ENTERTAINMENT
SM Entertainment Reports Robust Q1 2025 Financial Results with Significant Profit Surge
On the 7th, SM Entertainment (hereafter SM), led by co-CEOs Jang Cheol-hyuk and Tak Young-jun, announced its consolidated financial performance for Q1 2025, reporting a revenue of 231.4 billion KRW, an operating profit of 32.6 billion KRW, and a net profit of 242.9 billion KRW. Compared to the same period last year, revenue increased by 5.2%, operating profit surged by 109.6%, and net profit skyrocketed by 1,852.4%, largely due to the acquisition of shares in DearU.
On a separate basis, SM recorded a revenue of 165.5 billion KRW, an operating profit of 41.3 billion KRW, and a net profit of 32.2 billion KRW, marking increases of 21.5%, 105.2%, and 94.1% respectively from the previous year. Despite a decline in album sales, the rise in digital music revenue, expansion of global concerts, and increased MD/IP licensing revenue drove the improved performance.
In Q1, the rookie girl group Hearts2Hearts made a strong debut, surpassing 400,000 copies in first-week sales with their debut single. SMTR25, a group of 25 trainees, is already building a fanbase with high anticipation even before their official debut.
DearU, acquired in March, will be included as a consolidated subsidiary from Q2, contributing to SM's financials. Collaborations with Tencent Music for expansion into China, along with the expansion of SM IP and global reach, are expected to create long-term synergies.
In the MD/IP licensing sector, SM diversified its revenue streams by hosting various pop-up stores and collaborations with global brands, such as RIIZE's character pop-up store and SHINee Key's collaboration with Hello Kitty.
SM is focusing on securing new growth drivers by actively promoting global activities for its artists and aiming for high growth in secondary IP businesses. In April, NCT WISH released their second mini-album, achieving their first million-seller status and breaking their own records. EXO's Kai also released his fourth mini-album, continuing his dynamic activities as a world-class performer.
In May, RIIZE's first full album, Red Velvet-Irene & Seulgi's mini-album, and SHINee's single will be released. Following these, NCT Doyoung's second solo album, Hearts2Hearts' single, and aespa's single will be unveiled.
In the third quarter, SM plans to release new albums from a diverse lineup of artists, including SUPER JUNIOR's 20th-anniversary album, NCT DREAM's new full album, and aespa's mini-album.
Additionally, global fans can look forward to concerts from Kai's solo tour, RIIZE's debut tour, Red Velvet-Irene & Seulgi's tour, and NCT DREAM's fourth concert tour in major cities worldwide.
Co-CEO Jang Cheol-hyuk stated, "The rapid establishment of new IPs and our IP monetization strategy have driven growth. Moving forward, we will continue to pursue diversification of our IP business and accelerate global market expansion based on the SM 3.0 strategy, while maintaining qualitative growth through revenue growth and improved profitability."
Reported by Kim Ji-won, TenAsia one@tenasia.co.kr
