LG CNS Q3 operating profit up 15%, financial IT revenue up 21%

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LG CNS reported increases in both revenue and operating profit in the third quarter, driven by growth in artificial intelligence (AI), cloud services and next-generation financial systems projects. Revenue growth of more than 20% in its financial IT business contributed significantly to the overall improvement.

LG CNS said on Oct. 30 that consolidated third-quarter revenue reached 1.6643 trillion won, while operating profit totaled 138.2 billion won, up 9.3% and 15.0%, respectively, from a year earlier.

Operating profit returned to growth in the third quarter after declining 9.2% year on year in the second quarter. The operating margin also rose 0.4 percentage points to 8.3% from 7.9% a year earlier.

LG CNS' third-quarter 2026 financial results. (Source: LG CNS)

By business segment, Digital Business Services, which includes next-generation financial systems development, posted particularly strong growth. Revenue increased 21.3% year on year to 408.2 billion won, accounting for 24.5% of total revenue.

Revenue recognition increased as major projects secured from financial institutions, including NH NongHyup Bank, Mirae Asset Life Insurance and KB Kookmin Bank, entered full-scale development. Projects to replace or modernize financial institutions' IT systems typically generate revenue over time based on development progress.

New orders have also continued. On Oct. 15, LG CNS signed a 291 billion won contract with the Korean Federation of Community Credit Cooperatives to modernize its core banking system. The contract runs through February 2029 and is expected to expand the revenue base of the company's financial IT business.

Revenue from the core AI and cloud segment rose 9.3% year on year to 961.5 billion won, representing 57.8% of total revenue.

AI data center construction and operations, along with increased cloud adoption by enterprise customers, supported the segment's performance. Revenue increased from the construction and operation of the Samsong AI Data Center and colocation services at existing data centers. Colocation involves providing corporate customers with data center space, power, network connectivity and other infrastructure.

In enterprise AI, LG CNS carried out projects involving AI transformation planning for airports, drug discovery platforms and AI agents for health screenings. The company is also expanding its business of introducing global AI services, including OpenAI's ChatGPT Enterprise and Anthropic's Claude, to corporate customers.

The Smart Engineering segment, meanwhile, was affected by slowing manufacturing investment. Third-quarter revenue declined slightly from a year earlier to 294.5 billion won. LG CNS is expanding its smart factory customer base into defense, pharmaceuticals, electronics and batteries while strengthening its overseas logistics automation business.

AI infrastructure investment is a key variable for future earnings. In September, LG CNS decided to acquire 381.4 billion won worth of equipment, including Nvidia's next-generation Vera Rubin GPUs. The acquisition is scheduled for completion by the end of June 2027. The equipment will be used to build AI factories and provide related services.

The company is also pursuing joint investment in enterprise software AI businesses with global investment firm General Atlantic. In robotics, LG CNS is using its proprietary PhysicalWorks platform to convert demonstration projects at manufacturing and logistics sites into commercial operations.

Despite the year-on-year increase, operating profit remained below the 142.8 billion won recorded in the third quarter of 2024. While AI and cloud services are driving revenue growth, future earnings are expected to depend on the profitability of next-generation financial systems projects and the timing of revenue generation from large-scale GPU investments.