Lenovo sales drop 14% to $62 bn for fiscal 2022-23

Lenovo Group has reported revenue of $62 billion (–14 percent) and net income of $1.6 billion (–21 percent) for fiscal 2022-23.
Lenovo ThinkPad T480S

Lenovo revenue was impacted due to the softness in the device market. IDG revenue declined to $49.4 billion. Lenovo has maintained the #1 position in the PC market with 23.2 percent market share globally. Lenovo’s IDG revenue mix from premium products increased to nearly 30 percent.

Lenovo said its smartphone business has been profitable for three consecutive years and achieved premium-to-market revenue growth in most markets.

Lenovo revenue from non-PC businesses reached a fiscal year high of nearly 40 percent.

Lenovo revenue from Solutions and Services Group (SSG) reached $6.7 billion (+22 percent).

Lenovo revenue from Infrastructure Solutions Group (ISG) reached $9.8 billion (+37 percent). Revenue from the server business grew by almost 30 percent to a record high, making Lenovo the third largest server provider in the world.

Storage also reached a record high revenue, tripling the previous fiscal year’s results and moving from the #8 position in the world to #5. Software revenue grew 25 percent year-to-year, another record.

Lenovo expects the entire PC and smart devices market to resume growth in the second half of 2023. The IT services market will resume relatively high growth – together these will drive the total IT market in 2023 back to moderate growth. Digital and intelligent transformation will continue to accelerate, leading to a big growth potential for cloud and computing infrastructure.

Lenovo Group made investment in R&D around New IT (client, edge, cloud, network, and intelligence) to build its future core competencies. During the last year, Lenovo increased its full year investment in R&D to $2.2 billion (+6 percent).

In Q4, Lenovo Group recognized a one-time restructuring and other charges of $249 million, among various other actions, to deliver around $850 million of annual run-rate group expense savings, helping to establish a solid foundation for the Group’s operations in a challenging market.

Fiscal year Q4 was the most challenging quarter of the year given pressures from both the PC market and the global economy. Lenovo closed the quarter with revenue of $12.6 billion (–24 percent) in January-March.

Lenovo said Q4 revenue from IDG declined 33 percent, while the strong momentum from the growth engines of SSG and ISG helped offset the device market softness. SSG revenue was up 18 percent to $1.6 billion, and ISG revenue was up 56 percent to $2.2 billion. Non-PC revenue mix during the fourth quarter reached a historic high of 43 percent, up 12 points year-to-year.

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