HYBE, 1Q Operating Profit 14.4 Billion KRW Down 73% YoY... "Impact of Rookie Initial Costs" (Update)

Hive Q1 Earnings Announcement
Consolidated Revenue 360.9 Billion KRW, Operating Profit 14.4 Billion KRW

Hive is initiating an audit of the management of Adore, a subsidiary to which the group NewJeans belongs, leading to conflicts. The photo shows the Hive headquarters in Yongsan. Photo by Jo Yongjun jun21@

HYBE posted lower earnings in the first quarter of this year compared to the previous year due to the absence of major artists such as BTS members enlisting in the military and initial costs for rookie groups.

On the 2nd, HYBE announced that it recorded consolidated sales of 360.9 billion KRW and operating profit of 14.4 billion KRW in the first quarter of this year. These figures represent a decline of 12% and 73%, respectively, compared to the same period last year.

Regarding the sharp drop in operating profit, HYBE explained that "the activity hiatus of existing artists and the initial costs related to the debut of rookie groups had a significant impact."

The company analyzed that the successful debuts of Tours and Aileat offset the impact of the senior artists' rest periods, allowing HYBE to maintain a profitable trend. Both teams' albums sold over 500,000 copies each, achieving half-million seller status.

Although there were relatively fewer new releases in the first quarter, steady revenue from music streaming provided a stable foundation for performance. As a result, the proportion of music streaming in HYBE's first-quarter music sales rose to about 50%.

Direct participation revenue, including music sales, concerts, advertising, and appearances, amounted to 217 billion KRW, accounting for about 60% of first-quarter sales. Among direct participation, concerts by Seventeen, ENHYPEN, and &TEAM contributed significantly.

Indirect participation revenue, such as MD and licensing, content, and fan clubs, totaled 143.9 billion KRW, making up about 40%. 'Nana Tour with Seventeen,' co-invested by HYBE and CJ ENM's production company Eggs is Coming, along with tour MDs for Seventeen and TOMORROW X TOGETHER, contributed to indirect participation revenue in the first quarter.

HYBE expects both sales and operating profit to improve from the second quarter as artists resume activities en masse and world tours officially begin. Last month, Seventeen, TOMORROW X TOGETHER, and Boy Next Door made comebacks, while ENHYPEN and NewJeans are preparing for full-scale comebacks. BTS member Jin will complete his military service in mid-June.

With the comeback of existing artists and the debut of new artists, new releases this year are expected to increase by more than 30% compared to last year. Fan engagement will also expand. Last year, eight artist groups held 128 concerts and fan meetings, while this year, 10 teams plan about 160 tours and fan meetings.

HYBE plans to take a more active role in strengthening K-pop's global popularity. In addition to the existing multi-label system, from this year, it will promote a 'multi-home, multi-genre' strategy that strengthens IP development reflecting local cultures and characteristics. The strategy aims to secure a leading business position locally by developing IPs tailored to local cultures and characteristics, focusing on Japan, the United States, and Latin America, and to attract fans unfamiliar with K-pop into the HYBE ecosystem.

The first result of the attempt to transplant K-pop methodology to the birthplace of pop music, the United States, is Cats Eye, which is also part of the multi-home, multi-genre strategy. Cats Eye is scheduled to debut locally in the U.S. this summer.

This content was produced with the assistance of AI translation services.