Lenovo posts record $26.9B quarter as AI revenue soars

Lenovo Group ↗ 1.80% reported its strongest quarter in company history on Thursday, with revenue surging 43% year-on-year to $26.94 billion for the three months ending June 30, far exceeding analyst expectations of $22.3 billion. The results were powered by accelerating demand for AI hardware and robust PC sales, cementing the Hong Kong-listed company's position as a major beneficiary of the global AI infrastructure buildout.

AI Revenue Emerges as Growth Engine

AI-related revenue grew 60% year-on-year to $9.3 billion, accounting for 35% of total group sales in the quarter, according to the company's earnings release. The Infrastructure Solutions Group, which houses Lenovo's server and data center business, nearly doubled its revenue to $8.5 billion, with operating profit reaching a record $777 million and operating margin hitting an all-time high of 9.1%.stocktitan

Chairman and CEO Yuanqing Yang said the results validate the company's strategic pivot. "We are proud of our rapid emergence as a global leader in AI and Infrastructure — a clear validation of our strategic foresight," Yang said in a statement. The company's AI server pipeline expanded to $54 billion, up 157% quarter-on-quarter.stocktitan

Record Revenue, But a Net Loss

Despite the top-line beat, Lenovo swung to a net loss attributable to shareholders of $609 million, compared to a profit of $505 million in the year-ago period, according to Reuters. Operating expenses more than doubled year-on-year, rising 123% to $4.4 billion. However, on an adjusted basis — stripping out items including fair value changes and acquisition-related charges — net income jumped 176% to $1.075 billion, surpassing the $1 billion milestone for the first time.reuters+1

Broader Context

The results arrive as Lenovo's stock has surged more than 200% since the start of the year, with the shares trading near all-time highs ahead of the earnings release. The company's Intelligent Devices Group also posted record first-quarter revenue of $17.1 billion, up 27%, while its global PC market share rose to 24.2%. Lenovo now expects to cross $100 billion in annual revenue for the first time in the current fiscal year, according to analyst consensus estimates.ad-hoc-news+1