Lenovo Q1 revenue jumps 20%, beats estimates as PC market recovers

Lenovo’s shares rose 2.37% in Thursday afternoon trading.

China’s Lenovo Group reported a 20% rise in its quarterly revenue on Thursday, as the global personal computer market showed signs of recovery after a two-year slump.

For the three months ended in June, the company’s revenue rose to $15.4 billion, above the average estimate of $14.1 billion expected by analysts polled by LSEG.

This marks a third consecutive quarter of revenue growth for Lenovo after it suffered five straight quarters of revenue declines amid the post-COVID slowdown.

The global personal computer market has shown signs of recovery, with IDC data indicating a return to growth during the first quarter of this year after nearly two years of declines.

For the three months ended June, global PC shipments rose by 3% to 64.9 million units. Lenovo maintained its position as the market leader, holding a 23% market share, according to IDC.

Lenovo’s shares rose 2.37% in Thursday afternoon trading.

The global PC market recovery has been partly fueled by the emerging trend of ”AI PCs” – personal computers equipped with specialised chips optimised to run artificial intelligence (AI) software.

Lenovo has been among the first in the industry to unveil AI PCs, including two models in May. Company CEO Yuanqing Yang has said that by the end of the year, 10% of its shipped PCs will be AI PCs. By 2026, this number could jump to 50%-60%.

In recent years, Lenovo has diversified beyond its core PC business by expanding into business software and other services.

The company’s infrastructure solutions group, which includes server and other software businesses, grew by 65% to $3 billion in revenue for the quarter.

Lenovo’s net income for the quarter was $243 million, above the average estimate of $222.94 million expected by analysts polled by LSEG.

(Reporting by Liam Mo and Casey Hall; Editing by Sonali Paul and Muralikumar Anantharaman)