Tencent Music Entertainment Group (TME) Q4 2023 Earnings Report

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Tencent Music

TME

$18.58 -0.75%

Exchange: NYSE | Sector: Communication Services | Industry: Internet Content Information

Q4 2023

Published: Nov 14, 2023

Earnings Highlights

Revenue of $6.89B down 1.6% year-over-year
EPS of $0.82 increased by 13.5% from previous year
Gross margin of 38.3%
Net income of 1.31B
""We added 18.2 million subscribers for the full year, showing our content leadership and high quality user experience." - Kar Shun Pang, Executive Chairman" - Kar Shun Pang

TME

Tencent Music Entertainment Group

Period Q4 2023

Currency CNY

Report Type Quarterly Earnings

Generated Dec 8, 2025

Executive Summary

In the fourth quarter of 2023, Tencent Music Entertainment Group (TME) demonstrated solid financial performance, despite a year-over-year revenue decline attributed primarily to social entertainment service adjustments. The company achieved revenue of CNY 6.89 billion, a 41% increase in online music revenue, reflecting a sustained focus on subscription growth and premium user experiences. TME's strategic emphasis on partnerships and content differentiation led to a significant rise in both paying subscribers and average revenue per paying user (ARPPU), fostering a positive outlook heading into 2024. Management indicated growth potential is underpinned by an expanding catalog and technological innovation, positioning TME favorably within the competitive landscape.

Key Performance Indicators

Revenue

Decreasing

6.89B

QoQ: 4.93% | YoY: -1.58%

Gross Profit

Increasing

2.64B

38.31% margin

QoQ: 12.77% | YoY: 14.08%

Operating Income

Increasing

1.71B

QoQ: 20.28% | YoY: 24.11%

Net Income

Increasing

1.31B

QoQ: 11.82% | YoY: 13.76%

EPS

Increasing

0.84

QoQ: 13.51% | YoY: 13.51%

Revenue Trend

Margin Analysis

Financial Highlights

Revenue Analysis: TME reported Q4 2023 revenues of CNY 6.89 billion, down 7% YoY, yet online music services surged 41% YoY to CNY 5 billion due to robust subscription growth.

Profitability Ratios: Net income stood at CNY 1.31 billion, marking a YoY increase of 13.76%. The company's gross margin improved to 38.3%, a 5.3 percentage point uptick YoY, reflecting better content cost management and increased subscription revenues.

Cash Flow Insights: Net cash provided by operating activities was CNY 1.98 billion, reinforcing TME’s capacity to invest in growth while maintaining a healthy cash balance of CNY 32.2 billion, up from CNY 31 billion in the previous quarter.

Income Statement

Metric	Value	YoY Change	QoQ Change
Revenue	6.89B	-1.58%	4.93%
Gross Profit	2.64B	14.08%	12.77%
Operating Income	1.71B	24.11%	20.28%
Net Income	1.31B	13.76%	11.82%
EPS	0.84	13.51%	13.51%

Key Financial Ratios

Gross Profit Margin

Fair

38.30%

Gross profit margin is moderate, room for improvement in cost management

Operating Profit Margin

Good

24.90%

Operating margin is healthy and competitive within industry standards

Net Profit Margin

Good

18.90%

Net profit margin is healthy and competitive within industry standards

Return on Assets

Weak

1.73%

Return on assets suggests inefficient capital allocation

Return on Equity

Weak

2.34%

Return on equity suggests inefficient capital allocation

Current Ratio

Healthy

2.49

Current ratio shows adequate liquidity to meet short-term obligations

Debt to Equity

Conservative

0.11

Debt-to-equity shows conservative leverage and low financial risk

P/E Ratio

Fair Value

19.42x

P/E ratio in line with market averages

Price to Book

Fair Value

1.81x

Price-to-book ratio reasonable for profitable companies

Historical Earnings Comparison

Period	Revenue ($M)	EPS ($)	YoY Growth	Report
Q3 2024	7,015.00	1.01	+6.8%	View
Q2 2024	7,160.00	1.07	-1.7%	View
Q1 2024	6,768.00	0.92	-8.9%	View
Q4 2023	6,893.00	0.82	-1.6%	View
Q3 2023	6,569.00	0.74	-10.8%	View

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Tencent Music (TME) Q4 2023 Earnings Report

Earnings Highlights

Executive Summary

Key Performance Indicators

Revenue Trend

Margin Analysis

Financial Highlights

Income Statement

Key Financial Ratios

Management Insights Available for Members

Peer Comparison Available for Members

Investment Outlook & SWOT Available for Members

Historical Earnings Comparison

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