Lenovo Group Limited · HKEX:992
Lenovo — Q3 2025 Earnings Presentation
28 slides from Lenovo's earnings presentation, Feb 20, 2025
Slide 1: Q3FY25 Earnings Announcement
Q3FY25 Earnings Announcement Feb 20, 2025 2024 Lenovo Internal. All rights reserved. 2025 Lenovo Internal. All rights reserved.
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation contains “forward-looking statements”, which are statements that refer to the expectations and plans for the future and include, without limitation, statements regarding Lenovo’s future results of operations, financial condition or business prospects as we
Slide 3: Yuanqing Yang, Chairman & CEO
Yuanqing Yang Chairman & CEO February 20, 2025 2025 Lenovo Internal. All rights reserved.
Slide 4: Strong growth across core businesses
Strong growth Significant increase Well positioned across core businesses of group revenue & profit as Hybrid AI leader 2023 Lenovo Internal. All rights reserved. 4
Slide 5: Group: Performance
Group: Performance Strong growth of • Revenue $18.8 billion, up 20% YTY, revenue & profit, double-digit YTY growth for 3 Hybrid AI landing consecutive quarters accelerates • Net income (HKFRS) $693 million, up 106% YTY • All businesses achieved double-digit YTY revenue growth • Non-PC revenue mix up
Slide 6: Group: Opportunities & Sustainable growth
Group: Opportunities & Sustainable growth Strong growth of Hybrid AI creating huge opportunities revenue & profit, for devices, infrastructure, solutions & services Hybrid AI landing ⚫ New model driving AI democratization and application accelerates ⚫ On-device AI, Edge AI & AI deployment in enterpr
Slide 7: IDG Performance
IDG Performance Intelligent Devices Group: • Revenue $13.8 billion, up 12% YTY Double-digit • Strong profitability, operating margin 7.3% revenue growth, • PC: revenue up 10% YTY; market share Leading in AI devices 24.3%; industry leading profitability; five- feature AI PC exceeding volume mix expec
Slide 8: IDG Opportunities & Sustainable growth
IDG Opportunities & Sustainable growth Intelligent Devices Group: Hybrid AI creating growth Double-digit opportunities for device market revenue growth, • PC market entering new refresh cycle • AI PC to represent ~80% of PC industry Leading in AI devices landscape by 2027 • Driving smartphone market
Slide 9: ISG Performance
ISG Performance Infrastructure Solutions Group: Fast growth, • Revenue $3.9 billion, record high, up Breaking even, 59% YTY Heading toward • Returned to profitability profitable growth • CSP hypergrowth(+94% YTY) to reach historic high; E/SMB steady growth (+7% YTY) • AI server generated steady reve
Slide 10: ISG Opportunities & Sustainable growth
ISG Opportunities & Sustainable growth Infrastructure Solutions Group: ICT market shifting to hybrid Fast growth, infrastructure Breaking even, ⚫ Hybrid infrastructure supported by “Client-Edge-Cloud(hybrid)-Network” Heading toward architecture profitable growth ⚫ Server market grows at 12% CAGR 202
Slide 11: SSG Performance
SSG Performance Solutions & Services Group: Record revenue & • Revenue $2.3 billion, up 12% YTY, high profitability, double-digit YTY growth for 15 consecutive quarters Building Hybrid AI • Operating margin 20% Advantage • Managed Services and Project & Solution Services revenue mix 59%, up 5pts YTY
Slide 12: SSG Opportunities & Sustainable growth
SSG Opportunities & Sustainable growth Solutions & Services Group: Hybrid AI driving solutions & services Record revenue & demand growth high profitability, • IT services market expected solid growth for mid-term (CAGR 9.4%, 2024-2027) Building Hybrid AI • AI services growth more than twice as Advan
Slide 13: From scaling to higher profitability
From scaling to higher profitability PC Smartphone Infrastructure solution 2023 Lenovo Internal. All rights reserved. 13
Slide 14: Smarter AI for All
Smarter AI for All Continuous investment Operational Strengthened Enriched on AI innovation Excellence globalization capabilities brand equity 2023 Lenovo Internal. All rights reserved. 14
Slide 15: Wong Wai Ming, Chief Financial Officer
Wong Wai Ming Chief Financial Officer February 20, 2025 2025 Lenovo Internal. All rights reserved.
Slide 16: Record Performances
Record Performances Performance – Q3 FY24/25 Revenue Geographical Sales (%) • Group net income of US$693M, 106% year- +20% to-year growth Asia Pacific 19 +31% YTY 18,796 24 +21% YTY 17,850 China • Premium-to-market, double-digit YTY growth 15,721 15,447 13,833 25 +11% YTY across business groups and
Slide 17: Strong Balance Sheet for Future Growth
Strong Balance Sheet Performance for Future Growth Cash Balance CCC Breakdown (Days) +14% Inventory Receivable Payable • Strong business fundamentals and 108 4,179 104 100 robust capital management drove YTY 3,466 3,560 3,911 3,934 93 97 improvements and growth in 43 53 54 55 52 • Cash balance appro
Slide 18: IDG Highest Record
IDG Performance Intelligent Devices Group1 Revenue • Achieved 12% revenue growth YTY with a +12% Highest resilient, industry-leading 7.3% operating market share in PC and 13,514 13,784 smartphone in 5 years2 profit 12,362 10,463 11,422 • Highest PC market share in 5 years • Smartphone sales grew by
Slide 19: ISG Performance
ISG Performance Infrastructure Solutions Group Revenue • 59% YTY revenue hypergrowth with profitability turnaround +59% 90%+ YTY growth on CSP 3,938 revenue for 3 consecutive • Outstanding CSP growth to a record high; 4,000 2,473 2,533 3,160 3,305 quarters Solid execution of the right strategy to ca
Slide 20: SSG 15th Record
SSG Performance Solutions & Services Group Revenue • Quarterly revenue hit a record high, 4,000 making 15th consecutive quarters YTY +12% 2,165 2,257 Record Revenue and profit 2,021 growth with healthy operating margin at 1,820 1,885 20%+ • AI-powered portfolio continue to drive 0 Q3 Q4 Q1 Q2 Q3 mom
Slide 21: Outlook
Outlook Group Mission is to Lead and Enable Intelligent Transformation • Improve net income margin in the medium-term; Leverage Digital Transformation to drive secular growth • Strategically positioned for Hybrid AI revolution with products and services from device to edge to cloud • Confident of co
Slide 22: Supplemental Financial Materials
Supplemental Financial Materials - Financial Summary - Condensed Consolidated Income Statement - Condensed Consolidated Balance Sheet - Condensed Consolidated Cash Flow Statement - Supplemental Non-HKFRS Measures 2025 Lenovo Internal. All rights reserved. 22
Slide 23: Financial Summary
Financial Summary US$ Million Q3 23/24 Q3 24/25 Y/Y% Revenue 15,721 18,796 20% Gross profit 2,601 2,959 14% Operating expenses (1,988) (2,271) 14% Operating profit 613 688 12% Operating profit (non-HKFRS) 630 708 12% Other non-operating income/ (expenses) - net (142) (171) 20% Profit before taxation
Slide 24: Condensed Consolidated Income Statement
Condensed Consolidated Income Statement US$ Million Q3 23/24 Q3 24/25 Revenue 15,721 18,796 Cost of sales (13,120) (15,837) Gross profit 2,601 2,959 Selling and distribution expenses (869) (954) Administrative expenses (591) (710) Research and development expenses (547) (621) Other operating income/
Slide 25: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet US$ Million As of Dec 31, 2023 As of Dec 31, 2024 Current assets 23,228 28,575 Bank deposits and cash 3,533 4,071 Trade, notes and other receivables 13,088 14,542 Inventories 6,219 9,148 Others 388 814 Non-current assets 16,276 16,147 Property, plant and equipmen
Slide 26: Condensed Consolidated Cash Flow Statement
Condensed Consolidated Cash Flow Statement US$ Million Q3 23/24 Q3 24/25 Net cash generated from operating activities 364 344 Net cash used in investing activities (364) (335) Net cash used in financing activities (324) (99) Decrease in cash and cash equivalents (324) (90) Effect of foreign exchange
Slide 27: Supplemental Non-HKFRS Measures
Supplemental Non-HKFRS Measures US$ Million Q3 23/24 Q3 24/25 Profit before Profit for the Profit Profit before Profit for the Profit Operating profit taxation period attributable to Operating profit taxation period attributable to equity holders equity holders As reported 613 471 377 337 688 517 70
Slide 28: Smarter technology thanks
Smarter technology thanks. Lenovo