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South Korea-based entertainment giant SM Entertainment<\/a> reported a 20.6% year-over-year jump in first-quarter revenues to 279.1 billion South Korean won (approx. USD $191.7 million).<\/p>\n That\u2019s according to the company\u2019s latest quarterly report published<\/a> today (May 6). Despite the upbeat revenue growth, SM Entertainment\u2019s shares closed 4.8%<\/b> <\/span>lower in Seoul trading to the lowest level in over two weeks.<\/p>\n SM, whose roster of artists includes K-Pop stars like SUPER JUNIOR, Girls\u2019 Generation, SHINee, EXO, Red Velvet, KANGTA, BoA, TVXQ!, NCT, <\/b>and aespa<\/b>, attributed the revenue growth to strong sales from its Concert\/MD & Licensing segment, an improvement in earnings from its subsidiaries, and the consolidation of superfan app DearU<\/b>.<\/p>\n In the quarter ended March 31, SM\u2019s revenue from concerts surged 56% YoY<\/b> <\/span>to KRW 60.8 billion <\/b>($42m), driven by tours from SUPER JUNIOR, NCT DREAM, aespa, RIIZE, <\/b>and NCT WISH.<\/b> SM\u2019s MD (merchandise)\/licensing segment was its second-largest revenue source, generating KRW<\/b> 47.4 billion <\/b>($33m), up 20% YoY<\/b><\/span>. SM attributed the increase to strong merch sales from pop-up events, particularly EXO<\/b>\u2019s REVERXE THE WORLD <\/i>pop-up event held during its latest comeback tour, as well as the WISH BAKERY <\/i>pop-up event by NCT<\/b> WISH<\/b>.<\/p>\n Fan-light sales during aespa<\/b>\u2018s world tour and the launch of Hearts2Hearts<\/b>\u2019 new fan-light also delivered a boost to the segment. (For those unfamiliar: Fan-lights are handheld torches bearing the brand of an act, that fans can wave around at shows.)<\/p>\n Strong revenue from concerts and MD\/licensing offset the 15% YoY<\/b> <\/span>drop in revenue from physical album and digital music sales in Q1 to KRW<\/b> 57.5 billion <\/b>($40m). SM said the decline was due to a high base effect from a one-time digital music revenue item recognized in the same period last year.<\/p>\n Despite the drop in\u00a0 <\/span>album sales volume nearly doubled in Q1 to 1.79 million copies<\/b> from 920,000 copies a year earlier. In Q1, a total of 1.01 million<\/b> copies of EXO<\/b>\u2019s REVERXE <\/i>were sold, while NCT JNJM<\/b> sold 520,000<\/b> copies of its Both Sides <\/i>record. Red<\/b> Velvet<\/b> member Irene<\/b>\u2018s solo album Biggest Fan<\/i> sold 220,000<\/b> copies.<\/p>\n Meanwhile, the company\u2019s consolidated operating profit posted healthy double-digit growth, rising 18.5% YoY<\/b> <\/span>to KRW 38.6 billion <\/b>(27m), which SM partly attributed to the impact of the DearU<\/b> consolidation.<\/p>\n DearU operates Bubble<\/b>, a messaging service that connects artists with fans. SM consolidated DearU into its balance sheet in 2025 after\u00a0taking a larger stake<\/a>\u00a0in the platform. SM now controls\u00a045.1%<\/b>\u00a0of DearU.<\/p>\n DearU accounted for\u00a0KRW 23.4 billion<\/b>\u00a0($16m) of SM\u2019s revenue in Q1, down 1.7%<\/b>\u00a0<\/span>from the fourth quarter of 2025. The platform first appeared in SM\u2019s earnings in Q2 2025. <\/b>SM Entertainment CFO Jungmin<\/b> Jang<\/b> said: \u201cDearU has continued to deliver stable earnings contributions ever since its consolidation.\u201d<\/p>\n \u201cDearU has continued to deliver stable earnings contributions ever since its consolidation.\u201d<\/p>\n Jungmin<\/b> Jang, SM Entertainment<\/b><\/span><\/p>\n<\/blockquote>\n However, the company\u2019s consolidated net income fell 85.5%<\/b> YoY<\/b><\/span> to KRW 36.7 billion <\/b>($25m). Jang noted that the decline was mainly due to a high base effect from Q1 2025, which included a one-time gain from the acquisition of additional shares in DearU, as well as an increase in corporate tax expenses.<\/p>\n On a standalone basis, SM Entertainment, the parent company pulled in KRW 189.3 billion<\/b> ($131m) in revenue, up 14.4% YoY<\/b><\/span>, with operating profit falling 5.9% YoY<\/b> <\/span>to KRW 38.8 billion<\/b> ($27m) and net income jumping 20.9% YoY<\/b><\/span> to KRW 38.9 billion<\/b> ($27m).<\/p>\n SM\u2019s Q1 figures also broke down revenues from SM\u2019s major subsidiaries. Combined revenues from SM\u2019s subsidiaries climbed 31% YoY<\/b><\/span> to KRW 136.8 billion<\/b> ($94m) on the back of double-digit revenue growth at SM Culture & Contents<\/b>, SM Entertainment Japan<\/b>, SM Brand Marketing<\/b>, album printing unit SM<\/b> LDG<\/b>, and actor management subsidiary KEYEAST<\/b>. Their robust revenue growth offset the 68% YoY<\/b><\/span> drop in revenue at DREAM MAKER, SM\u2019s production company focusing on concert production, festivals, and live entertainment.<\/p>\n Looking ahead, SM\u2019s upcoming release pipeline for Q2 and Q3 2026 features a full-length album for artists including TAEYONG<\/b>, YESUNG<\/b>, aespa<\/b>, and NCT<\/b> 127<\/b>. New mini-albums and singles are also dropping from SHINee<\/b>, RIIZE<\/b>, Hearts2Hearts<\/b>, Super<\/b> Junior<\/b>, MINHO<\/b>, Red<\/b> Velvet<\/b> and more.<\/p>\n On the live music front, SM has lined up concerts for SUPER<\/b> JUNIOR<\/b>, NCT<\/b> WISH<\/b>, aespa<\/b>, EXO<\/b>, TAEYONG<\/b>, TVXQ!<\/b> and more across Asia. aespa<\/b> will be performing in Brazil, Chile, Peru, Mexico, the US and Canada in the third quarter.<\/p>\n According to an\u00a0exclusive report from South Korean outlet\u00a0Business Post<\/i><\/a>\u00a0about three weeks ago, SM Entertainment, along with rivals HYBE<\/b>, JYP<\/b> Entertainment,<\/b> and YG Entertainment<\/a> <\/b>are preparing to establish<\/a> a joint venture to launch a \u2018global\u2019 music festival as K-pop concert revenues rise.<\/p>\n The four companies, which collectively represent K-pop\u2019s so-called \u2018Big Four\u2019, recently submitted a business combination report to South Korea\u2019s Fair Trade Commission (FTC) as part of the JV formation process, the report said.<\/p>\n\n