Financial Performance - Group revenue reached RMB 116.0 billion, a 30.5% year-over-year increase[11] - Gross profit margin was 22.5%, up 1.8 percentage points year-over-year[11] - Adjusted net profit reached RMB 10.8 billion, a 75.4% year-over-year increase[11] - Smart EV, AI and other new initiatives revenue reached RMB 21.3 billion, a 233.9% year-over-year increase[11] Smartphone Business - Global smartphone market share ranked top 3 with 14.7%[16] - Mainland China smartphone market share increased 1.0 percentage point year-over-year to 15.3%[16] - Premium smartphone as a percentage of total smartphone units sold in Mainland China increased 5.5 percentage points year-over-year to 27.6%[16] - Global smartphone shipments reached 42.4 million units[38] IoT and Lifestyle Products - IoT and lifestyle products revenue reached RMB 38.7 billion, up 44.7% year-over-year[79] - Smart large home appliances revenue increased 66.2% year-over-year[16] - Global tablet shipments increased 42.3% year-over-year[16] Smart EV and AI Initiatives - Smart EV sales revenue reached RMB 20.6 billion, up 230.3% year-over-year[84] - Xiaomi EV quarterly delivery reached 81,302 vehicles[16] - Locked-in orders for Xiaomi YU7 series reached 240,000 units in 18 hours[16]

Financial Data and Key Metrics Changes - Lenovo reported a record high first quarter revenue of $18.8 billion, representing a 22% year-on-year growth [3][16] - Net income on a non-HKFRS basis increased by 22% year-on-year to $389 million, while on an HKFRS basis, net income more than doubled to $500 million [4][17] - Non-PC revenue mix reached 47% of total group revenues, indicating a significant diversification in revenue streams [5][17] Business Line Data and Key Metrics Changes - The Intelligent Devices Group (IDG) generated $13.5 billion in revenue, an 18% year-on-year increase, with PCs and related businesses growing by 19% [6][25] - The Solutions and Services Group (SSG) achieved a record revenue of $2.3 billion, growing 20% year-on-year with an operating margin of 22% [11][30] - The Infrastructure Solutions Group (ISG) saw a 36% year-on-year revenue growth, reaching $4.3 billion, driven by strong demand in both CSP and SMB segments [8][28] Market Data and Key Metrics Changes - In China, revenue surged by 36% year-on-year, with significant contributions from AI PC shipments [19] - The Asia Pacific region, excluding China, experienced a 39% year-on-year revenue growth, with market share gains in Japan and India [20] - In the Americas, Lenovo achieved PC market share gains for the ninth consecutive quarter, while EMEA saw record bookings in Device as a Service [20] Company Strategy and Development Direction - Lenovo is executing a hybrid AI strategy aimed at capitalizing on AI opportunities, focusing on personal and enterprise AI innovations [5][12] - The company is committed to investing in AI infrastructure and R&D, with a 10% year-on-year increase in R&D spending to $524 million [22][61] - Lenovo aims to maintain its competitive edge through a unique ODM Plus model, combining in-house manufacturing with ODM to enhance flexibility and resilience [51][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating future uncertainties, highlighting strong order visibility and market demand for PCs [38] - The company remains focused on expanding market share and profitability despite short-term pressures on margins due to strategic investments [11][29] - Management emphasized the importance of continuous innovation and adaptation to market shifts, particularly in AI and infrastructure [10][12] Other Important Information - Lenovo's cash flow from operations reached $1.2 billion, marking the highest level in the past eleven quarters, with free cash flow rebounding to $751 million [20][21] - The company reported a significant increase in its AI infrastructure business, with revenues more than doubling year-on-year [18][29] Q&A Session Summary Question: Trends for PC in Q3 and Q4 2025 - Management noted strong PC performance and optimistic outlook for the financial year, with good order visibility and growing demand [38] Question: Business progress in the Middle East - Lenovo is ahead of schedule in building a manufacturing facility in the Middle East, aiming to capture additional market share [42][44] Question: Drivers behind SSG growth - The shift from CapEx to OpEx models is driving strong growth in Device as a Service and Infrastructure as a Service across all geographies [46][48] Question: Impact of tariff uncertainties on supply chain - Management indicated minimal impact from tariff uncertainties, attributing strong performance to Lenovo's competitive business model [50][52] Question: Margin outlook and drivers - The decline in margins was attributed to the growth of the ISG business, particularly in AI servers, which have lower gross margins [58] Question: R&D investment growth outlook - R&D remains a priority, with continued investment planned to support the hybrid AI strategy and drive innovation [62] Question: Sustaining market share gains - Management expressed confidence in sustaining market share gains through innovation and operational excellence [66] Question: AI server sales growth drivers - AI server sales growth is driven by demand across all segments and geographies, with significant growth noted in China [80] Question: Strategy for gaining share in AIPC market - Lenovo's strategy focuses on R&D, innovation, and leveraging its comprehensive product ecosystem to gain market share [84]

Financial Data and Key Metrics Changes - Net sales grew by 5% year over year in constant currency, with strong demand across both consumer and B2B segments [15][19] - Non-GAAP gross margin for the quarter was 42.1%, reflecting a 120 basis points decline from the previous year due to tariffs and higher promotional spending [16][70] - Operating expenses decreased by 2% year over year, representing 24.5% of net sales, down from 26.5% in the same quarter last year [17][18] Business Line Data and Key Metrics Changes - Video collaboration segment saw a 13% year over year growth, driven by strong demand in North America [15][28] - Personal workspace grew by 6% year over year, with double-digit growth in webcams and tablet accessories [15] - Gaming segment experienced a 6% growth, with significant share gains in North America and a notable recovery in China [36][100] Market Data and Key Metrics Changes - Asia Pacific region grew by 15% year over year, with strong performance in China [16][36] - EMEA region grew by 9%, driven by robust demand across all product categories [16] - North America declined by 4%, primarily due to a pause in product shipments during price negotiations [16] Company Strategy and Development Direction - The company is focused on three guiding principles: playing offense, disciplined cost control, and agility [5][6] - Continued investment in research and development, representing 6% of sales, to drive innovation and superior products [5] - Expansion in B2B markets, particularly in video conferencing, with double-digit growth in this segment [10][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing uncertainty regarding tariff policies, inflation, and customer sentiment but expressed confidence in the company's resilience [11][12] - The company expects net sales growth of 1% to 5% year over year in the second quarter, with gross margin rates projected between 41% and 42% [20][70] - Management emphasized the importance of maintaining rigorous cost discipline and agility in response to evolving market conditions [13][19] Other Important Information - The company returned $122 million to shareholders through share repurchases, consistent with its capital allocation priorities [19] - The company launched nine new products during the quarter, including innovative gaming and business solutions [9][10] Q&A Session Summary Question: Consumer reaction to price actions - Management noted a positive impact of price increases in the first quarter, contributing 50 basis points to growth, but it was too early to assess the full consumer reaction [24][25] Question: Strength of video collaboration business - Management expressed confidence in the sustainability of the 13% growth in video collaboration, although some pull-in demand may have occurred ahead of tariffs [28] Question: Economic impact of growing B2B mix - Management confirmed strong demand in the B2B segment, outpacing consumer demand, and highlighted the positive margin contribution from video conferencing products [33][34] Question: Inventory strategy and cash flow - Management indicated a strategy to pull in inventory ahead of tariffs, resulting in a strong cash flow of $125 million from operations [60][61] Question: Guidance for gross margins - Management provided detailed guidance on gross margins, expecting a negative impact from tariffs offset by price increases, with a projected range of 41% to 42% [70][71] Question: Demand patterns in Q1 - Management reported high single-digit demand growth across both B2B and consumer segments, with broad-based strength in various product lines [45][46] Question: Market share and competition - Management noted share gains in key categories but anticipated a temporary softening of shares following price increases [49][50] Question: Future growth in gaming - Management expressed optimism about the gaming segment, citing strong growth in premium segments and a recovery in share in China [36][100]