Lenovo Group: Q1 Financial Results 2026/27

Lenovo Group Limited (HKSE: 992) (ADR: LNVGY), together with its subsidiaries (‘the Group’), today reported first quarter results for fiscal year 2026/27, marking the highest quarterly revenue growth in the past five years and the strongest quarter in the Group’s history. During the quarter, overall Group revenue reached an all-time quarterly high of US$26.9 billion, up 43% year-on-year, with all business groups delivering record first-fiscal-quarter revenue and operating profit. Adjusted net income^[1]was up 176% year-on-year to US$1.1 billion, surpassing the US$1 billion milestone for the first time ever, with adjusted net margin improvements of almost two percentage points year-on-year supported by higher revenue scale and continued efficiency gains. AI-related revenue^[2] grew 60% year-on-year to US$9.3 billion, accounting for 35% of total Group revenue in Q1. The Group continues to invest in innovation with R&D expenses up 30% year-on-year.

The first quarter results demonstrate the Group’s ability to translate its Hybrid AI strategy into tangible business performance, building on its leadership in PCs and smart devices while rapidly establishing Lenovo as a global leader in AI solutions and infrastructure. In particular, the record performance of the Infrastructure Solutions Group (ISG) demonstrated its clear role as a key engine of both growth and profitability for Lenovo. The quarter also saw Lenovo deliver AI solutions and services at scale for the FIFA World Cup 2026™, as FIFA’s Official Technology Partner. Spanning three countries, 16 cities, 48 teams, and 104 matches, Lenovo provided the devices, infrastructure, services, solutions and AI-powered innovation that helped support FIFA operations, global broadcasts, team analysis, officiating technology and fan experiences at massive scale. In addition, the partnership created a powerful platform for customer engagement, is accelerating commercial opportunities, and is elevating Lenovo’s global brand as an AI leader. The Group’s operational resilience was a key competitive advantage during the quarter. Lenovo’s scale, Global/Local supply chain, strong supplier relationships, and end-to-end operating model enabled it to anticipate and manage supply constraints and cost pressures effectively – turning industry-wide disruption into an opportunity to strengthen its competitive position.

Chairman and CEO quote – Yuanqing Yang:

“Following Lenovo’s best year in history, we have now delivered our strongest quarter ever – with growth accelerating, profitability further improving, and AI emerging as a clear growth engine across every business group. Building on our leadership in PCs and Smart Devices, we are proud of our rapid emergence as a global leader in AI and Infrastructure – a clear validation of our strategic foresight. Powered by our Hybrid AI strategy, operational excellence, and relentless innovation, Lenovo is not only navigating market cycles but also seizing initiatives to win. We are confident in our ability to drive sustainable, long-term growth and deliver greater value for our shareholders.”

Financial Highlights:

Q1 results:

Intelligent Devices Group (IDG):

• Revenue for IDG increased 27% year-on-year to record first fiscal quarter revenue of US$17.1 billion, with revenue from PCs and smart devices up nearly 30% year-on-year. Industry-leading operating margin was well maintained at 7.1% reflecting operational excellence, supply chain resilience, and continued innovation.
• Global PC market share leadership was further strengthened, reaching 24.2% and extending Lenovo’s lead over the #2 player to more than five percentage points, with the gap widening on a year-on-year basis for the 10th consecutive quarter. Lenovo continues to be the global #1 in AI PCs, with AI PC market share increasing to 25.1%.
• Tablet revenue surged by more than 80% year-on-year, and the smartphone business delivered its best fiscal first quarter revenue, up 15% year-on-year.

Infrastructure Solutions Group (ISG):

• ISG revenue nearly doubled (up 98% year-on-year) to a record quarterly revenue of US$8.5 billion. Operating profit reached a record US$777 million, driving operating margin to an all-time high of 9.1%.
• The results reflect continued investment in cloud, edge, AI and particularly AI inferencing, enabling ISG to capture the booming token economy and empower customers with agentic AI transformation.
• ISG is seeing extraordinary growth across both Cloud Service Provider (CSP) and Enterprise and SMB (ESMB) segments with revenue for both almost doubling year-on-year.
• In traditional compute, Lenovo rose to #2 globally in x86 server revenue. In AI compute, the AI server pipeline expanded to US$54 billion, up 157% quarter-on-quarter driven by accelerating AI infrastructure momentum and a rapidly expanding customer base.

Solutions and Services Group (SSG):

• SSG delivered its highest ever quarterly revenue of US$2.9 billion, up 28% year-on-year, with operating profit increasing 39% year-on-year to US$697 million, and operating margin expanding to a record 24.2%, reflecting disciplined execution and continued expansion into higher-value AI, managed services and solutions offerings.
• AI services revenue grew at triple-digit year-on-year, driven by accelerating customer adoption of AI Factory and AI Library solutions as customers moved from AI experimentation to production deployments.
• Managed Services and Projects and Solutions together accounted for over 62% of SSG’s revenue, reaching a new high, supported by a strong multi-quarter backlog and growing demand for outcome-based AI solutions.
• TruScale continues to be a key growth driver, growing 35% year-on-year. Solutions tailored to vertical industries such as sports, manufacturing, retail, and beyond contributed 50% revenue growth in Projects and Solutions.
• During the quarter, SSG continued to outperform the market, growing at nearly twice the market growth rate, demonstrating its strategic position in the fast-growing segments defined by AI solutions and services.

Corporate highlights

Achievements, announcements, and notable commitments over the past quarter include:

• Lenovo announced strong progress against its first generation of long-term enterprise-wider ESG aspirations, with measurable gains in climate action, circular economy, social impact, and governance, while reinforcing responsible innovation in the AI era and Lenovo’s continued commitment to ESG programs with the announcement of a new set of sustainability aspirations.
• Lenovo has once again been ranked in the Gartner® Supply Chain Top 25 for 2026, achieving its highest-ever ranking at fifth globally. Now in its 22nd year, the Gartner Supply Chain Top 25 identifies, celebrates, and profiles excellence in supply chain management. Lenovo ranked eighth in 2025, 10th in 2024, and eighth in 2023.
• Lenovo climbed 43 places to #153 in Fortune’s annual Global 500 List, making it the highest ranking in the company’s history and one of the most significant advances in recent years.
• Building on its Global/Local model, Lenovo expanded its North Carolina Smart Campus, adding meaningful new server manufacturing capacity to capture rising demand from hyperscalers and enterprise customers. The expansion builds on its longstanding presence in North Carolina and further strengthens the Group’s footprint of 30+ factories in 11 markets around the world.
• Lenovo achieved its highest-ever score in the Workplace Pride Global Benchmark, reaching 93.7% in 2026 and earning ‘Advocate’ status for the first time. The score reflects steady progress in recent years, with Lenovo now ranking in the top tier across every area measured, from policy and communications to employee networks, benefits, and societal impact.
• 1] Note on adjusted net income: Adjusted measure was defined as financial metric by excluding net fair value changes on financial assets at fair value through profit or loss, amortization of intangible assets resulting from mergers and acquisitions, merger and acquisitions related charges, impairment and write-off of intangible assets, property, plant and equipment and construction-in-progress, fair value change on derivative financial liabilities relating to warrants, notional interest on convertible bonds, and impairment of interests in associates; and the corresponding income tax effects, if any.

  [2] Note on AI-related revenue: AI Devices: PCs and Smartphones equipped with NPU; AI Servers: GPU Servers; AI Services: Services that enable customer to build, scale & manage AI.