Lenovo Grows Annual Sales Double Digits In PC, Infrastructure, Services To $69 Billion

‘The earnings results are exciting and I think it will continue to feed into how our partners are helping us deliver one of the best years in our history. We’re showing that the strategy and execution is strong,’ Lenovo North American Sales President Ryan McCurdy tells CRN.

Lenovo’s annual revenue grew 21 percent year over year to $69.07 billion as sales of its PCs, infrastructure and services surged by double digits in each category for “one of the best years in company history,” President of North American Sales Ryan McCurdy told CRN on Thursday.

“The channel continues to be integral to our success,” he said. “The earnings results are exciting and I think it will continue to feed into how our partners are helping us deliver one of the best years in our history. We’re showing that the strategy and execution is strong.”

McCurdy said each business unit achieved its objectives for the year and increased business outside of the PC.

“While PC remained number one in the world, and we expanded the gap between us and number two by a point we saw our infrastructure solutions business, our services business all continue to grow,” he told CRN.

The company’s solutions and services business had its 16th consecutive quarter of growth, crossing $1 billion in North America on increased demand for AI, hybrid cloud, sustainability.

“What I would say is we need and continue to be focused on that core PC business and making sure that we’re going faster than the market while simultaneously growing the services business, the Motorola business and the infrastructure business,” McCurdy (pictured above) told CRN. “So, that’s exciting to be able to do both the same time in a pretty dynamic environment.”

PCs, tablets, smartphones and peripherals has grown at a premium to the market for eight consecutive quarters, McCurdy said. Intelligent device sales were up13 percent year on year to $50.5 billion with 7 percent operating margins.

McCurdy said the PC refresh is well underway with millions of COVID-era devices being upgraded to meet Windows 10 end-of-life in October. The company controls 25 percent of the PC market worldwide and grew that share by 1.2 percent during its last fiscal year.

The company’s infrastructure group, which makes high-end servers and storage for hyperscaler customers, enterprises and cloud service providers, saw “a year of hyper-growth” with revenue up 63 percent year over year to $14.5 billion as customers sought out the company’s high-end Neptune servers to meet the demands of AI workloads.

“Just overall, that business is strong. There’s some strong cloud service provider pieces to that. But I also mentioned the high-performance computing, public sector, US mid-market, the growth in enterprise and SMB, we continue to be encouraged by that,” McCurdy said.

“Add that to the cloud service provider energy around AI and building the largest models. We also see some unique differentiation for ourselves, when we look at Neptune, liquid cooling was a huge portion of our growth. I think I called it out earlier, but I’ll reiterate that. In ISG, our Neptune revenue, which is warm water cooling, was up 68 percent for the year.”

For the quarter, revenue was up 23 percent year over year, with sales of $16.98 billion, which was underpinned by strong performance of Lenovo’s channel, the company’s channel chief, Rob Cato, told CRN.

“One of the things that we saw in the last three to five months is the channel became a very resilient part of our strategy in that through all the uncertainty in the North American market, they were really there to help us and help the customers manage through that,” he said. “We leaned on them pretty heavily and they responded.”

After Lenovo announced results today, its stock was down about 5 percent in trading on the Hong Kong markets on reaction to the company’s profitability, which missed analyst marks. McCurdy said not only was the company’s revenue up, the company’s net income was also up 36 percent for the full year.

“That’s not a good year, that’s a great year,” he said. “And the quarter was up 23 percent on the topline and 25 percent on the bottom line. I think what I would say is that the full year is extremely healthy and strong across all business units and then the quarter was strong as well.”