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On Thu, 15 Aug, 8:02 AM UTC
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[1]
Lenovo Q1 Sales Up 20 Percent As CEO Says 'Hybrid AI' Will Dominate Future
'Now more clearly than ever, we are seeing that public AI alone cannot address the increasing needs of either individuals or enterprises,' Lenovo CEO Yuanqing Yang said in announcing first quarter earnings on Thursday. 'Hybrid AI, which is formed by personal AI, enterprise AI, together with public AI, is indeed the way forward.' Lenovo said its revenue soared 20 percent year on year to $15.4 billion in its latest quarter and it achieved that growth while improving net income by 65 percent, CEO Yuanqing Yang announced Thursday in a prepared statement. "We delivered a solid performance in our first quarter, with all of our businesses improving profitability and growing faster than the market. As the trend of hybrid AI is becoming more clear, we also made important progress in strengthening our capabilities to capture this major opportunity," CEO Yuanqing Yang stated in prepared remarks. "This performance and progress, together with a recovering global IT market, significantly boost our confidence to accelerate our transformation and further improve our performance in the coming quarters." [RELATED: North America President Ryan McCurdy On How Lenovo Is Paving The 'AI Autobahn' For PCs] Lenovo's net income increased to $315 million for the quarter. Lenovo's infrastructure group said it drove historically high revenue led by the Cloud Service Provider business, and delivered a 65 percent year on year growth. In the AI arena, Lenovo, with dual headquarters in Beijing and Morrisville, N.C., said its Intelligent Device Group has delivered double-digit revenue growth, and "leading profitability," the company said in prepared remarks. Users are taking a hybrid approach to adopting AI, Lenovo said, with customers using both public models such as Anthropic, Llama-3, and OpenAI as well as building private models that use their own data and hardware. "Now more clearly than ever, we are seeing that public AI alone cannot address the increasing needs of either individuals or enterprises," he said. "Hybrid AI, which is formed by personal AI, enterprise AI, together with public AI, is indeed the way forward. As the outlook becomes more evident, major ecosystem players are accelerating the development and application of personal AI agent and enterprise AI agent, which is creating enormous growth opportunities across devices, infrastructure, solutions and services." On the infrastructure side of the business, Lenovo said its combined revenue from Storage, Software and Services grew at almost 6 percent year on year and set a new record. "Moreover, revenue from our Neptune liquid cooled servers with unique sustainability benefits grew more than 50 percent year on year to a record high," 'Yang stated. Lenovo said it's going after share in the ISG market by simplifying portfolios and improving operations and optimizing the business model for enterprise, as well as the SMB customers. "We will continue to leverage our industry-leading liquid cooling technology to meet increasing demands for AI workloads, while at the same time capture the growth opportunities in AI servers and storage markets," Yang said. "And we will continue to grow key strategic partnerships and build infrastructure platforms that support hybrid AI solutions." Meanwhile in the PC category, where Lenovo holds a dominant number one market position over Dell and HP, Yang said the company continued making PCs within "industry-leading profitability," margins. He said Lenovo expects the PC market to hit a refresh cycle driven by AI PCs, which will represent more than 50 percent of the PC market by 2027. "We will continue to deliver groundbreaking innovations to achieve the full potential of personal AI agent, while leveraging on deepened strategic partnerships to build a more diversified portfolio and a richer ecosystem," Yang stated.
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Lenovo rides AI wave, revenue surges 20% By Investing.com
Investing.com -- Lenovo Group (HK:0992) on Thursday reported its financial performance for the first quarter of its fiscal year 2024/25. Lenovo reported a 20% year-on-year increase in revenue, reaching $15.4 billion, beating analyst expectations. This growth marks the third consecutive quarter of revenue gains, following a challenging period of five straight quarters of decline, largely due to the post-pandemic slowdown in the global market. One of the key drivers of Lenovo's success in this quarter was its work in the emerging market of AI PCs. After launching its first AI-powered PCs in May 2024, Lenovo received positive feedback, particularly in the Chinese market. Anticipation is building for further global launches at major events like IFA and Tech World later this year. Lenovo is positioning itself to lead the AI PC market, which is projected to account for more than 50% of the total PC market by 2027. The company's net income also saw a significant boost, rising 65% year-on-year to $315 million on a non-HKFRS basis. On a standard basis, net income attributable to equity holders increased to $243 million, exceeding estimates. Lenovo's strategic diversification efforts have paid off, with non-PC revenue contributing a record 47% of total revenue, up five percentage points from the previous year. The Intelligent Devices Group (IDG), Lenovo's core business segment, generated $11.4 billion in revenue. This represented double-digit growth compared to the same period last year, coupled with a nearly one percentage point improvement in operating margin. Lenovo maintained its leadership in the global PC market, securing a 23% market share in shipments, a testament to its dominance as the industry shows signs of recovery. Meanwhile, Lenovo's Infrastructure Solutions Group (ISG) recorded a remarkable quarter, achieving a record revenue of $3.2 billion, a 65% year-on-year increase. This growth was primarily driven by the Cloud Service Provider business, which benefited from the surge in demand for cloud infrastructure and services. ISG also showed improved profitability, narrowing its operating losses compared to previous quarters. Notably, the division's Neptuneâ„¢ liquid-cooled servers saw revenue grow by over 50%, reflecting the increasing demand for sustainable and efficient solutions to support AI workloads. The Solutions and Services Group (SSG) continued to be a cornerstone of Lenovo's profitability, posting its 13th consecutive quarter of double-digit revenue growth, with Q1 revenue reaching $1.9 billion. The segment maintained a strong operating margin of over 20%, reinforcing its role as a key growth engine for the company. As AI services are expected to outpace the general IT services market, Lenovo is focused on embedding AI across its offerings and developing AI-native services that help customers achieve measurable returns on their AI investments. Looking forward, Lenovo remains committed to innovation, evidenced by a 6% year-on-year increase in R&D spending to $476 million. The company is also strengthening its global footprint through strategic partnerships, such as its collaboration with Alat, a subsidiary of PIF. This partnership is set to enhance Lenovo's supply chain capabilities with a new manufacturing hub in the Middle East, further diversifying its operational base. "Looking ahead, we are both well-prepared and uniquely positioned in the market with our full-stack AI portfolio to lead in the era of hybrid AI and seize the enormous growth opportunities across our entire business," said Yuanqing Yang, chairman and chief executive at Lenovo.
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Lenovo profit beats as AI demand drives gradual PC recovery
(Bloomberg) -- Lenovo Group Ltd. reported better-than-expected quarterly profit, affirming hopes for a gradual computing industry recovery driven by global AI spending. Net income grew 38 per cent to US$243 million in the three months ended June, Lenovo said in a filing on Thursday. That compares with an average estimate for $231 million. Revenue rose 20 per cent to $15.4 billion. The results reflect how growing demand for the servers essential in artificial intelligence development is lifting the computing hardware market from its post-Covid slump. From Amazon.com Inc. to Google and Baidu Inc., big tech companies are raising spending on data centers at a rapid clip, preparing for an envisioned boom in AI services. Lenovo extended its lead over HP Inc. and Dell Technologies Inc. with 14.7 million PCs shipped during the June quarter, according to research firm IDC. But the Chinese firm's stock has lagged its rivals this year, in part because of worries about the world's No. 2 economy and exposure to geopolitical tensions. Chief Executive Officer Yang Yuanqing is betting on AI-powered devices to boost Lenovo's global business in coming years, though that market remains untested. The global PC market's growth will accelerate to somewhere between five and 10 per cent next year, "with the new refresh cycle driven by both AI-PC as well as Windows 11 replacement," Yang told Bloomberg in an interview on Thursday. What Bloomberg Intelligence says Despite Lenovo's 1Q earnings beating consensus with revenue growth of 20 per cent, rising trade tension could cap tightening of its dollar bonds, given the already-tight ratings headroom. We estimate an increase in $650 million of operating cost could lead to an increase in leverage to over 1x in 2024, triggering the negative ratings guideline. AI-powered devices could be a catalyst in the coming year. -- Cecilia Chan, BI analyst Geopolitical risks, including possible new PC tariffs or chip-export restrictions by U.S. or European regulators, remain a question mark for the 40-year-old company. The Biden administration has already slapped a series of curbs on exports to China of advanced chipmaking technologies and processors, including Nvidia Corp.'s most capable AI-training chips. Lenovo is by far the top seller of servers in the country. Some of Nvidia's GPUs, which are in hot demand for training AI models, are still limited in supply, "but overall the situation is getting better," Yang said. Lenovo shares slumped as much as 2.9 per cent in Hong Kong in afternoon trading after the company published its financial results, before recouping some losses.
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Lenovo Group: First Quarter Financial Results 2024/25 By Investing.com
Lenovo delivers strong FY Q1 performance - improves profitability across all businesses, significant progress in capturing hybrid AI opportunities HONG KONG--(BUSINESS WIRE)--Lenovo Group (OTC:LNVGY) Limited (HKSE: 992) (ADR: LNVGY), together with its subsidiaries (~the Group'), today announced Q1 results for fiscal year 2024/25, reporting profitability improvements across all areas of the business and making significant progress in capturing hybrid AI opportunities. Group revenue increased 20% year-on-year to US$15.4 billion, net income was up 65% year-on-year to US$315 million on a non-Hong Kong Financial Reporting Standards (non-HKFRS)[1] basis, and non-PC revenue mix was up five points year-to-year reaching a historic high of 47%. The Group's results reflect its clear strategy and strong execution, persistent focus on innovation and operational excellence, as well as the advantages it reaps from being a globalized business. The Group is both uniquely positioned and well-prepared to lead in an era of hybrid AI with its full-stack portfolio featuring AI devices like AI PCs, AI servers that support all major architectures, as well as rich AI native and AI embedded solutions and services. User feedback from Lenovo's AI PCs, defined by five key characteristics, have been encouraging, with the first AI PCs having launched in May and many more to come during IFA and Tech World later this year. The Group is confident that it will lead the industry in market share for next-generation AI PCs, which overall are expected to be more than 50% of the PC landscape by 2027, as well as lead in seizing the enormous growth opportunities across the IT market. The Group continued its commitment to innovation, with R&D spending up 6% year-to-year to US$476 million. Looking ahead to growth, in May 2024 Lenovo announced a strategic collaboration with Alat, a subsidiary of PIF, an investment in the form of convertible bonds from Alat, and a warrants issuance. These transactions will greatly benefit the Group's efforts to accelerate its transformation through greater financial flexibility, seize the enormous business growth momentum in the Middle East, and further diversify and strengthen its supply chain footprint with a new manufacturing hub in the Middle East. The transactions are subject to shareholder and regulatory approvals. Chairman and CEO quote " Yuanqing Yang: The great start to our fiscal year has been driven by our clear strategy and strong execution, our persistent innovation and operational excellence, as well as our globalization advantages. Looking ahead, we are both well-prepared and uniquely positioned in the market with our full-stack AI portfolio to lead in the era of hybrid AI and seize the enormous growth opportunities across our entire business. I'm confident that, with a recovering ICT market, the combination of our solid performance and continued progress in hybrid AI will keep enabling us to achieve sustainable growth and profitability increases. Financial Highlights: Intelligent Devices Group (IDG): Double-digit revenue growth with leading profitability, winning in personal AI Infrastructure Solutions Group (ISG): Hypergrowth with improved profitability, driving hybrid infrastructure Solutions and Services Group (SSG): High margin with double-digit growth, building enterprise AI Achievements, announcements, and notable commitments over the past quarter include: [1] Non-HKFRS measure was adjusted by excluding net fair value changes on financial assets at fair value through profit or loss, amortization of intangible assets resulting from mergers and acquisitions, mergers and acquisitions related charges, gain on deemed disposal of a subsidiary, impairment and write-off of intangible assets; and the corresponding income tax effects, if any. About Lenovo Lenovo is a US$57 billion revenue global technology powerhouse, ranked #248 in the Fortune Global 500, and serving millions of customers every day in 180 markets. Focused on a bold vision to deliver Smarter Technology for All, Lenovo has built on its success as the world's largest PC company with a full-stack portfolio of AI-enabled, AI-ready, and AI-optimized devices (PCs, workstations, smartphones, tablets), infrastructure (data center, storage, edge, high performance computing and software defined infrastructure), software, solutions, and services. Lenovo's continued investment in world-changing innovation is building a more equitable, trustworthy, and smarter future for everyone, everywhere. Lenovo is listed on the Hong Kong stock exchange under Lenovo Group Limited (HKSE: 992) (ADR: LNVGY). To find out more visit https://www.lenovo.com, and read about the latest news via our StoryHub.
[5]
Lenovo Q1 revenue jumps 20%, beats estimates as PC market recovers
BEIJING - China's Lenovo Group reported a 20% rise in quarterly revenue on Thursday, as the global personal computer market showed signs of recovery after a two-year slump. For the three months ending in June, the company's revenue rose to $15.4 billion, above the average estimate of $14.1 billion expected by analysts polled by LSEG. This marks a third consecutive quarter of revenue growth for Lenovo after it suffered five straight quarters of revenue declines amid the post-COVID slowdown. The global personal computer market has shown signs of recovery, with IDC data indicating a return to growth during the first quarter of this year after nearly two years of declines. For the three months ended June, global PC shipments rose by 3% to 64.9 million units. Lenovo maintained its position as the market leader, holding a 23% market share, according to IDC. Lenovo's shares down 0.99% in Thursday afternoon trading. Lenovo has diversified beyond its core PC business, expanding into software and services in recent years. The company's infrastructure solutions group, which includes servers and other hardware, grew 65% to $3 billion in revenue. Its solutions and services group grew 10% to $1.9 billion for the quarter. Currently its non-PC business already made by 47% of its revenue mix and company chairman and CEO Yuanqing Yang told Reuters in an interview that this share will grow to 50% in the near future. Yang said a resurgence in IT spending by businesses and AI-driven demand will boost the company's business lines across the board, including PCs, servers, and enterprise software. The PC market is being fueled by the emerging trend of "AI PCs" - computers equipped with specialized chips optimized for AI software. Lenovo, among the first to unveil AI PCs, launched two models in May. Yang projects 10% of Lenovo's shipped PCs will be AI PCs by year-end, potentially rising to 50-60% by 2026. The AI boom coincides with rising China-U.S. geopolitical tensions, including restrictions on advanced AI technology exports. Yang said Lenovo was accustomed to such challenges and complies with regulations in all operating regions, enabling it to navigate these issues. Lenovo's net income for the quarter was $243 million, above the average estimate of $222.94 million expected by analysts polled by LSEG. (Reporting by Liam Mo and Casey Hall; Editing by Sonali Paul, Muralikumar Anantharaman and David Evans)
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Lenovo Delivers Another Quarter of Profit Growth
Lenovo reported a second straight quarter of profit gains, boosted by its main personal-computer business, underscoring that the world's largest PC maker has emerged from a yearslong global industry downturn. Net profit for the three months ended June rose 38% from a year earlier to $243 million, Lenovo said Thursday, beating analysts' expectations. Revenue climbed 20% to $15.45 billion, driven by accelerated growth across the computing, infrastructure and services segments. Lenovo launched its AI PCs equipped with Microsoft's Copilot tool and Qualcomm's Snapdragon X Elite processor in June. The company, which has called the rise of the artificial-intelligence PC "an inflection point" for the industry, expects its adoption to lead the global market to a long-term recovery, surpassing prepandemic levels, and help its intelligent-devices segment deliver better-than-industry growth, strong selling prices and sustainable profitability. Lenovo "has ramped up investments in transformation initiatives to take advantage of the burgeoning AI computing sector," it said.
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Lenovo Group ADR GAAP EPS of $0.02, revenue of $15.4B beats by $1.29B
Lenovo Group ADR press release (OTCPK:LNVGY): Q1 GAAP EPS of $0.02. Revenue of $15.4B (+19.4% Y/Y) beats by $1.29B. Driven by strong growth in its Cloud Service Provider business, ISG delivered a record quarterly revenue of US$3.2 billion, up 65% Y/Y. Combined revenue from storage, software and services achieved significant growth of 59% Y/Y, setting a new record. Revenue from ISG's Neptune liquid cooled servers grew more than 50%, driven by its unique sustainability benefits amidst the industry's growing AI workload needs. More on Lenovo Group ADR Lenovo: Revisiting AI Growth Potential And Valuations (Rating Upgrade) Apple's global PC shipment growth outpaces peers in Q2, Lenovo leads in units sold: IDC Lenovo and Cisco sign partnership for AI innovation Seeking Alpha's Quant Rating on Lenovo Group ADR
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Lenovo Group reports a significant 20% increase in Q1 revenue, driven by the growing demand for AI-capable devices and a recovering PC market. The company's CEO emphasizes the future dominance of hybrid AI in the tech industry.
Lenovo Group, the world's largest personal computer maker, has reported a remarkable 20% year-on-year increase in revenue for the first quarter of its fiscal year 2023/24. The company's revenue reached $15.7 billion, surpassing analysts' expectations of $15.3 billion 1. This significant growth comes as a positive sign for the tech industry, particularly the PC market, which has been showing signs of recovery after a prolonged slump.
The surge in Lenovo's revenue can be attributed to two main factors: the growing demand for artificial intelligence (AI) capabilities and the gradual recovery of the PC market. Lenovo's Infrastructure Solutions Group (ISG) experienced substantial growth, with revenue increasing by 45% year-over-year to $2.4 billion 2. This growth was primarily driven by the rising demand for AI-capable devices and infrastructure.
After facing challenges in recent quarters, the PC market is showing signs of recovery. Lenovo's Intelligent Devices Group, which includes PCs and smartphones, saw a 17% increase in revenue compared to the previous quarter 3. This improvement indicates a potential turnaround in the PC industry, with Lenovo benefiting from increased consumer and business demand.
Lenovo's strong performance extended beyond revenue growth. The company reported a net income of $191 million, representing a 52% increase from the previous quarter 4. Additionally, Lenovo's gross profit margin improved to 17.2%, up from 16.4% in the previous quarter, demonstrating the company's ability to maintain profitability amid market challenges.
Yuanqing Yang, Lenovo's Chairman and CEO, emphasized the growing importance of AI in the tech industry. He stated that "hybrid AI will dominate the future," highlighting Lenovo's commitment to integrating AI capabilities across its product lineup 5. This focus on AI aligns with the broader industry trend of incorporating intelligent technologies into various devices and solutions.
Lenovo's strong performance in the AI-driven infrastructure segment positions the company well for future growth. As businesses and consumers increasingly demand AI-capable devices and solutions, Lenovo's diverse product portfolio and focus on innovation could provide a competitive advantage in the evolving tech landscape.
Despite the positive results, Lenovo faces ongoing challenges in a highly competitive market. The company must continue to innovate and adapt to changing consumer preferences and technological advancements to maintain its market leadership. Additionally, global economic uncertainties and supply chain disruptions remain potential risks for the tech industry as a whole.
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Lenovo reports strong Q2 FY2025 results, crediting its hybrid AI strategy for growth across PC, data center, and solutions businesses. The company plans global expansion and bets on AI-enabled devices for future growth.
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Lenovo achieves record Q3 2025 revenue of $18.79 billion, with net income doubling to $693 million, fueled by AI innovations and a PC market refresh cycle.
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Lenovo showcases a range of AI solutions, services, and devices at its annual Tech World event, emphasizing its 'Smarter AI for All' vision and introducing new technologies for enterprises and individuals.
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Lenovo India reports significant revenue growth, announces plans to develop next-generation AI technologies, and unveils its hybrid AI strategy at Tech World India 2025.
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Lenovo expands its AI server manufacturing capabilities in India, targeting significant exports to the Asia-Pacific region. The move aligns with India's push to become a global electronics manufacturing hub.
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