Tencent Music Entertainment Group (TME) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 2025 performance with total revenues of RMB7.36 billion, up 8.7% year-over-year, driven by robust online music services growth and high-quality strategy execution.

• Online music paying users reached 122.9 million in Q1 2025, with a paying ratio of 22.1% and increased ARPPU, reflecting strong user engagement and loyalty.

• SVIP membership program, innovative product offerings, and immersive audio features fueled user engagement and ARPPU growth.

• Strengthened partnerships with major record labels, expanded music library, and enhanced user experience through exclusive content and technology leadership.

• Maintains a leading position in China's online music industry, with three of the top five music apps and a comprehensive content library.

Financial highlights

• Q1 2025 revenue reached RMB7.4 billion, up 9% year-over-year; online music services revenue grew 15.9% to RMB5.8 billion, with music subscription revenue up 17% to RMB4.22 billion.

• Monthly ARPPU increased to RMB11.4, up 7.5% year-over-year.

• Non-IFRS net profit rose 23% to RMB2.2 billion; non-IFRS diluted EPS up 26% to RMB1.37.

• Net profit attributable to equity holders surged 201.8% year-over-year to RMB4.29 billion, including a one-time gain from investment disposal.

• Gross margin improved to 44.1%, up 3.2 percentage points year-over-year.

Outlook and guidance

• Expects full-year 2025 year-over-year growth rate to accelerate from last year, with continued margin expansion.

• Subscription business to deliver high-quality growth via subscriber gains and ARPPU expansion; advertising and merchandise to drive steady non-subscription revenue growth.

• Continued focus on premium content, innovative technology, and diversified monetization to sustain growth.