KT Corporation

Good morning and good evening. Thank you all for joining this conference call, and now we will begin the conference of the first quarter of fiscal year 2026 earnings results by KT. We would like to have welcoming remarks from KT IRO, and then CFO will present earnings results and entertain your questions. This conference will start with a presentation followed by a Q&A session. If you have a question, please press star 1, that is star and 1 on your phone during the Q&A. Now we would like to turn the conference over to KT IRO.

Good afternoon. I am Sunok Kim, IRO of KT.

We will now begin the earnings presentation for the first quarter of 2026. Please note that today's presentation includes estimates of financial and operating performance based on KIFRS that have not been reviewed by an outside auditor.

As such, other than confirmed historical data, we cannot guarantee the accuracy and completeness of financial and business-related information, and such information is subject to change in the future.

그럼 당사 민해병 CFO의 인사 말씀과 함께, 2026년 1분기 실적에 대한 설명이 있겠습니다.

Now, 해병민 CFO of KT will present the 2026 Q1 earnings.

안녕하십니까? KT 재무실장 민해병입니다. In Q1, KT reorganized the company's growth strategy and implementation system based on stable transition of the management and business structure.

and developed a new mid-term shareholder return policy to solidify the foundation for corporate value enhancement.

AT will continue to be an AX platform company that leads the innovation of AI in Korea, and we are going to take the AX innovation as the starting point. First, we will take the innovation of IT infrastructure as the first step KT will evolve to become an AX platform company that leads the AI innovation of Korea.

AX innovation will be a springboard for our next leap forward. First, we will make utmost effort to regain customer trust while also strengthening our core businesses by innovating information security, network, and IT infrastructure. Second, we plan to secure solid growth drivers with AX innovation-based success models, such as Sector-Specific AX, Hyper-Personalized AX, and New Growth AX.

With this in mind, we will continue to carry out the project without fail. At the same time, we will continue to seamlessly implement our corporate value-up plan in order to ensure continuity

The new mid-term shareholder return policy, effective from 2026 to 2028, will be equivalent to the previous policy of using 50% of standalone adjusted net income as resources for shareholder return.

This year, the annual shareholder return is at least 2,400 won. The first quarter shareholder return is decided to be 600 won per share. The shareholder return date is May 27th. For 2026, the annual dividend per share will be a minimum of 2,400 won, and the dividend per share for Q1 will be 600 won.

The record date is May 27th, and payment date is June 11th. Also, as part of our corporate value-up plan for 2026, the share buyback program of $250 billion will be completed by September. Next, the performance and future plan of each business division will be presented by the respective division heads before we dive into the Q1 results.

Good afternoon.

I am Hyunjin Park, head of the Customer Business Group.

B2C 사업은 1월 위약금 면제에 따라 유무선 가입자가 일시적으로 크게 감소했으나, 6월부터 가입자 순종 추세를 이어가고 있습니다. 3배비 또한 작년에 집행 증가한 역량이 올해 상각 인식되면서 부담이 있는 상황이지만, 6월부터는 계획된 수준에서 운영 중입니다.

The B2C business in January experienced temporary decline in both wireless and fixed-line subscribers because of the early termination penalty waiver program. However, since February, we are observing a net increase in the number of subscribers. The related sales expense, which increased last year, should weigh on this year's results, as it is amortized this year. But since February, the related numbers are being managed within our business plan.

The B2C business in January We are focusing on customer trust and customer protection, and we are operating a customer compensation program for all customers since February 1st. On April 28th, we will launch the customer protection 365 TF and focus on the potential of the company.

The most important strategic direction this year is to regain customer trust while also pursuing sustainable growth by offering a hyper-personalized customer experience based on AX. In this regard, since February 1st, we have been running a customer appreciation program to regain customer trust and strengthen customer protection. And on April 28th, we launched the Customer Protection 365 Task Force to which we are concentrating company-wide resources.

We are working to detect risk preemptively by leveraging AI to analyze on and offline VOCs.

while establishing a system to address damages incurred by customers within 24 hours based on a company-wide cooperation system. We also have the Customer Outreach Forum to engage in direct communication with customers.

To provide an AX-based, ultra-personalized customer experience, we will first focus on the B2C AI service that KT can do best. The AI service for individual customers is called MyK, In order to provide an AX-based hyper-personalized customer experience, we are concentrating on the following.

First, we will focus on what we do best, which is AI in B2C. YK, the AI service for B2C customers, will be constantly improved to offer hyper-personalized user experience and convenience. For small business owners, we have the Sajang Easy AI, which offers specialized AI services for the small business segment. We will continuously develop the platform to support the success of small business owners.

Next, we will prepare the next IPTV platform to improve the user experience of customers' media content. Second, we will prepare the next IPTV platform to enhance the media content user experience.

The platform will offer hyper-personalized customer services by using AI speakers and TV windows. Content curated, content curated to the taste of the user will be recommended while also enhancing overall convenience.

Third, we will apply AI to all processes in which customers meet KT and provide an endless KT user experience. We will apply AI to all processes in which customers meet KT and provide an endless KT user experience. We will apply AI to all processes in which customers meet KT Third, AI will be applied to the entire process of customer contact to deliver uninterrupted user service.

AI will be introduced to customer consultation, sales, phone activation, and customer service. to boost operational efficiency, and to ensure that customers use KT in the most convenient manner from beginning to end. By leveraging AI, we will offer products and services tailored to customer needs, provide activation service at the customer's earliest convenience, and ensure continued usage of KT services through customized care.

Hello, I'm Kim Hong-ryeol, KT Enterprise Manager.

Good afternoon.

I am Bongkyun Kim, head of the Enterprise Business Division.

The strategic goal of KT's B2B business in 2026 is to lead the B2B AX market with specialized AI for the public sector and different industries. The three main pillars are basics and principles, solid growth, and future readiness. We will pursue the B2B AX market with specialized AI for the public sector and different industries. We will pursue the B2B AX market with specialized AI for the public sector and different industries. We will pursue the B2B AX market with specialized AI for the public sector and different industries. We will pursue the B2B AX market with specialized AI for the public sector and different industries.

We will pursue the B2B AX market with specialized AI for the public sector and different industries. We will pursue the B2B AX market with specialized AI for the public sector and different industries. We will pursue the B2B AX market with specialized AI for the public sector and different industries. We will pursue the B2B AX market with specialized AI for the public sector and different industries. We will pursue the B

risk and principles will be our top priority in terms of securing strong fundamentals. We will rigorously fulfill our commitment to customers while ensuring a safe working environment for our employees.

By doing so, we will strengthen our preemptive risk management system. We will expand the number of various large-scale businesses scheduled for this year and select the AX infrastructure market, which is growing rapidly among data centers. And we will expand and expand the customer base and human resources to the customer base, and we will also develop a new market step by step. We will continue to increase the value that customers want and provide communication and AX services in a package form.

Solid growth will be driven by KT's uniquely differentiated telco capabilities and AX competitiveness. To this end, we will preoccupy the rapidly growing AX infrastructure market by winning a diverse array of large-scale projects that are expected for this year and also expand the database business by leveraging group-wide capabilities. Also, we will pioneer new markets step-by-step by promoting our sector-specific AX reference within each customer category and then expand our presence into neighboring sectors. Moreover, we will continuously advance our service model to reflect values desired by customers to offer telco and AX services as a package.

마지막으로 B2E 사업의 지속성장을 위한 유례 준비를 병행하겠습니다. KPA 강점인 통신과 AX를 결합하여 고객의 핵심 문제를 해결하는 산업별 표준 모델을 구현하겠습니다. 그리고 이 표준 모델을 기반으로 Lastly, we will prepare for the future to secure sustainable growth.

We will combine telco, which is KT's key strength, with AX to deliver a standard model for each industry that addresses the key issues of customers. And based on the standard model, we will lay the foundation for mid-long-term growth. by innovating the overall B2B project implementation system across sales, consulting, execution, and operations.

Hello, I am Sangwon Park, the director of KT's AX business department. In the first quarter of KT, we established the AX capacity of the warrior, and the AX consulting, AI technology, platform, and operation capacity were connected organically, Good afternoon.

I am Sangwon Park, head of the AX Business Division. In Q1, KT mobilized company-wide AX capabilities and organically connected AX consulting, AI technology, platforms, and operational skills to develop an AX platform-centered project implementation system that can rapidly and effectively support the customer AX journey.

In addition, we have started the execution-based AX consulting service.

which works together with customers on diverse sectors to define on-site AX issues and jointly verify applicable solutions.

앞으로 KT의 AX 사업은 단순한 AX Tech Provider를 넘어서 고객의 비즈니스 혁신성과를 함께 만들어가는 AX Value Partner를 지향하고자 합니다. 이를 위해... 이를 위해... 2026년 KT의 AX 사업은 네 가지 전략 방향에 집중하겠습니다.

Going forward, KT's AX business will go beyond being a mere AX tech provider to become an AX value partner by working together with customers to deliver business innovation. To defend, in 2026, KT's AX business will focus on core strategic directions.

우선 KT 강점 영역인 First, we will further cement the business competitiveness of our key strength, which is agentic AICC.

We are incorporating business task automation based on agentic AI to develop the next generation AICC. AICC will be more than a simple customer service channel. It will evolve to become a customer marketing channel, which we plan to deploy to a wide range of sectors.

Second, we will create a platform that takes into account industrial characteristics, government regulations, security, and service requirements. Through this platform,

we will develop a platform that considers industrial characteristics, government regulations, security, and even sovereign requirements. The five-layer AX end-to-end service will be strengthened with this platform.

Customers will be able to apply our AX platform to their business rapidly.

It will be offered as a customized service that incorporates sector-specific features. We plan to provide an end-to-end AX service which encompasses the A to Z of AX. from adoption to operational optimization.

Thirdly, we will strengthen the data for AI business base for data acquisition and utilization, which is a key element of successful AX. KT will strengthen the customer's ability to use data based on data management experience and AI utilization based on its own AX innovation. We want to make this the core power of AX growth.

Third, we will strengthen the foundation for the data for AI business, which is necessary to secure and leverage data and is a key factor for successful corporate AX adoption. Based on internally accumulated data operation experience in the process of our own AX innovation, we will advance the foundation for data usage for customers to create a key driver for AX growth.

Lastly, we will continuously expand AX business capacity. Lastly, we will continue to expand the scope of our AX business.

With customized product packaging, we will venture into finance, public, manufacturing, defense, and other sectors to continue growth. Also, by commercializing managed services, which enables continuous support and optimization of the overall AX operation of customers, we will build a solid footing for long-term sustainable business growth. Thank you.

So that was the presentation by the heads of each business division on the first quarter results and the overview of the future strategic direction.

Now we will move on to the financial performance of 2026 Q1.

Sales revenue decreased by 1.0% compared to the previous year. Sales revenue decreased by 29.9% compared to the previous year.

Operating revenue decreased by 1.0% worldwide to $6,778,000,000. Operating income declined by 29.9% to $482.7 billion due to last year's base effect coming from property sales of the Gwangjin District Development Project and an increase of sales and labor costs.

Net income contracted by 31.5% YY to $388.3 billion due to the decline of operating income.

EBITDA decreased by 13.1% to 1,440,000,000 won of over the operating expense on the next page.

Sales increased by 2.3% in the previous year due to the increase in sales and the increase in human resources. Depreciation expense should shrink.

However, the amortization of increased sales expense that was incurred last year and the increase in labor cost led to a 2.3% increase worldwide to $6,295.7 billion. The statement of financial position is on the next page.

As of 2026 Q1, debt-to-equity stood at 117.6%.

Net debt-to-equity decreased by 3.9 percentage points on YY basis to 39.9%.

The total capex executed by KT and major group subsidiaries in 2026 Q1 was 363.7 billion won.

On standalone basis, CapEx was $304.2 billion won. Major subsidiaries executed $59.5 billion won. Now I will go over the performance of each business division.

First of all, the net service revenue is $1.6835, which is 0.4% increase compared to the previous year. In January, the reserve period ended and the number of applicants changed to zero. Wireless service revenue increased by 0.4% YY to $1,683,000,000.

Since the expiry of the early termination fee waiver program in January, the subscriber base turned to net addition. Number of subscribers grew by 2.72 million YOY to reach 29.16 million subscribers. 5G penetration as of Q1 was 82.7%. Next is fixed-line.

Internet revenue increased by 1.8% in the previous year due to the increase in the number of internet subscribers and the increase in the number of private services. Also, the media business increased the number of IPTV subscribers.

Broadband revenue rose by 1.8% to $640.2 billion thanks to an increase in both Kiva Internet subscribers and value-added services. The media business grew by 1.3%, which was mainly driven by an increase in both IPTV subscribers and premium plans.

Next is B2B services. Next is B2B services.

B2B revenue decreased by 2.2% YY due to the completion of a large-scale data center design and build project and ongoing streamlining of low-margin businesses. Moving forward, we will focus on winning B2B AX projects and strengthening the growth portfolio to deliver visible results. Next, I will go over the major subsidiaries.

KT Cloud posted 250.1 billion won in revenue, which is similar to last year,

Thanks to winning public sector projects and higher utilization of the Ka Sanh data center, despite the base effect coming from last year's completion of a DBO project.

KT estate's revenue has been increased by 72.9% compared to the previous year due to the addition of hotel, business, and housing.

AT estate revenue jumped by 72.9% YOY to 237.4 billion won, driven by robust hotel business and the Doonsan apartment complex property sales.

Contentship 자유산은 플레이티 회사 매각에도 스튜디오 지니, 나스 미디어, 밀리어스 등의 고른 성장에 힘입어서 전년 동기 대비해서 1.9% 증가했습니다. Key, Honor, Climax 등 프리미엄 오리지널 콘텐츠 라인업이 사회성하고 흥행성을 이어가고 있고, 유통 다변화를 통해서 경쟁력을 더욱 강화하고 있습니다.

The contents of CDRs grew by 1.9% YY, despite the divestment of PlayD, showing balanced growth across Studio Genie, NAS Media, and Millie's Library. In particular, Studio Genie had a strong year, generating buzz and viewership with its premium original content lineup, including Honor and Climax. The company is also working to enhance competitiveness by diversifying distribution.

지금까지 KT의 2026년 1분기 실적에 대해서 말씀을 드렸습니다. 1분기를 돌아보면, AX Platform Company라는 방향성을 설정하고, Today, I went over the business performance of KT for the first quarter of 2026.

In Q1, we set the direction of the company, which is to become an AX platform company. We reviewed our core competitiveness and created a launchpad for growth. Going forward, we will continue to boost corporate value by expanding our AX-driven growth portfolio and implementing rigorous profit management. We look forward to your continued interest and support. Thank you.

We look forward to your continued interest For further details, please refer to the earnings release materials distributed earlier.

We will now begin the Q&A session to answer your questions. To allow as many people as possible to participate, Please limit your questions to two per person.

지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼에 별표와 1번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 2번을 누르시면 됩니다.

Now Q&A session will begin. Please press star 1. That is star and 1 if you have any questions. Questions will be taken according to the order you have pressed the number star 1. For cancellation, please press star 2. That is star and 2 on your phone.

The first question will be provided by Jaemin Ahn from NH Investment and Securities.

Please go ahead with your question.

Hello. Thank you for your question. I am Jaemin Ahn from NH Investment and Securities. In the stock market, I'm looking forward to the change in P&T management. In particular, I think there is a lot of expectation from Chef Min Hyun-byeong and IRO Kim Sun-wook. Once again, congratulations. I will say that I congratulate you on behalf of the market analyst. I will give you two questions first. First of all, I would appreciate it if you could tell us about the direction of the management of the new CEO of Park In-young. I'm also curious if you have any plans to communicate with the market. Second, we think that the 1st quarter's separate business profit was a bit indefinite. I would appreciate it if you could tell us about the actual prospects for this year.

Good afternoon. Thank you for the opportunity today. And first, I would like to congratulate the new CFO, Hyebong Min, and IRL, Seonuk Kim, for their new appointments. And we really look forward to communicating with you as we further discuss KT IR issues. I have two questions today. One is regarding the appointment of the new CEO. So Mr. Yoon Young Park was appointed as the new CEO, and so I would like to have a better understanding of his strategic view and whether the company has plans to communicate, has plans for the CEO to communicate with the market. My second question is regarding the first quarter standalone operating income. I think it did underperform the expectations. So what would your annual outlook for operating income be for 2026?

Thank you for those kind words and we look forward to working with you as well.

I think there were largely two questions. First was regarding the appointment of the new CEO, his strategic direction, and communication plans with the market. And the second question was regarding the annual operating income outlook.

먼저 신임 CEO의 경영 방향에 대해서 말씀드리면 커다랗게 AX Platform Company라는 것이 신임 CEO의 커다란 비전이고 경영 방향입니다. 이 경영 방향은 기존에 KT가 갖고 있는 Yes, and I will take your first question regarding the strategic direction of the new CEO.

So the new CEO has emphasized KT's vision as to become an AX platform company. This means that we will be accelerating AX innovation based on the key strengths of KT. And in that sense, I think it's largely in line with the previous strategic direction of AICT.

The two pillars of the AX platform company is

strong fundamentals, and solid growth.

So we are working to establish a virtuous cycle between the two pillars.

So the strong fundamentals will drive solid growth, and then the solid growth can be reinvested in strong fundamentals. And by doing so, we believe KT can be a leader in the AX market going forward.

Let me tell you a little bit more about the basic principle. In particular, the innovation of information security, strengthening the quality of network infrastructure, and especially the optimization of IT infrastructure will restore customer trust. To grow into more detail on the strong fundamentals, so I think top priority of KT at the moment is to regain customer trust.

And to do that, we will be focusing on innovating information security, strengthening the quality of network infrastructure, and further advancing IT infrastructure as well.

And we believe that such strong fundamentals will be a cornerstone for sustainable growth.

And then I will go into more detail on solid growth. So as you all know, AX innovation has become an essential factor in all industries. To achieve that solid growth, we will be working on not only the B2C and B2C telco markets, but also we'll be expanding the AX success model to new growth areas.

And so, driven by strong fundamentals and solid growth, KT to become an AX platform company would be the key strategic vision of the new CEO. Yes. And then you also asked about communication plans.

So our new CEO has consistently emphasized the importance of communicating and delivering our commitments with the shareholders and the market. Currently, we are internally reviewing the right timing and format for such communication, and so once that is confirmed, we will be communicating that with the market.

Yes, I would like to talk about the annual outlook that you asked about earlier. As you know, due to the loss of revenue due to the loss of investors and large construction projects in the first quarter, So then I will move on to the second question.

You asked about the annual outlook for profitability. So in January, because of the reduction of our subscriber base and the completion of large-scale data center build projects, our service revenue declined. And in the cost segment, the depreciation expense decreased. However, operating costs such as sales and labor costs increased. So Q1 results were relatively lower than previous quarters.

We plan to manage profits through sales, especially sales.

But going into Q2, we will be having very strict management of the operating expenses with a special focus on sales cost.

According to this, we will be able to achieve 1.5 trillion won in net profit this year, except for the impact of customer failure last year.

And so considering all those factors for the fall year, we plan to achieve similar results as last year. So if you look at the last year results, if we exclude the impact of the data breach incident, adjusted operating income was around 1.5 trillion won. So we are working to achieve those levels.

In terms of corporate assets, we are working to achieve those levels

And if we also talk about the group subsidiaries, the main growth drivers, which are the real estate, DC cloud, and content subsidiaries, I believe will continue to generate improved growth. And that should also have positive contribution to the overall group numbers.

Next question, please.

The following question will be presented by Seung Hoon Lee from Uanta Securities.

Please go ahead with your question. I think it's about maintaining the basic standards. But as I said before, if the profit is recovered again, I'm curious if it will be able to increase directionally or additionally. Another thing is that as I mentioned the adjustment, there are non-refundable and non-refundable products. I'd like you to explain what this includes. And finally, there was a drop in the number of applicants as the minimum wage was exempted in January. So, the sales growth was a little slow compared to the second half of the year, but I'd like you to tell us what the growth strategy and sales will be like this year. Thank you.

Good afternoon, and thank you for the opportunity today. I largely have two questions. One is regarding the shareholder return policy, and KT announced the new midterm shareholder return policy recently, and I believe it largely continues the previous one. But if profitability recovers, what would be the direction of your shareholder return policy then? Is there a possibility that the return policy can be upsized? And there's also the item of the adjustment. So in the adjustment, you included non-cash items and non-ordinary P&L. So can you elaborate on specifically what those two items mean? And the third question is regarding your wireless business. In the first quarter this year, there was the early termination waiver program that led to a reduction of the subscriber base, and that had negative impact on the revenue. So what would be the growth strategy and overall revenue outlook for the full year for the wireless business?

Yes, I think you have three questions. First of all, I will tell you about the mid-term policy and the adjustment of the three items. I will tell you about the wireless sales growth strategy and the future. I will tell you about the wireless sales growth strategy and the future.

I think largely your question has two sections. The shareholder return policy will be addressed by myself, and your question on the wireless business will be addressed by Mr. Park Hyun-jin, the head of the Customer Business Division.

Yes, first of all, I would like to talk about the direction and adjustment of the medium-term policy. As we have said, the medium-term policy will be adjusted to the short-term interest rate

Yes, so regarding your question on shareholder return, the mid-long term, so 2026 to 2028 shareholder return policy was announced to be 50% of net adjusted income. And so that will continuously be implemented.

Yes, and then you talked about the overall direction of the return policy.

So of course, we will make effort to continuously improve profitability, which also means that we are making effort to increase the dividend per share.

As you would know, according to our Value Up program, we are buying shares around 250 billion won every year.

And so that program will continuously be implemented according to the value of program. And so I'd like to highlight that we are also working to indirectly increase the shareholder return.

Yes, and the second question you asked is, when we make a payment, we defined it as a separate adjustment period, and you asked about what adjustment is.

And your next question was regarding the adjustments that we make to come with the net adjusted income number.

There are largely two elements.

One is non-cash items, and the second is non-ordinary P&L.

And so if you first look at the non-cash items, it's the same as the previous policy.

But for example, there is some valuation gains and losses that may be incurred from some investments or foreign funds, overseas funds that we hold. So these transactions

do not actually insure cash transactions.

And then regarding the non-ordinary items, so for example, we may be divesting a sizable asset, or there may be some penalties that are sizable that we may need to pay. So we are trying to remove the impact of one-offs to ensure that there is stable visibility of dividend payments.

Yes, and I am Hyunjin Park, the head of the Customer Business Division, and I will address your question regarding the wireless service business. 그 역량이 조금 더 완화될 수 있을 것으로 생각하고 있습니다.

First of all, the decrease of subscriber base we experienced in January I think is largely being offset at the moment given the February numbers shown net additions.

그리고 다들 아시는 것처럼 하반기에는 정부 정책에 따른 요금제도 시행하게 되어 있는데 POS가 400kg BPS이기 때문에 And as you all know, in the second half, there are some new plans that will be launched related to government policy.

But the QS is around 400 kilobps. So we don't believe that this will have significant negative impact to our revenue. And for the whole year outlook, I think I can summarize it into two keywords. It is efficiency and agility.

We recently launched a 5G choice plan that is linked to the YouTube premium service.

KT is the only telco company in Korea that was able to partner with YouTube and launch this type of plan. So we will continue to work to understand customer needs and reflect them in the design of our plans so that we can observe an increase of the art pool.

And rather than acquiring subscribers due to the increase in sales, you can acquire more customers

And at this point, we are not really concentrating on acquiring new customers by spending large amounts of marketing and sales costs. We will be concentrating on efforts in non-contact channels, and other types of services like the used phone sales service so that we can reduce the acquisition cost and generate appropriate level of revenue.

The following question will be presented by John Sock Kim from KB Securities. Please go ahead with your question.

Thank you for the question. My name is Jun-seok Kim from KB. I would like to ask you two questions about the data center business. The first is related to the AIDC customer. It is assumed that the AIDC customer will have a different core point from the existing customer. I would like you to tell us about the needs of the AIDC customer that KT is looking at and KT's strength and strategy to attack it. Thank you for the opportunity today.

And I have two questions regarding data centers. One is the AI data center. So I believe that the customer needs and requirements for AI data centers will be different from existing B2B customers. So what are the key needs that you have understood from your discussions with customers, and what is the competitive edge KT has in this area? Second is the securing of power. So I believe that power has become the key obstacle in terms of building and securing more data centers. So how is KT working to overcome this challenge?

Thank you for your question. I think there are two questions. One is the characteristics and characteristics of the ARDC customers, and the strengths of KT. The second question is about the future of our power supply plan in terms of securing DC. The above is answered by Director Kim Bong-gyun of our Enterprise Department.

Thank you for the question. I think there were largely two questions. One was regarding AIDC, what are the customer needs and characteristics, and what are KT's key strengths in this area? And second was regarding the security of power for the dental centers. So to address this question, Mr. Bongyoon Kim, the head of the Enterprise Business Division, will be answering your question.

Enterprise Business Division, Kim Bongyoon. First, I would like to talk about the needs of the ARDC customers and the advantages of our KPA. I think the needs of ARDC customers can be divided into three main categories. The first is whether the environment is well built in order for the GPU to run properly. The environment I am talking about is whether the power supply is stable, whether the power supply or other problems can be addressed immediately. I think the needs of the environment are the first. Yes, I am Boon Kim Kim, head of the enterprise business division, and I'd like to take your questions.

So first, regarding the needs of customers in the ARDC, I think there are largely three needs. One is the environment that the GPU is operating. So when I say environment, it includes, like you've already mentioned today, the securing of power, the heating. And when heating occurs, can it be well managed by the facilities there? So that overall environment will be one key need. Second will be the build-out. So you will have multiple racks, and all those racks will be holding GPUs. Those racks will be connected to each other. We call this the clustering capability, and that is also one key aspect that the customers look at.

The fourth is the operational side. If the GPU is broken in the middle, can you quickly remove the GPU and monitor these things by re-clustering? The third is operations.

So, if there is a failure in one of the GPUs, can you detect it and take that out quickly and reconnect all of the racks? So, we call that re-clustering ability. So, largely, there are three aspects. One is the environment, second is the build, and third is the operations.

From a customer's point of view, And I'll move on to KT's key strengths.

So we have very long experience and track record in this area, going back to IDCs. And we are also operating the largest number of data centers as well. So that experience is key strength.

KT's key strengths.

Yes, and so in terms of the accumulation of the experience, the skills, and capabilities, I think KT would be by far top-notch, and we are also continuously enhancing the clustering abilities that I mentioned earlier as well.

In terms of the environment, in the past, for the DCs, air cooling was sufficient, but because the new data centers use very high voltage, it usually uses liquid cooling. We built this part for the first time in Korea, and we are testing it now. I think I can tell you this as an advantage.

Yes, and I would like to highlight that KT is the first company in Korea to commercialize this liquid cooling data center. So we mentioned the KASAN data center, which has been recently established, and the KASAN data center uses this type of cooling system. And currently, we are in the testing period.

The second question is about the KT strategy to solve the water problem of the data center.

I will move on to your question regarding securing power.

I will move on to your question regarding securing power.

Yes. In relative terms, I believe the power is more – it does more ample power in the areas outside of Seoul rather than Seoul. So in the Seoul and largely Seoul metropolitan area, we will be focusing on the expansion of low voltage, so the existing type data centers.

And outside of Seoul, where the power can be more abundant, we will be laying out the AIDC infrastructure. In terms of execution strategy, we are planning to buy and lease land that already has secured the necessary power.

So to summarize, we have a two-track strategy. So we have different strategy for Seoul and metropolitan Seoul and the areas outside of Seoul. And as for the execution strategy, we will be securing land that has already confirmed the procurement of power.

Next question, please.

The following question will be presented by Charlie Bay from HSBC.

Please go ahead with your question.

Hi. Congratulations on New Management Board. I have only one follow-up question on AIDC. Can I know more about your new AIDC build-up plan? And may I know if you have any full-year revenue target for the KT Cloud business?

Thank you. Thank you.

about the capacity of the AIDC, our plans, and the future sales and capex scale. First of all, I would like to hear from Director Kim Bong-gil, Director of Enterprise. I am Director Kim Bong-gil, Director of Enterprise. I think it will be difficult to tell you about the current size of the AIDC. In 5 years, we will be able to produce more than 500 megabytes Yes, thank you for those questions.

I think your first question is related to the capacity plans that we have for AIDC. So unfortunately, we are not able to share the exact numbers that we have for AIDC, but we have the goal to achieve around 500 megawatts within five years.

And regarding your question on KT Cloud, so let me try to answer it this way.

I think we'll be able to continue double-digit growth this year for the revenue. And the 500 megawatt number that I just shared with you, I want to clarify that it's for our total data center capacity.

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There are no further questions. We will now conclude the Q&A session.

We appreciate your active participation and interest. Thank you for joining us today despite your busy schedules. This concludes the earnings call for the first quarter of 2026. Thank you.