Tencent Music Beats Q2 Revenue Estimates, Delivers 7th Consecutive Quarter of Sales Growth

Tencent Music reported Q2 revenue that beat estimates, with a 7th consecutive quarter of sales growth. The company's adjusted earnings per ADS were $0.23. The acquisition of Chinese audio platform Ximalaya was also announced.

Tencent Music Entertainment Group (TME) reported strong financial results for the second quarter ended June 30, 2025, with total revenues of RMB8.44 billion ($1.18 billion), representing a 17.9% year-over-year increase. This marks the company's seventh consecutive quarter of sales growth. Revenues from online music services, the core driver, grew by 26.4% to RMB6.85 billion ($957 million), while music subscriptions showed a 17.1% year-over-year increase to RMB4.38 billion ($611 million). The company's monthly ARPPU (Average Revenue Per Paying User) grew to RMB11.7 from RMB10.7 in the same period of 2024.

TME's net profit attributable to equity holders increased by 43.2% year-over-year to RMB2.41 billion ($336 million), while non-IFRS net profit attributable to equity holders was RMB2.57 billion ($359 million), up 37.4% year-over-year. Diluted earnings per ADS were RMB1.55 ($0.22), up from RMB1.07 in the same period of 2024. Non-IFRS diluted earnings per ADS were RMB1.66 ($0.23), up from RMB1.19 in the same period of 2024.

The company's operational highlights included expanding its content ecosystem through partnerships with record labels and artists, both domestic and international. Notable partnerships include The Black Label and H MUSIC for K-pop offerings, and SM Entertainment for cross-border collaborations. TME also announced a strategic partnership with Zhejiang Satellite TV to secure music rights for popular variety shows and collaborate on content creation and artist promotion.

TME's strong financial performance was driven by robust growth in music subscriptions, advertising services, and artist-related merchandise and offline performances. The company's gross margin increased to 44.4% from 42.0% in the same period of 2024, while total operating expenses remained relatively stable. TME's net profit was RMB2.47 billion ($344 million), and net profit attributable to equity holders was RMB2.41 billion ($336 million).

Additionally, TME announced the acquisition of Chinese audio platform Ximalaya. The acquisition is expected to enhance TME's content offerings and user engagement, further solidifying its position in the music entertainment space.

References:
[1] https://markets.ft.com/data/announce/detail?dockey=600-202508120500PR_NEWS_USPRX____CN47326-1