K-pop Earns More Abroad: Third Quarter Report Card for the Four Major Agencies

SM Operating Profit Surges 261.6% to 48.2 Billion Won
YG Returns to Profit with Rapid Recovery
JYP Achieves Record Revenue but Faces Cost Burden
HYBE Posts Deficit Due to North American Restructuring

Panoramic image of NCT DREAM's world tour 'The Dream Show'. Provided by SM Entertainment

In the third quarter of this year, the financial results of the four major entertainment agencies-SM Entertainment, JYP Entertainment, YG Entertainment, and HYBE-varied significantly depending on the performance of their overseas tours. Companies that actively held global tours saw substantial improvements in both revenue and operating profit, while those with gaps in their tour schedules struggled to defend their results. As the center of K-pop consumption shifts overseas, the tour schedules of each company have become the key variable determining their performance.

According to the Financial Supervisory Service’s electronic disclosure system on November 20, SM Entertainment recorded revenue of 321.6 billion won and operating profit of 48.2 billion won, representing year-on-year increases of 32.8% and 261.6%, respectively. The world tour "The Dream Show 4" by NCT DREAM and large-scale concerts by aespa drove this improvement. Both groups held consecutive performances at Gocheok Sky Dome and embarked on Asian tours, boosting concert revenue, while the sale of tour-related merchandise and operation of pop-up stores further expanded MD (merchandise) sales. Album sales for both new and established acts such as NCT WISH, RIIZE, and Super Junior also grew evenly, resulting in stable growth across all sectors-albums and digital music, concerts, and merchandise.

YG Entertainment posted revenue of 173.1 billion won and operating profit of 31.1 billion won, turning a profit after being in the red during the same period last year. Revenue increased by 107.2% year-on-year. The world tours of BLACKPINK and BABYMONSTER, as well as TREASURE’s activities in Japan, lifted the company’s performance. In terms of operating profit, YG was assessed as showing the fastest recovery among the four companies.

JYP Entertainment achieved its highest-ever quarterly revenue at 232.6 billion won, but operating profit dropped by 15.7% year-on-year to 40.8 billion won. While the world tour of Stray Kids and the tours of TWICE in Korea, Japan, and Macau drove concert revenue, the rapid increase in production and personnel costs due to expanded tour scale became a burden. Lee Hyunji, a researcher at Eugene Investment & Securities, projected, "In the first half of next year, TWICE is scheduled to hold 35 tour dates in North America alone, with a minimum expected audience of over 700,000. Despite short-term cost pressures, there remains significant mid- to long-term growth potential."

HYBE recorded the highest revenue among the four companies at 727.2 billion won but posted an operating loss of 42.2 billion won, turning to a deficit. The world tours and fan events of SEVENTEEN, TOMORROW X TOGETHER (TXT), and ENHYPEN, as well as activities by BTS member Jin, contributed to increased concert and promotion revenue. However, restructuring costs for the North American subsidiary and debut expenses for the new boy group TWS and the new Latin team were reflected simultaneously, worsening profitability. Kim Jihyun, a researcher at Shin Young Securities, analyzed, "Debut costs for new groups at 43 billion won and restructuring costs for HYBE America at 43 billion won were the main reasons for the shift to a deficit."

The industry views the third quarter as the "true report card" for K-pop, as it is the period when the results of overseas dome and stadium tours are fully reflected. In this quarter, all four companies saw increased concert revenue, but the structural limitation that tour expansion does not immediately translate into improved profitability was once again revealed.

The growing proportion of MD (merchandise) and goods sales is also notable. HYBE saw a significant year-on-year increase in licensing and MD sales, while SM Entertainment also expanded concert MD and online sales centered on aespa and NCT. As fandom consumption diversifies from albums to clothing, digital goods, and experiential packages, a revenue structure centered on "concerts, merchandise, and platforms" has become the norm across the industry.

On the other hand, the burden of costs is a shared challenge for all four companies. Tours involve large fixed costs such as production and personnel expenses, and as overseas schedules increase, logistics and local operation costs also rise. The decline in JYP’s operating profit and HYBE’s shift to a deficit illustrate these structural issues.

The securities industry attributes the performance gap among the four companies to differences in "global tour competitiveness" and "cost management capabilities." SM Entertainment and YG Entertainment are analyzed to have relatively stable artist portfolios, leaving ample room for performance improvement after the fourth quarter. JYP Entertainment has a solid global fandom, but cost efficiency is cited as a key challenge. For HYBE, time is needed for the effects of North American subsidiary restructuring to be reflected, but profitability is expected to recover once one-off costs are resolved.

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