Good afternoon, and welcome to the fiscal year 2024 third quarter financial results conference call for Dell Technologies Inc. I'd like to inform all participants that this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information, in whole or in part, without the prior written permission of Dell Technologies, is prohibited. Following prepared remarks, we will conduct a question-and-answer session. If you have a question, simply press star, then one on your telephone keypad at any time during the presentation. I'd like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin. Thanks everyone for joining us. With me today are Jeff Clarke, Yvonne McGill, and Tyler Johnson. Our earnings materials are available on our IR website, and I encourage you to review these materials and the presentation, which includes additional content to complement our discussion this afternoon. Guidance will be covered on today's call. During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating income, net income, and diluted earnings per share. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and our press release. Growth percentages refer to year-over-year change, unless otherwise specified. Statements made during this call that relate to future results and events are forward-looking statements based on current expectations. Actual results and events could differ materially from those projected due to a number of risks and uncertainties, which are discussed in our web deck and our SEC filings. We assume no obligation to update our forward-looking statements. Now I'll turn it over to Jeff. Thanks, Rob. We delivered Q3 revenue of $22.3 billion, with solid profitability and strong cash flow. Operating income was $2 billion, diluted EPS was $1.88, and cash flow from operations was $2.2 billion. In ISG, the demand environment for traditional servers improved over the course of the quarter, and demand for AI servers continues to be strong across a wider range of customers. Demand for storage was down as expected. ISG revenue was flat quarter-over-quarter, with sequential growth in servers and networking revenue, driven by AI-optimized servers as we begin to convert more PowerEdge XE9680 backlog into revenue. For the quarter, we shipped over $500 million of AI-optimized servers, including our XE9680, XE9640, XE8640, and the R750 and R760xa servers. Customer demand for these AI servers nearly doubled sequentially, and demand remains well ahead of supply. In CSG, the demand momentum we saw in June and July continued into August, but slowed as the quarter progressed. The result was CSG revenue was down sequentially and short of our expectations. Operationally, we executed well, remaining disciplined on pricing in an increasingly competitive environment, and we controlled our expenses, focusing on profit and cash flow, including outstanding working capital performance. Lastly, we returned another $1 billion to shareholders via share repurchase and dividends. Yvonne will go into more details on cash flow and capital returns later. AI continues to dominate the technology and business conversation. Customers across the globe are turning their operations upside down to see how they can use generative AI to advance their businesses in meaningful ways. These AI initiatives are being driven at the CEO and board levels, and as a result, we are at the front of a significant TAM expansion. AI-optimized server mix increased to 33% of total server orders revenue in Q3, driven by strong demand from AI-focused cloud service providers and growing interest from other customer verticals. We drove improved demand margins, increased services attached, and incremental unstructured storage attached over the course of the quarter. The XE9680 is the fastest ramping solution in Dell history, and in Q3, we continue to see strong demand and big wins, including customers like CoreWeave, a cloud provider that specializes in GPU-accelerated workloads, and Imbue, which is using high-performance computing clusters powered by the XE9680 servers to train foundational models. Our AI-optimized server backlog nearly doubled versus the end of Q2, with a multi-billion-dollar sales pipeline, including increasing interest across all regions. That all said, AI hype is everywhere, and we need to be measured in our expectations. We are still in the early innings with AI as customers continue to work through their AI strategies. Experience over multiple technology cycles tells us that progress won't always be linear, but we are excited about the opportunity in front of us. We believe Dell is uniquely positioned with our broad portfolio to help customers size, characterize, and build GenAI solutions that meet their performance, cost, and security requirements. Our AI strategy, AI in our products, AI built on our solutions, AI for our business, and AI for our ecosystem partners, is the foundation for our actions, priorities, roadmaps, and partnerships. We continue to build our capabilities. We are collaborating with Meta to make it easy for our customers to deploy Meta's Llama 2 models on premises with Dell AI-optimized portfolio. We are also collaborating with Hugging Face to help users create and fine-tune and implement their own open-source GenAI models on Dell infrastructure. And earlier this month, we introduced the ObjectScale XF960, an all-flash scale-out appliance for GenAI and real-time analytics based on our software-defined object storage solution, which can run on Linux and Red Hat OpenShift on PowerEdge servers. Looking forward, the recovery and ramp in the PC demand we were expecting in Q3 has pushed out, with large enterprises and corporate customers remaining cautious with their spending. The PC install base continues to age, and there are exciting changes coming to the PC next year, including advances in AI-enabled architectures from Intel, AMD, and Windows on Arm, which will help drive a PC refresh cycle. We are also seeing the beginning of a traditional server rebound, and historically, storage follows a couple of quarters later. We are leveraging our strengths to extend our leadership positions and turn new opportunities, including multi-cloud, edge, and AI, into incremental growth. We are positive on FY 2025 and fully expect to return to growth next year, given the expected tailwinds to our various businesses, including AI. Technology is everywhere, and Dell is thriving. The amount and value of data continues to grow, and as that happens, the opportunity for Dell technology grows in tandem. We have proven that over four decades through wave after wave of innovation, and we have proven our ability to capture the growth as our TAM expands and translate that into results for our stakeholders. Regardless of the economic cycle, expect us to focus on growing and extending our core businesses in the areas with the most attractive profits, deliver innovation for our customers, remain disciplined in our pricing, and focus on cost. Now over to Yvonne for the detailed Q3 financials. Thanks, Jeff. We're focused on driving a balance of growth, profitability, and cash flow in any demand environment. We delivered revenue of $22.3 billion, down 10%, with strong gross margins, lower operating expense, and improved working capital management. Gross margin was $5.3 billion and 23.7% of revenue, flat year-over-year. We continued to see increased pricing pressure in Q3, but remained focused on profitable opportunities, and you should expect us to continue to maintain discipline and focus going forward. Operating expense was $3.3 billion, or 14.9% of revenue, down 5%, driven by lower SG&A costs, and down 7% sequentially as we actively manage our spend. Operating income was $2 billion, down 17% and 8.8% of revenue, with the impact of a decline in revenue partially offset by lower operating expense. Our tax rate was 19.2% year- to- date, or 15.4% for the quarter. Net income was $1.4 billion, down 19%, and diluted EPS was $1.88, down 18%. Our recurring revenue in the quarter was $5.6 billion, up 4%, and our remaining performance obligation, or RPO, was $39 billion, flat year-over-year, with growth in deferred revenue offset by a decrease in backlog. Deferred revenue was up primarily due to increases in software and hardware maintenance agreements and VMware resale. ISG revenue was $8.5 billion, down 12% and flat sequentially. Servers and networking revenue was $4.7 billion, up 9% sequentially. We saw server ASPs continue to expand in both AI-optimized and traditional servers, and our AI mix of server demand accelerated again sequentially, given customer interest in GenAI. We delivered storage revenue of $3.8 billion, down 13%, with demand growth in data protection and PowerScale. ISG's operating income was $1.1 billion, or 12.6% of revenue, down 170 basis points, driven by a decline in revenue, partially offset by an increase in gross margin rate. Looking forward, our many number one positions are proof of our deep enterprise expertise, and with a TAM of $200 billion growing at a 7% CAGR over the next few years, we are confident in our ability to grow the business as the market returns to growth. Our fiscal Q3 CSG revenue was $12.3 billion, down 11%, primarily driven by a decline in units while ASPs remained flat. Commercial and consumer revenue were $9.8 billion and $2.4 billion, respectively. CSG profitability remained strong in Q3, with operating income of $0.9 billion or 7.5% of revenue. Op Inc. was down 20 basis points, driven by a decline in revenue, offset by lower operating expense and an increase in gross margin rate as we maintained pricing discipline and benefited from lower input costs. With a TAM of $400 billion growing at a 2% CAGR, we will continue to focus on commercial, the high end of consumer, profitable relative performance, and executing our direct attach motion for services, software, peripherals, and financing. During the quarter, we saw continued strength in APEX, in our data center utility, and Flex on Demand offerings, and added new multi-cloud offerings, including APEX Cloud Platform for Azure and Red Hat OpenShift. Our Q3 Dell Financial Services originations were $1.8 billion. DFS ending managed assets reached $13.9 billion, up 1%, while the overall DFS portfolio quality remains strong, with credit losses near historically low levels. Turning to our cash flow and balance sheet. Our cash flow from operations was $2.2 billion, primarily driven by working capital improvement and profitability. Working capital benefited from an approximately $200 million sequential decline in inventory, strong collections performance, and continued improvement in receivables aging. Our cash conversion cycle improved again sequentially and is now at -52 days, a 20-day improvement since the end of last year. We ended the quarter with $9.9 billion in cash and investments, flat sequentially, driven by free cash flow generation, offset by $1 billion in capital returns. Core leverage was 1.6x exiting Q3, flat sequentially. During the quarter, we repurchased 11.2 million shares of stock at an average price of $66.55 and paid a $0.37 per share quarterly dividend. Turning to guidance, enterprise and large corporate customers continue to be cautious in the current macro environment. Against that backdrop, we expect Q4 revenue to be in the range of $21.5 billion-$22.5 billion, with a midpoint of $22 billion. Sequentially, we expect ISG revenue to be up mid-single digits, driven by sequential growth in traditional servers and seasonal growth in storage. We expect CSG revenue to be down low single digits sequentially. We're seeing pockets of stability in PC demand, but have yet to see a broader recovery in the PC market. And in our other business segment, we expect to be down in the low twenties sequentially. Operating income rate should be down marginally versus Q3, driven by a more competitive pricing environment in CSG. And for our tax rate, you should assume roughly 20% ±100 basis points for Q4, or 19.5% at the midpoint for the full year. We expect our Q4 diluted share count to be between 729 million and 733 million shares, and our diluted EPS should be $1.70, ±0.10. We're increasing our expectations for the full year diluted earnings per share to $6.63, ±0.10. Turning to FY 2025. It's still early in our planning process. However, I recognize you're thinking about next year, so let me share our current thinking. We're seeing signs of stability and inflection in parts of the portfolio, including traditional and AI-optimized servers. We expect revenue to return to growth next year above our long-term financial framework. The opportunity is the broader IT spending recovery with large corporate and enterprise customers, particularly in the U.S. We'll continue to focus on profitable growth, but we'll be mindful of the competitive environment and inflationary input costs as we move through the next year. Pricing discipline and cost controls will help mitigate these headwinds. Count on us to continue to execute our unique operational model, focused on cash flow and returning capital to shareholders, and we look forward to updating our FY 2025 expectations in more detail on our Q4 earnings call. In closing, we have strong conviction in the growth of our TAM over the long term, with technology trends like AI, multi-cloud, and edge in our favor. At the end of the day, our strategy is simple: leverage our unique operating advantages and to extend our number one leadership positions and capture new growth. This strategy, coupled with our PNL leverage and strong cash generation, drives a resilient long-term financial framework and capital allocation plan. We have proven our ability to generate strong cash flow through profitability and working capital efficiency, including $9.9 billion of cash flow from operations over the last 12 months. At our analyst meeting last month, we committed to increasing capital returns to our shareholders. Expect us to continue to invest in innovation, be disciplined in how we manage the business, and focus on what we can control, delivering for our customers and our shareholders. We're excited about the future and confident in our ability to create meaningful long-term value for all of our key stakeholders. Now I'll turn it back to Rob to begin Q&A. Thanks, Yvonne. Let's get to Q&A. We ask that each participant ask one question to allow us to get to as many of you as possible. Let's go to the first question. We will take our first question from Amit Daryanani with Evercore. Yep, thanks for taking my question. You know, I guess maybe to go to the AI server demand discussion, Jeff, that you had, I think you essentially said your orders doubled. So does that imply something north of $4 billion right now? And then how do you think that manifests itself into revenues into fiscal 2025? And if you can touch about how broad this customer base is becoming versus perhaps a couple hyperscalers, that'd be really helpful. ... Sure, let me pull that apart on that. So I mentioned our demand nearly doubled quarter-over-quarter. And what was, I thought, very interesting about that is every part of the AI-optimized portfolio grew quarter-over-quarter, and we saw significant growth for enterprise customers. So I think that's important to note, is we saw the entire portfolio grow, we saw the number of customers grow, and we saw the number of enterprise customers grow quarter-over-quarter. When I think about the $2 billion that you mentioned, that was a backlog comment that we made in August, and what we talked in August was a $2 billion of backlog. And that included, up until that point in time, the August first month of the quarter, because that was a real-time update of our backlog, $2 billion. We shipped over $500 million of AI-optimized servers during the quarter. When we think about demand nearly doubling, and I mentioned backlog doubled, we'd like you to part with $1.6 billion of AI-optimized servers backlog at the fiscal exit of Q3. Equally important, we saw the pipeline in the quarter triple. I'll say that again. The pipeline for AI-optimized servers tripled quarter-over-quarter during Q3. Lead times remain 39 weeks. Demand is ahead of supply. We continued up to work to improve supply, and we're working now to convert that pipeline into real sales, into orders, so we can continue to ship and benefit from this exciting time. As far as next year, Yvonne, I'm sure, will talk about this in greater detail, but we're still in the planning process. We think it's a tailwind. We talked about it at each of our last financial engagements. It's a large market opportunity, 18% CAGR over the next four years, growing to $120-ish billion. There's nothing that suggests that's not the case, and it's not coming at the cost of our traditional servers. All right. Thanks, Jeff. Next question? We will take our next question from Wamsi Mohan with Bank of America. Yes, thank you so much. I appreciate the early look into fiscal 2025. Given some of the puts and takes that you called out, both on revenues and margins, just wondering, when you say, you know, it's going to be higher than your long-term range, is the comment pertinent to overall Dell Technologies, or is it also a comment that we can attribute both to CSG and ISG? Frankly, we're coming off cyclical bottoms and so many of your businesses, it feels as though you should be able to go, you know, materially outgrow. So any kind of, you know, maybe characterization of that would be helpful. And also on the cost side, I think you noted, you know, pricing discipline, cost controls, but also some headwinds. Just thinking through that, would you say that there was also upside from a margin perspective or EPS growth rate perspective? Thank you so much. Thanks, Wamsi. You know, I'd tell you, we're certainly at the early stages of the planning process. We usually wrap that process in the January timeframe, but you know, I recognize everyone's interested in next year, so wanted to give you a little bit more context there. And we expect to return to growth, as I mentioned on the call already, above our long-term financial framework. And so you know, we're seeing an inflection point in traditional servers, in addition to those AI-optimized you know, momentum that we've been talking about. And we expect servers and networking holistically to be a bigger portion of our ISG mix in the next year. If I move to PCs, our growth expectations will be dependent on the timing of the PC refresh cycle. We're also expecting a decline and mentioned it for, you know, Q4 also in VMware reseller revenue, with no impact to profitability. We're expecting a more competitive environment overall. We started to see that in the third quarter, so we'll expect that to continue, especially in the PC market, into the next year. Other things to consider, input costs are expected to be inflationary next year, led by NAND and DRAM. And of course, as we always do, we'll continue to be mindful of our cost structure. But regardless of in the environment that we're operating in, right, we will continue to execute our proven operational model. You can continue to count on us to be financially disciplined, all while driving growth, profitability, and cash flow. We're really optimistic about FY 25, and really excited about returning to growth, and look forward to giving you all even more context and update in our Q4 earnings call, in February. All right. Thanks for the question, Vamsi. Next question, operator. We will take our next question from Tony Sacconaghi with Bernstein. Yes, thank you. Your tone on the call around the demand environment sounds very, very different than it was 90 days ago, where you talked about, you know, growth accelerating and a rebound in spending better than you had thought. And it sounds like the complete opposite this quarter. You were wildly above normal seasonality in Q2, you were below normal seasonality in Q3, and you're guiding below normal seasonality again for Q4. Did you just misgauge demand in Q2? Like, was there a pull-in from Q3 to Q2, and you just misgauged the characterization of demand 90 days ago, or, or like, what, what really happened and changed? And if I, if I could, I just want to clarify the, the AI situation. So it would be helpful if you could just give an update right now on your backlog relative to 90 days ago, which was $2 billion. And if I think about what you're saying in terms of the pipeline, it sounds very credible that backlog could be like $5 billion exiting this year. If it's a nine-month lead time, shouldn't we expect like $5-$7 billion in AI server delivery? And if you're saying servers are, demand is improving for traditional servers, why shouldn't we expect a gargantuan number for servers next year? Well, Tony, that's a few questions. Let me work my way through those. So what happened? You recall in Q2, we talked about the improved demand in June and July for PCs, and that certainly helped us close the quarter, and we benefited from that. And when we were together in August, we had seen that continue in August. In fact, through the month of August, the first month of the quarter, our PC business was up year-over-year. And then things changed. The business started to slow. It slowed in September. It slowed more in October. We saw more cautiousness from our customers. We saw them being more selective, particularly large commercial customers, enterprise customers, and particularly in North America, we saw the public sector slow down, while at the same time, we actually saw stabilization in SMB. But the big change was the number of large deals slowed over the course of the quarter as our customers, again, became more cautious and selective. And as the market slowed, which you've probably seen in some of the output numbers from the ODMs, we saw increased pricing pressure. So the pricing pressure changed in PCs from August to October. Those large deals became more competitive. I think you also saw inventory that was shipped in the June and July period, now was caught up, and you saw promotional pricing throughout the quarter, and it was more aggressive as we exited the quarter and we ended the quarter. So that, that did change the PCs. We did not see or call the slowdown in our guidance. The guidance that Yvonne and I gave a quarter ago was what we saw through August, and we were optimistic that we were seeing a recovery. It's clearly pushed. Things have slowed. While at the same time, we now have two consecutive quarters of quarter-over-quarter growth of our traditional or data center servers, and we have the tailwind of AI continuing to grow. As I mentioned earlier, the pipeline of AI tripled in the quarter. Demand doubled, nearly doubled quarter-over-quarter. So those are the tailwinds of the change that we see in the business. The biggest change was PCs, because storage performed as expected. Backlog. The number I'm going to give you is the Q3 exit backlog was $1.6 billion. Orders nearly doubled. Pipeline tripled. Our job is to convert that. We're working with our field, our customers, to convert that pipeline that grew significantly. The interest in our AI products continues to be strong. On-premise deployment of AI—or interest—continues to be strong. The fact that we now have been working with Meta and Llama 2, bringing that on-prem, Hugging Face in an open source environment to bring those models and tools on-prem, I think continues to reiterate, AI is going to follow the data, the data's on-prem, and we believe the pipeline and opportunity continues to build for us. All right. Hey, thanks for the answer there, and thanks for the question, Tony. I'd like to, I'd like to think that, you know, our tone would be, you know, transparent and honest, and, and that's what I hope you hear from us, is that we, we call it like we see it, and we give you the best view that we can give you at that point in time. So appreciate the question, Tony. Next question, please. We'll take our next question from Erik Woodring with Morgan Stanley. Awesome. Thank you guys for taking my question. Jeff, I just wanted to kind of dig into some of your comments about, you know, spending on AI, optimized infrastructure, and the impact that might have on traditional hardware spending. Because obviously there's a lot of money, as you're very clearly showing us, being thrown at AI-related infrastructure. So can you just maybe give us a bit more detail on what gives you confidence that this spending won't cannibalize traditional, either general compute spend or overall hardware spending, as we look out over the next 12+ months? What are the signposts that you're looking at that give you that confidence? Thank you so much. Of course, Erik. Let me try. We believe what we've seen for two consecutive quarters in our traditional server business is growth. It's grown sequentially from one to two, now two to three. What we saw for the first time this year was the pipeline actually grow in quarter for traditional servers. That's a very encouraging sign. We saw the adoption of our brand new 16G server double quarter over quarter. We saw the activity with our sales force and our accounts increase. We saw the opportunities in large deals increase towards the end of the quarter. Our conversion improved over the course of the quarter, and I think those signals tell us that this eight-quarter digestion of what was built or bought, I should say, through the course of COVID, has now worked its way through the system that data centers need to be updated, upgraded, additional capacity. Those workloads continue to need to be fed. More data is being traded, while at the same time, there's a whole new category of computing, accelerated computing, AI-optimized computing, fed by all of the market momentum around generative AI. That says that there's a big opportunity in both, that we think early signs. I'm not gonna. I won't use that word that you probably want me to use, this recovery, but we have early positive signs that there's a changing in the demand profile of traditional servers. We're seeing a lot of excitement across our broad portfolio of AI-optimized servers that have us feeling pretty good, as Yvonne just mentioned, about next year. Does that get at your question, Eric? I just wanna make sure that. Yep, absolutely. Very clear. Okay, great. Okay, good. Thanks, Eric. Appreciate it. Appreciate it. Next question. We'll take our next question from Ben Reitzes with Melius Research. Hey, guys. Thanks. I appreciate it. I wanted to ask about PCs, with regard to your comments around 2025. What is... Are you expecting that growth to be above model? And what do you think the impact will be of the Windows 10 expiration, and some of the new chips coming out that harness AI? If you don't mind touching on that, that'd be great. Thanks. Sure. Let me take a run at it, Ben. It probably is important to set context as we're heading into calendar 2024, our fiscal 2025 in PCs. We expect the market to close in Q4, being down. It will be eight quarters of negative growth in the PC industry, the longest I can recollect. It's ripe for a refresh. Another data point for you to think about: there'll be 300 million PCs turning four years old next year. That's typically a tipping point for upgrading in commercial, and most of those are notebooks. As everybody was working remote, the notebook mix went up. 300 million PCs that year, they're aging and time to refresh. We have the opportunity with new architectures from Intel, AMD, and Windows on Arm to really begin to see AI make its way out to the edge, to the PC. It's a pretty exciting time. I've used the moniker, the notion of this is the next great application, the next great use case of the greatest productivity device on the planet, and it's coming real next year. So I think eight quarters of decline, an aging install base, an install base of greater than 1.5 billion units, 750 million of them over four years old, 300 million more coming next year that will age, become four years old, the time to upgrade. None of those are capable of running the new AI workloads coming out to the edge in the PC. New architectures coming that are exciting and interesting, and we have what you said around Windows. There's another forcing function of an upgrade. So historically, when a new version of Windows is available or one is retired, that drives a replacement cycle, and that's an opportunity for us. So we're excited about that, particularly given our bias towards commercial. 80% of our revenue comes from our commercial PCs. I think the opportunity is good for us. And then the other question was around the silicon alternatives. Was that it, if I remember correctly? I think you- Mm-hmm. you hit on everything. I just, the- Okay. The clarification is just PCs above, PCs also above model, as well as server and ISG. That was, that's probably the final part. Yes, specifically, our internal model would have the PC market growing somewhere in the low single digits, think 3%-4%, you would expect us to grow, to take share. Thank you. Sure. Thanks a lot, guys. Thanks, Ben. Next question. We'll take our next question from Asiya Merchant with Citi. Great. Thank you very much. A couple of questions on my end. Just on the AI opportunity that you talked about in the enterprise, maybe if you could share with us, you know, the workloads and the use cases that are, that you're now seeing. Is this gone beyond, the cloud service providers that you talked about, that you're interacting with? I think you mentioned CoreWeave and xAI on the call, but if I recall, there was some commentary as well on enterprises. So are you seeing an opportunity for your AI pipeline growing with the enterprise use cases?... if you can share on that, if you can share any anecdotes on that. And then on share buybacks, you know, obviously, you kicked that up this quarter. Should we expect this level of share buybacks to continue into fiscal 2025? Or given improving, you know, cash conversion cycles, improving top line, we should see a further step up in that run rate. Thank you. Sure. I'll lead with the AI question. A couple of maybe specific data points to help understand and characterize what we're seeing. Number of buyers up, number of enterprise buyers up significantly. All of the portfolio saw quarter-over-quarter growth. And the reason that's important, 'cause not everybody needs a 96 80. Smaller models, smaller datasets, perfect setup for our other products, which line itself up with where we're seeing the opportunities in enterprise. So institutions of higher education, financial services, healthcare and life services, and manufacturing is where we're seeing pull for our products. That's data on-prem, that's models, that's doing AI and ML work across the board. That's what we're seeing, and we're pretty excited about that. And the tripling of the pipeline included enterprise customers and enterprise demand. I'll take the share buyback. Look, I think, you know, as you mentioned, look, we tripled share repurchase this quarter versus last quarter. You know, as a reminder, you know, last year, you know, cash was really kind of running more on the weaker side, and we had pulled back and focused more on dilution management. And then as we've seen cash accelerate this year, it's put us in a good position so that we could be a little bit more opportunistic. We don't typically guide around share repurchase, but I guess the way I would frame it is we're obviously very focused on the 80%+ capital return. If you go back to, when we first started, you know, our dividend, which would have been FY 2023, the beginning of FY 2023, we're running at 96% return of capital, so I feel really good about that. And I do think, recognizing we don't guide, I think it's fair to say, you know, as we look forward, we'll definitely be repurchasing more than just dilution management. All right. Great. Thank you. Thanks, Asiya. Appreciate it. We'll take our next question from Mike Ng with Goldman Sachs. Hi, good afternoon. Thank you for the questions. Just have two quick ones on AI. First, on the AI, margin profile, you obviously had very strong ISG margins in the quarter, despite rising contributions from AI server mix. So could you just talk a little bit about how much of a headwind to that ISG margin rate came from the rising mix of AI servers, if that's the right way to think about it? And then second, I was just wondering if you could talk about the relationship between AI servers and networking and storage for you guys. Should we expect some of that AI sales pipeline that you talked about to eventually include selling Ethernet for AI or InfiniBand or more storage in the near term? Thank you. So let me, let me start with the impact of margin rates. You know, we did see a little bit of dilution, if you will, from the impact of the shipments, as we called out, but really not a material impact right now. We saw nice performance really across the server holistic server portfolio, and so that increase that Jeff already talked about in the traditional servers was helpful in that mix. So it does have an impact, but you know, we've talked about it being margin dollar accretive, but margin rate dilutive. And so we saw a little bit of that, but not to a significant extent in our third quarter. But expect as that grows, we will see more of an impact. Again, margin dollar accretive. And so, as we have more services attached, as we expand that into the enterprise space, we'll see more and more, margin accretion coming from those AI offerings. No, I think that's a great point, Yvonne, is the team did a great job improving margins of our AI-optimized servers quarter over quarter. Selling the value of our design, the performance attributes, its thermal attributes, its connectivity attributes, and then attaching storage and services around it allowed us to see improved margins quarter over quarter. And Mike, to your question, is there a relationship between storage and, excuse me, networking with AI? Absolutely. These are typically clustered, small clusters, large clusters, high, high, high bandwidth needed. We see it ultimately deployed out where the data is being created. Much of the data that'll be created in the future is outside of the data center. Much of that data is unstructured. Much of that opportunity is really a nice, again, really nice tie to what we do with our unstructured and object assets. Networking is the high-speed interconnect, the fabric. They matter, they matter more, whether it's InfiniBand or Ultra Ethernet. Those are all exciting, high new technologies for us. Excellent. Thanks, Jeff. All right. Thanks, Yvonne. Of course. We will take our next question from Simon Leopold with Raymond James. Great. Thanks for taking the question. I wanted to see if you could unpack what you see going on trend-wise in storage, particularly given that I know you said it came in as expected, but the revenue was a bit light versus street expectations, and looks like it's still down year-over-year in the next quarter. And where my question is going is to think about the longer term trend, because I'm wondering, is AI pulling money away from storage? And do you see essentially margins trending better or worse, given shifts in input costs and, you know, the better margins that some of your peers have called out recently? Just wondering how you're seeing that trend as well. Thank you. Sure. Maybe a couple of data points, and Yvonne can chime in as well. From us, when you think about margins, that was the last comment. We saw our storage margins improve quarter-over-quarter and year-over-year on a demand basis. That's exciting. We continue to sell the value of our products and the broad portfolio we have. We do see customers cautious. Large concentration of the storage business is in very large customers, and they're absolutely being cautious and selective. And that clearly impacts our high-end product portfolio. But what was exciting during the quarter is we saw our data protection and our unstructured categories actually growing on orders basis year-over-year. So when I think about the opportunities around protecting valuable data, when I think about the opportunities of what data is going to be created, again, unstructured, largely outside of the data center at the edge, I think it's a great opportunity for us to continue to protect these valuable workloads and the opportunity for us to be where the data is created, out at the edge, with our vast array of unstructured assets. So I don't think AI pulls away storage dollars. I think what we see is the effect of eight quarters of server decline has impacted storage. Customers are cautious. Historically, as the server business rebounds and recovers, we think, well, our experience tells us that storage lags it by about two quarters. That's what we're expecting. We see nothing that suggests that's different. In the meantime, the opportunity around unstructured is immense, and we'll continue to focus on that. And I'd add, Jeff, on that, the margin accretion that you referred to on storage is real, and it's great because it's going to be recognized over time in the P&L, right? With the high services and software attached. So we don't see all that benefit today, but we'll see it going forward. Thank you very much. Next question. We'll take our next question from Sidney Ho with Deutsche Bank. Great, thanks. I have a question on, on AI as well. It's great to see very good momentum in, in that business. Are there any concerns that some of these orders could be, like, just double booking just because supply is tight everywhere, that, that could ease over the course of next year? I assume you have great visibility into, the backlog, the $1.6 billion you talk about in terms of timing, but how about the, quote, "the multi-billion dollar pipeline?" How, how comfortable are you with that? And also, I want- I want to ask about is that can you clarify what products and maybe services are included in that, order number? Is that just an AI-optimized service like the XE 96 80, or do you include like, CPU-only service in there, any professional services or even APEX as a service in there? Thanks. Last one first. When we talk about our AI backlog and demand, it's not high-performance computing; it's not CPU-based; it's simply the portfolio that is optimized for artificial intelligence. The 9680, the 9640, the 8640, the 760 and the 750. That's it. So it's clear it is that portfolio that we built to be optimized for AI. The double booking. It's a very unusual way that the marketplace is working with the role that NVIDIA plays in helping the end, obviously, it's the supplier or the card. They're out helping generate demand. I think there's reasonable fidelity in the demand signal that we see today. Is it possible there's double booking? I can't sit here and tell you that there's not. I don't. From my seat, I don't see it. When we see the opportunity of we are competing with others for the same opportunity, the opportunity is qualified. It's got to be qualified for NVIDIA to give the supply or to suggest the supply will be available. So I think there's a lot of control points in place that suggest there's great fidelity in the demand signal that we're seeing. But I can't sit here and tell you with 100% certainty that there isn't one or two, but I think it's a really good demand signal. And given where our team is and what we see across the globe, in enterprise, with CSPs, we know where the opportunities are. I hope that helps, Sidney. Thanks, Sidney. Next question. We'll take our next question from Krish Sankar with TD Cowen. Yeah. Hi, thanks for taking my question. Jeff, I had one for you. I'm kind of curious: you spoke about AI PC. What is your definition of an AI PC? And also, how much do you expect the ASP uplift to be for an AI PC, and how much incremental growth could it drive from, you know, the current 250 million unit run rate you're going through? Thank you. ...Our definition of an AI PC is going to be a PC that has the performance capability to run the workload on the PC. Not a cloud service, the capability of running an AI workload and an app that has been AI-optimized, and to be able to run it locally. The architectures that are coming all meet that criteria. There's variations in performance, but they're all meeting the threshold that we believe is required to call them PCs, that they'll be AI-enabled and AI PCs, if that's a name. And I think we're quite, quite comfortable with that definition. Whether it drives tremendous growth to the TAM is to be seen. What I believe it is, is you don't want to be a PC user that doesn't have an AI-enabled chip in it. You're gonna be next to people that have one and yours doesn't, and it will perform differently. It won't be able to take advantage of some of the new exciting workloads, whether that's new forms of search, new forms of security, new forms of interacting with your PC itself, the ability to put some form of assistant around you. Those are gonna be huge productivity uplifts, and I think it's gonna drive a refresh cycle. And again, the scale of this business is so large, with 1.5+ billion units in the install base, 950 million units sold over the last three years. This is a catalyst to increase the refresh or reduce the refresh cycle or increase the refresh rate, whatever you prefer, and I think that's an exciting time, but I can't call what that number is. Our estimate for the marketplace is low single-digit growth. I think I mentioned 3%-4%. That would take the market from roughly $250 to $260 next year. Let's get there. Let's get it growing again after eight quarters of decline. Well said. Next question. We'll take our next question from Aaron Rakers with Wells Fargo. Yeah, thanks for taking the question. There's been a lot of questions already answered, but, Jeff, I just want to ask you, simplistically on the AI narrative. You mentioned 39 weeks of delivery time or lead times. Are you at all surprised that that's not starting to change? Have you seen any indications that lead times have pulled back with some of the China restrictions put in place? And I guess that with that context also, would you expect diversity, i.e., another large GPU supplier, to be a factor in unlocking and converting some of that pipeline as we move into next year? A couple things. The pipeline is NVIDIA pipeline today. It's not alternative pipeline- Yep. It's NVIDIA pipeline. I wish I could tell you, Aaron, that the backlog was less than... or excuse me, the lead time was less than 39 weeks. I can't today. We are on the phone working every available channel opportunity, as you might imagine, with our supply chain capabilities, to improve supply, to improve supply availability. We've offered our services. We'll help where we can. I'm hopeful for the day to tell you that supply has improved greatly, lead times have reduced, and we can work the backlog down faster. That's our job. I don't have those answers today. It's 39 weeks. We're trying to continue to get more supply. That's where we are. As we look forward into calendar year 2024, there's clearly alternatives coming. There's work to be done on those alternatives. Software stacks have to be taken care of, resolved, the opportunities around them. But there's, there's more options coming. Their adoption rate, we'll see. But right now, that multibillion-dollar pipeline that I referenced, the backlog that we've talked about, is NVIDIA-based, 39-week lead time. We're working our behinds off every day to get more supply. Yep. Thanks, Jeff. You betcha. Next question? Question. We'll take our next question from Samik Chatterjee with JP Morgan. Hi, thanks for taking my question. I guess sticking on the AI subject, you shipped over $500 million of AI-optimized servers in the quarter. Just curious, with lead times holding where they are, how should we think about the trajectory of sort of what to expect for shipments in the coming quarters? Is it fairly stable in that sort of $500 million range, or should we expect some level of sort of ramp up if it's supply easing? And then just a quick clarification, Jeff. You've mentioned a few times now the improvement you're seeing in traditional servers, even as you sort of called out that customers are pulling back spending in most recent months, you've seen some signs of that. Just curious, what's the driver there? Like, why—what's your insight in terms of as customers are pulling back, why is there sort of this green shoot in traditional servers that runs a bit counter to that overall theme? Thank you. Well, we don't forecast shipments in terms of specific dollars by product line for the next quarter. Our shipments for AI are implied in the guidance that Yvonne gave. I really don't want to break it down into a specific of how many that will ship of AI servers, but 39-week lead time, nine months. You can You can kind of look at the math and go: Hmm, maybe that's probably the right sort of zip code to be in, but we're hand-to-mouth for parts. Traditional servers and why we think there's a green shoot. I think it's the comments around; it's been an eight-quarter digestion period, the longest that I can recollect in the server business. Data centers have aged products in them. They've worked through what they have bought in the early, the first half of the COVID era. They now need to add capacity, and we're seeing that in different areas. And to the point now, again, to be slightly repetitive, two quarters in a row of sequential growth, a building pipeline, which hasn't happened this year. Improved activity, increased activity, improved conversion, makes us feel comfortable that something's changed. Again, I'm not using that word recovery, but something's changed. It's an inflection point that Yvonne mentioned earlier, and we're going to continue to obviously feed that inflection and continue to look at the opportunity. Thank you. All right, let's see if we can get one last question in. We'll now take our final question from David Vogt with UBS. Great. Thanks, guys, for squeezing me in at the end. Can you, Jeff, can you talk to sort of the thought process if, you know, AI lead times come in a little bit more next year, what that means for your networking fabric or equipment business, and then ultimately the pull forward, maybe the pull-through of storage? I might have missed it earlier, but just want to get a sense for, how that would sort of impact the rest of the ISG business. And then just quickly on CSG, can you kind of share with us your thoughts, maybe, Yvonne, on sort of the margin impact from higher component costs, whether it's DRAM, NAND, or however you're thinking about it? Thanks. Well, clearly, as GPU supply improves, the fabric that is associated with those units will be shipped and aligned to that. So the ability for us in our business or our networking business will benefit from an uplift or an increase in supply, and I think that's encouraging. And as I talked about, storage attach is important. We are certainly working with our sales teams, working with it to find the opportunities as this data is being created at increasingly greater rates outside of the data center to make sure that we're there, and it's landing on Dell Storage. And as it lands on Dell Storage, making sure that as AI follows the data, that our AI-optimized portfolio is next to it. I mean, that's the sales motion. A set of professional services around that, a set of services that attach around that. So think of every opportunity of a model training, fine-tuning, ultimately, as we get to inference, is an opportunity for compute assets, which drags a set of storage assets around that, and it's got to be connected. We kind of look at that as the AI estate, if you will, and that's the opportunity. It's real, and our teams are focused on it. Then, you know, on your question around component costs and the potential pressure it would put on margin rates. You know, we do run a low inventory model, and so when we have component cost increases, we try to recover them as quickly as we can by raising prices and passing those through into the market. So you'll see us continue with that. It's certainly not the first time that we've had this happen, and so it's an engine that's well-tuned within Dell, but you will have to navigate through that and with the competitive environment, and we will. But it usually takes a period of time to recapture that impact of the inflation. All right. Great. Thanks, guys. Thanks, everyone, for joining us. Y eah. Thanks, David. Hey, we'll see many of you next week at Raymond James and Barclays, and also the first week in January at the Consumer Electronics Show. Thank you. Have a good evening. This concludes today's conference call. We appreciate your participation. You may disconnect at this time.