Tencent Music Entertainment Group (NYSE:TME) Releases Quarterly Earnings Results, Beats Expectations By $0.01 EPS

Tencent Music Entertainment Group (NYSE:TME) announced its earnings results on Tuesday. The company reported $0.25 earnings per share for the quarter, beating the consensus estimate of $0.24 by $0.01, reports. The business had revenue of $1.32 billion during the quarter. Tencent Music Entertainment Group had a return on equity of 11.20% and a net margin of 26.45%.The company’s quarterly revenue was up 5.8% compared to the same quarter last year. During the same period in the prior year, the business earned $1.55 EPS.

Here are the key takeaways from Tencent Music Entertainment Group’s conference call:

• Q2 revenue increased 6% year over year to RMB 8.9 billion, with music-related services up 11% and membership revenue up 8% to RMB 4.8 billion. Adjusted EBITDA rose 5% to RMB 3.3 billion, while net profit reached RMB 2.5 billion.
• IP-driven businesses—including concerts, merchandise, digital albums, and artist-related services—continued to deliver strong double-digit growth. Management expects these diversified monetization channels to provide relatively steady growth despite competitive pressure on subscriptions and advertising.
• The consolidation of Ximalaya contributed approximately RMB 0.4 billion in Q2 revenue and expands Tencent Music into a broader music-and-audio platform. Management highlighted potential long-term synergies from audiobooks, podcasts, children’s content, advertising, shared technology, and richer SVIP benefits.
• Competition and weaker traffic trends moderated underlying music subscription growth, particularly among casual and light users, while advertising faced macroeconomic and market headwinds. Management expects full-year operating expenses to rise modestly, net profit margin to come under slight pressure due partly to higher interest expense, and second-half gross margin to decline slightly year over year.
• Tencent Music ended the quarter with RMB 44.2 billion in cash, deposits, and short-term investments and repurchased 43.5 million ADSs for USD 400 million during Q2. Management said it remains on track to complete the existing USD 1 billion buyback program and is preparing for a potential new repurchase plan.

Tencent Music Entertainment Group Trading Down 3.1%

Shares of TME stock traded down $0.27 during trading hours on Wednesday, reaching $8.45. 8,783,192 shares of the stock traded hands, compared to its average volume of 9,250,243. Tencent Music Entertainment Group has a 1-year low of $7.94 and a 1-year high of $26.70. The business has a fifty day moving average price of $8.98 and a 200 day moving average price of $10.86. The company has a quick ratio of 2.08, a current ratio of 2.09 and a debt-to-equity ratio of 0.06. The firm has a market capitalization of $13.30 billion, a PE ratio of 10.56, a PEG ratio of 1.49 and a beta of 0.84.

Analysts Set New Price Targets

A number of equities research analysts have weighed in on TME shares. Weiss Ratings raised shares of Tencent Music Entertainment Group from a “hold (c-)” rating to a “hold (c)” rating in a report on Wednesday, July 1st. JPMorgan Chase & Co. lowered their price objective on shares of Tencent Music Entertainment Group from $12.00 to $10.00 and set a “neutral” rating on the stock in a research note on Thursday, May 14th. Mizuho dropped their target price on shares of Tencent Music Entertainment Group from $18.00 to $15.00 and set an “outperform” rating on the stock in a report on Wednesday. UBS Group set a $15.00 target price on shares of Tencent Music Entertainment Group in a report on Wednesday. Finally, Zacks Research upgraded shares of Tencent Music Entertainment Group from a “strong sell” rating to a “hold” rating in a research report on Tuesday, May 19th. Four analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Hold” and an average target price of $18.80.

Trending Headlines about Tencent Music Entertainment Group

Here are the key news stories impacting Tencent Music Entertainment Group this week:

• Positive Sentiment: Q2 revenue growth and earnings beat: Tencent Music reported second-quarter revenue of RMB8.93 billion ($1.32 billion), up 5.8% year over year, while EPS of $0.25 topped the $0.24 consensus estimate. Growth was driven primarily by music-related services, including subscription activity. Tencent Music second-quarter 2026 financial results
• Positive Sentiment: Potential shareholder returns: TME signaled another share-buyback round, which could support per-share value and investor sentiment. Management is also integrating Ximalaya into a broader music-and-audio platform, potentially expanding the company’s addressable market and cross-selling opportunities. TME buyback and Ximalaya integration
• Neutral Sentiment: Analyst targets remain above the stock’s recent trading level: Mizuho cut its price target from $18 to $15 but maintained an “outperform” rating, while China Renaissance downgraded TME from “buy” to “hold” and set a $9.30 target. The revisions indicate continued upside potential but less analyst confidence in the near-term outlook. Analyst rating and price target updates
• Negative Sentiment: Post-earnings selling despite the beat: Reports indicate that TME shares slid after the quarterly results, suggesting the modest revenue increase and earnings performance did not satisfy elevated expectations. EPS was also below the $1.55 reported in the same quarter a year earlier, adding to investor caution. Tencent Music shares after Q2 results

Institutional Trading of Tencent Music Entertainment Group

Several large investors have recently added to or reduced their stakes in the company. Allworth Financial LP grew its stake in Tencent Music Entertainment Group by 63.2% in the third quarter. Allworth Financial LP now owns 1,480 shares of the company’s stock valued at $35,000 after purchasing an additional 573 shares in the last quarter. Caitong International Asset Management Co. Ltd grew its position in Tencent Music Entertainment Group by 5,777.1% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 2,057 shares of the company’s stock worth $36,000 after acquiring an additional 2,022 shares in the last quarter. Smartleaf Asset Management LLC increased its stake in shares of Tencent Music Entertainment Group by 61.3% during the 4th quarter. Smartleaf Asset Management LLC now owns 2,123 shares of the company’s stock worth $37,000 after purchasing an additional 807 shares during the last quarter. Kestra Advisory Services LLC acquired a new position in shares of Tencent Music Entertainment Group during the 4th quarter worth $46,000. Finally, EverSource Wealth Advisors LLC raised its holdings in shares of Tencent Music Entertainment Group by 83.0% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 3,005 shares of the company’s stock valued at $59,000 after purchasing an additional 1,363 shares in the last quarter. 24.32% of the stock is owned by institutional investors and hedge funds.

About Tencent Music Entertainment Group

Tencent Music Entertainment Group (NYSE: TME) is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders.

The company traces its roots to the consolidation of Tencent’s music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity.