FX168 Financial News (North America) News Lenovo Group (Hong Kong code: 0992) announced financial results for the first quarter of the 2024/2025 fiscal year on Thursday (August 15).
According to the Lenovo report, revenue increased 20% year over year to $15.4 billion, exceeding analysts' expectations. This increase marks the third consecutive quarter of revenue growth for the company, which previously experienced five consecutive quarters of decline, mainly due to the post-pandemic slowdown in the global market.
A key factor in Lenovo's success this quarter was its performance in the emerging market AI PC segment. After launching the first AI-powered PC in May 2024, Lenovo received positive feedback, particularly in the Chinese market.
Looking forward to the global launch later this year at major events such as IFA and Tech World. Lenovo is positioning itself as a leader in the AI PC market, which is expected to account for more than 50% of the global PC market by 2027.
Lenovo's net revenue also increased significantly, up 65% year over year to USD 0.315 billion (based on non-HKFRS standards). In standard terms, net income attributable to shareholders increased to $0.243 billion, exceeding expectations.
Lenovo's strategic diversification efforts have paid off, with non-PC businesses contributing a record 47% of total revenue, an increase of 5 percentage points over last year.
Lenovo's core business unit, the Smart Devices Group (IDG), generated $11.4 billion in revenue, a double-digit increase over the same period last year, and increased operating margins by nearly 1 percentage point.
Lenovo continues to maintain its leading position in the global PC market, with a 23% market share in shipments, proving its dominant position in signs of market recovery.
At the same time, Lenovo's Infrastructure Solutions Group (ISG) also recorded brilliant quarterly results, achieving record revenue of $3.2 billion, a year-on-year increase of 65%. This growth is mainly due to the cloud service provider business and the surge in demand for cloud infrastructure and services.
ISG's profitability has also improved, reducing operating losses compared to previous quarters. Notably, the division's Neptune liquid-cooled server revenue grew by more than 50%, reflecting the growing demand for sustainable and efficient solutions to support AI workloads.
The Solutions and Services Group (SSG) continues to be the cornerstone of Lenovo's profits, achieving double-digit revenue growth for the 13th consecutive quarter, with revenue reaching $1.9 billion in the first quarter.
The division maintained a strong operating margin of over 20%, solidifying its role as a key growth engine for the company. As AI services are expected to surpass the overall IT services market, Lenovo is focused on incorporating AI into all of its products and developing native AI services to help customers achieve a return on AI investment.
Looking ahead, Lenovo remains committed to innovation, and R&D spending increased 6% year over year to $0.476 billion. The company has also strengthened its global presence through strategic partnerships, such as cooperation with Alat, a subsidiary of PIF. This partnership will enhance Lenovo's supply chain capabilities and further diversify its operating base by establishing a new manufacturing center in the Middle East.
Yang Yuanqing, Chairman and CEO of Lenovo, said, “Looking ahead, we are fully prepared and uniquely positioned in the market. With our full-stack AI product portfolio, we can lead the trend in the hybrid AI era and seize huge growth opportunities throughout the business.”