Core Insights - Tencent Music Entertainment Group's stock closed at $11.37, down 24.65% following its fiscal Q4 2025 results, which showed revenue growth but an EPS miss and a decline in free users [1][3] - The company reported a revenue increase of 16% and an EPS growth of 15%, which exceeded Wall Street expectations, yet the stock plummeted due to a 5% drop in free monthly active users (MAUs) to 528 million [3][4] - Increased competition in the industry may be impacting Tencent Music's results, although the average revenue per paying user rose by 7% [4] Financial Performance - Revenue for Q4 2025 grew by 16%, while EPS increased by 15%, indicating strong sales performance [3] - The decline in free MAUs could limit the potential for converting users to paying subscribers, which is a concern for future growth [4] Market Reaction - Trading volume for Tencent Music reached 63.9 million shares, significantly above the three-month average of 6.9 million shares, indicating heightened investor activity [1] - The stock's significant drop contrasts with the performance of other internet content companies, such as Spotify and PDD Holdings, which saw slight gains [2]

Core Insights - Tencent Music Entertainment Group reported solid revenue growth in Q4, but a decline in its user base overshadowed the results, leading to a significant drop in stock price [1][5]. Financial Performance - Revenue for the quarter increased by 15.9% to $1.24 billion [4]. - Adjusted earnings per share rose from $0.21 to $0.23, aligning with market estimates [4]. - Revenue from music subscriptions grew by 13% to $653 million, while revenue from other music services surged by 41% to $363 million [4]. User Metrics - Monthly active users (MAUs) decreased by 5% to 528 million, despite a 5.3% increase in paying users to 127.4 million [5]. - The decline in MAUs is attributed to competition from short-form video platforms like ByteDance's Douyin and Qishui Music, indicating potential challenges in Tencent Music's growth pipeline [5]. Strategic Developments - The super VIP user base exceeded 20 million, and average revenue per paying user increased by 7% to 11.9 RMB [6]. - The CEO mentioned progress with a newly launched ad-supported subscription plan aimed at broadening user access and attracting new audiences [6]. Market Outlook - There is uncertainty regarding Tencent's future expectations, as Chinese companies typically do not provide guidance [6]. - The market dynamics may be shifting towards a bifurcation between free and paid tiers, raising questions about Tencent's market share [7].

Market Overview - US stock index futures showed slight increases, with Nasdaq futures up 0.14%, S&P 500 futures up 0.21%, and Dow futures up 0.26% [1][12] - Major European indices collectively rose, with Germany's DAX up 0.52%, UK's FTSE 100 up 0.8%, France's CAC up 0.73%, and the Euro Stoxx 50 up 0.62% [1][12] Economic Insights - Moody's indicated that if oil prices remain high in the coming weeks, the probability of a US economic recession could exceed 50% [4][14] - Morgan Stanley's chief strategist stated that the US stock market correction is nearing its end, maintaining a positive outlook for the next 6 to 12 months [5][15] Company Developments - NVIDIA's CEO Jensen Huang raised the revenue forecast for computing chips to $1 trillion and introduced the NemoClaw smart shrimp farming platform [6][15] - Meta's potential 20% workforce reduction could save $6 billion, which is still considered insufficient against its large expenditure budget [7][15] - xAI, led by Elon Musk, is significantly hiring financial professionals to enhance Grok into a "top-tier investment banking analyst" [8][15] - Micron's HBM4 production line has commenced mass production and shipping in Q1, with initial products designed for the Vera Rubin platform [9][15] - SK Group's chairman projected that the global memory chip shortage may persist until 2030 [10][15] - Roche plans to incorporate 2,176 NVIDIA chips to expand its global AI infrastructure [11][15] - NEBIUS intends to issue $3.75 billion in convertible senior bonds to fund data center construction [12][15] - Alibaba launched the world's first enterprise-level AI-native work platform "Wukong," aimed at creating a 24-hour operational "lobster army" [13][15] - Delta Air Lines raised its revenue guidance for Q1, with the CEO noting "very strong" travel demand [14][15] - Beyond Meat's preliminary Q4 revenue was approximately $61 million, falling short of expectations, leading to a delay in its annual report [15][15] - Tencent Music reported a 15.9% year-over-year increase in Q4 total revenue to 8.64 billion yuan, with adjusted net profit rising 7.6% to 2.58 billion yuan [16][16]

Financial Data and Key Metrics Changes - In Q4 2025, total revenues grew 16% year-on-year to CNY 8.6 billion, driven by strong growth in online music services [21] - Music subscription revenues increased by 13% year-on-year, reaching CNY 4.6 billion in Q4 2025 [21] - Revenues from non-subscription music services were CNY 2.5 billion, up by 41% year-on-year [21] - For the full year 2025, total revenues were CNY 32.9 billion, up by 16% year-over-year [28] - Non-GAAP net profit increased by 60% to CNY 11.4 billion for 2025 [29] Business Line Data and Key Metrics Changes - The music subscription segment saw revenues of CNY 17.7 billion for the full year 2025, up by 16% year-over-year [28] - Revenues from social entertainment services increased by 7% year-over-year [28] - Non-subscription revenue growth was significantly driven by offline performances and artist-related merchandise sales [23] Market Data and Key Metrics Changes - The advertising revenue continued its strong growth trajectory, driven by an increase in advertisers and higher ECPM [22] - Offline performances and music festivals broadened user scenarios, effectively attracting more brands and driving growth in sponsorship advertising revenues [23] Company Strategy and Development Direction - The company is focused on a dual-engine content and platform strategy, emphasizing long-term value creation through disciplined investment and innovation [4] - A comprehensive suite of music services is being developed to create holistic value for music creators and enhance the music industry's long-term growth [5] - The company aims to deepen collaborations with artists and labels while expanding into offline experiences such as live concerts and merchandise [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in leading industry advancement despite competitive pressures, emphasizing the importance of a robust IP portfolio [4] - The company anticipates some short-term pressure on subscription revenue due to intense competition but believes its three-tier membership system will support sustainable growth [37] - AI technology is seen as a tool to improve efficiencies in content creation and enhance user experience [38] Other Important Information - The company plans to discontinue disclosing certain operating metrics quarterly, focusing instead on annual reporting of total paying users [12] - A cash dividend of approximately $368 million is expected to be paid in the second quarter of 2026 [30] Q&A Session Summary Question: Strategic growth outlook for 2026 amid AI and competition - Management highlighted solid results in 2025 and the successful implementation of a three-tier membership system, which has led to increased user retention and growth [35] - The company plans to continue expanding non-subscription offerings and deepen collaborations with artists [36] Question: AI impact on the music value chain - Management acknowledged that AI is changing the music industry, with a focus on providing effective creation tools for users while maintaining the importance of original content [40][46] - The company is committed to integrating AI into its platform to enhance user experience and content distribution [55] Question: Financial trends for GP margin and OPEX in 2026 - Management indicated that GP margin will likely remain flat or slightly lower than in 2025, with continued growth in subscription and advertising businesses expected to positively impact GP margin [60][62] - Operating expenses are anticipated to increase due to investments in content and strategic upgrades [74] Question: Update on Ximalaya acquisition and share repurchase program - Management is still in communication with regulators regarding the Ximalaya deal and plans to adhere to the existing share buyback program while responding to market needs [93][95]

Financial Data and Key Metrics Changes - In Q4 2025, total revenues grew 16% year-on-year to CNY 8.6 billion, driven by strong growth in online music services [21] - Music subscription revenues increased by 13% year-on-year, reaching CNY 4.6 billion in Q4 2025 [21] - Revenues from non-subscription music services were CNY 2.5 billion, up by 41% year-on-year [21] - For the full year 2025, total revenues were CNY 32.9 billion, up by 16% year-over-year [28] - Non-GAAP net profit increased by 60% to CNY 11.4 billion for 2025 [29] Business Line Data and Key Metrics Changes - The company achieved robust growth in music subscription, advertising, offline performance, and artist-related merchandise sales [21] - Revenues from social entertainment services decreased by 5% year-on-year to CNY 1.5 billion in Q4 2025 [25] - The gross margin in Q4 2025 was 44.7%, up by 1.1 percentage points year-on-year [25] Market Data and Key Metrics Changes - The company reported strong growth in advertising revenue, driven by an increase in advertisers and higher ECPM [22] - Offline performances and music festivals contributed significantly to sponsorship advertising revenues [23] Company Strategy and Development Direction - The company is focused on a dual-engine content and platform strategy to drive revenue growth and margin expansion [4] - Plans to deepen collaborations with artists and labels, and expand into offline experiences such as live concerts and merchandise [36] - The company aims to leverage AI to enhance user experience and improve efficiencies in content creation and promotion [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate competition and emphasized the importance of IP-driven content [37] - The company anticipates some short-term pressure on subscription revenue due to intense competition but believes in sustainable growth through its membership system [37] - AI is seen as a tool to improve efficiencies and enhance user experience, with ongoing investments in AI technology [38] Other Important Information - The company declared a cash dividend of $0.2 per ordinary share for the year ended December 31, 2025, expected to be paid in Q2 2026 [30] - The company will discontinue disclosing certain operating metrics quarterly, focusing instead on annual reporting of total paying users [12] Q&A Session All Questions and Answers Question: What is the company's strategic growth outlook for 2026 in light of AI and industry competition? - Management highlighted solid results in 2025 and emphasized the importance of a three-tier membership system to drive engagement and growth [35] Question: How will TME embrace AI in the music value chain? - Management acknowledged AI's profound impact on the music industry and emphasized the need to provide effective creation tools for users [40][42] Question: What are the trends regarding GP margin, OPEX, and earnings growth for 2026? - Management indicated that GP margin will remain flat or slightly lower than in 2025, with a focus on optimizing content costs and enhancing revenue from live concerts and merchandise [71][76]

Financial Data and Key Metrics Changes - In Q4 2025, total revenues grew 16% year-on-year to CNY 8.6 billion, driven by strong growth in online music services [22] - Music subscription revenues increased by 13% year-on-year, reaching CNY 4.6 billion in Q4 2025 [22] - Revenues from non-subscription music services were CNY 2.5 billion, up by 41% year-on-year [22] - For the full year 2025, total revenues were CNY 32.9 billion, up by 16% year-over-year [29] - Non-GAAP net profit increased by 60% to CNY 11.4 billion for 2025 [30] Business Line Data and Key Metrics Changes - The company achieved robust growth in music subscription, advertising, offline performance, and artist-related merchandise sales [22] - Revenues from social entertainment services decreased by 5% year-on-year to CNY 1.5 billion in Q4 2025 [25] - The gross margin in Q4 2025 was 44.7%, up by 1.1 percentage points year-on-year [25] Market Data and Key Metrics Changes - The company reported strong growth in advertising revenue, driven by an increase in advertisers and higher ECPM [23] - Offline performances and music festivals contributed significantly to sponsorship advertising revenues [24] Company Strategy and Development Direction - The company is focused on a dual-engine content and platform strategy to drive revenue growth and margin expansion [3] - There is an emphasis on expanding the music service offerings and enhancing the value of music IPs [4] - The company aims to grow its total addressable market sustainably while protecting and unlocking the full value of music IPs [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in leading industry advancement through disciplined investment and innovation [3] - The competitive landscape is evolving, but the company believes its integrated services provide a distinct competitive advantage [3] - Management anticipates some short-term pressure on subscription revenue due to intense competition but expects healthy and sustainable growth through refined services [38] Other Important Information - The company has built a multi-pronged membership system that includes ad-supported, standard, and SVIP memberships to cater to different user needs [23] - The company plans to continue investing in content and technology while focusing on IP development and self-produced content [31] Q&A Session Summary Question: What is the company's strategic growth outlook for 2026 in light of AI and industry competition? - Management highlighted solid results in 2025 and emphasized the importance of their three-tier membership system to drive engagement and growth [36] - They acknowledged competition but expressed confidence in their unique content and platform strategy to deliver high-quality growth [38] Question: How will TME embrace AI in the music value chain? - Management noted that AI is changing the music industry and that they are committed to providing effective creation tools for artists [46] - They emphasized the importance of original content while also recognizing the potential of AI-generated content [50] Question: What are the trends regarding GP margin, OPEX, and earnings growth for 2026? - Management indicated that GP margin will remain flat compared to 2025, with potential fluctuations due to changes in revenue mix [62] - They expect total net profit to improve in 2026, with a focus on optimizing content costs and enhancing user experience [76] Question: Any updates on the proposed Ximalaya acquisition deal and share repurchase program? - Management stated they are still in communication with regulators regarding the Ximalaya deal and emphasized their commitment to shareholder returns through dividends and share buybacks [95][96]

Tencent Music Entertainment Group Investor Presentation (NYSE: TME & HKEX: 1698) March 2026 Disclaimer 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 TME online music paying users (mm) TME online music paying ratio High-quality content and services continuously driving paying user loyalty 24.1% 127.4 1 Note: 1. Paying ratio is calculated by dividing the number of online music paying users by online music MAUs. 2. We adopted the nu ...

Financial Performance - Total revenues for Q4 2025 were RMB8.64 billion (US$1.24 billion), a 15.9% year-over-year increase, driven by strong growth in online music services[5] - Revenues from online music services reached RMB7.10 billion (US$1.02 billion), representing a 21.7% year-over-year growth, with music subscription revenues at RMB4.56 billion (US$653 million), up 13.2% year-over-year[5] - Net profit attributable to equity holders for Q4 2025 was RMB2.20 billion (US$315 million), reflecting a 12.6% year-over-year growth, while non-IFRS net profit was RMB2.49 billion (US$355 million), a 9.0% increase[5] - Total revenues for the full year 2025 were RMB32.90 billion (US$4.71 billion), a 15.8% year-over-year increase, with online music services contributing RMB26.73 billion (US$3.82 billion), a 22.9% growth[24] - Total operating profit for 2025 was RMB13.36 billion (US$1.91 billion), marking a 53.4% year-over-year increase[30] - Net profit for 2025 was RMB11.35 billion (US$1.62 billion), with net profit attributable to equity holders at RMB11.06 billion (US$1.58 billion)[31] User Growth and Engagement - The SVIP user base surpassed 20 million by year-end 2025, with monthly ARPPU for online music increasing to RMB11.9, up 7.2% year-over-year[7][13] - Revenues from online music services increased by 22.9% year-over-year to RMB26.73 billion (US$3.82 billion) in 2025, driven by growth in music subscriptions and other services[26] - Music subscription revenues reached RMB17.66 billion (US$2.53 billion), reflecting a 16.0% year-over-year growth[26] Cost and Margin Analysis - Gross margin for Q4 2025 increased to 44.7% from 43.6% in the same period of 2024, attributed to higher revenues from music subscriptions and advertising services[17] - Cost of revenues rose by 12.2% year-over-year to RMB18.37 billion (US$2.63 billion), primarily due to increased costs related to offline performances and advertising[27] - Gross margin improved to 44.2% from 42.3% in 2024, supported by higher revenues from music subscriptions and a lower revenue sharing ratio[28] Cash and Investments - Total cash, cash equivalents, term deposits, and short-term investments as of December 31, 2025, amounted to RMB38.04 billion (US$5.44 billion), up from RMB36.08 billion as of September 30, 2025[23] - Cash and cash equivalents decreased from RMB 13,164 million at the beginning of 2025 to RMB 8,470 million at the end of 2025, a decline of 35.7%[48] - Net cash provided by operating activities for the year ended December 31, 2025, was RMB 10,231 million, slightly down from RMB 10,275 million in 2024[48] - The company reported a loss from investments of RMB 2,285 million for the year ended December 31, 2025, compared to a gain of RMB 110 million in 2024[45] - The company reported a net cash used in investing activities of RMB 10,227 million for the year ended December 31, 2025, compared to a net cash used of RMB 6,818 million in 2024, indicating increased investment activity[48] Shareholder Returns - Basic earnings per ADS for 2025 were RMB7.21 (US$1.03), while diluted earnings per ADS were RMB7.11 (US$1.02)[32] - The board declared a cash dividend of US$0.12 per ordinary share, totaling approximately US$368 million to be paid in April 2026[34] Equity and Assets - Total assets increased from RMB 90,444 million as of December 31, 2024, to RMB 102,522 million as of December 31, 2025, reflecting a growth of 13.3%[47] - Total equity attributable to equity holders of the Company rose from RMB 67,863 million as of December 31, 2024, to RMB 80,287 million as of December 31, 2025, an increase of 18.2%[47] - The company’s investments accounted for using the equity method decreased significantly from RMB 4,669 million in 2024 to RMB 1,659 million in 2025[47] Operational Changes - The company hosted multiple flagship live events in 2025, including G-DRAGON's tour, which attracted over 260,000 attendees across 20 concerts[13] - Selling and marketing expenses increased by 8.8% year-over-year to RMB941 million (US$135 million) due to higher content promotion expenses[33] - The company will discontinue the disclosure of certain quarterly operating metrics, focusing instead on total paying users across music services annually[35] - Profit for the period in Q4 2024 was RMB 2,076 million, increasing to RMB 2,286 million in Q4 2025, representing a growth of 10.1%[45] - Non-IFRS Net Profit for the year ended December 31, 2025, reached RMB 9,924 million, up from RMB 8,136 million in 2024, indicating a year-over-year increase of 22.0%[45] - Earnings per share (diluted) for Class A and Class B ordinary shares increased from RMB 2.45 in 2024 to RMB 3.08 in 2025, a rise of 25.7%[45]

發行人所發行上市權證/可轉換債券的相關信息 發行人所發行上市權證/可轉換債券 不適用 其他信息 其他信息 不適用 發行人董事 於本公告刊發日期，本公司董事會由董事彭迦信先生、梁柱先生、胡敏女士、James Gordon Mitchell先生、Brent Richard Irvin先 生及曾偉業先生，以及獨立董事顏文玲女士、麥佑基先生及陳劍音女士組成。 第 2 頁 共 2 頁 v 1.1.1 EF001 免責聲明 | 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 | | | --- | --- | | 股票發行人現金股息公告 | | | 發行人名稱 | 騰訊音樂娛樂集團 | | 股份代號 | 01698 | | 多櫃檯股份代號及貨幣 | 不適用 | | 相關股份代號及名稱 | 不適用 | | 公告標題 | 截至2025年12月31日止年度的股息 | | 公告日期 | 2026年3月17日 | | 公告狀態 | 新公告 | | 股息信息 | | | 股息類 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何 責任。 Tencent Music Entertainment Group 騰訊音樂娛樂集團 （於開曼群島註冊成立以不同投票權控制的有限責任公司） （港交所股份代號：1698） （紐交所股份代號：TME） 2025 年第四季度 及 全年未經審計財務業績公告 我們謹此公佈我們截至2025年12月31日止三個月及全年的未經審計業績（「2025年第四季 度及全年業績公告」）。2025年第四季度及全年業績公告可於香港聯合交易所有限公司網 站www.hkexnews.hk及本公司網站https://ir.tencentmusic.com查閱。 承董事會命 騰訊音樂娛樂集團 執行董事長 彭迦信 香港，2026年3月17日 於本公告刊發日期，本公司董事會由董事彭迦信先生、梁柱先生、胡敏女士、James Gordon Mitchell先生、 Brent Richard Irvin先生及曾偉業先生，以及獨立董事顏文玲女士、麥佑基先 ...