Lenovo’s growth accelerated by hybrid AI

Lenovo's growth accelerated by hybrid AI

Lenovo Group has announced its financial results for the fourth quarter and full financial year 2023/24. Following the resumption of growth in the previous quarter, the Group reported year-on-year revenue growth in the fourth quarter for all business groups: Group revenue increased by almost 10% year-on-year to $13.8 billion, net profit doubled year-on-year to $248 million, and the non-PC revenue mix reached a historic high of 45%.

The Group’s results for the fourth quarter and the second half of the year demonstrate that Lenovo was able to overcome last year’s industry downturn, capitalize on the huge growth opportunities provided by AI, and accelerate the pace of business development. Revenue for the full fiscal year amounted to $56.9 billion, and net profit was $1 billion.

Starting in the second half of the fiscal year, Lenovo achieved an annual revenue growth of 6%, and its net margin recovered from a drop in the first half of the year and remained at the same level.

Лідерство в епоху ШІ

Leadership in the age of AI

The Group is leading the way in the era of unique AI capabilities with its portfolio of handheld to cloud devices, strong ecosystem and partnerships, and a full stack of AI capabilities. Since announcing its AI strategy in October 2023 at the annual Tech World event, Lenovo has launched the first wave of AI computers and expanded its AI capabilities to include other smart devices, infrastructure, solutions, and services.

The group expects AI computers equipped with a personal agent based on intuitive interactions, heterogeneous computing, personal knowledge base, connected to an open ecosystem of AI applications with privacy and security protection to grow from the current premium position to the mainstream over the next three years. This will be the beginning of a new cycle of renewal in the industry.

Hybrid AI is also driving demand for infrastructure, and customers are increasingly seeking personalized AI solutions and services, including AI consulting, design, deployment, and maintenance.

Lenovo’s ongoing commitment to and investment in innovation, focused on core AI and computing technologies, helps the company realize its vision of “smart AI for everyone” and remain a leader in the AI era. In the past fiscal year, the Group achieved a record high percentage of employees engaged in R&D at 26.2%, and the ratio of R&D expenses to revenue was 3.6%.

High performance

The Group is encouraged by its performance and momentum in the second half of the fiscal year and is optimistic about the prospects for the coming year. Lenovo will continue to maintain its leadership in AI, invest in innovation, and capitalize on the unique opportunities offered by hybrid AI, accelerating growth and sustained profitability across the business.

Lenovo’s board of directors has declared a final dividend of 3.8 US cents or HK$30.0 cents per share for the fiscal year ended March 31, 2024.

“Lenovo’s fourth-quarter results clearly demonstrate that we have not only restored growth across all businesses, but also accelerated the pace of our businesses by capitalizing on the unprecedented opportunities that hybrid artificial intelligence is bringing,” said Yuanqing Yang, chairman and CEO of Lenovo.

According to him, thanks to an intelligent transformation strategy and years of investment in innovation, the company has developed a full suite of artificial intelligence capabilities and is at the forefront of the revolutionary AI PC market.

“Our vision for the AI era is smart AI for everyone. We are confident that we will be able to deliver steady growth and improved profitability in the coming year through effective execution, continuous innovation, operational excellence, and ecosystem partnerships,” adds Yang.

Lenovo’s financial performance

Фінансові показники Lenovo

Solutions and Services Group (SSG): Strong Growth and Profitability Driven by AI Solutions

Results for the fourth quarter and full fiscal year 23/24:

  • SSG’s position as a growth and profit engine was strengthened by delivering revenue growth of more than 10% year-on-year to $1.8 billion and strong profitability with an operating margin of over 21%. This represents double-digit revenue and operating margin growth for 12 consecutive quarters. Revenue for the full fiscal year amounted to $7.5 billion, up 12% year-on-year, and operating margin increased by almost 21%.
  • Revenues from Managed Services and Projects and Solutions Services grew by five points year-on-year and now account for 55% of SSG’s total business for the quarter.
  • The rapid growth was driven by such notable offerings as Digital Workplace Solutionsand TruScale for hybrid clouds.

Opportunities and sustainable growth:

  • Going forward, SSG will continue to meet the growing customer demand by rapidly moving towards developing solutions and services that are entirely AI-based and with AI embedded.
  • The Care of One platform, cyber resilience as a service, and the Lenovo Intelligent Sustainability Solutions Advisor (LISSA) decision-making tool harness the power of artificial intelligence to deliver hyper-personalized experiences for employees, increase productivity, improve security, and focus on environmental technologies.

Infrastructure Solutions Group (ISG): regaining momentum

Results for the fourth quarter and full fiscal year 23/24:

  • Revenue in the fourth quarter resumed its upward trend with double-digit year-on-year growth of 15%, bringing ISG’s revenue for the quarter to $2.5 billion, a new record for the fourth quarter.
  • The storage, software and services businesses showed hypergrowth, with combined revenue increasing by more than 50% year-on-year. Revenue from high performance computing reached a record high.
  • During the year, ISG demonstrated revenue growth for three consecutive quarters and achieved the second highest revenue for the financial year.

Opportunities and sustainable growth:

  • The AI server market is expected to grow almost twice as fast as the overall server market as it shifts to AI infrastructure.
  • ISG will expand its portfolio and product line to capture new opportunities and leverage its strengths in traditional servers, peripherals, storage, software and services to drive growth and restore profitability.

Intelligent Devices Group (IDG): Steady growth, strengthened leadership

Results for the fourth quarter and full fiscal year 23/24:

  • IDG continued to deliver strong results for the quarter, strengthening its leadership in the global PC market with a 22.9% market share, well above average, and achieving industry-leading profitability. Revenue for the quarter amounted to $10.5 billion, and for the full year – $44.6 billion.
  • The PC business took first place in four of the five regions, reaching a record high market share in North America.
  • The smartphone business showed impressive positive dynamics, achieving double-digit growth in both shipments and revenues year-on-year, well above the market average.
  • IDG’s full-year profitability remained strong despite a weaker-than-expected market in the first half of the fiscal year. PCs, tablets and smartphones resumed growth in the second half of the financial year;

Opportunities and sustainable growth:

  • PC market volumes are expected to recover to pre-COVID-19 levels in the future, and the smartphone market has already returned to double-digit growth year-on-year.
  • AI PCs will gradually move from the premium segment to the mainstream over the next three years, as Lenovo has already released the first wave of AI PCs, and more devices will be delivered in the coming quarters, stimulating a new upgrade cycle in the PC market.
  • Expanding the use of artificial intelligence from PCs to phones and tablets, creating continuous interaction between devices using the Smart Connect software solution.

ESG and corporate aspects

Achievements, announcements and important commitments for the past quarter include:

  • Global environmental nonprofit CDP has recognized Lenovoas a leader in climate change and supplier engagement.This recognition is a testament to Lenovo’s efforts to implement best practices to combat climate change and actively engage with suppliers to create a more sustainable future.
  • The Companywon the awards“Best Value Chain Initiative”, “Best Environmental Product” and a high rating in the category “Circular Economy Company of the Year” at the global CRN Sustainability Tech Summit.

In February, Lenovo joined the UNESCO’s commitment to the responsible use of AI, which calls on companies to take timely action to “prevent, mitigate, or eliminate” potential negative impacts of AI. This commitment is in addition to Lenovo’s own internal AI Responsible Use Committee, which ensures that any AI-based products, services, and solutions are implemented in an ethical, legal, secure, private, and responsible manner.

Financial summary

4th quarter 23/24 4th quarter 22/23 Change from year to year Financial year 23/24 Financial year 22/23 Change from year to year
Revenue 13,833 12,635 9% 56,864 61,947 (8)%
Gross profit 2,428 2,143 13% 9,803 10,501 (7)%
Net profit margin 17.6% 17.0% 0.6 points 17.2% 17.0% 0.2 пунктів
Operating expenses (1,939) (1,852) 5% (7,797) (7,832) (0)%
R&D expenses
(included in operating expenses)
(532) (550) (3)% (2,028) (2,195) (8)%
Cost to revenue ratio 14.0% 14.7% (0.7) пунктів 13.7% 12.6% 1.1 пунктів
Profit from operating activities 489 291 68% 2,006 2,669 (25)%
Net income (expense) from non-operating activities (180) (161) 12% (641) (533) 20%
Income before income taxes 309 130 137% 1,365 2,136 (36)%
The amount of tax (56) (24) 124% (263) (455) (42)%
Profit for the period/year 253 106 140% 1,102 1,681 (34)%
Non-controlling interest (5) 8 N/A (91) (73) 26%
Profit attributable to equity holders 248 114 118% 1,011 1,608 (37)%
Profit attributable to equity holders, non-HKFRS1 218 284 (23)% 1,038 1,878 (45)%
Earnings per share, cents







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