Lenovo sees signs of recovery across technology sector – delivers quarter-on-quarter performance improvements and further accelerates AI leadership

Lenovo Group Limited and its subsidiaries have reported second-quarter results, revealing a Group revenue of US$14.4 billion and a net income of US$273 million, based on non-Hong Kong Financial Reporting Standards (HKFRS). The gross profit margin reached a record high of 17.5% for the second quarter, with the non-PC businesses contributing 40% to the Group revenue, showing a three-point increase from the previous year.

The technology sector is exhibiting signs of recovery, and Lenovo attributes its quarter-on-quarter performance improvements to effective strategy execution, operational excellence, and ongoing investments in innovation. The company is optimistic about its future growth, emphasizing its unique position in artificial intelligence (AI) with a hybrid AI model, a comprehensive portfolio from pocket to cloud, a robust ecosystem, partnerships, and a growing array of AI technologies.

Financial highlights for Q2 FY 23/24 include a 16% decrease in Group revenue compared to the previous year, amounting to US$14,410 million. Pre-tax income and net income (profit attributable to equity holders) experienced a 50% and 54% reduction, respectively. Lenovo’s Board of Directors declared an interim dividend of 8.0 HK cents per share.

Lenovo’s Chairman and CEO, Yuanqing Yang, expressed confidence in the company’s ability to achieve year-on-year growth soon, attributing the positive trajectory to intelligent transformation strategies and strengthened AI ecosystems.

The company’s commitment to AI leadership is evident, with a focus on the vision of ‘AI for All.’ Lenovo aims to capitalize on the exponential growth in AI, leveraging its pocket-to-cloud portfolio, ecosystem, partnerships, and a growing range of AI technologies. A notable investment of US$1 billion in AI-driven innovation underscores the company’s dedication to sustainable growth.

In terms of business segments, the Solutions and Services Group (SSG) achieved record revenue and profit, with managed services and project and solutions services constituting 56% of SSG’s revenue. The Infrastructure Solutions Group (ISG) faced challenges due to macro-economic industry headwinds but excelled in storage, making Lenovo the third-largest storage provider globally. The Intelligent Devices Group (IDG) maintained its global No.1 position for both PC shipments and activations despite a year-on-year revenue decline to US$11.5 billion.

Looking ahead, Lenovo plans to leverage generative AI for the launch of next-generation AI devices, including an AI PC next year. The company remains committed to technology innovation, sustainable growth, and addressing environmental, social, and governance (ESG) priorities. Lenovo’s ESG achievements, such as inclusion in the 2023 Hang Seng Corporate Sustainability Index and ‘Champion’ status in the Canalys Global Sustainability Ecosystems Leadership matrix, highlight its commitment to sustainability and responsible business practices.