Tencent Music Entertainment Group (TME) Q4 2024 earnings summary

Executive summary

• Achieved a return to top-line growth and significant profit margin expansion in 2024, driven by robust online music services, diversified offerings, and technology-driven user experiences, including AI-powered features.

• Online music paying users reached 121 million in Q4 2024, with a paying ratio of 21.8% and ARPPU of RMB11.1.

• Expanded music and audio library to over 260 million tracks through strategic partnerships and content innovation.

• Enhanced user engagement with new features, SVIP membership growth, and innovative fan experiences, leading to record highs in user time spent.

• Committed to ESG initiatives, supporting 192,000 female artists and launching biodiversity awareness campaigns.

Financial highlights

• Q4 2024 revenues reached RMB 7.5 billion, up 8.2% year-over-year; online music revenues rose 16.1% to RMB 5.83 billion.

• IFRS net profit for Q4 increased 47.3% year-over-year to RMB 2.2 billion; non-IFRS net profit up 43% to RMB 2.4 billion, highest quarterly profit to date.

• Music subscription revenues in Q4 were RMB 4.03 billion, up 18% year-over-year; online music paying users reached 121 million, up 13.4% year-over-year.

• Gross margin for Q4 was 43.6%, up 5.3 percentage points year-over-year; annual gross margin for 2024 was 42.3%, up 7 percentage points.

• Annual net profit for 2024 was RMB 7.1 billion, up 36.2% year-over-year; non-IFRS net profit was RMB 8.14 billion.

Outlook and guidance

• Expecting accelerated top-line growth and further margin improvement in 2025, driven by SVIP memberships, advertising, and content innovation.

• Gross margin expansion anticipated to continue, supported by subscription growth, content cost optimization, and new business opportunities in IoT, long-form audio, and international markets.

• Strategic focus on expanding content ecosystem, technology integration, and user engagement.