LENOVO GROUP, a global leader in the AI ecosystem, released its financial results for the first quarter of the 2026/27 fiscal year, which ended June 30, 2026. The company reported record-breaking quarterly revenue of RMB 183.4 billion, a 43% year-over-year surge that set a new historic high. Adjusted net profit for the single quarter surpassed the $1 billion mark for the first time (over RMB 7.3 billion), skyrocketing 176% compared to the same period last year. The adjusted net profit margin nearly doubled to 4.0%, also a new record. Both revenue and adjusted net profit significantly exceeded market expectations.
Lenovo Group extended gains in afternoon Hong Kong trade, rising more than 20%.
All three of Lenovo's core business segments achieved strong double-digit revenue growth, hitting new historical highs for the period. Revenue growth across the company's major market regions ranged from 25% to 58%. Based on the momentum from the first fiscal quarter, the group anticipates reaching its goal of "exceeding $100 billion in revenue within two years" ahead of the schedule set at the beginning of the fiscal year.
As the global AI industry enters a phase of large-scale commercial deployment, hyperscale cloud service providers are boosting capital expenditure on AI infrastructure. The rise of Agentic AI and increasing token usage are jointly driving AI into scaled application. With inference demand growing rapidly, the competitive focus is shifting from model capabilities to token generation efficiency, inference efficiency, and hybrid AI architecture. Concurrently, global supply chain restructuring, geopolitical tensions, and rising prices for key components present new operational challenges for tech companies. In this new cycle of technological leapfrogging and industrial reshaping, the competition is no longer just about innovation, but also about strategic execution, global operations, and the ability to convert AI into commercial value. Lenovo's historic quarterly results are a direct response to these industry trends.
The quarter saw three landmark breakthroughs for Lenovo. First, the ISG (Infrastructure Solutions Group) achieved its best-ever revenue and profit performance, maturing into a dual engine for the group's revenue and profit growth. Second, leveraging its unique "Global Resources, Local Delivery" model, robust supplier relationships, resilient supply chain, and an end-to-end autonomous operating model covering R&D, production, supply, sales, and service, Lenovo transformed industry challenges into competitive advantages. Third, as the official technology partner for the 2026 FIFA World Cup, Lenovo used AI technologies and solutions to execute the largest and most complex event support in history, covering 3 countries, 16 cities, and 104 matches, elevating its brand to an AI leader.
From a business performance perspective, all three of Lenovo's core business groups grew synergistically. The IDG (Intelligent Devices Group) expanded its global lead. Despite market headwinds, IDG revenue reached RMB 116.4 billion, a 27% increase. Its PC business held a 5.3 percentage point market share lead over the second-place competitor, a lead it has widened for 10 consecutive quarters. The ISG (Infrastructure Solutions Group) saw revenue nearly double year-over-year to a record RMB 57.9 billion, with an operating profit of approximately RMB 5.3 billion. Its operating profit margin rapidly improved to 9.1%, officially establishing it as a new core profit and growth engine. The SSG (Solutions and Services Group) generated revenue of RMB 19.6 billion, a 28% increase, marking its 21st consecutive quarter of double-digit growth. Its operating profit margin exceeded 24%, solidifying its ability to deploy AI solutions.
AI is accelerating as Lenovo's underlying growth engine. In the first fiscal quarter, Lenovo's AI-related revenue grew 60% year-over-year to a record RMB 63.4 billion, accounting for about 35% of total group revenue. AI service revenue surged 141% year-over-year. Correspondingly, Lenovo increased its R&D investment by 30% year-over-year. Lenovo's hybrid AI strategy is entering a value realization phase. In the personal intelligence domain, Lenovo continues its "One Device, Multiple Scenarios" strategy, building a new generation of AI terminal experiences centered on a super agent. The Tianxi 4.0 platform, launched in May, enhanced autonomous planning and task execution. The weekly active user rate on PCs reached 40%, up 2.7 percentage points from the previous quarter. The Qira user adoption rate is favorable, with a conversion rate of about 28%. The company is also advancing the "Cangqiong Plan" and other AI ecosystem initiatives, opening its AI Skills ecosystem and expanding global partnerships to build a self-evolving agent ecosystem, further solidifying its global lead in AI PCs and AI terminals.
In the enterprise intelligence domain, the company is refining its enterprise AI solution portfolio around its hybrid AI advantages, helping clients turn proprietary private data into business insights and value. The AI capabilities developed during the 2026 FIFA World Cup are being replicated into smart manufacturing, smart cities, and other vertical industries, providing practical validation for scaled enterprise intelligence. Leveraging innovations like the FIFA AI Pro World Cup Football AI Super Agent, referee-view AI video enhancement systems, 3D digital human visualization, and intelligent command centers, Lenovo successfully delivered AI support for 48 teams, 600 venues, 550 FIFA users, and over 50 business areas, achieving "zero failure" operation throughout the tournament cycle.
"After Lenovo's best year ever, we have delivered our strongest quarterly performance yet. Growth is accelerating, profitability is strengthening, and AI's role as a core growth engine is evident across all business segments. It is particularly exciting that after our PC and smart device businesses became market leaders, our AI and infrastructure businesses are also emerging as global market leaders, proving the foresight and correctness of our strategy," said Yang Yuanqing, Chairman and CEO of Lenovo Group. "Driven by our hybrid AI strategy, operational excellence, and relentless innovation, Lenovo is not only navigating market cycles steadily but also seizing opportunities to win. We are confident in achieving long-term, sustainable growth and creating greater value for our shareholders."
Key Performance Highlights
Revenue reached RMB 183.4 billion, a 43% year-over-year increase, a first-quarter record.
Non-HKFRS net profit surged 176% year-over-year, surpassing the $1 billion mark for the first time.
ISG revenue grew 98% year-over-year to RMB 57.9 billion, with an operating profit margin of 9.1%.
IDG revenue reached RMB 116.4 billion, with its PC market share lead widening for the 10th consecutive quarter.
SSG revenue grew 28% year-over-year to RMB 19.6 billion, with an operating profit margin exceeding 24%.
All three core business groups achieved strong double-digit growth, hitting new historical highs for the period.
AI-related revenue accelerated to RMB 63.4 billion, a 60% year-over-year increase.
R&D spending grew by more than 30% year-over-year, driving innovation in personal and enterprise intelligence.
ISG: Delivering Results Far Beyond Expectations, Becoming a Dual Engine for Profit and Growth
AI is driving a new long-term growth cycle for the global infrastructure market. IDC data shows the global server market revenue grew 30.4% year-over-year to $122.6 billion in the first quarter of 2026. Hyperscale cloud providers continue to increase AI capital expenditure, and enterprise AI deployment is deepening, driving strong growth. In this wave of rapid enterprise AI infrastructure development, Lenovo's ISG continues to fulfill its commitment to balanced growth and profitability. By capitalizing on the rapid increase in token usage and supporting clients' agentic transitions with infrastructure and solutions, ISG revenue grew 98% year-over-year to a record RMB 57.9 billion. Operating profit reached RMB 5.3 billion, with an operating margin of 9.1%, approaching industry-leading levels. After achieving profitability in the previous fourth quarter, ISG has again delivered results that significantly exceed expectations, proving its profitability is sustainable and establishing it as a new core profit and growth engine for the group.
This performance reflects the success of Lenovo's long-standing dual-drive strategy for CSP (Cloud Service Providers) and ESMB (Enterprise and SMB) infrastructure. In the first quarter, both CSP and ESMB infrastructure revenue nearly doubled year-over-year, with gross profit surging 1004% and 402%, respectively. Lenovo's AI server order backlog more than tripled from the previous quarter to over RMB 360 billion, indicating strong demand in the enterprise AI market and Lenovo's competitive edge in AI infrastructure. The company is also accelerating its next-generation AI infrastructure product lineup, advancing the GB300 platform deployment and developing the Vera Rubin 200 rack-scale solution. Its Neptune liquid cooling technology remains an industry leader, capable of supporting direct liquid cooling for next-generation flagship platforms like the GB300 NVL72. Looking ahead, with the dual-drive CSP and ESMB strategy and a complete product portfolio spanning traditional computing, AI servers, and liquid cooling, Lenovo will continue to enhance its hybrid AI infrastructure advantage, accelerating the scaled deployment of enterprise AI and driving high-quality, sustainable growth for ISG.
IDG: Revenue Reaches RMB 116.4 Billion with 27% Growth, PC and Smartphone Revenue Hit New First-Quarter Highs
After nine consecutive quarters of year-over-year shipment growth, the global PC market experienced a temporary adjustment in the second quarter of 2026. IDC data shows global PC shipments declined 4.9% year-over-year in Q2 2026, mainly due to persistent storage chip shortages and pre-stocking by manufacturers. However, with the continued volume growth of high-value products like AI PCs and premium gaming PCs, Goldman Sachs expects the global average selling price (ASP) of PCs to exceed $1,000 for the first time in 2026. The industry's growth driver is shifting from shipment volume to product mix upgrades and price increases. In the face of industry volatility, Lenovo's IDG business demonstrated strong operational resilience. First-quarter revenue hit a new historical high for the period at RMB 116.4 billion, a 27% year-over-year increase. The PCSD (Personal Computers and Smart Devices) business revenue reached RMB 98.9 billion, a new first-quarter record, growing nearly 30% year-over-year while maintaining industry-leading profitability. The PC business further solidified its global number one position with a market share of 24.2%, a first-quarter record, and widened its lead over the second-place competitor for the 10th consecutive quarter to 5.3 percentage points. Lenovo's tablet business revenue surged 83% year-over-year in the quarter, with a significant increase in consumer activations.
Specifically, the PC business achieved both volume and price optimization despite industry-wide shipment pressure. By continuously optimizing product mix and pricing strategy, Lenovo achieved significant revenue growth against the market trend. While some Windows PC makers faced market share pressure, Lenovo increased its consumer market share for the sixth consecutive quarter, converting market volatility into an opportunity to expand its lead. The global smartphone market also showed a "volume stability, price increase" trend. Counterpoint data shows that while global smartphone shipments in Q2 2026 fell 11% year-over-year, the lowest for a second quarter in 13 years, revenue grew 7% year-over-year to a record high, with ASPs up 17% year-over-year. The volume growth of AI phones, premium products, and rising storage costs are driving market growth toward value. In the quarter, Lenovo's smartphone business revenue grew 15% year-over-year, achieving its best first-quarter performance. Going forward, Lenovo will continue to upgrade its super agent capabilities and promote scaled deployment, actively layout AI-native devices, and expand its AI terminal installed base, further solidifying its global AI PC leadership position and laying a foundation for future AI capability pre-installation, AI application adoption, and personal AI ecosystem development.
SSG: Revenue Grows 27.8% to RMB 19.6 Billion, AI Capabilities Accelerate Scaled Deployment
As enterprise digitalization and AI applications deepen, the global IT services market is entering a new growth cycle. Gartner forecasts the global IT services market will reach $1.87 trillion in 2026, a 9% year-over-year increase, maintaining its position as the largest segment of the global IT market. Enterprises are accelerating the shift of AI from proof-of-concept to scaled application, driving demand for hybrid cloud, managed services, AI solutions, and professional services. The value center of IT services is shifting from traditional support to AI-driven high-value services. Aligning with this trend, SSG maintained high-quality growth in the quarter. SSG revenue grew 27.8% year-over-year to RMB 19.6 billion, marking its 21st consecutive quarter of double-digit growth. The operating profit margin exceeded 24%, up 2 percentage points year-over-year, maintaining an industry-leading level. Managed services and project & solution services together accounted for 62.4% of SSG's total revenue, a historical high, reflecting Lenovo's strategy to increase the proportion of high-value AI services. AI continues to be a key growth driver for SSG, with AI service revenue growing 141% year-over-year.
In the enterprise intelligence domain, SSG is continuously refining its AI solution portfolio, translating AI capabilities into client value. In the first quarter, revenue growth in Lenovo's key industries continued to outpace the overall business, showing the effectiveness of its long-term vertical industry strategy. The sports and manufacturing sectors achieved double-digit and high double-digit growth, respectively. AI solutions for smart warehousing, computer vision, and robotic inspection continue to see repeat client purchases. The AI solution library has begun to achieve scale, contributing to a 50% revenue growth in project & solution services. Lenovo's role as the official technology partner for the 2026 FIFA World Cup provided a representative case study for its hybrid AI capabilities. The successful, "zero-failure" operation covered 48 teams, 600 venues, and 550 FIFA users across 50+ business areas. More importantly, these World Cup-validated AI capabilities are being rapidly replicated into smart cities, smart manufacturing, and other industries, extending AI's reach from sports to various sectors. Meanwhile, SSG continues to enhance its enterprise AI commercialization capabilities. In the first quarter, TruScale service revenue grew 35% year-over-year, and IaaS business revenue grew 142%. New businesses like AI factories and NeoCloud continued to release growth potential. Centered on its hybrid AI advantages, Lenovo is strengthening its data platform, AI agent, and industry solution capabilities, driving AI from individual projects to scaled replication, further cultivating long-term growth momentum in the enterprise intelligence era.