SHENZHEN - Tencent Music Entertainment Group (NYSE:TME) reported third quarter earnings that fell short of analyst expectations, sending shares down 5.89% in premarket trading on Tuesday.
The Chinese music streaming giant posted adjusted earnings per American Depositary Share (ADS) of RMB1.01 ($0.14), missing the consensus estimate of RMB1.13. Revenue came in slightly ahead at RMB7.02 billion ($1.0 billion), compared to expectations of RMB7.01 billion.
Despite the earnings miss, Tencent Music saw solid growth in its core music subscription business. Music subscription revenues jumped 20.3% year-over-year to RMB3.84 billion ($547 million), driven by a 15.5% increase in paying users to 119 million. Monthly average revenue per paying user (ARPPU) also grew 4.9% to RMB10.8.
"Our commitment to high-quality growth is reflected in another solid quarterly performance. The steady expansion of our music subscribers and diversified music services continue to drive overall growth and profitability," said Cussion Pang, Executive Chairman of Tencent Music.
However, the company's social entertainment segment continued to decline, with revenues falling 23.9% year-over-year to RMB1.54 billion ($219 million). Tencent Music cited adjustments to certain live-streaming features and stricter compliance procedures as reasons for the drop.
Overall revenue for the quarter increased 6.8% from the same period last year. The company ended the quarter with RMB36.04 billion ($5.14 billion) in cash and short-term investments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.