Tencent Music Entertainment Group (TME) Q4 2025 earnings summary

Executive summary

• Achieved robust revenue and profit growth in 2025, driven by music subscriptions, advertising, offline performances, and artist merchandise, with online music services as a key driver.

• Dual-engine strategy focusing on content and platform innovation, including AI integration, led to margin expansion and increased user engagement.

• Maintained leadership in China's music and audio entertainment market with a large user base and innovative technology.

• Expanded partnerships with major music labels and artists, enhancing IP value and fan-based consumption.

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

Financial highlights

• Q4 2025 total revenue grew 16% year-on-year to CNY 8.6 billion; online music services revenue up 21.7% to RMB7.10bn; music subscription revenue up 13% to CNY 4.6 billion.

• Non-subscription music services revenue rose 41% year-on-year to CNY 2.5 billion.

• 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.

• Full-year 2025 revenue reached CNY 32.9 billion, up 16% year-over-year; non-GAAP net profit up 22% to CNY 9.9 billion; LTM 2025 total revenues were RMB32.9bn with a 30.2% adjusted net margin.

• Gross margin for Q4 2025 was 44.7%, up 1.1 percentage points year-on-year.

Outlook and guidance

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

• Net profit margin for 2026 projected to be similar to or slightly below 2025.

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

• Continued investment in content, IP, and technology, with focus on sustainable growth and diversified monetization.

• AI and three-tier membership system to drive long-term user engagement and revenue.