Lenovo Reports Third Quarter Financials for 2024/25: Key Insights and Trends

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Lenovo’s Financial Surge: A Closer Look

Lenovo Group Limited (HKSE: 992) (ADR: LNVGY) just dropped some impressive Q3 results for the fiscal year 2024/25, and let’s just say the numbers are turning heads. The company reported a

breathtaking

20% year-on-year revenue growth, hitting a whopping

US$18.8 billion

. This marks the third straight quarter of double-digit growth—definitely not a bad streak to be on! Meanwhile, net income more than doubled, soaring to

US$693 million

. Of course, this figure includes a non-recurring income tax credit of

US$282 million

, but still, it’s pretty remarkable.

What’s fueling this growth? Lenovo’s diverse revenue streams are becoming more significant, with non-PC revenue now making up

46%

of the mix—up more than four points from last year. The secret sauce appears to be their focused hybrid-AI strategy, a successful turnaround of the Infrastructure Solutions Group (ISG), and strong performances from both the Intelligent Devices Group (IDG) and Solutions and Services Group (SSG).

Investing in the Future: R&D and Innovation

Lenovo isn’t just resting on its laurels; it’s investing heavily in research and development. R&D expenses jumped nearly

14% year-on-year

, reaching

US$621 million

. At the recent CES 2025, Lenovo launched a series of products, including the world’s first

rollable AI laptop

and a handheld gaming device that lets players choose between Windows OS and Steam OS. Talk about options! And let’s not forget Moto AI, which has already snagged

185 industry awards

for innovation.

The company’s commitment to AI is palpable. Lenovo is focused on building a foundational AI technology platform, driving breakthroughs in what they call

agentic AI

, and continually evolving technologies into user-friendly products. With the current AI boom democratizing access to these technologies, Lenovo sees enormous opportunities ahead. Their hybrid AI strategy is not just about keeping pace; it’s about

accelerating

the deployment and customization of enterprise AI, which could yield impressive returns on investment.

Looking Ahead: Confidence in Growth

As Lenovo looks to the future, the company is steadfast in its commitment to hybrid AI innovation. They are optimistic that their

global, flexible, and resilient supply chain

, coupled with manufacturing expansion in the Middle East and tech partnerships with Formula 1 and FIFA, will help them navigate any economic uncertainties. With the momentum they’ve shown in Q3, Lenovo is feeling confident about maintaining this growth trajectory.

Chairman and CEO Yuanqing Yang shared his enthusiasm, noting that “Lenovo’s revenue and profit both achieved significant growth last quarter, with strong performance across all core businesses.” He highlighted the return to profitability for the ISG and the rapid growth in the smartphone sector. Yang emphasized that the efficiency and cost-effectiveness of AI technologies are accelerating the maturation of personal AI, aligning perfectly with Lenovo’s vision.

Diving Deeper into Business Segments

Let’s break down how each segment is performing, shall we?

Intelligent Devices Group (IDG): Leading the Charge

The IDG had a stellar quarter, reporting a

12% year-on-year revenue growth

with total revenues of

US$13.8 billion

. Lenovo’s PC business saw its market share strengthen to

24.3%

, widening the gap with the competition. Smartphones are also on the rise, with double-digit revenue growth, particularly in the Asia Pacific and EMEA markets. Looking ahead, IDG plans to continue merging powerful computing with innovative designs while enhancing AI capabilities and multi-device connectivity for a seamless user experience.

Infrastructure Solutions Group (ISG): Breaking Even and Beyond

The ISG is on fire, reporting nearly

60% revenue growth year-on-year

, reaching

US$3.9 billion

in revenue. This growth is largely attributed to the booming Cloud Services Provider (CSP) business and steady gains in the enterprise and SMB sectors. Their AI server business and Lenovo Neptune Liquid Cooling solutions are also making waves, expanding beyond traditional markets. With the rising demand for hybrid infrastructure, ISG is poised for sustainable profitable growth.

Solutions and Services Group (SSG): A Record-Breaking Streak

SSG is not to be overlooked, extending its revenue growth streak to

15 straight quarters

with revenues of

US$2.3 billion

and a healthy operating margin of

20%

. AI-powered solutions are driving momentum, and the non-hardware solutions are increasingly becoming the profit engine for SSG. They’re not just building capabilities; they’re setting the stage for significant market growth across all products.

ESG and Corporate Highlights: Commitment to Sustainability

On the corporate responsibility front, Lenovo has been making headlines. They were named FIFA’s official technology partner, a major deal that includes sponsorship for the

FIFA World Cup 2026

and the

FIFA Women’s World Cup 2027

. Additionally, Lenovo has received multiple awards for its commitment to sustainability and corporate governance, including a Platinum medal from EcoVadis, placing it in the top 1% of all companies evaluated.

In short, Lenovo is not just riding the wave of current trends; it’s actively shaping the future of technology while keeping sustainability in focus. With a strong foundation and innovative spirit, the company is well-equipped to tackle whatever challenges lie ahead.

Background Information

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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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Event Info

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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.

  

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Technology Explained

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Liquid Cooling: Liquid cooling is a technology used to cool down computer components, such as processors, graphics cards, and other components that generate a lot of heat. It works by circulating a liquid coolant, such as water or a special coolant, through a series of pipes and radiators. The liquid absorbs the heat from the components and then dissipates it into the air. This technology is becoming increasingly popular in the computer industry due to its ability to provide more efficient cooling than traditional air cooling methods. Liquid cooling can also be used to overclock components, allowing them to run at higher speeds than their rated speeds. This technology is becoming increasingly popular in the gaming industry, as it allows gamers to get the most out of their hardware.

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