Lenovo posts Q3 revenue of $22.2b as AI sales surge

Lenovo reported its third quarter of fiscal year 2025/26 with record revenue of US$22.2 billion, an 18% rise year-on-year, across all business segments.

Adjusted net income rose 36% to US$589 million, with an improved profit margin of 2.7%.

AI-related revenue grew 72% year-on-year, now making up 32% of total revenue, driven by demand for AI devices, infrastructure, and services.

The company restructured its Infrastructure Solutions Group, incurring US$285 million in charges, aiming for over US$200 million in annual savings over three years.

Revenue from the Intelligent Devices Group increased 14% to US$15.8 billion, with PC market share reaching a historic high of 24.9%.

Motorola smartphones achieved record volume and activations, while Lenovo announced new devices at CES 2026, including the Aura Edition PC and Legion Go.

The Infrastructure Solutions Group saw a 31% rise to US$5.2 billion, with high double-digit growth in AI servers and liquid-cooling systems.

The Solutions and Services Group grew 18% to US$2.7 billion, with a focus on AI, hybrid cloud, and enterprise services.

🔗 Source: Lenovo

🧠 Food for thought

Implications, context, and why it matters.

Adjusted profits rose, but bottom-line earnings fell

Adjusted net income rose 36%, yet net income attributable to shareholders dropped 21% year-on-year to US$546 million 1.
The decline came in a quarter with solid operations, plus a US$285 million one-time restructuring charge tied to a restructuring of its Infrastructure Solutions Group (ISG) 1.
Gross margin slipped to 15.1% from 15.7%, so the company kept less profit per dollar of revenue even as revenue increased 1.

Lenovo is using AI to rely less on PC hardware sales

Lenovo is using its PC market lead to bring customers into a broader AI ecosystem, moving beyond a model built mainly on hardware sales.
At CES 2026, Lenovo introduced its personal AI super agent, software that coordinates tasks across multiple devices. Lenovo has also used the name “Qira” for the same idea in its Tech World @ CES 2026 announcements and materials 2 3.
For enterprises, the “Lenovo AI Cloud Gigafactory with NVIDIA” aims to combine Lenovo hybrid AI infrastructure with NVIDIA accelerated computing platforms, including systems based on the NVIDIA Vera Rubin NVL72 platform 4.
Together, these moves aim to deepen customer ties and lift margins by adding software and services around Lenovo hardware.