LG Uplus (032640) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw a turnaround in profit, driven by structural cost improvements, phase-out of low-margin businesses, and focus on core business efficiency.

• Strategic partnerships with Google and AWS aim to expand AI capabilities in both B2C and B2B markets.

• Enhanced security offerings and customer-centric AI solutions were launched to boost trust and user experience.

• Consolidated service revenue for 1Q25 reached KRW 2.94tn, up 1.6% year-over-year, with wireless service revenue at KRW 1.54tn, up 2.4% year-over-year.

• MWC25 showcased AI-driven services, including in-house LLM model, security solutions, and post-quantum cryptography.

Financial highlights

• Operating profit rose 15.6% year-over-year to KRW 255.4 billion; net profit increased 24.6% to KRW 162.5 billion; EBITDA up 3.8% to KRW 921.3 billion.

• Q1 consolidated service revenue grew 1.6% year-over-year; operating revenue for 1Q25 was KRW 3.75tn, up 4.8% year-over-year; handset revenue up 18.5%.

• CapEx for Q1 was KRW 333.1 billion, down 13.4% year-over-year and 37.2% sequentially.

• Operating expenses increased 3.1% year-over-year, with marketing expenses up 1.6% to KRW 555.8 billion, accounting for 20.3% of service revenue.

• Total assets, liabilities, and equity decreased slightly from end-2024; net debt to equity ratio rose to 61.3%.

Outlook and guidance

• Annual guidance is expected to be met, with continued focus on profitability over revenue growth.

• Ongoing efforts to streamline non-core businesses and maximize operational efficiency.

• AI solutions will be internally validated before broader market expansion.

• Focus on active shareholder returns while maintaining financial stability, with a mid- to long-term ROE target of 8-10%.

• Total shareholder return targeted at 40-60%, with flexible buybacks up to 20% and ongoing review of full treasury share cancellation.