Tencent Music Entertainment Group (NYSE: TME; HKEX: 1698) reported robust third‑quarter results before the U.S. market opened Wednesday, posting double‑digit top‑ and bottom‑line growth driven by its core online‑music business. The company released the figures at 04:00 ET (09:00 GMT). 1
- Revenue: RMB 8.46 billion ($1.19 billion), +20.6% YoY. 2
- Online‑music revenue: RMB 6.97 billion, +27.2% YoY; music subscriptions RMB 4.50 billion, +17.2% YoY; ARPPU up to RMB 11.9 from RMB 10.8. 2
- Profitability:Net profit to equity holders RMB 2.15 billion (+36.0% YoY). Non‑IFRS net profit RMB 2.41 billion (+32.6% YoY). Non‑IFRS diluted EPSRMB 1.54 (US$0.22). 2
- User metrics:Online‑music paying users125.7 million (+5.6% YoY), while MAUs eased to 551 million (–4.3% YoY). 2
- Social entertainment: revenue RMB 1.49 billion, –2.7% YoY; gross margin improved to 43.5%. 2
Market reaction: early pop, midday drop
TME shares initially ticked higher in early reports citing a modest pre‑market gain after the beat on revenue and adjusted EPS. Investing.com
By mid‑session, sentiment flipped: as of 15:31 UTC, TME traded around $18.67, down roughly 10.0% intraday (day high $22.00, low $18.04).
What changed? While the release showcased strong monetization, investors appeared to home in on continued MAU softness and a decline in social‑entertainment revenue, a segment that has been under regulatory pressure industry‑wide. Those data points, coupled with higher costs tied to offline events, may have overshadowed the top‑line beat. 2
Q3 by the numbers: beat on the top line, stronger margins
- Revenue: RMB 8.46 billion (+20.6% YoY).
- Operating profit:RMB 2.71 billion (+26.4% YoY).
- Cash & investments:RMB 36.08 billion at September 30, 2025.
- Diluted EPS:RMB 1.38; Non‑IFRS diluted EPS:RMB 1.54.
All figures are from the company’s unaudited report for the quarter ended September 30, 2025. 2
Third‑party rundowns echoed the beat: multiple outlets noted revenue and adjusted EPS exceeded consensus (e.g., revenue vs. ~RMB 8.23 billion; non‑IFRS EPS RMB 1.54 vs. RMB 1.52). 3
Growth engine: subscriptions, live events and advertising
Management attributed the momentum primarily to online‑music services—not just subscriptions, but also advertising, artist merchandise, and offline performances. The company highlighted a slate of large‑scale concerts (including additional G‑DRAGON shows), plus new label tie‑ups (e.g., KING RECORDS, CEREAL) that enriched the catalog. 2
Product‑side, TME said higher‑tier SVIP penetration and features like AI‑assisted listening enhancements helped lift ARPPU to RMB 11.9. 2
User metrics: paying users climb, MAUs edge lower
TME closed the quarter with 125.7 million paying online‑music users (+5.6% YoY), even as monthly active users fell to 551 million (–4.3% YoY). That pattern—fewer casual listeners but a stickier, higher‑spend core—continued from prior periods. Meanwhile, social entertainment services revenue declined 2.7% YoY to RMB 1.49 billion, but gross margin improved to 43.5% on mix shift and lower revenue‑sharing ratios in that segment. 2
Strategic context: long‑form audio and ecosystem expansion
Beyond the quarter, TME has been broadening its audio footprint. In June 2025, the company announced plans to acquire long‑form audio platform Ximalaya for about $2.4 billion, a move aimed at deepening its content library and cross‑selling to paying users (deal status not updated in today’s release). 4
What’s next to watch
- Engagement vs. monetization: Can TME stabilize MAUs while continuing to raise ARPPU through SVIP and product features? (Q3 data show progress on ARPPU alongside MAU softness.) 2
- Social‑entertainment trendline: Whether declines in karaoke/live‑streaming‑related revenue moderate as the company diversifies (concert IP, merchandise, ads). 2
- Offline events economics: Management called out higher costs tied to performances; investors will watch margin impact as TME scales concerts. 2
- Deal flow & catalog: Any updates on Ximalaya and further label/game‑music partnerships (e.g., Honor of Kings collaborations) that boost engagement. 2
By the numbers (quick reference)
- Revenue: RMB 8.46B (+20.6%)
- Online‑music revenue: RMB 6.97B (+27.2%)
- Music subscription revenue: RMB 4.50B (+17.2%)
- MAUs (online music):551M (–4.3%)
- Paying users:125.7M (+5.6%)
- Gross margin:43.5%
- Net profit (attrib.):RMB 2.15B (+36%)
- Non‑IFRS diluted EPS (ADS):RMB 1.54
- Cash & investments:RMB 36.08B
All figures pertain to Q3 ended Sept. 30, 2025. 2
Reporting note: Today’s article covers developments dated November 12, 2025. Tencent Music’s press release is the primary source; no formal revenue guidance was included in that document. 2
Disclosure: This article is for informational purposes only and does not constitute investment advice.
Sources: Company IR/press release and third‑party reports cited above. 2
