HYBE revenue plummets, gets strong debuts from TWS and ILLIT

K-pop giant HYBE posted its lowest total revenue in two years as its recorded music division sank to its lowest level in seven quarters, the South Korean company said on Thursday (May 2).

HYBE had first-quarter revenue of 360.9 billion won ($271.5 million), down 12.1% year-on-year and the lowest since posting 285 billion won ($214.4 million) in the first quarter of 2022. Operating profit plummeted to 14.4 billion won ($10.8 million), down 72.6% from the year-ago period.

HYBE's share price was barely affected by the slowest quarter in years. The stock initially rose 1.7% to 205,500 won ($149.23), but by midday it had fallen to 201,500 ($146.33), down 0.2%. However, the stock is down 13.7% year-to-date and has fallen 12.6% in the past week following news that HYBE will report ADOR imprint CEO, Min Hee Jinto the police for “breach of trust and other related allegations”.

Earnings before taxes, interest and depreciation (EBITDA), a measure of profitability that strips out non-cash items, was 39.8 billion won ($29.9 million), down 45 percent year-on-year and the lowest since the first quarter of 2021.

Concert revenue of 44 billion won ($33.1 million) rose 74.5 percent year-on-year. While this was the largest annual increase of any category, the first quarter of 2023 was unusually slow. HYBE's latest quarter was on par with 45.3 billion won ($34.1 million) in concert revenue in the fourth quarter of 2021, the first quarter the company held shows after COVID-19 restrictions shut down the tour industry .

Recorded music, the company's largest segment at 40.2 percent of total revenue, fell 21.3 percent to 145.1 billion won ($109.2 million). HYBE successfully debuted two new groups during the quarter. Shiny Blue, the debut EP of PLEDIS Entertainment band TWS, sold 260,000 units in its first week and collected 500,000 units in its first nine weeks of release. Girl group EP ILLIT, Super Real Me, released through BELIFT LAB, sold 380,000 units in its debut week and reached the 500,000 mark in just four weeks. The single “Magnetic” debuted at No. 91 on the Billboard Hot 100 singles chart in April.

Merchandising and licensing fell 11.9 percent to 60.7 billion won ($45.7 million). Content fared worse, falling 29.8% to 61.1 billion won ($46 million).

Weverse, HYBE's social media platform, saw its monthly active users (MAU) decline for the second quarter. After peaking at 10.6 million MAUs in Q3 2023, MAUs fell to 10.1 million in Q4 and 9.2 million in Q1. Both average revenue per paying user and amount paid fell below the levels achieved in 2022 and 2023. HYBE does not provide specific numbers for either metric.