wallet<\/span> share. Rooted in strong copyright protection, we are committed to channeling this value to elevate the creative economy, unlock new opportunities across the music industry, and drive enduring long-term value.”<\/p>\nMr. Ross Liang, CEO of TME, continued, “As we operate in an increasingly competitive landscape, we remain focused on strengthening the resilience of our platform. Anchored\u00a0by\u00a0our content-and-platform dual engine, we continue to bolster\u00a0differentiation, drive engagement, and expand user lifetime value. Leveraging Tencent’s ecosystem, we are broadening user reach and deepening penetration, while advancing a tiered subscription strategy to better address diverse user needs. During the quarter, we delivered continued improvement in SVIP adoption and user engagement. Together, these initiatives position\u00a0us to compete effectively while driving scalable growth and durable monetization over time.”<\/p>\n
First Quarter 2026 Operational Highlights <\/b><\/p>\n
CONTENT \u2013 To unlock long-term value, we continued to invest in premium IP to drive differentiation and engagement, while leveraging AI to enrich content creation and improve efficiency. <\/b><\/p>\n\n- Strengthened our premium evergreen catalog by renewing key label partnerships, including JVR Music, Linfair Records, and MOK-A-BYE BABY MUSIC LTD., securing access to iconic artists such as Jay Chou, Karen Mok, Harlem Yu, and Angela Zhang[4]<\/span><\/sup>. We also deepened our strategic partnership with TF Entertainment through 30-day early release windows and expanded physical collaboration, reinforcing our content leadership and competitive differentiation.<\/li>\n
- Captured more user mindshare with our proprietary content. High-impact releases\u2014including Zhou Shen’s chart-topping theme song for Sony Pictures’ Project Hail Mary<\/i>\u2014collectively drove incremental streams across our self-produced catalog and further enhanced its visibility.<\/li>\n
- Harnessed AI to enhance production efficiency and revitalize classic IP. Our AI tools empower creators by lowering production barriers and accelerating workflows, effectively increasing content supply, with AI-generated songs accounting for a growing share of daily new releases. High-quality, authorized AI covers reintroduce classic works to new audiences and drive incremental engagement with original tracks.<\/li>\n<\/ul>\n
PLATFORM \u2013 Sustained our user base through a multi-pronged approach and advanced a multi-tiered monetization strategy, including new offerings to capture demand for super-premium music experiences. <\/b><\/p>\n\n- Recently stepped up collaboration with the Tencent’s Weixin Video Account to create a seamless funnel that converts casual background music (BGM) discovery into high-quality music streaming, enabling us to strengthen user base and drive incremental traffic.<\/li>\n
- To better engage casual listeners, we diversified touchpoints across the platform. Combined with AI-driven recommendations with interactive features, these initiatives encourage users to favorite tracks and curate playlists, fostering the accumulation of personal music assets.<\/li>\n
- SVIP membership continued to see solid adoption and engagement. To enhance its appeal, we appointed major artists such as Ryan Ding, Ju Jingyi, Liu Yuning,<\/span> JC-T, and Karry Wang<\/span> as ambassadors for a variety of collaborations. We also<\/span> introduced tailored collections for leading K-pop artists such as BLACKPINK, EXO, and IVE, combining digital albums with physical collectibles including NFC cards.<\/li>\n
- To meet demand for super-premium experiences, we launched our inaugural Fan Club membership with Silence Wang, integrating priority ticketing and exclusive merchandise to further enrich the fan experience.<\/li>\n<\/ul>\n
IP-VALUE \u2013 Adopted a holistic, pan-IP approach to amplify music influence, simultaneously<\/span> boosting user reach, engagement, and wallet<\/span> share.<\/b><\/p>\n\n- Extended the\u00a0IP value chain and unlocked commercial value through innovative virtual and physical offerings. A prime example is our strengthened partnership with Jay Chou for his digital album, Children of the Sun<\/i> where combined digital and physical benefits drove strong engagement and generated over RMB100 million<\/money> in sales.<\/li>\n
- Achieved triple-digit year-over-year<\/span> growth in revenues related to live performance while growing our IP’s global footprint. We hosted flagship concerts with leading K-pop groups, including BABYMONSTER’s concerts in Taiwan<\/location>, China<\/location>, and NCT WISH’s concerts in Hong Kong<\/location>, China<\/location>, and elevated strategic artists such as Will Pan, Silence Wang, Tia Ray, Angela Zhang, Jane Zhang, Zhang Yuan, and GAI onto prominent domestic and international stages, enhancing their global reach and commercial value.<\/li>\n<\/ul>\n
First <\/b>Quarter 202<\/b>6<\/b>\u00a0Financial Review <\/b><\/p>\n
Total revenues <\/b>increased by RMB539 million<\/money>, or 7.3%<\/percent>, to RMB7.90 billion<\/money> (US$1.15 billion<\/money><\/money>) from RMB7<\/money>.36\u00a0billion in the same period of 2025.<\/p>\n\n- Revenues from music related services<\/b> increased by 12.2%<\/percent> to RMB6.51 billion<\/money> (US$944 million<\/money><\/money>), compared with RMB5.80 billion<\/money> in the same period of 2025. The increase was driven by solid growth in revenues from membership services and offline performances related services<\/span>, supplemented by growth in revenues from advertising services. Revenues from membership services were RMB4.57 billion<\/money> (US$662 million<\/money><\/money>), representing 6.6%<\/percent> year-over-year growth, compared with RMB4.28 billion<\/money> in the same period of 2025. The growth was mainly driven by our continuous expansion of\u00a0SVIP membership privileges, such as early access to offline performances and artist-related merchandise, and the launch of other new membership programs, such as bubble, WeverseDM, and fan-club membership. Revenues from offline performances related services<\/span> achieved robust year-over-year growth. We successfully staged several successful concerts for our strategically collaborated local and Korean artists across domestic and overseas markets. The year-over-year increase in revenues from advertising services was primarily due to our more diversified product portfolio and innovative ad formats, such as ad-supported mode.<\/li>\n
- Revenues from social entertainment services and others<\/b> decreased by 11.0%<\/percent> to RMB1.38 billion<\/money> (US$200 million<\/money><\/money>) from RMB1.55 billion<\/money> in the same period of 2025.<\/li>\n<\/ul>\n
Cost of revenues<\/b> increased by 5.7%<\/percent> year-over-year to RMB4.35 billion<\/money> (US$630 million<\/money><\/money>), mainly due to increased costs related to<\/span> offline performances, advertising services and other\u00a0IP related services<\/span>. Meanwhile, revenue sharing fees decreased, resulting from declines in both revenue sharing ratio and revenues from social entertainment services.\u00a0<\/p>\nGross margin<\/b> increased to 44.9%<\/percent> from 44.1%<\/percent> in the same period of 2025, primarily due to increase in revenues from membership services, along with decreased channel fee.<\/span><\/p>\nTotal operating expenses <\/b>increased by 5.9%<\/percent> year-over-year to RMB1<\/money>.21\u00a0billion (US$176 million<\/money><\/money>). Operating expenses as a percentage of total revenues decreased to 15.3%<\/percent> from 15.5%<\/percent> in the same period of 2025.\u00a0<\/p>\n\n- Selling and marketing expenses were RMB271 million<\/money> (US$39 million<\/money><\/money>), representing a 36.2%<\/percent> year-over-year increase. The increase was primarily due to higher channel spending and content promotion expenses.<\/li>\n
- General and administrative expenses were RMB940 million<\/money> (US$136 million<\/money><\/money>), and remained relatively stable compared with the same period of 2025.<\/li>\n<\/ul>\n
On an IFRS basis,\u00a0net profit <\/b>and net profit attributable to equity holders of the Company<\/b> for the first quarter of 2026\u00a0were\u00a0RMB2.14 billion (US$310 million<\/money><\/money>) and RMB2.09 billion<\/money> (US$303 million<\/money><\/money>), respectively. Basic and diluted earnings per American Depositary Shares (“ADS”) <\/b>for the first\u00a0quarter of 2026 were RMB1.36<\/money> (US$0.20<\/money><\/money>) and RMB1.34<\/money> (US$0.19<\/money><\/money>), respectively. The Company had weighted averages of 1.54 billion basic and 1.56\u00a0billion diluted ADSs outstanding, respectively. Each ADS represents two of the Company’s Class A ordinary shares.<\/p>\nOn a non-IFRS basis, a<\/span>djusted EBITDA<\/b> for the first quarter of 2026 were RMB2.83 billion<\/money> (US$410 million<\/money><\/money>).<\/span> Non-IFRS net profit <\/b>was RMB2.33 billion<\/money> (US$338\u00a0million<\/money>) and non-IFRS net profit attributable to equity holders of the Company<\/b> was RMB2.27 billion<\/money> (US$330\u00a0million<\/money>). Non-IFRS basic and diluted earnings per ADS<\/b> were RMB1.48<\/money> (US$0.21<\/money><\/money>) and RMB1.46<\/money> (US$0.21<\/money><\/money>), respectively. Please refer to the section in this press release titled “Non-IFRS Financial Measures<\/span>” for details.<\/p>\nAs of March\u00a031, 2026, the combined balance of the Company’s cash, cash equivalents, term deposits and short-term investments <\/b>amounted to RMB41.00 billion<\/money> (US$5.94 billion<\/money><\/money>), compared with RMB38.04 billion<\/money> as of December 31, 2025.<\/span>\u00a0<\/p>\nDeclaration and Payment of 2025 Dividend<\/b><\/p>\n
On March 17, 2026, the Company’s board of directors declared a cash dividend of US$0.12<\/money><\/money> per ordinary share, or US$0.24<\/money><\/money> per ADS, for the year ended December 31, 2025, to holders of record of ordinary shares and ADSs as of the close of business on April 2, 2026. The payment for the cash dividend of US$370 million<\/money><\/money> was made in April 2026.<\/p>\nEnvironmental, Social, and Governance (“ESG”) <\/b><\/p>\n
On April 20, 2026, we released our 2025 ESG Report, detailing our progress in empowering creators, promoting digital inclusion, and driving sustainability across our value chain. These initiatives have strengthened our ecosystem’s resilience, leading to improved ESG ratings and broader recognition from our stakeholders.<\/p>\n
Exchange Rate <\/b><\/p>\n
This announcement contains translations of certain RMB amounts into U.S.<\/location> dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8980<\/money> to US$1.00<\/money><\/money>, the noon buying rate in effect on March\u00a031, 2026, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.<\/p>\nNon-IFRS Financial Measure<\/b>s<\/b>\u00a0<\/span><\/p>\nThe Company uses non-IFRS financial measures for the period, including non-IFRS net profit, adjusted EBITDA(inc.SBC) and adjusted EBITDA, in evaluating its operating results and for financial and operational decision-making purposes. TME believes that non-IFRS financial measures help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of certain expenses that the Company includes in its profit for the period. TME believes that non-IFRS financial measures for the period provide useful information about its results of operations, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.\u00a0<\/p>\n
Non-IFRS financial measures for the period should not be considered in isolation or construed as an alternative to operating profit, net profit for the period or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review non-IFRS financial measures for the period and the reconciliation to its most directly comparable IFRS measure. Non-IFRS financial measures for the period presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. TME encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.\u00a0<\/p>\n
Adjusted EBITDA(inc.SBC) for the period represents net profit for the period excluding income tax expense, finance cost, share of profit\/loss of associates and joint ventures, other gains\/losses, interest income, depreciation of property, plant and equipment and right-of-use assets, and amortization of intangible assets.\u00a0<\/p>\n
Adjusted EBITDA for the period represents net profit for the period excluding income tax expense, finance cost, share of profit\/loss of associates and joint ventures, other gains\/losses, interest income, depreciation of property, plant and equipment and right-of-use assets, amortization of intangible assets, and share-based compensation expenses.\u00a0<\/p>\n
Non-IFRS net profit for the period represents profit for the period excluding amortization of intangible and other assets arising from business acquisitions or combinations, share-based compensation expenses, net losses\/gains from investments and related income tax effects.<\/p>\n
Please see the “Unaudited Non-IFRS Financial Measures” included in this press release for a full reconciliation of adjusted EBITDA(inc.SBC), adjusted EBITDA and non-IFRS net profit for the period to its net profit for the period.<\/p>\n
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\n\n| \n [1]\u00a0<\/sup>Starting from the first quarter of 2026, “online music services” has been renamed to “music related services” to better reflect the nature of our businesses included in this business\u00a0line. Such\u00a0change does not affect the amounts of our historical revenue or its accounting treatment.<\/span><\/p>\n<\/td>\n<\/tr>\n\n| \n [2]<\/sup>\u00a0As part of music related services, membership services primarily consist of membership fees paid for membership benefits and privileges, including access to music and audio content, and other benefits and privileges within music related services. Revenues from membership services for each quarter of 2025 were RMB4,284 million<\/money>, RMB4,434 million<\/money>, RMB4,564 million<\/money> and RMB4,625 million<\/money>, respectively.<\/span><\/p>\n<\/td>\n<\/tr>\n\n | |