1. Crowdworks Q2 Earnings: What Happened?

Crowdworks reported KRW 2 billion in revenue, KRW 3 billion in operating loss, and KRW 5.7 billion in net loss for Q2 2025. While revenue slightly increased compared to Q1, losses widened significantly, raising concerns about the company’s financial health. The substantial increase in net loss is particularly worrying.

2. Why the Decline?

Several factors contributed to Crowdworks’ disappointing performance. High debt levels, slowing growth in Industrial AI and Academy business segments, and a revenue structure heavily reliant on large corporations are key factors driving the worsening profitability. External factors like intensifying competition in the AI market, fluctuating raw material prices, and rising interest rates also played a role. While the company maintains competitiveness in the LLM data and AI solutions market and benefits from strategic partnerships, these factors have not translated into short-term profitability gains.

3. What’s Next for Crowdworks?

Opportunities exist for Crowdworks in the growing generative AI market and its expansion into the Agentic AI market with its ‘Alpy’ solution. However, the company’s ability to monetize these opportunities remains questionable. The future stock performance hinges on the effectiveness of its profitability improvement strategies, market reception of ‘Alpy’, the recovery of growth in its existing business segments, and successful debt reduction.

4. What Should Investors Do?

Investors should proceed with caution given Crowdworks’ continued losses and high debt levels. Careful monitoring of the key factors outlined above, along with thorough financial analysis and market research, is crucial for making informed investment decisions. Investors should also demand transparency regarding short-term profitability improvement plans, their implementation, and results.