Tencent Music Reports Q1 Revenue of $980M, Net Profit Down 34% YoY

Tencent Music, a digital audio streaming platform operated by Chinese internet giant Tencent, released its unaudited financial report for the first quarter ended March 31, 2022 on Tuesday morning. The report shows that its revenue in the first quarter was 6.64 billion yuan ($980 million), down 15.1% year-on-year. The net profit attributable to shareholders of the company was 609 million yuan, down 34% year-on-year.

Data show that in the first quarter of 2022, Tencent Music’s online music subscription revenue increased by 17.8% year-on-year to 1.99 billion yuan. Revenue from social entertainment services and other businesses was 4.03 billion yuan, down 20.6% year-on-year.

Online mobile monthly active users (MAU) during the period totaled 604 million, down 1.8% year-on-year. The decline was reportedly due primarily to the short-term loss of some casual users and the reduction of promotional expenses under the company’s prudent cost control measures. In the first quarter, the number of mobile MAUs of the platform’s social entertainment services was 162 million, down 27.7% compared with 224 million in the same period last year.

Tencent Music’s online paying users amounted to 80.2 million in the first quarter, up 31.7% year-on-year. Compared with the previous quarter, the number of paid users of Tencent Music increased by 4 million.

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Based on an internal strategy referred to as “One Body and Two Wings,” the company seeks to continuously enhance the four pillars of music entertainment: listen, watch, sing and play. Taking “listen” as an example, the company took the lead in launching three professional playing functions in Chinese. As of the end of the first quarter, driven by optimization algorithms, the penetration rate of intelligent recommendations within the firm’s QQ Music reached a new high.

In terms of “play,” Tencent Music plans to launch virtual concerts and other featured activities with the “TMELAND Virtual Music Carnival” in the second quarter of the year.

In the financial report, the company also disclosed progress regarding its stock repurchase scheme. According to the 2022 stock repurchase plan announced by the company on March 28, 2021, Tencent Music has repurchased about 73.3 million ADSs in cash from the open market as of the financial report’s release, with a total repurchase amount of about $674 million.