TLDR: South Korean IT service giants Samsung SDS, LG CNS, and SK AX are experiencing significant growth in their operating profits and market standing, primarily fueled by strategic investments and expansion in artificial intelligence (AI) and cloud computing services. This trend is evident in their recent financial performances, with Samsung SDS reporting increased revenues and operating profits in Q2 2025, driven by strong cloud business performance and generative AI solution adoption. LG CNS and SK AX are also showing robust growth, with AI and cloud initiatives being key contributors to their financial success.
Domestic major IT service corporations, including Samsung SDS, LG CNS, and SK AX, are demonstrating strong performance results following their intensified focus on ‘artificial intelligence (AI) transformation and construction’ projects. Both Samsung SDS and LG CNS recorded growth in the second quarter of this year, with SK AX also anticipating double-digit performance increases. This robust performance is largely attributed to AI-based project awards in the public and financial sectors, alongside the expansion of their cloud and data center businesses.
Samsung SDS announced on July 24th that its second-quarter revenues reached 3.512 trillion won, with an operating profit of 230.2 billion won. This marks a 4.2% increase compared to the same period last year. The IT services institutional sector saw revenues rise by 5.8% to 1.6784 trillion won. Notably, cloud business revenues surged by approximately 20% to 665.2 billion won. Within the cloud segment, SCP (Samsung Cloud Platform)-based CSP (Cloud Service Provider) grew by 26% year-on-year, propelled by increased demand for high-performance computing (HPC), cloud network expansions, and a rise in public cloud project awards. The MSP (Managed Service Provider) sector also experienced a 20% growth, supported by cloud transformations in public institutions, increasing demand for generative AI services, and the implementation of supply chain management (SCM) and customer relationship management (CRM) systems by overseas corporations. In the logistics sector, despite some cargo volume decreases due to U.S. tariff policies, revenue increased by 3% year-on-year to 1.8336 trillion won, driven by new customer acquisition in warehouse logistics. The digital logistics platform ‘Cello Square’ reported revenues of 270.1 billion won, with corporate subscribers exceeding 21,900, a 48% increase compared to the previous year. Samsung SDS is also actively accelerating the dissemination of generative AI-based solutions, including its proprietary platform ‘Fabrics’ and an AI work assistance tool.
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LG CNS is also showing a notable recovery in both performance and stock prices. In the first quarter of 2025, it recorded consolidated revenue of 1.2114 trillion won and operating profit of 78.9 billion won, marking increases of 13.2% and 144.3%, respectively, compared to the same period last year. Revenue from cloud and AI businesses reached 717.4 billion won, accounting for 59% of the total. SK AX reported a revenue of 586 billion won and an operating profit of 29 billion won in the first quarter, marking an approximately 41% increase in revenue and a return to profit compared to the same period last year. The company aims to transform into an AX service partner, leading customer innovation with AI technology, and is redesigning its work, organization, and systems around AI. Along with SK Telecom and SK Broadband, SK AX is building an AI data center (AIDC) based on GPU infrastructure, targeting a 30% increase in overall productivity by 2027.
