The News: Lenovo Group (HKSE: 992) (ADR: LNVGY) announced its fourth quarter and fiscal year 2021/2022 financial results, boasting record full fiscal year revenue of $71.6 billion, up 18 percent over the $60.7 billion reported for the prior year, and record net income of $2 billion, up 72 percent from one year ago. Read the full Press Release from Lenovo Group.
Lenovo Posts $71.6B Record FY2021/22 Revenue, Up 18% YoY
Analyst Take: For the second quarter in a row, Lenovo smashed its own records for both its full year revenue and full year net income, showing that the global tech leader remains on an upward path despite the challenges brought on by geopolitical issues, supply chain, market volatility, and other factors. These results indicate that Lenovo has positioned itself well for growth and continues to take advantage of opportunities as they arise.
Here are Lenovo’s fiscal Q4 and FY 2021/22 results by the numbers:
- Full year fiscal 2021/22 revenue of $71.6 billion, a new record for the company, up 18 percent from $60.7 billion one year ago.
- Q4 2021/22 revenue of $16.7 billion, up from $15.6 billion in the same quarter one year ago.
- Full year fiscal 2021/22 net income of $2 billion, an increase of 72 percent rom $1.18 billion one year ago.
- Q4 2021/22 net income of $412 million, up 58 percent from $260 million one year ago.
- Full year fiscal 2021/22 basic earnings per share of $17.45 per share, up 7.9 percent from $9.54 per share one year ago.
- Q4 2021/22 basic earnings per share of $3.52 per share, up 1.3 percent from $2.19 per share one year ago.
These are record FY2021/22 revenue numbers for Lenovo, which crossed the $70 billion mark in revenue for the first time in the company’s history. This significant milestone was possible due to the fact that the company’s main business groups were profitable for the full fiscal year, with strong growth and momentum in Lenovo’s mobile, infrastructure, and solutions and services businesses.
This continuing strong financial performance for the China-based company is impressive. It indicates that Lenovo has been quietly making progress in the global market for PCs, servers, laptops, storage, services and more against rivals including IBM, Dell, HPE, and others.
The performance we have seen from Lenovo in recent quarters is impressive and we hope to see it continue forward. We are bullish on Lenovo for its strategic moves around mobile, infrastructure, and solutions/services business offerings and for what we see as a continued laser focus on delivering on the customer service/customer experience fronts.
Also notable – we continue to see Lenovo raising its corporate profile to compete with the offerings of the broader IT OEMs and cloud providers despite being a lesser-known entity here in the United States. This progress evidence that the company is delivering a strong product mix with an aggressive go-to-market strategy – all while managing margins and supply chains effectively given the global challenges that exist.
For a global tech leader like Lenovo, that is just what we want to see. While there is plenty of continuing pressure from competitors including Dell Technologies, HPE, Cisco, Microsoft, and others, all signs indicate that Lenovo is preparing itself for continued success and innovation and competitors would do well to take note .
Outlook for Lenovo In FY 2022/23
Keeping its record FY2021/22 revenue streak going will not be easy for Lenovo in FY 2022/23. Market pressures, war in Eastern Europe, global pandemic-related challenges affecting the Chinese market, and continuing supply chain issues aren’t likely to abate.
But the company’s FY 2021/22 performance – especially its Q4 performance amid supply and production disruptions due to COVID-19 outbreaks in China – showed it has been able to buck the odds in the past, and we’re hopeful it that will continue.
In FY 2021/22, Lenovo’s Infrastructure Solutions Group (ISG) hit an important milestone, becoming profitable over the full year, with record revenue of $7 billion, up more than 13 percent year-over-year. All parts of the high-value businesses such as storage, software, services, and HPC set individual revenue records in the period, according to the company.
Lenovo’s Solutions and Services Group (SSG) also delivered strong growth and high margins in FY 2021/22, with revenue reaching an all-time high of $5.4 billion, up almost 30 percent year-over-year, along with a 22 percent operating margin.
In the previous quarter, Q3, Lenovo marked another big achievement when its ISG unit reached profitability for the first time since the x86 business was acquired by Lenovo from IBM in 2014. That shows Lenovo’s dedication to making a decisive move and seeing it through.
It will be interesting to watch Lenovo and its progress as it negotiates the rest of 2022 into 2023 amid times of global uncertainty. It’s hard not to see the company’s continued execution, which has led to market share gains and its innovation efforts focusing on secular trends like future of work and sustainability to complement its technology roadmap.
Based on Lenovo’s recent record and performance in the marketplace, it seems that Lenovo is on sturdy ground with the right mix of products and more importantly services to grow top and bottom line numbers—even in more turbulent markets, which should be expected for the next several quarters.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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The original version of this article was first published on Futurum Research.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.