LENOVO GROUP (00992) first quarter performance of fiscal year 25/26 exceeded expectations, with revenue hitting a new historical high for the same period.

On August 14, 2025, LENOVO GROUP (00992) released its performance for the first quarter of the 2025/26 fiscal year ending on June 30, 2025: quarterly revenue increased by 22% year-on-year to 136.2 billion RMB, far exceeding market expectations of 13.7%, setting a new historical high for the same period; net profit under non-Hong Kong financial reporting standards increased by 22% year-on-year to 2.816 billion RMB, significantly enhancing profitability, achieving a strong start to the "opening season". This impressive performance was achieved during a period of significant disruption in global trade and supply chains due to the Trump tariff war, making it particularly challenging. LENOVO GROUP Chairman and CEO Yang Yuanqing stated, "With the ODM+ end-to-end operations and the unique model of 'global resources, local delivery', we overcame the challenges brought by the macroeconomic environment such as tariffs and successfully fulfilled the commitment of maintaining competitiveness, not losing market share, and not decreasing profitability in the first two quarters." Moreover, in the competitive market environment of the global AI race, all three major business groups of LENOVO GROUP seized the structural growth opportunities brought by AI, accelerating towards the "value realization period": The IDG Intelligent Device Business Group achieved revenue of 97.3 billion RMB, a year-on-year increase of 17.8%, far exceeding market expectations of 11.46%, with the PC business achieving the fastest growth rate in 15 quarters and the smartphone business revenue increasing by 14% year-on-year; The ISG Infrastructure Solutions Business Group achieved a robust revenue growth of 35.8%, significantly surpassing market expectations by more than 10 percentage points; The SSG Solution Services Business Group saw revenue growth of 19.8%, surpassing market expectations of 13.44% to reach a new high, with an operating profit margin of 22.2%, further solidifying its core profit engine position. Benefitting from the continuous acceleration of diversified growth engines, the non-PC business revenue of LENOVO GROUP this quarter further increased to 47%, driving a more balanced growth structure for the group while providing a solid business foundation for the company's mixed AI strategy. This also means that Lenovo is accelerating the levering of the "AI+ terminal" big wheel, using PCs as a pivot to drive IDG, ISG, and SSG multiple business synergistic growth, creating a positive flywheel effect from personal intelligence to enterprise intelligence. Currently, "super intelligence" is becoming a new hotspot that global technology giants are vying for, which is in line with LENOVO GROUP's AI hybrid strategy proposed two years ago and the early release of the "superintelligence body" matrix this year. A double-digit increase in R&D investment of 10% in the first quarter lays a solid foundation for future innovation. With the dual engines of personal intelligence and enterprise intelligence, Lenovo is taking a long-term approach to "walk the talk", seizing the structural growth opportunities brought by the AI era, and accelerating towards the "value realization period". In terms of personal intelligence, Lenovo continues to consolidate its leading position in the global AI PC market and has launched AI PC products equipped with the "Tianxi" personal superintelligence body in China, strengthening its differentiated advantages in edge reasoning, high energy efficiency, and privacy protection. During the reporting period, Lenovo's AI PC penetration rate exceeded 30%, with a 27% shipment penetration rate of AI PCs in the Chinese market with five major features, and the user activity of the "Tianxi" personal superintelligence body significantly increased, with an average WAU (weekly active users proportion) of 40%. Lenovo is also accelerating the construction of a unified AI entrance, exploring a new paradigm of intelligent experiences across terminals and ecosystems. In terms of enterprise intelligence, LENOVO GROUP is building a full-stack AI product system centered on hybrid cloud platform, smart body management platform, and industry vertical solution library, to help customers accelerate the deployment of enterprise-level intelligent bodies. Following the early launch of the "Leshe" enterprise superintelligence body in China, Lenovo is building an artificial intelligence model factory and developing intelligent body platforms to promote the comprehensive landing of Lenovo's mixed artificial intelligence advantage. During the reporting period, LENOVO GROUP's AI infrastructure revenue increased by 155% year-on-year. Yang Yuanqing stated, "In the future, we will continue to firmly implement the hybrid artificial intelligence strategy, promote the vision of inclusive artificial intelligence, continuously innovate in personal and enterprise intelligence products/solutions, strengthen operational competitiveness, and achieve sustainable growth and profitability improvement." It is worth noting that, if calculated according to the Hong Kong financial reporting standards, LENOVO GROUP's net profit for this quarter increased by 108% year-on-year to 3.66 billion RMB. This is mainly due to the impact of stock price fluctuations on the fair value change of warrants, resulting in non-cash nature balance sheet income. The group's management believes that the measurement under non-Hong Kong financial reporting standards can more clearly reflect the core operational performance and business quality of the group. Since the impact of fair value changes in warrants is expected to continue until the end of the 2027/2028 fiscal year, the company hopes that the market will pay more attention to the group's actual operating performance under non-Hong Kong financial reporting standards.