Lenovo Reports the Biggest Revenue Fall in 14 Years

Lenovo’s streak of breaking records in the previous quarters’ reports has come to an end. In its third fiscal quarter of the financial year 2022/2023, the vendor posted a double-digit drop in revenue and profit.

During the period, Lenovo had revenue of  $15.3 billion, a 24% drop compared with the same quarter in the previous year. Their income has also suffered falling 31% YoY to $437 million. The main reason for weak performance is a global slump in electronics demand.

Group revenue from non-PC 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 $1.8 billion and $2.9 billion respectively, up 23% and 48% YoY. All main business groups contributed operating profit for the fifth consecutive quarter.

“Today’s solid results demonstrate that our service-led transformation strategy is paying off. Our diversified growth engines of non-PC business now account for over 40% of our group revenue and are driving solid profitability. Despite the complex macro environment, we retained our market leadership in PCs. I remain confident that our clear strategy, operational resilience, healthy liquidity, and continued investment in innovation will ensure we can deliver long-term sustainable growth and improved profitability,“ said Chairman and CEO of Lenovo Yuanqing Yang.

The company said in a statement that 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 said. The company also said it will continue to invest in R&D and sustainability, remaining committed to doubling profitability in the medium term.