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Lixi Yuan: Good morning, good afternoon and good evening. Welcome to Lenovo's Earnings Investor Webcast. This is Lixi Yuan, Director of Investor Relations at Lenovo. Thanks, everyone, for joining us. Before we start, let me introduce our management team joining the call today. Yuanqing Yang, Lenovo's Chairman and CEO; Winston Cheng, Group CFO; Luca Rossi, President of Intelligent Devices Group; Ashley Gorakhpurwalla, President of Infrastructure Solutions Group; Ken Wong, President of Solutions and Services Group; and Sergio Buniac, Senior VP of Mobile Business Group and President of Motorola. We will begin with earnings presentations. And after that, we'll open the call for questions. Now let me turn it over to Yuanqing. Yuanqing, please.
Yang Yuanqing: Hello, everyone, and thank you for joining us. Today, I'm pleased to share that Lenovo has delivered another quarter of record performance, capitalizing on the AI democratization trend, we have made significant progress in both Personal AI and Enterprise AI, driven by our clear strategy, operational excellence and the relentless innovation. The results reflect not only our strong performance today, but also our strength to leading the AI era. First, let's start at the group level. Last quarter, our group revenue reached an all-time high of USD 20.5 billion, growing at almost 15% year-on-year. Our profit grew even faster with adjusted net income increasing more than 25% year-on-year. All business groups and all sales geographies, delivered a double-digit year-on-year revenue growth. While our AI-related revenues reached 30% of the group total increasing by 13 points year-on-year. While uncertainties remain in the external environment, we are seeing positive signs of stabilization. We will continue to leverage our unique Global/Local model to navigate uncertainties, lead the industry with operational resilience and capture the tremendous hybrid AI opportunities. We are seeing today's AI era unfold along a clear path. The first wave was marked by the emergence of large language models, which triggered a massive demand for AI infrastructure, and led to our explosion in cloud-based and training intensive computing power. Now as large language models become increasingly commoditized, user priorities are shifting towards personalization and the private domain. This is accompanied by growing emphasis on efficiency, response speed, security privacy and sustainability. This evolution is steering AI development towards a more human and enterprise-centric paradigm unlocking substantial opportunities in AI devices of diverse form factors, hybrid infrastructure of public cloud, private cloud, on-prem data center and edge computing as well as AI solutions and services tailored to diverse needs. This very trend, the democratization of AI is now accelerating rapidly across both Personal AI and Enterprise AI. In Personal AI, consumers are increasingly looking for AI outputs that are based on their own experiences, memories, behaviors and knowledge. At Lenovo, we are addressing this demand for hyper-personalization by landing our vision of One Personal AI, Multiple Devices. You will witness this firsthand at our upcoming Tech World on January 6, 2026, where we will launch our Personal AI super agent to the global market. It orchestrates across wearable and ambient devices to see what you see, hear what you hear, and memorize what you have experienced. Furthermore, it leverages portable devices and personal trusted computing hubs using personalized algorithms and models to continuously learn from your habits and anticipate your intentions, so that it can think as you would think and act as you would act, and ultimately becoming your Personal AI Twin. I invite you to join us for this spectacular event at Sphere in Las Vegas in person or via live stream. Our IDG or Intelligent Devices group acts as the core engine behind the Lenovo's Personal AI strategy as demonstrated by strong results from last quarter. Its revenue exceeded USD 15 billion with a 12% year-on-year growth. PC market share exceeded 25% for the first time in our history with a sustained industry-leading profitability. Our AI PC leads the Windows AI PC category as a global #1. We also achieved a record-high Motorola smartphone volumes last quarter. Our momentum in AI device is particularly encouraged with its revenue mix within IDG increasing by 17 points year-on-year to 36% now. In Enterprise AI, the infrastructure market is undergoing an important shift from AI training in public cloud to AI inferencing increasingly happening on-prem under the edge. It's significant because the scaling of infrastructure will potentially drive even higher growth of devices and applications, further expanding our total addressable market. At Lenovo, we are driving our Enterprise AI strategy by helping businesses, turn data and knowledge into insights and value. Specifically, we started with helping enterprises collect and process various types of data, organize it into knowledge, leveraging the computing power of our hybrid infrastructure. We then apply AI models and AI agents to turn data and knowledge into insights and outcomes or engage the business processes. These are consolidated into repeatable, scalable solutions for horizontal functions or vertical industries are supported by our full-cycle services. Ultimately, our goal is to create Enterprise AI Twin for our enterprise customers. ISG or Infrastructure Solutions Group is the key driver of Lenovo's hybrid infrastructure. Last quarter, its revenue grew 24% year-on-year to exceed USD 4 billion. We continue to execute our Cloud Service Provider, or CSP, and the enterprise SMB dual strategy. For CSP, the business not only delivered a record fiscal Q2 revenue, but also demonstrated a robust growth in AI infrastructure with a strong pipeline. For Enterprise SMB, we are optimizing and even rebuilding our business models to better serve the distinct needs of enterprise and SMB customers. We are confident our infrastructure business will return to profitable growth soon. SSG, our Solutions and Services group. By leveraging the Lenovo Hybrid AI Advantage framework, strives to provide the solutions and services for enterprises on their journey of intelligent transformation. Last quarter, SSG achieved 18% year-on-year revenue growth, its 18th consecutive quarter of double-digit expansion with our operating margin over 22%. Projects & Solutions and Managed Services revenue mix further advanced to almost 60% of SSG's total revenue. We are accelerating this business further by unleashing the power of Lenovo Hybrid AI Advantage, combining the AI factory, AI services and the AI library of repeatable, scalable AI solutions for selected vertical industries and horizontal functions. To conclude, we are proud of our record results, confident in our vision and strategy and determined to capture the enormous opportunities ahead. It's our firm belief that by rigorously executing our hybrid AI strategy, we will not only deliver sustainable long-term returns to our shareholders, but also make AI truly personalized for every individual and every enterprise and eventually bring smarter AI to all. Thank you. Now let me turn it over to our CFO, Winston. Winston, please?
Shao-Min Cheng: Thank you, Yuanqing. I will now go through the Lenovo's Fiscal Year 2025, '26 Second Quarter financial and operational results. The group continued its strong performance into the second quarter, maintaining strong momentum across our business groups and sales geographies. We delivered record fiscal quarter revenue of $20.5 billion representing 14.6% year-on-year increase with balanced double-digit growth across all business groups. Our adjusted net income grew 25% year-on-year to $512 million, and adjusted net income margin expanded to 2.5%, driven by higher revenues. Our second quarter results demonstrate our strategic potential to capture substantial AI opportunities. AI-related revenues now account for 30% of the group's total with high double-digit revenue growth year-on-year in AI servers and triple-digit revenue growth in AI PC, AI smartphones and AI services. Our PC business continued strong growth momentum and continue to grow share, reaching historic high of 25.6% global market share. Our smartphone business achieved a record high concurrent quarter activations, underpinned by solid end-user demand. ISG delivered strong revenue growth year-on-year and improved operating performance driven by growth in AI infrastructure and related industry demand. SSG delivered a record revenue quarter while continuing to expand operating margin. All reported geographies delivered double-digit year-on-year revenue growth, reinforcing our balanced strength across 180 markets supported by our Global/Local strategy and resilience and agility of our supply chain. Turning to liquidity and cash position. Our growth continues to be supported by disciplined financial management. In the second quarter, we delivered operating cash flow of USD 1.5 billion, while free cash flow climbed to $1.1 billion, supporting continuous investment in focused growth areas. This was driven by robust operational cash and effective working capital management with days of inventory reduced by 10 days year-on-year as well as disciplined expenditure. We also achieved a 31% year-on-year reduction in adjusted net finance costs, reflecting ongoing cost optimization and working capital efficiency initiatives. Our HKFRS net income this quarter was $340 million, primarily impacted by noncash items related to warrants and 0 coupon convertible bonds associated with our strategic transaction with Alat, a wholly owned subsidiary of PIF. Key adjustments to reported figures include $148 million noncash fair value loss from warrant revaluation and $28 million notional interest from the convertible bonds. Further details on other noncash items can be found in the supplementary financial materials at the end of this presentation. We encourage investors and analysts to focus on adjusted operating profit and net income, which excludes these noncash, nonoperating impacts and better reflect our core operational performance. Now let's turn to the performance of our business groups. IDG delivered another strong quarter. Revenue up 12% year-on-year to $15.1 billion, and operating profit climbed 11% to $1.1 billion. This performance reflects expanded PC leadership globally, obtaining a record high global market share of 25.6%. Growth was driven by high-margin segments, premium PC shipments grew 25% year-on-year, and AI PCs are now a major contributor, accounting for 33% of Lenovo PC shipments, solidifying our #1 position with 31.1% market share in the global Windows AI PC market. In China, AI PC with 5 key features now make up 30% of notebook shipments. Our cross-device AI ecosystem is creating a strong foundation for our Personal AI vision, delivering a seamless One AI, Multiple Devices experience that connects PCs, tablets and smartphones. Our continued investment in AI-driven innovation and R&D are delivering strong results. Lenovo remains the clear leader in the PC industry across all major categories. Globally, we hold the #1 position in both consumer and commercial segments, and we continue to expand market share in the second quarter. Within our PC portfolio, our leadership further extends into strategic categories, such as Windows AI PC, gaming and premium PCs. These are critical growth drivers as the industry transitions to a more intelligent and immersive computer experiences. Our global leadership is balanced across the world with #1 market leadership in 4 out of 5 geographies and market share gains in every region during the quarter. This broad-based growth underscores the strength of our manufacturing footprint and resilience of our global supply chain. Turning to our Infrastructure Solutions Group performance in the second quarter. ISG continues to benefit from the strength of AI infrastructure spend and our leading product and technology for advanced computing, delivering 24% year-on-year revenue growth to $4.1 billion with improved operating performance, driven by new customer acquisitions in cloud service providers and advancing enterprise and SMB transformation. ISG continued to experience strong growth in our Neptune liquid-cooling technology, which grew 154% year-on-year, reinforcing our leadership in sustainable high-performance infrastructure. We continue to drive sustainable growth in high potential areas, advancing enterprise and SMB transformation to capture opportunities in AI infrastructure and inferencing. Our AI server business achieved high double-digit revenue growth, fueled by rising AI adoption and supported by clear product launch road map. In China, our operations delivered consistent operating margin improvement, leveraging uniquely localized offerings and our ODM+ model to drive differentiation. In the second quarter, ISG broadened its customer base across CSP, enterprise and SMB segments with wins in the AI infrastructure, cloud computing and high-performance computing. These deployments include AI training clusters, GPU as a service and liquid cooling solutions, reinforcing our position in next-generation infrastructure. We also continue to see growing traction in AI inferencing workloads as customers deploy and scale AI applications across hybrid infrastructure, and we are actively accelerating our capabilities in this area. The enterprise server and storage industry has evolved over the last few decades and benefited from the infrastructure spend behind some of the largest industrial revolutions underpinned by data compute and storage. Lenovo's ISG business has an industry-leading technology and product excellence from its IBM x86 server heritage. Our leadership in high-performance compute and in liquid cooling positions in Lenovo well for the recent growth in demand due to AI training, and we are aligning our resources to capture the next future for AI inferencing in enterprise and SMB to traditional CSP and most recently, the emerging AI opportunities from CSPs. Echoing Yuanqing's remarks, we're entering the next stage enterprise and SMB AI. This represents a significant opportunity as the AI transitions from training to inferencing, driving increased demand towards on-premise hybrid environments. We've delivered another record revenue quarter marking SSG's 18th consecutive quarter of double-digit year-on-year revenue growth. Revenue rose 18% year-on-year to $2.6 billion, and operating margin expanded near historical high. SSG grew at twice the pace of addressable market driven by robust demand in high-growth areas such as hybrid cloud, AI and digital workplace solutions. Growth in Project & Solutions was driven by enhanced AI solutions targeted at key verticals such as manufacturing and retail. Revenue from TruScale DaaS and Infrastructure as a Service also increased year-on-year with notable customer wins across global markets. In addition, both support services revenue and bookings growth accelerated. Overall, SSG deferred revenue grew 17% year-on-year to $3.6 billion, providing strong visibility into future performance. With combined revenue for Managed Services and Project & Solutions now accounting for 59.9% of SSG's total revenue and AI services tripling year-on-year, we are capturing higher-value AI-led services business models. Over the past 4 years, Managed Services and Project Solutions have grown at a 25% compound annual rate significantly outpacing the addressable market. Our tech-driven offerings enable customers to optimize cost and deepen engagement, aligning with the industry shift towards subscription and consumption-based models that are gaining strong traction. Meanwhile, support services remain a solid, profit growth driver, supported by rising attach rates from devices and sustainable recurring revenue streams. We are proud to share that group continues to be recognized globally for our leadership in ESG. In 2025, Gartner Supply Chain Top 25, we ranked 8th highlighting our strong performance in building sustainable, resilient supply chains. Lenovo's factory in Monterrey, Mexico was recently added to the World Economic Forum's Global Lighthouse Network, the second for Lenovo, among only 201 leading manufacturing facilities worldwide. Our ESG scores also improved across CDP and S&P Global, and we maintain our AAA rating in the MSCI ESG Ratings for the fourth consecutive year. We've continued to build on our strong foundation of inclusion, the group was recognized as the Best Place to Work for Disability Inclusion in the U.S., the U.K. and Brazil. We're also honored as an Ambassador in the Workplace Pride Global Benchmark, reflecting our ongoing commitment to LGBTQ+ inclusion. In addition, we've deepened our collaboration with the United Nations Industrial Development Organization, focusing on circular economy initiatives. We also joined the Coalition for Sustainable AI, an initiative led by French government in partnership with UNEP, demonstrating our commitment to responsible innovation and environmental stewardship. These achievements reinforce our long-term commitment to sustainability, innovation and building a more inclusive future. Looking ahead, we are hopeful of global trade improvements. Our Global/Local model remains a key source of resilience and differentiation. We're also elevating our brand through major initiatives like the upcoming FIFA partnership and Tech World at CES 2026. With strong execution and continued focus on Personal and Enterprise AI, we are confident in translating our strategy into sustained profitable growth. Thank you. We will now answer any questions you may have.
Lixi Yuan: Thank you, Winston. Now we will open the floor for questions, and this session will be English only. [Operator Instructions] While we are waiting for the questions, allow me to introduce the management team again. Other than our Chairman, Yuanqing Yang; and CFO, Winston Cheng, we also have the following business leaders with us today for Q&A. Luca Rossi, President of Intelligent Devices Group; Ashley Gorakhpurwalla, President of our Infrastructure Solutions Group -- of our Solutions and Services Group; and Sergio Buniac, Senior VP of Mobile Business Group and President of Motorola. Our first question is from Albert Hung from JPMorgan. How big will the memory price impact on margin? What is our strategy to go through the memory cost hikes? And when do you expect to see the impact from inflated memory price? And what will be the memory impacts on our business segments? For these questions, I'd like to invite our Chairman and CEO, Yuanqing, to give some remarks. Thanks. Yuanqing, please.
Yang Yuanqing: Thank you, Albert, for the question. So if you look at the industry and the market, so 2 key -- 2 key dynamics are top of mind. First is top of AI bubble. And the second is concerns about the supply shortages and the rising component prices. And I believe these 2 topics are related to each other. So let me give you my opinion. First, on the so-called AI bubble, my opinion is as with any major innovation, there will be intense investment and competition at the beginning, particularly in certain areas such as large language models. But overall, we do not see a bubble. The substantial investments in AI infrastructure are laying the groundwork for the next major technology wave, much like the early Internet [ field ] explosive growth in PCs, particularly actually triggered the smartphones first for sure, more PC and mobile applications as well. What's happening now is the next wave of AI democratization, spreading across both personal and enterprise use, which is perfectly aligned with Lenovo's strategy. So we are addressing Personal Hybrid AI as well as Enterprise Hybrid AI. So because this AI adoption accelerates, the supply shortages and high component costs are natural consequences of rising demand. Addressing this issue, so first, this is not new for our industry, supply shortage or supply cost up and down the normal situation for the industry. But I believe Lenovo is better positioned and more flexible and resilient than our peers to manage it effectively. So this is not just because of our scale. So indeed, we are probably one of the largest buyers in our industry, combining PC, smartphone, server storage business together. But also, we have the best supply chain in our industry. So we are very proud of that. So actually, we are ranked #8 as again global supply chain -- top supply chain is [indiscernible]. And we have a much stronger and better relationship with the suppliers. And typically, we signed a long-term contract with some top upstream suppliers. So that we are very confident we can manage this situation better than our competition to ensure not only we have enough supply, not just for short term, but for entire year, next year. But for sure, hopefully, the demand will not grow too fast than we forecasted. But also we believe we can get the most competitive cost so that we can remain competitive in the market while protecting our profit and margin. More specifically, for the next 2 quarters, we are very confident we can continue to drive double-digit growth in both our PC business as well as our server and infrastructure solution business. Meanwhile, we are confident that our margin and profitability will not be impacted during this period. Last but not least, from a longer-term point of view, so we have the mechanism in place to adjust the price and continue delivering on our commitment to ensure the market competitiveness while maintaining our margin and profitability. Thank you.
Lixi Yuan: Thank you, Yuanqing. The second question is on PCs, and we also have a few questions on PCs as well. So we've got Anthony Leng from JPMorgan and Leping Huang from Huatai, asking about the PC outlook for the next year. And from Leping, he mentioned congrats on the industry-leading 7.3% OP margin in IDG and looking ahead, how do you assess the headwind from the rising storage memory component prices? Are you confident in maintaining this margin profile via pass-through? Luca, can I invite you to answer the questions.
Luca Rossi: Thank you, and thanks, Anthony. Thank you, Leping. So maybe I'll start with the demand side. And here, I will say that we are definitely more optimistic than what we are seeing from some of the industry analyst reports. So with the visibility, order visibility we have, as of now, I think we are confident to continue that we will continue to grow at double digit, at least for the next 2 quarters and also for the remainder of calendar 2026, on top of that, Lenovo will continue to grow at a premium to market, so faster than the market while maintaining industry-leading profitability, which brings me to the second point and our Chairman and CEO already mentioned it. So regarding the memory SSD commodity cost up trend, first of all, I want to remind to all that this is something we have been able to manage several times in the past, in the previous many years, generally speaking, always successfully expanding our market share without impacting our profitability trajectory. And that is coming with the combination of our strong procurement power, strategic inventory preparation that you can bet we made and definitely also the ability to understand each single market globally so that we know how to price correctly. So I think the combination of all these things bring me to say that we will price in the right way to expand the market share, to continue to gain market share, like we did in the past. Now it's 9 consecutive quarters that we are gaining market share and maintaining our industry-leading margin and our industry-leading profitability. Thank you.
Lixi Yuan: Thank you, Luca. The next question is from Cherry Ma from Macquarie. So this is on smartphone. She's asking the smartphone outlook for 2026 and what is our strategy for new product launches and the pricing given the component price increases? And what's the market to focus on given emerging market demand would tend to be weak when phone prices go up? So can I invite Sergio to address this question? Sergio, please?
Sergio Buniac: Yes. So thanks for the question. I think, I mean, no different than what Luca mentioned. I think, number one, we expect the market next year to go single digit, a little faster in value for the price adjustments. We are not changing our strategy. So we have been 9 quarters premium to market. I think in the last few years, it's not the first time we see component pressures. We have navigated those cycles very efficiently given Lenovo supply chain position. Our strategy continues the same. I mean we are going to double down in double-digit market, share markets, continued expansion in B2B that is growing double digit, and we will continue to accelerate premium. We believe the premium devices will be a little less affected by the component costs rising. Our Edge and Razr franchises are growing 28% year-over-year. We continue to see much faster growth in that segment. And we are now further investing in the [ $400 to the $700 segment ] and above [ $700 ], you'll see some announcements. We also will continue to double down on ecosystem. It's a fast-growing segment for us, and not less important to continue to invest in monetization. Now market-wise, we are more diversified now. So we believe our footprint is not -- we're not going to change. We are seeing strong growth in markets like India, Japan, Italy, Middle East, Latin America, North America. So I think the footprint is appropriate for what we see ahead of us in the next 18 months. But our expectation is to continue to grow premium to market in the next quarters.
Lixi Yuan: Thanks, Sergio. We've also got another question on SSG. So how do you capture opportunities in hybrid AI infrastructure, both in and outside of China? And what medium-term targets do you have for managed AI compute under TruScale? Yes. Ken, would you like to address this question?
Kin Hang Wong: Yes. Thank you. Thanks for the question, Jim. Well, so when we look at the deployment of AI, and there's a lot of customer feedback in terms of key consideration, right? I mean those key considerations are cost, latency, sovereignty, privacy. And that's why I think our hybrid AI strategy resonate a lot with our customers. And also, as you can see, it's proven in our performance. So that's number one. Number two, that is why we introduced the hybrid AI advantage, which is basically 3 important components. One is about the AI factory. Second is for the AI factory to power the solution, the AI solution for our customer. And lastly is to put together by all these things by our AI services in order to help our customers to accelerate their AI journey and help them to achieve the fastest time to token, right? I think this is so important in AI deployment and also getting ROI out of it. The other thing that we focus on is that there's a lot of requirement on agility and flexibility. And that is why when we put the TruScale as a service on top of our AI factory, I think that is even more resonate with our customers. So with that, if you look at the market and especially on our performance, I think this part of the business is actually growing much faster than the overall market. If you look at the overall IT services market, it's growing at about low single digit, but this part of the business is actually growing at double digit, and we are for sure much faster than the market. So thank you for your question, Jim.
Lixi Yuan: Thanks, Ken. So previously, we've also got a question from Randy from UBS asking, can we sustain the strong growth and margins on SSG? And moving forward, are we considering separating the warrant business? Would you like to take this question, Ken?
Kin Hang Wong: Well, thank you for the question. If you look at our business, I think there are 3 parts of our business. One is definitely the attached business, right? The attached services is basically to make sure to elevate and enhance our hardware experience from pocket to the edge to the cloud. The other part of our business is an extension of the attached business, right, into managing all the hardware and software and services in the workplace, which is digital workplace solution. Second is based on our compute leadership, right? We help our customers to build hybrid cloud. And lastly is the sustainability business. I think this is one of the most sought after all over the world, right? And the last part is our AI services, which is, as I answered earlier on, this is what is every customer is asking for. But when I look at all these businesses, they're actually interrelated, right? If you look at AI services, I think it's AI are all powered by hardware, powered by compute, right? So you need to make sure you have the world-class hardware as well as the world-class experience in order to deliver AI ROI, right? So my point of view is it has to be integrated and each part of our business plays an important part of the overall AI solution.
Lixi Yuan: Thank you, Ken. The next question also comes from Leping Huang from Huatai Securities. It's on our Alat strategic partnership. So could you share a timeline for the MEA manufacturing hub coming online? And when can we expect material financial contribution? Can I invite Winston, our CFO, to answer this question? Winston, please?
Shao-Min Cheng: Sure, thank you, Lixi. Thank you Leping for the question. I think in February, our Chairman, YY actually went to do the opening ground ceremony. And last month, he also visited the Saudi and saw now a group over a very well developed plant. So I think I personally was there as well, very much amazed by the progress. I think this is even fast for China standards. So amazing progress in the foreign land. The plant is one of the most complete for us in the international market. We will have desktop PC, mobile and server. So one of the most complete plants that we have in our supply chain. In terms of the timing, we'll start testing next month with volume production really by the middle of next year. I think we are doing quite well in the business, particularly in the PC space, where we have a #2 position there and really continue to gain. And so I think from that basis, we're looking to expand our business there by way of server and also mobile, where we will now have a more focused opportunity. So a lot of dialogue, a lot of excitement for our plants, which have been recognized locally there as the most complete end-to-end manufacturing, not just simple assembly. So I think we expect to have quite a bit of traction and market expansion opportunity with the made in Saudi products coming out. Thank you.
Lixi Yuan: Thanks, Winston. We've got more questions on ISG. So can you update us on the ESMB initiatives on ISG to drive profitability improvement? And how much should we factor offsets from the component cost? This question is from Randy Abrams from UBS. Can I invite Ashley to answer this question? Ashley, please?
Ashley Gorakhpurwalla: Sure. Thank you for the question. Maybe I'll also address the general server market as well as part of that. Today, we're experiencing strong momentum in the ISG business. That's mainly driven by accelerating demand for AI infrastructure, various new customer engagements and also definitely our unique dual CSP and ESMB strategy. And we think this momentum will provide a strong foundation for our commitment to long-term sustained profitability in our ISG business. If I elaborate in CSP, we're seeing our industry-leading scale and our unique Lenovo R&D deliver strong growth across the customer base of hyperscale to now emerging neo cloud AI providers. And in ESMB, we saw a solid 30% year-over-year revenue growth, reflecting much stronger than market momentum. This is driven by our focus on new transactional models, commercial AI growth and Lenovo's high-performance infrastructure portfolio. We saw Lenovo's AI server growth at high double-digit year-over-year. And we are really proud of the growth in our Neptune direct liquid-cooling solution, which grew well over market at 150-plus percent year-over-year. So for all the reasons that YY mentioned earlier, we believe the server and data center infrastructure market will expand over the next year by high double digits in year-over-year revenue in the CSP segment and by high single-digit percentage year-over-year in the ESMB segment. We remain very optimistic that the compelling value of our AI portfolio and services continue to drive our ISG growth momentum and improving profitability. Thank you.
Lixi Yuan: Thank you, Ashley. We've also got some follow-up questions on the general server demand in calendar year 2025. And how do you think the general server demand will trend into the next calendar year? This is from Howard Kao from Morgan Stanley. Perhaps if you can give a little bit more color on the general server demand side. Ashley, please.
Ashley Gorakhpurwalla: Sure. Thank you for the question. As I said earlier, I think if we segment the server market through our lens of CSP and ESMB, we believe we'll see continued high double-digit growth in the CSP segment and high single-digit growth in the ESMB segment, which would include for us general server marketplace. What we believe that as YY mentioned, AI democratization is a very compelling transformation and productivity enhancement for our customers, along with our capability to deploy in a very quick manner with our services capability. And we think this market remains impacted by AI going forward. And so we remain optimistic that the general server growth in the marketplace that we see this year will continue in the next calendar year.
Lixi Yuan: Thanks Ashley, great answers. For AI PC, we've seen some interest from analysts and investor communities. So Lenovo appears ahead in AI PC penetration versus our peers. So what is the strategy driving this competitive edge? And how durable are these competitive edge to us? This is from Jim Au from DBS. Can I please invite Luca to answer this question? Luca?
Luca Rossi: Thank you. Thanks, Jim. So I will say we definitely have been working hard to build our AI PC franchise. And currently, as you probably know, we are the #1 in Windows AI PC with over 30% of share. I would say that the current results come from our innovation capability, combined with time-to-market, combined with the best-in-class cost structure and then our operational excellence and our unique, what we call Global/Local business model. So I think all these advantages that I mentioned, they are structural and they will continue to serve us in the future. But additionally, we are also not standing by, and we look forward to what will be the new AI native device era. And here, we will leverage our unique position for the breadth of our offering, PC, tablet, smartphone, IoT devices, all part of a single ecosystem driven by our vision of One AI, Multiple Devices. So on this front, you will see us doubling down with new innovations, a lot of new innovation coming at the Tech World at the Sphere in Las Vegas coming soon in January 2026 during CES. So I believe that this innovation -- new innovation will also serve us to help us to solidify our competitive advantage. So to be frank, our ambition is to continue to expand our market share above and beyond where we are today while expanding profitability at the same time. Thank you.
Lixi Yuan: Thank you, Luca. So back to ISG. We don't really break down the CSP and ESMB, but what is Lenovo's expectation on the growth rate in these 2 segments in the coming 2 years? So this is from Robert Cheng from Bank of America. So actually, we've also got additional question from Jim Au from DBS and asking how do we capture the ISG opportunity through our Neptune liquid cooling service. Perhaps you can help address these 2 questions, Ashley.
Ashley Gorakhpurwalla: Thanks for the question. As I said earlier, I think we remain pretty optimistic that the democratization of AI through both personal use and use by enterprise customers is a very compelling reason for our customers and what they tell us to drive enhancements in their infrastructure. And so we don't break out, as we said, our segmentation revenue. But we see double-digit and high double-digit growth in the CSP market that we serve in that segmentation and high single digit in general or the ESMB space as well, mainly driven, of course, by many workloads with AI really becoming one of the most important workloads that our customers are deploying. We believe that one of the factors in AI deployment for all customers, enterprise, small and medium business, global hyperscale Tier 2, it doesn't matter. It's really making sure that power consumption and the efficiency of power usage and cooling remains a factor within how they deploy, how they use, what they can afford. And so this is where a multi-decade development of industry-leading direct liquid-cooling and water-cooling system, Neptune, which we're now on our sixth generation of development of has become a very important engagement with our customers through services and capability. We believe that we've helped the most customers in the industry convert data centers over from air cooled to liquid cool, and that's reflected in our very, very high growth rates going forward. We continue to invest in the business and in the R&D and technology on behalf of our customers. And so over the next 2 years, we believe this will become one of the dominant factors in choosing Lenovo AI infrastructure going forward.
Lixi Yuan: Great. Thanks a lot, Ashley. Next question is on our smartphone. So what is our smartphone AI strategy in leveraging Lenovo's strong PC installment? What is the current monetization road map for Moto AI? Sergio, can I invite you to answer this question, please. Thank you.
Sergio Buniac: Thanks for the question. Well, our strategy, One AI, Multiple Devices, so full leverage across Lenovo AI capabilities. Our mobile monetization strategy is anchored in providing our customers a differentiated and integrated experience, which will drive growth for the business. So our approach links devices for multiple partners, Microsoft, Google, Perplexity, many others. And these efforts are fully integrated into the group AI strategy. So we believe the cross-device experience is going to be the key differentiator for our solutions in the future. Now in terms of monetization, we are looking to the device value uplift. So AI features drive premium attach rates, AURs and volume increase, preloads and ads and of course, very strategic AI partnerships with shared revenue. So a lot happening, and a lot of leverage from the broader group, and our vision is fully integrated with One AI, Multiple Devices.
Lixi Yuan: Thank you, Sergio. We've got one more question on ISG. So in AI servers, you talked about the AI inferencing being a significant market opportunities. What is Lenovo's strategy to capture the potential growth upside? Ashley, would you like to answer this question, please?
Ashley Gorakhpurwalla: Thanks for the question. In addition, as you mentioned, with the inference being a significant market opportunity, we think we're only in the beginning of that market opportunity. We see through our -- especially through our CSP business, we're able to work with customers on foundational frontier model training, and we're beginning to see the move into production AI models, agents and capabilities into the enterprise, which requires a focus on inferencing services capability and infrastructure. As an example, today, our recent addition to the portfolio of the NVIDIA RTX 6000 Pro family across, for instance, today, we're delivering on our ThinkSystem, SR675 V3 and the SR658, V4 has already become a significant portion of our AI server demand and delivery. And so we expect as we continue to build out the world's best inferencing capability, as Ken said, really delivering time to token that this becomes a very important part of our business and of into our customers.
Lixi Yuan: Thank you. We've got one more question. So on the overall outlook, it's from Randy Abrams from UBS. How are our business tracking into the year-end? And what is the initial view for first quarter versus our normal seasonality? I think with this question, I would like to invite our Group CFO, Winston, to answer it. Winston, please?
Shao-Min Cheng: Sorry, the question is -- can you just repeat?
Lixi Yuan: The overall group outlook into the year-end.
Shao-Min Cheng: As stated earlier, and I think we reaffirmed today by our business leaders, I think we are reaffirming what we have in the Street estimates even prior to the recent changes by some of the analysts, in particular due to the DRAM cycle. So we continue to see strength in the order, particularly for PCs, as Luca mentioned earlier. So we are confident of the estimates out there. I think they may be slightly lower, but haven't tracked in the past few days given some revisions in the target price, but maybe not the estimate. I don't -- this part of me I have not changed the check. But I think overall, we are reaffirming what we had outlook a couple a month ago or even before. So I think consistent with the [indiscernible].
Lixi Yuan: Thank you very much. I think for the next question, we would like to invite Luca to answer. This is from Goldman Sachs, Verena Jeng, and she was asking if there's any plan for AI or AR glasses or new devices outside of our existing portfolio. Luca, would you like to give a few comments on this?
Luca Rossi: Sure. So as I alluded before, we are not standing by. And obviously, with this AI revolution that is in front of us, we are getting ready for that. That includes more AI native devices, more AI sensing devices. But of course, today, I will not launch or announce anything, but I will invite all the analysts to follow us at Tech World in the Sphere in Las Vegas, in January. We -- that will be the beginning of a journey where AI ecosystem -- One AI, Multiple devices, will be at the epicenter. Thank you.
Lixi Yuan: Thank you very much, Luca. It's an exciting journey ahead, and we're very looking forward to our Tech World next year. So this is the end of our earnings announcement and webcast, and thank you, everyone, for joining this webcast. Thank you. Goodbye.