Tencent Music’s quarterly revenue jumps on strong subscriber growth

Tencent Music Entertainment surpassed first-quarter revenue expectations on Tuesday on the back of strong subscriber growth in its online music services, particularly in its long-form audio content.

The Chinese music streaming giant has heavily invested in long-form content, like podcasts and audiobooks, as part of its bet on the Super VIP (SVIP) program, which bundles high-quality audio, online karaoke and exclusive event access.

This has helped Tencent Music offset weakness in its social entertainment business, impacted by the removal of certain live-streaming features such as virtual lucky draws to comply with Beijing’s anti-gambling regulations.

First-quarter revenue from music subscriptions grew 16.6 per cent to 4.22 billion yuan ($586.1 million), while paying users increased by 8.3 per cent to 122.9 million. CEO Ross Liang cited long-form audio as a key driver for SVIP business growth on an earnings call.

U.S.-listed shares of the company were last up 1 per cent after having declined as much as 7 per cent in early trading. The stock has jumped more than 26 per cent so far this year, through the last close.

“The Q1 print is a solid one … (The stock move) is mostly due to positions, as many investors had expected such strength and bought shares ahead of the earnings. They are now taking profit,” said Charlie Chai, vice head of research at 86Research.

Revenue rose 8.7 per cent to 7.36 billion yuan in the March quarter, beating estimates of 7.27 billion yuan, according to LSEG data.

Its adjusted profit of 1.37 yuan per American Depository Share (ADS) topped estimates of 1.33 yuan.

“Tencent Music’s continued innovation in AI-powered personalization, long-form audio and fan-driven commerce, combined with cost discipline and increased content scale, will support margin expansion and deeper monetization through the second half of 2025,” said CFRA Research analyst Ahmad Halim.

Revenue from the social entertainment business, which includes karaoke app WeSing and live concert platform Kuwo Music, fell 11.9 per cent to 1.55 billion yuan.

($1 = 7.2001 Chinese yuan renminbi)

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