Tencent Music's Q3 2025 performance exceeds expectations, with AI and competitive landscape drawing attention

2026-02-21 18:47:20

Economic Observer Network: Tencent Music Entertainment Group (TME) has recently demonstrated steady financial performance and deepened strategic layout, while facing new market competition and technological challenges.

Performance and Operating Conditions

In the third quarter of 2025, Tencent Music’s total revenue reached 8.46 billion yuan, a year-on-year increase of 20.6%, with adjusted net profit rising 27.7% year-on-year to 2.48 billion yuan. Revenue from online music services grew 27.2% year-on-year, and paying users increased by 1.3 million quarter-on-quarter to 126 million. Non-subscription business revenue increased 50.3% year-on-year, becoming a growth highlight. Institutions expect its Non-IFRS net profit for 2025 and 2026 to continue growing, with a positive trend in gross margin.

Industry and Risk Analysis

ByteDance’s “Fanqie Music” has seen rapid growth in monthly active users, complementing “Qishui Music,” which may intensify competition in the music streaming market. Meanwhile, companies like Kunlun Wanwei (300418) are adopting free strategies in AI music to expand market share and bypass domestic copyright barriers, posing long-term challenges to industry structure. Tencent Music itself continues to invest in AI to optimize services.

Strategic Advancement

The company adheres to the “One Body, Two Wings” strategy, deepening cooperation with global record labels, expanding its proprietary IP portfolio, and making long-term investments in offline performances. Additionally, Tencent Music has partnered with Billboard data provider Luminate to incorporate Chinese music consumption data into the international chart system for the first time, aiming to enhance its global content influence.

Industry Status

The rapid growth of paid users for music live streaming indicates the industry’s move toward professionalism and interactivity, which may indirectly influence Tencent Music’s social entertainment business competition strategies.

The above content is compiled from publicly available information and does not constitute investment advice.

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