Technology company Lenovo reported strong financial results for the third quarter of its fiscal year 2024-2025, citing increased demand for artificial intelligence (AI) technologies across its business units.
Lenovo’s revenue grew by 20% year-on-year to $18.8 billion, its third consecutive quarter of double-digit growth. Net income more than doubled to $693 million, which included a non-recurring income tax credit of $282 million.
The company said its AI-focused strategy, along with a rebound in its Infrastructure Solutions Group (ISG) and continued growth in its Intelligent Devices Group (IDG) and Solutions and Services Group (SSG), contributed to the positive results. Lenovo’s non-PC revenue mix also increased to 46%, reflecting its push beyond traditional hardware.
“Lenovo’s revenue and profit both achieved significant growth last quarter, with strong performance across all core businesses,” said Yuanqing Yang, chair and CEO of Lenovo. “The ISG business returned to profitability, and the smartphone business experienced rapid growth. AI technology, with higher efficiency and lower costs, is accelerating the maturation of personal AI, particularly on-device AI and edge AI.”
Business segment performance
Lenovo also increased its investment in research and development, with expenses reaching $621 million, a 14% increase from the previous year. At CES 2025, the company showcased new AI-driven products, including a rollable AI laptop and a handheld gaming device that supports both Windows OS and Steam OS.
The Intelligent Devices Group (IDG) division, which includes PCs and smartphones, reported a 12% year-on-year revenue increase, reaching $13.8 billion. Lenovo strengthened its market leadership in the PC sector with a 24.3% market share, maintaining its lead over competitors.
The smartphone segment also showed strong results, with double-digit revenue growth. Lenovo reported significant sales growth in the Asia Pacific and EMEA markets. The company said it plans to further enhance its AI agent capabilities and multi-device connectivity.
Lenovo’s Infrastructure Solutions Group (ISG) division saw nearly 60% revenue growth, reaching $3.9 billion. The company attributed this to increased demand for cloud services and enterprise solutions. AI server revenue also showed steady growth, while its liquid cooling solution, Lenovo Neptune, expanded into new industries beyond supercomputing and academia.
ISG broke even during the quarter and expects further gains as AI adoption continues to grow in public cloud, private cloud, and edge computing. The business is focusing on simplifying its product offerings and strengthening its enterprise market presence.
The Solutions and Services Group (SSG) division achieved its 15th consecutive quarter of double-digit revenue growth, generating $2.3 billion with an operating margin of 20%. AI-powered solutions contributed to increased demand for services attached to Lenovo hardware. Non-hardware solutions made up nearly 60% of SSG’s total revenue, reinforcing its role as a key profit driver.
SSG is also expanding its AI offerings, developing an enterprise AI agent platform for global customers. The company said it is confident in maintaining its momentum as AI becomes more widely adopted in the enterprise sector.
AI innovation
Lenovo said it remains focused on AI innovation and expects its hybrid AI strategy to support future growth. The company is also expanding its manufacturing operations in the Middle East and strengthening technology partnerships with organizations such as Formula 1 and FIFA.
“Looking ahead, our continued investment in innovation, combined with our exceptional and resilient global operations, positions us well for sustained and profitable growth in the future,” Yang said.