Tencent Music Entertainment Group (NYSE: TME), a unit of China-based internet giant Tencent Holdings, reported profit for the fourth quarter compared to a loss last year. The bottom-line benefited from a 35% increase in revenues and also topped the Street view.
Revenues increased to RMB 7.29 billion or $1.05 billion in the fourth quarter from RMB 5.40 billion in the same period of last year. Both online music services and social entertainment services registered double-digit growth. The top-line particularly benefited from a further uptick in music subscriptions.
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There was a 48% annual growth in online music paying users to 39.9 million. Online music ARPPU was up 8.1% year-over-year.
Net income was RMB 1.04 billion or $150 million in the December-quarter, which marked an improvement from the year-ago period when the company incurred a loss. Earnings were RMB 0.62 per ADS or $0.09 per ADS. On an adjusted basis, the company reported earnings of RMB 0.80 per ADS or $0.12 per ADS, which exceeded the forecast.
“Our powerful music content underlies the accelerating growth in online music subscribers on our platform. For 2020, we will continue to innovate to bring an even more engaging music experience to the users on our platform, and expand via partnerships with China Literature and others into the broader audio entertainment space,” said CEO Cussion Pang.
During the quarter, Tencent entered into strategic partnerships with music labels both at home and overseas, strengthening its content base. Besides, it upgraded the Tencent Musician Program, which has been quite popular among emerging indie artists.
Tencent shares have been in a free fall for the past several months and hit an all-time low this week. The stock, which has lost 13% since the beginning of the year, closed Monday’s trading sharply lower. However, it regained strength during the after-hours session.