Tencent Music Entertainment (NYSE:TME) shares rose Wednesday after the company posted third-quarter results that topped expectations.
Revenue came in at $1.19 billion, up 20.6% year-over-year (Y/Y) , driven by robust growth in online music services. Analysts had projected $1.11 billion.
China’s online music and audio entertainment platform’s adjusted EPADS of 22 cents (1.54 Chinese yuan) topped the analyst consensus estimate of 20 cents.
Also Read: Tencent Music Profits And Premium Sign-Ups Climb Despite Fewer Listeners
Subscription Momentum and User Trends
Revenues from music subscriptions were $632 million, representing 17.2% Y/Y growth.
Monthly active users (MAUs) for online music declined by 4.3% Y/Y to 551 million.
Paying users for online music grew by 5.6% Y/Y to 125.7 million.
The monthly average revenue per user (ARPPU) for online music grew by 10.2% Y/Y to 11.9 Chinese yuan.
Margins and Profitability Improve
Gross margin increased to 43.5% from 42.6%, primarily due to strong growth in revenues from music subscriptions and advertising services, and the decline in revenue sharing ratio of social entertainment services.
Adjusted net profit was $338 million, up by 32.6% Y/Y. Total cash, equivalents, term deposits, and short-term investments as of September 30, 2025, were $5.07 billion.
Management Commentary Highlights Innovation
TME Executive Chairman Cussion Pang said the company achieved strong third-quarter results driven by solid growth in its online music business.
Continuous innovation in content, expanded live experiences, and consistent subscription growth boosted both recurring and non-subscription revenue streams, including concerts and artist merchandise.
CEO Ross Liang noted that TME's ecosystem continued to strengthen as personalized offerings and deeper user insights improved loyalty, leading to higher SVIP penetration and ARPPU.
Price Action: TME shares were trading higher by 2.84% to $21.34 premarket at last check Wednesday.
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