HAMPTON, N.H. – Lenovo’s Data Center Group (DCG) continues to experience positive momentum in its top line, with revenue increasing a staggering 17% year-to-year in 4Q17 to $1.2 billion, following five consecutive quarters of year-to-year declines, according to data disclosed in the tech giant’s latest quarterly earnings report on Thursday.

[Lenovo’s DCG is based in the Triangle; the company operates one of its two global headquarters in Morrisville; the other is in Beijing.]

TBR believes much of DCG’s success can be seen in its domestic market of APAC, where the vendor reported double-digit year-to-year gains.

Although its success was concentrated in APAC in 4Q17, we note that gains were also experienced in North America and Europe, and anticipate that accelerated gains will spread globally in 2018.

While revenue performance continues to look up, DCG operated at a loss of $86 million in 4Q17.

TBR believes these profit challenges will not hinder DCG from reaching its long-term goals, as the vendor continues to lean on PCs to fund investments, and profit losses continued to lessen with each quarter in 2017.

Major overhauls of its data center hardware portfolio will continue to support positive revenue trajectory, while investments in emerging technologies such as high-performance computing (HPC) will be a key driver behind profit stabilization in 2018.

(C) TBR