Lotte Innovation's Q3 operating profit surges 88% year-on-year, beating market expectations
Lotte Innovate Q3 Operating Profit Surges 88%, Beats Expectations
Lotte Innovation's Q3 2026 operating profit reached 12.4 billion won, up 88% year-on-year, with revenue of 28.4 billion won, up 2.3%, and operating margin rising from 2.4% to 4.4%, beating market expectations. However, it posted a net loss of 7.1 billion won for the same period, swinging from profit to loss. The company is making AI data centers its new growth engine, having secured the operations contract for the Kamsquare Yongin data center, the DBO contract for IGIS Asset Management's edge data center, and the outsourced operations contract for the large Ansan data center.
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Lotte Innovate’s operating profit surged 88% year-on-year in the third quarter, exceeding market expectations as its profitability-focused management strategy delivered tangible results. The company is also accelerating its artificial intelligence (AI) data center business, which it has identified as a new growth driver.
Lotte Innovate disclosed on Nov. 2 that consolidated third-quarter revenue reached 284 billion won and operating profit totaled 12.4 billion won. Revenue increased 2.3% and operating profit rose 88% from the same period in 2025.
The operating margin improved from 2.4% in the third quarter of 2025 to 4.4% in 2026. Compared with the previous quarter, revenue increased 3.5% and operating profit rose 0.5%.
However, the company recorded a net loss of 7.1 billion won. It swung into the red after posting net profit of 4 billion won in the third quarter of 2025 and 8.7 billion won in the second quarter of 2026. The company also reported a pretax loss of 7.6 billion won.
The gap between operating profit and net income after tax amounted to approximately 19.56 billion won. The preliminary earnings disclosure released that day did not provide a detailed breakdown of non-operating gains and losses, including financial income and expenses.
Cumulative revenue for the first nine months of 2026 declined 0.4% year-on-year to 839.7 billion won. Cumulative operating profit, however, increased 60% to 34.6 billion won, while cumulative net profit fell 44% to 5.6 billion won.
Lotte Innovate has focused in 2026 on reducing orders for low-margin businesses and improving project operating efficiency. The improvement in profitability has continued, with second-quarter operating profit also rising 54% year-on-year.
Previously, Lotte Innovate’s profitability had been weighed down by losses at its new-business subsidiaries. In 2025, Caliverse, its metaverse subsidiary, recorded a net loss of 19.6 billion won, while EVSIS, its electric vehicle charging subsidiary, posted a net loss of 15.8 billion won. Lotte Innovate’s standalone operating profit at the time was 58.1 billion won, but consolidated operating profit, which reflected subsidiary results, amounted to just 31.3 billion won.
The company is developing data centers and AI businesses as new growth drivers. In 2025, it secured a contract to operate the Kamsquare Yongin Data Center. In February 2026, it won a contract to design, build and operate (DBO) edge data centers for IGIS Asset Management. It has also recently secured an outsourced operations contract for a large data center in Ansan, expanding its external customer base.