South Korea’s SM Entertainment, known for K-pop acts such as NCT 127, EXO, Riize, and aespa, has reported a massive increase in revenue and profit, driven by a streak of hit albums, rising concert revenue and growth at fan platform DearU.
The company reported a 261.6% year-over-year increase in operating profit for the third quarter of 2025, to 48.2 billion won, or USD $34.8 million at the average exchange for the quarter.
Revenue came in at KRW 321.6 billion ($232 million), up 32.8% YoY. The higher revenue, combined with gains in non-operating income and lower corporate taxes, propelled the company to a 1,107.0% YoY increase in net income, to KRW 44.7 billion ($32.3 million).
Excluding subsidiaries, digital and physical music sales at the parent company grew 32.7% YoY to 96.7 billion ($69.8 million), driven by a string of million-selling albums, including NCT WISH’s mini-album Color (1.48 million album equivalents sold), aespa’s mini-album Rich Man (1.13 million) and NCT DREAM’s Go Back to the Future (1 million).
Concert revenue rose 37.5% YoY to KRW 52.5 billion ($37.9 million). Despite a decrease in the total number of shows, revenue grew thanks to an “expansion in scale of SM artists’ performances,” Chief Financial Officer Jeongmin Jang said on the company’s earnings call Wednesday (November 5).
The company posted solid growth in merchandising and licensing revenue, up 32.8% YoY to KRW 50.3 billion ($36.3 million), which Jang attributed to sales of aespa merch and pop-up stores for NCT WISH and Super Junior. SM also saw 6.7% YoY growth in revenue from appearances (TV, advertising and events) to KRW 24.1 billion ($17.4 million).
“Our leading artists have continued to prove their solid capabilities while new IPs are growing rapidly and adding fresh energy to the company,” CEO Cheol-hyuk Jang said on the call.
“This generational synergy further reinforces the foundation of our IP portfolio, exemplifying the virtuous cycle of a sustainable IP ecosystem that SM Entertainment aims to build.”
“Our leading artists have continued to prove their solid capabilities while new IPs are growing rapidly and adding fresh energy to the company.”
Cheol-hyuk Jang, SM Entertainment
One new earnings driver at the company is fan platform DearU, which operates Bubble, a messaging service that connects artists with fans. SM consolidated DearU into its balance sheet earlier this year after taking a larger stake in the platform. SM now controls 45.1% of DearU.
DearU accounted for KRW 22.3 billion of SM’s revenue, up 10.5% from the second quarter, when the platform first appeared in SM’s earnings. Growth was driven by an increase in subscribers and a subscription price hike in July, CFO Jang said.
The company’s subsidiaries are experiencing a significant turnaround, swinging to a positive operating profit of KRW 13.5 billion ($9.7 million), compared to an operating loss of KRW 10.1 billion a year earlier.
Net income came in at KRW 15.3 billion ($11.0 million), compared to a loss of KRW 10.6 billion a year earlier.
That came on the back of a 20.6% YoY increase in revenue at the subsidiaries, to KRW 146.8 billion ($105.9 million).
Talent agency, TV production company and travel agency SM C&C, the company’s largest subsidiary by revenue, reported a 2.5% YoY increase in sales to KRW 25.4 billion ($18.3 million), which the company attributed to an increase in advertising revenue.
SM Entertainment Japan posted an 11.1% YoY jump in revenue to KRW 24.4 billion ($17.6 million) on the back of larger-scale concerts in the Japanese market. SM Brand Marketing (SM BM) posted revenue of KRW 18.9 billion ($13.6 million), driven by stronger album and merch sales.
On the earnings call, CEO Jang focused on SM Entertainment’s new IP development initiatives, including a “next-generation artist incubation project” dubbed SMTR25. Among its projects is a new in-production reality series, Reply High School, which features 15 K-pop trainees as they prepare for their public debut. The show is expected to premiere in the first half of 2026.
SMTR25 is also producing W.O.W! (Way Outta Walls), a hybrid travel series produced with support from the Korea Tourism Organization, which premiered in September via SM’s SMTOWN Channel.
“Through these initiatives, SM Entertainment is reinforcing its content-driven storytelling approach, expanding connections with fans even prior to debut, and enhancing the completeness of our IPs from the earliest stage,” Jang said.Music Business Worldwide
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