LENOVO GROUP (00992) announces latest financial report: Accelerated growth in performance, mixed AI layout showing results.

024AI120016%ISG23765%35%48%ISG SSG AI SSGSSG15513%20%60%SSG14AI LENOVO GROUPPCIn 2024, the global server and storage market is expected to grow by 40% and 7% respectively. Similarly, the demand from artificial intelligence will also drive the need for more efficient cooling solutions.In the second fiscal quarter, driven by strong performance in cloud infrastructure business, ISG business total revenue reached 23.7 billion RMB, achieving a high year-on-year growth of 65%, setting a new historical high for the second consecutive quarter, steadily moving towards breakeven point. Among them, the combined revenue of storage, software, and services business grew by 35% year-on-year, and revenue from Neptune liquid-cooled servers increased by over 48% year-on-year, reaching historical highs. Looking ahead, Lenovo will continue to build a more balanced portfolio in cloud infrastructure business, enterprise infrastructure business, AI, and traditional server business through outstanding operations and continuous innovation, spanning across cloud, on-premise, edge, and other areas. In addition, Lenovo will continue to leverage its industry-leading liquid cooling technology to meet the new demands of artificial intelligence workloads, balancing performance and energy efficiency. During Lenovo Tech World held in October, Lenovo introduced the sixth generation Neptune liquid cooling solution, capable of reducing power consumption by up to 40%. Furthermore, Lenovo is constantly developing key strategic partnerships to collaborate on intelligent infrastructure solutions. SSG: Consolidating the position of growth engine, launching a hybrid AI advantage set The trillion-dollar service market is rapidly growing. According to Gartner's latest forecast, the global IT services market is expected to grow by 5.6% by 2024, with service models still being the trend. Lenovo is seizing growth opportunities through a hybrid AI advantage set. In the second fiscal quarter, SSG further consolidated its position as the group's growth engine, maintaining double-digit revenue growth for 14 consecutive quarters: total revenue of 15.5 billion RMB, a year-on-year increase of nearly 13%, with an operating profit margin exceeding 20%. Strong growth was achieved in the total value of digital office and hybrid cloud solution contracts, with year-on-year growth rates of 29% and 202% respectively, and sustainable development solution revenue grew by 33% year-on-year. Over the next three years, the global IT services market is expected to maintain stable growth of over 10%, with artificial intelligence services growing at a rate more than double that of the overall market, becoming one of the main drivers. Lenovo will continue to embed artificial intelligence into key general solutions and develop more native AI services to help customers more easily adopt AI technology to seize development opportunities. * The USD amounts in this performance report are converted to RMB based on the average exchange rate for the second fiscal quarter of the 2024/25 fiscal year, i.e., 1 RMB equals 0.139570367 USD, and this rate cannot be used for any other period of performance reporting.