HYBE's net income fell 86% in the second quarter of 2024 as total revenue improved 3.1% to a quarterly record of 640 billion won ($482 million), the company said on Tuesday (Aug 6).
The South Korean K-pop giant splits its financial results into two main categories: segments with direct artist involvement, such as recorded music and concerts, and those with indirect artist involvement, such as fan clubs, licensing and merchandise. In the second quarter, indirect revenue flows rose 17.4 percent to 217 billion won ($163 million). Direct revenue fell 2.9 percent to 424 billion won ($319 million) as concerts fell 8.6 percent to 144 billion won ($108 million), while recorded music improved 1.5 percent to 250 billion won ($188 million).
Operating profit—total revenue minus cost of sales and operating expenses—fell 37.4 percent to 51 billion won ($38 million), a smaller decline than net income due to a sharp drop in non-operating income . Earnings before taxes, interest and depreciation (EBITDA), a measure of the company's cash earnings from operations, fell 24.6 percent to 79 billion won ($59 million).
The results for the first six months of the year were, in general, slightly worse than a year earlier. Although total revenue exceeded 1 trillion won ($741 million) for the second consecutive year, the figure was 2.9% lower than last year. First-half operating profit, net income and EBITDA were also lower than the first half of 2023.
HYBE sold fewer albums in the first half of the year, but dominated the sales charts in South Korea and Japan. Led by Seventeen's 4.4 million albums sold in the first half of the year, HYBE had 9 of the top 20 artists ranked by album sales in South Korea. Seventeen Best album “17 Is Right Here” ranked second in Japanese album sales with 423,000 units while the SEVENTEENTH Heaven: 11th Mini album ranked 6th with 242,000 units. In the US, Tomorrow X Together's Minisode 3: TOMORROW ranked No. 2 in CD sales behind Taylor Swift's Department of Tormented Poets.
Streaming accounted for 35% of recorded music revenue, compared to the first half of 2023. In a first-of-its-kind analysis of the company's streaming revenue, HYBE revealed that domestic streaming revenue for its HYBE labels in South Korea was 18 billion won ($18 million), less than half the amount from full-year 2023. (It did not provide first-half streaming revenue figures for those labels' streaming revenue outside of South Korea). HYBE's US labels—Big Machine Label Group and Quality Control—also had streaming revenue of 61 billion won in the first half.
Weverse, HYBE's social media platform, had 9.6 million monthly active users, up from 9.2 million in the first quarter and even with 9.6 million MAUs a year earlier. Beyond traditional social media functions, Weverse also has an e-commerce component, the Weverse Shop, and live streams of artist talks and concerts. Ariana Grande joined the platform in July, along with HYBE artists like BTS and ENHYPEN and non-HYBE acts like BLACKPINK and NCT-127.
This is a period of transformation for the company that was built on the global success of boy band BTS, but is now expanding into new markets and initiatives. In July, HYBE was named Jason Jaesang Lee as its new CEO to lead its strategic growth announced on August 1. Dubbed 'HYBE 2.0', the plan restructures the company to drive global expansion and focus on technology-driven initiatives. HYBE Music Group APAC combines its record companies in South Korea and Japan. The Braun scooterLed by HYBE America will bring management to its label operations. Social media platform Weverse will launch a subscription tier. HYBE is also accelerating its efforts in gaming, AI, audio and voice technology.
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