1. What Happened? Dream Security’s Q2 Earnings Breakdown
Dream Security reported Q2 2025 revenue of ₩74.8 billion, slightly exceeding the market consensus of ₩73.7 billion. However, operating income came in at a disappointing ₩2.4 billion, significantly below the expected ₩5.8 billion, and net income plunged to a loss of ₩0.6 billion. These figures represent a substantial decline compared to the same period last year.
2. Why Did This Happen? Analyzing the Causes of the Underperformance
The primary drivers of this underperformance are declining revenue and high fixed costs, leading to deteriorated profitability. Consolidated revenue decreased by approximately 44.5% year-over-year, and the company continues to report operating losses on a standalone basis. Furthermore, the high debt-to-equity ratio (270.11%) and net debt-to-equity ratio (185.42%) pose significant risks, particularly with the potential for increased interest expenses due to rising interest rates.
3. What Should Investors Do? Investment Strategy Recommendations
While Dream Security possesses strengths in the growing information security industry and its technological capabilities, these advantages could be overshadowed if the current underperformance persists. Investors should closely monitor upcoming quarterly earnings releases to assess the company’s ability to improve profitability and strengthen its financial position. At this juncture, we recommend either selling or adopting a cautious wait-and-see approach.
4. Action Plan for Investors
- Short-term investors: Sell Dream Security shares or hold off on further investment.
- Long-term investors: Monitor future earnings releases and changes in management strategy. Make investment decisions after confirming improvements in profitability and financial structure.