Lenovo Soars 13% to a 26-Year High, Reaches Annual Revenue of 590 Billion Yuan

Lenovo Group announced its financial results for the fiscal year ending March 31, 2026, yesterday, reporting a 20% year-over-year increase in full-year revenue to $83.1 billion, setting a historical high, boosted by strong growth in artificial intelligence-related businesses.

The adjusted net profit attributable to the parent company grew by 42% year-over-year to $2 billion, which is double the revenue growth rate. The fourth fiscal quarter's performance was particularly outstanding, with quarterly revenue increasing by 27% year-over-year to $21.6 billion, and adjusted net profit doubling year-over-year to $559 million.

Lenovo's four major regional markets all recorded double-digit growth. The Americas market contributed the largest share with revenue of $28.189 billion and a year-over-year growth rate of 21%. In the fourth fiscal quarter, Lenovo rose to the second position in the North American PC market, with a shipment share of 20.4%.

Lenovo's Hong Kong stock surged by more than 13% today, with its stock price reaching the highest level since March 2000. Citigroup said in a research report that Lenovo's net profit significantly exceeded the bank's expectations and market consensus.

AI Becomes the Core Growth Engine

AI-related revenues for the full year increased by 105% year-over-year, accounting for 33% of the group's total revenue, with the proportion further rising to 38% in the fourth fiscal quarter. Both AI equipment and AI service revenues recorded triple-digit growth, and AI server revenue achieved high double-digit growth.

By the end of the fiscal year, Lenovo's AI server project backlog reached $21 billion. The company has completed over 5,800 AI customer deployments, with an annual production capacity of more than 70,000 racks. Lenovo's NVIDIA GB300 NVL72 platform was fully shipped in the fourth fiscal quarter, and the next-generation platform based on the Rubin architecture is expected to be launched in the second half of 2026.

Three Major Businesses Record Growth

All three of Lenovo's business groups achieved double-digit revenue growth and were all profitable.

The Infrastructure Solutions Group saw the most significant change, with full-year revenue increasing by 32% to $19.188 billion, turning a loss of $68.5 million from the previous fiscal year into a profit of $73.37 million. However, the business's full-year operating profit margin is only about 0.4%, still in the low-profit margin climbing stage.

The Solutions and Services Group's revenue exceeded $10 billion for the first time, increasing by 19% year-over-year, with an operating profit margin of 22.4%, making it the highest profit margin business segment in the group, having achieved double-digit revenue growth for 20 consecutive quarters.

The Intelligent Devices Group's revenue increased by 17% to $58.935 billion. In the fourth fiscal quarter, Lenovo's global PC market share reached 24.4%, setting a historical high. The Motorola brand's smartphone business under its wing recorded the highest annual revenue since its acquisition.

Gross Margin Under Pressure

The full-year gross margin decreased from 16.1% in the previous fiscal year to 15.4%, mainly due to the dilution of the product mix by the lower profit rate of the infrastructure business. The company booked $285 million in one-time restructuring charges for the full year, mainly for the optimization of the infrastructure business portfolio and the improvement of operational efficiency.

Cost control on the expense side partially offset the pressure on the gross margin. The full-year operating expenses increased by 7%, significantly lower than the revenue growth of 20%, with the operating profit margin rising from about 3.1% in the previous fiscal year to about 3.9%.