Some call it low calorie. Nature of e-systems revenue. Is it low calorie for the foreseeable. Well, good morning, Carol. Thanks for having me. We did what we said we would do, and we had a very strong quarter where we had double digits year-over-year revenue growth. And to your point, it was all on the back of converting an amazing order book we have in our eye and continue to add to that order. Book, however, is also fair to say that we actually improve operating margins quarter over quarter by 50 basis points, despite the mix heavily weighted to a high. And I will say that the reason why the gross margin, not the operating margins, the gross margin is year over year down is because we have less contribution from the network business, which, as you know, is going through a market transition through the cyclicality we normally see in each of the businesses. So the main driver for the gross margin decline was now they are in fact our air

business. Our server business grew operating margins year over year by 70 basis points. That's actually like an industry-wide issue that you've brought up that others have talked to us about. I think the difference with you, Antonio, is the customer base is like much more enterprise-centric. And I think on the call you talked about improvement in margins relating to that. Could you just talk a bit more about how the enterprise customers are going to push you forward? Absolutely. And as you know, the HP, this carpet in Vegas, we introduced an HP private cloud offering, which I call it an air in the box ad, which is actually a full turnkey solution for enterprises of all sizes to train and deploy inference for their specific applications. And that offer is targeted specifically for enterprises, including very specific vertical solutions built on top. And we just made that offer available just two days ago, is now available for

global availability ordering, and we are excited about that. Now in the order book we announced this quarter, we had $1.6 billion of new orders, and mid-teens of those are all enterprise-related. Let's just talk about macro challenges to those enterprises you sell to. Are we seeing a pullback in confidence on spending? Actually, I have not seen it. You know, in fact, we saw orders growth in all our businesses on a sequential basis, which tells me kind of like we are on a recovery. In fact, our traditional server business had double-digit year-over-year and sequential growth in orders, which also tells me there is no cannibalization from the servers into the traditional servers. And it makes sense, Carolyn, because when you think about these legacy loads, some of them are not even, you know, cloud-native workloads. It makes no sense to put it on a more expensive infrastructure which should be focused on really training these models.

with their data so they can get the time to value from their deployment through the business process. And then on the networking side, which obviously has been a more negative story in the last few quarters in line with the peers. By the way, we saw sequential order growth across all geographies, and these were driven by the wireless LAN, the sassy deployment, which job security is very important, the edge and data center networking. Antonio, you talked about your fiduciary duty in pursuing damages in the sad incidents around Mr. Lynch. Just because this is the first time your our audience is hearing from you, you explain that fiduciary duty and basically what your end goal was in that piece of litigation. Well, listen, Dr. Lynch, there is a tragedy, as are the death of others on the ship. So clearly, A, it was a sad moment. However, it doesn't not change what happened.

You know, the UK judge ruled that the company is a victim of fraud. The ruling happened last year. And as a physician's duty, we need to see the finalization of the proceedings. And obviously, our duty is also to recover the damages and the fraud. So, we have to see it through. That's where we are, and we hope to hear soon. What are the next steps based on the proceedings of the judge?

HPE Reports Disappointing Margins on AI Server Business

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