Lenovo delivers its best ever financial report and aims to become a $100 billion company in the next two years.

Early on the morning of May 22nd, Lenovo Group (HKSE: 00992; ADR: LNVGY) released its financial report for the fiscal year 2025/26 (ending on March 31, 2026). Its annual revenue reached $83.1 billion, a year-on-year increase of 20.3%. The adjusted net profit was $2 billion, a year-on-year surge of 42.1%, almost twice the revenue growth rate, setting the best fiscal year record since the company's establishment.

Lenovo's revenue in the fourth fiscal quarter was $21.6 billion, a year-on-year increase of 27%, the highest single-quarter growth rate in five years. The adjusted net profit was $559 million, a year-on-year increase of 101%. The revenue from AI-related businesses increased by 84% year-on-year.

Yang Yuanqing, Chairman and CEO of Lenovo Group, said, "Lenovo ended its best year in history with an excellent performance in the fourth fiscal quarter. Driven by the strong momentum of all-round business, we are confident in achieving the goal of becoming a $100 billion-scale enterprise within the next two years and will continue to create substantial returns for shareholders."

AI has become the main growth line throughout the company's annual and single-quarter performance. In the fiscal year 2025/26, Lenovo's revenue from AI-related businesses skyrocketed by 105% year-on-year, and its proportion in the total revenue increased rapidly. In the fourth fiscal quarter, the growth potential of AI was further released, accounting for 38% in a single quarter, a nearly 6-percentage-point increase compared to the previous fiscal quarter.

Looking at each business segment, the profitability quality has improved. The annual revenue of the Intelligent Devices Group increased by 17% year-on-year to $58.9 billion, and the operating profit margin remained at a stable level of 7.2%. Lenovo stated in the financial report that the company has further consolidated its global leading position in the fields of consumer and commercial personal computers, AI personal computers, high-end personal computers, and gaming personal computers. The revenue from peripheral businesses has accelerated growth, achieving a double-digit year-on-year increase, and the profit margin has also significantly improved. As of the end of the fiscal year, Lenovo's cumulative sales of personal computers reached 1.1 billion units, setting a new historical high.

In the fourth fiscal quarter, the company's computer shipment growth rate was 5.6 percentage points higher than the industry average, and its global market share increased by 1.3 percentage points year-on-year to reach 24.4%, setting a new historical high. Lenovo emphasized that the group has achieved the largest market share leading advantage in fifteen years, and high-end personal computer shipments accounted for 50% of the total shipments. The revenue from peripheral businesses achieved high double-digit growth in the fourth fiscal quarter, and the tablet and monitor products jointly drove up the profit level.

In addition, driven by the increasing demand for the Razr, Edge, and Signature series, the annual proportion of Lenovo's high-end mobile phone shipments reached 19%. Motorola ranked first among the folding-screen mobile phone brands in the fiscal year 2025/26 and led the market share in North America and Latin America.

The annual revenue of the Infrastructure Solutions Group reached a new high of $19.2 billion, a year-on-year increase of 32%, and the annual operating profit was $73 million, indicating significant results from the business transformation. Driven by the strong AI demand in the cloud infrastructure and enterprise infrastructure fields, Lenovo's annual revenue from AI servers achieved high double-digit growth, and the AI server project reserves at the end of the year increased to $21 billion.

In the fourth fiscal quarter, the quarterly revenue of the Infrastructure Solutions Group reached a new high of $5.6 billion, a year-on-year increase of 37%, and the quarterly operating profit was $202 million, the best level in history. The financial report shows that Lenovo ranks among the top three server manufacturers globally and in China.

According to the company, Lenovo's NVIDIA GB300 NVL72 platform was fully shipped in the fourth fiscal quarter, and the new-generation platform based on the Rubin architecture is expected to be launched in the second half of 2026. Currently, it has served over 5,800 AI customers, with an annual rack production capacity of over 70,000 units and the production capacity of direct-cooling liquid-cooled servers exceeding 11,000 racks.

At the beginning of April, Lenovo completed the acquisition of Infinidat, a global provider of high-end enterprise-level storage solutions. Infinidat will operate independently as a business unit under Lenovo Group's Infrastructure Solutions Group in the future. Lenovo believes that this transaction will consolidate its market position in the enterprise storage field.

The annual revenue of the Solutions & Services Group exceeded $10 billion, a year-on-year increase of 19%. The operating profit increased to $2.2 billion, doubling the increase from the fiscal year 20/21 to 25/26, with a five-year compound annual growth rate of 21%. This business has achieved double-digit year-on-year revenue growth for twenty consecutive quarters.

Looking at different regions, in this fiscal year, the revenue contributions of Lenovo's Asia-Pacific, China, Europe, the Middle East, Africa, and the Americas regions were in the range of 19% to 34% respectively. The revenue of the Asia-Pacific region excluding China increased by 23% year-on-year, and Lenovo ranked first in both the consumer and commercial personal computer market shares in the region. The revenue in the Chinese market achieved double-digit growth, a 16% year-on-year increase. The significant increase in the shipments of AI personal computers drove up the market share in the computer market. The annual revenues of the Europe, the Middle East, Africa, and the Americas regions both increased by 21% year-on-year.

In the past year, Lenovo has been increasing its investment in the AI field. In March last year, Yang Yuanqing announced the start of the "Entrepreneurship 5.0" era, clearly focusing on hybrid AI in the next decade - the integration and symbiosis of personal intelligence, enterprise intelligence, and public intelligence. Around this strategy, Lenovo launched core products such as the world's first AI PC, a full range of AI servers, and enterprise-level intelligent agent solutions. At the same time, it has established intelligent manufacturing bases in Hefei, Mexico, Hungary, etc., to ensure the global delivery capacity of AI products.

On the eve of the release of the above financial report, Lenovo's stock price opened and closed higher on May 21st, reaching a maximum of HK$13.73 during the session, refreshing the record high since its listing, with an increase of more than 4% at one point. However, as of the close of the Hong Kong stock market yesterday, the stock price fell back to HK$13.15, and the market value was HK$163.121 billion.

Nomura's latest research report upgraded Lenovo Group's rating to "Buy" and significantly raised the target price from HK$11 to HK$16. The report believes that the rapid growth of AI inference and Agentic AI demand is driving the general server market into a new boom cycle, and the profit improvement potential of Lenovo's server business has become a core variable that cannot be ignored.

This article is from "Jiemian News", reporter: Song Jianan. Republished by 36Kr with permission.