Lenovo Group (SEHK:00992) Q3 2026 Earnings call February 12, 2026 02:00 AM ET Speaker2Good morning, good afternoon, and good evening. Welcome to Lenovo's Earnings Investor Webcast. This is Lisa Yuan, Director of Investor Relations at Lenovo. Thanks everyone for joining us. Before we start, let me introduce our management team joining the call today. Yuanqing Yang, Lenovo's Chairman and CEO. Winston Cheng, Group CFO. Luca Rossi, President of Intelligent Devices Group. Ashley Gorakhpurwalla, President of Infr ...

Financial Data and Key Metrics Changes - The group revenue reached an all-time high of $20.5 billion, growing at almost 15% year-on-year [2][11] - Adjusted net income increased more than 25% year-on-year to $512 million, with an adjusted net income margin expanding to 2.5% [2][11] - AI-related revenues accounted for 30% of the group's total, increasing by 13 percentage points year-on-year [2][11] Business Line Data and Key Metrics Changes - Intelligent Devices Group (IDG) revenue grew 12% year-on-year to $15.1 billion, with operating profit climbing 11% to $1.1 billion [15] - Infrastructure Solutions Group (ISG) revenue grew 24% year-on-year to exceed $4 billion, driven by AI infrastructure demand [8][17] - Solutions and Services Group (SSG) achieved 18% year-on-year revenue growth, marking the 18th consecutive quarter of double-digit expansion [9][20] Market Data and Key Metrics Changes - The PC market share exceeded 25% for the first time in Lenovo's history, reaching a historic high of 25.6% global market share [11][15] - The smartphone business achieved record-high concurrent quarter activations, supported by solid end-user demand [11] - All reported geographies delivered double-digit year-on-year revenue growth, reinforcing balanced strength across 180 markets [12] Company Strategy and Development Direction - The company is focusing on AI democratization, with a strategy that includes personal AI and enterprise AI [2][3] - The upcoming Tech World event will showcase a personal AI super agent, emphasizing the vision of one personal AI across multiple devices [4][5] - The company aims to create an enterprise AI twin for customers, leveraging hybrid infrastructure and AI solutions [7][8] Management's Comments on Operating Environment and Future Outlook - Management sees positive signs of stabilization despite uncertainties in the external environment [2] - The company is confident in maintaining double-digit growth in both PC and server businesses over the next two quarters [31] - The management believes that the substantial investments in AI infrastructure will lay the groundwork for future technology waves [29] Other Important Information - The company achieved a 31% year-on-year reduction in adjusted net finance costs, reflecting ongoing cost optimization [14] - Lenovo's factory in Monterrey, Mexico, was added to the World Economic Forum Global Lighthouse Network, highlighting its manufacturing excellence [22] - The company continues to be recognized for its leadership in ESG, ranking eighth in Gartner Supply Chain Top 25 [22] Q&A Session Summary Question: How big will the memory price impact on margin? - Management believes Lenovo is in a better position to manage supply shortages and rising component costs due to strong supplier relationships and procurement power [30][31] Question: What is the PC outlook for the next year? - The company is optimistic about maintaining double-digit growth in the PC business, despite rising storage and memory component prices [32][35] Question: What is the smartphone outlook for 2026? - The smartphone market is expected to grow in single digits, with a focus on premium devices that are less affected by component cost increases [36][39] Question: How does Lenovo capture opportunities in hybrid AI infrastructure? - The company is leveraging its hybrid AI strategy to resonate with customer needs, focusing on agility and flexibility in AI deployments [40][43] Question: Can Lenovo sustain strong growth and margins in SSG? - SSG is expected to continue its growth momentum, driven by high demand for AI services and solutions [44][54] Question: What is Lenovo's strategy for AI servers? - The company is focusing on AI inferencing as a significant market opportunity, with plans to enhance its capabilities in this area [68][70] Question: What is the overall outlook for the year-end? - Management reaffirms confidence in maintaining strength in order levels, particularly for PCs, despite some analyst revisions [73][74] Question: Are there plans for new AI or AR devices? - The company is preparing for the AI revolution, with plans for more AI-native devices to be revealed at the upcoming Tech World event [75]