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CJ ENM Co Ltd reported its third-quarter financial results for fiscal year 2025, revealing a notable increase in operating profit despite challenges in the TV advertising sector. The company’s stock, however, fell by 2.11% following the announcement, reflecting investor concerns over mixed performance in its entertainment business.
Key Takeaways
- Operating profit increased by 11% year-over-year to KRW 17.6 billion.
- TV advertising revenue surged by 75% year-over-year.
- Stock price dropped by 2.11% post-earnings announcement.
- Strategic partnerships and global expansion initiatives were highlighted.
Company Performance
CJ ENM demonstrated resilience in the third quarter of 2025, with a significant year-over-year increase in operating profit. However, the mixed performance in its entertainment segment, particularly the decreased profitability in TV advertising, has raised concerns. The company continues to leverage strategic partnerships, such as its collaboration with Warner Bros. Discovery, to bolster its content offerings and global reach.
Financial Highlights
- Revenue: KRW 1.256 trillion for Q3 FY2025.
- Operating Profit: KRW 17.6 billion, up 11% year-over-year.
- TV Advertising Revenue: Increased by 75% year-over-year.
Market Reaction
Following the earnings release, CJ ENM’s stock fell by 2.11%, closing at KRW 66,200. This decline reflects investor apprehension regarding the company’s mixed performance in its entertainment division, despite strong growth in TV advertising revenue. The stock’s movement is within its 52-week range, which has seen a high of KRW 82,300 and a low of KRW 51,400.
Outlook & Guidance
Looking ahead to the fourth quarter, CJ ENM anticipates the launch of new TV shows and the expansion of its OTT platforms. The company also expects growth from music tours and new artist launches, with some business segments potentially reaching break-even.
Executive Commentary
- "We will continue to enhance our content and platform competitiveness," stated Chunghwa Li, CFO.
- A representative from Mnet Plus expressed ambitions to "double current revenue level in 2026."
Risks and Challenges
- Declining profitability in TV advertising despite revenue growth.
- Global market expansion may face logistical and regulatory hurdles.
- Competition from other global content providers could impact market share.
Q&A
During the earnings call, analysts raised questions about the challenges in the TV advertising market and the strategies for monetizing overseas content. The company addressed these concerns by outlining its investment and growth strategy for Mnet Plus and future US content plans for Studio Dragon.
Overall, CJ ENM’s third-quarter results highlight strong operational performance, yet the market remains cautious about its entertainment sector’s profitability and future growth prospects.
Full transcript - CJ ENM Co Ltd (035760) Q3 2025:
Conference Moderator, CJ E and M: Good morning and good evening. First of all, thank you all for joining this conference call. And now we’ll begin the conference of the Fiscal Year twenty twenty five Third Quarter Earnings Release by CJ E and M. This conference will start with a presentation followed by a divisional Q and A session. Now we shall commence the presentation on the fiscal year twenty twenty five third quarter earnings results by CJ E and M.
Eunsong Wu, IR Representative, CJ E and M: Good afternoon. This is Eunsong Wu from CJE and M IR. I thank the shareholders and analysts for taking time out of their busy schedules to participate in our earnings session. Now we will begin CJ E and M’s twenty twenty five Q3 earnings report. Please note that the financial and management results presented now have yet to undergo an independent auditor’s report and could be subject to changes upon such review.
Today, we have heads of different businesses and our CFO, Jong Han, is leading us. From Media, we have Changyouk Park from Music, we have Yongju Okay from Film, we have Kiheon Park and from Global, we have Tongwoo Cho from Commerce, Chinook Sok and from Studio Dragon, we have Tongwoo Chang and from TV, we have CEO, Chuhi Choi and from CJ E and M Studios, we have CEO, Took Soo Hong. Our CFO, Chunghwa Li, will brief us on major results and business strategies. Good afternoon. This is CFO, Chunghwa Li.
With the late turnaround of media platform in Q3 and difference in activity timing of music artists, Our profit decreased in Q3 compared to Q2, but saw a slight increase on a Y o Y basis. Viewer rating and platform performances matrix improved and based on platform competitiveness, the company will strive for a company wide profit improvement. First on content, in Q3 dramas such as Bon Appetit Your Majesty and Xin’s Project achieved higher viewership ratings continuing the quarterly ARPU trend in both viewership and buzz for major dramas. This is the result of consistently producing well made content based on the ongoing enhancement of programming and production decision making processes, such as the improvement of the Green Light Committee or GLC and quality control or GC processes. Additionally, through the establishment of a strategic partnership with Warner Bros.
Discovery, we have agreed to collaborate on the joint planning and production of premium cake content targeting the global market. This is a recognition of our cake content leadership and production capabilities and is expected to provide an opportunity to expand overseas results with strengthened influence in the global market. Furthermore, we continue to expand as a foundation of global production and overseas distribution markets through joint production in Japan and The U. S. As well as distribution expansion in new markets such as LatAm and MENA.
As for platform, TV advertising revenue continued its high growth trend with a 75% Y o Y increase in cumulative third quarter figures and it demonstrated the advancement of the advertising business model by launching an integrated advertisement platform with Waze. The integrated advertising platform is expected to achieve differentiated results in the digital advertising space through competitive advantages such as economies of scale and maximizing Mnet Plus has smoothly built a circulating structure of content, user participation, community and commerce maintaining a high top line growth and strengthened its position as a global spend interactive platform with monthly average daily active users in September growing more than 1000% compared to January. On top of growth in MLC transaction revenue through the identification of customer touch points and expansion of brand sourcing including the expansion of omni channel IP that simultaneously broadcast on mobile, TV and OTT using the same IP. CNG E and M will continue to enhance our content and platform competitiveness, which in turn will fortify our revenue growth and profit improvement. In concluding, I thank our shareholders and analysts for the support.
Next is the results presentation. Our major financial statement is on a consolidated KIRM basis and the operating profit numbers include internal transaction. Now the Q3 twenty twenty five results. This is Jin Young Kim, Head of Finance. Sales in Q3 twenty twenty five amounted to KRW1.256 trillion and operating profit reached KRW17.6 billion representing an 11% increase Y o Y each.
I will go over pre consolidated adjusted operating profit changes by businesses. The entertainment business saw expanded content delivery sales from subsidiaries such as QD Dragon and Fifth Season, but due to continued sluggishness in TV advertising, operating profit decreased compared to the previous year. However, commerce improved profitability through continued expansion of mobile live commerce and strengthened high margin product portfolio. From now, I will discuss the performance by business segment and the outlook for the second half of the year. Media platform saw slower performance due to the sluggish advertisement market.
However, the ratings of key dramas such as Bon Appetit, Your Majesty continued to improve. In Q4, the scheduling of anticipated titles like Taiso Family and Pro Bono is expected to positively impact channel competitiveness. TVing is continuously expanding its double subscription plan with Wave and is building a structural foundation to maximize synergies in the integrated OTT by newly programming the terrestrial live channels within TV. In Q4, we aim to increase subscribers through the success of anticipated original titles such as Exchange four and DRS, while pursuing global business expansion through launches of brand sections in Southeast Asia and Japan via HBO Max and Disney plus Filament drama achieved a turnaround, thanks to steady content delivery from fifth season, ongoing diversification of overseas content sales partnerships, start the sales in new markets such as Latin America and The Middle East and box office results and overseas release of the film No Other Choice. In Q4, performance is expected to be driven by global simultaneous OTT streaming of anchor IPs like Typhoon Family and Pro Bono, creating stable overseas distribution revenue.
Through supplying content to global OTT platforms, including romantic, anonymous and soulmates, we will continue to strengthen production capabilities. Music saw an increase in revenue for Mnet Channel and Mnet Plus through the high performance of Boys to Planet, but profitability weakened due to a decrease in album releases and concerts by Japan’s Latona artist as well as increased investment costs in Mnet Plus and new artists. In Q4, we expect improvement over the previous quarters of performance supported by expanded tours, including MAMA and Zero Base One World Tours. Additionally, through the launch of new artists via Japan’s hip hop princess, Korea’s Alpha Drive On and Mnet plus original, Planet Home Race, targeting the greater Chinese market, MCS, we aim to focus on expanding our artist pool and growing global music label revenue from 2026 online. Commerce profit increased Y o Y through top line growth based on strengthening core PB brands and focus on high margin product portfolios such as beauty and health supplements.
In Q4, we plan to enhance fashion and beauty product curation through mega promotions to respond to seasonal demand and improve profitability. At the same time, we will focus on strengthening customer experience through omnichannel IP expansion across mobile, TV and OTT platforms and increased collaboration with trendy brands such as PopMark. For further details, please refer to the attached material. This concludes my presentation. Thank you.
From Studio Dragon will continue with the presentation. Good afternoon. This is Kwang Seok Bo, CFO of Studio Dragon. I’ll brief you on our business performance for the twenty twenty five third quarter. The total number of episodes aired in the third quarter was 72, an increase of 13 episodes compared to the same period last year.
Thanks to the expansion of original content supply and strong licensing sales, we recorded a revenue of billion and operating profit of KRW10.5 billion, achieving growth compared to both last year and the previous quarter. Furthermore, we achieved solid results in terms of content competitiveness. Bon Appetit, Your Majesty achieved a peak rating of 17.1% on TVN, making it the highest rated program on TVN this year. And Bon Appetit, Your Majesty and Genie: Make A Wish ranked first among Netflix global non English series, proving our global competitiveness in both viewership and popularity. In the fourth quarter, Taitung Family and Shin’s projects are running smoothly and we will reinforce our content competitiveness through the launch of anticipated titles such as Nice Not to Meet You and DRx.
Additionally, we will accelerate the diversification of our business model through new initiatives, including expanding ancillary businesses that leverage our IP, building fandoms and developing common centers. Thank you. Next, we will move on to the Q and A section. Given the time constraint, please limit your questions to three each centering on core issues.
Conference Moderator, CJ E and M: Currently, there are no participants with question. The first question will be given by Lee Ki Hoon from Hana Securities. Please go ahead.
Eunsong Wu, IR Representative, CJ E and M: Yes. So we will do the translation to the three questions. The first question is on your TV advertisement. I see that the TV ad space has seen a decrease by 17%. However, we look at your viewership, it’s doing quite well.
So why the disparity? Why the widening gap? And what’s your short term view on this decoupling effect? And in the three to six months timeframe, what do you think will happen given that you’re doing quite strong with content viewership? Do you think the advertisement market will follow suit or would there be a real decoupling between viewership and the advertisement income?
And my second question is related to your overseas profit structure. For example, if let’s say there is a subscriber to Disney in Japan and do you charge them according to the view according to how they watch the Korean content on this platform? So how is this business structured like? So this is my second question. And my third question is related to your music business.
Well, could you give us a profit a profit for NNet plus only? And if it’s recording a loss, do you have short term plans to address it? So this is Nidia answering your first question on advertisement. Well, the TV advertisement market in the first half did not see good results. As a whole, space, the market size has decreased by 20%.
And if you look at the TV advertisement market, most of it is upfront sales, pre sales of the advertisement slots. So the results tend to come after some time. So in the first half as was mentioned, the space has not really performed well and this has been reflected in our third quarter numbers and our results this time around really be felt in the fourth quarter numbers and the first half results of year 2026. I cannot say for sure whether the advertisement market as a whole will see a rebound, but we will do our best to defend our position with integrated advertisements and other tools in order to defend our market share. So this is CEO, Chi Chia from TV answering your second question on their activities overseas.
As you have mentioned in your question, I cannot give you the details, but we work with one of others Max in Southeast Asia and Disney plus in Japan. We do get a new guarantee performance Yes, this is the answer to your net plus question. Well, it’s still in an incubation phase that we are still making investment for net plus. This only started generating revenue of Internet plus in 2025. We have our IP such as KCOM, MAMA and MNET and with these contents we have reached a meaningful number in terms of MAU at 20,000,000 and DAU at 7,000,000.
So we’re in the process of honing our IP and we believe that in year ’26 we will be able to double the current revenue level and in the mid to long we will of course be seeing a turnaround when it comes to our revenue.
Conference Moderator, CJ E and M: The following question is by Shinen Zhong from TD Securities.
Eunsong Wu, IR Representative, CJ E and M: Yes, I have three questions. First is for TV and fifth season. Did you tell us the revenue and operating numbers for TV and fifth season? And if possible, could you give us a guidance for Q4 as well? And my second question is for pharmacy home rights.
Have you made any final decision on your China bound activity? Could we see programs being aired on other channels other than MNET? And my third question goes to Studio Dragon! I think you’ve missed the market anticipation when it comes to your results. Could you please elaborate on your Q3 results?
So on your first question, the revenue of T Bin this quarter stood at CNY98.8 billion with an operating loss of CNY16.1 billion. And the number for first season when it comes to revenue, it’s CNY199.7 billion revenue with operating loss of CNY2.1 billion. And outlook achieving for Q4, we’ll be entering the much anticipated regionals such as exchange for and DRS soon and we’ve introduced the double advertisement subscription scheme in October and we have also introduced a band section and we will be seeing recognition with these two models. And with that, I think we’ll still reach a BEP point. So if I may give you a guidance for our Q4 numbers, this is the key one.
Well, we’ve seen in Q3, we continue the momentum. We will be seeing a continuation of this momentum in Q4. As for drama, we will be delivering American class and as for movies, we have working title and astronauts to be released. And with that, we do expect to see the continuation of improved momentum in Q4 and our operating profit numbers will see an improvement over the previous year. So the last question on Planet C, we will start filming the program this week and we have a chance to open this program on Mnet Plus channel in mid December.
And the program is comprised of Chinese entertainers. So it is because it will be a use of local Chinese IP and we’ll be working to get with a Chinese partner who has been in the local Chinese music business for a very long time. I think we could see finalization of this plan this year and with that we will be making our announcements to the market. And this is from Studio Dragon. Well, it’s true that we did not meet market anticipation for our results in Q3.
It’s because some of the episodes of DRX was not recognized for its profit. Our original intent and plan was to recognize profit from all the episodes of DRX in Q3, but that has seen some delay. And in Q4, we’ll be seeing additional profit recognition from Taito DRX. And offtake too, well it was sold in the local market but not in a global stage. So this was something that went a little bit aside from our original anticipation and plans.
So there was shortcoming which led to results not really being on target in market anticipation. But as was mentioned, we’ll be recognizing profit from DRx in Q4 and we also have plans with Nice Not to Meet You, Typhoon Family and Progundo and these titles they were presold to OTT and that would now see a recognition in Q4 And with that recognition, we do anticipate to see better results in Q4 over
Conference Moderator, CJ E and M: The following question is given by Chae Yong Hyun from KB Securities. Please go ahead, sir.
Eunsong Wu, IR Representative, CJ E and M: The net profit. I also see much improvement with your Chinese originals. So could you please tell us about the major matrixes that you are really focusing on? And my second question goes to the integration of TV and Wave. I think that it’s running
So could you update us with the timeline or your schedule for the integration? And my third question goes to commerce. I see that the margin for your commerce business in Q3 is quite strong. And I see that your of the 60% of GMV is with your MLC. And do you well, was there a margin improvement with your mobile live commerce?
Yes, as was mentioned as for MNET we only begun generating revenue in 2025 and we’re still in investment stage when it comes to our MNET activities. But we saw much results by just bringing in our existing content and this was indeed very meaningful. And compared to ’25 we will see much more original production in ’26 which will lead to a people’s growth of our business. And while we are now getting revenue generation from our acquisitions and bankruptcies and of course in turn strengthen our traffic. And well as was mentioned in my previous answer, we do look at MAU and DAU and the other metrics that we value in the content search numbers.
More color on the metrics that we are seeing or looking for in MNET plus business, well, next year we have to see an average MAU of 10,000,000 and DAU of 1,100,000. And well, as to the integration between TV and WAVE, yes, we are seeing much synergy effect when it comes to operation of these two channels. However, there needs to be more discussion for us to reach a full integration. And as to the last point, the mobile e commerce, yes, we did see some results in Q3, but I believe that we could do even further. We hope to see an improved process and top line growth in the fourth quarter and since MFC is our future growth engine when it comes to commerce business, well the company as a whole would lend much support.
Conference Moderator, CJ E and M: Currently, there are no participants’ questions. The following question is by Kim Huei from Taejin Securities.
Eunsong Wu, IR Representative, CJ E and M: Yes. My question goes to Studio Dragon. I think you’ve seen some operating profit margin improvement. Is it because of the cost cutting activities that were initiated in the 2024? And how much more improvement do you think you could gain from this activity?
And my second question that goes to Studio Dragon is the series orders from overseas buyers. So could you please elaborate on that? Yes. So to the first part of your question on cost cutting, well, we’ve introduced many new initiatives including the changes in our settlement method. But it’s really difficult to carve out this effect from the rest of the results.
Well, as you will know per episode production cost has gone up. Well, it has seen a rise by 20% every year, but Studio Dragon we were able to curb and contain much of the product production cost increase. Well, of course, we would have to spend more in order to retain a quality creative such as writers and directors and producers, but for other parts including the actual filling in the lighting and the post work, we were able to well contain related production costs. Therefore, our production costs compared to the market had remained relatively flat. And our activities going forward will of course contribute to the improvement of our OP margin.
As to the second question, which was on our U. S. Series order. Well in The U. S.
We’re working in the market with our remakes and originals and as for remake we’re making quite some progress with some platforms and one or two remake titles. And as for original we are also working with one or two titles. And next year I think we could deliver some tangible results perhaps of pilot phase or even to programming. You will know our investment in Skydance and Paramount and with this investment we are discussing further partnerships to be involved in different areas as well. And these activities in place after year 2026, you’ll see more active movements on our part when it comes to U.
S. Series orders and remake.
Conference Moderator, CJ E and M: This concludes the fiscal year twenty twenty five third quarter earnings release by CZ E and M. Thank you for your participation.
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