Lenovo’s revenue hits $13.8bn, beats expectations

Alex Omenye
Alex Omenye

The world’s leading PC maker, Lenovo Group, has unveiled impressive fourth-quarter figures, showcasing a 9% surge in revenue to $13.8 billion.

This remarkable growth signals a departure from the pandemic-induced slump, marking a second consecutive quarter of revenue expansion after enduring five consecutive quarters of decline in the post-COVID landscape.

Remarkably, Lenovo’s quarterly revenue exceeded analysts’ expectations, surpassing the anticipated $13 billion mark. This positive trajectory aligns with the broader trend in the global PC market, which recently returned to growth after nearly two years of contraction, as highlighted by research firm IDC.

According to IDC, Lenovo solidified its position as the top PC vendor, boasting a 23% market share amidst a 1.5% year-over-year increase in PC shipments to 59.8 million units.

However, despite this quarterly success, Lenovo’s full-year revenue for the period ending March 31 dipped by 8% to $56.9 billion, slightly missing analysts’ forecasts.

Lenovo’s net profit for the January-March quarter witnessed an astounding 118% surge to $248 million, significantly outperforming analysts’ projections. Nevertheless, Lenovo’s shares experienced a 1% decline in Thursday’s afternoon trading session.

In a strategic move, Lenovo is actively diversifying its portfolio beyond traditional PCs, focusing on artificial intelligence and expanding its non-PC businesses, including smartphones, servers, and IT services.

Notably, the revenue from its service business unit climbed by 8.5% to $1.8 billion for the quarter.

The recent unveiling of two new AI PCs has propelled Lenovo’s shares to a nine-year peak, with analysts predicting Lenovo to be a primary beneficiary of the burgeoning AI PC market in Asia.

While AI PCs currently represent less than 5% of the market, analysts project that by 2028, nearly two-thirds of new PCs will integrate AI capabilities.

Lenovo CEO Yuanqing Yang anticipates AI PCs to drive the PC replacement cycle, emphasizing their transformative potential.

Despite regulatory restrictions in China limiting access to certain Microsoft AI features, Lenovo remains poised to cater to Chinese consumers’ evolving needs, offering a comparable or superior AI experience.

In Yang’s words, “Most people’s next PCs will be AI PCs,” signifying Lenovo’s commitment to innovation and its vision of shaping the future of computing. With the imminent rise of AI PCs, Lenovo anticipates a paradigm shift in the PC landscape, positioning itself as a frontrunner in this transformative journey.

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