Lenovo carried to its best Q3 net income yet by cloud and remote work tailwinds

Cloud, digital transformation, and hybrid work tailwinds have brought Lenovo its sixth consecutive quarter of net income growing over 50%, with the company earning $640 million during the third quarter.

“Lenovo continued to embrace the opportunities driven by accelerated digital and intelligent transformation, and our new IT architecture prepared us well with ‘client-edge-cloud-network intelligence’ capabilities,” said Yuanqing Yang, Lenovo chairman and CEO.

The $640 million net income figure, representing a 62% year-on-year improvement, also came alongside Lenovo earning its highest ever quarterly revenue — $20 billion.

Of the $20 billion in revenue earned by Lenovo, the lion’s share –$17.6 billion — came from the company’s PC, smartphone, and smart devices business.

Honing in on the smartphone, and smart devices portion of that business, Yang said the company’s non-PC revenue rose 22% year-on-year and now accounts for almost one-fifth of its revenue. He said he expected growth in non-PC revenue as 5G and cloud demand continues to increase around the world.

“The penetration of 5G and the development of edge cloud network intelligence will provide more growth potential for the emerging smart devices like, embedded computing, IoT, AR/VR driven by Metaverse, as well as smart home and smart collaboration solutions,” Yang said.

Its data centre business, the Infrastructure Solutions Group, chipped in $1.9 billion revenue-wise, which represented a 19% year-on-year increase. This culminated in the business staging a turnaround by delivering a $17 million operating income, which is its first profitable quarter for the 2022 financial year.

Lenovo’s third major segment, the Solutions & Services Group, saw its quarterly revenue grow 19% to $1.9 billion. This uptick was made possible through the improved segment profitability of its cloud and enterprise technology services, the company said.

For the remainder of the financial year, Lenovo CFO Wong Wai Ming said he expected the company’s profit across all business groups to expand yet again in light of the aforementioned tailwinds. 

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