Tencent Music Entertainment Group (NYSE:TME) posted third-quarter earnings that topped market forecasts, supported by strong growth in its online music segment. Shares of the company rose 2.41% in pre-market trading following the announcement.
The Chinese music streaming giant reported adjusted earnings per ADS of RMB1.54 ($0.22), narrowly beating analyst expectations of RMB1.52. Total revenue climbed 20.6% year-over-year to RMB8.46 billion ($1.19 billion), surpassing the consensus estimate of RMB8.23 billion. The growth was primarily driven by a 27.2% increase in online music services revenue, which reached RMB6.97 billion ($979 million).
Music subscription revenue advanced 17.2% YoY to RMB4.50 billion ($632 million), while average revenue per paying user (ARPPU) rose to RMB11.9, up from RMB10.8 a year earlier. Paying users for online music increased 5.6% to 125.7 million, although total monthly active users declined 4.3% to 551 million.
“In the third quarter, we delivered another set of solid results, underpinned by the well-rounded performance of our online music business,” said Cussion Pang, Executive Chairman of Tencent Music. “Our ongoing innovations in content enrichment, services expansion to include more live experiences continued to fuel consistent subscription revenue growth while boosting momentum in non-subscription services.”
Gross margin improved to 43.5%, up from 42.6% a year earlier, supported by higher revenues from subscriptions and advertising, as well as a reduced revenue-sharing ratio within the social entertainment business.
As of September 30, 2025, Tencent Music held RMB36.08 billion ($5.07 billion) in cash, cash equivalents, term deposits, and short-term investments — an increase from RMB34.92 billion in the previous quarter.