Lenovo Group Limited reports 3% year-on-year revenue increase and improved profitability, driven by strong performance in non-PC businesses and investments in AI and ESG initiatives.
- 3% year-on-year increase in revenue to reach $15.7 billion
- Record high operating profit and operating margin of over 20%
- Investing heavily in research and development, with R&D headcount accounting for over 25% of total headcount
Lenovo Group Limited, the global technology company, has announced its third quarter results, showcasing a 3% year-on-year increase in revenue to reach $15.7 billion. This marks the second consecutive quarter of improved profitability for the company. Net income stood at $357 million on a non-Hong Kong Financial Reporting Standards basis, with a net income margin of 2.3%, up 0.4% from the previous quarter. Lenovo’s non-PC businesses accounted for 42% of the total revenue, indicating strong performance in diversified growth engines.
The company’s success can be attributed to the resilience of its core businesses and the effectiveness of its ongoing transformation. Lenovo’s Services and Solutions Group (SSG) achieved a significant milestone by surpassing $2 billion in revenue, with a record high operating profit and an operating margin of over 20%. The Intelligent Solutions Group (ISG) also experienced quarter-to-quarter revenue growth, reaching a record high of $1 billion in revenue from its storage, software, and services businesses. The Intelligent Devices Group (IDG) resumed revenue growth and outperformed the market, maintaining its industry-leading profitability.
Looking ahead, Lenovo is focusing on capitalizing on the opportunities presented by the AI-era. The company recognizes the increasing demand for AI-powered devices, infrastructure, and applications. To solidify its position in this space, Lenovo is investing heavily in research and development, with R&D headcount accounting for over 25% of the total headcount. The company aims to provide a full portfolio of AI-enabled, AI-ready, and AI-optimized products and services to cater to the evolving needs of individuals and enterprises.
Lenovo has made several recent announcements related to AI, including partnerships with Anaconda to accelerate AI development and deployment, the introduction of AI-powered devices and solutions at CES, expansion of its hybrid cloud platform for AI, and the launch of cyber-resiliency as a service (CRaaS) offering.
In terms of its business segments, the Solutions and Services Group (SSG) achieved record revenue and operating profit, driven by the expansion of managed services and project and solutions services. The Infrastructure Solutions Group (ISG) experienced quarter-to-quarter revenue growth and reached a record high in combined revenue from storage, software, and services. The Intelligent Devices Group (IDG) resumed growth, particularly in the PC market, and saw significant year-on-year shipment growth in the smartphone and tablet businesses.
Lenovo’s commitment to environmental, social, and governance (ESG) initiatives has also been recognized. The company received a AAA rating in the annual MSCI ESG ratings, a Gold award in the Best Corporate Governance and ESG awards by the Hong Kong Institute of Certified Public Accountants, inclusion in the Human Rights Campaign Foundation’s Corporate Equality Index, and its highest score in the Workplace Pride Global Benchmark.
With its strong performance and strategic investments in AI and ESG, Lenovo is well-positioned to capture the opportunities presented by the AI-era and drive sustainable growth in the future.
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Background Information
About Lenovo:
Lenovo, formerly known as "Legend Holdings," is a important global technology company that offers an extensive portfolio of computers, smartphones, servers, and electronic devices. Notably, Lenovo acquired IBM's personal computer division, including the ThinkPad line of laptops, in 2005. With a strong presence in laptops and PCs, Lenovo's products cater to a wide range of consumer and business needs. Committed to innovation and quality, Lenovo delivers reliable and high-performance solutions, making it a significant player in the tech industry.
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About CES:
CES, the Consumer Electronics Show, is an annual event held in Las Vegas, Nevada, organized by the Consumer Technology Association (CTA). With a history dating back to 1967, it has become the world's premier platform for unveiling and exploring the latest innovations in consumer electronics and technology. Drawing exhibitors ranging from industry titans to startups across diverse sectors, including automotive, health and wellness, robotics, gaming, and artificial intelligence, CES transforms Las Vegas into a global tech hub, offering a glimpse into the future of technology through a wide array of showcases, from startup-focused Eureka Park to cutting-edge automotive and health tech exhibitions. Latest Articles about CES
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