South Korea-headquartered entertainment powerhouse HYBE has published its financial results for Q3 2024 (the three months ending September 30).
During the quarter, across all of its divisions, the company generated 527.8 billion South Korean Won (USD $389.2 million at the average exchange rate for the quarter).
This represents a 1.9% YoY drop and a 17.6% slump versus the previous quarter (Q2), according to the company’s latest earnings report published Tuesday (November 5).
The company’s “artist indirect-involvement” segment, which includes merchandising and licensing, content, and the Weverse fan platform, reported revenue of KRW 205 billion ($151.2 million) up 31.8% YoY and down 5.4% QoQ. In Q2, the segment reported double-digit growth on a YoY and QoQ basis.
Notably, the Weverse platform witnessed a slight increase in its monthly active users (MAUs) to 9.7 million from 9.6 million in Q2. During the reporting quarter, HYBE rolled out new features for Weverse including dark mode, a new community tab, content recommendations based on region/country, and advanced language translation features. The app has also integrated Weverse Shop, which sells exclusive merch, books, photos, and annual fan-club memberships.
Digging deeper into HYBE’s “artist indirect-involvement” segment, the company’s ‘Fan Club, etc’ revenues rose 23.4% YoY to KRW 26 billion ($19.2 million).
Merchandising and licensing revenues climbed 15.7% YoY to KRW 99.1 billion ($73.1 million).
Elsewhere in the company’s financial report, HYBE reported that revenue from its “artist direct-involvement” segment, which includes recorded music, concerts, ads, and appearances, fell 15.5% YoY to KRW 323 billion ($238.2 million). On a QoQ basis, the figure also plummeted 23.8%.
The company’s recorded music revenues declined 18.8% YoY in Q3 to KRW 214.5 billion ($158.2 million), while revenues from concerts were down 14.8% YoY to KRW 74 billion ($54.6 million).
Meanwhile, operating profit continued to decline in Q3, falling 25.4% YoY to KRW 54.2 billion. The operating profit margin rose to 10.3% from 7.9% in Q2.
For the first nine months of 2024, HYBE’s accumulated revenue amounted to KRW 1.53 trillion ($1.13 billion), down from KRW 1.57 trillion in the year-ago period. However, HYBE said in a press release cited by local media that the company is poised to achieve the KRW 2 trillion mark in annual revenue for the second straight year.
HYBE attributed part of the performance downturn to the Paris Olympics, which affected album release scheduling. “There was a global event, the Olympics, so no albums were released during this period,” the company was quoted by Yonhap News Agency as saying. This reportedly affected the group’s “artist direct-involvement” segment.
The company also faces ongoing internal challenges, including a legal dispute with former ADOR CEO Min Hee-jin, which recently resulted in a court dismissing her reinstatement bid on October 29. The dispute with Min has spilled over into the K-pop world, with ADOR girl group NewJeans expressing their support for the former ADOR CEO.
Despite these headwinds, HYBE saw underwhelming album sales from acts like Enhypen and Boynextdoor, while NewJeans achieved a new milestone with their Japanese debut single becoming a million-seller, Yonhap said. BTS member Jimin and Le Sserafim also contributed positively to chart performance, the report said.
Looking ahead, HYBE projects improved sales in Q4, with planned album releases from several artists including BTS’ Jin, Enhypen, Le Sserafim, and Boynextdoor. This outlook is backed by Seventeen’s recent success, whose 12th EP Spill the Feels achieved strong first-week sales of 3.16 million copies, according to Yicai.
During a conference call, CEO Lee Jae-sang vowed to “calmly continue” HYBE’s business, while focusing on “fundamental values.” The executive also pledged continued support for NewJeans, Yonhap reported.
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