TME(TME) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenues for Q2 2024 were RMB7.16 billion (US$985 million), a 1.7$247 million), representing a 33.1% year-over-year growth[2]. - Total operating profit for Q2 2024 was RMB2.20 billion (US$302 million), a 42.8$515 million), with paying users rising by 17.7% to 117.0 million[2]. - Revenues from online music services grew by 27.7% year-over-year to RMB5.42 billion (US$746 million)[10]. - Revenues from social entertainment services decreased by 42.8$239 million) due to compliance adjustments and increased competition[11]. User Engagement and Growth - Monthly ARPPU for online music increased by 10.3% year-over-year to RMB10.7[4]. - The company launched new digital album offerings and enhanced user engagement through personalized privileges and advanced technology features[5][8]. - The company reported a total of 51.6 million monthly active users in its online music services segment as of June 30, 2024, a decrease from 45.6 million in the previous year[24]. Financial Position - Cash, cash equivalents, term deposits, and short-term investments totaled RMB35.03 billion (US$4.82 billion) as of June 30, 2024[15]. - The company has increased its financial assets at fair value through other comprehensive income to RMB 10,294 million as of June 30, 2024, from RMB 6,540 million at the end of 2023[28]. - Tencent Music's total assets grew to RMB 82,405 million as of June 30, 2024, compared to RMB 75,536 million at the end of 2023, indicating a growth of 9.8%[29]. - Total equity decreased from RMB 62,879 million to RMB 57,202 million, a decline of 9.7%[30]. - Total liabilities decreased from RMB 19,526 million to RMB 18,334 million, a decline of 6.1%[31]. Cash Flow - Net cash provided by operating activities increased from RMB 2,067 million to RMB 2,944 million, a growth of 42.4%[33]. - Net cash used in investing activities improved from a usage of RMB 1,339 million to a usage of RMB 693 million, a reduction of 48.3%[33]. - Cash and cash equivalents at the end of the period decreased from RMB 12,950 million to RMB 12,251 million, a decline of 5.4%[33]. Other Financial Metrics - Gross margin improved to 42.0%, up from 34.3% in the same period of 2023, driven by strong growth in music subscriptions and advertising[12]. - The gross profit for the same period was RMB 3,010 million, representing a gross margin of 42.0%, up from RMB 2,497 million and a gross margin of 34.3% in the prior year[24]. - Operating profit increased to RMB 2,198 million for the three months ended June 30, 2024, a growth of 43.0% year-over-year from RMB 1,539 million[24]. - Retained earnings increased from RMB 16,520 million to RMB 16,969 million, an increase of 2.7%[30]. - Non-controlling interests decreased from RMB 1,670 million to RMB 1,295 million, a decline of 22.4%[30]. - Current liabilities decreased from RMB 13,179 million to RMB 12,014 million, a decline of 8.8%[30]. - Total equity and liabilities decreased from RMB 82,405 million to RMB 75,536 million, a decline of 8.3%[31]. - Deferred revenue increased from RMB 2,952 million to RMB 2,854 million, a decline of 3.3%[30].