1. TME's Q1 revenue reached RMB7.36 billion, an 8.7% increase. 2. Music subscription revenue surged 16.6% to RMB4.22 billion. 3. Net profit increased by 201.8% YoY, reaching RMB4.29 billion. 4. ARPPU grew to RMB11.4, reflecting enhanced user value. 5. Strategic partnerships expanded music offerings, enhancing user engagement.
Strong revenue growth and substantial profit increase indicate positive market performance akin to previous growth surges in Q1 of past years.
Revenue and profit growth higher than market expectations is likely to drive investor confidence, impacting TME positively.
Continued investments in content and user experience suggest sustained growth, similar to trends observed post-2020.
Mr. Cussion Pang, Executive Chairman of TME, commented, "Our strong first-quarter performance, marked by robust revenue growth and solid profitability, underscores the successful execution of our high-quality growth strategy. With the sound foundations we have built, a thriving music ecosystem, and healthy financial position, we are well equipped to navigate global uncertainties with confidence. Following a good start to the year, we remain on track and well positioned to achieve sustainable growth in 2025 and beyond."
Mr. Ross Liang, CEO of TME, continued, "We're encouraged by the continued rise in user lifetime value, a testament to our continued investment in compelling content and innovative, differentiated products delivered across diverse formats. This momentum has driven further growth in both our paying user base and ARPPU, with particularly strong adoption by our SVIP memberships. As we look ahead, we remain committed to enhancing our core competitiveness and pioneering new ways to inspire deeper and broader music engagement."
| Metric | 1Q25 | 1Q24 | YoY % |
|---|---|---|---|
| MAUs – online music (million) | 555 | 578 | (4.0 %) |
| Paying users – online music (million) | 122.9 | 113.5 | 8.3 % |
| Monthly ARPPU – online music (RMB) | 11.4 | 10.6 | 7.5 % |
Total revenues increased by RMB588 million, or 8.7%, to RMB7.36 billion (US$1.01 billion) from RMB6.77 billion in the same period of 2024.
Cost of revenues increased by 2.9% year-over-year to RMB4.11 billion (US$567 million), mainly due to increase of advertising agency fees, costs related to offline performances and IP related costs, such as costs for artist-related merchandise. Meanwhile, revenue sharing fees decreased as a result of the decline of revenues from social entertainment services.
Gross margin increased to 44.1% from 40.9% in the same period of 2024, primarily due to strong growth in revenues from music subscriptions and advertising services, and the ramp-up of our own content. In addition, the decline in revenue sharing fees outpaced the decrease in revenues from social entertainment services and others, which also had a positive impact on gross margin.
Under our previously announced share repurchase programs, during the three months ended March 31, 2025, we repurchased a total of 5.9 million ADSs in the open market with cash for an aggregate consideration of approximately US$64.5 million at an average price of US$10.8 per ADS.
Tencent Music Entertainment Group (NYSE: TME and HKEX: 1698) is the leading online music and audio entertainment platform in China, operating the country's highly popular and innovative music apps: QQ Music, Kugou Music, Kuwo Music and WeSing.
This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements.
Tencent Music Entertainment Group
Email: [email protected]
Phone: +86 (755) 8601-3388 ext. 818415