On February 22, Lenovo Group (00992) released its third-quarter results, with revenue growing for three consecutive quarters, up 9% quarter-on-quarter to $15.7 billion, which is the first year-on-year increase in quarterly revenue in the last year and a half.
Lenovo Group CFO Huang Weiming said that Lenovo Group's operating performance continued to expand in the third quarter. While navigating ongoing market challenges, the core business has returned to a healthy growth trajectory, driven by a strong, diversified growth engine and resilient profitability. Revenue and operating profit improved sequentially across all three business groups. This marks a new milestone in Lenovo's service-led transformation during the quarter, with double-digit sequential growth in revenue and operating profit for the SSG Solution Services Group. As a strong indicator of long-term development channels, its total contract value (TCV) has grown by more than 50% year-on-year.
In the fiscal third quarter, the SSG Solution Services business group once again achieved record results, reaching a new milestone with revenue exceeding $2 billion. The key role of the Solution Services business group as an engine of growth and profitability was further highlighted, with an operating margin of 20.04%, up 22 basis points year-over-year.
The pay-as-you-go TruScale service continued to gain traction, with double-digit year-over-year growth in contract signings. The SSG Solution Services business group also signed the largest Infrastructure-as-a-Service agreement to date for a broad partner ecosystem and the largest agreement to date for asset recovery services for superior data security assurance.
Wong said the SSG Solution Services business group is also using AI to enrich its product and service portfolio to meet the changing needs of customers. One powerful use is to embed artificial intelligence into Lenovo's products. For example, Lenovo's Care of One platform uses artificial intelligence to improve employee experience and productivity. On the other hand, Lenovo has also launched a new AI-native service, called AI Professional Services, to help customers deploy AI technology safely and efficiently in hybrid environments.