Lenovo's annual results: The key takeaways
While revenue grew 10 per cent year-on-year, entire FY turnover is still down by eight per cent
PC manufacturer Lenovo has posted another positive quarter after it returned to growth (3 per cent) in Q3, this time posting a 10 per cent increase in revenue year-on-year to $13.8bn.
However, this wasn't enough to offset the entire financial year which was still down by eight per cent to $56.8bn.
Lenovo's Q4 FY23/24 report also highlighted other areas of expansion and growth, such as its pocket-to-cloud AI portfolio, solutions and services group (SSG) and infrastructure solutions group (ISG), its intelligent devices group (IDG) and its commitment to sustainable growth.
Below we've summarised five key highlights from Lenovo's most recent results.
1. Growth across all business
Lenovo reported strong revenue growth across all business groups in Q4, with group revenue increasing nearly 10 per cent year-on-year to $13.8bn.
Net income doubled year-on-year to $248m, and non-PC revenue mix reached a "historic high" of 45 per cent.
Yearly turnover however was still down eight per cent compared to the previous year, a symptom of the economic struggles the PC industry has been undergoing.
2. Charging ahead with AI
Lenovo's pocket-to-cloud portfolio, ecosystem partnerships, and full-stack AI capabilities are leading the way in the vendor's AI strategy.
The company expects the AI PC market to grow from premium to mainstream over the next three years, driving a new refresh cycle.
The full-stack "pocket-to-cloud" AI portfolio spanning devices, infrastructure, and services integrates personal AI agents, heterogeneous computing, and on-device AI capabilities.
Lenovo expects the premium AI PC segment to go mainstream within three years, driving an industry refresh cycle.
3. Lenovo's SSG and ISG both delivered growth and profitability
Lenovo's enterprise-focused groups SSG and ISG delivered impressive results fuelled by accelerating AI adoption.
SSG's revenue grew over 10 per cent in Q4 to $1.8bn with over 21 per cent operating margins, driven by managed services and AI-powered workplace solutions.
ISG hit record Q4 revenue up 15 per cent year-over-year, with storage, software and AI server sales seeing significant growth.
With AI infrastructure demand outpacing traditional servers, ISG is broadening its AI portfolio.
Yet again, services - from consulting to infrastructure to deployment - drove much of the demand as both groups capitalised on customers seeking comprehensive AI solutions.
Lenovo says their strength validates its strategy of being an end-to-end AI provider across the entire technology stack.
4. IDG continues to strengthen its global PC market
Lenovo's IDG cemented its global leadership, capturing 22.9 per cent PC market share and industry-leading profitability.
IDG ranked #1 in 4 of 5 regions, with an over 30 per cent share in North America.
The smartphone business also shone, with double-digit shipment and revenue growth outpacing the market.
After a soft first half, PCs, tablets and phones all resumed growth in the second half. Looking ahead, Lenovo expects the overall PC market to recover to pre-pandemic levels, with smartphones already seeing double-digit growth.
5. Lenovo is focused on sustainable growth and innovation
Lenovo is doubling down on innovation for sustainable growth, allocating 26.2 per cent of its workforce and 3.6 per cent of revenue to R&D.
The investments target Lenovo's anchor AI and computing technologies to realise its "Smarter AI for All" vision.
Complementing the R&D push, Lenovo has been pushing forward on its environmental certifications.
It earned top CDP rankings for supplier engagement and climate initiatives, alongside awards for green products and circular economy practices.
Lenovo has also committed to responsible AI development principles.