Hybrid AI drives profit jump at Lenovo

Net profit at Chinese tech giant Lenovo (0992) soared 70 percent to US$1.3 billion (HK$10.14 billion) year on year in the first nine months of last year, mainly driven by its adoption of hybrid artificial intelligence.

Revenue rose 21 percent to US$52.1 billion while gross profit increased 13 percent to US$8.32 billion.

For the three months to the end of December, revenue hit US$18.8 billion, up 20 percent year on year. This also marks its highest quarterly sales in the past three years as well as the second-highest sales in the company's history. The gross profit margin was 15.7 percent, down 0.8 percentage points year on year.

Lenovo's intelligent devices group, infrastructure solutions group, and solutions and services group all achieved double-digit year-on-year revenue growth for the third consecutive quarter.

Revenue from the intelligent devices group, which covers personal computers and other smart devices, grew 12 percent, driven primarily by sales of high-end personal computers and premium smartphones.

Revenue from infrastructure solutions increased by 59 percent, with profit coming in at US$39 million, mainly fueled by robust cloud demand.

Solutions and services achieved a 12 percent revenue growth to US$2.3 billion, setting a new record and maintaining double-digit growth for the 15th consecutive quarter. Operating profit for the group rose by 11 percent to US$459 million.

Lenovo unveiled a series of AI-driven solutions at this year's Consumer Electronics Show in Las Vegas, with most of these innovations rooted in its investments in on-device AI and AI agents. These AI advancements were made possible by the company's focus on research and development, which saw a year-on-year increase of 14 percent and a 7 percent rise compared to two years ago.

GORDON YANG