Lenovo announced that it restructured its data center business unit, the Infrastructure Solutions Group (ISG), last quarter to “realign the cost structure” by streamlining its product portfolio, upskilling employees, and driving sustained productivity improvements. This restructuring, detailed in the company’s third-quarter earnings report, resulted in a one-time charge of $285 million and aims to accelerate ISG’s return to profitability. ISG posted record revenue of $22. 2 billion for the quarter ending in December, an 18 percent year-over-year increase, largely driven by strong AI product demand, which contributed to a double-digit rise across Lenovo’s portfolio. Despite a 21 percent drop in net income to $546 million year-over-year, Lenovo’s adjusted net income rose 36 percent to $589 million, excluding restructuring and intangible asset expenses. The company anticipates ISG will achieve annualized net savings exceeding $200 million over the next three years and move closer to profitability, expecting to break even by fiscal year-end in late March. ISG’s revenue alone surged 31 percent year-over-year to $5. 2 billion, fueled by robust sales from cloud service providers, enterprises, and SMBs. The unit narrowed its operating loss to $11 million, a sequential improvement of $21 million. AI server revenue saw high double-digit growth, bolstered by new solutions such as Nvidia’s Blackwell Ultra GB300 NVL72 racks and a 300 percent increase in sales of Neptune liquid-cooling products. Lenovo projects the AI infrastructure market to triple by 2028, positioning ISG well for long-term growth as AI demand shifts from training to inference. Lenovo’s Intelligent Devices Group (IDG), which includes PCs and smartphones, experienced a 14 percent year-over-year revenue increase to $15. 7 billion, along with a 15 percent rise in operating profits.

The company’s PC market share reached an all-time high of 24. 9 percent in 2025, attributed to strong sales of AI PCs, a balanced commercial-consumer portfolio, and global demand fueled by Windows end-of-service upgrades and PC replacements. Profitability in PCs, tablets, and client devices remained stable due to higher average selling prices and improved margins from premium, AI-enabled, and gaming PCs, despite industry-wide supply shortages and rising component costs, especially amid a global memory chip shortage affecting DRAM and NAND prices. Lenovo’s smartphone segment delivered record volumes and activations, growing faster than the market in key regions. Lenovo’s Solutions and Services Group saw 18 percent year-over-year revenue growth to $2. 7 billion, marking its 19th consecutive quarter of growth. Gains were driven by enterprises in manufacturing, retail, sports, transportation, and smart city sectors moving AI from experimentation to production. Operating margins improved by 2. 1 percentage points to 22 percent. Nearly 60 percent of the group’s revenue came from high-growth areas like managed services and project solutions. Additionally, revenue for Lenovo’s TruScale device-as-a-service and infrastructure-as-a-service offerings increased, fueled by customer demand for flexibility, scalability, and faster time-to-value in GPU and AI workloads. Lenovo CEO and chairman Yuanqing Yang hailed the strong overall performance, emphasizing AI as a key growth engine overcoming market challenges such as component cost rises and supply shortages. Looking ahead, Lenovo plans to further expand Hybrid AI capabilities to capitalize on AI democratization, aiming for sustained growth, improved profitability, and long-term shareholder value.