[Edaily Reporter Shin Yeong-bin ] Major domestic information technology (IT) service companies continued to grow their revenue in the second quarter of this year, driven by their artificial intelligence (AI) and cloud businesses. This growth stems from the expansion of their revenue base as companies’ adoption of generative AI has moved beyond pilot projects to actual business operations, including the development of data platforms, Agent AI, and graphics processing unit (GPU) infrastructure.

LG CNS Sees Operating Profit Decline Due to Proactive AI Investment… Expects Recovery in Deferred Projects in the Second Half of the Year

According to the information technology (IT) industry on the 31st

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LG CNS (#LGCNES) reported consolidated revenue of 1.5208 trillion won and operating profit of 127.9 billion won for the second quarter of this year. While revenue increased by 4.2% year-over-year, operating profit decreased by 9.2%.

Revenue from AI and cloud businesses rose 3.9% to 906 billion won. Demand for AI platforms, data infrastructure, cloud managed services (MSP), and GPU infrastructure deployment and maintenance drove this growth. Next-generation financial systems and digital business operations also contributed to the revenue increase.

The decline in profitability reflected increased investments in new AI platforms, physical AI R&D, and securing key talent, as well as the postponement of project contracts at some affiliates to the second half of the year.

In the second half of the year, LG CNS plans to expand its next-generation financial systems, AI and cloud, data center design, construction, and operation (DBO), and physical AI businesses. The company is also accelerating efforts to secure physical AI reference projects in the manufacturing and logistics sectors, such as building a robot data factory with LGELECTRONICS and conducting robot proof-of-concept tests at Kurly’s logistics sites.

Samsung SDS Sees 75% Growth in External Cloud Business… Expands AI Infrastructure to 800 MW

Samsung SDS (SAMSUNG SDS CO., LTD.(018260)) also continued its growth momentum, driven primarily by its cloud and logistics businesses. Samsung SDS’s second-quarter revenue reached 3.7178 trillion won, a 5.9% increase year-over-year, while operating profit rose 0.7% to 231.8 billion won.

Cloud revenue rose 17% to 779.4 billion won. In particular, external cloud revenue surged 75%, driven by the expansion of external clients in sectors such as finance, the public sector, and shipbuilding. It was notable that the company is rapidly broadening its external client base, moving away from a business structure centered on Samsung affiliates.

Samsung SDS plans to expand its AI infrastructure business—currently at approximately 110 megawatts (MW)—to 230 MW by 2029 and over 800 MW by 2031. The NVIDIA B300, which the company proactively adopted last March as one of the first domestic cloud service providers (CSPs) to do so, is already being utilized in customer services for more than 90% of the deployed units.

While demand for AI infrastructure and cloud services is driving revenue growth, the investment burden is also increasing. Building data centers and securing GPUs require substantial capital, and upfront investments in personnel and technology are necessary to expand AX business in the public and financial sectors. Samsung SDS has set a goal to restore its IT services operating profit margin to around 12% in the second half of the year through increased revenue and improved profitability in the public and financial sectors.

HyundaiAutoever and LOTTE INNOVATE Perform Well… POSCO DX Sees Rebound in Orders

HyundaiAutoever(307950)posted the most notable growth among major IT service companies. Second-quarter revenue reached 1.2507 trillion won, and operating profit stood at 90.5 billion won, representing year-over-year increases of 20.0% and 11.3%, respectively.

Revenue in the Enterprise IT division—comprising System Integration (SI) and IT Outsourcing (ITO)—rose 27.9% to 1.0384 trillion won. Increased demand for cloud services from HyundaiMotor Group affiliates and next-generation Enterprise Resource Planning (ERP) migration projects drove these results.

In contrast, revenue from vehicle software decreased by 7.8% to 212.3 billion won. This was due to a slowdown in the growth of the vehicle software segment as volatility in the automotive market intensified amid U.S. tariffs and geopolitical uncertainties. Overall, the strong growth rate of the Enterprise IT business offset the slump in vehicle software.

LOTTE INNOVATE(286940)succeeded in improving profitability. Second-quarter revenue was 274.5 billion won, similar to the same period last year, but operating profit rose 54% to 12.4 billion won. The operating profit margin also rose by 1.7 percentage points to 4.5%.

The profit increase was driven by a selective order-taking strategy that evaluates project viability from the initial bidding stage, improvements in project execution efficiency, and the return to profitability of key subsidiaries. LOTTE INNOVATE is expanding its data center DBO and Group AX businesses while simultaneously prioritizing profitability in its operations.

In contrast, POSCO DX(022100)posted lackluster results due to the impact of investment adjustments by Group companies. Second-quarter revenue stood at 232.6 billion won, down 14.8% year-over-year, while operating profit fell 42.3% to 9.9 billion won.

However, compared to the first quarter, operating profit increased by 169.6%, and the operating profit margin improved from 1.5% to 4.2%. Second-quarter order intake reached 230.4 billion won, a 32.8% increase year-over-year, and the order backlog stood at approximately 960 billion won.

POSCO DX is expanding its businesses in the automation of high-risk steelmaking processes, the unmanned operation of crane and secondary battery material plants, and Agent AI-based office automation. The company expects orders and revenue in the IT sector to gradually recover once the POSCO Group’s large-scale AX projects begin to be awarded in earnest starting in the second half of the year.

AI Business in the Deployment and Operation Phase… Ability to Recoup Investments Is a Key Competitive Advantage

The industry is taking note of the fact that the AI business is transitioning into a revenue-generating operation. It is assessed that the role of IT service companies is expanding as enterprises are not merely adopting AI models but are also organizing data, integrating AI agents into business systems, and building out GPU and data center infrastructure.

In particular, in next-generation systems for the financial sector, public-sector AX, and manufacturing and logistics automation projects, traditional SI and ITO capabilities are being integrated with AI platforms, cloud services, and data businesses. The fact that once-built platforms and cloud environments can generate revenue through operations, maintenance, and subscriptions is another reason companies are increasing their investment in these areas.

However, increased AI revenue does not necessarily translate directly into higher profits. There are significant upfront costs associated with securing data centers and GPUs, hiring AI specialists, and conducting R&D for proprietary platforms. Quarterly earnings volatility may also increase depending on the timing of project orders from group affiliates and the revenue recognition schedules for large-scale financial and public sector projects.

An industry insider stated, “As the generative AI business shifts from a proof-of-concept (PoC) focus to the actual deployment and operation stages, order opportunities for IT service companies are increasing,” adding, “Profitability will hinge on how much they can expand the share of external clients and cloud/subscription-based revenue, as well as how efficiently they can recoup their AI infrastructure investment costs.”