SM Entertainment (Co-CEOs Jang Cheolhyuk and Tak Youngjun) announced on May 7 that its consolidated operating profit for the first quarter of this year reached 32.6 billion KRW, marking a 109.6% increase compared to the same period last year. During the same period, revenue grew by 5.2% to 231.4 billion KRW, while net profit soared by 1,852.4% to 242.9 billion KRW, driven by factors such as the acquisition of shares in DearU, which operates the paid fan and artist messaging platform Bubble.
On a separate basis, the company posted revenue of 165.5 billion KRW, operating profit of 41.3 billion KRW, and net profit of 32.2 billion KRW, representing increases of 21.5%, 105.2%, and 94.1%, respectively. Although album sales volumes slightly declined, the company attributed the improved performance to increased digital music revenue, a rise in global concerts, and expanded revenue from MD and IP (intellectual property) licensing.
In the first quarter, the rookie girl group Hearts2Hearts formed a global fandom by surpassing 400,000 copies sold with their debut single, while the trainee group SMTR25 drew attention even before debut through the release of pre-debut content, demonstrating the growth potential of new IPs.
The company's IP monetization strategy is also gaining momentum. SM is diversifying its MD and IP business through initiatives such as the RIIZE character pop-up store and a collaboration between SHINee Key and Hello Kitty. The company also plans to accelerate its global market expansion by collaborating with Tencent Music in China and incorporating DearU as a consolidated subsidiary.
In the second quarter, major artists including aespa, Red Velvet, and NCT Doyoung are scheduled to release new albums, while global tours by Kai, RIIZE, and NCT Dream are expected to drive performance revenue in earnest. In the third quarter, high-profile IP-based releases such as Super Junior's 20th anniversary studio album and a new aespa mini-album are planned.
Co-CEO Jang Cheolhyuk stated, "The rapid establishment of new IPs and the implementation of monetization strategies have driven our performance growth," adding, "Based on the SM 3.0 strategy, we will continue to pursue diversification of our IP business and expansion into global markets."
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