Lenovo released its latest financial report:
Revenue increased by nearly 24% year-on-year, and the hybrid AI layout has achieved real results.
On November 15, Lenovo Group announced the second quarter results of the 2024-2025 fiscal year ending September 30, 2024: revenue of RMB 127.9 billion, a year-on-year increase of nearly 24%, and all main business revenues achieved strong double-digit growth; according to non-Hong Kong financial reporting standards, net profit was nearly RMB 2.9 billion, a year-on-year increase of 48%; revenue from businesses other than PC accounted for nearly 46%.
The group's core business, the personal computer business, continued to outperform the market: revenue increased by 12.1% year-on-year, and the gap with the second place in global market share further widened by more than 4 percentage points. AI PC also performed better than expected: in the Chinese market, AI PCs with five features currently account for double-digit shipments of notebook computers in China.
The growth momentum of the group's smartphone business was further strengthened in this fiscal quarter: revenue increased by 43% year-on-year, setting a record high quarterly sales volume in history and achieving the highest market share in ten years. According to the latest statistics from IDC, Lenovo's mobile phone business has entered the top 5 in total revenue in other markets around the world, except for the Chinese market. In the second quarter, the vertical folding screen market share ranked first in the world. Following the personal computer business, the successful turnaround of the mobile phone business fully demonstrated the Group's ability to "turn stones into gold" in restructuring and reshaping declining businesses. In the 2023/24 fiscal year, the Group formulated a "three-year growth plan", that is, to reach the top three positions in other global markets outside the Chinese market within three years, and is now steadily moving towards the expected goal.
The global investment boom in the field of artificial intelligence has strongly driven the performance of the Infrastructure Business Group (ISG). In this fiscal quarter, ISG's overall revenue was RMB 23.7 billion, a year-on-year increase of 65%, setting a record high for the second consecutive quarter, and the combined revenue of storage, software and services businesses increased by 35% year-on-year. While the ISG business is steadily moving towards the break-even point, the Group is confident that it will replicate the successful path of the PC and mobile phone businesses.
The new opportunities in the hybrid AI era have consolidated the position of the Solution Services Business Group (SSG) as the new growth engine of the Group. In the second fiscal quarter, SSG's overall revenue was RMB 15.5 billion, a year-on-year increase of nearly 13%, and an operating profit margin of more than 20%. This is the 14th consecutive quarter that SSG has maintained strong double-digit revenue growth. Among them, the revenue from operation and maintenance services, projects and solution services accounted for nearly 60% of SSG's overall revenue, an increase of 3 percentage points from the same period last year.
"Last quarter, Lenovo's overall revenue achieved strong and sustainable accelerated growth, and all main businesses grew again. This is due to the strong execution of a clear strategy, continued investment in innovation, operational excellence and global layout, as well as the differentiated competitive advantages created by seizing the opportunities of hybrid artificial intelligence, and the leading position established." Lenovo Group Chairman and CEO Yang Yuanqing said: "Looking forward, Lenovo will continue to promote technological innovation in hybrid artificial intelligence, and we are confident that we will continue to achieve accelerated growth and improved profitability in the second half of the fiscal year."
Looking forward, Lenovo will continue to build a more balanced cloud infrastructure business and enterprise infrastructure business, as well as AI and traditional server businesses through operational excellence and continuous innovation, to build a product portfolio across cloud, local, edge and other fields. At the same time, continue to use industry-leading liquid cooling technology to meet the new needs of artificial intelligence workload growth with both performance and energy efficiency. During Lenovo Tech World in October, Lenovo launched the sixth-generation Neptune liquid cooling solution, which can reduce power consumption by up to 40%. In addition, Lenovo continues to develop key strategic partnerships to jointly develop intelligent infrastructure solutions.
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