SK TELECOM CO (SKM)·Q4 2025 Earnings Summary

SK Telecom Cuts Dividend as Cybersecurity Fallout Drags Net Income Down 73%

February 5, 2026 · by Fintool AI Agent

SK Telecom reported FY 2025 results marked by the severe aftermath of a major cybersecurity incident. Consolidated revenue came in at KRW 17,099.2 billion, beating estimates by 45.5%, but profitability collapsed with operating income down 41.1% YoY and net income plunging 73% YoY to KRW 375.1 billion . The company suspended its Q4 dividend and announced a strategic pivot toward AI data centers and customer value innovation for 2026.

Did SK Telecom Beat Earnings?

The results tell a tale of two metrics:

*Values retrieved from S&P Global

Revenue beat but profits collapsed. Revenue declined 4.7% YoY due to non-core subsidiary sales, net subscriber losses following the cybersecurity incident, and the implementation of an "accountability and commitment program" that included tariff discounts . Operating income was hit by USIM replacement costs and year-end restructuring, while net income suffered from penalty payments arising from the incident .

What Did Management Guide?

Management provided directional guidance rather than specific targets, framing 2026 as a recovery year:

Revenue Outlook: Will not recover to pre-incident 2023 levels due to subscriber attrition and subsidiary divestitures, but management is prioritizing cost efficiency over topline growth .

Operating Income Target: Aiming to return "close to 2023 levels" by improving telecom profitability and achieving self-sustainability in AI business .

Dividend Policy: Management apologized for the Q4 dividend suspension and committed to "do our best to return to previous dividend payout levels" in 2026. They are also exploring tax-free dividend structures to enhance shareholder value .

Key Quote from CFO Jong-suk Park:

"We will do our utmost to build SK Telecom with strong fundamentals, grounded in the trust of our customers... We sincerely apologize to our shareholders for not being able to pay the year-end dividend."

How Did the Stock React?

Despite the challenging results, SKM shares rose +3.4% to close at $29.65 on the earnings day, hitting a new 52-week high of $30.09 intraday. The stock has rallied 50% from its August 2025 low of $19.66.

Why the rally despite weak results? Investors appear to be looking forward to 2026 recovery and the AI data center growth narrative. The worst of the cybersecurity impact appears to be in the rear-view mirror, and management's commitment to restoring dividends provided reassurance.

What Changed From Last Quarter?

The Q3 2025 call was dominated by crisis management. Q4 2025 marked a shift toward forward strategy:

New CFO Jong-suk Park and new Head of MNO Support Byung-chan Bae led the call, signaling a management refresh aimed at restoring investor confidence .

What Are the 2026 Strategic Priorities?

Management outlined three core pillars for the year ahead:

1. Customer Value Innovation

Restore market leadership by redesigning all telecom products, membership programs, and channels around "real value that customers want" . The focus is on customer lifetime value (LTV) optimization rather than destructive marketing competition.

2. AI Acceleration

Apply AI across marketing, network operations, and customer touchpoints to boost productivity. Specific initiatives include AI-based LTV modeling for personalized offerings and end-to-end network automation .

3. AI Business Scale-Up

• AI Data Centers: Ulsan AIDC under construction since September 2025; planning additional Seoul-region facility. AIDC revenue grew double-digits in 2025 .
• A.X K1 Foundation Model: Korea's first 500-billion-parameter hyperscale AI model, developed with consortium partners. Targeting top-2 selection by end of 2026 for government projects .
• Anthropic Stake: Equity holding to be revalued in 2025 business report; no monetization decisions made .

Q&A Highlights

On Dividend Recovery (NH Investment & Securities): Management committed to restoring previous dividend levels in 2026, contingent on earnings normalization. They're also exploring tax-free dividend structures to enhance shareholder value .

On Anthropic Stake (IBK Securities): Due to confidentiality clauses, exact stake value cannot be disclosed, but the 2025 business report will include updated equity stake information. No decisions on monetization or using proceeds for dividends .

On KT's Cancellation Fee Waiver (Daishin Securities): A competitor's waiver temporarily expanded the carrier-switching market, benefiting SKT's win-back efforts. Many returning customers were previous SKT subscribers who left after the incident . The "Customer Appreciation Package" (tenure restoration, membership benefits) helped rebuild trust.

On 2026 MNO Strategy: Revenue unlikely to recover to pre-incident levels, but profitability is the priority. Focus on LTV-based optimization and cost efficiency rather than subscriber volume .

Capital Allocation & Shareholder Returns

Management emphasized that capital allocation decisions will balance "business performance, financial positions, and funds for growth investments" at the board level .

Historical Quarterly Performance

*Values retrieved from S&P Global

The Q3 2025 quarter was the trough, with operating income collapsing to $35M on cybersecurity costs. Q4 2024 was also weak (Q4 seasonality plus early incident impact).

Risks & Concerns

1. Subscriber Attrition: Handset subscribers remain below pre-incident levels; recovery timeline uncertain .

2. Revenue Headwinds: Non-core subsidiary sales and tariff discounts create structural revenue pressure.

3. AI Investment Risk: Data center expansion requires significant capital; ROI depends on Korean AI demand growth.

4. Execution Risk: New management team must deliver on ambitious 2026 targets while rebuilding customer trust.

5. Competitive Dynamics: KT and LG Uplus benefited from SKT's troubles; market share recovery will be costly.

Forward Catalysts

Key Takeaways

1. Revenue beat, profit miss: Topline exceeded estimates by 45%, but cybersecurity fallout crushed net income by 73% YoY.

2. Dividend suspended: No Q4 payout; full-year DPS at KRW 1,661 vs ~3,500+ in prior years.

3. Stock rallied anyway: +3.4% to 52-week high on forward recovery narrative and AI strategy.

4. New leadership: CFO, COO, and IRO turnover signals strategic reset.

5. 2026 priorities: Customer value innovation, AI acceleration, and AI data center scale-up.

6. Anthropic wildcard: Equity stake valuation update coming in March; no monetization plans disclosed.

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This analysis was generated by Fintool AI Agent based on the SK Telecom Q4 2025 earnings call transcript and financial data from S&P Global.