Good morning, good afternoon and good evening. Welcome to Lenovo's Earnings Investor 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, 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 Vice President of Mobile Business Group and President of Motorola. We will begin with earnings presentations, and 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, I'm very pleased to report that our performance in the past fiscal year has been one of the best in Lenovo's history. It was particularly remarkable that we achieved such results amid a volatile and challenging geopolitical landscape and the industry environment. By firmly executing our clear strategy, we have delivered a significant growth in both revenue and the profit. All our main businesses are healthy and strong, each fulfilling its strategic intent and the financial goals. And more importantly, we have made significant progress in both personal AI and the enterprise AI, laying a solid foundation for our leadership in the AI era. Now let's first look at our full year performance at the group level. Group revenue saw robust growth of more than 21% year-on-year to reach USD 69 billion, the second highest ever. Profit grew even faster with net income up 36% year-on-year on a non-Hong Kong FRS basis. While our core PC business continued to grow and expand market leadership, our diversified growth engines also accelerated with non-PC revenue mix reaching 47%, up almost 5 points year-on-year. And we are especially encouraged by the ongoing balanced footprint across our sales geographies with all geographies gaining double-digit growth year-on-year, fully reflecting the vitality and resilience of Lenovo as a truly global company. Like everyone else in our industry, we are navigating the uncertainties brought by the dynamic tariff policies and geopolitical environment. But at Lenovo, we have dealt with these kind of challenges throughout the past 20 years of operating a global business. We have confidence in not only building, but constantly enhancing our market competitiveness. And our confidence comes from 2 fronts

our operational excellence and our continued investment in innovation. On the one hand, we have successfully built end-to-end integrated global operations from product design to demand forecasting, from procurement to manufacturing, and from sales to services. What's more, our unique ODM+ model with 30-plus manufacturing sites either in-house or outsourced in 11 different markets also inspires our global local model with global resources and local delivery. All this provide us maximum flexibility and resilience in times of uncertainty, allowing us to be more reliable and adaptive than our competitors. On the other hand, our commitment to increasing R&D investment has prepared us well to grasp the opportunities that are the certainty in the era of AI. Two weeks ago, we held our Shanghai Tech World event. After our first launch of AI PC 1 year ago, we took the next step in defining AI super agent and launching Lenovo's first personal AI super agent and enterprise AI super agent. So that was at the group level. Now I will talk about each of our businesses. Let's start with IDG, Intelligent Device Group, which delivered a fantastic performance this year. Overall revenue grew double digit year-on-year with operating margin in a historically higher range. For PCs, we expanded our market leadership, enlarging the gap to the second player to 3.6 points, up 1 point year-on-year, while maintaining the industry-leading profitability. Our AI PCs exceeded our volume target in the first year. Our products with innovative form factors such as foldable, rollable and 2D, 3D hybrid laptop are setting market trends. For smartphones, the revenue reached a historical high since our acquisition of Motorola Mobility with a hyper growth of 27% year-on-year. This was driven by the particularly robust growth in Asia Pacific and EMEA markets, which now complement our traditional stronghold in Latin America and North American markets, forming a more balanced global momentum. Our premier products, especially the Razr foldable series earned higher praise with commercial success. For tablets, we achieved 15% year-on-year growth in sales volume. Looking ahead, we will continue to develop products with personal AI super agent while building AI-driven application ecosystem and delivering seamless cross-device cross ecosystem experience with One AI, Multiple Devices. Our Infrastructure Solutions Group, or ISG, concluded a year of hyper growth with record revenue and significant operating margin improvement, breaking even in the second half of the fiscal year. We have successfully built our cloud service provider or CSP business into a scale of USD 10 billion and self sustained profitability. Meanwhile, our traditional Enterprise SMB business also gained strong momentum with 20% year-on-year growth, driving the revenue to a record high. Our AI server business started to land in the market and achieved hyper growth by capturing the rising demand for AI infrastructure. Our industry-leading Neptune liquid cooling solutions are the indispensable technological force behind this rapid growth. Looking ahead, we will continue to execute our CSP plus Enterprise SMB strategy, simplify our product portfolio, strengthen our go-to-market capabilities and enhance our operational resilience to drive high growth and sustainable profitability for ISG. Our Solutions & Services Group, or SSG, has further solidified its role as our transformation engine. Revenue grew at double-digit year-on-year with an operating margin of 21%. Our Support Services business continued its steady growth alongside our hardware business. Our Solutions and as-a-Service business grew even faster with the revenue mix of SSG's total business increasing 4 points to nearly 60%. In particular, our AI-driven offerings and solutions have started to generate momentum for the SSG's growth. Looking ahead, we will continue to build capabilities in the Lenovo Hybrid AI advantage framework. Building upon the successful launch of our first enterprise AI super agent, we will continue to develop and enrich our Hybrid AI solution and service offerings for enterprise customers. So that was for last fiscal year's business results. And let me also briefly cover our strong fourth quarter performance. The group revenue grew 23% year-on-year with double-digit growth across all businesses. Despite the unexpected impact from tariffs, we still delivered a strong profit increase with net income up 25% year-on-year on a non-Hong Kong FRS basis. In particular, for IDG, while we further enlarged our PC market leadership, our smartphone revenue outgrew the market by 12 points, raising our global ranking to #4 players in the outside of China market. Our ISG business achieved profitability for the second consecutive quarter with revenue hyper growth of more than 60% year-on-year. Our SSG delivered revenue growth and operating margin either close to or exceeding 20%. Finally, I'd like to close by once again sharing my pride in what Lenovo has accomplished in the past year despite a challenging environment. No matter what the future may hold, remember, while the tides answer to forces beyond us, how we sail the ship is always our decision. Thank you. Now let me turn it over to our CFO, Winston. Winston, please.

Thank you, Yuanqing. I will now go through Lenovo's Fourth quarter and full year financial and operational performances for the fiscal year 2024 and '25. Next chart, please. In fiscal year 2024 and '25, the group's revenue increased by 21% to USD 69 billion, the second highest in the company's history. Non-HKFRS net profit surged by 36% year-on-year to USD 1.4 billion. The strong results reflect Lenovo's strategic position with industry-leading products across devices, infrastructure and services to capture AI-driven demand. The strategic positioning is supported by our relentless execution, continuous operational improvement, our scale and balanced global exposure and strong market positioning across all business groups. Clear strategic initiatives, particularly in hybrid AI, have driven strong growth in all business units of the group, delivering premium to market growth, double-digit sales increases and profitability. While we are in an early innings of the AI industry's development and monetization, Lenovo is capturing the initial industry opportunities, and we are well positioned for the future in both personal and enterprise AI. Our efforts are beginning to bear fruit, setting a solid foundation for future leadership in hybrid AI. ISG experienced hyper growth and achieved 2 quarters of sustained profitability for the second half, driven by record CSP revenues and momentum in E/SMB, along with rising contribution from AI server. SSG generated record operating profits, while IDG achieved market share gains in PCs and smartphones with PC sustaining our industry-leading profitability. The group's global local strategy delivers uniform group initiatives with local knowledge, coupled with agile execution of the group strategy is reflected in our group results. Our agility have enhanced our growth profiles globally with double-digit revenue growth year-on-year across all regions. Our concerted effort in driving hybrid AI innovations across all business groups was supported by $2.3 billion spending on R&D, an increase of more than $260 million in the year, aiming at fully capturing any hybrid AI opportunities presented. In January, our strategic partnership with PIF Alat took an important step forward as we gained overwhelming shareholder support and obtained all regulatory approvals to close on this landmark transaction. For the first time, Lenovo opened up its shareholder base of greater than 10% to a single shareholder since its founding over 40 years ago. Upon conversion, PIF Alat will be the largest sovereign wealth fund in the shareholder base. The successful issuance of the USD 2 billion, zero-coupon convertible bond to Alat and the $210 million of warrants marks a significant milestone, enabling the group to broaden its shareholder base, expand its global presence, diversify its manufacturing footprint and capture substantial growth opportunities in the Middle East and Africa regions. In addition, we announced the acquisition of Infinidat in January to build out our product offerings in ISG and further capture the growth opportunities in the enterprise infrastructure space. For fiscal year '24, '25, basic earnings per share reached USD 0.113. The Board declared a final dividend of HKD 0.305 per share, combined with interim dividend of HKD 0.085 per share, the total dividend for fiscal year '25 will be HKD 0.39 per share. Next chart, please. Operating cash flow remained robust at USD 1.1 billion, with cash balance reaching USD 4.7 billion. The group effectively reduced fourth quarter finance costs by 20% year-on-year. This excluded a USD 22 million noncash implied interest from the newly issued zero-coupon convertible bond. Inventory days increased by 5 year-on-year, resulting in an increase in the cash conversion cycle to end the year at 2 days. This was primarily driven by the group's sales mix shift towards ISG business amid strong infrastructure demand by cloud service providers. The infrastructure business requires longer inventory periods, partly due to high-value components like AI GPUs. Next chart, please. IDG achieved a 13% year-on-year revenue growth. Its industry-leading operating margin expanded to 7.2%. Despite the tariff impact in the fourth quarter, IDG segment operating margin for the year achieved the historical upper end, underscoring our operational strength in supply chain, scale and balanced global market position in weathering uncertainties. IDG continued to grow its dominance in the global PC sector, expanding its market share by another percentage point to 24% and maintaining its top notch position in both commercial and consumer segments. Notably, IDG also retains the leadership in the gaming PC category. The business remained #1 globally and in 4 out of 5 global markets, widening its lead over the closest competitor. AI PC is a new category with significant growth potential, comprised 16% of IDG notebook shipments in China in the most recent quarter. According to IDC report in the fourth quarter, we reached the #1 position in Windows AI PCs outside of China. The smartphone business continues to gain share globally and grew its operating profit with record revenues. Motorola was ranked the fourth largest smartphone vendor by revenue in the market outside of China in the fourth quarter. Our smartphones revenue reached a record high since our acquisition of Motorola Mobility. Moto's premium models such as foldable Razr and Edge models are experiencing strong demand, boosting premium sales mix. In addition, non-hardware Internet services revenues are seeing strong growth with increasing user activation of our smartphones. IDG is positioned to lead the personal AI era by integrating strong hardware innovations with proprietary software to drive enhanced user experience. Within the last 12 months, IDG launched Xiaotian, a tailored AI agent for the China market, a global version AI Now, which is prime for preloading and shipping and an advanced personal AI super agent. In the rest of the world market, Lenovo launched AI Now in partnership with leading global LLMs and tech companies. Next chart, please. ISG revenue reached an all-time high of USD 15 billion, representing a hyper growth of 63% year-on-year. This growth was driven by a successful dual strategy targeting both the CSP and the E/SMB segments. On top of this, ISG also achieved a profitability turnaround in the second half of the fiscal year for 2 quarters in a row on the back of our product portfolio and cost optimization initiatives and strategic focus. A key driver of this momentum was the group's unique ODM+ model and a strong long-standing relationship with leading GPU suppliers. Our ODM+ model delivers scalable, tailored solutions for CSP customers while maintaining operational efficiency. Going forward, ISG will continue to focus on increasing volume and profitability for its E/SMB business through its streamlined portfolio, enhanced channel capabilities and high-value 3S offerings across storage, software and services. The E/SMB business delivered strong growth and strengthened its competitive position. ISG further solidified its leadership in liquid cooling technology with over 100 patents in this critical area of innovation that enhances energy efficiency and optimizes data center performance. Neptune liquid cooling server revenue saw a robust growth of 68% year-on-year. The strong growth is the result of Lenovo's dedication to innovation and technological leadership, operational excellence and delivering exceptional value to customers in a rapidly evolving market. Next chart, please. SSG achieved record revenues and profits for a fourth consecutive year with revenue increasing by 13% year-on-year to USD 8.5 billion and a record operating profit of USD 1.8 billion, up 15% year-on-year. In fourth quarter, SSG delivered a record operating margin of 22.7%. Support Services saw accelerated growth in bookings, driven by significant growth in Premier Support Plus with elevated user experiences. Continued momentum in managed services was driven by digital workplace solutions, including DaaS with enriched offerings. Meanwhile, hybrid cloud momentum was fueled by TruScale Infrastructure-as-a-Service to capture the strong customer demand of hybrid infrastructure for AI workloads. Leveraging the Lenovo hybrid AI advantage, we are providing full spectrum offerings to assist our customers in their AI journeys. Our enterprise AI capabilities integrate hardware, data, platforms, models and services to provide everything customers need to run AI. Next chart, please. In the fourth quarter, group revenues reached USD 17 billion, up 23% year-on-year, while non-HKFRS net income grew 25% year-on-year to $278 million, despite a notable tariff impact. This growth reflected strong performances across all business groups and geographies, showcasing double-digit year-on-year revenue increases. With the issuance of the 3-year warrants in January, which will have a mark-to-market noncash accounting impact on HKFRS net income, we'll focus on non-HKFRS net income, which is a better reflection of our operating results. IDG maintained global PC leadership with premium PCs driving 13% revenue growth. Non-PC growth engines also played a significant role, contributing a record 49% of total sales across 3 business groups, up by a notable 5 percentage points year-on-year. IDG's smartphone sales grew strongly, particularly in the Asia Pacific region, EMEA and North America. Meanwhile, ISG reported record sales and improved profitability year-on-year, driven by both the CSP and E/SMB segments. Additionally, SSG delivered its highest ever operating margin, 22.7%. This performance highlighted the group's ability to drive growth amid uncertainty, leveraging our diverse product and services portfolio and balanced global presence in 180 markets. Next chart, please. The group's unwavering long-standing commitment to top-level corporate governance and sustainability has once again earned global recognition. The group was included in CDP's Corporate A list for 2024, highlighting our commitment to environmental transparency and comprehensive disclosure. In addition, the group retained a AA rating in the 2024 Hang Seng Corporate Sustainability Index. For the third consecutive year, the group achieved a AAA in the MSCI ESG ratings for strong performances in environmental, social and governance metrics. Additionally, EcoVadis, a globally recognized provider of business sustainability ratings awarded Lenovo a leader in carbon management for our environmental efforts. These track records are a testament to the group's ongoing pursuit of excellence in product design, innovation and dedication to environmental sustainability. Next chart, please. Amid evolving macro challenges and policy shifts, the group is executing on our strategies to expand market share and improve profitability. Our global supply chain is rated among the world's best by Gartner. Our global manufacturing footprint spanning more than 30 sites in 11 countries provides scale and agility. Our strong operational capabilities helped us navigate supply chain uncertainties in the fourth quarter. These unique advantages have ensured sustainable growth, strengthened our competitive position and enhance the group's resilience while adapting to shifting market conditions. We continue to thrive in the early phase of the hybrid AI trend with confidence rooted in our early recognition of industry trends, ability to innovate and execute on our vision. Our R&D investments will unlock the full potential of hybrid AI and the synergy among our 3 business groups will spark innovation in next-generation product designs and solutions. By business segment, IDG has strategic plans to further accelerate smartphone growth with AI PCs positioned to drive a new demand cycle. Both factors are critical for premium to market growth, higher ASP and improved profitability. IDG is developing proprietary IPs to enhance performance in inferencing speed, language model compression and memory consumption while extending differentiation to components and software. ISG aims to drive growth and improve profitability in hybrid AI infrastructure, high-performance computing, storage and edge solutions. The segment will expand its channel partnerships and customer base, acquire new accounts and the balance between general-purpose compute and GPU accelerated systems, ensuring cost effectiveness and scalable revenue growth. SSG will continue to strengthen its hybrid AI advantage framework to meet rising demand for AI solutions with AI-driven services, generating significant growth. SSG will prioritize high value-added support services to protect its core business and through ecosystem and partnerships, support customers' digital transformation, boosting its financial contribution to the group. Finally, as always, we maintain our unwavering commitment to drive sustainable growth and profitability to our shareholders. Thank you. We'll now answer questions you may have.

Thank you, Winston. Now we will open the floor for questions, and this session will be in English only. Please be reminded to limit yourself to 2 questions at a time. 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 our Intelligent Devices Group; Ashley Gorakhpurwalla, President of our Infrastructure Solutions Group; Ken Wong, President of our Solutions and Services Group; and Sergio Buniac, Senior Vice President of Mobile Business Group and President of Motorola. Without further ado, operator, please announce the instructions.

[Operator Instructions]

The first two questions are coming from Leping Huang at Huatai Securities. His first question is about how mature are AI PC and AI smartphone this year? And which applications do you believe will drive AI PC demand this year? And the second question from Leping is Lenovo has recently launched many, many new products and new AI agents. Please elaborate the commercial opportunities for Lenovo from this AI agents. And I would like to invite Luca Rossi, our IDG Head to offer insights to these two questions.

Sure. Thank you, Jenny. Good morning, evening to everyone, and thanks for the question. I think I will say we are pleased with the progress and the innovation that together with the industry ecosystem we brought to the segment of AI PC in 2024 and now recently in 2025. As you mentioned, we launched many products. Innovation is going full speed with sleek designs, great performance, responsiveness, battery life, very long battery life. And our performance on AI PC is very strong as we are now the #1 Windows AI PC OEM globally by shipments as tracked by AI PC. Now this is only one part of the equation. I think on the other part, the more the AI software stack, step-by-step, we are releasing AI-driven experiences. We have been the first one 1 year ago with Xiaotian, our AI agent in China, then last October, November with AI Now in the rest of the world. The ISV ecosystem partners are also releasing new features, although I will say, a bit later than expected. There was some technical, some regulatory constraint, but now things are coming online with new releases happening in the past few months and a lot of things going to happen to leverage the NPU, the neural processing unit within the CPU so that there will be the possibility to truly deliver on-device AI and abilitate use cases at the edge. So if you ask about the maturity, I would say we are still at the beginning of this journey. We expect a lot of innovation to come in 2025, 2026. There will be the arrival or the progression of the so-called LAM, large action model, that will enable the device to not only help with information, but also help with personal and enterprise productivity, taking action on behalf of the user and many other use cases that, frankly, maybe today are not even existing, but there is a lot of room for innovation. AI agent is a new area of development. I think we are ahead of everyone. Not only we launched in PRC and ROW last year. But recently, you probably noticed we have launched our super agent in PRC just recently. And obviously, we have plans for upgrade over time. This will not stop. We will continue to innovate. And on the -- because I noticed you also talk about phones, we also launched our AI agent on phone with Moto AI. We have a very great feedback from beta users. And also on that front, there is a road map for future releases. Our vision is One AI, Multiple Devices. And this vision sees us uniquely positioned with the broad offering of PC, tablet, phones, wearable, IoT devices. And then think about our core competence, multiple OS, I think we are really uniquely positioned. And last but not least, we also believe this AI PC and AI devices will drive the need for the ecosystem. And this is where we have built our unique IP called Smart Connect that enable you to orchestrate all those devices. Now to the commercial opportunities of your question, I will -- I think it translates into 2 directions

one is how about monetization? And here is something we are certainly working on. We believe that once we get scale, and we have good scale because we have hundreds of millions of devices every year out in the market. When we have scale and we are able to offer value added to users taking the role of an orchestrator, we will be able to generate meaningful monetization opportunity. That is one. The other one is that we are convinced that this AI PC will reenergize the category being a tailwind for the PC demand in the next 1, 2 and 3 years. Thank you.

Thank you, Luca. Our next question is from Mr. Jaime Ledesma with GVC Gaesco. Could you please help us to understand the financial charge from warrants? Could I invite our CFO, Winston Cheng, to elaborate the details?

Thank you, Jaime, for the question. This is really important as it relates to our results. Our transaction that you point towards closed in January of this fourth quarter. And so this is the first time that this impact is reflected in our financials. The impact of the fair value adjustment to the warrants is approximately USD 118 million for the quarter. And that's a result of the stock price at the close of March 31 being higher than at the time of issuance. As you know, the basis of the warrants, it's an equity option for shareholders -- for investors to potentially buy the warrants at 13 -- HKD 12.31 price for total cost of about HKD 13.74 at the time. So this is a record high in terms of the issuance. So that's the impact in terms of $118 million, which is in our operating expenses and therefore, bringing operating income lower. The second point I will make as it relates to the warrants is the combination of this issuance of the warrants was with the zero-coupon convertible bonds. As a part of the accounting treatment for zero-coupon convertible, there is a notional interest amount that we need to account for in the interest line below the operating income line. And so there is a USD 22 million charge to interest expenses even though we don't pay any interest expenses and, therefore, also bringing down the HKFRS net income. Therefore, our results this time we point to investors to look at our non-HKFRS profit attributable to the equity holders of the company, which is $278 million for the quarter and up 25% year-on-year, which is higher than the revenue growth. Thank you.

Thank you, Winston. Our next question is from Cherry Ma with Macquarie. For ISG's enterprise or E/SMB business, our product development, distribution channel build-out and order growth on track with what you are planning? I would like to invite Ashley to respond to this question. Ashley is our Head for ISG. Ashley, please go ahead.

Thank you. I appreciate the question around our Infrastructure Solutions Group. And I would say, yes, Enterprise Infrastructure is meeting or in some cases, exceeding our internal goals and targets as evidenced as referenced earlier by record revenue in the fiscal year and by further evidenced by growing 63% year-over-year in Q4, both great results. Although you asked about Enterprise, I would remind you that our unique ODM+ model in the CSP segment positions Lenovo well for serving Enterprise customers with improved global scale, a much better cost structure and by bringing cutting-edge technology from our CSP segment into the Enterprise customer set. Specifically in the Enterprise segment, our balanced growth across all geos and segments was driven by several factors, an emerging enterprise AI solution set, a simplified product experience and expanded go-to-market capabilities. In addition, I'd like to point out that our set of enhanced professional services and a very new and refreshed set of compute and storage products from Lenovo offer all of our enterprise and small, medium customers a very rapid return on investment during their technology refresh cycles. So we believe firmly that we are on track for continued momentum in this space and improved profitability in the enterprise infrastructure. Thank you.

Thank you, Ashley. And we also have our next question now. It's from Randy with UBS. What's your manufacturing footprint to mitigate the U.S. tariff? And how quickly can you shift capacity outside of China to supply to U.S.? Could I invite our CEO and Chairman, Yuanqing, to answer this question?

Thank you, Randy, for the question. So actually, the very simple answer is we are very flexible and resilient to make adjustment. So probably just in a couple of weeks, we can finish the adjustment to shift the capacity from one location to another. Why we can do that? That's because we have built this foundation. We have built the global footprint, so not like other players in our industry. So Lenovo has built an end-to-end integrated model. It means we have complete control from product design to demand forecasting from procurement to manufacturing and from sales to service. With that model, so we have built our unique ODM+ model, which means not only we rely on the outsourcing manufacturing, but also in-house manufacture that give us different advantages. With that model, so we have built this kind of China plus model, making us a truly global high-tech manufacturing powerhouse, which makes us more resilient than anybody else. So why we call it China plus. So definitely -- so in our view, China manufacturing is still very unique. It's very -- it is the most competitive manufacturing country with low cost, high efficiency and aggregation of supply chain. So far, no other country can replace China. So everybody want to leverage the advantage of that. But meanwhile, so dealing with current geopolitical tension, dealing with such a scenario of high tariff, we have built multiple manufacturing facilities in probably more than 10 countries. We can leverage those manufacturing facilities to finish the last mile delivery for different regions. So that has given us a lot of advantage. So in summary, so actually, I want to mention another point. So actually, we are not worried about the tariff. We are worried about the uncertainty and the quick changes. If you don't know when the tariffs will increase and what will it be for specific countries. So those are certain changes and uncertainties will impact the performance. So actually, 10% tariff happened last quarter. So we had already prepared for that to rebuild something to adjust the pricing. So that had nothing impact on our performance. But when the 25% tariff was announced in March and also was implemented so suddenly that we didn't even have time to prepare. It had a significant impact on our performance last quarter. So probably 50 million to 60 million on our performance last quarter. But fortunately, even with that kind of impact, we still delivered a strong performance with 25% operating profit increase. So that's also demonstrated our resilience and strong foundation. So in summary, as long as we know what will happen and what's the end gap, so we are in the best position to make the quick changes or adjustment so that not only we can keep the competitiveness in the market, but also ensure the similar or better performance for shareholders. Thank you.

Thank you, Yuanqing. Our next question is coming from Anthony Lan with JPMorgan. Are you making any breakthroughs in your Middle East business? Is there any ISG or IDG order win in the region? And could you elaborate the details? And Luca and Ashley, could you kindly tap the question, please?

Yes. Thanks for the question. I'll take it for the IDG piece. So I will say that over the last several years, we have risen the ranks in Middle East region, and we are now consistently the #1 in PC in this region with leading market share. For mobile phone, we are still relatively small and definitely, this is going to be our next goal, exactly starting with the KSA, where we have this new strategic partnership with Alat. This is a fairly premium device market with good average selling price, which, of course, we like. And we are designing our strategy, go-to-market and product portfolio exactly to enable fast growth, I would say, in the next 2 years in this market. And Obviously, it will not be limited to KSA, probably that will be the beginning. And then we plan to continue to expand also with our mobile phone or smartphone in this region. So I would say that will be a growth opportunity for PC, but we are already #1, and there will be a bigger growth opportunity for phone where we have more headroom to grow. Thank you.

Thank you, Luca. Ashley, would you like to take the part regarding to ISG, our Middle East expansion plan?

Sure. I'll build on both what Winston and Luca have called out. I don't think we are going to announce any sort of specific customer deal, but we are extremely confident in recent announcements that are showing that our leadership in our strategic partnership with Alat is now being followed by others in the increasing growth of both enterprise and AI infrastructure investments in the region. And so we will continue to drive through that partnership a set of product services and capabilities with our customers and partners in the region.

Thank you, Ashley. And Ashley, could you stay on and to answer a follow-up question from Randy. Randy's question is, how is your contribution from AI server ramping as a percentage of sales now and by end of this year? And what is the impact on growth and your operating margin? And what's the outlook for traditional servers? Ashley, please?

Sure. Thank you for the question. Thank you for the question. We don't break out specifically revenue for accelerated or AI infrastructure and solutions. But we remain confident in both the current progress we're making in both the set of training, service provider and the emerging enterprise AI solutions that we're offering. We believe both through our own end-to-end solutions and our strong ecosystem partnerships that we will see continued growth across both the hyperscale and enterprise segment. One proxy perhaps I can offer for accelerated infrastructure and AI capability is with our industry-leading Neptune liquid cooling capability. We believe that enterprise AI, training AI, and hyperscale service provider, GPU-as-a-service and AI installations all have a common denominator, which is customers having to deal with server power and server cooling demands. And that is where we see a very direct application of something that Lenovo has been steadily building hundreds of patents across a 10-year period in Neptune liquid cooling. And so as a proxy for that growth, for instance, just in Q4, we saw almost 250% year-over-year growth in our Neptune cooling solutions offered to customers. So we believe being the only industry OEM capable of really designing, manufacturing and deploying from an end-to-end point of view under like direct liquid cooling really will position us going forward in a differentiated manner to take advantage of the growth, both across the enterprise and the hyperscale areas.

Thank you, Ashley. And our next question is a follow-up question from Anthony Lan with JPMorgan. Is the operating expense hike in March quarter and onetime effect could be more structured in the future? I think this is referring to the mark-to-market expense, the mark-to-market impact in our OpEx. And Winston, would you like to take this question, please?

Yes. Thank you, Anthony. The operating expenses, as Jenny alluded to, included the fair value loss on the derivative financial liabilities relating to the warrants. The warrants are 3 years. So this instrument revaluation will be with us for the next 3 years. I think that's one. The other parts of true operating expenses, and this is a noncash item. The other parts of the operating expenses as it relates to employee benefits actually grew at a rate slower than revenue growth. So revenue growth was in the 23% range, and these benefits actually grew at a rate slower. Other areas where we have been investing in has been consistent with our strategy has been information technology and R&D. These are areas of investments that we will continue and that will continue to drive our penetration in terms of what we are gaining today, which is revenue growth across all our business segments, double-digit share and significant growth across all regions that we operate in 180 markets. So these are investments that we'll continue to make to build the foundation to our business for years to come. But -- and to your question, this $118 million, it's a function of the stock price being higher at the quarter end than at the time of issuance for the warrants. And unfortunately, this will be reflective. And when there is a gain, then that would mean that our stock price is lower, but I think that's a scenario we also don't wish. So I would urge the analysts to really look at this and take this out and focus on our non-HKFRS net income going forward. Thank you.

Thank you, Winston. And the next question is from Jordan Pong with Franklin Templeton. ISG has been profitable for 2 consecutive quarters. How sustainable going forward is this? And how should we expect the operating margin to achieve in longer term? Ashley, would you like to take this question?

Yes, of course. Thank you for the question. As noted several times, we've been able to have hyper growth in our ISG business, which is a factor of our unique ODM+ model in the CSP business. This allows us quite a few unique advantages for Lenovo. We have the ability to have incredible scale, global resilience in our global plus local capabilities, in our manufacturing network and access to cutting-edge technology that we can then bring to the enterprise, small and medium business customers. We've seen very good growth, very good scale and improving profitability in this space. In addition, our enterprise and small medium business segmentation can now leverage that ODM+ model capability, both in scale and technology capability that we can bring to others that improves our cost structure, which, of course, is a factor within our improved profitability. We think, to your question of going forward, that we have additional levers to improve our profitability, including that we're currently focused on in terms of implementation or in the middle of implementation. That includes streamlining our product portfolio to be hyper-focused on the enterprise segmentations that offer value to our customers, including strengthening our go-to-market capabilities across geos and the segmentations of AI and other verticals and also increasing our operational resilience, allowing us to more efficiently do business with our customers by offering simpler methodologies for ordering, understanding our product portfolio, deploying and managing our capability. We think all of these will increase our profitability in the future. Thank you.

Thank you, Ashley. And our next question is on Motorola. Motorola's strong performance and growing market share in smartphone space suggests that we are on the right track. What kind of strategies are you planning to keep up the momentum in your smartphone business? And could we invite Sergio. Sergio is the Head of our Mobile Business to elaborate more details. Sergio, please go ahead.

Yes. So thanks for the question. Hello, everyone. So definitely a strong quarter, growing at 17% and a full strong year that we grew 27%, was our record year with revenue growing faster than units at 27%. Record activations also and triple-digit growth in what we call our premium franchise, the main reason that the revenue is growing faster than the units. Now looking ahead, we will continue to expand in premium. The growing premium in the last 3 years has been almost 10x as we exit this segment during the transformation, and now we are seeing very strong momentum. We have a more balanced business with Europe and Asia at hyper growth while protecting our Latin America, North America business. And we also see very good momentum in enterprise and commercial leveraging the Lenovo channel footprint. If you look to like markets like North America, we are now prepaid #1 in foldable, now starting to grow in postpaid. We are seeing Asia, we are now #2 in Japan. We're the fastest-growing player in India. So we see this momentum continue in the year, both expanding geographies and also our premium mix.

Thank you, Sergio. And the next question is for IDG. So I'm going to invite Luca to respond. This is from Randy with UBS. And how much pull-in demand did you see to get ahead of tariffs? And how do you see that could impact PC growth in the second half of this calendar year?

So thanks for the question, Randy. So we did not see a very significant pull-in effect from customers due to the tariff. Yes, we prepared some own inventory in North America that was to mitigate risk and have more flexibility in the first half of 2025, calendar '25, so that we have sufficient time to adapt our production plan to the final tariff setup. Now when I look at the current global demand, the current order load, to be honest, we are recording good performance even comparing with previous year same quarter or same time in all geographies. So that brings me to say that there is no reason to believe that this is driven by pull-in. I would say that the second half of the year, the demand, in my view, will be more driven by economic environment, GDP growth or decline and the consumer and enterprise confidence. It's also fair to say that we also see many tailwinds, Windows 10 end of service, this we are less than half of the way, 4 and 5 years old devices to be replaced. You are now talking about 400 million plus, maybe even 500 million. And then the innovation with AI PC should also bring some energy to the category and to the replacement. So maybe to give you a data point, our current modeling for the full year is a mid 1-digit growth for the total PC market, which is largely aligned with IDC and other analysts. And another data point that we always look at the consumption as measured by Windows activation or activation of devices globally is also aligned with this number. So hopefully, that clarifies. Thank you.

Thanks, Luca, for the details. And because of time constraint, we are going to have our last question for service business, the SSG business. And looking ahead, what's your vision for SSG's growth trajectory and your margin profile? And how are you positioning to capture emerging opportunities in the market such as AI services? Ken, Ken is our Head for SSG. Could I invite you to give us to share details?

Very sure, Jenny. So hi, everyone. Well, first of all, I think we're very happy about the momentum that we had last fiscal year, especially Q4. If you look at our -- the financials that we have shared, we have record high revenue for the whole year and especially Q4. We were able to grow for 16th consecutive quarter of double-digit growth, which is at a significant premium to the market. And at the same time, we were able to maintain a very healthy margin performance, right? So from a financial perspective, I think it has been a great year for Solutions and Services Group, SSG. Then when we look at the market, I think there are 2 trends that at least that we have seen in the market. I think one is we're seeing more and more AI adoption going mainstream, especially around areas of like software engineering, customer services, marketing to legal, right? And that also resonate with our internal AI deployment within Lenovo. The other part is we consistently see more and more momentum around demand for hybrid AI, right? I think for reason -- very simple reason around security, latency and costs. And this is why I think our Lenovo Hybrid AI advantage is a perfect fit for us to capture all this opportunity. The Lenovo Hybrid AI advantage in a nutshell, it is about building the right hybrid infrastructure, computing power for our customer as well as picking the right model, bringing the right data to the model and create a genetic application for our customer, right? So this has been resonating a lot with our customers. We see good demand. And also there are a couple of really good flagship wins that we had, especially in Q4. So looking ahead, I think that this trend is going to continue in the new fiscal year. And from an SSG perspective, we are still confident that we're able to grow at a premium to the market, continue to be the growth engine of the company, at the same time, maintain a good margin profile, which is another profit driver for the company. Thank you, Jenny.

Thank you, Ken. And I thank everyone for joining this call today. This was our last question, and we thank you very much for joining today. And if you have further questions, please feel free to contact Lenovo IR team directly. And the replay of this webcast will be available in the next couple of hours on our Investor Relations website. Thank you again. Bye-bye now.