South Korea’s SM Entertainment, home to K-pop acts such as NCT DREAM, aespa, RIIZE, and NCT WISH, has reported the strongest Q4 performance in the company’s history.
For the fourth quarter of 2025, SM recorded consolidated revenue of KRW 319 billion (USD $219.4m), up 16.6% year over year, alongside operating profit of KRW 54.6 billion ($37.6m) – a 62.2% increase on the equivalent period 12 months ago.
SM’s fourth-quarter performance was primarily driven by expanded global touring activities from the company’s core IP, including NCT DREAM, aespa, RIIZE, and NCT WISH, alongside continued growth in its artist-driven merch and licensing businesses.
Improved performance at key subsidiaries, including SM C&C and SM Japan, as well as the consolidation of DearU, also contributed to consolidated earnings growth.
Concert earnings leapt 53.6% YoY to KRW 34.5 billion ($23.8m), while revenues generated by SM’s Merchandising/Licensing division soared 50.6% YoY to KRW 78.1 billion ($53.8m).
However, revenue in SM’s Physical Album/Digital Music segment dipped 22.8% YoY to KRW 64.8 billion ($44.6m), as new album sales slid from 3.67 million to 2.72 million.
In connection with the earnings release, SM highlighted continued progress under its long-term strategic blueprint, which the company has dubbed ‘SM NEXT 3.0’
According to the company, SM NEXT 3.0 represents “the borderless expansion of K-pop” as it evolves from its existing “SM 3.0” system to a “Multi-Creative” structure.
The blueprint was revealed by the company last month, when it also disclosed that it plans to “more actively” pursue M&A opportunities through music.
“By advancing new IP incubation alongside disciplined global expansion, we aim to drive revenue growth, improve profitability, and enhance long-term shareholder value.”
Daniel Jang, SM Entertainment
“SM NEXT 3.0 is focused on strengthening the foundation of our growth rather than pursuing short-term expansion,” said Daniel Jang, Co-CEO of SM Entertainment.
“Through our Multi-Creative system, we are enhancing production autonomy and operational efficiency, enabling greater consistency and scalability across IP development. By advancing new IP incubation alongside disciplined global expansion, we aim to drive revenue growth, improve profitability, and enhance long-term shareholder value.”
Dmitry YJ Tak, Co-CEO of SM Entertainment, added: “Our global expansion strategy under SM NEXT 3.0 emphasizes sustainability, operational discipline, and strategic partnerships. By adopting a more focused, IP-specific regional approach aligned with market dynamics, we expect to enhance performance visibility while improving operational efficiency and execution across markets.”
“Our global expansion strategy under SM NEXT 3.0 emphasizes sustainability, operational discipline, and strategic partnerships.”
Dmitry YJ Tak, SM ENTERTAINMENT
SM expects continued growth in recorded music, digital distribution, and live performance revenue in the first half of 2026, supported by a robust artist lineup.
Full-length albums by EXO and Irene are scheduled for release in Q1 2026, along with new projects from Hearts2Hearts, NCT JNJM, and HYO.
Japanese market releases include a mini album from NCT WISH and singles from RIIZE, TVXQ!, and MINHO. In the second quarter, full-length albums from Taeyong, aespa, and NCT WISH are planned, alongside a Japanese full album from Yesung, mini-albums from WayV, RIIZE, XngHan&Xoul, and Hearts2Hearts, and a single release from Ryeowook.
The live concert segment is also expected to maintain strong global momentum. In the first quarter, Super Junior will continue its 20th anniversary tour across Asia, joined by NCT DREAM, aespa, RIIZE, NCT WISH, and Taeyong on concurrent touring schedules.
SMTOWN Live concerts are planned in Japan and Thailand, and Hearts2Hearts will hold its first U.S. premiere showcase alongside fanmeeting dates in Korea and Indonesia. In the second quarter, EXO will embark on a 16-date tour spanning Korea, Vietnam, Japan, Thailand, Indonesia, Hong Kong, and Malaysia, while TVXQ! will hold concerts at Nissan Stadium. Super Junior’s 20th anniversary tour will return to Seoul, with continued touring from NCT WISH, aespa, and Taeyong across additional markets.
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 ’
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