Tencent Music Entertainment Group Announces Second Quarter 2026 Unaudited Financial Results

SHENZHEN, China, Aug. 11, 2026 /PRNewswire/ -- Tencent Music Entertainment Group ("TME," or the "Company") (NYSE: TME and HKEX: 1698), the leading all-in-one music and audio entertainment platform in China, today announced its unaudited financial results for the second quarter ended June 30, 2026.

Second Quarter 2026 Financial Highlights

Mr. Cussion Pang, Executive Chairman of TME, commented, "Our second-quarter results reflect the continued strength of our content-and-platform strategy. Concerts, merchandise, and other IP-driven experiences drove another quarter of solid growth in our marketing and consumption services, underscoring our ability to unlock greater value from premium music IP. Our expansion into digital audio through the integration of Ximalaya broadened our reach and enriched our ecosystem. As the industry evolves, we continue to champion copyright protection, foster a healthy ecosystem, and safeguard the value of creative work."

Mr. Ross Liang, CEO of TME, continued, "Amid a rapidly evolving market, we remain steadfast in building an ecosystem where our users can discover, connect, and be inspired through music and audio experiences. Our focus on differentiated content and a vibrant community continues to deepen engagement with our core users, and SVIP membership continues to grow. The addition of Ximalaya is an exciting milestone that will allow us to deliver an even richer audio experience and serve our users more effectively. Together, we are shaping the future of music and audio entertainment and unlocking long-term growth."

Second Quarter 2026 Operational Highlights

Products & Services – Elevated the music experience through continuous product innovation, ecosystem integration, and thoughtful AI application, to expand user reach and deepen engagement.

IP-Centric Content Ecosystem – Deepened strategic partnerships, strengthened proprietary IP capabilities, and expanded presence in digital audio to reinforce long-term IP value.

Holistic IP Value Creation – Extended the value of premium IPs beyond streaming through digital and physical experiences, deepening fan engagement and driving diversified growth.

Second Quarter 2026 Financial Review

Total revenues increased by RMB491 million, or 5.8%, to RMB8.93 billion (US$1.32 billion) from RMB8.44 billion in the same period of 2025. The revenue generated from Ximalaya was RMB407 million (US$60 million) [6].

Cost of revenues increased by 6.2% year-over-year to RMB4.98 billion (US$735 million), mainly due to increased costs related to offline performances, and higher long-form audio content costs due to expansion of content library. Meanwhile, revenue sharing fees decreased, resulting from declines in both revenue sharing ratio and revenues from social entertainment services.

Gross margin was 44.2%, compared with 44.4% in the same period of 2025. The consolidation of Ximalaya had a positive impact to our gross margin of this quarter.

Total operating expenses increased by 12.0% year-over-year to RMB1.30 billion (US$191 million). Operating expenses as a percentage of total revenues increased to 14.5% from 13.7% in the same period of 2025. The increase was primarily due to the consolidation of Ximalaya, including the amortization of intangible assets arising from the acquisition.

On an IFRS basis, net profit and net profit attributable to equity holders of the Company for the second quarter of 2026 were RMB2.55 billion (US$376 million) and RMB2.47 billion (US$364 million), respectively. Basic and diluted earnings per American Depositary Shares ("ADS") for the second quarter of 2026 were RMB1.58 (US$0.23) and RMB1.57 (US$0.23), respectively. The Company had weighted averages of 1.56 billion basic and 1.58 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 second quarter of 2026 were RMB3.25 billion (US$480 million). Non-IFRS net profit was RMB2.78 billion (US$410 million) and non-IFRS net profit attributable to equity holders of the Company was RMB2.69 billion (US$396 million). Non-IFRS basic and diluted earnings per ADS were RMB1.72 (US$0.25) and RMB1.70 (US$0.25), respectively. Please refer to the section in this press release titled "Non-IFRS Financial Measures" for details.

As of June 30, 2026, the combined balance of the Company's cash, cash equivalents, term deposits and short-term investments amounted to RMB44.22 billion (US$6.52 billion), compared with RMB41.00 billion as of March 31, 2026.

Share Repurchase Program

Under our previously announced share repurchase programs, during the three months ended June 30, 2026, we repurchased a total of 43.5 million ADSs in the open market with cash for an aggregate consideration of approximately US$400.0 million at an average price of US$9.2 per ADS.

Environmental, Social, and Governance ("ESG")

We continued to enhance tailored music experiences for users of all ages. This quarter, we enhanced Youth Mode across our core products and introduced a curated, age-appropriate content library for younger users to safely discover and enjoy music.

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 RMB6.7851 to US$1.00, the noon buying rate in effect on June 30, 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, including long-form audio. Such change does not affect the amounts of our historical revenue or its accounting treatment.

[2] As part of music related services, marketing and consumption services primarily consist of advertising, offline performance related services and artist-related merchandise sales.

[3] 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.

[4] 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.

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

[6] On May 18, 2026, the Company completed the acquisition of Ximalaya. Its financial results from the acquisition date have been included in the Company's consolidated financial statements for the second quarter of 2026

About Tencent Music Entertainment

Tencent Music Entertainment Group (NYSE: TME and HKEX: 1698) is the leading all-in-one music and audio entertainment platform in China, operating the country's highly popular and innovative music and audio apps: QQ Music, Kugou Music, Kuwo Music, WeSing and Ximalaya. TME's mission is to create endless possibilities with music and technology. Powered by its content-and-platform dual-engine strategy, TME's expansive offerings extend the value of IP beyond online streaming into offline concerts, artist merchandise, and other IP-centric experiences. TME continuously innovates to deliver a seamless experience where users can discover, listen, sing, watch, perform, and connect across diverse scenarios, while unlocking the enduring value of music and audio IP. 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 June 30

Six Months Ended June 30

2025

2026

2025

2026

RMB

US$

RMB

US$

Unaudited

(in millions, except per share data)

Revenues

Music related services*

6,854

7,605

1,121

12,658

14,119

2,081

Social entertainment services and others

1,588

1,328

196

3,140

2,709

399

8,442

8,933

1,317

15,798

16,828

2,480

Cost of revenues

(4,693)

(4,984)

(735)

(8,807)

(9,333)

(1,376)

Gross profit

3,749

3,949

582

6,991

7,495

1,105

Selling and marketing expenses

(216)

(236)

(35)

(415)

(507)

(75)

General and administrative expenses

(940)

(1,059)

(156)

(1,884)

(1,999)

(295)

Total operating expenses

(1,156)

(1,295)

(191)

(2,299)

(2,506)

(369)

Interest income

254

229

551

475

Other gains, net

131

152

2,571

218

Operating profit

2,978

3,035

447

7,814

5,682

837

Share of net profit of investments accounted

for using equity method

Finance cost

(12)

(5)

(1)

(37)

(51)

(8)

Profit before income tax

2,982

3,067

452

7,816

5,661

834

Income tax expense

(515)

(514)

(76)

(961)

(971)

(143)

Profit for the period

2,467

2,553

376

6,855

4,690

691

Attributable to:

Equity holders of the Company

2,409

2,471

364

6,700

4,562

672

Non-controlling interests

155

128

Earnings per share for Class A and Class B

ordinary shares

Basic

0.79

0.12

2.19

1.47

0.22

Diluted

0.78

0.12

2.16

1.46

0.21

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

Basic

1.57

1.58

0.23

4.38

2.94

0.43

Diluted

1.55

1.57

0.23

4.32

2.91

0.43

Shares used in earnings per Class A and Class B

ordinary share computation:

Basic

3,059,783,073

3,128,328,814

3,057,167,291

3,104,964,331

Diluted

3,102,937,547

3,151,215,721

3,098,531,942

3,132,392,396

ADS used in earnings per ADS computation

Basic

1,529,891,537

1,564,164,407

1,528,583,645

1,552,482,166

Diluted

1,551,468,773

1,575,607,860

1,549,265,971

1,566,196,198

* 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, including long-form

audio. Such change does not affect the amounts of our historical revenue or its accounting treatment.

TENCENT MUSIC ENTERTAINMENT GROUP

REVENUES FROM MUSIC RELATED SERVICES

Three Months Ended June 30

Six Months Ended June 30

2025

2026

2025

2026

RMB

US$

RMB

US$

Unaudited

(in millions)

Revenues from music related services

Membership services*

4,434

4,792

706

8,718

9,360

1,379

Marketing and consumption services**

2,420

2,813

415

3,940

4,759

701

6,854

7,605

1,121

12,658

14,119

2,081

*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.

**As part of music related services, marketing and consumption services primarily consist of advertising, offline performance related services and artist-related merchandise sales.

TENCENT MUSIC ENTERTAINMENT GROUP

UNAUDITED NON-IFRS FINANCIAL MEASURES

Three Months Ended June 30

Six Months Ended June 30

2025

2026

2025

2026

RMB

US$

RMB

US$

Unaudited

(in millions, except per share data)

Profit for the period

2,467

2,553

376

6,855

4,690

691

Adjustments:

Income tax expense

515

514

961

971

143

Finance cost

Share of net profit of investments accounted for

using equity method

(16)

(37)

(5)

(39)

(30)

(4)

Operating profit

2,978

3,035

447

7,814

5,682

837

Other gains, net

(131)

(152)

(22)

(2,571)

(218)

(32)

Interest income

(254)

(229)

(34)

(551)

(475)

(70)

Depreciation of property, plant and equipment and

right-of-use assets

Amortisation of intangible assets

314

379

589

677

100

Adjusted EBITDA(inc. SBC)

2,947

3,078

454

5,359

5,746

847

Share-based compensation

147

176

297

339

Adjusted EBITDA

3,094

3,254

480

5,656

6,085

897

Profit for the period

2,467

2,553

376

6,855

4,690

691

Adjustments:

Amortization of intangible and other assets arising from

business acquisitions or combinations*

157

194

246

Share-based compensation

147

176

308

339

Gains from investments**

(2)

(28)

(4)

(2,377)

(30)

(4)

Income tax effects***

(61)

(77)

(11)

(114)

(131)

(19)

Non-IFRS Net Profit

2,640

2,781

410

4,866

5,114

754

Attributable to:

Equity holders of the Company

2,574

2,686

396

4,698

4,959

731

Non-controlling interests

168

155

Earnings per share for Class A and Class B

ordinary shares

Basic

0.84

0.86

0.13

1.54

1.60

0.24

Diluted

0.83

0.85

0.13

1.52

1.58

0.23

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

Basic

1.68

1.72

0.25

3.07

3.19

0.47

Diluted

1.66

1.70

0.25

3.03

3.17

0.47

Shares used in earnings per Class A and Class B

ordinary share computation:

Basic

3,059,783,073

3,128,328,814

3,057,167,291

3,104,964,331

Diluted

3,102,937,547

3,151,215,721

3,098,531,942

3,132,392,396

ADS used in earnings per ADS computation

Basic

1,529,891,537

1,564,164,407

1,528,583,645

1,552,482,166

Diluted

1,551,468,773

1,575,607,860

1,549,265,971

1,566,196,198

* 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, other expenses in relation to

equity transactions of investments and the fair value changes of consideration liabilities related to the acquisition of Ximalaya.

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

TENCENT MUSIC ENTERTAINMENT GROUP

CONSOLIDATED BALANCE SHEETS

As at December 31, 2025

As at June 30, 2026

RMB

US$

Audited

Unaudited

(in millions)

ASSETS

Non-current assets

Property, plant and equipment

1,201

1,540

227

Land use rights

2,290

2,254

332

Right-of-use assets

287

322

Intangible assets

2,899

5,895

869

Goodwill

20,521

29,757

4,386

Investments accounted for using equity method

1,659

2,691

397

Financial assets at fair value through other comprehensive income

26,231

19,147

2,822

Other investments

303

934

138

Prepayments, deposits and other assets

365

445

Deferred tax assets

498

633

Term deposits

13,810

13,640

2,010

70,064

77,258

11,386

Current assets

Inventories

Accounts receivable

3,903

4,184

617

Prepayments, deposits and other assets

4,183

4,745

699

Other investments

Short-term investments

123

Term deposits

15,763

6,761

996

Restricted Cash

Cash and cash equivalents

8,470

23,698

3,493

32,458

39,689

5,849

Total assets

102,522

116,947

17,236

EQUITY

Equity attributable to equity holders of the Company

Share capital

Additional paid-in capital

29,919

34,933

5,148

Shares held for share award schemes

(801)

(870)

(128)

Treasury shares

(664)

(3,389)

(499)

Other reserves

22,450

16,478

2,429

Retained earnings

29,381

31,118

4,586

80,287

78,272

11,536

Non-controlling interests

2,763

2,801

413

Total equity

83,050

81,073

11,949

LIABILITIES

Non-current liabilities

Borrowings

7,142

1,053

Notes payables

3,497

3,390

500

Other payables and other liabilities

379

468

Deferred tax liabilities

504

1,462

215

Lease liabilities

200

218

Deferred revenue

303

447

4,883

13,127

1,935

Current liabilities

Accounts payable

6,284

6,716

990

Other payables and other liabilities

3,558

4,451

656

Borrowings

5,997

884

Current tax liabilities

1,092

999

147

Lease liabilities

116

137

Deferred revenue

3,539

4,447

655

14,589

22,747

3,352

Total liabilities

19,472

35,874

5,287

Total equity and liabilities

102,522

116,947

17,236

TENCENT MUSIC ENTERTAINMENT GROUP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended June 30

Six Months Ended June 30

2025

2026

2025

2026

RMB

US$

RMB

US$

Unaudited

(in millions)

Net cash provided by operating activities

1,638

2,864

422

4,157

5,196

766

Net cash (used in)/provided by investing activities

(633)

(3,718)

(548)

(3,854)

2,932

432

Net cash (used in)/provided by financing activities

(2,056)

6,262

923

(2,512)

7,273

1,072

Net (decrease)/increase in cash and cash equivalents

(1,051)

5,408

797

(2,209)

15,401

2,270

Cash and cash equivalents at beginning of the period

12,022

18,416

2,714

13,164

8,470

1,248

Exchange differences on cash and cash equivalents

(126)

(19)

(173)

(25)

Cash and cash equivalents at end of the period

10,999

23,698

3,493

10,999

23,698

3,493

SOURCE Tencent Music Entertainment Group