Hive Faces Consecutive Setbacks, Q3 Sales and Operating Profit Decline... "Will Focus on Core Value" (Comprehensive)

Q3 Sales of 527.8 Billion KRW, Operating Profit of 54.2 Billion KRW Recorded

HYBE's sales and operating profit both declined in the third quarter of this year. Weakness in core areas such as albums and performances dealt a significant blow.

HYBE announced on the 5th that its consolidated sales for the third quarter of this year reached 527.8 billion KRW, with an operating profit of 54.2 billion KRW. Both sales and operating profit decreased by 1.9% and 25.4%, respectively, compared to the same period last year.

The cumulative sales for the third quarter of this year exceeded 1.5 trillion KRW, making it highly likely that the company will achieve annual sales of 2 trillion KRW for the second consecutive year.

Regarding this performance, HYBE explained, "Due to the impact of the Olympic Games, the release of albums by HYBE Music Group artists was somewhat postponed, but indirect participation-type sales reflecting the performance of artist intellectual property (IP)-related businesses showed a significant upward trend, driving the results."

Among total sales, direct participation-type sales such as album sales, performances, and advertising amounted to 323 billion KRW. The growth in album sales by ENHYPEN and BOYNEXTDOOR, NewJeans’ debut single in Japan achieving million-seller status, and strong digital music performance by BTS’s Jimin and LE SSERAFIM contributed to the results. Cats Eye, which showed strong digital music performance globally upon debut, also contributed to album sales.

Indirect participation-type sales, including MD and licensing, content, and fan club sales, totaled 204.9 billion KRW. This represents a 32% increase compared to the same period last year. All segments of indirect participation-type sales rose year-on-year, with the content segment showing the highest growth at 64%.

The operating profit margin was in the 10% range. HYBE’s operating profit margin has been on an upward trend this year, rising from 4% in Q1, 7.9% in Q2, to 10.3% in Q3. As the initial infrastructure setup for new business development enters its final stage, the operating profit margin is recovering.

In the fourth quarter, various HYBE Music Group artists, led by BTS’s Jin, will be active. Jin will release his first solo album, ‘Happy,’ on the 15th. The pre-release track from this album, ‘I’ll Be There,’ topped Japan’s Oricon Chart and China’s QQ Chart immediately after release, and also ranked number one on iTunes’ ‘Top Song’ charts in 70 countries and regions including Japan, Brazil, and Australia.

Seventeen, who made a comeback in October with their 12th mini-album ‘SPILL THE FEELS’ after six months, recorded initial sales of 3.16 million copies, setting a triple million-seller record. Seventeen will continue their world tour ‘SEVENTEEN [RIGHT HERE] WORLD TOUR’ from their concert at Goyang Sports Complex Main Stadium in October through early next year.

TOMORROW X TOGETHER is preparing for the encore concert of their third world tour ‘TOMORROW X TOGETHER WORLD TOUR’ and will continue activities with their 7th mini-album ‘The Name Chapter: SANCTUARY,’ released on the 4th.

LE SSERAFIM, who charted on the US Billboard ‘Hot 100’ for two consecutive weeks with the title track ‘CRAZY’ from their 4th mini-album, will release a Japanese single in December. BOYNEXTDOOR, who achieved million-seller status with their 3rd mini-album ‘19.99’ in September, plans to hold their first solo tour, ‘BOYNEXTDOOR TOUR ‘KNOCK ON Vol.11,’ in December.

ENHYPEN will continue their momentum with the repackaged album ‘ROMANCE : UNTOLD -daydream-’ set to release on the 11th.

NewJeans' Hani is attending as a witness at the Environment and Labor Committee's audit held at the National Assembly on the 15th. Photo by Hyunmin Kim kimhyun81@

However, for HYBE’s stable growth, it seems important to resolve conflicts and improve the image with former ADORE CEO Min Hee-jin. Especially since Min plans to release NewJeans’ full-length album and hold a world tour next year, there is high interest in whether these activities will proceed smoothly.

Moreover, HYBE has recently faced difficulties due to the release of the ‘Weekly Music Industry Report.’ This report contained evaluations of various artists, which has led to boycott movements among fandoms.

Regarding this, HYBE CEO Lee Jae-sang said at the earnings conference call, "Despite various circumstances surrounding the company, HYBE employees and artists did their best to achieve good results. We intend to quietly continue our business by focusing more on fundamental values."

Regarding NewJeans, the CEO stated, "HYBE will continue to do its best to support NewJeans’ sustained growth."