TME · Tencent Music Entertainment Group

Tencent Music Entertainment Group delivered steady Q1 2026 results with total revenues rising 7.3% year-over-year to RMB7.90 billion, primarily propelled by 12.2% growth in music related services to RMB6.51 billion. Membership services, the largest component, grew 6.6% to RMB4.57 billion, supported by expanded SVIP privileges like early access to performances and merchandise, plus new programs such as bubble, WeverseDM, and fan-club memberships. Non-membership music services surged 28.0% to RMB1.94 billion, fueled by robust offline performances and advertising gains from diversified formats. Social entertainment revenues declined 11.0% to RMB1.38 billion. Gross margin improved to 44.9% from 44.1%, aided by higher membership revenues and lower channel fees, despite cost increases in performances and IP services. Operating expenses rose 5.9% but fell as a percentage of revenues to 15.3%, with selling and marketing up 36.2% due to channel and content promotion spending. IFRS net profit attributable dropped to RMB2.09 billion from RMB4.29 billion due to a prior-year RMB2.37 billion gain on associate disposal, while non-IFRS net profit grew 7.0% to RMB2.27 billion. Management highlighted a resilient model with strong non-membership growth, AI-enhanced content efficiency, premium IP investments including renewals with JVR Music and TF Entertainment, and SVIP adoption. CEO Ross Liang emphasized platform resilience via content-platform dual engine, Tencent ecosystem leverage, and tiered subscriptions. Cash position strengthened to RMB41.00 billion. A US$0.24 per ADS dividend for 2025 was paid in April 2026, signaling capital return confidence.