KT Corporation Q4 FY2025 earnings call

• Apologized to shareholders and customers for data breach incident in 2024 and committed to regaining trust.
• 2025 annual performance: Revenue and operating profit grew vs last year, core businesses like data center, cloud, and Gwangjin-gu real estate project contributed. Excluding Gwangjin-gu project profit, consolidated and stand-alone operating profit had double-digit growth.
• Launched series of new products in collaboration with global big tech, including SOTA K AI model, secure public cloud, and partnership with Palantir. Opened Gasan AI data center using liquid cooling technology.
• 2025 year-end dividend set at KRW 600 per share, DPS increased 20% to KRW 2,400. Plan for KRW 250 billion share buyback and cancellation.
• New CEO appointed, focus on strengthening fundamentals, implementing security improvements with KRW 1 trillion investment in security over 5 years to expand Zero-Trust security, etc.

Wireless revenue was up 2.8% on year to KRW 7,155.4 billion, driven by subscriber expansion around 5G with 5G penetration at 81.8% end of '25. Fixed line: Broadband revenue posted 1.9% year-over-year growth to KRW 2,533.5 billion, Media business revenue grew 1.7%, Home Telephony revenue was down 5.8% to KRW 658.9 billion. B2B service revenue was up 1.3% year-over-year, with AI IT seeing growth of 3.1% on back of AICC design and build business. KT Cloud revenue increased 27.4% year-on-year to KRW 997.5 billion. KT Estate revenue was up 15.9% year-on-year to KRW 719.3 billion.

• 2026 earnings expected to be better than 2025.
• Shareholder return plan to be finalized by new CEO and Board of Directors, expected to align with past progressive shareholder return stance.
• KT Cloud growth trend expected to continue in 2026.

• Data breach incident in 2024 causing inconvenience and concerns to shareholders and customers, leading to short-term cost increase for customer compensation measures.

Q: What is the financial impact of the customer compensation package regarding the data breach incident?

A: The benefit to customers will amount to about KRW 450 billion. Not all expense booked as cost in 2025, with 2026 costs to be accounted with external auditor. But 2025 costs already booked, and 2026 earnings expected better than 2025.

Q: Will the incoming new CEO keep to the previous shareholder return stance?

A: Shareholder return plan for 2026 to be finalized by new CEO and Board. Expected to align with past progressive stance. New CEO has B2B expertise and values company's promise to market and shareholders, so no significant change to strategic approach expected, though tactical approaches may reflect new CEO's philosophy.

Q: Outlook for wireless business going forward?

A: During 14 days of cancellation fee waiver, about 230,000 subscribers left, but full year had net addition. Hard to expect very high double-digit growth, focus on rationalizing selling expenses and improving offerings for efficiency.

Q: Why is B2B growth slower than peers and outlook?

A: B2B business includes enterprise Internet, lease line, data center, and AI. Combining KT Cloud revenue, B2B growth is 6% year-over-year. KT Cloud separate growth was 27.4% year-on-year and expected to continue in 2026.