Tencent Music Q1 Revenue Hits $7.9 billion, Non-member Business Leads Growth, Pre-market Rises Over 10%

Tencent Music Entertainment Group today released its financial report for the first quarter of 2026, with data showing that the company is at a critical period of transitioning from a single membership-driven model to a diverse ecosystem. In this quarter, Tencent Music achieved a total revenue of 7.9 billion yuan, a year-on-year increase of 7.3%, demonstrating its operational resilience amidst macroeconomic fluctuations. After the release of the financial report, Tencent Music's U.S. stocks rose before the market, surging by over 10%.

The core highlight of the report is the optimization of the business structure: while membership service revenue maintained a robust growth of 6.6% to 4.57 billion yuan, non-membership related business revenue saw a significant year-on-year increase of 28.0%, reaching 1.94 billion yuan. This change indicates that Tencent Music's monetization capabilities in areas such as digital albums, live performances, and advertising are significantly strengthening.

Under the non-IFRS accounting standards, the net profit attributable to the company's shareholders was 2.27 billion yuan, a year-on-year increase of 7.0%. The adjusted EBITDA reached 2.83 billion yuan, a year-on-year increase of 10.5%. The gross margin improved from 44.1% last year to 44.9% this year, mainly due to the increased proportion of high-profit margin membership revenue and effective control of channel expenses.

The application of AI technology is no longer limited to cost reduction and efficiency enhancement. The management emphasized in the report that the proportion of AI-generated songs in daily newly released content continues to rise. The company leverages AI technology to revitalize classic IPs and, through interactive formats such as AI cover songs, increases content supply at a low cost and enhances user activity. On the platform side, the synergistic effect between Tencent Music and WeChat's Video Account has been further amplified. By transforming the music discovery scene of Video Accounts into streaming music behavior, Tencent Music has successfully built a traffic closed loop. This deep ecosystem collaboration increases the full lifecycle value of users and reduces customer acquisition costs.

As of the end of March 2026, Tencent Music held a total of 41 billion yuan in cash and cash equivalents, providing ample cash flow for subsequent copyright acquisitions and technological research and development. Under a sustainable dividend policy, this robust financial performance is expected to further support its valuation in the capital market.