[Edaily Reporter NA EUN-KYUNG ] Lunit Inc.(328130)reduced its third-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) loss by 77% year-over-year. By increasing revenue and cutting costs, the company’s quarterly EBITDA loss fell to its lowest level in 14 quarters since the first quarter of 2023.

According to Lunit Inc.’s third-quarter earnings report released on the 12th, the company’s consolidated EBITDA loss for the third quarter was 3.501 billion won, a 77% decrease from the same period last year (14.925 billion won). Compared to the previous quarter, the loss also decreased by 55%.

In the first quarter of 2023, revenue from a one-time technology fee received from U.S.-based Guardant Health was reflected in the results. Excluding this, revenue at that time was approximately 6.2 billion won. Considering this one-time factor, Lunit Inc. assesses that the third quarter of this year recorded the smallest quarterly EBITDA loss in real terms since its KOSDAQ listing in 2022.

Third-quarter revenue totaled 22.215 billion won, a 13% increase year-over-year. This marks the highest quarterly revenue in the company’s history. Cumulative revenue for the first three quarters of this year also reached 67.981 billion won, up 20% from the same period last year. Of this, overseas revenue amounted to 64.27 billion won, accounting for approximately 95% of the total.

Cost efficiency measures contributed to the improvement in profitability. Lunit Inc.’s cash-based operating expenses for the third quarter decreased by 25% year-over-year, marking the third consecutive quarter of decline this year.

The combination of revenue growth and cost reductions led to a narrowing of the operating loss. The third-quarter operating loss was 10.685 billion won, down 50% year-over-year and 30% quarter-over-quarter. The cumulative operating loss for the first three quarters was 39.647 billion won, a 38% decrease compared to the same period last year. The cumulative EBITDA loss also decreased by 59% year-over-year.

EBITDA is a metric that represents profit before interest, income taxes, and depreciation and amortization. It is used to assess a business’s profitability by excluding the burden of depreciation and amortization on fixed assets and intangible assets. However, since Lunit Inc. is still posting an operating loss, the reduction in the EBITDA deficit does not necessarily mean the company has turned a profit.

Given the company’s business structure, which relies heavily on overseas sales, exchange rates also impacted its performance. According to the Bank of Korea’s Economic Statistics System, the monthly average won-dollar exchange rate fell from 1,527.3 won in June to 1,359.0 won in September. Although this created an unfavorable environment for converting revenue generated in foreign currencies, such as the U.S. dollar, into won, third-quarter overseas revenue increased by 15% year-over-year and 3% quarter-over-quarter. A Lunit Inc. official explained, “If it weren’t for the impact of exchange rates, the third-quarter loss would have been even smaller.”

By business segment, the cancer screening division drove overall revenue growth. Cumulative revenue from the cancer screening business for the first three quarters of this year reached 63.17 billion won, a 20% increase compared to the same period last year. Of this, North American revenue accounted for 71%.

Lunit Inc. secured a customer base among North American healthcare institutions by acquiring Volpara, a breast cancer screening software company, in 2024. Volpara’s subscription-based software-as-a-service (SaaS) business, now operating as Lunit International, is structured to generate recurring revenue through contracts with existing customers.

The company is also pursuing a cross-selling strategy to supply both companies’ products to existing customers. This approach involves providing the medical imaging AI solution “Lunit Inc. Insight” to Lunit Inc. customers and supplying Lunit Inc.’s products to existing Lunit Inc. customers, thereby increasing revenue per customer.

Cumulative third-quarter revenue for the cancer treatment business segment reached 4.81 billion won, a 19% increase compared to the same period last year. This business is centered around “Lunit Scope,” which uses AI to analyze pathological tissue and provide information necessary for the development of anticancer drugs.

Recently, demand has been growing for “Lunit Inc. Scope uIHC,” an immunohistochemistry (IHC) analysis solution that can be utilized in the development of antibody-drug conjugates (ADCs). The company also noted that joint research with global pharmaceutical companies using “Lunit Inc. Scope IO,” a tumor microenvironment analysis solution, is expanding.

Considering that revenue from pharmaceutical companies typically peaks in the fourth quarter, Lunit Inc. expects to see revenue growth in this business segment through the end of the year.

Seo Beom-seok, CEO of Lunit Inc., stated, “Despite challenging external conditions, including a decline in the won-dollar exchange rate, we recorded our highest cumulative revenue since the company’s founding as of the third quarter and significantly reduced our EBITDA loss through cost efficiency measures.” He added, “As our structural improvements—increasing revenue while cutting costs—are being reflected in our quarterly figures, we intend to maintain this momentum through the fourth quarter and into next year.”