Lenovo Resumes Revenue Growth in Q3 2023/24

Lenovo Group Limited has reported its third-quarter results for the fiscal year 2023/24, showcasing a notable 3% year-on-year increase in Group revenue, reaching US$15.7 billion. The Group’s profitability has also seen improvement for the second consecutive quarter, with net income climbing to US$357 million on a non-Hong Kong Financial Reporting Standards (non-HKFRS) basis.

The resilient performance of Lenovo’s core businesses has been a driving force behind these positive results, further propelled by the efficacy of the company’s ongoing transformation efforts. Notably, revenue from non-PC businesses accounted for 42% of the Group’s revenue, marking a 1.3 point increase year-on-year.

Chairman and CEO, Yuanqing Yang, expressed optimism about the future, stating, “Last quarter, we delivered on our promise and resumed year-on-year revenue growth, driven by both the resilience of our core businesses and the effectiveness of the service-led transformation.”

Financial Highlights:

– Group Revenue: US$15,721 million (3% increase from Q3 FY 22/23)

– Pre-tax income: US$471 million (22% decrease from Q3 FY 22/23)

– Net Income (profit attributable to equity holders): US$337 million (23% decrease from Q3 FY 22/23)

– Net Income (profit attributable to equity holders – non-HKFRS): US$357 million (20% decrease from Q3 FY 22/23)

– Basic earnings per share: 2.81 US cents (23% decrease from Q3 FY 22/23)

Accelerating AI Leadership:

Lenovo is strategically positioning itself to seize opportunities in the AI-era, leveraging the emerging trend of hybrid AI to drive demand for AI PCs and hybrid infrastructure. The company’s commitment to innovation is evident in its increased investment in research and development, with a focus on AI-enabled devices, infrastructure, solutions, and services.

Recent announcements include partnerships with industry leaders like Anaconda to accelerate AI development, as well as the launch of AI-powered devices and solutions showcased at CES. Lenovo’s expansion of its hybrid cloud platform for AI and the introduction of cyber-resiliency as a service further underscore its dedication to AI innovation.

Solutions and Services Group (SSG):

The SSG division achieved record revenue of US$2.0 billion, demonstrating double-digit year-on-year growth and a record high operating profit margin of over 20%. The focus on managed services and project and solution services has been instrumental in driving consecutive year-on-year growth for 11 quarters.

Infrastructure Solutions Group (ISG):

ISG witnessed quarter-to-quarter revenue growth for the second consecutive quarter, with combined revenue from storage, software, and services reaching a record high of US$1 billion. The company anticipates maintaining its position as a solid #3 globally for both storage and AI infrastructure.

Intelligent Devices Group (IDG):

IDG experienced a strong quarter with revenue growth resuming, particularly in the PC market where Lenovo outperformed the industry and returned to year-on-year shipment growth. The non-PC devices business also showed promising progress, with high double-digit year-on-year shipment growth in smartphones and tablets.

Looking ahead, Lenovo remains optimistic about its growth prospects, particularly in the realm of AI, where it aims to deliver innovative solutions that reshape how individuals and enterprises operate in the digital age.