Tencent Music Entertainment Group reported unaudited earnings after the close. The Chinese music streaming service grew revenue 14% YoY, but missed earnings estimates. The company also announced a deal with Warner Music Group to create a Chinese joint-venture music label.
Here are the numbers:
EPS: $0.12 vs $0.13 est.
Revenue: $1.2B +14.3% YoY
Mr. Cussion Pang, Chief Executive Officer of Tencent Music, shared:
In 2020, we demonstrated resilience and agility during and after the COVID-19 pandemic. We forged ahead with our operations, invested in technologies to customize services and introduced new products to meet the evolving demands of our users. Our fourth quarter results were underpinned by strong performance in online music services, which registered outstanding year-over-year revenue growth of 42% from subscriptions and over 100% from advertising. Even against the backdrop of macro-economic uncertainty and a changing competitive environment, our social entertainment services delivered steady revenue growth alongside moderation in margins as we proactively invested some profit to pave the way for future growth. By investing in various musical genres across multiple formats and enriching long-form audio content, we have further strengthened our content leadership and improved user engagement, reflected in the sequential increase in total user time spent on our platform. Our initial investment in long-form audio started to pay off with 15% long-form audio penetration of our user base in the fourth quarter of 2020, up from 6% for the same period last year.
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