HONG KONG — Lenovo Group Limited reported revenue of US$26.94 billion for the first quarter of its 2026/27 financial year, up 43% year on year and an all-time quarterly high, as demand for AI servers and AI-capable PCs accelerated.
The figure, for the quarter ended 30 June 2026, comfortably beat analyst expectations of roughly US$22.3 billion. Lenovo shares hit a record high following the results.
Key numbers
- Revenue: US$26.94 billion, up 43% year on year
- Analyst estimate: approximately US$22.3 billion
- Reported net result: US$609 million net loss attributable to shareholders
- Adjusted net income: US$1.075 billion, up 176%
- AI-related revenue: US$9.3 billion, up 60% — 35% of group revenue
- AI server pipeline: US$54 billion, up 157% quarter on quarter
Why did Lenovo report a loss despite record revenue?
Lenovo posted a net loss of US$609 million attributable to shareholders, against analyst expectations of a US$589 million profit — even as revenue hit a record.
The gap is an accounting effect, not an operating one. A non-cash warrant revaluation loss of about US$1.7 billion ran through the reported figure. Warrants give their holder the right to buy shares at a set price; when the share price rises, the accounting value of that obligation rises with it, producing a charge. No cash left the business.
Stripping that charge out, adjusted net income was US$1.075 billion, up 176% year on year and above US$1 billion for the first time. So: is Lenovo profitable? On an operating and adjusted basis, clearly yes. On a reported basis this quarter, no — because a rising share price generated a paper charge.
AI revenue reaches 35% of the group
AI-related revenue was US$9.3 billion, up 60% year on year, and now accounts for 35% of Lenovo’s total revenue. The forward book is larger still: the company’s AI server pipeline stands at US$54 billion, up 157% from the previous quarter.
Segment breakdown
ISG, which houses the AI server business, nearly doubled revenue and delivered an operating profit of US$777 million at a record 9.1% margin — the number analysts focused on, since AI server growth has historically come at thin margins.
SSG generated US$697 million in operating profit at a 24.2% margin, with AI services revenue growing in triple digits. Lenovo said its global PC market share was 24.2% and its AI PC share 25.1%. Research and development spending rose 30%.
Memory costs and why PC prices are rising in 2026
The quarter also showed how the AI boom is reaching consumers. Soaring DRAM and NAND memory chip prices have pushed up the cost of building PCs, and Lenovo raised prices twice during the year in response. Rivals Dell, HP and Super Micro have raised prices by 10–30%.
“We accurately anticipated supply shortages and cost increases (of memory chips), and addressed it successfully,” Chairman and CEO Yang Yuanqing said.
The mechanism is straightforward: AI data centres are absorbing memory supply, memory prices rise, and PC makers pass the cost through. Buyers should expect laptop prices to stay elevated while AI infrastructure demand holds.