Tencent Music Entertainment Group (NYSE:TME) Announces Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Key Points

• Tencent Music beat earnings estimates, reporting $0.25 EPS versus the $0.24 consensus, while quarterly revenue rose 5.8% year over year to $1.32 billion. Net margin was 26.45%.
• Growth was led by music-related services, subscriptions, and IP-driven businesses such as concerts and digital albums. The Ximalaya consolidation added roughly RMB 0.4 billion in revenue and expands the company’s broader music-and-audio platform.
• Management cited competitive pressure on subscriptions, weaker advertising trends, and modest margin pressure ahead. Shares fell after the release, while analysts’ average rating remained “Hold,” despite ongoing buybacks and a planned potential new repurchase program.

Tencent Music Entertainment Group (NYSE:TME - Get Free Report) released its quarterly earnings data on Tuesday. The company reported $0.25 earnings per share for the quarter, beating analysts' consensus estimates of $0.24 by $0.01, reports. Tencent Music Entertainment Group had a net margin of 26.45% and a return on equity of 11.20%. The business had revenue of $1.32 billion during the quarter. During the same quarter in the prior year, the firm posted $1.55 earnings per share. The firm's quarterly revenue was up 5.8% on a year-over-year basis.

Here are the key takeaways from Tencent Music Entertainment Group's conference call:

• Q2 revenue increased 6% year over year to RMB 8.9 billion, with music-related services up 11% and membership revenue up 8% to RMB 4.8 billion. Adjusted EBITDA rose 5% to RMB 3.3 billion, while net profit reached RMB 2.5 billion.
• IP-driven businesses—including concerts, merchandise, digital albums, and artist-related services—continued to deliver strong double-digit growth. Management expects these diversified monetization channels to provide relatively steady growth despite competitive pressure on subscriptions and advertising.
• The consolidation of Ximalaya contributed approximately RMB 0.4 billion in Q2 revenue and expands Tencent Music into a broader music-and-audio platform. Management highlighted potential long-term synergies from audiobooks, podcasts, children’s content, advertising, shared technology, and richer SVIP benefits.
• Competition and weaker traffic trends moderated underlying music subscription growth, particularly among casual and light users, while advertising faced macroeconomic and market headwinds. Management expects full-year operating expenses to rise modestly, net profit margin to come under slight pressure due partly to higher interest expense, and second-half gross margin to decline slightly year over year.
• Tencent Music ended the quarter with RMB 44.2 billion in cash, deposits, and short-term investments and repurchased 43.5 million ADSs for USD 400 million during Q2. Management said it remains on track to complete the existing USD 1 billion buyback program and is preparing for a potential new repurchase plan.

Tencent Music Entertainment Group Price Performance

Shares of Tencent Music Entertainment Group stock traded down $0.32 during trading on Wednesday, hitting $8.40. The stock had a trading volume of 8,316,599 shares, compared to its average volume of 9,248,015. The company has a current ratio of 2.09, a quick ratio of 2.08 and a debt-to-equity ratio of 0.06. Tencent Music Entertainment Group has a 12 month low of $7.94 and a 12 month high of $26.70. The firm has a market cap of $13.22 billion, a price-to-earnings ratio of 10.50, a P/E/G ratio of 1.49 and a beta of 0.84. The business's 50-day moving average is $8.98 and its 200 day moving average is $10.86.

Wall Street Analysts Forecast Growth

Several brokerages have recently weighed in on TME. Mizuho reduced their price target on Tencent Music Entertainment Group from $18.00 to $15.00 and set an "outperform" rating for the company in a research report on Wednesday. Zacks Research raised Tencent Music Entertainment Group from a "strong sell" rating to a "hold" rating in a report on Tuesday, May 19th. Weiss Ratings upgraded Tencent Music Entertainment Group from a "hold (c-)" rating to a "hold (c)" rating in a research report on Wednesday, July 1st. China Renaissance downgraded shares of Tencent Music Entertainment Group from a "buy" rating to a "hold" rating and set a $9.30 price target on the stock. in a report on Wednesday. Finally, JPMorgan Chase & Co. cut their price objective on shares of Tencent Music Entertainment Group from $12.00 to $10.00 and set a "neutral" rating for the company in a research report on Thursday, May 14th. Four investment analysts have rated the stock with a Buy rating and nine have given a Hold rating to the stock. According to data from MarketBeat.com, the company currently has an average rating of "Hold" and an average target price of $18.80.

Hedge Funds Weigh In On Tencent Music Entertainment Group

Several hedge funds and other institutional investors have recently added to or reduced their stakes in TME. Royal Bank of Canada raised its holdings in shares of Tencent Music Entertainment Group by 9.0% in the 1st quarter. Royal Bank of Canada now owns 144,475 shares of the company's stock valued at $2,082,000 after acquiring an additional 11,979 shares in the last quarter. AQR Capital Management LLC grew its holdings in shares of Tencent Music Entertainment Group by 107.5% during the first quarter. AQR Capital Management LLC now owns 85,450 shares of the company's stock worth $1,231,000 after purchasing an additional 44,265 shares in the last quarter. Jones Financial Companies Lllp bought a new position in shares of Tencent Music Entertainment Group in the first quarter worth approximately $985,000. Acadian Asset Management LLC increased its position in shares of Tencent Music Entertainment Group by 385,900.0% in the first quarter. Acadian Asset Management LLC now owns 50,180 shares of the company's stock worth $722,000 after purchasing an additional 50,167 shares during the last quarter. Finally, EverSource Wealth Advisors LLC raised its stake in Tencent Music Entertainment Group by 83.0% in the second quarter. EverSource Wealth Advisors LLC now owns 3,005 shares of the company's stock valued at $59,000 after purchasing an additional 1,363 shares in the last quarter. 24.32% of the stock is currently owned by hedge funds and other institutional investors.

Tencent Music Entertainment Group News Roundup

Here are the key news stories impacting Tencent Music Entertainment Group this week:

• Positive Sentiment: TME reported second-quarter revenue of RMB8.93 billion (approximately $1.32 billion), up 5.8% year over year and ahead of expectations. Growth was driven primarily by music-related services, subscription expansion, concert activity, and the integration of Ximalaya. Tencent Music second-quarter 2026 financial results
• Positive Sentiment: The company signaled another share-buyback round while combining Ximalaya with its music business into a broader music-and-audio platform. Buybacks could support per-share value, while the acquisition may expand TME’s addressable market and cross-selling opportunities. TME buyback and Ximalaya integration
• Neutral Sentiment: Mizuho lowered its price target from $18 to $15 but maintained an “outperform” rating. The revised target still implies substantial upside, indicating continued long-term confidence despite lower near-term expectations. Mizuho rating update
• Negative Sentiment: China Renaissance downgraded TME from “buy” to “hold” and assigned a $9.30 target. Although that target remains above the recent trading level, the downgrade adds pressure and suggests limited near-term upside in the analyst’s view. China Renaissance rating update
• Negative Sentiment: The stock declined after the earnings release even though revenue exceeded expectations. Investors may be focused on the modest 5.8% growth rate, uncertainty surrounding Ximalaya integration, and whether the strong reported earnings comparison will translate into sustained operating momentum. Tencent Music shares slide after second-quarter results

About Tencent Music Entertainment Group

Tencent Music Entertainment Group NYSE: TME is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders.

The company traces its roots to the consolidation of Tencent's music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity.

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