus S. Ryu - President, Chief Executive Officer & Director: Right. So, to the first part of your question, we have many Tier 1 conversations underway, more than we've ever had in our history. And I guess the most specific I can be is to say that we would be bitterly disappointed if we didn't close multiple of them by the end of the year. It's hard to be more specific than that. In terms of the SI relationships, SIs are vital to every one of those sales cycles. In fact, they are important to almost every sale that we do, but particularly at the upper end, where the large preponderance of the work, the implementation work, will be executed by the SI. They are a vital part of the sales process. And indeed, a good portion of the evaluation cycle is not evaluating the software per se, but evaluating the implementation plans as presented by multiple SIs. And we play a major role in that, but we're not the ones being evaluated. In fact, in a sense, we're on the other side of the table helping the carrier make the decision. So they are very, very important to that process. It's helpful that we have multiple choices to offer almost to any large insurer. And we've worked hard in those relationships. But in some cases, the most arduous part of the evaluation is defining this large scale transformation program. It's not the evaluation of the software itself, where at this point we have such a considerable corpus of proof that that part's somewhat easier now than it used to be.

Is that – add an extension to the sales cycle that wasn't there before because now there's this evaluation stage that the Tier 1s have to go through, or is there just enough credibility and confidence around having those SIs behind you that it doesn't really impact it on the negative side. Marcus S. Ryu - President, Chief Executive Officer & Director: No, I wouldn't say the sales cycles are longer as a result, but the character of the sales cycle now has a somewhat heavier emphasis on the implementation front perhaps than it did in prior years. In the recognition that the software works, and therefore it's appropriate to spend the evaluation time that you have on picking the right partner, thinking about how the team – the project will be organized, understanding all our methodology and best practice. And we find ourselves talking about that a great deal more if you compare to how we were selling maybe a decade ago, where there's very, very heavy emphasis just on the technology. But in terms of the overall duration of the sales cycle, in some respects, it's gotten faster. But then again, over time, the ambitions have gotten larger and the projects more complex. So it's been a bit of a wash when you get down to the core evaluation part of the cycle. What we do think has gotten faster and we are optimistic of continuing to improve is what we call wandering in the desert phase, the deliberation about whether to undertake core system transformation in the first place, and I think we see some encouraging signs that that's becoming much more of a decided question in our favor.

Great. Thanks so much, guys.

Thank you. We'll take our next question from Matt Van Vliet with Stifel. Matthew Van Vliet - Stifel, Nicolaus & Co., Inc.: Yes, hi. Thank you, on for Tom Roderick today. Congratulations, Karen. Question on some of the newer products or those offered outside InsuranceSuite. Multi-part here, but kind of how should we think about revenue contribution or ASP contributions now or more importantly going forward? When you're adding these on, do you think there's much impact now from having all this additional SI capacity that allows you to maybe have a more robust project? And then long-term, just kind of where do you see revenue coming from InsuranceSuite and the additional modules? Marcus S. Ryu - President, Chief Executive Officer & Director: Right. So InsuranceSuite will always be the preponderance of our bookings and, therefore, our revenue. We don't see that changing for any kind of – over any meaningful horizon. However, new products are not just there incidentally, they are expected to make a meaningful and growing contribution to both bookings and revenue. We have, of course, our own internal targets and plans for that. And I'd say while staying at a high level that we're on track or ahead for our expectations for the newer products. But in terms of revenue, they're competing against, if you will, a much larger corpus of existing contracts and relationships with recurring revenue. So that does recur in each period, where they are just another layer of additional recurring revenue being added on top of that. But it will be a growing wedge that are important to our growth aspirations for the future. And we also – we expect we have a couple levers there. First, we have more products to build, each of which will carry its own license. And…

Thank you. We'll take our next question from Alex Zukin with Stephens.

Yeah, hey, guys. Congratulations on a solid quarter. Marcus, one for you, just increasingly we've been picking up, and I think in some of your comments about the data and analytics product traction. We're hearing that it's not just becoming a point of up-sell, but it's actually starting to drive sales cycles with the core products as well. So can you just walk through, how are the conversations changing now now that you have these products working in the field with some of your customers? Marcus S. Ryu - President, Chief Executive Officer & Director: Yes, I appreciate the question and the observation. That's absolutely the case. We see data management, which is the overall rubric for all our data assets right now, as a very important complement to the core suite. Right? So our core suite is a transactional engine. It's the operational platform in which people spend, insurance knowledge workers spend their working day, but of course what that operational platform is doing is generating and processing huge amounts of data. And that data is, if you will, the core inventory of an insurer. Right? It's what they have to analyze. It's what they transact on. And so data is not – it's not an afterthought for an insurer, it's often the main objective of a transformation program is to have better command over that data to understand what's going on and then to translate that into analytic insight, which gets re-injected into the operational platform. So, for all of these reasons, we find ourselves positioning data at the same time as we talk about the operational platform, namely InsuranceSuite. And we have more insurers who say, well, both are essential, we should just license it all at once and we should stage – frame the project in a way that they're both being implemented at the same time. On top of that, our data assets perform a couple of other very useful functions in the implementation cycle. They often provide a staging area for data conversion across multiple legacy systems, and they can also serve as an integration hub for a large category of key integrations that have to happen in a typical implementation. So for all these reasons, they're right alongside the core suite. And sometimes it makes sense to implement them together, sometimes after the core implementation. And in a couple of cases, even before, as an initial stage. We're seeing all of those and those are all very healthy trends for us. And we expect as those products mature that we're going to enjoy very broad adoption of them by our customers.

That's helpful. And then, Karen, maybe just one for you. Again, on the FX side, just maybe a little bit more clarity just on the guidance. I realize it's going to be higher than the initial – a little bit higher than the initial headwind that you've talked about, but maybe is there some way to just quantify, how – are you – on a constant currency basis, how does the guidance that you just gave look versus the guidance that you have provided on the prior quarter call? Karen Blasing - Chief Financial Officer & Treasurer: So if you remember that guidance was given in the first part of December, so there had already been a fair amount of acceleration in the U.S. dollar as of that early December. Now there has been a bit more acceleration of the U.S. dollar, but it hasn't necessarily been in currencies that have affected us the most. So, our four biggest currencies that we get some impact from are Austrian dollar, Japanese yen, British pound, and then euro. And so we've been able to look at kind of the piano play of transactions that we have in our customer base as well as those expected transactions and still stay within the expected guidelines.

Okay, got it. Karen Blasing - Chief Financial Officer & Treasurer: So it's deteriorated a little bit, but not a significant impact from where we thought we were in the first part of December.

Got it.

Thank you. And with that, we have no further questioners in the queue. I'd like to turn the program back over to Marcus Ryu for any additional or closing comments. Marcus S. Ryu - President, Chief Executive Officer & Director: No other comments. Thank you all for participating on our call today. Good-bye.