China’s Lenovo Group reported a 20% rise in quarterly revenue on Thursday, reaching $15.4 billion for the three months ending in June. This exceeded the average estimate of $14.1 billion expected by analysts polled by LSEG. It marks the third consecutive quarter of revenue growth for Lenovo, following five quarters of decline amid the post-COVID slowdown.
The global personal computer market has begun to recover, with IDC data showing a 3% increase in global PC shipments to 64.9 million units for the three months ending June. Lenovo maintained its position as the market leader with a 23% market share, according to IDC. However, Lenovo’s shares were down 0.99% in Thursday afternoon trading.
In addition to its core PC business, Lenovo has expanded into software and services. Its infrastructure solutions group, which includes servers and other hardware, grew 65% to $3 billion in revenue. The solutions and services group also grew, reaching $1.9 billion for the quarter. Non-PC business already accounts for 47% of Lenovo’s revenue mix, and the company’s chairman and CEO, Yuanqing Yang, anticipates this share growing to 50% in the near future.
Yang expects a resurgence in IT spending and AI-driven demand to boost the company’s business lines across the board, including PCs, servers, and enterprise software. Lenovo has launched two models of AI PCs and projects that 10% of its shipped PCs will be AI PCs by year-end, potentially rising to 50-60% by 2026.
The AI boom coincides with rising China-U.S. geopolitical tensions, including restrictions on advanced AI technology exports. Yang emphasized that Lenovo complies with regulations in all operating regions, enabling it to navigate these challenges.
Lenovo’s net income for the quarter was $243 million, surpassing the average estimate of $222.94 million from analysts polled by LSEG