Major South Korean IT service companies developing artificial intelligence and data centers as future growth businesses continued to increase revenue in the third quarter of 2026. As they pursued new business expansion, revenue growth rates and profitability improvements differed among the companies.
The companies are expanding into next-generation technologies connected with their corporate groups’ businesses, including AI factories, cloud computing, physical AI and robotics. They also plan to accelerate efforts to acquire external customers on that basis.
According to earnings announcements released by the companies on November 6, four major IT service companies, Lotte Innovate, Shinsegae I&C, CJ OliveNetworks and POSCO DX, presented their third-quarter results and future business strategies.
Third-quarter revenue rises on business efficiency improvements and increased AI transformation orders
Lotte Innovate had the highest third-quarter revenue at 284 billion won, followed by POSCO DX at 265.2 billion won, CJ OliveNetworks at 224.2 billion won and Shinsegae I&C at 176.9 billion won. All four companies reported year-on-year revenue growth. CJ OliveNetworks recorded the highest growth rate at 9.7%, followed by POSCO DX at 8.4%, Shinsegae I&C at 8.15% and Lotte Innovate at 2.3%.
Operating profit totaled 16.9 billion won at POSCO DX, 16.5 billion won at CJ OliveNetworks, 16.2 billion won at Shinsegae I&C and 12.4 billion won at Lotte Innovate. Compared with a year earlier, operating profit increased 88.0% at Lotte Innovate, 29.03% at Shinsegae I&C and 9.1% at CJ OliveNetworks, but fell 22.2% at POSCO DX.
Shinsegae I&C had the highest operating margin at approximately 9.2%, followed by CJ OliveNetworks at 7.4%, POSCO DX at 6.4% and Lotte Innovate at 4.4%.
Although Lotte Innovate’s revenue grew only 2.3%, its operating profit increased 88.0% through selective order-taking, more efficient business operations and improved subsidiary earnings. Operating profit was approximately 13% above the market forecast of 11 billion won. However, the company fell into a net loss of 7.1 billion won.
Shinsegae I&C’s revenue and operating profit increased 8.15% and 29.03%, respectively, supported by expanded IT service projects for internal and external customers and increased IT distribution revenue. A reduction in low-margin business and lower costs following the transfer of its electric vehicle charging business also contributed to improved profitability. The IT distribution division moved from a loss of 200 million won a year earlier to a profit of 1.9 billion won.
CJ OliveNetworks achieved its highest-ever third-quarter results, with revenue of 224.2 billion won and operating profit of 16.5 billion won. Revenue from its smart space AI transformation business, including AI factories and logistics automation, increased 112.3% year on year, leading overall revenue growth. AI-driven improvements in development productivity and cost efficiency also contributed to higher operating profit.
POSCO DX’s revenue increased year on year, but operating profit fell 22.2%. As revenue from large digital transformation projects began to be fully reflected in its results, revenue and operating profit rose 14.0% and 71.0%, respectively, from the preceding quarter, showing a recovery. New orders totaled 246.9 billion won, up 32.7% year on year.
Expanding external business from data centers and cloud computing to physical AI
Alongside earnings improvements, the four companies are expanding next-generation businesses including AI, data centers, cloud computing and industrial automation. Their common direction is to extend IT service capabilities developed primarily through work for group affiliates to external customers.
Lotte Innovate identified data centers as a core business for future revenue growth. It has secured external business including contracted operation of the Cam Square data center, an IGIS Asset Management edge data center and a large data center in Ansan. It also plans to expand its design, build and operate business. Kyobo Securities expects data centers’ share of revenue to rise from 18.4% in 2026 to 25.3% in 2028.
Shinsegae I&C has sold assets in its electric vehicle charging business and is concentrating its capabilities on core IT businesses such as AI and cloud computing. In July 2026, it signed an agreement with KT covering enterprise private and hybrid cloud businesses. It is targeting external customers with its subscription-based private cloud service, Sparos One. It is also strengthening development of retail technology, including AI-based demand forecasting and personalized recommendations.
CJ OliveNetworks is expanding industry-specific AI transformation businesses, including AI factories, logistics automation and media AI. Third-quarter smart space AI transformation revenue more than doubled to 17.2 billion won, while data and marketing platform revenue increased 21.7%. The company plans to expand new orders, focusing on AI data centers and AI transformation in manufacturing and logistics.
POSCO DX is expanding physical AI and robotic automation technologies proven in steel manufacturing across its corporate group. It is applying these technologies at industrial sites, including unmanned operation of steelworks cranes and raw material unloaders, and automated guided vehicles for transporting steel products. It is also pursuing industrial vision AI using domestically produced neural processing units and an AI agent business.
Starting in 2027, POSCO DX aims to substantially expand its external business based on technologies and business experience acquired within its corporate group, and to increase orders and revenue by approximately 30% within the next three years.
The four companies are pursuing improved profitability and external customer acquisition while expanding new businesses such as AI and data centers. The extent to which new orders translate into actual revenue and profit is seen as a major factor that will determine their medium- to long-term growth.
“We will make 2027 a year in which we strengthen profitability in existing businesses while expanding revenue in new growth businesses,” a Lotte Innovate representative said. “We plan to strengthen the foundation for sustainable growth by expanding external revenue centered on data centers and commercializing AI and mobility businesses.”
Original Korean article: ZDNet Korea
English brief by Korea Wind Intelligence, koreawindintel.com
