KT NYSE: KT reported lower first-quarter earnings for fiscal 2026 as higher sales and labor costs and a year-earlier property development gain weighed on profitability, while management outlined plans to reposition the company around AI-driven “AX” services and maintain its shareholder return framework.
CFO Min Hye-byung said KT’s operating revenue fell 1.0% year over year to KRW 6,778 billion. Operating income declined 29.9% to KRW 482.7 billion, reflecting the base effect from last year’s Gwangjin District Development Project property sales as well as increased sales and labor expenses. Net income decreased 31.5% to KRW 388.3 billion, and EBITDA fell 13.1% to KRW 1,440 billion.
Operating expenses rose 2.3% to KRW 6,295.7 billion, as lower depreciation was offset by the amortization of sales expenses incurred last year and higher labor costs. KT said its debt-to-equity ratio stood at 117.6% at the end of the quarter, while net debt-to-equity improved by 3.9 percentage points year over year to 39.9%.
KT Sets AX Platform Strategy
Min said the quarter was a period in which KT reorganized its growth strategy and implementation system following a management transition. He said the company aims to evolve into an “AX platform company” that leads AI innovation in South Korea, with a focus on rebuilding customer trust, strengthening security and network infrastructure, and developing AI-based growth models for consumer, enterprise and new business areas.
Park Hyun-jin, head of the Customer Business Group, said KT’s B2C business saw a temporary decline in fixed-line and wireless subscribers in January due to an early termination penalty waiver program, but subscriber additions resumed in February. Park said KT has been running a customer appreciation program since Feb. 1 and launched a Customer Protection 365 task force on April 28.
Park said KT plans to apply AI across customer consultation, sales, activation and customer service, while expanding personalized AI services such as My K for individual customers and Sajang EZ for small business owners. The company is also preparing a next-generation IPTV platform that uses AI speakers and TV interfaces to provide personalized content recommendations.
Wireless Grows Modestly, B2B Revenue Declines
Wireless service revenue increased 0.4% year over year to KRW 1,683 billion. KT said its subscriber base turned to net additions after the early termination fee waiver program ended in January. The number of subscribers increased by 2.72 million year over year to 29.16 million, and 5G penetration reached 82.7% at the end of the quarter.
Broadband revenue rose 1.8% to KRW 640.2 billion, supported by growth in giga internet subscribers and value-added services. Media revenue increased 1.3% on higher IPTV subscriber numbers, premium plans and set-top box usage.
B2B revenue declined 2.2% year over year due to the completion of a large-scale data center design-and-build project and the streamlining of low-margin businesses. Kim Bong-gyun, head of the Enterprise Business Division, said KT intends to pursue growth by winning B2B AX projects, expanding in AX infrastructure and packaging telecom and AX services for enterprise customers.
Park Sang-won, head of the AX Business Division, said KT has built an AX platform-centered business system that connects consulting, AI technology, platforms and operations. He said the company will focus on strengthening Agentic AICC, developing platforms that address industry requirements and regulation, expanding “data for AI” services and commercializing managed services for customer AX operations.
Subsidiaries Show Mixed Trends
KT Cloud posted KRW 250.1 billion in revenue, similar to the prior year, as public-sector project wins and higher utilization at the Gasan Data Center offset the base effect from a completed DBO project. KT Estate revenue jumped 72.9% to KRW 237.4 billion, driven by hotel business strength and Dunsan apartment complex property sales.
Content subsidiaries grew 1.9% year over year despite the divestiture of PlayD. KT cited growth at Studio Genie, Nasmedia and Millie’s Library, and said Studio Genie’s original content lineup, including “Honor” and “Climax,” continued to gain attention and viewership.
Shareholder Returns and Outlook
KT said its new midterm shareholder return policy for 2026 through 2028 will continue to use 50% of standalone adjusted net income as the funding source for shareholder returns. The company said the annual dividend per share for 2026 will be at least KRW 2,400, with a first-quarter dividend of KRW 600 per share. KT also plans to complete a KRW 250 billion share buyback program by September as part of its corporate value-up plan.
In response to an analyst question from Jaemin Ahn of NH Investment & Securities, management said new CEO Park Yoon-young’s strategy centers on becoming an AX platform company, supported by “strong fundamentals” and “solid growth.” KT said it is reviewing the timing and format for future communication between the CEO, shareholders and the market.
On profitability, KT said first-quarter results were pressured by subscriber losses in January, the completion of large-scale data center projects and higher operating costs. Management said it will focus on stricter operating expense management beginning in the second quarter, particularly sales costs, and is working to achieve full-year adjusted operating income near last year’s level of about KRW 1.5 trillion, excluding the impact of a data breach incident.
Data Center Plans
During the Q&A, Kim said AI data center customers are focused on three areas: the operating environment for GPUs, including power and heat management; build-out capabilities, including rack connectivity and clustering; and operational capabilities, including detecting failed GPUs and reclustering.
Kim said KT operates the largest number of data centers in South Korea and is testing liquid cooling at the Gasan Data Center, which he described as the first commercialized liquid-cooling data center in Korea. He said KT will pursue a two-track data center strategy: using existing lower-power data centers in the Seoul metropolitan area and building higher-power AI data center infrastructure outside Seoul, where power availability is better. The company is also seeking to buy or lease land where power supply has already been secured.
In response to HSBC’s Charlie Bay, Kim said KT is not disclosing current AIDC capacity but aims to reach about 500 megawatts of total data center capacity within five years. He also said KT Cloud is expected to continue double-digit revenue growth this year.
About KT NYSE: KT
KT Corporation, 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.
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