Lenovo PC Sales Soar To $15.3B In Q2

‘Both our net income and revenue achieved new records, and we are on track to double our net margin in three years,’ says Lenovo Chairman and CEO Yuanqing Yang regarding the company’s second-quarter financial earnings results.

Led by its bread-and-butter PC sales, revenue for Lenovo’s Intelligent Devices Group soared 21 percent to $15.3 billion during its second fiscal quarter 2021.

The spike in PC sales drove Lenovo’s total revenue to $17.9 billion in its second quarter, representing an increase of 23 percent year over year. Net income reached $512 million during its second quarter ended Sept. 30, representing a 65 percent increase year over year.

Lenovo Chairman and CEO Yuanqing Yang said the company’s “Client-Edge-Cloud-Network-Intelligence” architectural strategy is gaining momentum and acceptance across the industry.

“Through the strong execution of our 3S strategy (Smart Devices/IoT, Smart Infrastructure, Smart Vertical), last quarter, both our net income and revenue achieved new records, and we are on track to double our net margin in three years,” said Yuanqing in a statement. “Looking ahead, we will continue to drive to our goal to double R&D spending over three years, and further drive our service-led intelligent transformation.”

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Lenovo’s largest business is its Intelligent Devices Group (IDG) consisting of PCs, smartphones and other devices. Profitability in IDG reached $1.2 billion, an increase of 34 percent year over year.

According to new data from IT research firm Gartner, Lenovo was the largest supplier of PCs by shipments in the world in the third quarter of 2021. The company shipped nearly 20 million PCs worldwide in the third quarter to win 23.7 percent share.

Premium PC segments, such as Yoga and workstation offerings, each grew revenue by more than double year over year. Commercial PC sales grew 29 percent, while SMB PC sales grew 48 percent.

Looking ahead, Lenovo said it will “further invest in premium segments to drive increased profitability and average selling price” for its IDG business.

Lenovo’s Infrastructure Solutions Group (ISG), which includes servers, storage and software, delivered record revenue of nearly $2 billion, up nearly 34 percent year over year.

ISG’s cloud services provider business jumped 50 percent year over year, with enterprise and SMB sales growing 20 percent. Lenovo said storage revenue grew 50 percent year over year, although the company did not provide a storage revenue figure.

The Solutions and Services Group, which includes Lenovo’s as-a-service portfolio, TruScale, reached $1.36 billion in sales, up 30 percent year over year. Lenovo’s managed services sales were up 90 percent year over year in second quarter 2021. The Solutions and Services Group now represents 7 percent of the company’s total revenue as of the second quarter.

Lenovo said new platforms, tools and go-to-market capabilities will be introduced over the coming quarters to enhance its TruScale as-a-service offerings.

Lenovo’s stock is down 2 percent as of Thursday afternoon, trading at $21.49 per share.