PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,900 per share · Prices as of the 2026-10-02 close
Enterprise IT growth kept offsetting a shrinking vehicle software line through the first half of 2026, while the swing in quarterly margins widened rather than narrowed.
Consolidated revenue expanded from KRW 2.755tn in 2022 to KRW 4.252tn in 2025, more than 1.5x in three years, while the operating margin rose from 5.2% to 6.0%.
Operating profit collapsed to KRW 21.2bn (2.3% margin) in 1Q26 before recovering to KRW 90.5bn (7.2%) in 2Q26; Samsung Securities noted roughly KRW 20bn of revenue deferred from 1Q was recognized in 2Q.
In 1H26, SI revenue of KRW 867.4bn (+26.2%) and ITO of KRW 908.8bn (+18.8%) drove growth, while vehicle software slipped 2.9% to KRW 410.2bn.
A KRW 304.3bn GPU server supply contract with Hyundai Motor and Kia and a KRW 398.6bn AWS commitment contract with Hyundai Motor were both disclosed in July 2026, giving concrete shape to the company's group AI infrastructure role.
In a January 2026 filing the company guided only to full-year revenue of KRW 4.512tn, declining to provide any profit guidance.
Hyundai AutoEver runs an IT services business covering information system planning, construction and operation alongside a vehicle software business spanning in-car software platforms and navigation software, with overseas subsidiaries in China, India, Germany and the United States.
Results are split between Enterprise IT, made up of system integration (SI) and IT outsourcing (ITO), and the vehicle software (SW) division. In 2Q26 Enterprise IT revenue rose 27.9% year on year to KRW 1,038.4bn while vehicle software fell 7.8% to KRW 212.3bn.
For the first half, SI was KRW 867.4bn (+26.2%), ITO KRW 908.8bn (+18.8%) and vehicle software KRW 410.2bn (-2.9%), placing the growth axis squarely in traditional IT services.
SI leans on high value-added projects such as the group's next-generation ERP build and cloud migration, while ITO rests on IT operations for the automakers and affiliates plus expanding domestic and overseas Car Connectivity Service operations.
Vehicle software comprises navigation software, the mobilgene vehicle control middleware and HD maps, with mobilgene beginning to be applied to Hyundai and Kia vehicles from 2Q23.
By region, 1H26 revenue was KRW 1,408.0bn domestically, KRW 394.6bn in the Americas, KRW 212.2bn in Europe and KRW 126.9bn in Asia, lifting the overseas share to 35.6%.
Customer concentration on Hyundai Motor Group is overwhelming, with press reports indicating group-related volume accounts for more than 90% of total revenue.
Competitively, the Korean IT services market is divided among conglomerate-affiliated integrators each serving their own group, leaving external customer expansion and third-party sales of proprietary solutions such as the NEO Factory smart factory suite as the key differentiation task.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩1T | ₩81.4B | 7.8% |
| 2025Q3 | ₩1.1T | ₩70.8B | 6.7% |
| 2025Q4 | ₩1.3T | ₩76.5B | 5.8% |
| 2026Q1 | ₩935.7B | ₩21.2B | 2.3% |
| 2026Q2 | ₩1.3T | ₩90.5B | 7.2% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩2.8T | ₩142.4B | ₩113.9B | 5.2% | 7.7% | 75.8% |
| 2023 | ₩3.1T | ₩181.4B | ₩137.8B | 5.9% | 8.7% | 78.5% |
| 2024 | ₩3.7T | ₩224.4B | ₩170.8B | 6.0% | 10.0% | 93.6% |
| 2025 | ₩4.3T | ₩255.3B | ₩182.5B | 6.0% | 9.9% | 92.3% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
On confirmed figures, consolidated revenue expanded for four straight years: KRW 2.755tn in 2022, KRW 3.065tn in 2023, KRW 3.714tn in 2024 and KRW 4.252tn in 2025.
Operating profit rose from KRW 142.4bn to KRW 255.3bn over the same span, with the operating margin improving then plateauing at 5.2% (2022), 5.9% (2023), 6.0% (2024) and 6.0% (2025).
Net profit attributable to owners was KRW 182.5bn in 2025 while operating cash flow reached KRW 423.6bn, well above the prior year's KRW 256.0bn, underlining cash generation relative to reported operating profit.
The debt-to-equity ratio climbed from 75.8% in 2022 to 93.6% in 2024 before easing slightly to 92.3% in 2025. Quarterly swings were pronounced.
After revenue of KRW 1,042.1bn and operating profit of KRW 81.4bn in 2Q25, KRW 1,054.3bn and KRW 70.8bn in 3Q25 and KRW 1,322.7bn and KRW 76.5bn in 4Q25, first-quarter 2026 revenue of KRW 935.7bn came with operating profit of just KRW 21.2bn, a 2.3% margin.
In 2Q26 revenue of KRW 1,250.7bn, operating profit of KRW 90.5bn and owners' net profit of KRW 68.2bn marked the strongest profit level among the five quarters provided, which Samsung Securities attributed to Enterprise IT growth plus roughly KRW 20bn of revenue deferred from the first quarter.
The quality of that profit was uneven, however: Kiwoom Securities pointed out that year-on-year gross margins improved for SI from 10.1% to 12.8% and for ITO from 9.2% to 10.3%, while vehicle software plunged from 19.3% to 8.2%.
With headcount rising to about 7,900 in the first half of 2026 and more than 20% of that sitting in vehicle software, fixed-cost absorption remains the central variable behind quarterly margin volatility.
Korean IT services demand is in a phase where cloud migration and a next-generation ERP replacement cycle overlap, concentrating large build projects.
Press coverage tied the company's first-half performance to expanding large IT projects at Hyundai Motor Group affiliates, and in its semi-annual report the company said it would pursue system upgrades and expanded operating services in IT services while responding to the software-defined vehicle (SDV) transition in vehicle software.
On the other side, the downstream auto cycle is signalling deceleration: Hyundai Motor's 2Q26 wholesale volume fell 6.9% year on year and operating profit dropped 20.8% on higher raw material prices and a supplier fire.
The company itself cited US tariffs and geopolitical risk carried over from last year as the reason for slowing vehicle software revenue. In other words, the group's digital and AI investment cycle and the downstream vehicle demand and pricing cycle currently point in opposite directions.
Its industry position is that of a captive affiliate integrator, which brings the advantage of stable recurring revenue and the drawback of limited external customer acquisition.
More recently, whether the physical AI and humanoid theme translates into smart factory software demand has become an industry-wide focus, and at its August 2026 CEO Investor Day Hyundai Motor disclosed plans to expand its robot training centre tenfold and deploy robots at a US plant in 2028.
That said, labour costs sit at the centre of the cost base in IT services, so sector margins continue to hinge on headcount growth and the outcome of rate negotiations.
In a January 2026 filing the company guided to full-year consolidated revenue of KRW 4.512tn and omitted operating profit and other earnings forecasts, citing difficulty in projecting profitability amid external uncertainty.
For reference, its 2025 revenue guidance was KRW 3.906tn against actual revenue of KRW 4.252tn, an 8.9% deviation.
Large project schedules underpin the second-half revenue base: Hyundai Motor's next-generation ERP head office and Americas roll-in was slated for completion at the end of August 2026, while the Asia-Pacific and Europe roll-in runs to April 2027.
In July 2026 the company disclosed a KRW 304.35bn GPU server integrated purchase and supply contract with Hyundai Motor and Kia running to 28 February 2027, plus a KRW 398.59bn AWS private pricing commitment contract with Hyundai Motor covering 1 October 2026 to 30 September 2031.
That said, the company described the GPU server deal as ordinary hardware purchasing and supply, so the full contract value will not be recognised as high value-added service revenue.
Broker views diverge: in a July 2026 report NH Investment & Securities analyst Ha Neul projected that overseas subsidiary next-generation ERP builds, third-quarter ITO rate negotiations and rising next-generation navigation fitment rates could feed into the second half, while Kiwoom Securities analyst Shin Yun-chul argued at the same time that the vehicle software downturn was becoming more pronounced and estimated the division would contribute less than 10% of this year's operating profit.
In a July 2026 report Samsung Securities forecast third-quarter revenue of KRW 1.18tn and operating profit of KRW 73.9bn, and said the scope for meaningful third-quarter revenue tied to the robot training centre was limited.
On confirmed figures the operating margin improved from 5.2% in 2022 to 6.0% in 2025 and has hovered around 6% for three years, while margins across the last five quarters swung between 2.3% and 7.2%.
The share multiples the market references, by contrast, sit well above the Korean IT services sector average and carry a large premium to net asset value, which is generally read as reflecting expectations for a business model shift toward SDV, physical AI and smart factory work rather than current earnings.
On dividends, the company has previously referenced maintaining a 27% payout ratio in its 2021 mid-term targets, and the current dividend yield level runs below the KOSPI average.
Broker assessments diverge: in a July 2026 report Samsung Securities said it cut its target price to KRW 400,000 and its rating to HOLD, applying a target price-to-earnings multiple of 42x, described as the upper end of valuation during the earlier business model shift, to average 2027-2028 earnings per share, while Hyundai Motor Securities in an April 2026 report lowered its target price from KRW 580,000 to KRW 540,000.
Whether those multiples are borne out will be settled by operating metrics such as vehicle software margin recovery, ITO rate negotiation outcomes and whether AI infrastructure contracts convert into recurring revenue, and this report takes no position on the direction.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
In 1H26 SI revenue rose 26.2% to KRW 867.4bn and ITO rose 18.8% to KRW 908.8bn, offsetting vehicle software weakness. The simultaneous progression of the group's next-generation ERP build and cloud migration lifted the share of high value-added projects.
With the Asia-Pacific and Europe roll-in of Hyundai Motor's next-generation ERP running to April 2027, visibility on build volume is secured over a relatively long horizon.
In July 2026 the company disclosed a KRW 304.3bn GPU server integrated purchase and supply contract with Hyundai Motor and Kia, followed by a KRW 398.6bn AWS private pricing commitment with Hyundai Motor. The latter equals 9.4% of 2025 consolidated revenue and bills actual monthly usage through September 2031.
Industry commentary points to the possibility of follow-on work such as AI data centre construction and infrastructure operation after the server supply phase.
Operating cash flow of KRW 423.6bn in 2025 far exceeded that year's operating profit of KRW 255.3bn and rose sharply from KRW 256.0bn a year earlier. The debt-to-equity ratio eased from 93.6% in 2024 to 92.3% in 2025.
In a July 2026 report Samsung Securities stated that the company held net cash of KRW 665.8bn at the end of 2Q26 with no borrowings, which ties to its capacity to fund upfront headcount and R&D investment internally.
Vehicle software revenue fell 7.8% year on year to KRW 212.3bn in 2Q26 and 2.9% to KRW 410.2bn for the first half. The company attributed this to US tariffs and geopolitical risk.
Kiwoom Securities noted the division's gross margin plunged from 19.3% a year earlier to 8.2%, and the weakening of what had been the group's highest-margin axis is a burden.
According to Kiwoom Securities, headcount grew from about 5,500 at the end of 2022 to roughly 7,800 at the end of 2025 and about 7,900 in the first half of 2026, with more than 20% sitting in vehicle software. The same report estimated the division would contribute less than 10% of this year's operating profit.
The drop in the operating margin to 2.3% in 1Q26 illustrates how fixed costs immediately compress margins when revenue recognition slips.
Press reports indicate more than 90% of revenue comes from Hyundai Motor Group, and the counterparties to the GPU server contract are largest shareholder Hyundai Motor and major shareholder Kia. Joseilbo noted the deal carries limited significance as external customer expansion.
In a July 2026 report Samsung Securities said the scope for meaningful third-quarter revenue from the robot training centre was limited and that expectations for robot and data centre revenue had been pushed out beyond 2028.
Hyundai Motor's 2Q26 wholesale volume fell 6.9% year on year and operating profit dropped 20.8%. Vehicle software revenue is directly geared to group vehicle volumes and fitment rates, and the company itself cited US tariffs and geopolitical risk behind slowing growth.
If automaker volumes or pricing strategy wobble further, the timing of a vehicle software recovery could slip again.
The gap between operating profit of KRW 21.2bn in 1Q26 and KRW 90.5bn in 2Q26 shows how heavily results depend on the recognition timing of large build projects. Samsung Securities analysed that roughly KRW 20bn of revenue deferred from the first quarter was booked in the second.
As large ERP projects wind down in sequence, revenue and profit can shift between quarters, complicating trend assessment.
In IT services labour is the core cost, and the company paid KRW 259.1bn in total headquarters salaries in the first half of 2026. In July 2026 press reports noted the establishment of the company's first labour union.
How wage negotiations and changes in workforce management affect selling and administrative expenses and divisional margins remains an unverified variable.
The AWS private pricing commitment with Hyundai Motor (KRW 398.59bn, running to 30 September 2031) begins. With no upfront or advance payment and monthly billing of actual usage, it is worth checking how much genuinely recurring ITO-type revenue is added.
Third-quarter 2026 results are expected. Key checks are the actual figures against the third-quarter forecast of KRW 1.18tn revenue and KRW 73.9bn operating profit given by Samsung Securities in its July 2026 report, plus the outcome of third-quarter ITO rate negotiations and any recovery in vehicle software gross margin.
This is the point to check the start of Ioniq 5-based robotaxi supply to Waymo and progress on the tenfold expansion of the robot training centre, both announced by Hyundai Motor at its August 2026 CEO Investor Day. The question is whether Hyundai AutoEver orders in control and data systems actually appear in filings.
Full-year 2026 results and the 2027 business plan disclosure with a revenue outlook are due around this time. Whether the 2026 revenue guidance of KRW 4.512tn is met, and whether profit guidance is again omitted, offers a read on management's confidence in profitability.
The contract period for the KRW 304.35bn GPU server integrated purchase and supply agreement with Hyundai Motor and Kia ends. Since the company described it as ordinary hardware purchasing and supply, the actual revenue recognised, any renewal, and the margin contribution should all be examined together.
Hyundai AutoEver lifted its operating margin from 5.2% to 6.0% while growing revenue from KRW 2.755tn in 2022 to KRW 4.252tn in 2025, but the margin has stalled near 6% for the past three years.
Through the first half of 2026 the pattern persisted, with SI at KRW 867.4bn (+26.2%) and ITO at KRW 908.8bn (+18.8%) filling the gap left by vehicle software at KRW 410.2bn (-2.9%), and quarterly operating profit rebounded sharply from KRW 21.2bn in the first quarter to KRW 90.5bn in the second.
That rebound included roughly KRW 20bn of first-quarter deferred revenue flagged by Samsung Securities, so the durability of the recovery must be verified in third-quarter figures onward.
The bullish elements are group next-generation ERP and cloud volume, the GPU server (KRW 304.3bn) and AWS commitment (KRW 398.6bn) contracts disclosed back-to-back in July 2026, and a near debt-free balance sheet.
The bearish elements are the contraction and sharp gross margin decline in the previously highest-margin vehicle software line, the fixed-cost burden of headcount that has grown to about 7,900, and group dependence exceeding 90% of revenue.
The fact that the company guided only to 2026 revenue of KRW 4.512tn while omitting profit guidance, alongside broker observations that robot and data centre revenue expectations have been pushed back, also belongs in the frame. This report is for information purposes and contains no buy or sell opinion and no target price.
Report written 2026-09-05 · Data as of 2026-09-04
This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.