LG CNS continued its top-line growth in the first half of this year, driven by the expansion of external businesses including artificial intelligence (AI), cloud, and financial digital transformation (DX). While second-quarter operating profit slightly missed market expectations due to increased investment in new platforms, the company is viewed as having solidified its growth foundation by accelerating efforts to secure future growth engines such as AI data centers, physical AI, and next-generation financial systems.
LG CNS announced on the 31st through a regulatory filing that it recorded consolidated revenue of ₩1.52 trillion (approximately $1.1 billion) and operating profit of ₩127.9 billion (approximately $89.0 million) for the second quarter. Revenue increased 4.2% year-over-year, but operating profit declined 9.2%. Compared to the previous quarter, revenue rose 15.7% and operating profit surged 35.8%, reflecting seasonal peak effects and expanded project sales. For the entire first half, the company achieved revenue of ₩2.84 trillion (approximately $2.0 billion) and operating profit of ₩222.1 billion (approximately $154.6 million), up 6.1% and 1.1%, respectively, from the same period last year.
Compared to the second-quarter consensus compiled by financial data provider FnGuide—which projected revenue of ₩1.557 trillion and operating profit of ₩137 billion—actual revenue fell short by about 2.3% and operating profit by about 6.6%. However, the company explained that the sharp recovery in operating profit from the first quarter indicates a continuing trend of profitability improvement.
The core driver of first-half performance was the AI and cloud business. Revenue from this segment rose 5.1% year-over-year to ₩1.67 trillion (approximately $1.2 billion), accounting for roughly 59% of total revenue. In particular, hyperscale-level projects in Goyang Samsong and Yongin Jukjeon, aligned with the expanding AI data center construction market, generated stable revenue, and the company secured over ₩1 trillion (approximately $696.0 million) in DBO orders in the first half alone. The company has been expanding its AI infrastructure business by proposing modular AI data centers as a new business model while also launching ‘XPUWorks,’ a subscription-based service providing AI computing resources such as graphics processing units (GPUs) and neural processing units (NPUs).
In the AI platform sector, the company broadened its customer base beyond manufacturing and logistics to include pharmaceuticals and biotech, airports and aviation, and defense and shipbuilding. It expanded AI transformation (AX) projects for clients including Doosan, Korea Federation of SMEs, Kurly, and LX Pantos, while also strengthening its business based on the agentic AI platform ‘AgenticWorks’ in the financial and public sectors. Additionally, the company is actively pursuing new customer acquisition through partnerships with global AI firms such as OpenAI, Palantir, and Anthropic.
By business segment, the smart engineering division posted first-half revenue of ₩502.4 billion (approximately $349.7 million), up 6.2% year-over-year. External projects in defense, shipbuilding, semiconductors, and pharmaceuticals, alongside affiliate projects, began contributing meaningfully to revenue, while the manufacturing AX business expanded, centered on the AI smart factory solution ‘Factova.’ The digital business services (DBS) division recorded first-half revenue of ₩662.1 billion (approximately $460.8 million), up 8.8% year-over-year, marking the highest growth rate. Next-generation system builds and IT operations management (ITO) projects for the banking and insurance sectors progressed steadily, and the expansion of global financial clients also supported performance.
LG CNS identified physical AI and global business expansion as growth pillars for the second half. The company plans to expand its humanoid business based on ‘PhysicalWorks,’ a robot learning and operations platform, and industry-specific robot foundation models (RFMs). It recently signed a physical AI infrastructure contract with LG Electronics worth approximately ₩190 billion (approximately $132.2 million) to supply GPU-based AI infrastructure and a robot learning platform. The company also aims to expand collaboration with global robotics firms such as Skilled AI, Config, Dexmate, and Genesis AI, while building a robotics transformation (RX) ecosystem with Nvidia, Google DeepMind, and Amazon Web Services (AWS).
Global operations are also set for continued expansion. The Indonesia AI data center—the first such project won by a South Korean company—is scheduled for completion in the second half of the year. Furthermore, the company plans to participate in IMTS 2026, the world’s largest machine tool exhibition in Chicago, to intensify its push into the North American manufacturing AX market, while continuing to expand its financial DX business, particularly in the Asia-Pacific and Japan (APJ) region.
During the second-quarter earnings conference call held the same day, a concrete blueprint for the financial AX business and AI cost management strategy was also presented. Cho Sung-woo, Managing Director of LG CNS’s Financial AX Business, stated, “Next-generation projects in the financial sector are typically large-scale undertakings lasting about two years, with revenue recognition beginning in earnest roughly six months after initiation.” He added, “The Mirae Asset Life Insurance and Shinhan Investment Corp. projects have entered the full-scale development phase, and as the NH NongHyup Bank and KB Kookmin Bank next-generation projects also commence, their revenue contribution will gradually increase toward the second half of this year.” He explained, “As the ITO business for new customers secured through next-generation projects expands concurrently, it will strengthen not only short-term build revenue but also the foundation for stable operational revenue.” He further noted, “Next year, we expect the progress rate of ongoing financial next-generation projects to accelerate further, with new orders anticipated not only from banks but also from the credit card, insurance, and securities industries.”
Jin Yo-han, head of the LG CNS AI Center, diagnosed that corporate AI adoption is shifting toward a phase emphasizing cost-effectiveness, and highlighted the differentiated cost management features of its proprietary AI platform ‘AgenticWorks.’ He said, “AgenticWorks provides an ‘AI FinOps’ dashboard that allows users to check the usage and costs of major AI services like ChatGPT, Claude, and Gemini by service, organization, and user.” He added, “We are supporting a more secure cost management system through user-specific data access control features.” He continued, “We are also enhancing intelligent routing capabilities that connect appropriate AI models based on security requirements and task characteristics, optimizing both performance and cost simultaneously.”