Tencent Music posts strong Q4 profit but flags key metrics shift

Tencent Music Entertainment Group (NYSE:TME) reported robust fourth-quarter earnings, driven by beardown gross maturation successful its online euphony business, but announced a alteration successful disclosure of idiosyncratic metrics that sent its shares down much than 20% connected Tuesday morning.

Total gross for Q4 2025 roseate 15.9% year-on-year to RMB8.64 cardinal (US$1.24 billion), boosted by a 21.7% leap successful online euphony services to RMB7.10 cardinal (US$1.02 billion). Revenue from euphony subscriptions grew 13.2% to RMB4.56 cardinal (US$653 million), portion different music-related services, including concerts, advertising, and creator merchandise, surged 40.8% to RMB2.54 cardinal (US$363 million).

Non-IFRS diluted net per American Depositary Share (ADS) reached RMB1.60 (US$0.23), up from RMB1.47 a twelvemonth earlier, portion IFRS diluted net per ADS accrued to RMB1.41 (US$0.20) from RMB1.26.

CEO Ross Liang highlighted the company’s AI-driven initiatives and user-focused strategies. “Notably, driven by differentiated, expansive contented privileges and immersive experiences, our SVIP idiosyncratic basal surpassed 20 million, with ARPPU continuing to inclination upward,” helium said, adding that a recently launched ad-supported subscription program is opening to pull caller audiences.

Despite the beardown gross and nett figures, Jefferies analysts flagged a cardinal reddish flag: Tencent Music volition discontinue disclosure of definite quarterly operating metrics, including monthly progressive users (MAU), paying users, and mean gross per paying idiosyncratic (ARPPU), starting adjacent quarter. The institution volition study full paying users annually instead.

Jefferies noted that portion the institution continues to put successful euphony contented and IP development, the absorption connected gross and nett arsenic superior show indicators reduces transparency for investors tracking idiosyncratic engagement trends.

Q4 gross nett grew 19% year-on-year to RMB3.86 billion, with a non-IFRS nett borderline of 28.8%. Total monthly progressive users fell 5% year-on-year to 528 million, beneath expert expectations.

Looking ahead, Tencent Music expects Q1 2026 gross to diminution 9% quarter-on-quarter but turn 7% year-on-year to RMB7.88 billion, with subscription and different euphony work revenues projected to proceed dependable maturation amid a competitory market.