Lenovo Reports 48% Profit Surge as Hybrid AI Strategy Drives Global Growth in Q2 2024/25
Lenovo Group Limited (HKSE: 992) (ADR: LNVGY) has announced outstanding financial results for the second quarter of fiscal year 2024/25, marking a significant milestone in its global technology leadership position. The company’s strategic focus on hybrid AI and continued innovation has resulted in remarkable growth across all business segments.
Strong Financial Performance and Market Position
The technology giant reported a substantial 24% year-on-year revenue increase to US$17.9 billion, with net income climbing 48% to US$404 million on a non-HKFRS basis. This performance underscores Lenovo’s successful execution of its strategic initiatives and operational excellence.
The company’s Board of Directors has declared an interim dividend of 8.5 HK cents per share, reflecting strong confidence in Lenovo’s financial stability and future prospects.
Revolutionary Advances in Hybrid AI
Lenovo’s investment in hybrid AI technology has yielded significant returns, particularly in the Chinese market, where AI PCs have captured a double-digit share of total notebook shipments. The company’s R&D investments increased by 10% year-on-year to US$548 million, demonstrating its commitment to technological innovation.
Business Group Performance
Intelligent Devices Group (IDG) Success
The IDG division demonstrated remarkable performance with revenue reaching US$13.5 billion, a 17% year-on-year increase. Lenovo’s PC business expanded its market leadership to almost 24% market share, while both smartphone and tablet segments achieved impressive growth rates of 43% and 19% respectively.
Infrastructure Solutions Group (ISG) Achievement
The ISG division set a new quarterly record with a 65% year-on-year revenue increase to US$3.3 billion. Notable achievements include:
- Record-high combined revenue from storage, software, and services
- 48% growth in Lenovo Neptune™ liquid-cooled servers
- Continued progress toward operational breakeven
Solutions and Services Group (SSG) Excellence
SSG maintained its strong performance trajectory, marking its 14th consecutive quarter of double-digit revenue growth, reaching US$2.2 billion with an impressive 20% operating margin. Managed services and project solutions now represent nearly 60% of SSG’s revenue, showing a three-point year-on-year increase.
Future Growth Prospects and Innovation
Looking ahead, Lenovo is positioned for continued growth with several key drivers:
- AI PC market expected to represent 80% of the PC industry by 2027
- Expanding hybrid AI infrastructure solutions through strategic partnerships
- Growing IT services market with AI services leading the growth trajectory
Corporate Leadership and Sustainability
The company’s commitment to innovation and sustainability has garnered significant recognition:
- Ranked #1 on Fast Company’s list of best places to work for innovators
- Joined the European Commission’s AI Pact
- Achieved highest environmental score in the IT industry in the 2024 Hang Seng Corporate Sustainability Index
- Appointed Ashley Gorakhpurwalla to lead the Infrastructure Solutions Group
