Lenovo Q3 Report 2023

Lenovo announced third quarter results, reporting Group revenue of US$15.3 billion and net income of US$437 million. Group revenue from nonPC businesses reached a high of 41% and profitability remained solid as Lenovo’s diversified growth engines of Solutions and Services Group (SSG) and Infrastructure Solutions Group (ISG) grew revenue to record highs of US$1.8 billion and US$2.9 billion respectively, up 23% and 48% year-on-year. All main
business groups contributed operating profit for the fifth consecutive quarter.

While the industry faces significant macroeconomic pressures, Lenovo sees long-term opportunities ahead as the global trends of digitalization and intelligent transformation continue to accelerate and IT spending is expected to recover to a moderate growth rate in the mid-to-long term. In the PC sector, real demand, as reflected by the activation data in 2022, is much better than the industry shipment data indicates as the channel consumes excess inventory. The Group expects year-on-year growth to resume in the second half of the calendar year with end-user demand to be higher than pre-Covid levels.

The Group continues to take proactive actions to further strengthen its cost competitiveness. It will do this by investing in high-margin growth engines as well as reducing run rate operational expenses. Lenovo’s cash balance remains strong, the cash conversion cycle continues to improve, channel inventory has reduced, and the company continues to invest in R&D and sustainability – remaining committed to doubling profitability in the medium-term.

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