Tencent Music Entertainment Group (TME) investor relations material

Executive summary

• Achieved robust revenue and profit growth in 2025, driven by music subscriptions, advertising, offline performances, and artist merchandise.

• Online music services revenue grew 21.7% in Q4 2025, with diversified monetization and strong user engagement.

• Maintained leadership in China's music and audio entertainment market, leveraging innovative technology and expanding partnerships.

• Enhanced profitability with expanding gross and net margins, supported by robust cash generation.

• SVIP membership surpassed 20 million, with ARPPU trending upward and new ad-supported plans gaining traction.

Financial highlights

• Q4 2025 total revenue grew 16% year-on-year to CNY 8.6 billion; music subscription revenue up 13% to CNY 4.6 billion.

• Online music services revenue reached RMB7.10bn in Q4 2025, up 21.7% YoY; full-year revenue was RMB32.9bn, up 15.8%.

• Q4 gross margin was 44.7%, up 1.1 percentage points year-on-year; full-year gross margin was 44.2%.

• Q4 net profit increased 10% to RMB 2.3 billion; non-GAAP net profit up 8% to CNY 2.6 billion; non-IFRS net profit for Q4 was RMB2.58bn, up 7.6% YoY.

• Declared a cash dividend of $0.24 per ADS for 2025, totaling $368 million, payable in April 2026.

Outlook and guidance

• 2026 gross margin expected to be flat or slightly lower than 2025, with positive impact from subscription and advertising growth.

• Will discontinue quarterly disclosure of certain operating metrics, shifting focus to annual reporting of total paying users and prioritizing revenue and profit.

• Continued investment in content, IP, and technology, with focus on AI integration and diversified monetization.

• Anticipates short-term subscription revenue pressure due to competition, but expects holistic and sustainable growth via tiered memberships and non-subscription services.