15 November, 2024 – Lenovo Group Restricted (HKSE: 992) (ADR: LNVGY), along with its subsidiaries (‘the Group’), right this moment introduced Q2 outcomes for fiscal yr 2024/25, reporting vital will increase and development in internet revenue, year-on-year income development for the 4th consecutive quarter, and powerful double-digit year-on-year income will increase from all its enterprise teams. Group income elevated 24% year-on-year to US$17.9 billion. Web revenue was up 48% year-on-year to US$404 million on a non-Hong Kong Monetary Reporting Requirements (non-HKFRS)[1] foundation, and non-PC income combine was up 5 factors year-to-year to 46%. The Group’s outcomes replicate its clear technique, operational excellence, funding in R&D, improvements in hybrid AI, and international footprint.
The Group’s hybrid AI technique and years of steady funding in R&D and improvements are paying off, with its first part of AI PCs, launched in China in Might 2024, already reaching double digit share of its complete pocket book shipments within the China market. Latest launches of AI PCs for the worldwide market with Lenovo AI Now have additionally been obtained positively. For enterprise AI, the Group is leveraging its full-stack hybrid infrastructure in addition to Lenovo Hybrid AI Benefit to seize development alternatives. This relentless deal with AI innovation in addition to funding in R&D (up 10% year-on-year to US$548 million) is firmly establishing the Group’s market differentiation and {industry} management.
Waiting for development, Lenovo will drive continued innovation in hybrid AI to additional speed up development and profitability will increase and is optimistic its present momentum will proceed by way of the remainder of the fiscal yr.
Lenovo’s Board of Administrators declared an interim dividend of 8.5 HK cents per share.
Chairman and CEO quote – Yuanqing Yang:
“Final quarter, we achieved robust, sustainable, and accelerated development, marking one other interval of income enlargement throughout all enterprise teams. This vital momentum is pushed by our clear technique, innovation funding, operational excellence, and international presence, in addition to our dedication to hybrid AI, the place we’re additional strengthening our market differentiation and {industry} management. As we glance forward, we’re assured that our ongoing innovation developments in hybrid AI will proceed to speed up development and profitability, propelling us ahead for the remainder of the fiscal yr.”
Monetary Highlights: 
Clever Gadgets Group (IDG): Vital development and main profitability, accelerating in private AI
Q2 FY24/25 efficiency:
- IDG delivered a robust quarter of double-digit year-on-year income development with income of US$13.5 billion, up 17% year-on-year.
- The PC enterprise expanded its market management to nearly 24% market share, widening the result in the quantity two participant to 4 factors and with AI PCs reaching double digit share of complete pocket book shipments for the Group within the China market.
- Each the smartphone and pill companies delivered excessive double-digit income development, up 43% and 19% year-on-year respectively, with hypergrowth for smartphones in North America, EMEA and Asia Pacific markets.
Alternatives and Sustainable Development:
- The PC market is anticipated to steadily get well and enter a brand new refresh cycle pushed by AI PCs, steadily rising to signify round 80% of the PC {industry} panorama by 2027.
- The brand new improvement of AI applied sciences can be anticipated to drive a refresh within the smartphone market.
- IDG will proceed to leverage its five-feature AI PCs to ascertain management within the AI PC market, whereas on the identical time constructing a richer AI gadget portfolio.
Infrastructure Options Group (ISG): Hypergrowth, constructing hybrid AI infrastructure
Q2 FY24/25 efficiency:
- Pushed by robust cloud momentum and recovering enterprise enterprise, ISG set a brand new quarterly file, growing income 65% year-on-year to US$3.3 billion.
- Working losses continued to slim, with the enterprise group on monitor to breakeven.
- Mixed income from storage, software program and providers grew 35% year-on-year to a file excessive. Income from ISG’s Lenovo Neptune TM liquid-cooled servers grew 48% year-on-year.
Alternatives and Sustainable Development:
- ISG will proceed to strengthen the enterprise and SMB enterprise mannequin, together with simplifying portfolios and enhancing operations, in addition to diversifying Cloud Service Supplier clients.
- It can proceed to construct differentiation with its industry-leading liquid cooling know-how to fulfill the growing efficiency and power effectivity calls for of AI workloads.
- As well as, ISG will proceed to develop key strategic partnerships to develop hybrid AI infrastructure options.
Options and Providers Group (SSG): Excessive margin and double-digit development, constructing hybrid AI Benefit
Q2 FY24/25 efficiency:
- SSG prolonged its double-digit income development streak to 14 straight quarters, with income of US$2.2 billion and an working margin of 20%.
- Income combine from managed providers and challenge and options providers grew three factors year-on-year to account for almost 60% of SSG’s income.
- Hero choices reminiscent of Digital Office Options, Hybrid Cloud, and Sustainability Options additionally delivered robust development.
Alternatives and Sustainable Development:
- The worldwide IT providers market is anticipated to see regular double-digit development over the following three years, with AI providers rising greater than twice as quick because the market to turn out to be the first driver of the IT providers market.
- Lenovo will proceed to embed AI in its key choices, reminiscent of Digital Office Options, Hybrid Cloud and Sustainability options.
- SSG will develop extra AI native providers for purchasers to undertake AI use instances and seize hybrid AI alternatives.
ESG and company highlights
Achievements, bulletins, and notable commitments over the previous quarter embody:
[1] Non-HKFRS measure was adjusted by excluding internet honest worth adjustments on monetary property at honest worth by way of revenue or loss, amortization of intangible property ensuing from mergers and acquisitions, mergers and acquisitions associated prices, impairment of intangible property; and the corresponding revenue tax results, if any.
About Lenovo
Lenovo is a US$57 billion income international know-how powerhouse, ranked #248 within the Fortune World 500, and serving thousands and thousands of shoppers day-after-day in 180 markets. Targeted on a daring imaginative and prescient to ship Smarter Expertise for All, Lenovo has constructed on its success because the world’s largest PC firm with a full-stack portfolio of AI-enabled, AI-ready, and AI-optimized units (PCs, workstations, smartphones, tablets), infrastructure (server, storage, edge, excessive efficiency computing and software program outlined infrastructure), software program, options, and providers. Lenovo’s continued funding in world-changing innovation is constructing a extra equitable, reliable, and smarter future for everybody, in all places. Lenovo is listed on the Hong Kong inventory trade beneath Lenovo Group Restricted (HKSE: 992) (ADR: LNVGY). To seek out out extra go to https://www.lenovo.com, and browse in regards to the newest information by way of our StoryHub.
