What Happened? iCRAFT’s Q2 Performance

iCRAFT reported KRW 29.3 billion in revenue (-30.6% YoY), an operating loss of KRW 0.7 billion, and a net profit of KRW 2.1 billion for Q2 2025. While the shift to net profit is positive, the operating loss is a point of concern. Furthermore, a discrepancy between the reported net income (KRW 0.961 billion) and the announced net profit (KRW 2.1 billion) warrants attention.

Why These Results? Unpacking the Drivers

The revenue decline appears primarily driven by decreased product sales. While selling, general, and administrative expenses decreased by 11.9% YoY, reflecting cost-cutting efforts, it wasn’t enough to offset the revenue drop. The positive net profit despite the operating loss likely stems from non-operating income, but further clarification is needed. Operating cash flow increased by 57.7% YoY to KRW 7.151 billion, signaling improved financial health.

What’s Next? Outlook and Investment Strategies

iCRAFT is focusing on AI infrastructure and cloud services for future growth. The expanding ICT market and iCRAFT’s existing business strengths offer a positive outlook. However, the continued revenue decline, reasons for the operating loss, and the financial statement discrepancies are key factors to monitor.

Action Plan for Investors

  • Maintain a Long-Term Perspective: Focus on the growth potential of AI and cloud services.
  • Manage Risk: Clarification on financial statement discrepancies and the revenue decline is crucial.
  • Consider Dollar-Cost Averaging: DCA could be a viable strategy once uncertainties are resolved and performance improves.