CJ ENM CO (035760) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached KOR 1.1383 trillion, with operating profit at KOR 700 million, essentially break-even, and net income of KOR 35.3 billion.

• Profitability was weighed down by weak viewership and a sluggish ad market, but recovery is expected from H2 2025, driven by strong content and live commerce growth.

• Strategic focus remains on content quality, creator/artist IP, global content distribution, and profit-oriented management.

Financial highlights

• Music label sales grew 35.5% YoY, with revenue at W167.2bn (+32.9% YoY), driven by overseas performance, but operating profit fell 43.9% YoY.

• Mobile live commerce transaction amount surged 92.4% YoY in Q1, with commerce revenue at W362.3bn (+4.2% YoY) and OP W26.2bn.

• Studio Dragon posted Q1 revenue of KOR 133.8 billion (-30.3% YoY) and operating profit of KOR 4.3 billion (-80.1% YoY), with negative growth due to fewer episodes and weak overseas sales.

• Entertainment revenue was W776.0bn (-3.8% YoY), and media platform revenue W292.8bn (-6.8% YoY), pressured by TV ad contraction and content amortization.

• Operating cash flow turned positive in 2024 and remains positive in 2025, with net borrowing reduced to KOR 1.5 trillion in Q2 2025.

Outlook and guidance

• Profitability recovery is anticipated from the second half of 2025, with 2Q25 targeting expanded content distribution and ad revenue rebound.

• TV ad market and TVING traffic expected to improve, lifting profits.

• Music business expects improved profitability in Q2 with new album releases and global concerts.

• Commerce segment to enhance profitability through high-margin portfolios, tailored curation, and global expansion, especially in Japan.

• Studio Dragon aims for results improvement in Q2 with new hit IP, Japanese titles, and cost settlement practices targeting a 10% production cost cut.