Lenovo Revenues Jump 20 Percent as PC Market Recovery Continues

The world’s biggest maker of PCs delivered a net income of $253 million on revenues of $15.4 billion in the quarter ending June 30. Those figures represent gains of 38 percent and 20 percent year-over-year (YOY), respectively. More importantly, this is the third consecutive quarter of revenue growth for Lenovo, after five straight quarters of decline.

“Lenovo achieved new performance milestones in the fiscal quarter ended June 30, 2024, capitalizing on the unprecedented opportunities brought by hybrid AI and its continued success in service-led transformation,” the Lenovo announcement explains. “Revenue grew by 20 percent, the first double-digit increase in the last two and a half years. All three business groups increased their revenue by double digits, propelled by strong performances in infrastructure, premium products, and services.”

Lenovo’s biggest product group is the Intelligent Devices Group (IDG), it’s responsible for the company’s core PC products, and it delivered a profit of $828 million on $11.4 billion in revenues, up 11 percent YOY, or 74 percent of Lenovo’s total revenues in the quarter. Lenovo credited “new products, commercial sales recovery, and demand shift towards high value-added models” for the gains, and it noted that “favorable market feedback on its new AI PC models created positive trends in average selling prices and premium sales mix.”

“The introduction of its first Arm-based AI PC, powered by Snapdragon X Elite from Qualcomm, marked an important milestone in Lenovo’s AI journey, paving the way for more opportunities in new and premium devices,” Lenovo said. “AI PCs saw high activation rates among new users and received positive feedback. Premium PC sales grew by 21 percent.” Indeed, Lenovo PC sales outpaced its two biggest rivals in the quarter, according to IDC, with the firm selling 14.7 million units, up 3.7 percent YOY. Lenovo now controls about 22.5 percent of the market, compared to 21.3 percent for HP and 16.4 percent for Dell.

Almost 70 percent of Lenovo’s revenues from PCs came from commercial PC sales, which it says had a positive impact on average selling prices.

Lenovo’s Infrastructure Solutions Group (ISG) delivered an operating loss of $60 million on ISG $3.2 billion in revenues. And its Solutions and Services Group (SSG) added a record $361 million profit on $1.9 billion in revenues. ISG designs and markets servers and AI infrastructure products, while SSG provides what Lenovo calls AI-empowered services and solutions.

Looking ahead, Lenovo expects the PC market recovery to continue.

“The adoption of hybrid AI is expected to propel global PC market growth and lead to a long-term recovery surpassing pre-pandemic levels,” the firm noted. “AI PCs represent a major inflection point for the industry, initiating a new product cycle for commercial users. It is projected by a third-party research firm that nearly 60 percent of annual PC shipments will incorporate AI features by 2027, presenting new growth opportunities for [our] differentiated and enhanced devices.”