Key facts
- Lenovo's Q1 revenue rose 43% to $26.94 billion, beating analyst expectations.
- The company reported a net loss of $609 million, compared to a profit of $505 million last year.
- AI-driven demand and strong PC sales contributed to the revenue growth.
- Lenovo China reported revenue and profit growth of 36% and 43% respectively.
- AI PCs constituted over 30% of Lenovo's PC shipments in the quarter.
Lenovo Group, the world's largest computer maker, reported a significant 43% increase in quarterly revenue to $26.94 billion for the three months ending June 30, surpassing analyst expectations of $22.3 billion. This surge was attributed to strong demand for AI hardware and robust PC sales, benefiting from a global memory chip shortage.
Despite the revenue jump, Lenovo experienced a swing to a net loss of $609 million, compared to a profit of $505 million in the same period last year. This result was below the average analyst estimate of $589 million.
Lenovo CEO Yang Yuanqing expressed optimism regarding the tariff pause between the U.S. and China, viewing it as a positive development that reduces uncertainty. He noted that U.S. tariffs on Chinese goods, currently at 30%, have had minimal impact on Lenovo's business due to its global manufacturing presence, with the U.S. accounting for less than 20% of its total revenue.
In a separate report, Lenovo's overall revenue was stated to have climbed 22% year-on-year to $18.8 billion, with net profit attributable to shareholders more than doubling to $505 million. This report also highlighted that AI PCs comprised over 30% of Lenovo's PC shipments and that its AI server business saw a 150% growth.
Lenovo China also reported strong performance, with revenue and profit increasing by 36% and 43% respectively. Non-PC business revenue exceeded 54% of the total, marking a historical breakthrough. The company's Intelligent Devices Group (IDG) saw PC market share in China reach new highs, while Intelligent Infrastructure Group (ISG) revenue grew 72% with servers up 81%. Solutions and Services Group (SSG) achieved over 20% year-on-year growth in both revenue and profit. Liu Jun, President of Lenovo China, attributed these achievements to the company's hybrid AI strategy and investments in personal and enterprise intelligence, including the 'Tianxi' personal super intelligent body and AI PCs, phones, and tablets.