HYBE Posts Q2 Revenue of 1.45 Trillion Won, Highest Performance in a Quarter

HYBE achieved its highest quarterly results on account of BTS’s “Arirang” world tour. The company reported consolidated revenue of 1.45 trillion won and operating profit of 170.9 billion won, representing increases of 105.5% and 159.3% respectively compared to the same period last year.

This is the first time in the entertainment industry that a company has simultaneously exceeded 1 trillion won in quarterly revenue and 100 billion won in operating profit. The cumulative revenue for the first half of the year also surpassed 2 trillion won for the first time ever.

The main drivers of this growth were BTS’s world tour and their music albums. Their fifth studio album, “Arirang,” released in March, topped sales charts for CDs and LPs in the United States. The world tour that began in April took place across North America, Europe, Mexico, Spain, and other regions around the globe. Revenue from concerts reached 647.7 billion won, marking the highest figure on record and an increase of 243.3% compared to the previous year. Revenue from albums and digital music totaled 326.8 billion won (an increase of 43.0%), while revenue from merchandise and licensing amounted to 310.6 billion won (a rise of 103.1%).

Revenue from directly related activities, including music and concerts, reached 1.399 trillion won, reflecting a 132.2% increase. Revenue from indirectly related activities, such as merchandise and fan clubs, increased to 410.1 billion won, a growth of 59.1%. BTS’s world tour generates significant economic impact in every location it visits, even giving rise to the new term “BTSomics.” On July 20, HYBE showcased BTS during the halftime show of the FIFA World Cup final, further solidifying their status as global icons.

However, the rising proportion of revenue from concerts caused the operating profit margin to drop to 11.8%, falling short of market expectations of 12.7%. This is because artists receive a larger share of concert revenues, resulting in lower profitability compared to album sales.

The securities industry remains optimistic. Hana Securities predicts that additional earnings from BTS’s future world tours, along with the Comeback of NewJeans, the performance of KATSEYE, and the Debut of new groups, will drive further growth. Nevertheless, analysts are lowering target stock prices due to concerns over declining operating profit margins and the overall neglect of the entertainment sector in stock markets. NH Investment & Securities reduced its target price to 360,000 won but noted that there are many factors contributing to a reevaluation, including high growth among younger artists, expanded tours by mid-tier groups, and increased digital music sales from more established artists.