LG Uplus (032640) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw a turnaround in profit, with consolidated service revenue up 1.6% year-over-year to KRW 2.94 trillion and operating profit rising 15.6% to KRW 255.4 billion, driven by structural cost improvements and focus on core business efficiency.

• Net profit increased 24.6% year-over-year to KRW 162.5 billion, with EBITDA up 3.8% to KRW 921.3 billion.

• Strategic partnerships with Google and AWS, and expansion of AI capabilities in B2C and B2B markets, including the launch of the 'ixi' AI brand and telecom-specialized generative AI.

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

• The company maintained a strong market position in mobile, smart home, and enterprise infrastructure, with continued investment in 5G, AI, and platform businesses.

Financial highlights

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

• 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.

• 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.

• Total assets at Q1-end were KRW 19,651.0 billion, with total liabilities of KRW 10,897.3 billion and equity of KRW 8,753.7 billion.

Outlook and guidance

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

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

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

• Management targets over 2% service revenue growth for FY2025, driven by digital transformation and platform expansion.