Despite posting double-digit revenue and profit gains for Q3 2025, Tencent Music shares sank about 12% in Hong Kong on Thursday.

The QQ, Kugou, Kuwo, and WeSing operator detailed its seemingly solid third-quarter performance yesterday, pointing to 20.6% year-over-year (YoY) revenue growth to CNY 8.46 billion (currently $1.19 billion).

That growth percentage, execs noted during the corresponding earnings call, is Tencent Music’s best since Q1 2021. And in keeping with more recent trends, the lion’s share of the Ximalaya parent’s third-quarter revenue derived from core streaming (and especially subscription) operations.

All told, 551 million MAUs (down 4.3% YoY) drove the company’s online music services revenue to $979.93 million/CNY 6.97 billion (up 27.2% YoY) on the quarter, the report shows.

Therein, 125.7 million paid users (up 5.6% YoY) fueled a 17.2% YoY subscription revenue improvement to $632.67 million/CNY 4.50 billion, per the business. (The long-sliding social entertainment category once again dipped, this time by 2.7% YoY to $209.48 million/CNY 1.49 billion.)

Furthermore, average revenue per paid user grew 10.2% YoY to $1.67/CNY 11.90, the breakdown indicates. Regarding the discrepancy between the top-level subscription revenue and ARPPU increases: The SVIP tier remains a key focus for Tencent Music, which has added lossless to the diehard-geared package and is teeing up a spatial audio launch.

Also factoring into the superfan offering are QQ’s AI-equipped 「interactive community,」 Bubble, early access to albums, and 「collectible NFC cards,」 according to Tencent Music.

Additionally, Tencent Music reported Q3 net profit of $302.27 million/CNY 2.15 billion, representing a 36% YoY spike but a bit of a slide from Q2’s $338.83 million/CNY 2.41 billion.

The quarterly falloff may have contributed to the company’s valuation decline during today’s trading.

Macquarie maintained its Outperform rating on Tencent Music while lowering its price target to $28.30 from $29.80 on on investment outlook.