Lenovo unveils FY 2023/24 earnings report, revealing promising financial performance

Lenovo Group announced its Q4 and full-year results for fiscal year 2023/24, showcasing impressive growth and performance across all business groups. In Q4, the Group reported a nearly 10% year-on-year increase in revenue to $13.8 billion, with net income doubling to $248 million. The non-PC revenue mix also reached a historic high of 45%. These results demonstrate Lenovo’s ability to navigate industry downturns, capitalize on AI opportunities, and accelerate momentum in its business.

For the full fiscal year, Lenovo achieved revenue of $56.9 billion and net income of $1 billion. In the second half of the fiscal year, the company achieved 6% year-on-year revenue growth and recovered from a decline in net margin to reach a flat position. Lenovo attributes its success to its pocket-to-cloud portfolio, strong ecosystem and partnerships, and full-stack AI capabilities.

Lenovo has been at the forefront of the AI era, leveraging its AI strategy unveiled in October 2023. The company has launched its first wave of AI PCs and expanded AI capabilities to cover smart devices, infrastructure, solutions, and services. Lenovo expects AI PCs to transition from a premium position to mainstream adoption over the next three years, driving a new refresh cycle for the industry. The demand for AI infrastructure and customized AI solutions and services is also on the rise.

The Group’s commitment to innovation is evident in its record-high R&D headcount and R&D expense to revenue ratio. Looking ahead, Lenovo is optimistic about its future performance and plans to continue leading in AI, investing in innovation, and seizing opportunities presented by hybrid AI.

Lenovo’s Solutions and Services Group (SSG) delivered strong growth and profitability, with over 10% year-on-year revenue growth in Q4. SSG’s total revenue for the full fiscal year reached $7.5 billion, growing at 12% year-on-year. The group’s Managed Services and Project and Solutions Services revenue mix also grew, accounting for 55% of SSG’s total business in Q4. Digital Workplace Solutions and TruScale for Hybrid Cloud were key drivers of rapid growth.

The Infrastructure Solutions Group (ISG) regained momentum in Q4, achieving double-digit year-on-year revenue growth of 15%. ISG’s revenue for the quarter reached a record high of $2.5 billion. The storage, software, and services businesses within ISG experienced hypergrowth, with combined revenue increasing by over 50% year-on-year. ISG aims to capture new opportunities in the AI infrastructure market and leverage its strengths in traditional servers, edge computing, storage, software, and services.

The Intelligent Devices Group (IDG) maintained solid growth and strengthened its leadership in the global PC market with a market share of 22.9%. IDG achieved record-high market share in North America and remarkable growth in the smartphone business. Despite a weaker market in the first half of the fiscal year, IDG’s profitability remained resilient. The volume of the PC market is expected to recover to pre-Covid levels, and Lenovo plans to drive the adoption of AI PCs from premium to mainstream over the next three years.

Lenovo has also made significant achievements in ESG (environmental, social, and governance) initiatives. The company was recognized by CDP for its leadership in climate change and supplier engagement. It received awards for ‘Best Value Chain Initiative’, ‘Best Green Product’, and was highly commended in the category of ‘Circular Economy Company of the Year’ at the CRN Sustainability Tech Summit. In addition, Lenovo joined UNESCO’s commitment for responsible AI, further emphasizing its dedication to ethical, legal, safety, privacy, and accountability standards for AI products and solutions.

Background Information

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About Lenovo: Lenovo, formerly known as "Legend Holdings," is a prominent 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.