SHENZHEN, China, May 12, 2026 /PRNewswire/ -- Tencent Music Entertainment Group ("TME," or the "Company") (NYSE: TME and HKEX: 1698), the leading online music and audio entertainment platform in China, today announced its unaudited financial results for the first quarter ended March 31, 2026.
First Quarter 2026 Financial Highlights
-- Total revenues were RMB7.90 billion (US$1.15 billion), representing a
7.3% year-over-year increase, primarily due to strong growth in revenues
from music related services[1].
-- Revenues from music related services[1] were RMB6.51 billion (US$944
million), representing 12.2% year-over-year growth. Revenues from
membership services[2] were RMB4.57 billion (US$662 million),
representing 6.6% year-over-year growth. Revenues from music related
services other than membership services were RMB1.94 billion (US$282
million), representing 28.0% year-over-year growth.
-- On an IFRS basis:
-- Net profit attributable to equity holders of the Company was
RMB2.09 billion (US$303 million), compared with RMB4.29 billion in
the same period of 2025, as the Company has recognized a gain of
RMB2.37 billion on deemed disposal of an associate in the first
quarter of 2025.
-- Diluted earnings per ADS was RMB1.34 (US$0.19), compared with
RMB2.77 in the same period of 2025.
-- On a non-IFRS basis:
-- Adjusted EBITDA[3] was RMB2.83 billion (US$410 million),
representing 10.5% year-over-year growth.
-- Non-IFRS net profit attributable to equity holders of the
Company[3] was RMB2.27 billion (US$330 million), representing 7.0%
year-over-year growth.
-- Non-IFRS diluted earnings per ADS was RMB1.46 (US$0.21), up from
RMB1.37 in the same period of 2025.
-- Total cash, cash equivalents, term deposits and short-term investments as
of March 31, 2026 were RMB41.00 billion (US$5.94 billion).
Mr. Cussion Pang, Executive Chairman of TME, commented, "This quarter's steady results reflect the effectiveness of our holistic approach to the music ecosystem. By expanding how we serve and engage our audience, we have built a more diversified and resilient model, supported by continued strong growth beyond membership services in our music related business. While AI is broadening participation in content creation, it does not replace human creativity and, in many ways, reinforces the scarcity and intrinsic value of premium IP--which remains central to deeper engagement and greater wallet 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."
Mr. 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 by our content-and-platform dual engine, we continue to bolster differentiation, 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 us to compete effectively while driving scalable growth and durable monetization over time."
First Quarter 2026 Operational Highlights
CONTENT -- 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.
-- 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]. 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.
-- Captured more user mindshare with our proprietary content. High-impact
releases--including Zhou Shen's chart-topping theme song for Sony
Pictures' Project Hail Mary--collectively drove incremental streams
across our self-produced catalog and further enhanced its visibility.
-- 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.
PLATFORM -- 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.
-- 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.
-- 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.
-- 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, JC-T, and Karry Wang as ambassadors for a variety of
collaborations. We also introduced tailored collections for leading K-pop
artists such as BLACKPINK, EXO, and IVE, combining digital albums with
physical collectibles including NFC cards.
-- 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.
IP-VALUE -- Adopted a holistic, pan-IP approach to amplify music influence, simultaneously boosting user reach, engagement, and wallet share.
-- Extended the IP 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 where combined digital and physical benefits drove strong
engagement and generated over RMB100 million in sales.
-- Achieved triple-digit year-over-year 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, China, and NCT WISH's concerts in Hong Kong, China, 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.
First Quarter 2026 Financial Review
Total revenues increased by RMB539 million, or 7.3%, to RMB7.90 billion (US$1.15 billion) from RMB7.36 billion in the same period of 2025.
-- Revenues from music related services increased by 12.2% to RMB6.51
billion (US$944 million), compared with RMB5.80 billion in the same
period of 2025. The increase was driven by solid growth in revenues from
membership services and offline performances related services,
supplemented by growth in revenues from advertising services. Revenues
from membership services were RMB4.57 billion (US$662 million),
representing 6.6% year-over-year growth, compared with RMB4.28 billion in
the same period of 2025. The growth was mainly driven by our continuous
expansion of SVIP 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 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.
-- Revenues from social entertainment services and others decreased by 11.0%
to RMB1.38 billion (US$200 million) from RMB1.55 billion in the same
period of 2025.
Cost of revenues increased by 5.7% year-over-year to RMB4.35 billion (US$630 million), mainly due to increased costs related to offline performances, advertising services and other IP related services. Meanwhile, revenue sharing fees decreased, resulting from declines in both revenue sharing ratio and revenues from social entertainment services.
Gross margin increased to 44.9% from 44.1% in the same period of 2025, primarily due to increase in revenues from membership services, along with decreased channel fee.
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