SK Telecom Co., Ltd. Q4 FY2024 earnings call

• Operational improvements strengthened competitiveness, with consolidated operating profit up 4% and OP margin over 10%.
• Strengthened global AI partnerships via equity investments in Lambda, Penguin Solutions, etc. Launched SKT GPU-as-a-Service with Lambda.
• Restructured business portfolio by phasing out low-profit businesses and increasing high-profit ones.
• Changed classification of AI-related revenue to better showcase AI business growth, with AI-related revenue growing 19% in 2024.

Consolidated revenue for 2024 was KRW 17,940.6 billion, up 1.9% year-over-year. Operating income was KRW 1,823.4 billion. Net income was KRW 1,438.8 billion, up 25.6% year-over-year. AI-related revenue grew 19% year-over-year. The telecom business is one category, and the AI business includes AIX, AIDC, etc. MNO business had slight top-line slowdown, but data center and B2B (cloud, AICC) contributed to consolidated revenue growth. AI-related revenue now includes quarterly sales of AIX and AIDC to show AI business growth.

• Annual consolidated revenue target for 2025 is KRW 17.8 trillion, ~1% growth normalized after removing subsidiary sales impact.
• Aim to achieve year-over-year growth in operating income through continuous operational improvements.
• Funds from operational improvements will be used for AI investments and acquiring equity of SK Broadband.

• Uncertainties in economic, industrial, and political changes globally.
• Challenges in executing AI business strategies and competing in the market.

Q: Outlook on stock price and B2C AI pricing plans?

A: Market valuation reflects future growth potentials; 2025 to demonstrate AI business effect. No specific B2C AI pricing plans yet, but A. paid service launch could strengthen MNO product competitiveness.

Q: Impact of AI models like DeepSeek on AIDC business and details on AIX business models?

A: Cost-effective AI models can promote AI infrastructure market growth. AIX business includes AI cloud (2/3 of revenue, +20% growth in 2024), AI B2B (AI vision, AICC +30% growth in 2024), and AT use case business (A. Biz, market intelligence, manufacturing AI) aiming for external client expansion.