LG Energy Solution (373220) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was KRW 5,565B, down from KRW 6,265B in Q2 2024, with operating profit rising to KRW 492B (8.8% margin) and net income at KRW 91B, reflecting improved product mix and cost efficiency.

• H1 2025 consolidated revenue was KRW 11,830,403 million, with operating income of KRW 866,832 million and net income of KRW 317,178 million.

• Second quarter performance was strong, with solid momentum expected to continue into the third quarter, though uncertainties remain for the second half due to policy changes and market volatility.

• North American ESS business is a key growth driver, leveraging local LFP production and a robust order book exceeding 50 GWh as of June.

• The company continues to invest heavily in R&D and capacity expansion to maintain leadership in the fast-growing battery market.

Financial highlights

• Gross margin improved to 18.0% in Q2 2025 from 16.2% in Q1 2025 and 11.2% in Q2 2024.

• EBITDA increased to KRW 1,375B (24.7% margin) in Q2 2025.

• Cash and cash equivalents at June 30, 2025: KRW 5,440,471 million.

• Basic EPS for H1 2025: -1,894 KRW (negative due to losses attributable to owners of parent).

• H1 2025 segment assets: KRW 62,982,502 million.

Outlook and guidance

• Short-term EV battery demand slowdown expected due to tariff and policy changes, but mid- to long-term growth seen from autonomous driving and renewable energy trends.

• ESS-related revenue is projected to increase significantly, with Michigan site ramping up shipments and capacity targets of 30 GWh or higher by 2026.

• The company is expanding into new business areas such as BaaS, EaaS, and battery recycling/reuse.

• Focus on cost reduction, supply chain localization, and new technology development, including fast charging and dry electrode production.

• Ongoing focus on R&D, capacity expansion, and global operational competitiveness to secure future growth.