Tencent Music Entertainment Group (TME) recently declared impressive financial outcomes for the final quarter of 2024, driven by a robust increase in its music subscription sector and enhanced profitability. The company's revenue climbed to RMB7.46 billion, reflecting an 8.2% rise year-over-year, primarily due to its online music services. TME also reported significant growth in paying subscribers and improved profit margins.
In addition to its financial achievements, TME emphasized its commitment to enhancing user experience through content innovation and strategic partnerships with tech-driven companies like BYD and XPENG. With a strong cash position and plans to integrate AI into personalized services, TME aims to continue leading advancements in the music industry landscape.
Revenue Growth and Subscriber Expansion
The fourth quarter of 2024 witnessed remarkable financial progress for TME, as total revenues rose significantly compared to the previous year. This growth was largely attributed to a surge in online music service revenues, which increased by 16.1%, reaching $799 million. Furthermore, the company’s paying user base expanded substantially, adding two million new subscribers in just one quarter, bringing the total number to 121 million.
TME's executive chair, Cussion Pang, noted that the year marked solid advancement for the company, particularly within its online music business. This segment not only contributed to overall revenue growth but also played a crucial role in expanding profit margins. The company’s net profit surged by 47.3%, reaching $284 million, while operating profit increased by 40.5%. These figures reflect the effectiveness of TME’s initiatives across the music value chain, which have reshaped the industry and enriched its ecosystem. Additionally, full-year results highlighted a steady climb in both total revenues and music subscription revenues, showcasing the company's ability to sustain growth over time.
Innovation and Technological Integration
Beyond financial metrics, TME has placed a strong emphasis on user experience enhancement and content innovation. CEO Ross Liang underscored the importance of these factors in driving the company’s stellar performance throughout 2024. By enriching its content ecosystem through technology integration, TME has been able to further innovate and lead the way in music content consumption. The SVIP premium membership program demonstrated sequential growth in memberships alongside improved ARPPU and engagement levels.
TME's efforts extend beyond traditional music platforms, as it forged expanded partnerships with mapping services and electric vehicle manufacturers such as BYD and XPENG. These collaborations aim to enhance in-car music consumption, thereby broadening the scope of music delivery channels. Moreover, TME integrated DeepSeek LLM into song creation processes and launched virtual fan-artist communities for various acts. Looking forward to 2025, the company intends to leverage the power of AI to personalize its services and deliver innovative experiences to users. With a robust cash position of $5.15 billion as of December 31, 2024, TME remains well-equipped to pursue ambitious technological and strategic objectives in the coming years.