Lenovo Q3 Revenue Up 20%, Net Income Doubles

Lenovo Group Limited (HKSE: 992) (ADR: LNVGY) has announced its impressive Q3 results for fiscal year 2024/25, reporting a significant 20% year-on-year growth in overall revenue, totaling US$18.8 billion. This marks the third consecutive quarter of double-digit growth for the company. Lenovo’s net income soared to US$693 million, more than doubling from the previous year, including a one-time income tax credit of US$282 million. The company’s diversification strategy continued to drive its success, with non-PC revenue now accounting for 46% of total revenue, reflecting a four-point increase year-on-year.

The strong performance in Q3 was largely driven by Lenovo’s hybrid-AI strategy, the turnaround of its Infrastructure Solutions Group (ISG), and strong results from both the Intelligent Devices Group (IDG) and Solutions and Services Group (SSG). Lenovo’s focus on innovation and investment in AI continued to pay off, with R&D expenses up nearly 14% year-on-year to US$621 million. At CES 2025, Lenovo launched breakthrough products, including the world’s first rollable AI laptop and the first handheld gaming device allowing users to choose between Windows OS or Steam OS, along with Moto AI, which has already won 185 industry awards.

Lenovo’s AI-driven approach is helping to lead the way in personal AI, with cutting-edge devices that are optimizing AI efficiency and driving the development of enterprise AI solutions. The company’s AI investments are seen as key to driving growth across multiple sectors, including devices, infrastructure, and services. With the current AI boom, Lenovo believes that higher AI efficiency and reduced computing costs are opening up new opportunities for widespread AI adoption, especially in hybrid infrastructure, edge computing, and enterprise AI.

In its business units, Lenovo’s Intelligent Devices Group (IDG) delivered a strong quarter with US$13.8 billion in revenue, marking a 12% year-on-year increase. The PC business continued to lead the market with a 24.3% market share, and Lenovo also saw significant growth in its smartphone business, particularly in the Asia Pacific and EMEA regions. The Infrastructure Solutions Group (ISG) achieved a remarkable 60% increase in revenue, reaching US$3.9 billion, and successfully returned to profitability. This growth was driven by strong demand in the cloud services sector and the success of Lenovo’s AI server business and Neptune liquid cooling solutions.

The Solutions and Services Group (SSG) extended its streak of double-digit growth, reaching US$2.3 billion in revenue, with an operating margin of 20%. AI-powered solutions played a significant role in driving hardware-attached services, and non-hardware solutions now account for nearly 60% of SSG’s revenue, strengthening its profitability. Lenovo is also building momentum in the AI solutions market, with a growing number of enterprise AI projects and applications being deployed globally.

Lenovo continues to make strides in sustainability and corporate governance. Recently, the company was named FIFA’s official technology partner, securing major sponsorships for the 2026 FIFA World Cup and 2027 FIFA Women’s World Cup. The company was also recognized for its ESG efforts, receiving the Gold Award for sustainability and a Platinum medal from EcoVadis for its leadership in sustainability.

Looking ahead, Lenovo remains committed to driving growth through its hybrid AI strategy, continuing its focus on innovation, and strengthening its global operations and supply chain. With strategic partnerships such as those with Formula 1® and FIFA, as well as ongoing expansion into the Middle East, Lenovo is well-positioned for sustained, profitable growth.

Chairman and CEO Yuanqing Yang expressed confidence in Lenovo’s future, stating, “Our strong performance in Q3 reflects the success of our hybrid AI strategy and the growing demand for AI-powered devices and solutions. We remain committed to innovation and believe that our global operations and strategic partnerships will continue to drive growth and profitability.”

Lenovo’s Q3 FY 2024/25 financial highlights include a 20% increase in group revenue to US$18,796 million, net income of US$693 million (up 106% YoY), and earnings per share of 5.66 US cents, up 2.85 cents from the previous year.