Tencent Music Entertainment Group (TME) investor relations material

Executive summary

• Achieved total revenue of RMB 8.93 billion in Q2 2026, up 5.8% year-over-year, driven by music-related services, membership growth, and Ximalaya integration.

• Monetization from music-related services reached RMB 7.61 billion, up 11% year-over-year.

• Expanded IP-driven offerings, live concerts, merchandise, and premium content, strengthening the content ecosystem.

• Enhanced user engagement through product innovation, AI-driven personalization, and deeper integration with the Tencent ecosystem.

• Integration of Ximalaya improved content diversity, user engagement, and cross-platform synergies.

Financial highlights

• Total revenues: RMB 8.93 billion, up 5.8% year-over-year.

• Music-related services revenue grew 11% year-over-year to RMB 7.61 billion; membership services revenue reached RMB 4.79 billion, up 8.1%.

• Adjusted EBITDA was RMB 3.25 billion, up 5.2% year-over-year.

• Net profit attributable to equity holders: RMB 2.5 billion; non-IFRS net profit: RMB 2.78 billion, up 5.3%.

• Gross margin was 44.2%, slightly down from 44.4% year-over-year.

• Cash, term deposits, and short-term investments totaled RMB 44.22 billion as of June 30, 2026.

Outlook and guidance

• Expect gross margin to decrease slightly year-over-year in the second half due to higher share of offline performance business.

• Continued investment in SVIP membership, innovative products, and diversified user benefits.

• Ongoing focus on content and IP development, leveraging Ximalaya integration for long-term growth.

• Net margin projected to decline slightly for the full year, while EBITDA is expected to edge up.

• Continued innovation in AI-driven music creation, engagement, and monetization models.