South Korean K-pop giant HYBE said its net profit basically evaporated in the third quarter and total revenue slipped 2% after after the company earned less from concerts and saw reduced music sales, according to results published on Tuesday (Nov. 5).
HYBE’s net profit for the third quarter was 1.444 billion won ($1.05 million), a figure 98.6% lower than the third quarter of 2023 when the company reported of 99,690 billion won ($72.3 million). Total revenue for the third quarter of 527.9 billion won ($382.6 million).
HYBE’s biggest release of the quarter was the debut album, SIS, from KATSEYE, a six-member girl group formed over the summer as part of The Debut: Dream Academy, which spent two weeks on the Billboard 200, the company said.
HYBE’s direct revenue — which comes from its recorded music business, concerts, and things where artists are directly involved — fell by 15.5% to 323 billion won ($234 million). Revenue from its recorded music division declined by nearly 19% to 214.5 billion won ($155.5 million), while concert revenue fell nearly 15% to 74 billion won ($53.6 million). Revenue from ads and appearances rose by nearly 10% to 34.5 billion won ($25 million).
HYBE’s business lines that operate independently of their artists — like merchandising and sync licensing — performed much better, with revenue from artist-indirect involvement business lines rising by 32% to nearly 205 billion won ($148.5 million). Revenue from merchandise and licensing song rights rose by nearly 16% to 99 billion won ($71.9 million), contents revenue rose 64% to almost 80 billion won ($58 million) and fan club revenue rose by more than 23% to 26 billion won ($18.8 million).
The company’s operating profit margin saw significant improvement — up 4% — from the first quarter this year to 10.3% for the third quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of HYBE’s profit from its operations, fell by 16.4% to 81 billion won ($58.7 million).
HYBE has had an eventful few months. In July, the company appointed Jason Jaesang Lee as its new CEO and announced its “HYBE 2.0” growth strategy, which reorganizes the company, pushes a global expansion and focuses on tech-driven initiatives.
The company has also been embroiled in a dispute with Min Hee-jin, ex-CEO of the company’s label subsidiary ADOR — home to chart-topping girl group NewJeans — regarding HYBE’s claim that Min tried to take control of ADOR and NewJeans.