LG Energy Solution (373220) Q2 2026 earnings summary

Executive summary

• Q2 revenue rose to KRW 7.6 trillion, up 15% QoQ, driven by growth in mid to low-end EV chemistry, cylindrical shipments, and ESS capacity utilization in North America.

• Automotive battery revenue increased despite weak North American EV demand, with strong volume growth in high voltage mid-nickel and high-nickel products for Europe and Asia.

• Operating income reached KRW 113.3 billion with a 1% margin, turning positive from a loss in Q1, supported by improved sales mix and utilization rates.

• North America Production Incentive Effect contributed KRW 241 billion to revenue in Q2.

Financial highlights

• Q2 EBITDA was KRW 1.33 trillion; net cash inflow totaled KRW 4.7 trillion, including proceeds from the Honda JV building sale.

• CapEx was reduced by nearly 40% QoQ, with KRW 1 trillion executed; H1 CapEx was KRW 1.041 trillion, down 53% YoY.

• Cash and cash equivalents rose to KRW 7.17 trillion at the end of Q2, up from KRW 3.75 trillion at the end of Q1.

• Total assets rose by KRW 6.1 trillion QoQ to KRW 77.9 trillion; liabilities increased by KRW 5.7 trillion to KRW 47.6 trillion.

• Net income remained negative at -KRW 329 billion in Q2, following -KRW 944 billion in Q1.

Outlook and guidance

• Q3 expected to see at least 50% QoQ increase in ESS shipments and 20%+ company-wide revenue growth.

• Full-year revenue growth guidance of 20% is expected to be comfortably achieved.

• ESS production in North America projected to double in H2 vs. H1, with margin improvements targeted as ramp-up costs stabilize.

• Arizona cylindrical production line to improve equipment efficiency by 50% and secure additional demand for 46-Series.

• Preparation for mass production of high-power Tabless 2170 cylindrical and development of sodium and all-solid-state batteries.