Tencent Music’s Q2 Revenue Jumps 18% on Paid-User Growth

Chinese online music and audio platform Tencent Music Entertainment Group (TME) has reported significant gains in its Q2 financials. TME operates China’s music apps QQ Music, Kugou Music, Kuwo Music and WeSing.

The Q2 stats:

• Total revenue for the quarter of $1.18 billion (RMB8.44 billion), a 17.9% YoY increase which the company puts down to strong YoY growth in revenues from online music services.

• The increase was partially offset by an 8.5% decline in revenues from social entertainment services and others, reaching $222 million (RMB1.59 billion) from RMB1.74 billion in the same period of 2024.

• Revenues from online music services hit $957 million (RMB6.85 billion), signaling 26.4% YoY growth. This was driven by solid growth in music subscription revenues, supplemented by growth in revenues from advertising services, artist-related merchandise and offline performances.

• Revenues from music subscriptions were $611 million (RMB4.38 billion), representing 17.1% YoY growth. That result was driven mainly by an improved monthly average revenue per paying user (ARPPU), which increased to RMB11.7 from RMB10.7 in the same period of 2024.

• The growth in ARPPU was primarily due to the expansion of the SVIP membership program, a higher priced premium membership that offers enhanced audio quality, early access to concert tickets, exclusive digital albums and collectible artist merchandise.

• Net profit attributable to equity holders of the company was $336 million (RMB2.41 billion), representing 43.2% YoY growth.

• Non-International Financial Reporting Standards (IFRS) net profit attributable to equity holders of the company was $359 million (RMB2.57 billion), representing 37.4% YoY growth.

• Operating profit rose 35.5% to $416 million (RMB2.98 billion), with a gross margin of 44.4%.

• Operating expenses were $161 million (RMB1.16 billion), a lower percentage of revenue compared to last year.

• TME ended Q2 with $4.87 billion (RMB34.92 billion) in cash, equivalents, and short-term investments.

What they said:

• Mr. Ross Liang, CEO of TME: “Our focus on product innovation to deliver immersive user experiences has driven solid growth in our online music business. This is reflected in the continued expansion of both our subscriber base and ARPPU, along with deeper user engagement.”

• He adds: “We are especially pleased to see our SVIP subscribers recently surpass 15 million, a new milestone reflecting the deep trust and loyalty of our users. We see great potential in the music entertainment space and remain committed to investing in new initiatives that create lasting value and impact to music creators and consumers.”