Ladies and gentlemen, thank you for standing by, and welcome to the Sonus Networks Fourth Quarter and Full Year Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, February 20, 2014. I would now like to turn the conference over to Patti Leahy, Vice President, Investor Relations. Please go ahead.

Thank you. Good morning, everyone. Welcome to Sonus Networks Fourth Quarter and Year End 2013 Operating Results Conference Call. Today's press release, prepared remarks and supplementary financial and operational data have been posted to our IR website at sonus.net. A recording of this call will be available there later this morning as well. During the call, we will also be referring to our presentation with supporting information. Please take a moment to locate this on our IR website if you haven't done so already. Joining me on the call today are Ray Dolan, President and Chief Executive Officer; and Mark Greenquist, Chief Financial Officer. As shown on Slide 2. Please note that during this call we will be making forward-looking statements regarding items such as future market opportunities and the company’s financial outlook. Actual events or financial results may differ materially from these forward-looking statements and are subject to various risks and uncertainties including, without limitation, economic conditions, market acceptance of our products and services, the timing of revenue recognition, difficulties leveraging market opportunities, the impact of restructuring activities, and our ability to realize the benefit of acquisition. A discussion of these and other factors that may affect future results is contained in our most recent form 10-Q filed with the SEC and in today's earnings release, both of which are available on our website. While we may elect to update or revise forward-looking statements at some point, we specifically disclaim any obligation to do so. During our call, we will be referring to certain GAAP and non-GAAP financial measures. A reconciliation of the non-GAAP to comparable GAAP financial measures is included in our press release issued today, as well as in the Investor Relations section of our website. With that, it's now my pleasure to introduce the President and Chief Executive Officer of Sonus, Ray Dolan.

Thank you, Patti, and good morning, everyone. I'm very pleased to report strong fourth quarter and year-end results. We've made great progress and we hope the presentation that Patti referenced will help make that progress abundantly clear. Let's move to Slide 4. I'd first like to recap the news announced yesterday, which is that we have successfully closed the transaction with Performance Technologies, or PT. We're excited about this deal for several reasons: First, it substantially expands our addressable market. The diameter market is projected to grow at a 42% full-year CAGR, reaching nearly $1 billion in 2017. Nearly all of this market opportunity is ahead of us, combined with our SBC TAM, addressable market is expected to increase by 50% to nearly $3 billion in 2017. Second, it's strengthens our virtualization strategy, which is directly in line with a current architectural shift taking place toward NFV. We plan to expand and diversify our product portfolio with an integrated, virtualized diameter in SBC solution. And third, this acquisition accelerates our mobility strategy by adding Diameter Signaling capabilities that are required in all-IP, IMS-based 4G/LTE networks. Let's now turn to the highlights of the fourth quarter and full year on Slide 5. As discussed with you during our quarterly calls throughout 2013, we focused on 4 key metrics that we thought would be foundational to our continued success. Those key metrics included SBC growth, customer growth, enterprise and channel growth and achieving full-year non-GAAP profitability. I'm very pleased to report that we firmly delivered on each of these commitments. And let's take each in turn on Slide 6. Our SBC revenue grew a healthy 48% year-over-year. We won an unprecedented 670 new customers in 2013, many to our new channel initiatives. Today, about 80% to 85% of our new customers in…

Thanks, Ray, and good morning, everyone. Before diving into the details, I've been asked on many occasions by investors and analysts, some of you on this call, what was behind my decision to join Sonus. So allow me to briefly provide some color for you. To start, I've known Ray for a number of years now, and have been watching closely his journey at Sonus. I also have previously worked with Todd Abbott, when we were both at Symbol Technologies. So I thought, I had a good handle on 2 of the key people that I'd be working closely with. I had an opportunity to meet others in the leadership team and board and my observation is that this team has done truly heroic job transforming Sonus, reaching the key inflection point, as they now have where the growth engine is larger than the core business, tells me that the future is indeed bright for Sonus. In my opinion, they remains a disconnect between the company's current market value and the real upside potential, which I believe exists. So in short, I'm extremely happy to be the newest member of Ray's management team, and I'm really looking forward to helping take Sonus to the next level. So now turning to Slide 14 for the financial highlights. In the interest of time, I'll keep my remarks, primarily focused on the fourth quarter of '13 compared to the fourth quarter of 2012. Total revenue for the fourth quarter was $76.2 million, up 1% from the fourth quarter of 2012. And while that might not sound like much growth, if you look underneath, you'll see really strong progress on the SBC side of the business. SBC product revenue of $32.2 million, grew 56% compared to the fourth quarter of 2012. And SBC total…

Thanks, Mark. Let's wrap up starting on Slide 19. A lot of work remains ahead of us to demonstrate meaningful operating leverage, which I'm convinced we will do over time. As I stand back and evaluate our progress, I see a very different company today than I did 3 years ago. I see a company that has delivered consistent strong SBC growth, in spite of the steep hill we're climbing from a declining Gateway business. I see a company that is established a vibrant channel and it's extended, its go to market to the enterprise segment, when many were skeptical it could be done so successfully. I see a company that has started to make real financial progress and lived up to its commitment to deliver non-GAAP profitability for the full year. And, while admittedly, just a start, it's an important pivot point for company that is, in its early days, won the commercial battle but lost the war bringing that commercial success to the bottom line. Today, we are poised to do both. I also step back and see a company that's becoming increasingly strategic to its customers and partners. And this is perhaps the aspect of our transformation that I am most excited about. Today, we are engaged in a strategic way with our customers that is almost unprecedented. I attribute this in large part to tenacious focus that our team has demonstrated in delivering the market's broadest, most innovative portfolio and road map, working in concert with our customers to deliver the industry's next generation of virtualized cloud-based networking. That concludes the prepared remarks for this afternoon, and I'll now open the call up to questions. Operator?

[Operator Instructions] And our first question comes from James Kisner of Jefferies.

So just jumping in the questions here. So I'm just wondering if you could give us any texture on what drove the session border controller strength in Q4. Is it primarily enterprise? Is it both service provider and enterprise? And I'm just kind of wondering too, as you look out into 2014. I know, you're not going to guide those segments, but can you just intuitively help us, is it really mostly just the channel and enterprise? Is that the primary driving factor? Or is service provider also contributing? Is VoLTE at all in these numbers?

James, it's Ray. Let me answer the last part first. No, VoLTE is not in these numbers yet. Happy to talk about it more in 2014. On what makes of the strength in Q4, it is both. We had a strong quarter in the channel. We see Lync accelerating, and we see enterprise adoption of SIP trunking globalizing. Those were trends already in 2013 and they're continuing. In fact, I think, they may be strengthening. We are tracking that very closely. But we also saw strong growth in our service provider segment, and I'd expect that to continue into 2014. So I think this is clearly both sides of the SBC market segments as we know them now, continuing to be strong.

Is there any way for you to tell, how much share gain may be helping you here?

Yes. It's complicated issue on share because the market numbers are moving around quite a bit. There's 3 primary analysts that we're tracking and their numbers is actually a fairly diverging. VoLTE is starting to show up, which is clouding the numbers. So if you take them down in segments, we are clearly gaining share in the enterprise SIP trunking market. We are clearly gaining share in the service provider peering and SIP trunking market, but we're not present in 2013 numbers in any VoLTE deployments, and some of those were large enough and were done over a period of, say, 18 months that in the aggregate, were flat share, but we are gaining share in the places that were present. Does that make sense?

Absolutely, absolutely. And just let me get one last question, as just more strategic, Facebook just bought WhatsApp. It just seems like on the face of it that could perhaps to be a catalyst for operators to really kind of, I guess, get fearful and try to invest and accelerate IMS-based networks to drive that you need to any advantage. But I was wondering, what are your thoughts on the WhatsApp acquisition, both positive and negative implications for Sonus?

Sure, James. One is, wow, no disclosure on revenue, but $19 billion, $3 billion of which go to the founders in our shoes, good job. Congratulations to them. But strategically, I think, it continues to play to the theme that the capital markets are completely enamored by the notion of social mobile cloud, and the hockey stick of growth and the notion that, that's going to be a universe that monetizes advertising and users in exchange for free service. And that the rest of the exercise of actually carrying that content and communications layer is either going to be driven by massive deployments in fiber by companies like Google or they're just going to run over dumped pipes by the service providers. So that's kind of like this proceed notion that's out there. However, I will say to you that the reality is probably going to play out differently and there is a role for Sonus to meet in the middle of all those notions as this plays out. It's going to probably take several years for this to become obvious, but it feels obvious to me right now that applications are going to ride over the top of that programmable IP transport layer. Layers like 3 and below are going to look more and more like transport and there will be an intelligence that lives and gets extracted from that, and lives in the cloud in software. And that, that's actually were Sonus is focused. Now, as those players like WhatsApp that are really doing IM right now, which is not necessarily a real-time app, but as they move closer and closer to real time, they will become increasingly obvious value to that intelligence layer for monitoring and managing that real-time communications. So those trends are awesome for us, but frankly, right now, they're a little bit fuzzy and cloudy, and it's just going to take some time for people to rationalize that. Okay?

Our next question comes from Subu Subrahmanyan.

I have 2 questions. Ray, can you talk about, as you mentioned, some of the VoLTE numbers are starting to show up in shares, and so on. You've made some steps in that direction, including PT. If you can talk about for Sonus, when the opportunity turns to revenue, as you noted, it's not in your 2014 numbers. And then, you'd also mentioned some risk of some architectural sale related delays on the SBC site. Clearly, that did not transpire last quarter, you had a very strong SBC quarter. Can you just talk about how that is playing out in 2014, when you look at deal pipeline?

Sure, Subu, thanks for your question. First one is on the VoLTE, the second one, I may ask you to restate because I'm not sure I understood your question. But let me try that first one first. I said that VoLTE wasn't in our '13 numbers. I didn't say, it's not going to be in our '14 numbers. We really don't have enough clarity to project our revenue in 2014 yet, on VoLTE, but we are active. We do believe that the PT transaction that we've closed this week, will help drive the diameter piece and will continue to drive to our SBC piece greater and greater VoLTE traction. We'll see how that plays out, but I didn't make any statement. I want to make sure that's clear on the 2014 piece of VoLTE. The point that I was trying to make is, that's it making market sizing and forecasting a little bit challenging for the industry analysts. You have some of them that are taking up their '13 numbers, and then flattening the curve as the world consolidates around the initial VoLTE deployments, and then others are starting to see that and are projecting it to continue. And we're just going to follow those trends, but strategically and operationally, we are engaged in the VoLTE opportunity. We do think that 2014 is our time. And then beyond that, '15 and '16, as we get more and more strategic with our Tier 1s. Okay. So I hope that's helpful to the VoLTE question. I'll pause there, make sure, you don't have anything else on that and then ask you to restate the '13, '14 issue, please.

Understood on the VoLTE side. On the SBC side, I think, you've made some comments on last quarter's call that you are seeing carriers make some architectural decisions that it may cause some longer sales cycles on SBC. And then you mentioned that clearly didn't impact December, but I'm just wondering, how those architectural decisions are playing out, how you see that playing out in 2014?

Sure. So the architectural decisions to go towards a SIP architecture and drive their cloud-based solutions using our SBC. Those are long sales cycles by their nature. I'm trying to recall the exact comment in Q3 into Q4. And the way I would position is this, I'm always concerned that we don't want to forecast the timing of architectural decisions for our customers. But as you see in our Q4 results, we are still seeing good strength. We forecast good strength in Q1 in our SBC. That is both the enterprise transactional side of business, which is doing well, as well as service providers. So I don't have much to say on that. I am pleased that we are winning more Tier 1 business, continuing to take down orders from existing Tier 1 customers. I think, frankly, that despite the market's desire early on in my tenure for us to kind of shed the gateway business, potentially even sell the gateway business and just focus on a growth engine. We, as a team, are being rewarded by some of our largest customers by being faithful to that gateway side of the business, carrying them through the maturation of their voice business, and using the underpinnings of that architecture to drive their transition to SIP and SBC. And so I think that process is a healthy process, and it will play out over 2014 with our existing Tier 1s, as well as new Tier 1s, that are driving there, either on a 9,000 platform brand new or on our 5,000 series platform or anything else that we may launch going forward.

And final question on the financial side. Gross margin, I think you mentioned, you expect kind of a general moderate increase. And just -- what are the assumptions for legacy product revenue and service in your guidance for the mix.

Yes. So I think -- this is Mark. I think, the legacy product side is going to continue to decline pretty much in line with what we've been seeing over the past year or so. So we are well up into double-digit. I think on the maintenance side, though, that just has been sort of the slowly melting ice cube and kind of expect that to continue. So now having said that, just one note. I mean, when we add PT results into our 2014 results, effectively what we'll do is we'll take their SS7 Signaling revenue, and we'll add that to the core side, the legacy side, as you called it. And the diameter will put into the SBC side, so that was reflected in the guidance that we gave you. So the addition of the SS7 Signaling revenue, which if you just do the math, it's around $12 million number for 2014, that will get added to the legacy product side, so that's going to moderate somewhat the year-over-year decline that we see there. But the kind of underlying stand-alone Sonus legacy product, I think, it's going to continue to decline pretty rapidly. However, off of an increasingly smaller base, so as Ray pointed out in his remarks, just mathematically on an absolute basis, that's going to be a smaller and smaller drag on revenue growth year-over-year, as we go forward.

Our next question comes from Mike Latimore of Northland Capital.

Ray, you mentioned, you saw a Lync related revenue accelerating, can you just elaborate on that a little bit? Is it just more customers coming in? Or is it current customers fully expanding and replacing your PBX across divisions? Just maybe a little more color on that would be interesting.

Sure, Mike. This is Ray. The Lync environment, if you will, is globalizing nicely. There's a lot of strength all around the world, particularly in the EMEA region. And we are seeing both modest incremental revenue from existing accounts, as well as some strong new account adds. The good news is that the channel has been in place long enough. We are driving to a greater and greater traction in the channel. We're picking up channel partners nicely that are moving beyond just an Oracle-Acme relationship, so that's very healthy for us. We are also seeing though that there appears to be an inflection point in the awareness of unified communications, among some large multinationals that it feels like, to me, in the last 6 months. People have gone from thinking this was interesting to it's now intuitive to CIOs and to senior executive suite that BYOD has been around long enough. People understand what unified communications looks like on a smartphone. It means, running all your apps simultaneously, and doing whatever you want and they want that to transition between an enterprise environment, a home environment and the mobility environment, that's why fixed mobile convergence is driving. So for all of those reasons, Lync is strengthening. Microsoft is putting a lot of wood behind that. In fact, we're active today in the Lync conference that's still going on, this is the last day of the Lync conference out in Las Vegas this year and we're one of their platinum sponsors.

Great. And then on the services side, what's the rough split between maintenance and professional service events?

Oh, I mean, the vast majority of the services side is the maintenance. I want to say, just off the top of my head, it's going to be close 70% -- close to 80% in maintenance on the services side.

Okay. And then you talked about, about $3 million, I believe of diameter revenue this year. Can you just elaborate a little bit on that? Is that 1 or 2 customers? Or that's multiple customers? Or are there any Tier 1s in the mix there? Are you the exclusive vendor? Just a little bit more color will be helpful.

So I think, we're being -- we are being cautious on our guidance there. I mean, we just completed the transaction. I think on the go-to-market side, we do have some work to do there with regard to augmenting and strengthening the team. I don't have a lot of color on like what's going to cost the $2 million to $3 million, I mean I suspect that, that is going to be a number of smaller deals. Obviously, if there was like one bigger deal, it's going to change that dramatically. But we're not at least, where we are right now kind of calling that in our guidance. You can rest assured with sort of trying to find one of those and do better. But like, we're given where we stand right now, I think, this is going to be get PT integrated, get the team in place and start to get up the pace. And as we said, when we the announced the deal, we really think that that's starts to begin into a more meaningful way in 2015 as opposed to 2014.

Sure, sure. And just one last one, what was the book-to-bill over one on the quarter?

I'm sorry, say that one more time? Book-to-bill?

The book-to-bill ratio?

Yes, Q4 was a very good bookings quarter, as it typically is because that's when we're doing the maintenance renewals bid; even adjusting for that, it was a good bookings quarter. And frankly, we took that momentum also into the first quarter as well. So when we look at the first quarter, we're actually looking more linear than we typically would because we came into the first quarter with a good backlog.

Our next question comes from Paul Silverstein of Cowen and Co.

My apologies if you've already addressed some of these, but Ray, I'm hoping that you give us some new insight. I appreciate that you don't have any VoLTE revenue yet to disclose and sending a diameter, but can you give us any indications, some sense for how many wins, if any, you have on both VoLTE and the diameter by way of PTIX? Have they made meaningful penetration strategy at this point? Or is it still largely on the comp? And I've got a couple of follow-up questions.

Sure, Paul. On PT, they've had a few wins, but I would -- if I had to choose between meaningful and on the comp, I'd call it on the comp. This is a company that had been embedded in SS7 networks had moved their product portfolio to diameter, but really hadn't fed the go-to-market side. And as a result, haven't had the opportunity or the capital to really drive that. We can do that together, and we will, and we look forward to talking more about it in '14, but for now, I'd call it on the comp, okay?

And do you need -- are the products there? Or do you need to do some lifting similar to what was the case, when you were arrived at Sonus on the SBC side?

It's nothing like when I arrived at Sonus. PT's products are there. Now they need to be continued to be developed, as you would expect, that was in their plans organically anyway. And then, they need to be virtualized quickly, and we're going to focus on that, so that we can combine them with SBC and create a unique solution in the marketplace, and really lead the world to that intelligence layer, which in my opinion, has to be both a session layer, as well as the signaling layer. That's the power of this transaction.

Okay. And again, my apologies if you already answered this, but with respect to VoLTE any wins yet?

Nothing that we could comment on VoLTE, Paul. I think it's still early days, and so I don't want to give you the impression that we are on any verge of major breakthrough there. But I will say that the trends are very favorable to us strategically, and the majority, the vast majority of the VoLTE market, is in front of us. In front of everybody in the marketplace.

Okay. CenturyLink and AT&T, the CenturyLink 10% contribution to the quarter, what was the primary driver of that? Was it the SBC or was it a mix?

It was a mix, but it was primarily SBC.

And the same question for AT&T's 10% contribution over the calendar year, was that primarily SBC?

It was, I would say, a mix.

A mix, okay. And finally, my last question, I'll pass it on. Did you comment on the split between enterprise services side of the revenue for your SBC?

We didn't break it out for SBC, but the majority of the enterprise revenue is SBC. I mean, our gateway doesn't flow to the enterprise as an end market and it certainly doesn't flow through the channel.

So I can use that as a proxy and figure out the rough split between enterprise and [indiscernible]

We'll help you on that, and we're not trying to be cagey, Paul, but I just don't want to give you the wrong answer. But it is a fairly simple set of math because everything that's going through the channel in the enterprise. I guess, there's some enterprise revenue that could be gateway, but it's very, very limited. I'm know going through the channel load it's 100% math SBC through the channel.

Our next question comes from Todd Koffman [ph] of Concourse.

Two quick ones. Did you say going forward, you're going to be putting the performance technology signaling product revenues in your SBC numbers?

Yes, so what we'll do is they've got also a split of, what we consider to be legacy SS7 and they've got their next-gen, which is the Diameter. And what we'll do is we'll take SS7 revenue we put that in our legacy or core segment, and then we'll take the Diameter and we'll put it in the SBC. Just, so that I just want to give you guidance on our visibility, our transparency and how we'll take that $15 million that we're guiding to in '14, and where it will start to show up in the actuals.

Very helpful. Just a follow-up. When I look at the first quarter guidance on SBC, and I sort of compare it to the last 5 or 6 quarters, SBC business is typically running around $30 million, plus or minus, and then you have this really strong calendar fourth quarter just posted a $42 million total SBC. Just -- was that, as a follow-up to Paul's question earlier, largely, just enterprise business that you filled out to channel that's linked to enterprise? Or was there something else in the December quarter in SBC that made that quarter look so strong?

I think that's just typical seasonality. I mean, if you look back over the last couple of years. You're going to see that the fourth quarter is always the strongest. And we've seen the SBC revenue be the strongest in the fourth quarter, and also just as a percentage of our total revenue, it's typically the strongest in the fourth quarter. First quarter then basically goes back down and will be better year-over-year. But we'll sort of track at a lower level. We would expect then a little bit better in second and third, and I would expect fourth quarter of '14, as we've comprehended it in our guidance, to be the strongest quarter again. So, kind of a rambling way of saying, probably less complicated than what you were thinking. It's just kind of -- it's just the normal seasonality that's impacting our business.

Okay. Because historically in the last few years, the SBC business just mathematically, year-over-year was strongest in the calendar first quarter. And now it's looking like it'll be up about 10% year-over-year based on your guidance. That's why I was asking the question.

Yes, Okay. And that's fair, but like I said, I was more focused on the seasonality and in the fourth quarter. You're typically going to see SBC being strongest.

[Operator Instructions] And our next question comes from Carter Mansbach of Jupiter Wealth Strategies.

I just had a quick question regarding the buyback. So you mentioned that the buyback is implemented. Can you tell us how many shares you bought? And how many you have left?

Sure. So we had announced last year $100 million buyback program. We've bought back just under $60 million. I believe it's 18.7 million shares, and we have around $40 million left to go in that program. So it will depend on the price of the stock with regards to how many shares we end up buying. And we would expect that we'll complete that $40 million sometime during the '14 calendar year.

All right, seems like it's been solid investment for the company so far. Keep up the great work.

Our next question comes from Steve Cohen [ph] of Provo Partners [ph].

First, housekeeping. What was the head count at the end of the fourth quarter? And 10% customers in the quarter? And more importantly, looking forward to 2014, can you talk a bit about what the OpEx trends are going to be considering that you're heading 100-plus people from the PT acquisition? What kind of growth you anticipate in OpEx next year? Also can you give any guidance as far as the enterprise and channel contributions. Do you expect those to continue to tick upward as a percentage of revenues in 2014?

Sure. So let me take those one at a time. So with regard to year end headcount, it was about 1,050, 1,060 right in there. And actually, like at the current moment in time, we are still probably right around those levels. So we've been monitoring head count pretty closely. With regards to 10% customers in the quarter, I believe it was -- help me out Patti.

Yes, CenturyLink.

Yes, CenturyLink. So 10% for the year was AT&T's 10% for the quarter was CenturyLink. With regards to OpEx trends. Yes, as we go through the year, we are focused on keeping the OpEx roughly flat, that's excluding PT. And the addition of PT will add some to that, but not a tremendous amount. And over time, we would hope to absorb all of the PT OpEx into sort of our current cost structure as we did with NET, that's what the objective will be with PT. But that's -- we won't be able to do that in '14. That would be something that we will be aiming for, for '15. And then with regard to enterprise, can I hand it over to you.

Yes, Steve, it's Ray. Thanks for your question. On the enterprise, it will really depend on trends. We seek continued momentum on both the service provider and enterprise, so I would expect that the ratios are going to stay in the ballpark that they're in. If we had some acceleration in any of the decisions made or some delays, we could have a quarter, where enterprise is higher or lower as a percentage of total. But somewhere in the 25% range, where we are right now, could be as high as 30%, would be a good blend for enterprise as a percentage of total. Okay? Is that helpful?

Yes, it is. A different question. Can you talk a little bit about what you're seeing in the competitive landscape, particularly as far as Acme year after the Oracle acquisition? And also if you could talk a little about OREO codes they seem between making a lot of noise recently.

Yes, so on Acme-Oracle, we are competing very vigorously there. And I feel good about how we're doing against Oracle-Acme. One, we're not Oracle. And the world loves the fact that we're not Oracle and the fact that we are easier to do business with customers and channel partners and technology partners. So I feel good about that strategically. I think that teams executing really well, and we are laser-focused. It's the only business we're in compared to other folks that are in multiple businesses and in my opinion, hopefully, not paying enough attention to the SBC market as it grows to a $3 billion TAM. I'll leave it at that. I really don't want to give into the deal-by-deal kind of dynamics, Steve. With regards to AudioCodes, I agree, they're making a lot of noise. They can make all the noise they want. We want to focus commercially. On the channel partnerships, the benefit of channel partners to carry our product and to bring our products into that part of the market, which is the low to medium end of the market, where NET compete independently, and now as part of Sonus competes with AudioCodes. And we go toe-to-toe with them all the time. I love our solution. We are continuing to compete vigorously and drive that side of the market as well. But in that case, what we can do is that we've got the broadest portfolio that's the one-stop shop for the channel, and we are going after that as hard as we can in 2014.

I think also on AudioCodes, if you look what's coming out of the Lync conference, there've been comments made about Lync really gaining market share in the enterprise UC market, and we see that we believe that, that's true. Both ourselves, we feel like ourselves in AudioCodes are like the 2 leaders there in terms of that business. And so frankly, I think, we're both benefiting from Lync increasing their market share and UC. So we obviously both vying for our fair share or more than fair share of the pie, but that pie is going rapidly, so I think we're both benefiting tremendously from that.

And our final question comes from Dmitry Netis of William Blair & Co.

Dmitry, are you there? [Technical Difficulty] Dmitry Netis - William Blair & Company L.L.C., Research Division: Can you hear me now? First of all, great to see you guys get over that 50% line for the new products. Great accomplishment. And a couple of questions that I have is, if you, Ray, will just kind of refresh our thinking around the market. Both enterprise and service provider, as you've mentioned, the industry data varies and there's some that may be including the VoLTE contribution there. What is this you exclude the VoLTE business? What would be the natural sort of growth, call it, 5-year CAGR, 3-year CAGR, whichever way you want to look at it in both the service provider and the enterprise markets? How are you guys are thinking about? And I imagined you'd probably talk more about it at the Investor Day, but just give us a sense of your current thoughts.

Sure, Dmitry. Thanks for your question. So if you strip out what might be early lumpy VoLTE, it's probably a market that's growing 20%. It might be a little bit more than that, it could be a couple points less than that, and it's probably a little faster on enterprise and a little slower on SP. Now when I say probably, it's because these projects could take done a fairly good gulp of capacity pause for a year. And so the data will look a lot more rational over a one-year period than it does quarter-to-quarter, okay? So, I expect that to change, I actually think it will accelerate because as VoLTE drives growth and fixed mobile convergence drives a common signaling and session layer, I think that two of them are going to come back together again and drive even greater growth in '15, '16 and '17. So the broader CAGR of say, 35% to 45% that's there for the category in general, I think it's healthy and sustainable and potentially even conservative. Dmitry Netis - William Blair & Company L.L.C., Research Division: That's very helpful and I will imagine, if I looked at your FBC [ph] guidance for the full year, are you getting growth of 27%? You're calling the market growing at 20%, so there's certainly some market share gains, probably embedded in that guidance. Is that the way to think about this?

That's not a bad simple first take to the extent, we can participate in VoLTE. And some of that -- those numbers come from VoLTE. It could be just a modest share gains to the extent that it all ends on our current place, that's fine. So that's where we go and any other questions on that, Dmitry? Dmitry Netis - William Blair & Company L.L.C., Research Division: Just a real quick one here on -- if I still look at the session border controller revenue guidance, I think you're lumping it for the total. I mean, you're providing the total revenue contribution. Is that what we should be expecting going forward? Or are you going to at least maybe directionally guide us in terms of products and services. If you could talk about whether services maybe growing faster than their product, or in line with product growth. Give us some sense of that.

Yes, sure. I think on the guidance side, we're going to stick to the total revenue. I mean, certainly as the actuals come out, we do these calls or we are more than happy to give you more color in terms of, what are the trends and what are the components that are like driving the actual numbers. But I think for guidance purposes, we're just going to stick to the total SBC revenue. Dmitry Netis - William Blair & Company L.L.C., Research Division: Can you talk qualitative whether one gross over the other? Or is it in line for the growth of both anyway kind of...

It's roughly in line for both. It's is roughly in line for both. We're presuming that obviously, the product is the driver, the attach rates will mean relatively the same, therefore the services will continue to grow at a commensurate rate. There's nothing dramatically that's changing their that's causing any kind of disconnects or anything. We see both of them growing consistently together.

This is a Ray. Our current mix is fairly close to the industry mix and the trends are fairly stable, so we'll monitor that disclose quarterly, where we are in the mix. But I don't expect that to be any big surprise to our results or any, certainly, any principal driver in any changes in our results in 2014. Is that helpful?

Gentlemen, there are no further question. I'll turn the call back over to you for any closing remarks.

Thank you, operator. This is Ray. I appreciate everybody's time this morning. I'm mindful of the fact that the markets are about to open, so I'll keep my closing remarks brief. But I'm very proud of this team for having made it across the chasm toward revenue growth that we will never turn back from. In the future, we are going to focus on being a greater and greater software-oriented company, to drive SDN, virtualizing our products and NFV are all very, very favorable trends to our company, to our industry at large. And so, we're going to pursue those and we look forward to talking more with you at Investor Day about what those mean to our company and to our operating model. But thanks for your time this morning, and thanks for your support over the several years for Sonus and for the team, the management team as well. Have a great day.