Lenovo Reports Impressive Growth in Fiscal Year 2024/25
Lenovo Group Limited has released its financial results for the fourth quarter and full fiscal year 2024/25, revealing substantial growth in both revenue and profits. The tech giant reported a remarkable 21% increase in annual revenue, reaching $69.1 billion—marking the second-highest annual revenue in its storied history.
Financial Highlights
The fourth quarter results further illuminate Lenovo’s upward trajectory. Revenue surged 23% year-over-year to $17 billion, with all business units posting double-digit growth. Net income, calculated on a non-Hong Kong Financial Reporting Standards (non-HKFRS) basis, rose by 36% to $1.4 billion. Key factors contributing to this robust performance include a diversified business model and a significant shift towards non-PC revenue sources, which now account for 47% of total revenue—a nearly five-point increase from the previous year.
Diverse Business Growth
Lenovo’s strengths were reflected across its various business groups. Each sector met its strategic objectives, signaling resilient operations in a competitive landscape. Geographically, every sales region experienced double-digit revenue growth, showcasing the effectiveness of Lenovo’s multifaceted strategy and solid global presence.
The company attributes its successful performance to a well-executed strategy reinforced by an integrated operational framework. This includes everything from design to manufacturing, supported by an ODM+ manufacturing model and a robust supply chain. Lenovo’s extensive manufacturing footprint—boasting over 30 sites in 11 countries—enables it to remain agile and responsive to market changes.
Commitment to Innovation
Lenovo’s dedication to innovation remains unwavering, with R&D investments increasing by 13% year-on-year to $2.3 billion. The past year has been marked by key milestones in hybrid AI, including the launch of AI-powered PCs, securing Lenovo’s top position globally in the Windows AI PC sector. The company also introduced advanced technologies like foldable smartphones and AI-driven enterprise solutions, affirming its commitment to pushing the boundaries of technological capabilities.
Yuanqing Yang, Chairman and CEO of Lenovo, emphasized the importance of this year’s achievements in navigating macroeconomic uncertainties. "This has been one of our best years yet," he stated, highlighting the strategic focus on hybrid AI as a foundational driver for both personal and enterprise advancements. "Our operational excellence and continued investment in innovation will not only sustain but strengthen our competitiveness."
Segment Performance Review
Intelligent Devices Group (IDG): A Leader in Personal AI
The Intelligent Devices Group, which includes Lenovo’s PC and smartphone sectors, reported a 13% revenue growth to $50.5 billion. The group’s operating margin also saw historical highs, exceeding 7%. Notably, Lenovo has established a dominant position in the AI PC market and achieved significant growth in its smartphone business, particularly in Asia Pacific and EMEA regions. Innovative product launches, including the ThinkBook Plus Gen 6 and the latest Motorola razr with AI capabilities, have further bolstered its market presence.
Infrastructure Solutions Group (ISG): Profitability and Growth
The Infrastructure Solutions Group has experienced remarkable growth, with revenues escalating 63% year-on-year to $14.5 billion. This segment has successfully achieved profitability in the latter half of the fiscal year, driven by demand for AI infrastructure and innovative cooling solutions. As ISG continues to refine its product offerings, it aims to enhance operational resilience while ensuring balanced growth across various markets.
Solutions and Services Group (SSG): Transformation Engine
The Solutions and Services Group solidified its role as a pivotal transformation engine within Lenovo, recording a 13% revenue increase to $8.5 billion. This division has excelled in delivering high-margin solutions, including AI-driven services that are gaining traction in the enterprise market.
Looking Ahead
As Lenovo prepares for the future, the company’s strategic focus on innovation combined with a resilient supply chain positions it advantageously to enhance its market competitiveness. The Board of Directors has declared a final dividend of 3.9 US cents per share for the fiscal year ending March 31, 2025, reflecting a commitment to shareholder value amid impressive financial performance.
In an evolving tech landscape fraught with challenges, Lenovo’s blend of strategic foresight and dedication to innovation sets a solid foundation for sustained growth and leadership. With a commitment to driving forward its hybrid AI strategy, Lenovo aims to continue its trajectory of remarkable growth, maintaining its status as a leading player in the global technology arena.
