KT Q3 Earnings Call Highlights

Key Points

• Q3 financial results weakened: Revenue fell 1.8% year over year to KRW 6.998 trillion, operating profit declined 6.1% to KRW 505.3 billion, and net income dropped 17.5%. KT said operating profit would have risen 3.5% excluding a one-time property gain in the prior-year comparison.
• Mobile recovery is emerging but markets remain saturated: Wireless service revenue fell 3.9%, though KT cited improving trends since August, recovering average revenue per user, and 83.5% 5G penetration.
• AI and data centers are growth priorities: B2B orders rose more than 20%, and KT plans to add 1 gigawatt of AI data center capacity by 2031, supported by a 911-megawatt pipeline. The company also reaffirmed its share repurchase and dividend commitments.

KT NYSE: KT reported lower revenue and profit for the third quarter of 2026, though executives said its mobile business was recovering and a growing pipeline of AI and data center orders was laying the groundwork for future growth.

Operating revenue fell 1.8% from a year earlier to KRW 6.998 trillion, while operating profit declined 6.1% to KRW 505.3 billion. Net income decreased 17.5% to KRW 367.3 billion, and EBITDA fell 5% to KRW 1.428 trillion.

CFO Hye-Byung Min said the results reflected the customer appreciation program, the prior-year comparison with a one-time property development gain and the outcome of collective bargaining. Excluding the prior-year real estate gain, operating profit rose 3.5%, while net income fell 7.1%, he said.

KT said the K-IFRS estimates and operating results presented on the call had not yet been reviewed by an outside auditor and could change.

Mobile Revenue Declines, but Recovery Signals Emerge

Wireless service revenue fell 3.9% year over year to KRW 1.667 trillion, reflecting subscriber churn during a period when early contract cancellation fees were waived and the impact of the customer appreciation program. Min said wireless revenue had shown a gradual recovery since August, helped by flagship handset releases and greater adoption of premium plans. At the end of the quarter, 5G penetration reached 83.5%.

Hyun Jin Park, head of the customer division, said average revenue per user had gradually recovered after the appreciation program ended. He also said complaints of customer harm declined 60% in the third quarter compared with the first quarter, following measures that included a one-stop resolution center.

Park cautioned that the mobile, internet and TV markets were saturated. Despite improving mobile trends in August and September, he said it would not be easy to exceed the previous year’s performance on a year-over-year basis. KT would continue to focus on profitability across its consumer telecom businesses, he said.

Broadband revenue was flat from a year earlier. Media revenue fell 2.4%, as lower advertising and pay-per-view revenue offset an increase in IPTV subscribers. B2B service revenue slipped 0.7% after the completion of a system infrastructure project in the prior year.

AI Orders and Data Center Plans

KT said cumulative B2B order intake through the third quarter rose more than 20% year over year. Bong-Gyun Kim, head of KT Enterprise, cited projects including Woori Bank’s Agentic AICC and an intelligent national defense platform, as well as an AI data center pipeline developed with kt cloud.

Quarterly AX revenue grew 9.8% year over year, while cumulative AX revenue through the third quarter rose 11.9%. Min said KT aims to more than double AX revenue by 2028 from its 2025 baseline.

Kim said the group plans to add 1 gigawatt of AI data center capacity by 2031, based on actual demand, on top of its current 152 megawatts. He said KT had secured a pipeline of 911 megawatts across 20 sites, with another 500 megawatts across 10 sites available as a backup. Decisions had been made on 200 megawatts of the main pipeline, with a further 60 megawatts to be decided before year-end.

About 80% of the planned 1 gigawatt would be leased and 20% owned, Kim said. KT would determine how best to fund the investment while considering its debt ratio.

Sang-Won Park, head of the AX business division, said KT’s Token Factory, launched at the end of October, combines inference services using locally hosted models and the company’s own GPUs with routing services for third-party models. He said KT plans to grow both sides of the business and sees potential synergies with its telecom billing capabilities.

Subsidiaries, Spending and Shareholder Returns

Min said kt cloud grew 7.7% year over year, supported by public cloud growth and higher utilization at the Gasan Data Center. KT estate grew 39.1%, helped by its hotel business and development projects in Dunsan, Daejeon. Content revenue increased 12.1%.

Capital spending by KT and its subsidiaries totaled KRW 1.599 trillion for the first nine months of 2026, including KRW 1.228 trillion at the standalone company and KRW 370.9 billion at core subsidiaries.

KT declared a third-quarter dividend of KRW 600 per share, with a November 12 record date, and completed a KRW 250 billion treasury share buyback in September. Min reiterated the company’s minimum 2026 dividend commitment of KRW 2,400 per share, while saying the board would decide the year-end dividend based on annual net profit.

He also reaffirmed KT’s plan to repurchase a cumulative KRW 1 trillion of shares by 2028 and its target of 9% to 10% return on equity by that year. The company is actively considering ways to monetize non-core assets, he said.

About KT (NYSE:KT)

KT Corporation, formerly known as Korea Telecom, is a South Korean telecommunications and technology company. Established as a state-owned telecommunications provider in 1981, it was privatized in 2002 and adopted the KT name.

The company provides fixed-line and mobile communications, high-speed internet and broadband, and IPTV services. It also serves businesses and public-sector organizations with information and communications technology solutions, including cloud, data center and network services.

KT's operations are centered primarily in South Korea, where it serves consumers, businesses and government customers.

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