MBW Explains is a series in which we dig behind the headlines, via data and context, to improve your understanding of key stories. Only MBW+ subscribers have unlimited access to these articles. MBW Explains is supported by Reservoir.
HYBE’s latest earnings call offered a clear signal of where the K-pop giant’s priorities lie in 2026: the return of BTS.
All seven members have completed their mandatory military service, and will release their fifth studio album, ARIRANG, on March 20 – followed by what HYBE is billing as the largest tour ever by a K-pop artist. CEO Jason Jaesang Lee told analysts the first confirmed schedule alone includes “82 shows in 34 cities around the world, which is the most ever for a single tour by a K-Pop artist.” BTS has also signed a deal with Netflix to livestream the opening concert and produce a documentary about the making of the album.
The comeback comes at an important time for the South Korea-headquartered entertainment giant. HYBE posted record annual revenues of KRW 2.65 trillion (USD $1.86 billion) in 2025, up 17.5% year-over-year, but operating profit fell 73% to just KRW 49.9 billion (USD $35.1 million) as the company spent heavily on launching new artists and restructuring its US business.
The earnings call covered far more than BTS, though. Here are three things you might have missed…
1. HYBE America is being restructured – at a cost of approximately KRW 200 billion in impairment losses
Perhaps the most sobering disclosure on the call concerned HYBE’s North American operations. CFO Lee Kyung-Jun confirmed that approximately KRW 200 billion (roughly USD $140 million) in impairment losses were recognized in Q4, resulting from what he called “a more conservative and strict revaluation of HYBE America currently in the middle of business restructuring.”
The CFO noted that these are “accounting losses with no actual cash outflow.”
As previously disclosed, HYBE has been restructuring its US operations – a legacy of the 2021 acquisition of Scooter Braun’s Ithaca Holdings. Braun himself exited his role as CEO of HYBE America in July last year, and on the same day as the FY 2025 earnings report on Thursday (February 12), HYBE confirmed that Scott Borchetta has also departed the company.
Borchetta had served as CEO of Big Machine Label Group since the Ithaca acquisition, and will continue to use the Big Machine Records brand for future ventures. HYBE will retain BMLG’s distribution deal, publishing company, and key artists including Thomas Rhett, Carly Pearce, and Jackson Dean, operating under a new label name.
CFO Lee said the company has “been transitioning from the management-centered business structure to a label-based integrated IP business model to reduce volatility in business performance and generate more stable profit.”
He acknowledged that “one-off costs incurred during this process were recognized in the second half of 2025,” but said these “were necessary measures aimed at improving mid-to-long-term profitability of the North American business through business restructuring, which in turn, will start to produce visible financial impact in 2026.”
Despite the writedown, HYBE expressed confidence in the value of its US operations. “The value chain that HYBE has established in the US, including talent development, production and marketing, is proven to be competitive as demonstrated by the global success of KATSEYE,” CFO Lee said.
HYBE also highlighted the continued performance of its country music roster, noting that Riley Green had “made history by becoming the first artist since Taylor Swift in 2013 to top Billboard‘s Country Airplay with two consecutive self-written songs,” and won three awards at the 2025 CMAs. The company also confirmed it has signed a management contract with Tyla.
Elsewhere at HYBE America, last month, the company appointed veteran music exec Ethiopia Habtemariam as its new President of Music.
2. Weverse has turned profitable –
CEO Lee confirmed that Weverse, HYBE’s superfan platform, had achieved profitability on an annual basis in 2025.
He attributed the turnaround to growth in digital business lines – including digital membership and Weverse DM – which he said are “independent profit models that continue to generate profit regardless of artist activities.” That digital business, he revealed, “has been growing at an annual rate of 30%, and is accounting for more than 10% of the total revenue of Weverse.”
Weverse hit a peak of 12 million monthly active users in June last year – a milestone driven by BTS’s full-group reunion following the completion of all seven members’ military service. However, that figure dipped to 11.2 million MAUs by Q4 2025. CEO Lee said that number had already increased by 15% in January – likely reflecting growing anticipation around BTS’s album and tour.
However, Lee indicated that HYBE is willing to sacrifice some of that profitability in the near term to expand the platform into new markets.
“We don’t really want to continue to maintain this profit structure as is because we want to grow this platform to be a truly global platform,” he said.
He described a cycle in which established markets generate profits, while new markets require investment that may temporarily reduce earnings.
“In some of the established markets, we will continue to generate profits. But in the new markets where we enter, we have to make investments for future growth, which may lead to some decline in profits to a certain extent.”
3. HYBE’s concert revenues nearly matched its recorded music revenues – a shift that would have been unthinkable two years ago
HYBE’s concert business was the standout growth driver in 2025.
The company held 250 concerts and 29 fan meetings over the year, generating what executives confirmed was the highest concert revenue in the company’s history.
CEO Lee revealed that HYBE’s global ranking in Billboard’s Top Promoter category rose five places from the prior year to fourth place, “making HYBE one of the Big Four.”
He added: “In the Top Tour category, three out of four K-Pop teams belong to HYBE, reaffirming the strong ticket power of HYBE artists.”
According to HYBE’s earnings report, the company’s concert revenues (KRW 763.9 billion) were just KRW 9 billion short of its recorded music revenues (KRW 773.0 billion).
That is a dramatic shift from 2023, when recorded music generated nearly three times as much revenue as concerts.
With the BTS World Tour ARIRANG set to launch in April, concerts could overtake recorded music as HYBE’s largest revenue line in 2026.
Reservoir (Nasdaq: RSVR) is a publicly traded, global independent music company with operations across music publishing, recorded music, and artist management.
Music Business Worldwide‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source www.musicbusinessworldwide.com ’
