LG CNS has maintained its sales growth momentum driven by its artificial intelligence (AI) business, but the company’s profitability has declined due to increased investments in related areas.
On Friday, LG CNS reported consolidated second-quarter sales of 1.52 trillion KRW (about 1.06 billion USD) and operating profit of 127.88 billion KRW (about 89.2 million USD). These figures represent a 4.2% increase in sales but a 9.2% decrease in operating profit compared to the same period last year. The results fell slightly short of market expectations, which had projected sales of 1.557 trillion KRW (about 1.08 billion USD) and operating profit of 137 billion KRW (about 95.6 million USD).
While revenue grew due to expansion in AI and cloud services, the company’s profitability decreased, likely due to increased investments in AI transformation (AX) and robotics transformation (RX) initiatives.
LG CNS reported that sales from its core growth drivers, AI and cloud businesses, increased by 5.1% year-on-year to 1.6714 trillion KRW (about 1.16 billion USD) in the first half, accounting for about 59% of total revenue.
For the first half of 2026, cumulative sales reached 2.8358 trillion KRW (about 1.98 billion USD), with operating profit of 222.077 billion KRW (about 155 million USD), marking increases of 6.1% and 1.1%, respectively, compared to the previous year.
The company highlighted significant achievements in its cloud and data center operations, particularly noting steady revenue from hyper-scale AI data center (AIDC) projects in locations such as Samsong and Jukjeon. LG CNS secured over 1 trillion KRW (about 698 million USD) in contracts for data center design, construction, and operation (DBO) projects in the first half of the year.
In the AI sector, LG CNS is bolstering its manufacturing and logistics AX business while expanding into industries such as pharmaceuticals, aviation, defense, and shipbuilding. The company is also developing innovative solutions based on its agentic AI platform in its core finance and public sector markets.
The smart engineering division reported a 6.2% increase in first-half sales, reaching 502.4 billion KRW (about 350.6 million USD). The smart factory business benefited from stable revenue from subsidiaries and new projects in defense, shipbuilding, semiconductors, and pharmaceuticals.
Digital business services saw first-half sales increase by 8.8% year-on-year to 662.1 billion KRW (about 462 million USD).
However, profitability declined due to delays in recognizing results from the data center DBO business and increased investments in new AX and RX projects. In May, LG CNS unveiled its RX platform, Physical Works, which integrates and manages the entire process from training to operation for robot implementation.
For the second half of 2026, LG CNS plans to enhance its Physical Works platform and validate field applications based on its industry-specific robot foundation model (RFM) in the physical AI sector.
Recently, the company signed a contract worth approximately 190 billion KRW (132.6 million USD) with LG Electronics for physical AI infrastructure. This collaboration involves humanoid robot training technology proof of concept (PoC), the Physical Works platform, and high-performance graphic processing unit (GPU)-based AI infrastructure.
Additionally, LG CNS aims to strengthen its global ecosystem by exploring RX collaborations with industry leaders such as NVIDIA, Google DeepMind, and AWS.
The company is also expanding its global operations, with its first AIDC project in Indonesia set for completion in the second half of the year.