Lenovo Group: Third Quarter Financial Results 2025/26

Lenovo Group Limited (HKSE: 992) (ADR: LNVGY), together with its subsidiaries (‘the Group’), today reported results for the third quarter of fiscal year 2025/26, a quarter that delivered record revenues, accelerated profitability, and continued AI revenue expansion. During the quarter, overall group revenue reached an all-time fiscal quarter high of US$22.2 billion, up 18% year-on-year, with revenue from all business groups growing double-digit year-on-year.

Excluding non-operating non-cash items and one-time gains and charges in Q3 FY24/25 and Q3 FY25/26, adjusted net income (profit attributable to equity holders – non-HKFRS)[1] increased by 36% year-on-year to US$589 million, with adjusted net income margin[1] expanding to 2.7%.

The results demonstrate the Group’s ability to deliver on its promise of double-digit growth and sustained profitability, while proving its ability to manage through cycles by leveraging innovation to drive growth and operational excellence to navigate volatility. AI has become a leading multi-year growth engine for the Group, with AI-related revenue growing 72 percent year-on-year to represent nearly a third (32%) of overall Group revenue, driven by strong demand across AI devices, infrastructure, services, and solutions. The quarter was marked by strong topline growth, driven by expanding market leadership in PCs and Smart Devices, record volume and activation in smartphones, and all-time-high revenue from both the Infrastructure Solutions Group, and Services and Solutions Group.

To better capture the multi-year AI training demand and long-term AI inferencing growth, the Group undertook a strategic restructuring of its ISG business, resulting in one-time restructuring charges in Q3 FY25/26 of US$285 million. The optimized cost structure, streamlined product portfolio, and strengthened sales organization are expected to deliver annual run-rate savings of over US$200 million over the next three years and accelerate the transformation towards profitable and sustainable growth for ISG.

Chairman and CEO quote – Yuanqing Yang:

“Lenovo delivered an outstanding performance across all fronts in the third fiscal quarter, with all main businesses achieving strong double-digit revenue growth and AI becoming a leading growth engine. We implemented a strategic restructuring of our Infrastructure Solutions business, setting it on a solid path toward sustainable and profitable growth. By leveraging our operational excellence, we effectively navigated market challenges of component cost increases and supply shortages, delivered our commitment of gaining market share and improving profitability. Looking ahead, as AI increasingly integrates into individuals' daily lives and enterprise operations, we will continue to drive Hybrid AI to capture the significant opportunities brought by AI democratization, accelerate growth, improve profitability, and deliver long-term value to our shareholders.”