SK Telecom (017670) Q1 2025 earnings summary

Executive summary

• Consolidated revenue for Q1 2025 was KRW 4.4547 trillion, down 0.5% year over year, mainly due to subsidiary sales, with AI and fixed line businesses offsetting the decline.

• Operating income rose 13.8% year over year to KRW 567.4 billion, driven by business portfolio restructuring, lower marketing and depreciation costs, and AI segment growth.

• Net income was KRW 361.6 billion, nearly flat year over year, down 0.1%.

• A major cybersecurity incident occurred, prompting immediate response, customer trust restoration efforts, and ongoing investigation.

Financial highlights

• Non-consolidated revenue was KRW 3.167 trillion, down 0.7% year over year, mainly due to lower interconnection revenue.

• Non-consolidated operating income increased 10.5% year over year to KRW 482.4 billion, as marketing and D&A costs fell with 5G market maturity.

• Non-consolidated net income declined 3.6% year over year to KRW 474.6 billion, impacted by higher corporate tax after special depreciation benefits expired.

• SK Broadband revenue grew 2.0% year over year to KRW 1.1 trillion, with operating income up 23% and net income up 21.7%.

• Consolidated EBITDA margin was 33.3% in Q1 2025, up from 31.9% a year earlier.

Outlook and guidance

• The company is accelerating USIM shipments, developing financial plans to address potential costs from the cybersecurity incident, and plans to expand hyperscale AIDC and launch enterprise AI assistant 'A. Biz' in 1H 2025.

• Global AI agent service 'Aster' is in open beta in the U.S., with official release set for 2H 2025.

• Revenue impact from customer churn and new signup suspension will depend on future trends and timing of resumption.

• Stable dividend policy is maintained despite anticipated financial impact from the incident.