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Lenovo Group: Q4 and Full Year Financial Results 2023/24

Lenovo’s growth accelerates in Q4 FY 23/24 - capturing hybrid AI opportunities

HONG KONG — (BUSINESS WIRE) — May 22, 2024Lenovo Group (HKSE: 992) (ADR: LNVGY) today announced Q4 and full-year results for fiscal year 2023/24. After resuming growth in Q3, the Group reported year-on-year revenue growth across all business groups in Q4, with Group revenue increasing nearly 10% year-on-year to US$13.8 billion, net income doubling year-on-year to US$248 million, and non-PC revenue mix reaching a historic high of 45%. The Group’s Q4 and overall 2nd half performance demonstrates how Lenovo has navigated the past year’s industry downturn, captured the tremendous growth opportunities presented by AI, and accelerated momentum across the business. Revenue for the full fiscal year was US$56.9 billion, and net income was US$1 billion. From the second half of the fiscal year, Lenovo achieved year-on-year revenue growth of 6% and net margin recovered from a first half year-on-year decline to flat in the second half.

The Group is leading in an era of unprecedented AI opportunities with its pocket-to-cloud portfolio, strong ecosystem and partnerships, and full-stack AI capabilities. Since announcing its AI strategy in October 2023 at its annual Tech World event, Lenovo has launched its first wave of AI PCs as well as AI capabilities covering other smart devices, smart infrastructure, and smart solutions and services. The Group expects the AI PC – which is defined as equipped with a personal AI agent based on natural interactions, heterogeneous computing, personal knowledge base, connected to an open AI application ecosystem, and with privacy and security protection – to grow from its current premium position to mainstream over the next three years, driving a new refresh cycle for the industry. Hybrid AI is also driving greater demand for AI infrastructure and customers are increasingly asking for customized AI solutions and services, particularly consulting, design, deployment and maintenance of AI.

Lenovo’s continued commitment and investment in innovation, focused on its anchor technologies of AI and computing, is helping it realize its vision of ‘Smarter AI for All’ and further lead in the AI era. In the past fiscal year, the Group achieved a record high percentage for both R&D headcount at 26.2%, as well as a R&D expense to revenue ratio of 3.6%.

Looking ahead, the Group is encouraged by its performance and momentum in the 2nd half of the fiscal year and is optimistic about the outlook for the year ahead where it will continue to lead in AI, invest in innovation, and seize on the unprecedented opportunities presented by hybrid AI as it accelerates growth and sustainable profitability increases across its entire business.

Lenovo’s Board of Directors declared a final dividend of 3.8 US cents or 30.0 HK cents per share for the fiscal year ended March 31, 2024.

Chairman and CEO quote – Yuanqing Yang:

“Lenovo’s fourth quarter results clearly demonstrate that we have not only resumed growth across all our businesses but that our business momentum is accelerating, driven by the unprecedented opportunities brought by Hybrid AI. Fueled by our intelligent transformation strategy and years of investment in innovation, we’ve built a full stack of AI capabilities and are at the forefront of pioneering the revolutionary AI PC market. Our vision in the AI era is Smarter AI for All. Supported by our strong execution, persistent innovation, operational excellence, and ecosystem partnerships, we are confident we can deliver sustainable growth and profitability improvement in the coming year.”

Financial Highlights:

 

Q4 23/24

US$ millions

Q4 22/23

US$ millions

Change

 

FY 23/24

US$ millions

FY 22/23

US$ millions

Change

 

 

Group Revenue

13,833

12,635

9%

 

56,864

61,947

(8%)

 

Pre-tax income

309

130

137%

 

1,365

2,136

(36%)

 

Net Income

(profit attributable to equity holders)

248

114

118%

 

1,011

1,608

(37%)

 

Net Income

(profit attributable to equity holders – non-HKFRS) [1]

218

284

(23%)

 

1,038

1,878

(45%)

 

 

Basic earnings per share (US cents)

2.02

0.95

1.07

 

8.41

13.50

(5.09)

 

Solutions and Services Group (SSG): Strong growth and profitability, driving AI solutions

Q4 and full year FY23/24 performance:

Opportunities and Sustainable Growth:

Infrastructure Solutions Group (ISG): Regained momentum

Q4 and full year FY23/24 performance:

Opportunities and Sustainable Growth:

Intelligent Devices Group (IDG): Solid growth, strengthened leadership

Q4 and full year FY23/24 performance:

Opportunities and Sustainable Growth:

ESG and corporate highlights

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, restructuring and other charges, gain on remeasurement of a written put option liability; and the corresponding income tax effects, if any.

About Lenovo

Lenovo is a US$57 billion revenue global technology powerhouse, ranked #217 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 pocket-to cloud 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

LENOVO GROUP

FINANCIAL SUMMARY

For the quarter and year ended March 31, 2024

(in US$ millions, except per share data)

 

 

Q4
FY23/24

Q4
FY22/23

 

Y/Y CHG

 

 

FY23/24

 

FY22/23

 

Y/Y CHG

Revenue

 

 

13,833

12,635

9%

 

56,864

61,947

(8)%

Gross profit

 

 

2,428

2,143

13%

 

9,803

10,501

(7)%

Gross profit margin

 

 

17.6%

17.0%

0.6 pts

 

17.2%

17.0%

0.2 pts

Operating expenses

 

 

(1,939)

(1,852)

5%

 

(7,797)

(7,832)

(0)%

R&D expenses
(included in operating expenses)

 

 

(532)

(550)

(3)%

 

(2,028)

(2,195)

(8)%

Expenses-to-revenue ratio

 

 

14.0%

14.7%

(0.7) pts

 

13.7%

12.6%

1.1 pts

Operating profit

 

 

489

291

68%

 

2,006

2,669

(25)%

Other non-operating income/(expenses) – net

 

 

(180)

(161)

12%

 

(641)

(533)

20%

Pre-tax income

 

 

309

130

137%

 

1,365

2,136

(36)%

Taxation

 

 

(56)

(24)

124%

 

(263)

(455)

(42)%

Profit for the period/year

 

 

253

106

140%

 

1,102

1,681

(34)%

Non-controlling interests

 

 

(5)

8

N/A

 

(91)

(73)

26%

Profit attributable to equity holders

 

 

248

114

118%

 

1,011

1,608

(37)%

Profit attributable to equity holders – non-HKFRS[1]

 

 

218

284

(23)%

 

1,038

1,878

(45)%

Earnings per share (US cents)
Basic
Diluted

 


2.02
1.95


0.95
0.93


1.07
1.02

 


8.41
8.05


13.50
12.74


(5.09)
(4.69)

 



Contact:

Hong Kong – Angela Lee, angelalee@lenovo.com, +852 2516 4810
London – Charlotte West, cwest@lenovo.com, +44 7825 605720
Zeno Group - LenovoWWcorp@zenogroup.com