Tencent Music Entertainment Group (TME) investor relations material

Executive summary

• Achieved 6% year-on-year revenue growth in Q2 2026, reaching RMB 8.93 billion, driven by music-related services and the consolidation of Ximalaya.

• Net profit attributable to equity holders reached RMB 2.47 billion, with diluted EPS of RMB 1.57.

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

• Strengthened IP-centric content ecosystem and broadened digital audio offerings, enhancing long-term value.

Financial highlights

• Total revenues: RMB 8.93 billion, up 6% year-on-year; music-related services revenue grew 11% year-on-year.

• Membership services revenue: RMB 4.79 billion, up 8.1% year-on-year; Ximalaya contributed RMB 0.407 billion to overall revenues.

• Gross margin: 44.2% in Q2 2026, compared to 44.4% in Q2 2025; impacted by revenue mix and Ximalaya consolidation.

• Net profit attributable to equity holders: RMB 2.47 billion, up from RMB 2.4 billion in Q2 2025.

• Adjusted EBITDA: RMB 3.25 billion, up 5.2% year-on-year; non-GAAP net profit: RMB 2.69 billion, up 4.4% year-on-year.

• Cash, term deposits, and short-term investments: 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 revenue mix and seasonal changes in offline performance.

• Continued focus on SVIP membership growth, innovative products, and diversified benefits.

• Ongoing investment in quality content, IP development, and deeper Tencent ecosystem collaboration.

• Ximalaya integration expected to unlock further growth, operational efficiencies, and enhance platform differentiation.