South Korea-headquartered entertainment giant HYBE has published its financial results for Q2 2024 (the three months ending June 30).
During the quarter, the company generated 640.5 billion South Korean Won (USD $465 million) across all of its divisions.
According to the company’s latest earnings report, published Wednesday (August 7), this represents a 3.1% YoY increase and a 77.5% jump from the previous quarter (Q1).
The company’s “artist indirect-involvement” segment, which includes merchandising and licensing, content, and the Weverse fan platform, booked a 17.4% YoY and 50.5% QoQ increase in revenue to 216.58 billion South Korea Won.
It also marked a recovery from Q1 when revenue from the segment declined 18.3% YoY to 143.94 billion South Korean won as the Weverse fan platform suffered a drop in its monthly active users (MAUs) to 9.2 million.
Digging deeper into HYBE’s “artist indirect-involvement” segment, the company’s ‘Fan Club, etc’ revenues specifically rose 8.6% YoY to 23.69 billion South Korean won.
Merchandising and licensing revenues fell 2.5% YoY to 109.09 billion South Korea won.
Most recently, HYBE noted a rebound in Weverse users, with the number of monthly active users growing 4% from Q1 to 9.6 million (see below).
In June alone, Weverse’s MAUs exceeded 10 million, boosted by fans celebrating BTS Jin‘s military discharge and 2024 FESTA.
“Owing to the increasing use of Weverse DM, Weverse recorded its highest average revenue per paying user (ARPPU) and payment since its launch,” HYBE said in a statement accompanying its Q2 results.
Last week, HYBE announced that it will be adding subscription-based memberships to its Weverse platform as part of its HYBE 2.0 global business strategy. The company also plans to “fully implement” advertising across “certain areas” of the Weverse app by the end of the year.
Weverse has recently added global artists such as Ariana Grande, YOASOBI, Lauv, and Conan Gray to the platform. It also secured an investment from Universal Music Group (UMG) earlier this year, strengthening a 10-year distribution deal for HYBE’s music.
“During Q2, most HYBE MUSIC GROUP APAC’s artists made a triumphant comeback, collectively selling more than 15 million physical albums accounting for 34% of total album sales in Korea.”
HYBE
Elsewhere in the company’s financial report, the company reported that revenue from its “artist direct-involvement” segment, which includes recorded music, concerts, ads, and appearances, fell 2.9% YoY to 423.89 billion South Korea Won.
However, on a QoQ basis, the figure nearly doubled, rising 95.4% from 216.98 billion South Korean won when HYBE suffered from lower turnover from recorded music sales.
The company’s recorded music revenues grew 1.5% YoY in Q2 to 249.55 billion South Korean won, while revenues from concerts were down 8.6% YoY to 143.99 billion South Korean won.
“During Q2, most HYBE MUSIC GROUP APAC’s artists made a triumphant comeback, collectively selling more than 15 million physical albums accounting for 34% of total album sales in Korea,” the company said.
“HYBE artists dominated the streaming market as well, representing 8 out of the 10 most-streamed K-pop tracks globally (excluding Korea) in the first half of 2024, as reported by Spotify’s Global Impact List.”
Meanwhile, operating profit slumped 37.4% YoY to South Korea Won, which the company attributed to initial expenses for new businesses and artists. However, the figure recovered on a QoQ basis by 253.9%. Net profit also tumbled 85.9% YoY to 16.53 billion South Korea Won, but jumped 49% from Q1.
Looking ahead, HYBE expects profitability to improve as tech initiatives gain traction and artists ramp up their activities.
HYBE last week unveiled its HYBE 2.0 strategy, outlining a number of plans including launching a new division called HYBE MUSIC GROUP APAC, which will oversee all of the company’s music label businesses based in Korea and Japan.
HYBE also revealed plans to make “discreet investments” in gaming, audio/voice technology, generative AI, Original Story Business (OSB), and Integrated online and offline experiences.
Commenting on the company’s Q2 results, Jason Jaesang Lee, CEO of HYBE, said: “The second half of 2024 marks the beginning of our new era that focuses on fostering music, platform, and tech-driven future growth initiatives for long term success.
“HYBE will further solidify its core capabilities in music, while structuring both future IPs and fandom business models that reflect the changing market environment.”Music Business Worldwide