Tencent Music Entertainment Group (TME) Q3 2024 earnings summary

Executive summary

• Achieved strong third quarter performance with total revenues rising 6.8% year-over-year to RMB 7.02 billion, driven by robust online music services growth and subscriber expansion, while social entertainment revenues declined.

• Online music paying subscribers reached 119 million, up 15.5% year-over-year, with ARPPU rising to RMB 10.8.

• Strengthened partnerships with top domestic and international record labels, expanded content offerings, and hosted major music festivals and concerts.

• Launched innovative product features, including a horizontal player interface and real-time interactive comments, and expanded AI-driven engagement.

• Published inaugural ESG report and recognized for copyright protection and content ecosystem achievements.

Financial highlights

• IFRS net profit increased by 35.3% year-over-year to RMB 1.71 billion; non-IFRS net profit rose by 29.1% to RMB 1.94 billion.

• Total revenues reached RMB 7.02 billion, up 6.8% year-over-year; online music revenues grew 20.4% to RMB 5.48 billion.

• Music subscription revenues were RMB 3.84 billion, up 20.3% year-over-year; monthly ARPPU rose 4.9% to RMB 10.8.

• Gross margin for Q3 was 42.6%, up 6.9 percentage points year-over-year.

• Diluted earnings per ADS was RMB 1.01, up 36% year-over-year; non-IFRS diluted earnings per ADS was RMB 1.16.

Outlook and guidance

• Expects continued high-quality growth in music business, focusing on SVIP memberships, advertising, and operational efficiency.

• Optimistic about 2025, anticipating acceleration in top-line growth, subscriber numbers, ARPPU, and improved profit margins, assuming stable external environment.

• Focus on leveraging AI and proprietary technology to enhance user experience and operational efficiency.

• GP margin growth may moderate in 2025 compared to 2024, but adjusted net profit and margin are expected to maintain strong momentum.