Lenovo Group Limited (HKSE: 992) (ADR: LNVGY), together with its subsidiaries (the “Group”), today announced its fourth quarter and full-year results for the 2024/25 financial year, reporting significant increases in the Group’s total revenue and profit. For the full year, revenue increased by 21.3% year-on-year to US$69.1 billion, the Group’s second highest annual revenue in its history. Net profit increased by 36.3% year-on-year to US$1.4 billion on a non-Hong Kong Financial Reporting Standards (non-HKFRS) basis.

The Group's diversified growth engines continue to accelerate, with non-PC revenue increasing by almost five percentage points year-on-year to 47%. All business groups were healthy and strong, meeting their strategic intent and financial targets, and all sales geographies achieved double-digit revenue growth year-on-year, reflecting the strength of the Group's diversified businesses and resilient global presence.

The results were driven not only by the Group's focus on executing a clear strategy, but also by its comprehensive integrated global operations (design, demand forecasting, procurement, manufacturing, marketing, sales and services), ODM+ manufacturing model and global sourcing/local delivery model. Over the past 20 years of operating a global business, Lenovo has established a manufacturing presence that boasts over 30 manufacturing facilities (either in-house or outsourced) in 11 different markets around the world. The combination of these gives the Group maximum flexibility and resilience to navigate through uncertainties and be more adaptable to market conditions.

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Lenovo continues to prioritize investment in innovation, with R&D spending increasing 131% year-over-year to $2.3 billion. Over the past year, the Group made several key announcements, investments and milestones as part of its hybrid AI strategy. These include the launch of AI PCs, where Lenovo is now the number one global market for Windows AI PCs; the launch of the first foldable phone with Moto AI ; strong growth in the AI server business; the creation of core solutions and service capabilities with Lenovo Hybrid AI Advantage , and most recently the launch of the group's first personal and enterprise-based AI superagents at their Tech World event in Shanghai.

Lenovo remains confident that their focus on innovation and hybrid AI, coupled with their globally balanced operations and a flexible and resilient supply chain, will not only maintain but also improve their competitiveness in the market.

Lenovo's board of directors approved a final dividend of 3.9 US cents or 30.5 HK cents per share for the fiscal year ending March 31, 2025.

Chairman and CEO quote – Yuanqing Yang:

“This has been one of our best years to date, despite significant macroeconomic uncertainty. We achieved strong revenue growth with double-digit growth across all of our business groups and sales geographies, and our profit grew even faster. Our strategy to focus on hybrid AI has led to significant advances in both personal and enterprise AI, laying a strong foundation for leadership in this AI era. With 20 years of experience in leading a global company and navigate challenges, I am confident that our operational excellence and continued investment in innovation will not only maintain but also strengthen our competitiveness.”

Financial highlights:

Group Q4 FY24/25 results: Revenue and non-HKFRS net profit increased by over 20%, double-digit revenue growth compared to previous year across all businesses

• Group revenue increased 23% year-on-year to $17 billion, with double-digit revenue growth year-on-year across all businesses.
• Net profit increased by 25% compared to the previous year on a non-HKFRS statistical basis to USD 278 million.
• Intelligent Devices Group further expanded its leadership position in the PC market, increasing the gap to the second player by another percentage point compared to the previous year. At the same time, smartphone revenue grew by 12 percentage points and its global smartphone ranking in terms of revenue is now number four in all markets outside China.
• The Infrastructure Solutions Group achieved profitability for the 2nd year and quarter in a row, with revenue growth of more than 60% compared to the previous year.
• The Solutions and Services group delivered revenue growth of 18% compared to the previous year and a record operating margin of 27%.

Full-year results:

Intelligent Devices Group (IDG): Market leadership is strengthened and gained in personal AI

Results for the financial year 24/25:

• IDG's total revenue increased by 13% year-over-year to $50.5 billion, with an operating margin of more than 7% in the historically high range.
• Personal computers expanded its market leadership position, increasing the gap to the second largest player by almost 1 point to 3.6 points, and maintained industry-leading profitability.
• AI PCs exceeded volume targets for the year, and Lenovo is now the global leader in the Windows AI PC category.
• Smartphone revenue reached its highest level since the acquisition of Motorola Mobility, with strong growth of 27% YoY. There was robust growth in the Asia Pacific markets and EMEA, which complemented the traditional strongholds in Latin America and North America.
• The tablet business achieved double-digit growth in sales volume compared to previous year.
• Innovative form factors were launched throughout fiscal 24/25 across Lenovo's portfolio of AI PCs and smartphones, including the ThinkBook Plus Gen 6 with a rollable display, the Legion Go S handheld gaming console, and the ultra-premium ThinkPad and Yoga Aura editions. Motorola extended its leadership in foldable PCs with the latest Motorola RAZR , now enhanced with Moto AI features.
• Going forward, IDG will continue to build an AI-powered application ecosystem to deliver seamless experiences across multiple devices and ecosystems, as well as further develop the AI super agents recently launched at the group's Tech World event in Shanghai.

Infrastructure Solutions Group (ISG): Hypergrowth, profitable in the 2nd and half of the year, driving hybrid infrastructure

Results for the financial year 24/25:

• ISG experienced a year of strong growth with revenue increasing 63% year-over-year to a record $14.5 billion. Operating margin improved significantly and ISG broke even in the second half of the fiscal year.
• The cloud services (CSP) business continued to scale up during the year with self-sustaining profitability.
• The Enterprise and Small Business (E/SMB) business had strong performance with revenues up 20% compared to the previous year to a record level.
• The AI server business also achieved strong growth driven by increasing demand for AI infrastructure, with Lenovo's industry-leading Neptune™ liquid cooling solutions a key driver of this rapid growth.
• Going forward, ISG will continue to execute on its CSP and E/SMB strategy, simplify its product portfolio, strengthen its go-to-market capabilities, and improve operational resilience to drive steady, balanced growth across all geographies and sustainable profitability.

Solutions and Services Group (SSG): High-margin, rapid-growth transformation engine, unlocking hybrid AI advantage

Results for the financial year 24/25:

• SSG further strengthened its role as the Group's transformation engine, with revenue growth of 13% year-on-year to USD 8.5 billion, with an operating margin of 21.1%.
• The support services business continued its steady growth and improved the hardware user experience.
• The solutions and as-a-service business grew even faster and now accounts for almost 60% of SSG's revenue, with AI offerings in particular generating momentum.
• Going forward, SSG will continue to build capacity within the Lenovo Hybrid framework AI Advantage, while expanding and deepening their portfolio of enterprise solutions.

ESG Highlights

Lenovo made progress on its environmental, social and governance commitments in fiscal year 24/25 and is on track to meet its 2030 emissions reduction targets, in line with the Science Based Targets initiative. Lenovo is proud to have received global recognition over the past year, such as the Gold Award in the Most Sustainable Companies/Organizations category in the Best Corporate Governance and ESG awards, organized by HKICPA, and the platinum medal from EcoVadis , which places Lenovo among the top 1% of all companies ranked by EcoVadis worldwide. Lenovo also received AAA recognition in MSCI's ESG Assessment Ratings and A-list recognition from CDP for Climate Change Leadership (A) and Water (A-). Embracing people of all backgrounds and abilities is essential to Lenovo’s vision to provide smarter technology for everyone. In 2024, Lenovo was named “Best Workplace for Disability Inclusion” for the fourth year in the US, with expansion to Brazil and the UK. As part of Lenovo's focus on providing Smarter AI for everyone , the company has adopted governing principles that strengthen the responsible, ethical, and secure development, deployment, and use of AI. Lenovo has strengthened its internal governance by engaging in public initiatives such as European Commission's AI Pact More information about the company's progress will be published in its annual ESG report which will be published at the end of June.

The non-HKFRS measure was adjusted by excluding net changes in real value on financial assets measured at fair value through profit or loss, amortization of intangible assets resulting from mergers and acquisitions, merger and acquisition-related costs, gain on assumed disposal of a subsidiary, impairment and amortization of intangible assets, one-time tax deductions; restructuring and other costs, gain on revaluation of an issued put option liability, change in fair value of derivative liabilities related to warrants and nominal interest on convertible bonds; and corresponding income tax effects, if any.

About Lenovo

Lenovo is a global technology company with a turnover of 69 billion USD, ranked number 248 on the Fortune Global 500 list and serves millions of customers every day in 180 markets. Focused on a bold vision to deliver smarter technique for everyone, Lenovo has built on its success as the world's largest PC company with a complete portfolio of AI-enabled, AI-ready and AI-optimized devices (PCs, workstations, smartphones, tablets), infrastructure (server, storage, edge, high-performance computing and software-defined infrastructure), software, solutions and services. Lenovo's continued investment in world-changing innovation builds a fairer, more reliable and smarter future for everyone, everywhere. Lenovo is listed on the Hong Kong Stock Exchange under Lenovo Group Limited (HKSE: 992) (ADR: LNVGY).

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