Tencent Music Entertainment Group reported third‑quarter 2025 results that surpassed analyst expectations, with total revenue reaching RMB 8.46 billion (US$1.19 billion), a 20.6% year‑over‑year increase driven by a 27.2% rise in online music services revenue to RMB 6.97 billion and a 17.2% jump in subscription revenue to RMB 4.50 billion. The company’s net profit attributable to equity holders climbed to RMB 2.15 billion (US$302 million), reflecting a 36.0% YoY growth that outpaced the 26.4% figure originally reported. This robust profit expansion is largely attributable to higher margins in the subscription segment and disciplined cost management amid a competitive market.
The company’s online music services grew 27.2% as user engagement intensified, while subscription revenue benefited from a 10% increase in the average revenue per paying user (ARPPU) to RMB 11.9, up from RMB 10.8 in Q3 2024. Monthly active users (MAUs) edged down to 551 million from 576 million, indicating a slight contraction in the user base but offset by higher monetization per user. Other revenue streams, including social entertainment services and advertising, declined 2.7% YoY, underscoring the company’s shift toward higher‑margin subscription and live‑streaming offerings.
Gross margin expanded to 43.5% from 42.6% in the same quarter a year earlier, driven by a higher mix of subscription and advertising revenue, which carry lower royalty costs than social entertainment services. Operating profit rose to RMB 2.71 billion (US$381 million), reflecting both revenue growth and margin expansion. The company’s operating margin improved to 32.0% from 30.5% YoY, a result of tighter cost controls and economies of scale in content acquisition and platform operations.
Management raised its full‑year 2025 revenue guidance to RMB 4.396‑4.400 billion from the prior range of RMB 4.140‑4.150 billion, and increased operating income guidance to RMB 2.151‑2.155 billion. The upward revision signals confidence in continued demand for AI‑enhanced music recommendations, live‑streaming events, and the expansion of the SVIP membership program. The company also reiterated its focus on cost discipline and strategic investments in high‑return verticals, indicating a balanced outlook for profitability and growth.
Analysts welcomed the earnings beat, noting that revenue and earnings exceeded consensus estimates by 3.5% and 24% respectively. The market reaction was positive, with the stock gaining in pre‑market trading, reflecting investor confidence in the company’s ability to sustain growth and margin expansion amid a competitive landscape. Management’s emphasis on content enrichment, live‑experience expansion, and cost efficiency reinforced the narrative that Tencent Music is well positioned to capture long‑term value in China’s music streaming market.
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