Lenovo Group Ltd S/Adr

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Good morning, good afternoon, and good evening. Welcome to Lenovo's Investor and its webcast. This is Jenny Lai, Vice President of Investor Relations at Lenovo. Thanks, everyone, for joining us. Before we start, let me introduce our management team joining the call today. Mr. Yang Yuanqing, Lenovo's Chairman and CEO. Mr. Wong Wai-Ming, Group CFO. Mr. Ken Wong, President of Solutions and Services Group, Mr. Kurt Skaugen, President of Infrastructure Solutions Group, Mr. Luca Rossi, President of Intelligent Devices Group, Mr. Sergio Buniyak, President of Mobile Business Group, and President of Motorola. We will begin with earnings presentations, and shortly after that, we will open the call for questions. Now, let me turn it over to Yuanqing Yuanqing, please.

Hello, everyone, and thank you for joining us today. Last quarter, Lenovo delivered on its promise to resume year-on-year revenue growth despite multiple macro challenges. Profitability has improved quarter-to-quarter for two consecutive quarters. a testament to both the resilience of our core business and the effectiveness of our transformation. In addition, we have also been focusing on the growth opportunities brought by hybrid AI. This includes continuous investment in innovations to fuel sustainable growth into the future, a part of which we demonstrated last month at the annual CES event where we received industry-wide recognition for more than 40 new devices and solutions. As I shared with you in Q2, Lenovo has been consistently improving quarter to quarter, and we have entered our trajectory to recover. Now, for fiscal Q3, we successfully achieved the year-on-year growth. Global revenue increased 3% year-on-year. And the global profitability improved quarter-to-quarter for two consecutive quarters. Thanks to the execution of our transformation strategy, our non-PC revenue mix further expanded year-on-year to 42% of the global revenue. In the AI era, hybrid AI, leveraging both public and private foundation models, is creating significant growth opportunities for the industry across devices, infrastructure, and the solution and the services. Among the continued signs of recovery in the PC market, we are particularly excited to see the emerging trend of hybrid AI directly driving the future demand for the coming AI PC. AI PC, comes with a personal intelligent agent using natural language user interface, a compressed local large language model, heterogeneous computing with the CPU, GPU, NPU, privacy and security protection, and a rich AR application ecosystem. We believe this trend will stimulate another industry refresh cycle as users require devices designed for more creativity and productivity. According to Canalys' projection, by 2026, it is expected that more than 50% of PCs will be AI-capable. In the meantime, hybrid AI is also driving increased demand for hybrid infrastructure. On top of that, we are seeing increased customer demand for AI native applications, solutions, and services, such as consulting, design, deployment, and maintenance. Fueling AI services growth across different verticals. Lenovo is in a unique position with many advantages to lead this hybrid AI revolution. We stay committed to furthering investment in innovation, focusing on AI and computing. Our number and percentage of R&D headcounts keep increasing, and we are on track for a record year of R&D expense-to-revenue ratio. We have long embraced AI in all our businesses and have built computing capabilities from pocket to cloud. This relentless focus means we now have a full portfolio that includes AI-enabled, AI-ready, and AI-optimized devices, infrastructure, solutions, and services. We are realizing our vision of AI for all, for each individual and enterprise, changing the way they live and work, while at the same time, driving sustainable growth for our business. Now, I will talk about each of our businesses. Let's start with SSG, Solutions and Services Group. Last quarter, SSG revenue reached the $2 billion US dollar milestone, growing double-digit year-on-year to another record high. Operating profit also hit a record with a high operating margin above 20%. We protected the support services and the software as our core profit engine. We further expanded the manager services and the project solutions services. And the together revenue mix for these two areas now accounts for 55% of SSG's total business growing year on year for 11 consecutive quarters. In particular, strong growth momentum continued for our hero offerings, such as digital workplace solution, hybrid cloud, and sustainability, each winning major customer deals in key markets. Looking ahead, the new IT service segment within the trillion-dollar IT services market is expected to see stable mid-term growth. the rise of hybrid AI is opening up new opportunities for our AI-native solutions and services. Additionally, we are proactively embedding AI into the vertical solutions that we are building for various industries to strengthen value proposition and enhance differentiation for our customers. Next, our infrastructure solution group, or ISG. Last quarter, while industry and market headwinds continued to impact the overall ISG performance, we delivered a quarter-to-quarter revenue growth for the second consecutive quarter. And the combined revenue from storage, software, and services reached a record high of $1 billion U.S. dollars. We remained a solid number three for both storage and AI infrastructure on the global market. Looking ahead, we expect that the market will continue to shift to AI infrastructure, with AI server expected to grow nearly twice as fast as the total server market. At Lenovo, we are growing key strategic partnerships and building more sophisticated AI infrastructure solutions to strengthen our portfolio competitiveness, as well as securing major customer deals and a stable pipeline. We remain confident that we will resume year-on-year growth as soon as the coming quarter. Our intelligent device group, or IDG, delivered a strong quarter with revenue-resuming growth thanks to our clear strategy, consistent investment in innovation, and operational excellence. As the PC market continued to recover, our PC business excelled and outperformed the market. we returned to year-on-year shipment growth with leading profitability. Our global number one position in PC was further strengthened with a significant premium to the market, winning the highest market share since COVID. Last quarter, our non-PC device businesses made encouraging progress in building a more diversified portfolio. Both the smartphone and the tablet business returned to high double-digit growth, with a significant premium to the market of more than 20 points. Particularly, we see smartphone hyper-growth in Asia-Pacific, EMEA, and the North American market. Looking ahead, we expect the trend of hybrid AI to drive the demand for AI climate devices, driving another refreshment cycle, creating more growth potential and improving margin for us. Before I close, I want to point out that even though global economic headwinds still challenge the industry, We have all seen the potential of the revolutionary AI technology and its applications. Our commitment to AI innovation and partnerships with other key leaders in AI ensures that we are well positioned to capture the tremendous growth opportunities in AI. Thank you. Now let me turn it over to our CFO, Wei-Ming. Wei-Ming, please.