TME

This article first appeared on GuruFocus. Total Revenues: RMB8.9 billion, up 6% year over year. Music-Related Services Revenues: Grew 11% year over year, driven by solid growth in membership services and offline performance-related services. Membership Services Revenues: RMB4.8 billion, up 8% year over year. Ximalaya Contribution: Contributed approximately RMB0.4 billion to overall revenues in Q2 2026. Gross Margin: 44.2% in Q2 2026, compared with 44.4% in the same period of last year. Operating Expenses: RMB1.3 billion, representing 14.5% of total revenues, compared with 13.7% in the same period of last year. Net Profit Attributable to Equity Holders: RMB2.5 billion, compared with RMB2.4 billion in Q2 2025. Diluted Earnings per ADS: RMB1.57 for Q2 2026. Adjusted EBITDA: RMB3.3 billion, up 5% year over year. Non-IFRS Net Profit: RMB2.7 billion, up 4% year over year. Cash and Investments: Combined balance of cash, cash equivalents, term deposits, and short-term investments was RMB44.2 billion as of June 30, 2026, compared with RMB41 billion as of March 31, 2026. Share Repurchases: Repurchased 43.5 million ADSs for total cash consideration of USD400 million in Q2 2026. Warning! GuruFocus has detected 5 Warning Signs with BOM:535322. Is TME fairly valued? Test your thesis with our free DCF calculator. Release Date: August 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue from music-related services grew 11% year-over-year, driven by strong membership and offline performance growth. The consolidation of Ximalaya expanded TME's content ecosystem, adding premium audiobooks and podcasts, and contributed RMB0.4 billion to Q2 revenue. IP-related consumption services, including live events and artist merchandise, delivered strong double-digit year-over-year growth. SVIP membership program continued to expand, with diversified benefits driving higher user adoption, ARPPU, and retention. Deepened integration with Tencent ecosystem, including Weixin Video Accounts and XiaoWei AI, expanded user reach and engagement. Advertising business faced headwinds due to a challenging macro environment and competitive market, impacting ad-supported model. Subscription revenue growth moderated in Q2, excluding Ximalaya, due to competitive pressures on casual and light users. Gross margin slightly declined to 44.2% from 44.4% year-over-year, impacted by revenue mix from growing offline performance services. Operating expenses increased to 14.5% of total revenues from 13.7% year-over-year, partly due to Ximalaya consolidation and intangible amortization. Management expects gross margin to decrease slightly year-over-year in the second half of 2026, with net margin also expected to decline slightly. Q: How will the IP-related business drive revenue growth for the rest of 2026, and what is the financial outlook after Ximalaya's consolidation? A: Ross Liang (CEO) stated that IP-related services, such as concerts and performances, are experiencing steady growth due to a strong IP supply from in-house development and external collaborations, diversified monetization through merchandise and member benefits, and a solid competitive moat. Regarding Ximalaya, he noted that its consolidation has created a one-stop music plus audio platform, amplifying the user base and enriching user profiles, which sets a solid base for future growth in the medium to long run. Q: Excluding Ximalaya, subscription revenue growth moderated in Q2. What is the growth trend for SVIP and overall ARPU in the second half, and what is the latest status on competition? A: Ross Liang (CEO) explained that while competition has impacted traffic and light users, the high-value SVIP base has not been heavily affected. The strategy is to stabilize the SVIP base by adding more benefits, such as merchandise, concerts, and long-form audio from Ximalaya. He emphasized that TME has never been upset by competition and, with the transition to a music plus audio platform, can provide richer content and benefits, ensuring stable and steady development. Q: What measurable results have the Weixin Xiaowei integration and upgraded AI agents produced, and what is the intended monetization path for AI? A: Ross Liang (CEO) said Weixin Xiaowei is still in early testing but users are frequently using it to send and share song lists. Internally, AI agents have increased retention for high-value users and boosted engagement through features like swipe-to-listen and AI DJ. The monetization model is clear: AI will drive engagement and activity, particularly for paid users, to grow subscriptions. Additionally, AI is used to generate music, which has already produced good commercial returns. Q: What is TME's competitive advantage and moat in music, long-form audio IP, and overall IP strategy? A: Ross Liang (CEO) and an unidentified representative highlighted that while exclusive content is restricted by SAMR rules, TME's advantages include Ximalaya's legacy user base in Tier 1 and 2 cities, deep collaboration with China Literature for audiobooks, and synergy with Tencent Video to convert hit shows into audio content. In music creation, TME collaborates with domestic and international labels, co-produces artworks, and invests in artist nurturing, such as the partnership with SM Entertainment, which contributes to business growth and SVIP expansion. Q: What drove the modest sales and marketing increase in Q2, and what is the gross and net margin outlook for Q3 and Q4 with Ximalaya's full consolidation? A: Shirley Hu (CFO) attributed the slight gross margin decline to the rapid growth of offline performance and artist brokerage businesses, which have lower margins. She projected gross margin will decrease slightly year-over-year in the second half. Sales expenses were controlled by shifting channel spending to higher ROI projects and deepening Tencent ecosystem collaboration. For the full year, sales and operating expenses will rise slightly, net margin will decline slightly, and EBITDA will edge up. Q: With cash and deposits reaching RMB44 billion, what are the latest thoughts on enhancing shareholder returns? A: Shirley Hu (CFO) confirmed that TME is on track to complete the USD1 billion share repurchase program, having completed USD400 million in Q2 alone. Management is confident in the company's future and is preparing for another round of share buybacks, using different approaches to increase shareholder returns. Q: How is TME leveraging the Tencent ecosystem to expand user reach and engagement? A: Ross Liang (CEO) detailed deepened cooperation with Weixin Video Accounts, bringing labels and artists into the ecosystem for a seamless discovery-to-playback journey. Collaborations with Weixin Pay and the integration with Weixin's AI agent, XiaoWei, allow users to discover songs and generate playlists easily. Additionally, TME extended reach into smart vehicles with automakers like Changan, Li Auto, and XPeng, and integrated with HarmonyOS to capture new monetization opportunities. Q: How is TME enhancing the SVIP value proposition, and what is driving its growth? A: Ross Liang (CEO) explained that SVIP is transforming into a multi-dimensional experience centered on IP engagement, with premium music and audio at its core. Digital albums, tailored packages for artists like Renjun and aespa, and Starlight Card additions from The Black Label artists have driven adoption. Collaborations with gaming IPs like Wuthering Waves brought themed decorations, contributing to the highest growth in SVIP user base, ARPPU, time spent, and retention. Q: What is the competitive advantage of Ximalaya's content, and how will it complement TME's offerings? A: Ross Liang (CEO) noted Ximalaya's strength in kids' content and online literature audiobooks, with 9 of its top 10 new online local titles produced in-house. The collaboration with China Literature ensures new works are efficiently distributed as audiobooks. Deep collaboration with Tencent Video allows for quick conversion of hit shows into audio content, attracting diverted traffic, while Ximalaya's audio resources are licensed back to Tencent Video, creating a mutually beneficial ecosystem. Q: How is TME strengthening copyright protection, especially with the evolution of AI? A: Kar Shun Pang (Executive Chairman) stated that TME continues to strengthen copyright protection through proactive screening, takedowns, legal action, and industry collaboration. As AI evolves, TME is stepping up engagement with regulators, labels, and artists to strengthen copyright protection in the new era, fostering a healthier environment for creators and supporting sustainable industry development. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Tencent Music Entertainment Group recently reported second-quarter 2026 results showing revenue of CNY 8,933 million and net income of CNY 2,471 million, while also completing a CNY-equivalent US$400 million buyback of 43,500,000 shares announced in March 2025. The quarter also marked the first full contribution from the Ximalaya audio platform, which broadened Tencent Music’s ecosystem beyond music streaming into audiobooks, podcasts, and online novels, reinforcing its push into wider digital audio entertainment. We’ll now examine how the integration of Ximalaya and the completed US$400 million buyback may influence Tencent Music’s investment narrative. AI is about to change healthcare. These 43 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. To own Tencent Music today, you need to believe its transition from pure music streaming toward a broader digital audio ecosystem can offset margin pressure and slower profit growth. The Q2 2026 results showed modest year-on-year revenue and net income increases, but did not materially change the key near term catalyst of integrating Ximalaya or the major risk that rising offline and content costs could weigh on margins. The completion of the US$400 million buyback in Q2 stands out here. It reduced the share count by 2.82% at a time when net margins have come under pressure versus last year, and when earnings for the first half are down year-on-year. For investors, that combination of capital returns and softer profitability sits right at the intersection of the current margin risk and any future re‑rating built on successful Ximalaya integration. Yet beneath this broader audio growth story, investors should also be aware of the rising reliance on lower margin offline events and the potential for... Read the full narrative on Tencent Music Entertainment Group (it's free!) Tencent Music Entertainment Group's narrative projects CN¥43.7 billion revenue and CN¥12.0 billion earnings by 2029. Uncover how Tencent Music Entertainment Group's forecasts yield a $14.97 fair value, a 72% upside to its current price. Some of the lowest ranked analysts see a harsher risk picture than the Q2 headline growth, assuming revenue of about CN¥40.7 billion and earnings near CN¥10.5 billion by 2029, so if you are weighing Ximalaya’s contribution and margin strain, it is worth comparing those more pessimistic expectations with how this latest quarter might shift the debate. Explore 5 other fair value estimates on Tencent Music Entertainment Group - why the stock might be worth just $10.03! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Tencent Music Entertainment Group research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. Our free Tencent Music Entertainment Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Tencent Music Entertainment Group's overall financial health at a glance. Our daily scans reveal stocks with breakout potential. Don't miss this chance: Outshine the giants: these 16 early-stage AI stocks could fund your retirement. This technology could replace computers: discover 26 stocks that are working to make quantum computing a reality. Uncover the next big thing with 19 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Tencent Music Entertainment Group stock has fallen 64.8% over the past year, and current checks suggest the valuation may now lean too low rather than too high. Both the Discounted Cash Flow (DCF) intrinsic value estimate and market multiple signals point to upside relative to the recent share price. The share price is down 64.8% over the last year, which puts the focus on whether sentiment has weakened more than the long term earnings and cash flow outlook. Revenue growth from music services and the broader audio ecosystem can support expectations for future cash generation. However, execution risk around integrating new platforms and monetising user engagement may limit how much value investors are willing to ascribe today. The broader checks lean cheap, with Tencent Music Entertainment Group screening as undervalued on 5 of 6 metrics in its valuation summary. The issue now is whether Tencent Music Entertainment Group’s current share price already reflects the recent share price weakness or if the intrinsic value estimate and multiples still suggest a material gap. Find out why Tencent Music Entertainment Group's -64.8% return over the last year is lagging behind its peers. The Discounted Cash Flow model looks at the cash Tencent Music Entertainment Group is expected to generate and discounts it back to today. Tencent Music Entertainment Group currently reports last twelve month free cash flow of about CN¥10.0b, with the model assuming broadly growing cash flows over time. On that basis, the intrinsic value is estimated at around $12.80 per share. This compares to a recent share price that sits about 31.9% below that estimate, which indicates the market is applying a sizeable discount to those projected cash flows. The recent Q2 2026 revenue update, which included the first full quarter of Ximalaya and wider audio services, helps explain why the cash flow profile used in the model extends beyond core music streaming alone. The share price, however, still sits below the DCF output. Overall, the DCF work suggests Tencent Music Entertainment Group stock currently appears undervalued relative to its projected cash generation. Our Discounted Cash Flow (DCF) analysis suggests Tencent Music Entertainment Group is undervalued by 31.9%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Tencent Music Entertainment Group. P/E suits Tencent Music Entertainment Group because earnings are a key reference point for how investors value established internet platforms. Tencent Music Entertainment Group currently trades on a P/E of about 10.4x. That sits well below the broader Entertainment industry average of 19.7x and the peer group average of 54.5x, even though investors often compare companies in this space on earnings power and user scale. The tailored fair P/E ratio for Tencent Music Entertainment Group is estimated at around 21.4x. This is more than double the current 10.4x multiple, which implies the stock trades at a sizeable discount to what that framework suggests could be reasonable given its profile and risks. The gap indicates the market is pricing Tencent Music Entertainment Group well below both the industry yardstick and the modelled fair ratio. On this earnings multiple, Tencent Music Entertainment Group stock appears undervalued relative to both its sector and the framework that adjusts for its specific characteristics. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Tencent Music Entertainment Group pick up where this valuation puzzle leaves off. They set out the specific assumptions on Tencent Music Entertainment Group's future growth, margins and earnings that would need to hold for the stock to be worth materially more or less than today's price. Instead of a single multiple or model result, each one lays out its underlying fair value assumptions so you can compare them with actual results over time on the Community page. One of the top community narratives on Tencent Music Entertainment Group: 42% undervalued Read one of the top narratives on Tencent Music Entertainment Group Do you think there's more to the story for Tencent Music Entertainment Group? Head over to our Community to see what others are saying! The Discounted Cash Flow (DCF) work and the earnings multiple view both point to Tencent Music Entertainment Group trading at a discount to what its cash flows and earnings profile suggest. The broader valuation checks also lean supportive, which keeps the focus on whether that gap persists. What really decides it from here is whether Tencent Music Entertainment Group can keep turning its wider audio ecosystem and user base into sustained, monetisable cash generation without execution missteps. The key question for investors is whether the current discount is compensation for those risks or an opportunity if the business delivers against those assumptions. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Tencent Music Entertainment Group (TME) has drawn fresh interest after reporting its second quarter 2026 results and confirming completion of a sizeable share repurchase tranche announced in March 2025. See our latest analysis for Tencent Music Entertainment Group. The recent Q2 earnings update and confirmation of buyback progress come against a weaker share price backdrop, with Tencent Music Entertainment Group’s year to date share price return down 51.18% and 1 year total shareholder return down 64.76%. However, 3 year and 5 year total shareholder returns of 47.59% and 16.83% point to a stronger longer term picture and suggest recent momentum has faded. If this earnings reaction has you reassessing the wider music and audio space, it can help to compare Tencent Music Entertainment Group with other businesses exposed to content, platforms and recurring revenue models through the 18 top founder-led companies Given Tencent Music Entertainment Group's earnings profile and sizeable buyback against a sharply weaker share price, are you looking at a business under pressure or a stock where sentiment has moved further than the fundamentals justify? Tencent Music Entertainment Group's most followed narrative points to a fair value of $14.97 compared with the last close at $8.72, which places a big question mark over how sentiment lines up with those underlying assumptions. Read the complete narrative. Want to see what is baked into that valuation gap? The narrative leans on steady revenue compounding, firmer margins, and a future earnings multiple that differs from today. The detail sits in how those three levers interact over time. Result: Fair Value of $14.97 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Tencent Music Entertainment Group still faces two clear swing factors: regulatory scrutiny in China, and competition that could pressure margins if spending outpaces revenue. Find out about the key risks to this Tencent Music Entertainment Group narrative. The mix of concern and optimism around Tencent Music Entertainment Group is clear. It therefore makes sense to review the data now and form your own view using the 3 key rewards and 1 important warning sign. If Tencent Music Entertainment Group has sharpened your thinking, do not stop here. Use fresh stock ideas from focused screeners to pressure test and expand your watchlist. Target higher quality opportunities by scanning companies that look mispriced on fundamentals through the 49 high quality undervalued stocks. Strengthen your downside protection by filtering for companies with resilient finances using the solid balance sheet and fundamentals stocks screener (50 results). Get ahead of the crowd by reviewing the screener containing 20 high quality undiscovered gems before others start paying attention. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

SHENZHEN, China, Aug. 11, 2026 /PRNewswire/ -- Tencent Music Entertainment Group ("TME," or the "Company") (NYSE: TME and HKEX: 1698), the leading all-in-one music and audio entertainment platform in China, today announced its unaudited financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights Total revenues were RMB8.93 billion (US$1.32 billion), representing a 5.8% year-over-year increase, primarily due to strong growth in revenues from music related services[1]. Revenues from music related services[1] were RMB7.61 billion (US$1.12 billion), representing 11.0% year-over-year growth, driven by solid growth in revenues from marketing and consumption services[2], such as offline performance related services, as well as revenues from membership services[3]. Revenues from membership services[3] were RMB4.79 billion (US$706 million), representing 8.1% year-over-year growth. On an IFRS basis: On a non-IFRS basis: Total cash, cash equivalents, term deposits and short-term investments as of June 30, 2026 were RMB44.22 billion (US$6.52 billion). In the second quarter of 2026, the Company repurchased 43.5 million ADSs with cash for an aggregate consideration of approximately US$400.0 million. Mr. Cussion Pang, Executive Chairman of TME, commented, "Our second-quarter results reflect the continued strength of our content-and-platform strategy. Concerts, merchandise, and other IP-driven experiences drove another quarter of solid growth in our marketing and consumption services, underscoring our ability to unlock greater value from premium music IP. Our expansion into digital audio through the integration of Ximalaya broadened our reach and enriched our ecosystem. As the industry evolves, we continue to champion copyright protection, foster a healthy ecosystem, and safeguard the value of creative work." Mr. Ross Liang, CEO of TME, continued, "Amid a rapidly evolving market, we remain steadfast in building an ecosystem where our users can discover, connect, and be inspired through music and audio experiences. Our focus on differentiated content and a vibrant community continues to deepen engagement with our core users, and SVIP membership continues to grow. The addition of Ximalaya is an exciting milestone that will allow us to deliver an even richer audio experience and serve our users more effectively. Together, we are shaping the future of music and audio entertainment and unlocking long-term growth." Second Quarter 2026 Operational Highlights Products & Services – Elevated the music experience through continuous product innovation, ecosystem integration, and thoughtful AI application, to expand user reach and deepen engagement. Enhanced the user experience through a more seamless discovery-to-playback journey, introducing vertical swipe-based discovery, video feeds, and expanded freemium access to drive higher daily time spent per user. Expanded distribution and user acquisition through deeper integration with the broader Tencent ecosystem. We strengthened music content distribution through Weixin Video Accounts and improved click-through and conversion to our apps. We also collaborated with Weixin Pay to drive traffic to our lightweight apps, such as Bodian Music and Kugou Concept, which cater to users seeking a simpler music experience. Harnessed AI agents to make music discovery more intuitive and personalized. We recently integrated with Weixin XiaoWei, and are pleased that by tapping into Weixin's massive user base, more users can discover songs, generate playlists, stream music with easy commands and instantly share favorite tracks with friends. Within QQ Music and Kugou Music, our upgraded AI agents now act as personal DJs, creating personalized playlists in real time that match what users want to hear in the moment. IP-Centric Content Ecosystem – Deepened strategic partnerships, strengthened proprietary IP capabilities, and expanded presence in digital audio to reinforce long-term IP value. Expanded strategic partnerships beyond traditional music licensing to unlock greater value. 1) Deepened our partnerships with Dream Music Group, securing first-release for its top artists while expanding into new areas of collaborations including content co-creation, physical offerings, and offline experiences. 2) To enrich how users experience music beyond audio, we partnered with Huace Film & TV, RUYI FILM, and Zhejiang Satellite TV to bring original soundtracks and popular music variety shows to our platform, creating a more immersive connection between music and visual entertainment. Advanced our proprietary content creation capabilities and deepened artist development efforts to support growth of IP-driven experiences. 1) Produced hit releases for leading artists and major IPs, including Zhou Shen's Blaze into Bloom, Liu Yuning's Borrow a Little Light from Ordinary Days, and the theme song for the hit animated film All Wishes Come True!. 2) Following rapper Zhou Yan's (GAI) successful EVOLUTION tour in Asia, we elevated his latest tour, REAL G, to stadium scale. We also supported renowned actor and singer Steven Zhang's first-ever arena tour, New Journey. 3) Made a strategic investment in THE BLACK LABEL to help artists deepen connection with Chinese audiences. The addition of Ximalaya strengthened our position as a leading music and audio ecosystem. Its extensive content library broadened our user reach and enriched our SVIP offering. Meanwhile, we have begun the backend integration journey, laying the foundation for operational efficiency gains over time. Holistic IP Value Creation – Extended the value of premium IPs beyond streaming through digital and physical experiences, deepening fan engagement and driving diversified growth. Continued to enhance our SVIP offering with differentiated IP-driven benefits, driving growth in user scale, engagement, and consumption of premium ancillary experiences. New benefits, including digital albums and tailored gift packages for artists and groups such as RENJUN, Lay Zhang, aespa, and RIIZE[5], deepened fan engagement. Expanded music IP into more immersive offline experiences, contributing to strong growth in concert-related revenue. 1) Hosted three fan meetings in Macau, China for SM Entertainment's trainee group, SMTR25, attracting tens of thousands of attendees and generating strong merchandise sales. 2) Building on last year's success, we scaled up our proprietary international IP event, TIMA, expanding to a much larger venue to welcome more fans amid growing enthusiasm. Extended the value of music IP through end-to-end IP merchandise development and distribution. Physical releases from KUN, Chen Chusheng, Eazin Poe, and Zhou Shen were met with strong demand, highlighting fans' growing appetite for premium music collectibles. Second Quarter 2026 Financial Review Total revenues increased by RMB491 million, or 5.8%, to RMB8.93 billion (US$1.32 billion) from RMB8.44 billion in the same period of 2025. The revenue generated from Ximalaya was RMB407 million (US$60 million)[6]. Revenues from music related services increased by 11.0% to RMB7.61 billion (US$1.12 billion), compared with RMB6.85 billion in the same period of 2025. The increase was driven by solid growth in revenues from marketing and consumption services, such as offline performance related services, as well as revenues from membership services. Revenues from membership services were RMB4.79 billion (US$706 million), representing 8.1% year-over-year growth, compared with RMB4.43 billion in the same period of 2025. The consolidation of Ximalaya contributed to the increase of our membership revenues. Additionally, our SVIP membership continued to expand and contributed to our membership revenue growth. Revenues from offline performances related services achieved robust year-over-year growth as we successfully staged several concerts for our strategically collaborated artists. Revenues from social entertainment services and others decreased by 16.4% to RMB1.33 billion (US$196 million) from RMB1.59 billion in the same period of 2025. Cost of revenues increased by 6.2% year-over-year to RMB4.98 billion (US$735 million), mainly due to increased costs related to offline performances, and higher long-form audio content costs due to expansion of content library. Meanwhile, revenue sharing fees decreased, resulting from declines in both revenue sharing ratio and revenues from social entertainment services. Gross margin was 44.2%, compared with 44.4% in the same period of 2025. The consolidation of Ximalaya had a positive impact to our gross margin of this quarter. Total operating expenses increased by 12.0% year-over-year to RMB1.30 billion (US$191 million). Operating expenses as a percentage of total revenues increased to 14.5% from 13.7% in the same period of 2025. The increase was primarily due to the consolidation of Ximalaya, including the amortization of intangible assets arising from the acquisition. On an IFRS basis, net profit and net profit attributable to equity holders of the Company for the second quarter of 2026 were RMB2.55 billion (US$376 million) and RMB2.47 billion (US$364 million), respectively. Basic and diluted earnings per American Depositary Shares ("ADS") for the second quarter of 2026 were RMB1.58 (US$0.23) and RMB1.57 (US$0.23), respectively. The Company had weighted averages of 1.56 billion basic and 1.58 billion diluted ADSs outstanding, respectively. Each ADS represents two of the Company's Class A ordinary shares. On a non-IFRS basis, adjusted EBITDA for the second quarter of 2026 were RMB3.25 billion (US$480 million). Non-IFRS net profit was RMB2.78 billion (US$410 million) and non-IFRS net profit attributable to equity holders of the Company was RMB2.69 billion (US$396 million). Non-IFRS basic and diluted earnings per ADS were RMB1.72 (US$0.25) and RMB1.70 (US$0.25), respectively. Please refer to the section in this press release titled "Non-IFRS Financial Measures" for details. As of June 30, 2026, the combined balance of the Company's cash, cash equivalents, term deposits and short-term investments amounted to RMB44.22 billion (US$6.52 billion), compared with RMB41.00 billion as of March 31, 2026. Share Repurchase Program Under our previously announced share repurchase programs, during the three months ended June 30, 2026, we repurchased a total of 43.5 million ADSs in the open market with cash for an aggregate consideration of approximately US$400.0 million at an average price of US$9.2 per ADS. Environmental, Social, and Governance ("ESG") We continued to enhance tailored music experiences for users of all ages. This quarter, we enhanced Youth Mode across our core products and introduced a curated, age-appropriate content library for younger users to safely discover and enjoy music. Exchange Rate This announcement contains translations of certain RMB amounts into U.S. 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 RMB6.7851 to US$1.00, the noon buying rate in effect on June 30, 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. Non-IFRS Financial Measures The 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. 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. 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. 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. 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. 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. About Tencent Music Entertainment Tencent Music Entertainment Group (NYSE: TME and HKEX: 1698) is the leading all-in-one music and audio entertainment platform in China, operating the country's highly popular and innovative music and audio apps: QQ Music, Kugou Music, Kuwo Music, WeSing and Ximalaya. TME's mission is to create endless possibilities with music and technology. Powered by its content-and-platform dual-engine strategy, TME's expansive offerings extend the value of IP beyond online streaming into offline concerts, artist merchandise, and other IP-centric experiences. TME continuously innovates to deliver a seamless experience where users can discover, listen, sing, watch, perform, and connect across diverse scenarios, while unlocking the enduring value of music and audio IP. For more information, please visit ir.tencentmusic.com. Safe Harbor Statement This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law. Investor Relations Contact Tencent Music Entertainment [email protected]+86 (755) 8601-3388 ext. 885034 View original content:https://www.prnewswire.com/news-releases/tencent-music-entertainment-group-announces-second-quarter-2026-unaudited-financial-results-302848218.html

Interested in Tencent Music Entertainment Group Sponsored ADR? Here are five stocks we like better. Q2 revenue rose 6% to RMB 8.9 billion, while net profit increased to RMB 2.5 billion. Music-related services grew 11%, with membership revenue up 8% and Ximalaya contributing about RMB 400 million after its consolidation. Music IP and offline entertainment drove growth through concerts, artist merchandise, digital albums and other performance-related services, which recorded strong double-digit growth. Ximalaya also broadens Tencent Music’s audio offerings with audiobooks, podcasts, online novels and educational content. Advertising and margins remain under pressure, with management expecting gross and net margins to decline slightly in the second half. Tencent Music is prioritizing SVIP retention, AI-powered discovery and shareholder returns, having repurchased $400 million of ADSs in Q2 and remaining on track for its $1 billion buyback program. As U.S. Debt Surpasses GDP, These 2 ETFs Are Emerging Winners in the “Sell America” Trade Tencent Music Entertainment Group (NYSE:TME) reported second-quarter 2026 revenue of RMB 8.9 billion, up 6% from a year earlier, as growth in music-related services and the consolidation of Ximalaya offset pressure in advertising. Net profit attributable to equity holders rose to RMB 2.5 billion from RMB 2.4 billion in the prior-year period. Chief Financial Officer Shirley Hu said music-related services revenue increased 11% year over year, supported by membership services and offline performance-related offerings. Membership revenue reached RMB 4.8 billion, up 8% from a year earlier, while Ximalaya contributed about RMB 400 million to total revenue during the quarter. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat The "Spotify of China" Just Got a Whole Lot Cheaper The company reported diluted earnings per ADS of RMB 1.57. Adjusted EBITDA rose 5% year over year to RMB 3.3 billion, while non-GAAP net profit attributable to equity holders increased 4% to RMB 2.7 billion. Executive Chairman Cussion Pang said marketing and consumption services continued to expand through concerts, merchandise and other IP-driven experiences. The company said IP-related consumption services, especially live events and artist merchandise, recorded strong double-digit year-over-year growth during the quarter. → 3 Dividend Champion Utilities for a Market That Can't Sit Still These 3 Stocks Just Rewarded Investors With Big Dividend Bumps Tencent Music cited concerts and artist-development initiatives involving rapper Zhou Yan, singer Tia Ray and actor and singer Steven Zhang. Pang said the opening show of Zhou Yan’s stadium tour in Xi’an drew more than 30,000 fans, while Tia Ray’s tour concluded with two sold-out arena shows in Hangzhou. The company also highlighted the expansion of its TIMA concert brand, which moved to Kai Tak Sports Stadium in Hong Kong in its second year. Tencent Music said it increased audience capacity by more than three times from the prior year. → Is Wingstop's Growth Story Losing Steam? Hu said offline performance-related services generated robust results, including concerts for strategically collaborating artists Silence Wang and Sam Fish. Digital album sales also performed solidly, she said, led by the release of Jeff Chang’s album, Children of the Sun. Pang said Tencent Music is expanding partnerships beyond music licensing into content co-creation, physical products and offline experiences. The company recently deepened its partnership with Three Music Group and invested in The Black Label to support artist promotion and merchandise development. Management described the addition of Ximalaya as a key expansion of Tencent Music’s content and platform strategy. The company said the audio platform adds audiobooks, podcasts, online novels, history, children’s content and educational programming, creating more listening occasions and potentially increasing user engagement. Pang said nine of Ximalaya’s top 10 new online-novel titles this year were produced in-house, which he said demonstrates the platform’s original-content capabilities and offers better economics from owned hits. Chief Executive Officer Ross Liang said Tencent Music has begun adding premium audio content to its SVIP membership offering. Over time, the company also sees opportunities to improve advertising efficiency through shared technology and infrastructure following the Ximalaya consolidation. During the question-and-answer session, Liang said Ximalaya brings a user base that includes white-collar and female users in China’s Tier 1 and Tier 2 cities. He also pointed to opportunities to deepen ties with China Literature for audiobook adaptations and with Tencent Video for audio versions of popular video programming. Hu said the advertising business, particularly its ad-supported model, is facing headwinds amid a challenging macroeconomic environment and competitive market. The company is seeking to improve advertising exposure, entry rates and effective cost per mille, or eCPM, while introducing more interactive products and expanding distribution through Tencent’s ecosystem. Gross margin was 44.2% in the second quarter, compared with 44.4% a year earlier. Hu said changes in revenue mix affected the result as offline performance-related services became a larger part of revenue. She added that Ximalaya had a favorable impact on gross margin in the quarter after accounting for intangible-asset amortization recorded in purchase accounting. Operating expenses totaled RMB 1.3 billion, or 14.5% of revenue, compared with 13.7% a year earlier. Hu said the company reduced channel spending and shifted toward higher-return projects, while relying more heavily on collaborations across the Tencent ecosystem, including WeChat video accounts, WeChat Pay, Tencent Video and Tencent Games. For the second half, Hu said Tencent Music expects gross margin to decline slightly year over year. She said sales expenses and operating expenses are expected to rise modestly for the full year, net margin is expected to decrease slightly, and EBITDA is expected to edge higher. Liang said the company is working to protect and expand its higher-value SVIP user base through premium music, audio content, digital albums, merchandise, photo cards, NFC cards and gaming-related member benefits. He said casual and light users have been more affected by competitive conditions than high-value users. Tencent Music also continued to introduce AI-based discovery tools, including upgraded AI agents on QQ Music and Kugou that can generate personalized playlists. Liang said the integration with Weixin’s Xiaowei AI agent remains in testing, but users are already using it to create playlists, share songs and stream music through voice or text commands. Management said AI is primarily intended to improve engagement, activity and efficiency, though Liang said the company has also generated commercial returns from AI music-generation functions in its apps. As of June 30, Tencent Music had RMB 44.2 billion in combined cash equivalents, term deposits and short-term investments, up from RMB 41 billion at March 31. Under its repurchase program, the company bought back 43.5 million ADSs for $400 million during the second quarter. Pang said Tencent Music remains on track to complete its existing $1 billion shareholder-return program and is preparing for another round of repurchases. Tencent Music Entertainment Group (NYSE: TME) is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders. The company traces its roots to the consolidation of Tencent's music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tencent Music Entertainment Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Tuesday, August 11th, 2026Pre-market futures are correcting Monday’s slight selloff at this hour; ultimately, as we had said in this space yesterday, we don’t expect much movement either direction until inflation reports begin to hit the tape Wednesday morning with the Consumer Price Index (CPI) Inflation Rate. The Dow is +71 points presently, the S&P 500 +16 and the Nasdaq +129 points. Early this morning, the NFIB Small Business Index for July came in at 99.8 — the highest rate since August of last year, which was 100.8. (For scale, the 12-month low was 95.3 in March of this year.) Eight of 10 components in this survey were optimistic, and 20% of small business owners plan to create new jobs in the next three months. The top issue these small business owners had last month were labor quality and availability. Estimates for July Existing Home Sales — a metric of the housing market that could use some good news — are expected to tick down to 4.05 million seasonally adjusted, annualized units, down for the second-straight month from a near-term high 4.19 million units in May. In the last report, only the Northeast increased in existing home sales, +2.1% to 0.48 million units; the South dipped -3.6%, the Midwest was -3.0% and the West -1.3%. Ahead of today’s open, Cardinal Health CAH posted mixed fiscal Q4 results, beating expectations by +20% to earnings of $2.91 per share on revenues of $63.67 billion, which missed the Zacks consensus by -2.96%. Higher 2027 earnings guidance, however, is keeping Cardinal shares buoyant: up marginally on the news, +15% year to date. For more on CAH’s earnings, click here.Chinese audio entertainment platform Tencent Music TME beat earnings estimates by a penny to $0.25 per ADS, on revenues of $1.32 billion (U.S. dollar equivalent), which was shy of the $1.35 billion analysts had been expecting. Shares had gone up +12% over the past month, and have given up -10% of its stock price on the news in early trading.After the close today, Super Micro Computer SMCI is expected to grow +65.85% on earnings per share, +91% on revenues. The data center technology services provider has outpaced earnings estimates in each of the past three quarters.AI GPU infrastructure provider CoreWeave CRWV shares are up +2% early today, ahead of its earnings report after the closing bell. Earnings are anticipated to tumble -333% for Q2, but gain +109% on quarterly revenues. Three of the past four quarters, CoreWeave has missed earnings estimates.Fast-casual restaurant chain Cava Group CAVA is expected to report fiscal Q4 earnings up +12.5% per share this afternoon, on +25.9% on revenues. The company has beaten estimates in three of the past four quarters; shares are up modestly ahead of the open.Questions or comments about this article and/or author? Click here>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report Tencent Music Entertainment Group Sponsored ADR (TME) : Free Stock Analysis Report CAVA Group, Inc. (CAVA) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Tencent Music Entertainment Group Sponsored ADR? Here are five stocks we like better. Revenue grew 7% year over year in Q1 2026, led by a 12% increase in music-related services and continued strength in membership, advertising and offline performance-related revenue. Tencent Music also said its offline concert business posted another quarter of triple-digit growth. Management warned that the company faces an increasingly competitive market and ongoing AI copyright and infringement challenges, saying unauthorized AI-generated content can hurt subscription growth and creators’ rights. Tencent Music said it is strengthening rights protection while also using AI tools like Venus to support creators. The company is shifting toward a broader IP-driven membership strategy, combining subscriptions with fan clubs, merchandise, digital albums and concerts to boost engagement and monetization. Tencent Music reported improved gross margin to 44.9%, adjusted EBITDA up 10%, and ended the quarter with RMB 41 billion in cash and investments. The "Spotify of China" Just Got a Whole Lot Cheaper Tencent Music Entertainment Group (NYSE:TME) reported steady first-quarter 2026 results as management highlighted growth in music-related services, rising contributions from offline performances and continued pressure from competition and AI-related copyright issues. On the company’s earnings call, Chief Financial Officer Shirley Hu said total revenue rose 7% year over year in the quarter. Revenue from music-related services increased 12%, driven by membership services, offline performance-related services and advertising. Membership services revenue was RMB 4.6 billion, up 7% from a year earlier. → Micron Investors Face a High-Stakes Moment After the Latest Rally These 3 Stocks Just Rewarded Investors With Big Dividend Bumps Executive Chairman Kar Shun Pang said Tencent Music’s growth is increasingly being supported by “diversified monetization across the music value chain,” adding that the offline concert-related business delivered another quarter of triple-digit year-over-year growth. Pang said the company is operating in an “increasingly competitive landscape” and identified unauthorized AI-generated content as a key challenge for the industry. He said such content creates headwinds for music subscription growth, undermines creators’ rights and dilutes the long-term value of the music ecosystem. → How Bad Could Tesla’s Cybertruck Recall Be for Shares? Tencent Music Stock Outshines Spotify as China’s Music Giant “We are working closely with creators, rights holders, and regulators to lead and champion robust copyright protection efforts,” Pang said. During the Q&A session, Hu said the company had established a dedicated rights-protection mechanism and would act against “song washing and other infringing behaviors.” Management said it supports technological innovation but does not want AI to become an excuse for infringement. → Reading the Stripes: Is The Industrial Recession Over? At the same time, Pang said AI is becoming an important tool within Tencent Music’s own business. He cited the company’s one-stop AI music production tool, Venus, which supports creators through songwriting, composition, arrangement, vocal performance and mixing. Pang said AI can improve efficiency while complementing rather than replacing human creativity. Chief Executive Officer Ross Liang said Tencent Music is transitioning toward a broader membership-based model that goes beyond content subscriptions. The company is focusing on a “content and platform dual engine” strategy to improve user engagement and lifetime value. Liang said the company is using a tiered membership approach to address different user segments. Light users are being served through free and ad-supported models, while more engaged users are targeted with basic music services, fan clubs and products such as Bubble. The company did not disclose retention rates by subscription tier. Liang said retention was generally stable and said the company’s medium- and high-value users remained intact. He added that SVIP membership continued to grow steadily. Management said some quarter-over-quarter weakness in membership services was tied to competition in the music streaming business, particularly among free and ad-supported users. Liang said Kugou users are more price-sensitive and promotion-sensitive, while QQ Music’s operating data remained “steady and healthy.” Pang and Liang both emphasized Tencent Music’s efforts to expand beyond traditional streaming through concerts, merchandise, digital albums and fan memberships. Pang said the company renewed licensing arrangements with labels including JVR Music, Linfair Records and Mok-A-Bye Baby Music Limited, securing access to catalogs from artists including Jay Chou, Karen Mok, Harlem Yu and Angela Zhang. The company also deepened its strategic partnership with TF Entertainment. Pang cited Tencent Music’s collaboration with Jay Chou on the digital album “Children of the Sun,” which bundled the album with SVIP memberships and physical collectibles. He said the release was supported by a nationwide offline campaign across 45 cities, topped major charts, surpassed CNY 1 billion in sales and drove SVIP conversions. The company also highlighted recent collaborations and releases involving artists including Kun, Roy Wang, Silence Wang, Will Pan, Tia, Jane Zhang and others. Tencent Music said it staged flagship concerts involving K-pop groups BABYMONSTER and NCT WISH, and supported tours and performances in markets including Taiwan, Hong Kong, Singapore, Asia and North America. Liang said the company launched its first fan club, Romance Universe, with Silence Wang, offering benefits such as priority ticket access, unique content and artist-specific perks. He also pointed to merchandise distribution for artists and groups including TOP, Song Yuqi and Hu Xia. Hu said Tencent Music’s gross margin was 44.9% in the first quarter, up 0.8 percentage points from the prior-year period. She attributed the improvement to growth in membership and advertising revenue, lower channel fees and improved cost efficiency for IP-related services. Revenue from social entertainment services and others was RMB 1.4 billion, down 11% year over year. Operating expenses were RMB 1.2 billion. Selling and marketing expenses rose 36% year over year to RMB 271 million, which Hu said reflected increased channel spending in response to competition and efforts to reduce user churn. General and administrative expenses were RMB 940 million and remained relatively stable from a year earlier. Net profit attributable to equity holders was RMB 2.1 billion, compared with RMB 4.3 billion in the same period of 2025. Hu said the prior-year period included a RMB 2.4 billion gain from the disposal of an associate. Diluted earnings per ADS were RMB 1.34. The company reported adjusted EBITDA of RMB 2.8 billion, up 10% year over year, and non-GAAP net profit attributable to equity holders of RMB 2.3 billion, up 7%. As of March 31, Tencent Music had RMB 41 billion in cash equivalents, term deposits and short-term investments, compared with RMB 38 billion at the end of 2025. The company declared a dividend of $0.012 per ordinary share, or $0.24 per ADS, for 2025, with a $317 million cash payment made in April. Hu also said Tencent Music plans to complete its two-year stock repurchase program announced in March 2025 on time. Management said Tencent Music is deepening integration with the Tencent ecosystem, including WeChat Channels. Pang said users who discover music through short-form video can now jump directly to QQ Music, creating a path from discovery to legitimate listening, collection and higher-quality consumption. In response to an analyst question about Ximalaya, Liang said Tencent Music had received notice of approval from China’s State Administration for Market Regulation. He said Tencent Music and Tencent Group would follow SAMR’s requirements and commitments to proceed legally. Looking ahead, management did not provide a detailed revenue forecast. Pang said Tencent Music expects some short-term volatility in growth from membership and advertising because of competition, but remains optimistic about comprehensive IP-based monetization over the long term. Hu said second-quarter gross margin is expected to be on par with last year, while IP-related business growth may create structural pressure on margins. Tencent Music Entertainment Group (NYSE: TME) is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders. The company traces its roots to the consolidation of Tencent's music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tencent Music Entertainment Group Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.