Tencent Music reported non-IFRS earnings per ADS of US$0.10 and revenue of US$859 million for the second quarter of 2019.
Tencent Music Entertainment, a Chinese music streaming services company, recently released its revenue and earnings results for the second quarter of 2019. The company saw its stock tumbling more than 5% in after-hours trading on the day it announced the results. This was surprising because the company reported results that surpassed Wall Street estimates. For the second quarter, the non-IFRS diluted earnings per American depositary share for the second quarter was 10 cents, whereas analysts had expected around 9 cents. Revenue in the second quarter reached $859 million, beating the estimate of $843 million. It showed an increase of over 30% from the revenue earned in the year-ago quarter.
“Tencent Music is happy with Q2 results driven by the strength of both our social entertainment and online music businesses. With 2.6 million paying users sequentially added, the rise in our online music paying users sped up during Q2. Our company continued to expand its music content leadership through partnership with more music labels and also through addition of more content including long-form audio such as podcasts and audio books, short-form videos, and music-centric variety shows,” said CEO of Tencent Music, Cussion Pang.
Highest net addition achieved with increase in total number of online music paying users
“Tencent Music added strength to its alliances for producing and distributing more high-quality original soundtracks, including our company’s partnerships within the Tencent ecosystem for developing original music content for TV shows, films, and games. In social entertainment, our company not only expanded its user base effectively through a lite version app and mini-program, but also enhanced user engagement through addition of new features to products, especially social features with impressive user participation. We’re happy with our company’s progress and confident that these initiatives will be leading to further growth in the year’s second half,” added Pang.
With a Y-o-Y growth of more than 30%, total number of online music paying users touched 31 million in Q2 2019, with the highest net addition since Q1 2018. Gross margin was almost 33% and gross profit jumped just over 8% to reach US$283 million. Operating profit rose to US$158 million, representing a Y-o-Y increase of 7%. Non-IFRS net profit attributable to equity holders of Tencent Music increased to US$164 million.