Lenovo Revenue Grows 43% on AI Demand Despite Accounting Loss
Key Facts
Lenovo reported 43% year-on-year revenue growth in its first fiscal quarter, according to results the company announced on August 13, 2026, as its artificial intelligence and infrastructure businesses expanded. Revenue for the period reached US$26,942,766 thousand, exceeding analysts' expectations of $22.3 billion cited by Reuters when the results were announced. The sales cover the quarter ended June 30, 2026, the start of the company's fiscal year. Revenue in the corresponding quarter a year earlier was $18,829,869 thousand, according to the income statement published on its investor relations website. The increase in sales coincided with a loss attributable to shareholders, which the company attributed primarily to the revaluation of warrants.
Breaking down its operations, Lenovo said in its earnings statement that AI-related revenue rose 60% from the same period a year earlier to $9.3 billion. These businesses accounted for 35% of total group revenue in the first fiscal quarter, with sales expanding year on year. Their share had reached 38% of total group revenue in the preceding fourth fiscal quarter, according to the company's annual results statement. Infrastructure Solutions Group revenue rose 98% from the corresponding quarter a year earlier, according to the quarterly statement. The group's sales reached $8.5 billion, a quarterly record announced by Lenovo for the business.
On earnings, the income statement showed a loss attributable to Lenovo shareholders of US$608,600 thousand in the quarter ended in June. The company attributed the result primarily to a non-cash fair-value loss of $1.7 billion, according to Reuters' report on the results. The item arose from the revaluation of warrants, putting the accounting valuation effect at the forefront of the company's explanation for the quarterly loss. Adjusted net profit attributable to shareholders, meanwhile, was $1,074,717 thousand, according to the adjusted measure in the published income statement. The company posted gross profit of $4,451,969 thousand for the same period, alongside growth in group sales and infrastructure operations.
The results at the start of the fiscal year followed a fourth fiscal quarter with revenue of $21.6 billion, according to Lenovo's announcement of its previous fiscal year's results. The company ended that year with record annual revenue of $83.1 billion, according to its published annual statement. In its computer business, Lenovo faced higher memory costs, according to Reuters, and took pricing measures to mitigate their impact on its operations. The company raised computer prices twice during the year, according to the agency's report published alongside the August earnings announcement. The price increases addressed component costs as the company recorded year-on-year expansion in AI-related revenue and infrastructure solutions sales.
In the market, Lenovo shares jumped as much as 22% during the August earnings session, according to the Reuters report dated the day of the announcement. The shares rose in the session in which the company announced strong year-on-year sales growth and quarterly revenue above analysts' expectations. Market interest in the shares coincided with the announcement of record infrastructure solutions revenue, which nearly doubled from the corresponding quarter a year earlier. The loss linked to the revaluation of warrants was part of the results announced that day, alongside adjusted net profit attributable to shareholders. The earnings session thus combined a rise in the shares with the announcement of expanding operations, despite the impact of the non-cash loss on the result attributable to shareholders.
On manufacturing, Lenovo expanded its facility in Whitsett, North Carolina, to support server production, according to the company's statement on the U.S. facility's expansion. The company added 35% in manufacturing capacity as part of the announced expansion to serve the business as demand for AI infrastructure grows. Ben Massey, who oversees the global supply chain for Lenovo's infrastructure solutions, said the manufacturing expansion in Whitsett was tied to the company's ability to meet customer needs faster. He added in the statement: "Expanding our manufacturing capabilities in Whitsett allows us to serve customers faster." Massey linked the move to growing demand for AI infrastructure, placing the speed of customer service at the heart of the production expansion's objective.