Lenovo Group Limited and its subsidiaries have announced robust second-quarter results for the fiscal year 2023/24. The company reported a Group revenue of US$14.4 billion and a net income of US$273 million, based on non-Hong Kong Financial Reporting Standards (HKFRS). Notably, the gross profit margin reached a record high for a second quarter at 17.5%, showcasing a year-on-year improvement.
The company’s diversified growth engines demonstrated strong performance, with non-PC businesses contributing 40% to the Group revenue, a three-point increase from the previous year. Lenovo attributes its positive performance to the recovery observed in the technology sector, emphasizing the success of its strategic execution, operational excellence, and continuous investments in innovation.
Looking ahead, Lenovo aims to capitalize on opportunities in artificial intelligence (AI), leveraging its unique position with a hybrid AI model, a comprehensive pocket-to-cloud portfolio, a robust ecosystem, and strategic partnerships. The company is committed to ongoing investments in AI and innovation to drive sustainable growth and profitability. Lenovo expresses confidence in its ability to resume year-on-year growth in the near future.
Yuanqing Yang, Chairman and CEO of Lenovo, stated, “With continuous execution of our intelligent transformation strategy and with our AI ecosystem and partnerships further strengthened, we will leverage our full-stack AI capabilities from pocket to cloud to enable hybrid AI applications for every enterprise and every individual, ultimately driving sustainable growth for our business.”
In the Middle East, Africa, and Gulf regions, Lenovo showcased resilience, maintaining a dominant position in the PC market with a 29.1% market share in the broader Middle East and Africa and an impressive 33.8% share in the Gulf region. The company aims to foster lasting growth in these regions through a strengthened AI strategy.
Lenovo’s commitment to AI leadership was highlighted at its annual Tech World innovation event, where it outlined the vision of ‘AI for All.’ The company emphasized its hybrid AI model and showcased a rich smart device portfolio, including AI-enabled PCs, smartphones, and tablets. Lenovo’s collaborations with global partners, including NVIDIA, AMD, Formula 1®, Microsoft, Qualcomm, and Intel, further strengthen its position in the AI space.
Lenovo continues its investment in AI-driven innovation with an additional US$1 billion, reinforcing its commitment to realizing the vision of ‘AI for All’ and driving sustainable growth across the business.
The Solutions and Services Group (SSG) achieved record revenue and operating profit in Q2 FY23/24, with a focus on AI solutions and services. SSG’s hero offerings, including Digital Workplaces Solutions, Hybrid Cloud, and sustainability solutions, contributed to its strong performance. Managed services and project and solutions services accounted for 56% of SSG’s revenue.
The Infrastructure Solutions Group (ISG) faced challenges in the wider macro-economic industry, resulting in a year-on-year revenue decline to US$2 billion. Despite this, ISG performed well in storage, software, and services, becoming the third-largest storage provider globally. ISG is poised for future growth in the evolving hybrid AI landscape.
The Intelligent Devices Group (IDG) maintained its global No.1 position in PC shipments and activations, with an industry-leading operating margin of 7.4%. Although revenue declined year-on-year to US$11.5 billion, IDG’s smartphone business achieved double-digit premium to market shipment growth. Looking ahead, IDG plans to leverage generative AI for the launch of next-generation AI devices, including an AI PC in the coming year.
Lenovo received recognition for its Environmental, Social, and Governance (ESG) efforts, including inclusion in the 2023 Hang Seng Corporate Sustainability Index and achieving ‘Champion’ status in the Canalys Global Sustainability Ecosystems Leadership matrix. The company also joined the UN Global Compact Forward Faster initiative to accelerate private sector action for the UN’s 17 Sustainable Development Goals.
In summary, Lenovo’s second-quarter results reflect a resilient and strategically positioned company, poised for growth in the rapidly evolving technology landscape, with a strong focus on AI, innovation, and sustainability.
