Lenovo's Growth Accelerates in Q4 FY 23/24 - Capturing Hybrid AI Opportunities
On 23 May, 2024, Lenovo Group (HKSE: 992) (ADR: LNVGY) revealed its Q4 and full-year results for fiscal year 2023/24. Following a resurgence in Q3, the Group experienced year-on-year revenue growth across all business divisions in Q4. Group revenue surged by almost 10% year-on-year to US$13.8 billion, net income doubled year-on-year to US$248 million, and the non-PC revenue mix hit a record high of 45%. This outstanding performance in Q4 showcases how Lenovo successfully navigated the industry downturn of the past year, seized growth opportunities stemming from AI, and accelerated progress across its operations.
Key Highlights
The revenue for the full fiscal year reached US$56.9 billion, with net income totaling US$1 billion. Starting from the second half of the fiscal year, Lenovo achieved a 6% year-on-year revenue growth and saw the net margin recover from a decline in the first half to stabilize in the second half. Lenovo is at the forefront of the AI revolution with its comprehensive pocket-to-cloud portfolio, robust ecosystem, partnerships, and full-stack AI capabilities.
Investing in AI
Lenovo has made significant strides in the AI domain since unveiling its AI strategy in October 2023 at its annual Tech World event. The Group has introduced a range of AI-powered PCs and expanded AI capabilities to cover various smart devices, infrastructure, solutions, and services. The envisioned growth of AI PCs, featuring personal AI agents, heterogeneous computing, and enhanced privacy and security features, is expected to shift from a premium position to mainstream adoption within the next three years.
Hybrid AI and Future Prospects
The rise of Hybrid AI is fueling demand for AI infrastructure and customized solutions, such as consultancy, design, deployment, and maintenance services. Lenovo's unwavering commitment to innovation, particularly in the realms of AI and computing, is propelling the company towards its goal of 'Smarter AI for All.'
Financial Outlook and Achievements
Lenovo's R&D investment has been substantial, with a record high R&D headcount and an impressive R&D expense to revenue ratio. Looking ahead, the Group remains optimistic about its performance in the upcoming fiscal year. Lenovo aims to maintain its leadership in the AI space, drive innovation, and capitalize on the opportunities presented by hybrid AI to sustain growth and enhance profitability.
Final Dividend Declaration
Lenovo's Board of Directors has declared a final dividend of 3.8 US cents or 30.0 HK cents per share for the fiscal year ending March 31, 2024. Chairman and CEO Yuanqing Yang expressed confidence in Lenovo's trajectory, emphasizing the potential for sustained growth and profitability in the future.
Financial Highlights
The SSG showcased strong growth and profitability, focusing on driving AI solutions. Similarly, the ISG regained momentum, and the IDG experienced solid growth and strengthened its leadership position in the market.
ESG and Corporate Highlights
Lenovo's recent achievements and commitments underscore its dedication to innovation. As a global technology powerhouse, Lenovo continues to enhance its AI-enabled product portfolio, striving to bring Smarter Technology to All.
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On May 20, 2024, Lenovo launched the Lenovo Yoga™ Slim 7x and Lenovo ThinkPad™ T14s Gen 6, ushering in a new era of AI-powered personal computing.
