Last year, Korea's IT service corporations posted record results on the back of the AI transition and growth in cloud businesses. LG CNS settled into the "6 trillion won revenue club," and Hyundai AutoEver topped 4 trillion won in revenue for the first time. But POSCO DX under POSCO Group saw double-digit declines in revenue and operating profit, contracting year over year.
While Samsung SDS and LG CNS, which expanded external orders for AI and cloud, improved their results, POSCO DX, which is highly dependent on POSCO Group whose investments shrank due to sluggish steel and secondary battery market conditions, appears to have suffered a second straight year of weaker results. Depending on group investment stances and whether new growth engines in the AI era take hold, IT service corporations' fortunes diverged.
According to the industry on the 1st, major IT service firms Samsung SDS, LG CNS and Hyundai AutoEver posted solid results last year.
LG CNS surpassed 6 trillion won in annual revenue for the first time since its founding. The company said preliminary figures show last year's revenue at 6.1295 trillion won and operating profit at 555.8 billion won, up 2.5% and 8.4%, respectively. It was a record on an annual basis.
Increases in AX (AI transformation) orders in finance, manufacturing and public sectors, as well as growth in AI data center DBO (design, build, operate) projects, were major drivers. Annual revenue in the AI and cloud segment rose 7% to 3.5872 trillion won, accounting for more than half of total revenue. LG CNS plans to continue securing external customers in the AX market this year and push "physical AI" businesses identified as future growth drivers to accelerate robot transformation (RX).
Samsung SDS recorded 13.9299 trillion won in revenue and 957.1 billion won in operating profit last year, maintaining its lead in the industry. The cloud business drove growth. While the IT service segment's revenue rose only 2% from a year earlier, cloud segment revenue increased 15.4%.
In particular, usage of GPU services based on cloud infrastructure (CSP) grew, and external orders expanded as financial institutions' cloud transitions gathered pace, driving performance. Increased orders related to generative AI services in the public sector also helped. A Samsung SDS official said, "This year as well, we will continue to expand AI and cloud businesses based on 'AI full stack' capabilities spanning AI infrastructure, platforms and solutions."
Samsung SDS and LG CNS projected they will continue growth centered on AX this year as major corporations keep investing in Generative AI and AI agents.
Hyundai AutoEver surpassed 4 trillion won in revenue last year, posting its best results since its founding. Revenue was 4.2521 trillion won and operating profit was 255.3 billion won, up 14.5% and 13.8%, respectively, from a year earlier. Unlike Samsung SDS and LG CNS, which increased the share of external customers, Hyundai AutoEver lifted results by taking charge of Hyundai Motor Group's digital transformation (DX) execution.
By segment, the system integration (SI) business grew 29.6% year over year to 1.6572 trillion won, raising its share of total revenue to 40%. The company said expansion of overseas business for next-generation ERP systems for finished vehicles and supply of cloud services led growth. IT outsourcing (ITO) segment revenue rose 8.4% to 1.7672 trillion won, with Hyundai Motor Group's IT and connected car services (CCS) operations driving growth.
As Hyundai Motor Group announced plans to invest more than 50 trillion won in future businesses including AI, Robotics and SDV (software-defined vehicles) by 2030, the market expects Hyundai AutoEver, which has strengthened its position as the group's core software affiliate, to continue steep growth this year.
By contrast, POSCO DX saw double-digit declines in revenue and operating profit last year. Annual results fell for the second straight year. Last year's revenue dropped 27% to 1.0752 trillion won, and operating profit fell 44.6% to 60.4 billion won. In the fourth quarter, with a one-off expense of 12.5 billion won reflected, it posted an operating loss of 1.2 billion won, swinging to a loss from a year earlier.
Unlike Hyundai AutoEver, which benefited from Hyundai Motor Group's investment expansion, POSCO DX appears to have taken a direct hit from reduced group investments due to sluggish steel and secondary battery market conditions. Last year, POSCO DX's orders totaled 1.0594 trillion won, down 6.6% from 1.1347 trillion won a year earlier. By revenue share, POSCO (59%), group affiliates (26%), Future M (11%) and external (4%) meant internal transactions within POSCO Group accounted for 96%.
A POSCO DX official said, "In the fourth quarter last year, we temporarily posted an operating loss as year-end expense processing was reflected due to industry characteristics," adding, "Despite the timing adjustments in group investment execution amid weaker demand in downstream industries such as steel and secondary batteries, cumulative orders last year were similar to the previous year."
This year, the plan is to focus on boosting productivity by applying robotic automation to industrial sites such as steel and secondary batteries. A POSCO DX official said, "We will continue efforts toward a revenue turnaround by expanding physical AI-based robotic automation not only to group affiliates but also to external industrial sites."