Lenovo Group (992) investor relations material

Executive summary

• Achieved record quarterly revenue of $26.9 billion, up 43% year-on-year, marking the highest growth in five years and the strongest quarter in company history, with all business groups posting double-digit growth across all geographies.

• Adjusted net income surpassed $1.075 billion for the first time, up 176% year-on-year, with adjusted net margin improving by nearly 2 points.

• AI-related revenue accelerated to over $9.3 billion, up 60% year-on-year, now representing 35% of total revenue.

• Reported net loss of $609 million due to a $1.7 billion non-cash fair value loss from warrant revaluation.

• Expanded global brand presence, including official technology partnership with FIFA World Cup 2026 and advancement in Fortune Global 500 and Gartner Supply Chain rankings.

Financial highlights

• Record first quarter revenue: $26.9 billion, up 43% year-on-year; gross profit increased 60% to $4.45 billion; gross margin improved to 16.5%.

• Adjusted operating income increased 141% year-on-year to $1.5 billion; adjusted net margin reached 4.0%; adjusted operating margin expanded to 5.7%.

• Basic and diluted loss per share were US(5.04) cents, compared to earnings per share of US4.12 and US3.65 cents last year.

• R&D expenses increased 30% year-on-year, reflecting continued investment in innovation.

• Net cash generated from operations was $382 million, down from $1.2 billion a year ago.

Outlook and guidance

• Confident in achieving $100 billion annual revenue target ahead of schedule, with a path toward $130 billion and net margin over 5% in the next 3-5 years.

• Accelerating execution of Hybrid AI strategy to drive AI democratization and long-term growth across all business groups.

• AI demand expected to continue rising, especially in inferencing and private AI, driving long-term growth; AI-led TAM expected to grow ~25% annually through FY29/30.

• Memory supply expected to remain constrained through next year, but scale and supply chain resilience position the company to benefit.

• PC and smartphone markets expected to contract in units, but higher ASP, premium mix, and innovation to offset declines and sustain profitability.