KT Q1 2026 Earnings Report

KT EPS Results

• Actual EPS: $0.16
• Consensus EPS: $0.18
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: N/A

KT Revenue Results

• Actual Revenue: $4.72 billion
• Expected Revenue: $4.69 billion
• Beat/Miss: Beat by +$31.82 million
• YoY Revenue Growth: N/A

KT Announcement Details

• Quarter: Q1 2026
• Date: 4/13/2026
• Time: Before Market Opens
• Conference Call Date: N/A
• Conference Call Time: N/A

KT (NYSE:KT), listed on the New York Stock Exchange as an American depositary receipt under the symbol KT, is a major telecommunications and information technology provider headquartered in Seongnam, South Korea. The company’s services span traditional fixed-line voice communication, high-speed broadband internet access and mobile cellular networks. Leveraging an extensive fiber-optic and wireless infrastructure, KT delivers voice, data and multimedia solutions to both consumer and enterprise customers.

KT has been at the forefront of technological innovation in its home market, launching South Korea’s first commercial 5G network and expanding its offerings to include Internet of Things (IoT) platforms, cloud computing services and cybersecurity solutions. Its media division operates one of the country’s largest IPTV platforms, providing on-demand video, digital content and interactive entertainment. For business clients, KT delivers integrated ICT services encompassing data center operations, network management and system integration across industries such as finance, manufacturing and public administration.

Originally founded in 1981 as a state-owned telecom operator and privatized in the early 2000s, KT has pursued a strategy of diversification and global collaboration. The company partners with international technology firms to support equipment development, network interoperability and service innovation. While its core market remains South Korea, KT continues to explore overseas opportunities through technology exports and strategic ventures aimed at extending its global footprint.

KT Q1 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: KT said it is repositioning itself as an AX platform company, with a focus on restoring customer trust, strengthening network/security/IT fundamentals, and expanding AI-driven growth in B2C, B2B, and new business areas.
• Neutral Sentiment: Q1 results were weaker year over year, with operating revenue down 1.0% to KRW 6.78 trillion and operating income down 29.9% to KRW 482.7 billion, mainly due to last year’s property sale base effect and higher sales and labor costs.
• Positive Sentiment: KT reaffirmed its shareholder returns policy, keeping the 2026–2028 payout framework at 50% of standalone adjusted net income, setting a minimum annual dividend of KRW 2,400 per share, and completing a KRW 250 billion share buyback by September.
• Positive Sentiment: Wireless momentum improved after the January waiver period ended, with net subscriber additions from February and wireless service revenue up 0.4% year over year; management also highlighted new “Choice” plans and lower-cost acquisition channels to support ARPU and revenue growth.
• Positive Sentiment: KT is leaning into AI data centers and cloud as a growth engine, targeting 500 MW of total data center capacity within five years and saying KT Cloud should deliver double-digit revenue growth this year.

Presentation

[Operator]

Good morning and good evening. Thank you all for joining this conference call. Now we will begin the conference of the first quarter of fiscal year 2026 earnings results by KT. We would like to have welcoming remarks from KT IRO, and then CFO will present earnings result and entertain your questions. This conference will start with a presentation followed by a Q&A session. If you have a question, please press star one, that is star and one on your phone during the Q&A. Now we would like to turn the conference over to KT IRO.

[Sun Wook Kim, Investor Relations Officer at KT]

[Non-English content].

[Translator]

Good afternoon. I am Sun Wook Kim, IRO of KT. We will now begin the earnings presentation for the first quarter of 2026.

[Sun Wook Kim, Investor Relations Officer at KT]

[Non-English content].

[Translator]

Please note that today's presentation includes estimates of financial and operating performance based on K-IFRS that have not been reviewed by an outside auditor. As such, other than confirmed historical data, we cannot guarantee the accuracy and completeness of financial and business-related information, and such information is subject to change in the future.

[Sun Wook Kim, Investor Relations Officer at KT]

[Non-Enlish content].

[Translator]

Now, Min Hye-byung, CFO of KT, will present the 2026 Q1 earnings.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Good afternoon. I am Min Hye-byung, CFO of KT. In Q1, KT reorganized the company's growth strategy and implementation system based on stable transition of the management and business structure and developed a new midterm shareholder return policy to solidify the foundation for corporate value enhancement.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

KT will evolve to become an AX platform company that leads the AI innovation of Korea. AX innovation will be a springboard for our next leap forward. First, we will make utmost effort to regain customer trust while also strengthening our core businesses by innovating information security, network, and IT infrastructure. Second, we plan to secure solid growth drivers with AX innovation-based success models such as sector specific AX, hyper-personalized AX, and new growth AX.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

At the same time, we will continue to seamlessly implement our corporate value up plan. In order to ensure continuity, the new midterm shareholder return policy, effective from 2026 to 2028, will be equivalent to the previous policy of using 50% of standalone adjusted net income as resources for shareholder return.

[Min Hye-byung, CFO at KT]

[Non-english content].

[Translator]

For 2026, the annual dividend per share will be a minimum of KRW 2,400. The dividend per share for Q1 will be KRW 600. The record date is May 27th and payment date is June 11th. As part of our corporate value up plan for 2026, the share buyback program of KRW 250 billion will be completed by September.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

The performance and future plan of each business division will be presented by the respective division heads before we dive into the Q1 results.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

Good afternoon. I am Park Hyun-jin, Head of the Customer Business Group.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

The B2C business in January experienced temporary decline in both wireless and fixed line subscribers because of the early termination penalty waiver program. Since February, we are observing a net increase in the number of subscribers. The related sales expense, which increased last year, should weigh on this year's results as it is amortized this year. Since February, the related numbers are being managed within our business plan.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

The most important strategic direction this year is to regain customer trust while also pursuing sustainable growth by offering a hyper-personalized customer experience based on AX. In this regard, since February 1st, we have been running a customer appreciation program to regain customer trust and strengthen customer protection. On April 28th, we launched the Customer Protection 365 task force, to which we are concentrating company-wide resources.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

We are working to detect risk preemptively by leveraging AI to analyze on and offline VOC while establishing a system to address damages incurred by customers within 24 hours based on a company-wide cooperation system. We also have the customer outreach forum to engage in direct communication with customers.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

In order to provide an AX-based hyper-personalized customer experience, we are concentrating on the following. First, we will focus on what we do best, which is AI in B2C. MyK, the AI service for B2C customers, will be constantly improved to offer hyper-personalized user experience and convenience. For small business owners, we have the Sajang Easy, which offers specialized AI services for the small business segment. We will continuously develop the platform to support the success of small business owners.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

Second, we will prepare the next IPTV platform to enhance the media content user experience. The platform will offer hyper-personalized customized services by using AI speakers and TV windows. Content curated to the taste of the user will be recommended while also enhancing overall convenience.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

Third, AI will be applied to the entire process of customer contact to deliver uninterrupted user service. AI will be introduced to customer consultation, sales, phone activation, and customer service to boost operational efficiency and to ensure that customers use KT in the most convenient manner from beginning to end. By leveraging AI, we will offer products and services tailored to customer needs, provide activation service at the customer's earliest convenience, and ensure continued usage of KT services through customized care.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Good afternoon. I am Kim Bong-gyun, Head of the Enterprise Business Division.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

The strategic goal of KT's B2B business in 2026 is to lead the B2B AX market with specialized AI for the public sector and different industries. The three main pillars are basics and principles, solid growth, and future readiness.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Basics and principles will be our top priority in terms of securing strong fundamentals. We will rigorously fulfill our commitment to customers while ensuring a safe working environment for our employees. By doing so, we will strengthen our preemptive risk management system.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Solid growth will be driven by KT's uniquely differentiated telco capabilities and AX competitiveness. To this end, we will preoccupy the rapidly growing AX infrastructure market by winning a diverse array of large-scale projects that are expected for this year, and also expand the database business by leveraging group-wide capabilities. We will pioneer new markets step by step by promoting our sector specific AX reference within each customer category, and then expand our presence into neighboring sectors. We will continuously advance our service model to reflect values desired by customers to offer telco and AX services as a package.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Lastly, we will prepare for the future to secure sustainable growth. We will combine telco, which is KT's key strength, with AX to deliver a standard model for each industry that addresses the key issues of customers. Based on the standard model, we will lay the foundation for mid, long-term growth by innovating the overall B2B project implementation system across sales, consulting, execution and operations.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

Good afternoon. I am Park Sang-won, head of the AX Business division. In Q1, KT mobilized company-wide AX capabilities and organically connected AX consulting, AI technology, platforms, and operational skills to develop an AX platform-centered project implementation system that can rapidly and effectively support the customer AX journey.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

In addition, we have started the execution-based AX consulting service, which works together with customers on diverse sectors to define on-site AX issues and jointly verify applicable solutions.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

Going forward, KT, AX business will go beyond being a mere AX tech provider to become an AX value partner by working together with customers to deliver business innovation. To this end, in 2026, KT's AX business will focus on four strategic directions.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

First, we will further cement the business competitiveness of our key strengths, which is Agentic AICC. We are incorporating business task automation based on Agentic AI to develop the next generation AICC. AICC will be more than a simple customer service channel. It will evolve to become a customized marketing tunnel, which we plan to deploy to a wide range of sectors.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

Second, we will develop a platform that considers industrial characteristics, government regulations, security, and even Sovereign requirements. The five-layer AX end-to-end service will be strengthened with this platform.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

Customers will be able to apply our AX platform to their business rapidly. It will be offered as a customized service that incorporates sector-specific features. We plan to provide an end-to-end AX service, which encompasses the A to Z of AX, from adoption to operational optimization.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

Third, we will strengthen the foundation for the data for AI business, which is necessary to secure and leverage data and is a key factor for successful corporate AX adoption. Based on internally accumulated data operation experience in the process of our own AX innovation, we will advance the foundation for data usage for customers to create a key driver for AX growth.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

Lastly, we will continue to expand the scope of our AX business. With customized product packaging, we will venture into finance, public, manufacturing, defense, and other sectors to continue growth.

[Park Sang-won, Head of AX Business Division at KT]

[Non-English content].

[Translator]

By commercializing managed services, which enables continuous support and optimization of the overall AX operation of customers, we will build a solid footing for long-term sustainable business growth. Thank you.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

That was the presentation by the heads of each business division on the first quarter results and the overview of the future strategic direction. We will move on to the financial performance of 2026 Q1.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Operating revenue decreased by 1.0% YoY to KRW 6,778 billion. Operating income declined by 29.9% to KRW 482.7 billion due to last year's base effect coming from property sales of the Gwangjin District Development Project and an increase of sales and labor costs.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Net income contracted by 31.5% YoY to KRW 388.3 billion due to the decline of operating income. EBITDA decreased by 13.1% to KRW 1,440 billion. I'll go over the operating expense on the next page.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Depreciation expense should shrink. However, the amortization of increased sales expense that was incurred last year and the increase in labor cost led to a 2.3% increase year-over-year to KRW 6,295.7 billion. The statement of financial position is on the next page.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

As of 2026 Q1, debt to equity stayed at 117.6%. Net debt to equity decreased by 3.9 percentage points on YoY basis to 39.9%.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

The total CapEx executed by KT and major group subsidiaries in 2026 Q1 was KRW 363.7 billion. On standalone basis, CapEx was KRW 304.2 billion. Major subsidiaries executed KRW 59.5 billion. Now I will go over the performance of each business division.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Wireless service revenue increased by 0.4% YoY to KRW 1,683 billion. Since the expiry of the early termination fee waiver program in January, the subscriber base turned to net addition. Number of subscribers grew by 2.72 million YoY to reach 29.16 million subscribers. 5G penetration as of Q1 was 82.7%. Next is fixed line.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Broadband revenue rose by 1.8% to KRW 640.2 billion, thanks to an increase in both giga internet subscribers and value-added services. The media business grew by 1.3%, which was mainly driven by an increase in both IPTV subscribers and premium plans. Next is B2B services.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

B2B revenue decreased by 2.2% year-over-year due to the completion of a large-scale data center design and build project and ongoing streamlining of low margin businesses. Moving forward, we will focus on winning B2B AX projects and strengthening the growth portfolio to deliver visible results. I will go over the major subsidiaries.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

KT Cloud posted KRW 250.1 billion in revenue, which is similar to last year, thanks to winning public sector projects and higher utilization of the Gasan Data Center, despite the base effect coming from last year's completion of a DBO project.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

KT Estate revenue jumped by 72.9% YoY to KRW 237.4 billion, driven by robust hotel business and the Dunsan apartment complex property sales.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

The content subsidiaries grew by 1.9% YoY, despite the divesture of PlayD, showing balanced growth across Studio Genie, Nasmedia, and Millie's Library. In particular, Studio Genie had a strong year, generating buzz and viewership with its premium original content lineup, including Honor and Climax. The company is also working to enhance competitiveness by diversifying distribution.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Today, I went over the business performance of KT for the first quarter of 2026. In Q1, we set the direction of the company, which is to become an AX platform company. We reviewed our core competitiveness and created a launchpad for growth. Going forward, we will continue to boost corporate value by expanding our AX-driven growth portfolio and implementing rigorous profit management.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

We look forward to your continued interest and support. Thank you.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

For further details, please refer to the earnings release materials distributed earlier. We will now begin the Q&A session to answer your questions. To allow as many people as possible to participate, please limit your questions to two per person.

[Operator]

[Non-English content].

[Translator]

Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. The first question will be provided by Jae-min Ahn from NH Investment & Securities. Please go ahead with your question.

[Ahn Jae-min, Analyst at NH Investment & Securities]

[Non-English content].

[Translator]

Good afternoon. Thank you for the opportunity today. First, I would like to congratulate the new CFO, Min Hye-byung, and IRO, Sun Wook Kim, for their new appointments. We really look forward to communicating with you as we further discuss KT IR issues. I have two questions today. One is regarding the appointment of the new CEO. Mr. Park Yoon-young was appointed as the new CEO. I would like to have a better understanding of his strategic view and whether the company has plans for the CEO to communicate with the market. My second question is regarding the first quarter standalone operating income. I think it did underperform the expectations. What would your annual outlook for operating income be for 2026?

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Yeah. Thank you for those kind words, and we look forward to working with you as well. I think there were largely two questions. First was regarding the appointment of the new CEO, his strategic direction and communication plans with the market. The second question was regarding the annual operating income outlook. Yes, I will take your first question regarding the strategic direction of the new CEO. The new CEO has emphasized KT's vision as to become a AX platform company. This means that we will be accelerating AX innovation based on the key strengths of KT. In that sense, I think it's largely in line with the previous strategic direction of AICT. The two pillars of the AX platform company is strong fundamentals and solid growth. We are working to establish a virtuous cycle between the two pillars.

[Translator]

The strong fundamentals will drive solid growth, and the solid growth can be reinvested in strong fundamentals. By doing so, we believe KT can be a leader in the AX market going forward. To go into more detail on the strong fundamentals. I think top priority of KT at the moment is to regain customer trust. To do that, we will be focusing on innovating information security, strengthening the quality of network infrastructure and further advancing IT infrastructure as well. We believe that such strong fundamentals will be a cornerstone for sustainable growth.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

I will go into more detail on solid growth. As you all know, AX innovation has become a essential factor in all industries.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

To achieve that solid growth, we will be working on not only the B2C and B2C telco markets, but also we'll be expanding the AX success model to new growth areas.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Driven by strong fundamentals and solid growth, KT to become a AX platform company would be the key strategic vision of the new CEO.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

You also asked about communication plans. Our new CEO has consistently emphasized the importance of, you know, communicating and delivering our commitments with the shareholders and the market.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Currently, we are internally reviewing the right timing and format for such communication, and so once that is confirmed, we will be communicating that with the market.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

I will move on to the second question. You asked about the annual outlook for profitability. Also in January, because of the reduction of our subscriber base and the completion of large-scale, the data center build projects, our service revenue declined. In the cost segment, the depreciation expense decreased. However, operating costs such as sales and labor costs increased. Q1 results were relatively lower than previous quarters.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Going into Q2, we will be having very strict management of the operating expenses, with a special focus on sales cost.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Considering all those factors for the full year, we plan to achieve similar results as last year. If you look at the last year results, if we exclude the impact of the data breach incident, adjusted operating income was around KRW 1.5 trillion. We are working to achieve those levels.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

If we also talk about the group subsidiaries, the main growth drivers, which are the real estate, DC cloud and content subsidiaries, I believe will continue to generate improved growth. That should also have positive contribution to the overall group numbers.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Operator]

[Non-English content].

[Translator]

The following question will be presented by Seung-Woong Lee from Yuanta Securities. Please go ahead with your question.

[Seung-Woong Lee, Analyst at Yuanta Securities]

[Non-English content].

[Translator]

Good afternoon, thank you for the opportunity today. I largely have two questions. One is regarding the shareholder return policy. KT announced the new midterm shareholder return policy recently. I believe it largely continues the previous one. If profitability recovers, what would be the direction of your shareholder return policy then? Is there a possibility that the return policy can be upsized? There is also the item of the adjustment. In the adjustment, you included non-cash items and non-ordinary P&L. Can you elaborate on specifically what those two items mean? The third question is regarding your wireless business. In the first quarter this year, there was the early termination waiver program that led to a reduction of the subscriber base. That had negative impact on the revenue.

[Translator]

What would be the growth strategy and overall revenue outlook for the full year for the wireless business?

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Yes. I think largely your question has two sections. The shareholder return policy will be addressed by myself, and your question on the wireless business will be addressed by Mr. Park Hyun-jin, the Head of Customer Business Group. Yeah. Yes. Regarding your question on shareholder return, the mid-long term, 2026 to 2028 shareholder return policy was announced to be 50% of net adjusted income, that will continuously be implemented. Yes. You talked about the overall direction of the return policy. Of course, we will make effort to continuously improve our profitability, which also means that we are making effort to increase the dividend per share. Yes. Yes.

[Translator]

As you would know, according to our Value Up Program, we are buying shares around KRW 250 billion every year. That program will continuously be implemented according to the Value Up Program. I'd like to highlight that we are also working to indirectly increase the shareholder return.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Yeah. Your next question was regarding the adjustments that we make to come with the net adjusted income number. Yeah. There are largely two elements. One is non-cash items, and the second is non-ordinary P&L. Yeah. If you first look at the non-cash items, it's the same as the previous policy. For example, there is some valuation gains and losses that may be incurred from some investments or foreign funds, overseas funds that we hold.

[Translator]

These transactions do not actually ensue cash transactions. Regarding the non-ordinary items. For example, we may be divesting a sizable asset, or there may be some penalties that are sizable that we may need to pay. We are trying to remove the impact of one-off to ensure that there is stable visibility of dividend payments.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

I am Hyun-jin Park, the Head of the Customer Business Group, and I will address your question regarding the wireless service business. First of all, the decrease of subscriber base we experienced in January, I think is largely being offset at the moment, given that February numbers show net additions.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

As you all know, in the second half, there are some new plans that will be launched, related to government policy. The QoS is around 400 kilobps, so we don't believe that this will have some significant negative impact to our revenue.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

For the full year outlook, I think I can summarize it into two keywords. It is efficiency and agility.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

We recently launched a 5G Choice plan that is linked to the YouTube Premium service. KT is the only telco company in Korea that was able to partner with YouTube and launch this type of plan. We will continuously work to understand customer needs and reflect them in the design of our plans, that we can observe an increase of the ARPU.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Translator]

At this point, we are not really concentrating on acquiring new customers by spending large amounts of marketing and sales cost. We will be concentrating on efforts in non-contact channels and other types of services, like the used phone sales service, so that we can reduce the acquisition cost and generate appropriate level of revenue.

[Park Hyun-jin, Head of Customer Business Group at KT]

[Non-English content].

[Operator]

[Non-English content].

[Translator]

The following question will be presented by Joonsop Kim from KB Securities. Please go ahead with your question.

[Joonsop Kim, Analyst at KB Securities]

[Non-English content].

[Translator]

Thank you for the opportunity today. I have two questions regarding data centers. One is the AI data center. I believe that the customer needs and requirements for AI data centers will be different from existing B2B customers. What are the key needs that you have understood from your discussions with customers, and what is the competitive edge KT has in this area? Second is the securing of power. I believe that power has become the key obstacle in terms of building and securing more data centers. How is KT working to overcome this challenge?

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

Thank you for the question. I think there were largely two questions. One was regarding AIDC. What are the customer needs and characteristics and what are KT's key strengths in this area? Second was regarding the securing of power for the data centers. To address this question, Mr. Kim Bong-gyun, the Head of the Enterprise Business Division, will be answering your question.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yes. I am Kim Bong-gyun, head of the Enterprise Business Division, and I'd like to take your questions. First, regarding the needs of customers in the AIDC, I think there are largely three needs. One is the environment that the GPU is operating. When I say environment, it includes, like you already mentioned today, the securing of power. The heating. When heating occurs, can it be well managed by the facilities there? The overall environment will be one key need. Second will be the build-out. You will have multiple racks, and all those racks will be holding GPUs. Those racks will be connected to each other. We call this the clustering capability, and that is also one key aspect that the customers look at.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

The third is operations. If there is a failure in one of the GPUs, can you detect it and take that out quickly and reconnect all of the racks? We call that reclustering ability. Largely, there are three aspects. One is the environment, second is the build, and third is the operations.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

I'll move on to KT's key strengths. We have very long experience and track record in this area going back to IDCs, and we are also operating the largest number of data centers as well. That experience is key strength.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yes. In terms of the accumulation of the experience, the skills and capabilities, I think KT would be by far top-notch. We are also continuously enhancing, the clustering, abilities that I mentioned earlier as well.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

In terms of the environment, in the past for the DCs, air cooling was sufficient, but because the new data centers use very high voltage, it usually uses liquid cooling.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yes. I would like to highlight that KT is the first company in Korea to commercialize this liquid cooling data center. We mentioned the Gasan Data Center, which has been recently established, and the Gasan Data Center uses this type of cooling system. Currently, we are in the testing period.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

I will move on to your question regarding securing power.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yes. In relative terms, I believe the power is more, there's more ample power in the areas outside of Seoul rather than Seoul. In the Seoul and largely Seoul metropolitan area, we will be focusing on the expansion of low voltage, so the existing type data centers. Outside of Seoul, where the power can be more abundant, we will be laying out the AIDC infrastructure.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

In terms of execution strategy, we are planning to buy and lease land that already has secured the necessary power.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yes. To summarize, we have a two-track strategy. We have different strategy for Seoul and metropolitan Seoul and the areas outside of Seoul. As for the execution strategy, we will be securing land that has already confirmed the procurement of power.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Operator]

[Non-English content].

[Translator]

The following question will be presented by Charlie Bay from HSBC. Please go ahead with your question.

[Charlie Bay, Analyst at HSBC]

Hi. Congratulations on new management's boarding. I have only one follow-up question on AIDC. May I know more about your new AIDC build-up plan? May I know if you have any full-year revenue target for the KT Cloud business? Thank you.

[Translator]

[Non-English conetnt].

[Min Hye-byung, CFO at KT]

[Non-English content].

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yes. Thank you for those questions. I think your first question is related to the capacity plans that we have for AIDC. Unfortunately, we are not able to share the exact numbers that we have for AIDC, but we have the goal to achieve around 500 MW within 5 years.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yeah. Regarding your question on KT Cloud. Let me try to answer it this way. I think we will be able to continue double-digit growth this year for the revenue.

[Kim Bong-gyun, Head of Enterprise Business Division at KT]

[Non-English content].

[Translator]

Yes. The 500 MW number that I just shared with you, I want to clarify that it's for our total data center capacity.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Sun Wook Kim, Investor Relations Officer at KT]

[Non-English content].

[Translator]

There are no questions in the queue right now.

[Min Hye-byung, CFO at KT]

[Non-English content].

[Translator]

There are no further questions. We will now conclude the Q&A session. We appreciate your active participation and interest. Thank you for joining us today despite your busy schedules. This concludes the earnings call for the first quarter of 2026. Thank you.

Participants

Executives

• Kim Bong-gyun, Head of Enterprise Business Division
• Min Hye-byung, CFO
• Park Hyun-jin, Head of Customer Business Group
• Park Sang-won, Head of AX Business Division
• Sun Wook Kim, Investor Relations Officer

Analysts

• Ahn Jae-min, Analyst at NH Investment & Securities
• Charlie Bay, Analyst at HSBC
• Joonsop Kim, Analyst at KB Securities
• Seung-Woong Lee, Analyst at Yuanta Securities
• Translator