Lenovo reported its third consecutive quarter of double-digit revenue growth, with all three business units contributing at double-digit levels.
Revenues in the quarter ending December 31, 2024 were $18.8 billion compared to the year-ago $15.5 billion, with an HKFRS profit of $693 million – 106 percent higher than a year ago. The PC-selling Intelligent Devices Group (IDG) brought in $13.8 billion, up 12 percent. $3.9 billion flowed in from the turned-around Infrastructure Solutions Group (ISG), a 59 percent rise for its servers, storage, and so on. The SSG (Services and Solutions Group) was responsible for a 13.8 percent rise to $2.3 billion. Lenovo’s cash balance grew 14 percent year-on-year to $3.93 billion.
Chairman and CEO Yuanqing Yang stated: “Lenovo’s revenue and profit both achieved significant growth last quarter, with strong performance across all core businesses. Notably, the ISG business returned to profitability and the smartphone business experienced rapid growth. AI technology, with higher efficiency and lower costs, is accelerating the maturation of personal AI, particularly on-device AI and edge AI. It has also accelerated enterprise adoption of AI.”
Lenovo believes the AI boom is creating enormous opportunities for devices, infrastructure, and services. It has a hybrid AI strategy that includes building a foundational AI technology platform, AI PCs, edge, and datacenter AI products and services.
IDG gained a top 24.3 percent share of the PC business, almost five points clear of the number-two player (Dell), its highest share in 5 years, and was profitable. Lenovo saw strong growth in smartphones with revenue up double digits year-on-year, and hypergrowth in both the Asia Pacific (+155 percent) and EMEA (+28 percent) markets. It says it will “optimize AI agent capabilities, enhance multi-device connectivity, and build application ecosystems to provide seamless user experiences across devices and ecosystems.”
Lenovo expects the AI PC to represent approximately 80 percent of the PC industry landscape by 2027.
The ISG business experienced continued hypergrowth in the Cloud Services Provider (CSP) market (+94 percent), and steady growth in the enterprise and SMB (E/SMB) business (+7 percent). AI server revenue grew steadily and Neptune liquid cooling systems expanded beyond supercomputing and academia to wider vertical industries. This business unit was profitable for the first time in seven quarters.
No storage business results were called out. The ISG unit is under new executive leadership with Ashley Gorakhpurwalla now its EVP and president. Lenovo is acquiring Infinidat, an enterprise storage array business, with the deal expected to complete in the second half of this year. This will enable Lenovo to compete more strongly against the storage businesses of Dell, HPE, and Huawei.
It sees AI driving demand across public clouds, on-premises datacenters, private clouds, and edge computing. AI benefited the SSG unit with hardware-attached services, although revenue from non-hardware systems and services remained SSG’s strong profit engine, as it has been for 15 straight quarters.
The company said more than 46 percent of its revenues now come from non-PC sources, meaning smartphones, infrastructure, and services, up from 42 percent a year ago. It wants to drive its three businesses’ revenues and profitability higher:
The company does not present a revenue outlook for the next quarter.
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Lenovo is FIFA’s official technology partner in a sponsorship deal that includes the FIFA World Cup 2026 in Canada, Mexico, and the United States, and the FIFA Women’s World Cup 2027 in Brazil. It also has a strategic technology partnership with Formula 1 racing.
