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Investing.com - Tencent Music Entertainment Group (NYSE:TME) reported third-quarter results that exceeded analyst expectations, driven by strong growth in its online music services.
The company saw its shares rise 2.41% in pre-market trading after the results.
The leading Chinese online music platform reported adjusted earnings per ADS of RMB1.54 ($0.22), beating analyst estimates of RMB1.52. Revenue climbed 20.6% YoY to RMB8.46 billion ($1.19 billion), surpassing the consensus estimate of RMB8.23 billion. The company’s performance was primarily fueled by a 27.2% increase in online music services revenue, which reached RMB6.97 billion ($979 million).
Music subscription revenue grew 17.2% YoY to RMB4.50 billion ($632 million), with monthly average revenue per paying user (ARPPU) increasing to RMB11.9 from RMB10.8 in the same period last year. The company’s paying users for online music increased 5.6% YoY to 125.7 million, though total monthly active users declined 4.3% to 551 million.
"In the third quarter, we delivered another set of solid results, underpinned by the well-rounded performance of our online music business," said Cussion Pang, Executive Chairman of TME. "Our ongoing innovations in content enrichment, services expansion to include more live experiences continued to fuel consistent subscription revenue growth while boosting momentum in non-subscription services."
The company’s gross margin improved to 43.5% from 42.6% in the same period last year, primarily due to increased revenues from music subscriptions and advertising services, alongside a lower revenue sharing ratio for social entertainment services.
As of September 30, 2025, Tencent Music’s cash, cash equivalents, term deposits, and short-term investments totaled RMB36.08 billion ($5.07 billion), up from RMB34.92 billion at the end of the previous quarter.