Lenovo Group Ltd (FRA:LHL1)

Q1 2027 Lenovo Group Limited Earnings Call Transcript

Aug 13, 2026 / 07:00 AM GMT

Transcript

Key Points

Positve

Lenovo Group Ltd (LNVGF) delivered its best quarter in history with record revenue of $26.9 billion, up 43% year-on-year, and adjusted net income surpassing the $1 billion milestone for the first time, up 176%.
AI-related revenue accelerated to over $9 billion, up 60% year-on-year, now accounting for 35% of group revenue, demonstrating strong momentum in the AI sector.
The Infrastructure Solutions Group (ISG) nearly doubled its revenue to a record $8.5 billion with operating margin expanding to a record 9.1%, proving its transformation into a sustainable growth and profit engine.
The AI server pipeline grew to $54 billion, more than doubling from the previous quarter, indicating strong future demand and a rapidly expanding customer base.
The Solutions and Services Group (SSG) delivered record revenue of $2.9 billion, up 28% year-on-year, with operating margin expanding to a record 24.2%, driven by strong growth in managed services and AI solutions.
Lenovo successfully leveraged its global supply chain and operational excellence to turn industry-wide supply shortages and cost increases into competitive advantages, gaining market share in PCs and maintaining industry-leading profitability.

Negative

The company reported a net loss of $609 million, primarily due to a $1.7 billion non-cash fair value loss from warrant revaluation driven by strong share price performance, which could concern investors despite being non-operating.
Lenovo Group Ltd (LNVGF) expects the PC market to contract double-digit in units (around 15%) in the second half of the fiscal year due to inflationary cost environment, which could pressure revenue growth.
The smartphone market is also expected to decline around 20% in shipments due to the inflationary cost environment, posing a headwind for the Motorola business.
Ongoing component supply-demand imbalances, particularly in memory, are impacting component costs and creating a challenging operating environment for the IDG business.
The company's reported net income was negatively impacted by a $30 million notional interest from convertible bonds, adding to the non-cash losses in the quarter.
While the AI server pipeline is strong, the company does not guide on committed orders, and the conversion rate of this pipeline to actual revenue remains uncertain.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

0992.HK - Lenovo Group Limited
Q1 2027 Lenovo Group Limited Earnings Call
Aug 13, 2026 / 07:00AM GMT

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Presentation
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Unidentified_1 [1]
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Good morning, good afternoon, and good evening. Welcome to Lenovo's earnings webcast.

This is Li Siyuan, Director of Investor Relations at Lenovo.

Thanks everyone for joining us today.

Before we start, let me introduce our management team joining the call today.

Yuanqing Yang, Lenovo's Chairman and CEO Winston Chang, Group's CFO.

Luca Rossi, President of Intelligence Devices Group.

Ashley Grauparala, President of Infrastructure Solutions Group.

Ken Wong, President of Solutions and Services Group.

We will begin with Ernie's presentations and after that, we will open the call for questions.

Now, let me turn it over to our Chairman and CEO, Yuanqing

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