South Korean K-pop giant HYBE said its net profit essentially evaporated in the third quarter and total revenue fell 2 percent after the company earned less from concerts and saw lower music sales, according to results released Tuesday (Nov. 5 ).
HYBE's net profit for the third quarter was 1.444 billion won ($1.05 million), down 98.6% from the third quarter of 2023, when the company reported 99.690 billion won ($72.3 million). Total revenue for the third quarter 527.9 billion won ($382.6 million).
HYBE's biggest release of the quarter was the debut album, SISby KATSEYE, a six-member girl group formed over the summer as part of The debut: Dream Academywhich spent two weeks at Bulletin board 200, the company said.
HYBE's direct revenue – which comes from its recorded music business, concerts and things directly involved with artists – fell 15.5 percent to 323 billion won ($234 million). Revenue from the recorded music division fell nearly 19 percent to 214.5 billion won ($155.5 million), while revenue from concerts fell nearly 15 percent to 74 billion won ($53.6 million). Advertising and display revenue rose nearly 10 percent to 34.5 billion won ($25 million).
HYBE's business lines that operate independently of their artists – such as merchandising and sync licensing – performed much better, with revenue from artist indirect participation business lines rising 32% to nearly 205 billion won (148.5 million dollars). Merchandise and song rights revenue rose nearly 16% to 99 billion won ($71.9 million), content revenue rose 64% to nearly 80 billion won ($58 million), and fan club revenue rose more up 23% to 26 billion won ($18.8 million).
The company's operating margin improved significantly – up 4% – from the first quarter of this year to 10.3% for the third quarter. Earnings before taxes, interest and depreciation (EBITDA), a measure of HYBE's earnings from its operations, fell 16.4 percent to 81 billion won ($58.7 million).
HYBE has had an eventful few months. In July, the company appointed Jason Jaesang Lee as the new CEO and announced its “HYBE 2.0” growth strategy, which reorganizes the company, promotes a global expansion and focuses on technology-driven initiatives.
The company has also been embroiled in controversy with Min Hee Jinformer CEO of subsidiary company ADOR – home of top girl group NewJeans – regarding HYBE's claim that Min tried to take control of ADOR and NewJeans.
