Last year, domestic IT service corporations posted record results on the back of AI transition and growth in cloud businesses. LG CNS settled into the "6 trillion won revenue club," and Hyundai AutoEver surpassed 4 trillion won in revenue for the first time. However, POSCO DX under POSCO Group saw double-digit declines in revenue and operating profit, shrinking year over year.
While companies such as 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, where investment was curtailed due to sluggish steel and secondary battery conditions, appears to have deteriorated for a second straight year. Depending on group investment stances and whether new growth engines in the AI era take hold, IT service corporations saw diverging performances.
According to the industry on the 1st, the three 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 last year. The company said preliminary figures show revenue of 6.1295 trillion won and operating profit of 555.8 billion won, up 2.5% and 8.4%, respectively. It was a record high on an annual basis.
Orders for AX (AI transition) projects increased in finance, manufacturing and public sectors, and growth in AI data center DBO (design, build and operate) projects had a large impact. 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 posted revenue of 13.9299 trillion won and operating profit of 957.1 billion won last year, maintaining its industry-leading position. The cloud business led growth. While the IT service segment's revenue at Samsung SDS grew only 2% year over year, cloud segment revenue rose 15.4%.
In particular, usage of GPU services based on cloud infrastructure (CSP) increased, and as cloud transition projects in the financial sector got underway in earnest, expanded external orders drove performance growth. Increased orders for public-sector Generative AI service projects also served as a tailwind. A Samsung SDS official said, "This year, we will continue to expand AI and cloud businesses based on our 'AI full stack' capabilities that span AI infrastructure, platforms and solutions."
Samsung SDS and LG CNS predicted they will continue to grow this year centered on AX projects, as major corporations keep investing in Generative AI and AI agents.
Hyundai AutoEver surpassed 4 trillion won in revenue last year, posting the best results since its founding. Revenue was 4.1735 trillion won and operating profit was 258.6 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 its 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 to 40% of total revenue. The company said expansion of overseas projects for next-generation ERP systems for finished cars and the supply of cloud services led growth. IT outsourcing (ITO) segment revenue rose 8.4% to 1.7672 trillion won, driven by Hyundai Motor Group's IT and connected car service (CCS) operations.
As Hyundai Motor Group announced it would invest more than 50 trillion won in future businesses such as AI, Robotics and SDV (software-defined vehicles) through 2030, the market expects Hyundai AutoEver, which has strengthened its position as the group's core software affiliate, to continue steep growth this year.
In contrast, POSCO DX saw double-digit declines in revenue and operating profit last year. Annual results fell for the second straight year. 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. It swung to a loss from a year earlier.
Unlike Hyundai AutoEver, which benefited from Hyundai Motor Group's expanded investments, POSCO DX appears to have taken a direct hit from reduced group investments due to sluggish steel and secondary battery conditions. Last year, POSCO DX's orders totaled 1.0594 trillion won, down 6.6% from 1.1347 trillion won a year earlier. In terms of revenue mix, POSCO (59%), group companies (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, due to year-end expense processing reflecting the nature of the industry, we temporarily recorded an operating loss," and added, "Despite the impact of timing adjustments in group investment execution due to weakening 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 for a revenue turnaround by expanding robotic automation based on physical AI not only within group companies but also to external industrial sites."