Tencent Music Entertainment Group Announces First Quarter 2026 Unaudited Financial Results

SHENZHEN, China, May 12, 2026 /PRNewswire/ -- Tencent Music Entertainment Group ("TME," or the "Company") (NYSE: TME and HKEX: 1698), the leading online music and audio entertainment platform in China, today announced its unaudited financial results for the first quarter ended March 31, 2026.

First Quarter 2026 Financial Highlights

Mr. Cussion Pang, Executive Chairman of TME, commented, "This quarter's steady results reflect the effectiveness of our holistic approach to the music ecosystem. By expanding how we serve and engage our audience, we have built a more diversified and resilient model, supported by continued strong growth beyond membership services in our music related business. While AI is broadening participation in content creation, it does not replace human creativity and, in many ways, reinforces the scarcity and intrinsic value of premium IP—which remains central to deeper engagement and greater wallet share. Rooted in strong copyright protection, we are committed to channeling this value to elevate the creative economy, unlock new opportunities across the music industry, and drive enduring long-term value."

Mr. Ross Liang, CEO of TME, continued, "As we operate in an increasingly competitive landscape, we remain focused on strengthening the resilience of our platform. Anchored by our content-and-platform dual engine, we continue to bolster differentiation, drive engagement, and expand user lifetime value. Leveraging Tencent's ecosystem, we are broadening user reach and deepening penetration, while advancing a tiered subscription strategy to better address diverse user needs. During the quarter, we delivered continued improvement in SVIP adoption and user engagement. Together, these initiatives position us to compete effectively while driving scalable growth and durable monetization over time."

First Quarter 2026 Operational Highlights

CONTENT – To unlock long-term value, we continued to invest in premium IP to drive differentiation and engagement, while leveraging AI to enrich content creation and improve efficiency.

PLATFORM – Sustained our user base through a multi-pronged approach and advanced a multi-tiered monetization strategy, including new offerings to capture demand for super-premium music experiences.

IP-VALUE – Adopted a holistic, pan-IP approach to amplify music influence, simultaneously boosting user reach, engagement, and wallet share.

First Quarter 2026 Financial Review

Total revenues increased by RMB539 million, or 7.3%, to RMB7.90 billion (US$1.15 billion) from RMB7.36 billion in the same period of 2025.

Cost of revenues increased by 5.7% year-over-year to RMB4.35 billion (US$630 million), mainly due to increased costs related to offline performances, advertising services and other IP related services. Meanwhile, revenue sharing fees decreased, resulting from declines in both revenue sharing ratio and revenues from social entertainment services.

Gross margin increased to 44.9% from 44.1% in the same period of 2025, primarily due to increase in revenues from membership services, along with decreased channel fee.

Total operating expenses increased by 5.9% year-over-year to RMB1.21 billion (US$176 million). Operating expenses as a percentage of total revenues decreased to 15.3% from 15.5% in the same period of 2025.

On an IFRS basis, net profit and net profit attributable to equity holders of the Company for the first quarter of 2026 were RMB2.14 billion (US$310 million) and RMB2.09 billion (US$303 million), respectively. Basic and diluted earnings per American Depositary Shares ("ADS") for the first quarter of 2026 were RMB1.36 (US$0.20) and RMB1.34 (US$0.19), respectively. The Company had weighted averages of 1.54 billion basic and 1.56 billion diluted ADSs outstanding, respectively. Each ADS represents two of the Company's Class A ordinary shares.

On a non-IFRS basis, adjusted EBITDA for the first quarter of 2026 were RMB2.83 billion (US$410 million). Non-IFRS net profit was RMB2.33 billion (US$338 million) and non-IFRS net profit attributable to equity holders of the Company was RMB2.27 billion (US$330 million). Non-IFRS basic and diluted earnings per ADS were RMB1.48 (US$0.21) and RMB1.46 (US$0.21), respectively. Please refer to the section in this press release titled "Non-IFRS Financial Measures" for details.

As of March 31, 2026, the combined balance of the Company's cash, cash equivalents, term deposits and short-term investments amounted to RMB41.00 billion (US$5.94 billion), compared with RMB38.04 billion as of December 31, 2025.

Declaration and Payment of 2025 Dividend

On March 17, 2026, the Company's board of directors declared a cash dividend of US$0.12 per ordinary share, or US$0.24 per ADS, for the year ended December 31, 2025, to holders of record of ordinary shares and ADSs as of the close of business on April 2, 2026. The payment for the cash dividend of US$370 million was made in April 2026.

Environmental, Social, and Governance ("ESG")

On April 20, 2026, we released our 2025 ESG Report, detailing our progress in empowering creators, promoting digital inclusion, and driving sustainability across our value chain. These initiatives have strengthened our ecosystem's resilience, leading to improved ESG ratings and broader recognition from our stakeholders.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8980 to US$1.00, the noon buying rate in effect on March 31, 2026, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

Non-IFRS Financial Measures

The Company uses non-IFRS financial measures for the period, including non-IFRS net profit, adjusted EBITDA(inc.SBC) and adjusted EBITDA, in evaluating its operating results and for financial and operational decision-making purposes. TME believes that non-IFRS financial measures help identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that the Company includes in its profit for the period. TME believes that non-IFRS financial measures for the period provide useful information about its results of operations, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

Non-IFRS financial measures for the period should not be considered in isolation or construed as an alternative to operating profit, net profit for the period or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review non-IFRS financial measures for the period and the reconciliation to its most directly comparable IFRS measure. Non-IFRS financial measures for the period presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. TME encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

Adjusted EBITDA(inc.SBC) for the period represents net profit for the period excluding income tax expense, finance cost, share of profit/loss of associates and joint ventures, other gains/losses, interest income, depreciation of property, plant and equipment and right-of-use assets, and amortization of intangible assets.

Adjusted EBITDA for the period represents net profit for the period excluding income tax expense, finance cost, share of profit/loss of associates and joint ventures, other gains/losses, interest income, depreciation of property, plant and equipment and right-of-use assets, amortization of intangible assets, and share-based compensation expenses.

Non-IFRS net profit for the period represents profit for the period excluding amortization of intangible and other assets arising from business acquisitions or combinations, share-based compensation expenses, net losses/gains from investments and related income tax effects.

Please see the "Unaudited Non-IFRS Financial Measures" included in this press release for a full reconciliation of adjusted EBITDA(inc.SBC), adjusted EBITDA and non-IFRS net profit for the period to its net profit for the period.

[1] Starting from the first quarter of 2026, "online music services" has been renamed to "music related services" to better reflect the nature of our businesses included in this business line. Such change does not affect the amounts of our historical revenue or its accounting treatment.

[2] As part of music related services, membership services primarily consist of membership fees paid for membership benefits and privileges, including access to music and audio content, and other benefits and privileges within music related services. Revenues from membership services for each quarter of 2025 were RMB4,284 million, RMB4,434 million, RMB4,564 million and RMB4,625 million, respectively.

[3] See the sections entitled "Non-IFRS Financial Measures" and "Unaudited Non-IFRS Financial Measures" for more information about the non-IFRS measures referred to within this announcement.

[4] Names grouped by artists and bands, sorted in alphabetical order by family names.

About Tencent Music Entertainment

Tencent Music Entertainment Group (NYSE: TME and HKEX: 1698) is the leading online music and audio entertainment platform in China, operating the country's highly popular and innovative music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. TME's mission is to create endless possibilities with music and technology. TME's platform comprises online music, online audio, online karaoke, music-centric live streaming and online concert services, enabling music fans to discover, listen, sing, watch, perform and socialize around music. For more information, please visit ir.tencentmusic.com.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Investor Relations Contact

Tencent Music Entertainment Group

[email protected]

+86 (755) 8601-3388 ext. 885034

TENCENT MUSIC ENTERTAINMENT GROUP

CONSOLIDATED INCOME STATEMENTS

Three Months Ended March 31

2025

2026

RMB

US$

Unaudited

(in millions, except per share data)

Revenues

Music related services*

5,804

6,514

944

Social entertainment services and others

1,552

1,381

200

7,356

7,895

1,145

Cost of revenues

(4,114)

(4,349)

(630)

Gross profit

3,242

3,546

514

Selling and marketing expenses

(199)

(271)

(39)

General and administrative expenses

(944)

(940)

(136)

Total operating expenses

(1,143)

(1,211)

(176)

Interest income

297

246

Other gains, net

2,440

Operating profit

4,836

2,647

384

Share of net profit/(loss) of investments accounted

for using equity method

(7)

(1)

Finance cost

(25)

(46)

(7)

Profit before income tax

4,834

2,594

376

Income tax expense

(446)

(457)

(66)

Profit for the period

4,388

2,137

310

Attributable to:

Equity holders of the Company

4,291

2,091

303

Non-controlling interests

Earnings per share for Class A and Class B

ordinary shares

Basic

1.40

0.68

0.10

Diluted

1.39

0.67

0.10

Earnings per ADS (2 Class A shares equal to 1 ADS)

Basic

2.81

1.36

0.20

Diluted

2.77

1.34

0.19

Shares used in earnings per Class A and Class B

ordinary share computation:

Basic

3,054,522,173

3,081,340,243

Diluted

3,093,008,542

3,111,369,968

ADS used in earnings per ADS computation

Basic

1,527,261,087

1,540,670,122

Diluted

1,546,504,271

1,555,684,984

* Starting from the first quarter of 2026, "online music services" has been renamed to "music related services" to better

reflect the nature of our businesses included in this business line. Such change does not affect the amounts of our historical

revenue or its accounting treatment.

TENCENT MUSIC ENTERTAINMENT GROUP

UNAUDITED NON-IFRS FINANCIAL MEASURES

Three Months Ended March 31

2025

2026

RMB

US$

Unaudited

(in millions, except per share data)

Profit for the period

4,388

2,137

310

Adjustments:

Income tax expense

446

457

Finance cost

Share of net (profit)/loss of investments accounted for

using equity method

(23)

Operating profit

4,836

2,647

384

Other gains, net

(2,440)

(66)

(10)

Interest income

(297)

(246)

(36)

Depreciation of property, plant and equipment and

right-of-use assets

Amortisation of intangible assets

275

298

Adjusted EBITDA(inc. SBC)

2,412

2,668

387

Share-based compensation

150

163

Adjusted EBITDA

2,562

2,831

410

Profit for the period

4,388

2,137

310

Adjustments:

Amortization of intangible and other assets arising from

business acquisitions or combinations*

105

Share-based compensation

161

163

Gains from investments**

(2,375)

(2)

Income tax effects***

(53)

(54)

(8)

Non-IFRS Net Profit

2,226

2,333

338

Attributable to:

Equity holders of the Company

2,124

2,273

330

Non-controlling interests

102

Earnings per share for Class A and Class B

ordinary shares

Basic

0.70

0.74

0.11

Diluted

0.69

0.73

0.11

Earnings per ADS (2 Class A shares equal to 1 ADS)

Basic

1.39

1.48

0.21

Diluted

1.37

1.46

0.21

Shares used in earnings per Class A and Class B

ordinary share computation:

Basic

3,054,522,173

3,081,340,243

Diluted

3,093,008,542

3,111,369,968

ADS used in earnings per ADS computation

Basic

1,527,261,087

1,540,670,122

Diluted

1,546,504,271

1,555,684,984

* Represents the amortization of identifiable assets, including intangible assets such as domain name, trademark, copyrights,

supplier resources, corporate customer relationships and non-compete agreement etc., and fair value adjustment on music content

(i.e., signed contracts obtained for the rights to access to the music contents for which the amount was amortized over the

contract period), resulting from business acquisitions or combination.

** Including the net gains/losses on deemed disposals/disposals of investments, fair value changes arising from investments,

impairment provision of investments and other expenses in relation to equity transactions of investments.

*** Represents the income tax effects of Non-IFRS adjustments.

TENCENT MUSIC ENTERTAINMENT GROUP

CONSOLIDATED BALANCE SHEETS

As at December 31, 2025

As at March 31, 2026

RMB

US$

Audited

Unaudited

(in millions)

ASSETS

Non-current assets

Property, plant and equipment

1,201

1,301

189

Land use rights

2,290

2,272

329

Right-of-use assets

287

272

Intangible assets

2,899

2,770

402

Goodwill

20,521

20,528

2,976

Investments accounted for using equity method

1,659

2,593

376

Financial assets at fair value through other comprehensive income

26,231

19,866

2,880

Other investments

303

299

Prepayments, deposits and other assets

365

418

Deferred tax assets

498

535

Term deposits

13,810

14,330

2,077

70,064

65,184

9,450

Current assets

Inventories

Accounts receivable

3,903

3,825

555

Prepayments, deposits and other assets

4,183

4,036

585

Other investments

Term deposits

15,763

8,254

1,197

Restricted Cash

Cash and cash equivalents

8,470

18,416

2,670

32,458

34,667

5,026

Total assets

102,522

99,851

14,475

EQUITY

Equity attributable to equity holders of the Company

Share capital

Additional paid-in capital

29,919

30,020

4,352

Shares held for share award schemes

(801)

(821)

(119)

Treasury shares

(664)

(96)

Other reserves

22,450

17,156

2,487

Retained earnings

29,381

28,647

4,153

80,287

74,340

10,777

Non-controlling interests

2,763

2,790

404

Total equity

83,050

77,130

11,182

LIABILITIES

Non-current liabilities

Borrowings

1,100

159

Notes payables

3,497

3,443

499

Other payables and other liabilities

379

425

Deferred tax liabilities

504

588

Lease liabilities

200

188

Deferred revenue

303

356

4,883

6,100

884

Current liabilities

Accounts payable

6,284

6,176

895

Other payables and other liabilities

3,558

5,460

792

Current tax liabilities

1,092

1,059

154

Lease liabilities

116

111

Deferred revenue

3,539

3,815

553

14,589

16,621

2,410

Total liabilities

19,472

22,721

3,294

Total equity and liabilities

102,522

99,851

14,475

TENCENT MUSIC ENTERTAINMENT GROUP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31

2025

2026

RMB

US$

Unaudited

(in millions)

Net cash provided by operating activities

2,519

2,332

338

Net cash (used in)/provided by investing activities

(3,221)

6,650

964

Net cash (used in)/provided by financing activities

(456)

1,011

147

Net (decrease)/increase in cash and cash equivalents

(1,158)

9,993

1,449

Cash and cash equivalents at beginning of the period

13,164

8,470

1,228

Exchange differences on cash and cash equivalents

(47)

(7)

Cash and cash equivalents at end of the period

12,022

18,416

2,670

SOURCE Tencent Music Entertainment Group