Tencent Music Entertainment Group (HKEX: 01698; NYSE: TME) reported unaudited results for the quarter and year ended 31 December 2025, showing double-digit top-line growth and a sharp jump in full-year earnings.

Financial Performance • Fourth-quarter revenue rose 15.90% year on year to RMB8.64 billion (US$1.24 billion), while net profit attributable to equity holders increased 12.60% to RMB2.20 billion (US$0.32 billion). • Full-year revenue expanded 15.80% to RMB32.90 billion (US$4.71 billion). Net profit attributable to equity holders grew 66.40% to RMB11.06 billion (US$1.58 billion), boosted by a RMB2.37 billion gain from the deemed disposal of an associate in 1Q25. • On a non-IFRS basis, full-year net profit attributable to equity holders advanced 25.00% to RMB9.59 billion (US$1.37 billion).

Revenue Mix • Online music services contributed RMB26.73 billion (US$3.82 billion) for 2025, up 22.90% and accounting for 81.30% of total revenue. – Music subscription income climbed 16.00% to RMB17.66 billion (US$2.53 billion). – Non-subscription music services (including advertising, live events and merchandise) jumped 39.20% to RMB9.07 billion (US$1.30 billion). • Social entertainment services and others declined 7.30% to RMB6.18 billion (US$0.88 billion).

Margins and Expenses • Full-year gross margin improved to 44.20% from 42.30%, aided by higher-margin subscription and advertising revenue, and a lower revenue-sharing ratio in social entertainment. • Operating expenses rose 3.90% to RMB4.86 billion (US$0.70 billion), but the expense ratio fell to 14.80% of revenue from 16.50% in 2024, reflecting improved operating leverage. • Full-year operating profit increased 53.40% to RMB13.36 billion (US$1.91 billion).

Balance Sheet and Cash Flow • Cash, cash equivalents, term deposits and short-term investments totaled RMB38.04 billion (US$5.44 billion) at end-2025, versus RMB36.08 billion three months earlier. • Net cash from operations remained robust at RMB10.23 billion (US$1.46 billion) for the year.

Dividend • The Board approved a cash dividend of US$0.24 per ADS (two Class A shares), equivalent to an aggregate payout of about US$368 million, payable in April 2026 to shareholders on record as of 2 April 2026.

Operational Highlights • Online music monthly active users stood at 528.00 million in 4Q25 (-5.00% YoY); paying users rose 5.30% to 127.40 million, lifting monthly ARPPU by 7.20% to RMB11.90. • The SVIP subscriber base surpassed 20.00 million, supported by expanded privileges such as early concert ticket access and premium audio. • Content partnerships deepened with Warner Music Group, Bin-music, Media Asia Music and Korean label P NATION, while self-produced hits and K-pop additions bolstered engagement. • AI initiatives empowered over 150,000 artists and 10.00 million users with an in-house music production platform, and AI-driven recommendation achieved record-high stream shares.

Reporting Changes Starting 1Q26, the company will cease quarterly disclosure of online-music MAUs, paying users and ARPPU, shifting focus to revenue and profit metrics. Annual disclosure of total paying users will continue.