First-time disclosure of non-subscription revenue highlights diversification achievements, and Tencent Music's steady growth path continues to broaden.

As the online music industry accelerates its shift from competing primarily on traffic scale to a new phase of comprehensive competition centered on ecosystem value, technology-driven user experience, and diversified monetization, Tencent Music’s financial results have become a key focus for capital markets.

The underlying logic is that, through a forward-looking strategic layout, Tencent Music has already built a diversified, integrated music services system. While establishing unique competitive advantages, it is also guiding the industry’s continued evolution.

This means that Tencent Music, already positioned to take the lead, will deeply influence how value is allocated across the industry value chain, and will become a critical lens for market observers and investors to assess the industry’s future and Tencent Music’s intrinsic value.

On March 17, Tencent Music once again demonstrated the effectiveness of its strategic deployment with performance data showing steady growth, and also confirmed the resilience of its business development under its unique competitive advantages.

According to the financial report, Tencent Music’s total revenue in 2025 was 32.9 billion yuan (RMB; the same applies below), up 15.8% year over year, setting a historical record high. Adjusted net profit rose 22% year over year to 9.92 billion yuan. This marks the company’s third consecutive year of sustained growth since 2023.

Specifically in the fourth quarter, Tencent Music’s total revenue for the reporting period was 8.64 billion yuan, up 15.9% year over year; net profit under non-IFRS (International Financial Reporting Standards) was 2.58 billion yuan. The double-digit growth in both total revenue and adjusted net profit indicates the certainty of Tencent Music’s steady development.

The strong performance of its online music business forms a solid foundation for steady growth in earnings. In particular, the online music subscription business continued to grow steadily. During the reporting period, the number of paid subscribers for online music reached 127.4 million. Monthly average revenue per paid user (ARPPU) increased to RMB 11.9 year over year, driving online music subscription revenue up 13.2% year over year to 4.56 billion yuan.

In addition, growth in online music non-subscription revenue, such as concerts and artist merchandise, exceeded market expectations. For the first time in this earnings report, Tencent Music disclosed that its fourth-quarter online music non-subscription revenue increased 40.8% year over year to 2.54 billion yuan. This further highlights the effectiveness of its diversified strategy. This business, together with the online music subscription business that has supported long-term steady growth, jointly underpins high-quality growth in online music service revenue.

Tencent Music’s core drivers of steady growth come from its ongoing “one body, two wings” strategy for content and platform. During the reporting period, Tencent Music also continued to deepen this strategy, further building a differentiated one-stop music services platform and continuously strengthening its core competitive advantage.

On the content side, Tencent Music has continued to provide diverse and differentiated content offerings to meet the needs of users across different circles, ages, and preferences. While attracting new users and improving user stickiness and engagement, it has continued to consolidate its advantages in classic content and high-quality original productions.

During the reporting period, after the Mid-Autumn Festival-themed song “Years and Years” (“岁岁年年”), jointly produced by TME’s production studio TME制作家工作室 and Xiao Zhan Studio (肖战工作室), launched and quickly went viral. It topped charts across 17 countries and regions, with the single-day reading volume on social media platforms exceeding 100 million. Multiple songs jointly produced by Tencent Music also appeared in the 2026 CCTV New Year Gala hosted by the China Central Broadcasting Television (中央广播电视总台春节联欢晚会), and quickly went viral. Among them, multiple works surpassed 10 million plays within one week.

Meanwhile, Tencent Music has built a high-quality live experience to further unlock IP value. While deeply meeting core users’ demands for experiences with strong emotional value-added components, it has continued to broaden the boundaries of its services, laying a solid foundation for exploring a wider market space.

During the reporting period, Tencent Music successfully held multiple flagship offline events. In particular, it organized 20 performances across 8 cities in the Asia-Pacific region for G-DRAGON 권지용’s (权志龙) management of a large-scale 2025 world tour, attracting a cumulative total of more than 260,000 attendees. In the fourth quarter, the two shows at Taipei Arena in Taipei, China, drew more than 75,000 attendees. These were the largest-scale performances Tencent Music has hosted for it to date.

On the platform side, Tencent Music has met the broad needs of different user groups through a multi-product, multi-scenario layout. Benefiting from deep collaboration with labels and artists, as well as the launch of high-value new entitlements, the number of Super Members surpassed 20 million by the end of 2025, reaching a new milestone (002219).

At the same time, Tencent Music uses AI to empower music creation and enhance users’ music experiences, driving music consumption in all directions. Its recently launched one-stop AI music production platform has empowered more than 150,000 music creators and over 10 million ordinary users to produce music more efficiently.

Through deep coordination between a “content ecosystem” and “platform services,” Tencent Music has built a self-reinforcing growth flywheel. This flywheel is driven by “deepening user value” as its core impetus. By continuously providing irreplaceable high-quality content and distinctive experiences, it keeps enhancing users’ willingness to pay and loyalty, thereby pushing the business onto a healthier, more sustainable growth trajectory.

Under this mechanism, the growth flywheel evolves into core competitive strengths that are difficult to imitate: high-quality content attracts users, while an outstanding platform experience and exclusive entitlements further strengthen user stickiness and sense of belonging—promoting the retention and conversion of more high-value users. The ensuing financial returns then continuously feed back into an even better and more differentiated content and services system, forming an accelerating virtuous cycle of “content—experience—value.”

Based on this, Tencent Music’s value focus has gradually shifted from fundamental dimensions such as catalog scale to comprehensive services that cover end-to-end experiences and emotional connection. This enables it to build an ecosystem-level advantage with clear differentiation, grounded in deep and broad industry capabilities.

The latest manifestation of this ecosystem-level advantage is that, while Tencent Music’s subscription business continues to develop steadily, it can continue to expand the boundaries of diversified services. This has also become an important driver behind its non-subscription revenue exceeding market expectations.

During the reporting period, Tencent Music rolled out a series of collectibles and merchandise around innovative physical releases, effectively boosting user engagement and sales conversion. Among them, Yu Shu xin’s collector’s edition physical album “Spicy Honey” sparked strong collector interest. Also, derived merchandise such as Zhang Yixing’s “The Great Voyages: No Distance Too Far” tour special commemorative gift box, and Lu Han’s “Meeting You Through the Four Seasons—2025 Asian Tour Memorial Book,” further extended the long-tail value of the live-performance IP and strengthened fan participation and emotional connection.

These cases show that Tencent Music has successfully transformed its large online user base and content ecosystem into offline value experiences such as box office performance for concert tickets and merchandise sales. This means Tencent Music is not only relying on a member subscription model; it is building an end-to-end commercial closed loop across all scenarios. This is the most direct confirmation of its ecosystem-level competitive advantage.

From a long-term perspective, Tencent Music still has a growth path with clear certainty. Its high-quality development is expected to continue to remain strong. On one hand, as its online music subscription business remains its growth base, with Gen Z becoming the main force of consumption, content quality continuing to improve, and the platform’s commercialization strategy becoming more refined, UBS expects that over the next 5–7 years, China’s music market paid conversion rates could approach international advanced levels. Meanwhile, Tencent Music’s SVIP user base reaching a new milestone indicates that users are willing to pay for high-quality diversified services, which is expected to support continued increases in ARPPU.

On the other hand, Tencent Music’s online music non-subscription business serves as a new growth driver. Businesses such as concerts and artist merchandise are growing rapidly and are gradually building another pillar for its earnings growth, further expanding the boundaries of its commerce.

Based on the high certainty of Tencent Music’s long-term steady growth, multiple securities firms and investment banks have issued research reports expressing optimism about Tencent Music’s future development. For example, Daiwa stated that it is optimistic about Tencent Music’s deepening of user value, as well as new revenue sources from offline music events and merchandise. It upgraded its rating of Tencent Music from “outperform the broader market” to “buy.”

Goldman Sachs also said it is optimistic about Tencent Music’s growth strategy that provides diversified services and improves membership penetration by increasing average revenue per paid user (ARPU). It maintained its “buy” rating on Tencent Music.

Given that Tencent Music has demonstrated to the market that its diversified integrated music services system has been built into a differentiated ecosystem-level competitive advantage with sustainable long-term growth potential through its steadily growing performance, when market sentiment recovers and value discovery once again dominates the investment logic, Tencent Music—whose outlook is more certain—may be among the first to see a re-rating. The current allocation window is therefore worth investors’ focused attention.