K-pop giant HYBE has reported all-time record high revenue for 2024, but the company swung to a net loss amid rising costs and weakness in its recorded music segment.
In latest earnings report, HYBE recorded revenues of KRW 2.2545 trillion, or USD $1.654 billion at the average exchange rate for 2024. That was up by 3.5% year-on-year.
It was the third year in a row that HYBE’s revenues exceeded $1 billion and the second year in a row above the KRW 2 trillion mark.
However, operating profit dropped 37.5% YoY to KRW 184.82 billion ($135.55 million), and the company swung to a net loss of KRW 3.38 billion ($2.48 million), compared to a net profit of KRW 183.45 billion in 2023.
Operating expenses jumped 9.9% YoY to KRW 2.069 trillion ($1.518 billion).
“The decline in profitability was primarily attributable to BTS‘ temporary break, a shift in the artist sales mix due to new debuts, and strategic investments in infrastructure and new growth businesses like Weverse and gaming,” HYBE said in a statement to shareholders on Tuesday (February 25).
BTS, the world’s largest K-pop act, has been on hiatus for the past few years as its members complete mandatory military service. Two of the group’s seven members have already completed their service, and the rest are expected to finish up this year.
HYBE says it expects “growth in operating profit” this year as BTS resume their activities, alongside “steady growth of [other] artists, as well as strengthened artist management capabilities across global offices.”
HYBE’s “artist-direct” segment, which includes recorded music, concerts, commercials and artist appearances, recorded revenues of KRW 1.445 trillion ($1.06 billion), down 1.8% YoY.
A 25.6% YoY jump in concert revenue to KRW 450.87 billion ($330.69 million) was not enough to offset an 11.3% YoY decline in recorded music to KRW 860.96 billion ($631.46 million).
The company’s “artist-indirect” segment, which includes merchandising, licensing, and the Weverse superfan platform, saw revenues jump 14.5% YoY to KRW 809.29 billion ($593.56 million).
Weverse’s monthly active user growth has flatlined, with HYBE recording 9.4 million MAUs in Q4 2024, down from 9.7 million in the previous quarter but still up from 9.2 million in the same period a year earlier. However, recent MAU numbers haven’t matched the peak of 10.6 million achieved in Q3 2023.
However, HYBE expects to see a bump in Weverse revenue starting in January of this year, after a free trial period of its premium service expires.
HYBE also expects “an improvement in profitability in Weverse, Supertone, and HYBE IM, which required initial investments to propel mid-to-long-term growth.”
“The company… expects to see an improvement in profitability in Weverse, Supertone, and HYBE IM, which required initial investments to propel mid-to-long-term growth.”
HYBE
For Q4 2024, HYBE reported revenue of KRW 725.32 billion ($519.04 million at the average exchange rate for Q4), an increase of 19.2% YoY.
The artist-direct segment posted a 15.1% YoY increase in revenue to KRW 481.42 billion ($344.51 million), with a 111% YoY surge in concert revenue more than offsetting an 8.8% YoY decline in recorded music.
The artist-indirect segment saw revenues of KRW 243.90 billion ($174.54 million), up 28.0% YoY. Fan club revenue, which includes Weverse, was up 6.5% YoY, while merchandising and licensing jumped 156.0% YoY.
For Q4, HYBE recorded an operating profit of KRW 65.34 billion ($46.76 million), down 26.7% YoY. It recorded a net loss of KRW 26.02 billion ($18.62 million) for the period.
HYBE also revealed in its earnings report that Supertone Shift, the AI voice-changing tool from HYBE-owned Supertone, has attracted 350,000 subscribers since its launch in Q2 2024.
Looking ahead to 2025, the company said it’s pursuing a “multi-home, multi-genre” strategy that “combines the company’s profound knowledge of the K-pop system with local cultures.”
As MBW reported before, HYBE is looking to export the K-pop methodology to music markets outside South Korea. To that end, it partnered with Universal Music Group’s Geffen Records to launch a new international girl group, KATSEYE, which debuted in June 2024.
“KATSEYE had the best debut year with their double title track Touch spending two weeks on Billboard‘s Bubbling Under Hot 100 and 13 consecutive weeks on [the] Billboard Global Excl. US chart, which proved that HYBE’s K-pop methodology can be successful in the US music market,” the company said on Tuesday.
Earlier this week, HYBE announced another partnership: HYBE Chairman Bang Si-hyuk joined forces with HYBE America CEO Scooter Braun and Ryan Tedder of OneRepublic fame to create a new boy group. Submissions from would-be group members are now open.
In its report to shareholders, HYBE said its Latin music division, HYBE Latin America, “will launch a new group for the region this year, tailored to the culture and fandom of the local market.”Music Business Worldwide
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