Lenovo’s AI-driven growth fuels strong Q3 performance with record revenue and profit

Lenovo Group Limited has reported an impressive financial performance for the third quarter of fiscal year 2024/25, demonstrating the increasing impact of its AI-driven growth strategy. The company’s revenue surged by 20% year-on-year to $18.8 billion, marking the third consecutive quarter of double-digit expansion. Net income more than doubled, reaching $693 million, supported in part by a $282 million income tax credit. The strong momentum was driven by Lenovo’s hybrid AI strategy, which is shaping its business across devices, infrastructure, and enterprise AI adoption.

With non-PC revenue rising to 46% of total revenue, Lenovo’s transformation into an AI-powered technology leader continues to accelerate. The company’s Infrastructure Solutions Group (ISG) recorded a remarkable 60% year-on-year revenue increase, achieving break-even, while the Solutions and Services Group (SSG) maintained its double-digit growth streak for the 15th consecutive quarter.

How Is AI Driving Lenovo’s Record Growth?

Lenovo’s continued investment in hybrid AI strategy is at the core of its financial success. The company increased its research and development (R&D) spending by 14% year-on-year to $621 million, reinforcing its commitment to AI innovation. At CES 2025, Lenovo introduced a range of AI-powered devices, including the world’s first rollable AI laptop and a handheld gaming device supporting both Windows OS and Steam OS. These developments underscore Lenovo’s leadership in on-device AI and enterprise AI adoption, two critical areas of AI deployment.

The company’s AI initiatives extend beyond hardware, integrating AI-powered enterprise solutions to drive operational efficiency and user experience. Lenovo’s Hybrid AI Advantage, a framework designed to enhance both device AI and enterprise AI adoption, is setting a foundation for long-term market leadership.

What Is Fueling Lenovo’s Growth in Key Business Segments?

Intelligent Devices Group (IDG): Strengthening Market Leadership in AI Devices

Lenovo’s Intelligent Devices Group (IDG) continues to expand its dominance in the PC and smartphone markets, reporting $13.8 billion in revenue, up 12% year-on-year. The company strengthened its PC market share to 24.3%, widening the lead over its closest competitor by nearly five percentage points while maintaining industry-leading profitability.

The smartphone segment also delivered strong results, with double-digit growth across Asia-Pacific and EMEA markets. Lenovo’s emphasis on AI-enhanced personal devices has played a crucial role in driving consumer demand. The company is integrating AI-powered software features and improving multi-device connectivity, positioning itself at the forefront of AI-driven growth in the consumer electronics sector.

Infrastructure Solutions Group (ISG): AI-Powered Servers Drive Market Expansion

Lenovo’s Infrastructure Solutions Group (ISG) has emerged as a significant growth driver, with revenue increasing nearly 60% year-on-year to $3.9 billion, reaching break-even. The growth was fueled by rising demand for AI servers, expansion in the Cloud Services Provider (CSP) business, and steady performance in the enterprise and small-to-medium business (E/SMB) segments.

A key factor in ISG’s expansion is Lenovo’s Neptune liquid cooling technology, which is now extending beyond high-performance computing and academia into broader enterprise AI adoption. As AI workloads increase across industries, Lenovo is capitalizing on growing demand for hybrid cloud solutions and AI-driven data centers.

Solutions and Services Group (SSG): Scaling AI-Powered Enterprise Solutions

Lenovo’s Solutions and Services Group (SSG) reported $2.3 billion in revenue, maintaining 15 consecutive quarters of double-digit growth. Non-hardware solutions accounted for nearly 60% of the division’s revenue, reinforcing its role as Lenovo’s most profitable segment.

Lenovo’s AI-powered enterprise solutions are rapidly gaining traction, offering businesses an AI agent platform that enhances automation, efficiency, and enterprise operations. This shift towards AI-driven enterprise solutions is part of Lenovo’s broader hybrid AI strategy, which integrates cloud computing, edge AI, and device AI to optimize enterprise AI adoption.

How Is Lenovo Leveraging AI to Sustain Long-Term Growth?

Looking ahead, Lenovo is focusing on scaling AI deployment across its product ecosystem to ensure continued financial momentum. The company remains confident in its global supply chain resilience and expansion into emerging markets, particularly with its new manufacturing facility in the Middle East in partnership with Alat.

Strategic collaborations with Formula 1 and FIFA further position Lenovo as a leading technology partner, reinforcing its AI-driven innovations in high-performance computing and digital transformation. Lenovo’s sponsorship of FIFA World Cup 2026™ and FIFA Women’s World Cup 2027 solidifies its brand visibility on a global stage.

Lenovo’s hybrid AI strategy is expected to drive enterprise AI adoption, particularly in AI-enhanced devices, hybrid cloud computing, and AI-powered services. Chairman and CEO Yuanqing Yang highlighted AI’s role in optimizing enterprise efficiency, emphasizing that on-device AI and enterprise AI adoption are accelerating due to AI’s improving cost efficiency and computational power.

Lenovo’s AI-First Strategy Positions It for Future Leadership

Lenovo’s financial performance in Q3 2024/25 underscores its AI-driven growth strategy, reinforcing its leadership in AI-powered devices, cloud infrastructure, and enterprise solutions. With a 20% year-on-year revenue increase, significant profit growth, and strategic investments in AI, Lenovo is well-positioned for sustained AI-powered market expansion.

By leveraging its hybrid AI strategy and expanding its enterprise AI adoption, Lenovo is setting the stage for long-term profitability. The company’s focus on AI innovation, cloud services, and high-performance computing ensures that it remains a formidable force in the evolving AI-driven technology landscape.