Lenovo Group Limited · HKEX:992
Lenovo — Q1 FY2025/26 Earnings Presentation
33 slides from Lenovo's earnings presentation, Aug 17, 2024
Slide 1: Q1FY26 Earnings Announcement
Q1FY26 Earnings Announcement Aug 14, 2025 2025 Lenovo Internal. All rights reserved. 2025 Lenovo Internal. All rights reserved.
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation contains “forward-looking statements”, which are statements that refer to the expectations and plans for the future and include, without limitation, statements regarding Lenovo’s future results of operations, financial condition or business prospects as we
Slide 3: Yuanqing Yang, Chairman & CEO
Yuanqing Yang Chairman & CEO August 14, 2025 2025 Lenovo Internal. All rights reserved.
Slide 4: Group Performance
Performance Group: Clear strategy, • Revenue: $18.8 billion, +22% YoY, record fiscal Q1 strong execution, • Net income(non-HKFRS): $389 million, record-breaking Q1 results +22% YoY • Net income(HKFRS): $505 million, +108% YoY • Main businesses(IDG/ISG/SSG): revenue YoY growth all in double digits •
Slide 5: Group Outlook
Group: Outlook Clear strategy, ⚫ AI era brings huge opportunities for strong execution, devices, infrastructure, solutions & record-breaking Q1 results services ⚫ Firm execution of Hybrid AI strategy toward “Smarter AI for all” ⚫ Driving innovation around AI, R&D investment up double-digit YoY ⚫ Lev
Slide 6: IDG Performance
IDG Performance Intelligent Devices Group: • Revenue $13.5 billion, +18% YoY Strong growth across • Strong profitability, operating margin 7.1% the board, • PC and related business: revenue +19% leading in Personal AI YoY, industry leading profitability; China business returned to double-digit reven
Slide 7: IDG Outlook
IDG Outlook Intelligent Devices Group: Strong growth across • Building agent-native devices of the board, various forms leading in Personal AI • Enriching AI super agent app ecosystem, boosting user engagement • Driving toward “One AI, Multiple Devices”, positioning agent-native devices as the entry
Slide 8: ISG Performance
ISG Performance Infrastructure Solutions Group: High growth, • Revenue $4.3 billion, +36% YoY building long-term • Investments on AI infrastructure market competitiveness and R&D, and ESMB competitiveness • CSP revenue +36% YoY • ESMB revenue +35% YoY • AI infrastructure revenue more than doubled Yo
Slide 9: ISG Outlook
ISG Outlook Infrastructure Solutions Group: High growth, • Adoption of Enterprise AI accelerates, building long-term market demand for hybrid AI competitiveness infrastructure grows • Continue to execute the CSP & ESMB dual strategy • Continue to invest in AI infrastructure and ESMB competitiveness
Slide 10: SSG Performance
SSG Performance Solutions & Services Group: High growth & high margin, • Revenue $2.3 billion, +20% YoY， unleashing Lenovo Hybrid AI record high Advantage • Operating margin 22.2% • Support Services revenue +12% YoY • Managed Services revenue +36% YoY, Projects & Solutions revenue +18% YoY, combined
Slide 11: SSG Outlook
SSG Outlook Solutions & Services Group: • Hybrid AI driving solutions & services High growth & high margin, demand growth unleashing Lenovo Hybrid AI • Build capabilities under Lenovo Advantage Hybrid AI Advantage framework to serve customers’ needs • Build horizontal building blocks - Digital Workp
Slide 12: Driving Hybrid AI strategy, advancing Personal AI & Enterprise AI
Driving Hybrid AI strategy, advancing Personal AI & Enterprise AI • Personal AI: building agent-native devices of various forms, enriching AI super agent app ecosystem, driving user engagement (WAU% averaging 40% since Tianxi AI super agent went live), delivering highly personalized user-centric exp
Slide 13: Smarter AI for All
Smarter AI for All 2023 Lenovo Internal. All rights reserved. 13
Slide 14: Winston Cheng, Chief Financial Officer
Winston Cheng Chief Financial Officer August 14, 2025 2025 Lenovo Internal. All rights reserved.
Slide 15: Record-High First Quarter
Record-High First Quarter Double-digit Growth across all BGs on Innovation Leadership, Supply Chain Resilience, and Operational Agility ✓ Record first fiscal quarter revenue US$18.8b (+22% YoY), with double-digit growth across all Others Smartphone BGs 7 consecutive quarters of double-digit YoY ✓ Di
Slide 16: Balanced Growth Across Global Markets
Balanced Growth Across Global Markets ✓ PRC: Solid growth across all business segments All Geos delivered strong YoY growth, validating the effectiveness of our “Global/Local” model and ODM + Model ✓ AP: PC and Smartphone market share gain in key markets such as Japan and India 22% 25% +36% YoY Chin
Slide 17: Cash Position
Cash Position Strong OCF and Effective Finance Cost Reduction to Support Business Growth • FCF rebounded to US$751m despite higher CAPEX, driven by strong OCF; Q1 OCF at US$1.2b Healthy cash position supported by strong OCF and disciplined cash expenditure • Cash and cash equivalent at US$4.5b, up 1
Slide 18: R&D Investment to Fuel Long-term Growth & Transformation
R&D Investment to Fuel Long-term Growth & Transformation ✓ R&D investment increased by 10% YoY (US$524m) R&D Spends ($M) in Q1 FY25/26, reinforcing our long-term Full Year First Quarter commitment to Hybrid AI innovations supporting the 2,073 2,195 2,288 2,028 Group’s strategy positions levered to A
Slide 19: Award-Winning Innovation
Award-Winning Innovation Yoga Solar PC (Concept) ThinkBook Plus Gen 6 Neptune liquid-cooling The Brilliant Collection Rollable (Production) technology with Swarovski® Crystals (Tech + Fashion) • Solar panel features “Back • The world’s first rollable display • Liquid-cooling design with • Fashion an
Slide 20: Non-HKFRS Adjustments
Non-HKFRS Adjustments Operating Profit: Non-HKFRS Adjustments ($M) 785 ✓ Non-cash fair value gain from Warrants: US$152m -2 0 631 -152 ✓ Notional interest from Convertible Bonds: US$28m ✓ Non-HKFRS measure offers a clearer view of our Other non-cash Notional interest of core operational performance
Slide 21: IDG: Intelligent Devices Group
IDG Intelligent Devices Group Revenue ($M) Operating Profit ($M) ✓ Expanded PC leadership globally with 24.6% global +18% +15% market share1 13,459 11,422 950 ✓ Industry-leading profitability fueled by strong momentum in 828 premium products despite tariff impact ✓ MBG among the fastest growing OEMs
Slide 22: IDG Leadership in All Key PC Categories
IDG Leadership in All Key PC Categories Commercial Consumer Gaming Windows PC PC PC AI PC #1 global M/S #1 global M/S #1 global M/S #1 global M/S 27.9% 20.2% 18.5% 30.6% +2.2pts YoY +1.1pts YoY +2.2pts YoY +2.8pts YoY 2025 Lenovo Internal. All rights reserved. Source: IDC 2QCY25 data; Lenovo Gaming
Slide 23: ISG: Infrastructure Solutions Group
ISG Infrastructure Solutions Group Revenue Operating Loss ($M) ($M) ✓ Strong revenue growth of +36% YoY capturing dual +36% -48m CSP+ESMB growth opportunities 4,290 3,160 (37) ✓ AI server revenue more than doubled YoY, underpinned by (86) a robust pipeline and a clear roadmap Q1 Q1 FY24/25 FY25/26 ✓
Slide 24: ISG Customer Win Highlights in Q1 FY25/26
ISG Customer Win Highlights in Q1 FY25/26 CSP ESMB HPC/AI Sample customer wins Sample customer wins Sample customer wins • CSP provides cloud computing, • Ad-tech company deploys Lenovo • Educational institution implements a security solutions, and content solutions with high performance and flagshi
Slide 25: SSG: Solutions & Services Group
SSG Solutions & Services Group ✓ Record-high quarterly revenue with +20% YoY growth with ($M) Revenue ($M) Operating Profit margin expansion to 22% operating margin, +1.2pts YoY +20% +26% ✓ SSG revenue grew >2x the industry rate with concentration 501 2,258 in high-growth areas like Hybrid Cloud, AI
Slide 26: SSG Customer Win Highlights in Q1 FY25/26
SSG Customer Win Highlights in Q1 FY25/26 Financial Services Warehousing, Construction Technology and Logistics End-to-end AI Solution TruScale IaaS services for multi- Predictive AI Platform on with LLM-in-a-Box country rollout Databricks Banking Construction Telecom Secure Infrastructure Operation
Slide 27: 2025 Lenovo Internal. All rights reserved.
2025 Lenovo Internal. All rights reserved.
Slide 28: Supplemental Financial Materials
Supplemental Financial Materials 1. Financial Summary 2. Condensed Consolidated Income Statement 3. Condensed Consolidated Balance Sheet 4. Condensed Consolidated Cash Flow Statement 5. Non-HKFRS Adjustments 2025 Lenovo Internal. All rights reserved. 28
Slide 29: 1. Financial Summary
1. Financial Summary US$ Million Q1 24/25 Q1 25/26 Y/Y% Revenue 15,447 18,830 22% Gross profit 2,560 2,774 8% Operating expenses (2,066) (1,989) -4% Operating profit 494 785 59% Operating profit (non-HKFRS) 572 631 10% Other non-operating income/ (expenses) - net (181) (163) -10% Profit before taxat
Slide 30: 2. Condensed Consolidated Income Statement
2. Condensed Consolidated Income Statement US$ Million Q1 24/25 Q1 25/26 Revenue 15,447 18,830 Cost of sales (12,887) (16,056) Gross profit 2,560 2,774 Selling and distribution expenses (836) (955) Administrative expenses (651) (677) Research and development expenses (476) (524) Other operating inco
Slide 31: 3. Condensed Consolidated Balance Sheet
3. Condensed Consolidated Balance Sheet US$ Million As of Jun 30, 2024 As of Jun 30, 2025 Current assets 24,557 29,761 Bank deposits and cash 3,973 4,587 Trade, lease, notes and other receivables 12,321 16,025 Inventories 7,778 8,743 Others 485 406 Non-current assets 15,928 16,562 Property, plant an
Slide 32: 4. Condensed Consolidated Cash Flow Statement
4. Condensed Consolidated Cash Flow Statement US$ Million Q1 24/25 Q1 25/26 Net cash generated from operating activities 791 1,219 Net cash used in investing activities (320) (421) Net cash used in financing activities (47) (1,087) Increase/(decrease) in cash and cash equivalents 424 (289) Effect of
Slide 33: 5. Non-HKFRS Adjustments
5. Non-HKFRS Adjustments US$ Million Q1 24/25 Q1 25/26 Operating Profit before Profit for the Profit attributable Operating Profit before Profit for the Profit profit taxation period to equity holders profit taxation period attributable to equity holders As reported 494 313 253 243 785 622 538 505 N