SEOUL, South Korea--(BUSINESS WIRE)--SM Entertainment Co., Ltd. (KOSDAQ: 041510) announced the highest-ever quarterly earnings for Q3 bolstered by surging music and record sales.
On Nov 8, SM Entertainment Co., Ltd. (SM) revealed consolidated operating profit of KRW 50.5 billion for Q3, a staggering 70% YoY increase. This achievement is accompanied by a revenue surge of KRW 266.3 billion, a 12% YoY increase. Both figures recorded the highest quarterly performance, while net profit increased by 189% to KRW 84.2 billion, compared to KRW 29.2 billion during the same period last year. Operating margin for Q3 recorded 19%, a YoY increase of 6.5 percentage points.
On a standalone basis, SM reported KRW 48 billion in operating profit, a 77% YoY surge. Revenue followed suit with a 40% YoY increase, soaring to KRW 188.7 billion. Net profit reached KRW 37.1 billion, an impressive 68% YoY growth. This performance is seen as a result of the rise in music and recording sales by NCT DREAM, aespa and RIIZE, as well as the increase in artist activities such as offline concerts.
In terms of core music business, the company achieved an extraordinary feat by selling 8.71 million new albums in Q3, significantly exceeding last year’s total sales of 4.15 million, marking a record-breaking number of quarterly album sales. NCT DREAM rose as a quadruple million seller with 4.32 million copies sold, and EXO, NCT and RIIZE each achieved a million-seller status. aespa continued to expand its global fan base with 18 world tours across North America, Asia and Europe.
SM's subsidiaries also showcased impressive results, with DREAM MAKER posting an operating profit of KRW 3.9 billion, reflecting 38.4% YoY increase. SMC also posted an operating profit of KRW 1.2 billion, a 122% YoY surge. While SM C&C announced an operating profit of KRW 900 million, which is a 20% YoY decrease, and KEYEAST’s substantial reduction of its YoY deficit is equally notable with an operating loss of KRW 400 million.
SM is poised for continued success, anticipating robust album and music revenues in the fourth quarter of 2023 and the first quarter of 2024. The coming months are packed with highly anticipated releases, following NCT 127’s comeback with their fifth full-length album and the rookie group RIIZE’s release of a single titled “Talk Saxy” last month. This includes WayV’s second studio album, aespa’s fourth mini album, “Drama,” Red Velvet’s third studio album, “What a Chill Kill,” Taeyeon’s fifth mini album, “To. X,” and a new single from Super Junior’s Ryeowook. NCT 127 will kick off December with a new single, and TVXQ will treat fans with their 9th studio album.
Looking forward to 2024, aespa is set to release a full-length English album aimed for a global audience, in addition to a new single. NCT DREAM and NCT NEW TEAM are gearing up for the release of their highlight anticipated albums, ensuring that fans worldwide will have plenty to look forward to.
In addition to its musical endeavors, SM is committed to bolstering its music publishing business. SM’s subsidiary group, Kreation Music Rights (KMR) is posed to expand its in-house songwriting team, with plans to secure 80 talented songwriters. KMR also has its sights set on establishing overseas subsidiaries to recruit songwriters with a passion for the K-pop industry.
CEO Cheol Hyuk JANG shared its excitement about SM’s future prospects, stating “we have a packed line-up of activities through the end of the year, from aespa, Red Velvet and Taeyeon to TVXQ’s 20th anniversary album and concerts. We are also planning on showcasing a strong lineup of artists and content in the coming year as well. Through our music publishing subsidiary KMR, we’ll actively seek out global song writers, focus on securing a stable supply of high-quality songs and eventually secure a new stream of revenues for SM through royalties made from selling music to external labels and agencies.”
SM Entertainment's Q3 performance is a testament to the company's unwavering commitment to innovation, artistry, and global excellence. With a future filled with remarkable endeavors, SM is poised to continue captivating the world with its extraordinary music and entertainment offerings.
