【TME Performance】Tencent Music Stock Price Plummets to 75% Valuation, US Stock Plunges 25%, Strong Earnings with Increased Dividend

Tencent Music (01698) (US: TME) states that the company’s business model has changed significantly in recent years. As advertising and other IP-related businesses continue to expand, and the company offers multi-tiered membership services for online music subscriptions, the contribution of each paying member to the overall business varies. Therefore, the company is increasingly focusing on revenue and profit as core performance indicators. Due to this development, starting from the next quarter, the company will cease disclosing certain quarterly operational metrics, including monthly active users of online music, paying users, and average revenue per paying user. The company will instead disclose the total number of paid music service users once a year at year-end.

Market concerns over reduced transparency caused Tencent Music’s US stock to plummet 25%, closing at $11.37, 22% below the Hong Kong closing price, with a trading volume of $780 million.

For the fourth quarter ending December 31, 2025, Tencent Music reported a diluted EPS of RMB 1.41 per American Depositary Share (ADS), up 12% year-over-year. Non-IFRS diluted EPS was RMB 1.6, up 9% year-over-year. The board announced a dividend of 12 US cents per ordinary share for fiscal year 2025, an increase of 33% year-over-year.

Tencent Music’s net profit for the fourth quarter increased 13% year-over-year to RMB 2.2 billion; non-IFRS net profit attributable to shareholders rose 9% to RMB 2.49 billion. Total revenue for Q4 was RMB 8.64 billion, up 16% year-over-year, mainly driven by strong growth in online music service revenue.

Tencent Music’s super membership count has surpassed 20 million

CEO Liang Zhu of Tencent Music Entertainment Group stated that with differentiated massive content rights and immersive experiences, the number of super members has exceeded 20 million. The average revenue per paying user per month remains steady, and the recently launched advertising membership subscription plan has made initial progress. Going forward, this will help the group further expand user reach and attract new audiences.

In Q4 2025, Tencent Music’s online music service revenue grew 22% year-over-year to RMB 7.1 billion; subscription revenue increased 13% to RMB 4.56 billion; non-subscription online music revenue grew 41% to RMB 2.54 billion; social entertainment and other service revenues declined 5% to RMB 1.54 billion.

In Q4, Tencent Music’s online music service had 530 million monthly active users, down 5% year-over-year; paying users increased 5% to 130 million; average revenue per paying user per month increased 7% to RMB 11.9.

Gross profit margin increased from 43.6% in the same period last year to 44.7%, mainly due to growth in music subscription and advertising revenue, and a decrease in revenue sharing from social entertainment services.

As of December 31, 2025, the total cash, cash equivalents, time deposits, and short-term investments amounted to RMB 38.04 billion.

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