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, but operating profit rose to KRW 492B (8.8% margin) due to improved product mix and cost efficiency.

• Net income reached KRW 91B, a decrease from KRW 227B in Q1 2025.

• 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.

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) from KRW 1,231B in Q1 2025.

• Cash and equivalents rose to KRW 5,440B at quarter-end, up from KRW 3,574B in Q1 2025.

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.

• Plans to maximize capacity utilization, optimize manufacturing, and expand ESS business in North America.

• Cost efficiency and resource reallocation efforts are underway to offset EV demand slowdown and maximize profitability.