HYBE (352820) Q3 2024 earnings summary

Executive summary

• Q3 revenue reached ₩527.8 billion, maintaining a similar level year over year despite fewer album releases due to the Olympic Games, but down 1.9% YoY and 17.6% sequentially.

• Operating profit was ₩54.2 billion with a margin of 10.3%, down 25.4% YoY but up 6.4% from the previous quarter.

• Net income was ₩41.4 billion, impacted by non-operating losses from equity valuation and FX losses, while net profit dropped sharply to 1.4 billion KRW, down 98.6% YoY.

• Strong global performance from multiple artists, with significant album sales, chart achievements, and successful tours.

Financial highlights

• Revenue with direct artist involvement (recorded music, concerts, ads) was ₩323 billion (61% of total); indirect involvement (merch, licensing, content, fan clubs) was ₩204.9 billion (39%).

• Recorded music sales were ₩214.5 billion, down 18.8% YoY and 14.0% sequentially; streaming revenue made up about 30% of this.

• Concert sales reached ₩74 billion, supported by major tours and fan meetings, but dropped 14.8% YoY and 48.6% sequentially.

• Merchandise and licensing sales were ₩99.1 billion (up 16% YoY); content sales were ₩79.8 billion (up 64% YoY), with merchandising and licensing revenue up 15.7% YoY and content revenue up 63.6% YoY.

• EBITDA for Q3 2024 was 80.96 billion KRW, down 16.4% YoY but up 1.8% sequentially.

Outlook and guidance

• Q4 expected to see growth in direct artist revenue as more artists return and new activities commence.

• 2025 projected as a year of tangible results from investments in music, solutions, platform, game, and AI businesses.

• Margin and profitability expected to improve as one-off expenses subside and new businesses mature.