LG Energy Solution (373220) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue rose 15% QoQ to KRW 7.6 trillion, driven by growth in mid to low-end EV chemistry, cylindrical shipments, and ESS capacity utilization in North America.

• Operating income reached KRW 113.3 billion with a 1% margin; net loss was KRW 328.6 billion due to non-operating losses.

• 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.

• Small Battery and ESS divisions posted robust revenue growth, with ESS revenue up 30% QoQ and AMPC up 27% QoQ.

• North America Production Incentive Effect contributed 241 billion KRW to revenue in Q2 2026.

Financial highlights

• Q2 total assets increased by KRW 6.1 trillion QoQ to KRW 77.9 trillion, mainly from U.S. dollar bond issuance and asset growth in Arizona.

• EBITDA was KRW 1.3 trillion; net cash inflow, including Honda JV building sale, was KRW 4.7 trillion.

• CapEx was reduced by nearly 40% QoQ, with KRW 1 trillion executed; cash balance rose to KRW 7.2 trillion.

• First half revenue was KRW 14.1 trillion, up over 10% YoY, with ESS business growth highlighted.

• Gross profit margin in Q2 2026 was 20.4%, up from 18.9% in Q1 2026.

Outlook and guidance

• Q3 shipments expected to rise at least 50% QoQ in ESS, with overall company revenue projected to grow 20% or more QoQ.

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

• ESS production in the second half is projected to double versus the first half, with margin improvements targeted as production stabilizes.

• 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.