Tencent Music Entertainment Group (NYSE:TME) Posts Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Tencent Music Entertainment Group (NYSE:TME) posted its quarterly earnings data on Tuesday. The company reported $0.25 earnings per share for the quarter, beating the consensus estimate of $0.24 by $0.01, reports. Tencent Music Entertainment Group had a net margin of 26.45% and a return on equity of 11.20%. The firm had revenue of $1.32 billion for the quarter. During the same quarter last year, the business posted $1.55 EPS. The business’s quarterly revenue was up 5.8% compared to the same quarter last year.

Here are the key takeaways from Tencent Music Entertainment Group’s conference call:

• Q2 revenue increased 6% year over year to RMB 8.9 billion, with music-related services up 11% and membership revenue up 8% to RMB 4.8 billion. Adjusted EBITDA rose 5% to RMB 3.3 billion, while net profit reached RMB 2.5 billion.
• IP-driven businesses—including concerts, merchandise, digital albums, and artist-related services—continued to deliver strong double-digit growth. Management expects these diversified monetization channels to provide relatively steady growth despite competitive pressure on subscriptions and advertising.
• The consolidation of Ximalaya contributed approximately RMB 0.4 billion in Q2 revenue and expands Tencent Music into a broader music-and-audio platform. Management highlighted potential long-term synergies from audiobooks, podcasts, children’s content, advertising, shared technology, and richer SVIP benefits.
• Competition and weaker traffic trends moderated underlying music subscription growth, particularly among casual and light users, while advertising faced macroeconomic and market headwinds. Management expects full-year operating expenses to rise modestly, net profit margin to come under slight pressure due partly to higher interest expense, and second-half gross margin to decline slightly year over year.
• Tencent Music ended the quarter with RMB 44.2 billion in cash, deposits, and short-term investments and repurchased 43.5 million ADSs for USD 400 million during Q2. Management said it remains on track to complete the existing USD 1 billion buyback program and is preparing for a potential new repurchase plan.

Tencent Music Entertainment Group Trading Down 3.7%

NYSE:TME traded down $0.32 during trading hours on Wednesday, reaching $8.40. The company’s stock had a trading volume of 8,316,599 shares, compared to its average volume of 9,248,015. The firm has a market capitalization of $13.22 billion, a price-to-earnings ratio of 10.50, a PEG ratio of 1.49 and a beta of 0.84. The firm has a 50-day simple moving average of $8.98 and a 200-day simple moving average of $10.86. Tencent Music Entertainment Group has a 1 year low of $7.94 and a 1 year high of $26.70. The company has a debt-to-equity ratio of 0.06, a quick ratio of 2.08 and a current ratio of 2.09.

Analyst Ratings Changes

Several brokerages recently issued reports on TME. China Renaissance lowered shares of Tencent Music Entertainment Group from a “buy” rating to a “hold” rating and set a $9.30 target price for the company. in a research report on Wednesday. Weiss Ratings upgraded Tencent Music Entertainment Group from a “hold (c-)” rating to a “hold (c)” rating in a research report on Wednesday, July 1st. JPMorgan Chase & Co. dropped their price target on Tencent Music Entertainment Group from $12.00 to $10.00 and set a “neutral” rating for the company in a research note on Thursday, May 14th. Zacks Research upgraded Tencent Music Entertainment Group from a “strong sell” rating to a “hold” rating in a report on Tuesday, May 19th. Finally, UBS Group set a $15.00 price objective on Tencent Music Entertainment Group in a research report on Wednesday. Four equities research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock has a consensus rating of “Hold” and an average target price of $18.80.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of TME. Allworth Financial LP lifted its stake in shares of Tencent Music Entertainment Group by 63.2% in the 3rd quarter. Allworth Financial LP now owns 1,480 shares of the company’s stock valued at $35,000 after acquiring an additional 573 shares during the last quarter. Caitong International Asset Management Co. Ltd grew its position in Tencent Music Entertainment Group by 5,777.1% during the 4th quarter. Caitong International Asset Management Co. Ltd now owns 2,057 shares of the company’s stock worth $36,000 after acquiring an additional 2,022 shares during the last quarter. Smartleaf Asset Management LLC grew its position in Tencent Music Entertainment Group by 61.3% during the 4th quarter. Smartleaf Asset Management LLC now owns 2,123 shares of the company’s stock worth $37,000 after acquiring an additional 807 shares during the last quarter. Kestra Advisory Services LLC purchased a new position in Tencent Music Entertainment Group in the 4th quarter worth approximately $46,000. Finally, EverSource Wealth Advisors LLC increased its stake in Tencent Music Entertainment Group by 83.0% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 3,005 shares of the company’s stock worth $59,000 after purchasing an additional 1,363 shares during the period. 24.32% of the stock is owned by institutional investors.

Tencent Music Entertainment Group News Roundup

Here are the key news stories impacting Tencent Music Entertainment Group this week:

• Positive Sentiment: TME reported second-quarter revenue of RMB8.93 billion (approximately $1.32 billion), up 5.8% year over year and ahead of expectations. Growth was driven primarily by music-related services, subscription expansion, concert activity, and the integration of Ximalaya. Tencent Music second-quarter 2026 financial results
• Positive Sentiment: The company signaled another share-buyback round while combining Ximalaya with its music business into a broader music-and-audio platform. Buybacks could support per-share value, while the acquisition may expand TME’s addressable market and cross-selling opportunities. TME buyback and Ximalaya integration
• Neutral Sentiment: Mizuho lowered its price target from $18 to $15 but maintained an “outperform” rating. The revised target still implies substantial upside, indicating continued long-term confidence despite lower near-term expectations. Mizuho rating update
• Negative Sentiment: China Renaissance downgraded TME from “buy” to “hold” and assigned a $9.30 target. Although that target remains above the recent trading level, the downgrade adds pressure and suggests limited near-term upside in the analyst’s view. China Renaissance rating update
• Negative Sentiment: The stock declined after the earnings release even though revenue exceeded expectations. Investors may be focused on the modest 5.8% growth rate, uncertainty surrounding Ximalaya integration, and whether the strong reported earnings comparison will translate into sustained operating momentum. Tencent Music shares slide after second-quarter results

About Tencent Music Entertainment Group

Tencent Music Entertainment Group (NYSE: TME) is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders.

The company traces its roots to the consolidation of Tencent’s music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity.