Hybe

HYBE runs a multi-label structure spanning recorded music, concerts, merchandise and licensing, content, and its own fan platform. Revenue is split between 'direct-participation' lines such as albums, concerts and advertising, and 'indirect-participation' lines such as merchandise, licensing, content and platform.

In 1Q26 direct-participation revenue was KRW 403.7bn, of which albums accounted for KRW 271.5bn, while indirect-participation revenue was KRW 294.7bn. In 2Q26, concerts contributed KRW 647.7bn, recorded music KRW 326.8bn and merchandise/licensing KRW 310.6bn, all record highs.

Beyond BTS, TOMORROW X TOGETHER, ENHYPEN, &TEAM, BOYNEXTDOOR, TWS and CORTIS became million-sellers on Korea's Circle Chart, while global group KATSEYE kept growing overseas.

Weverse bundles content subscriptions, digital memberships and commerce; management said it has strengthened revenue models such as digital memberships, direct messages and advertising that generate income regardless of artist activity schedules.

Geographically, Korea and Japan are complemented by North America and Latin America, and the company shifted its North American business from a management-centric model to a label-centric integrated IP model, set up entities in China and India, and debuted several Latin acts.

Competition runs against domestic peers SM, JYP and YG for IP, and against global majors and large promoters abroad. Adjacent businesses include games, where early marketing spend on a new MMORPG was cited as a drag on 4Q25 profitability.

Annually, revenue rose steadily from KRW 1.776tn in 2022 to KRW 2.178tn in 2023, KRW 2.256tn in 2024 and KRW 2.650tn in 2025, while profitability moved the other way.

Operating profit fell from KRW 295.6bn in 2023 (13.6% margin) to KRW 184.0bn in 2024 (8.2%) and KRW 49.3bn in 2025 (1.9%), with an owners' net loss of KRW 237.3bn in 2025.

Two forces drove the 2025 erosion: upfront investment in new artist debuts plus one-off restructuring costs pressured the operating line, while roughly KRW 200bn of goodwill impairment from converting the US business from a management-centric to a label-centric structure was booked as a non-operating item.

Quarterly, after KRW 65.9bn of operating profit in 2Q25 came a KRW 42.2bn operating loss in 3Q25 and only KRW 4.0bn in 4Q25, when the owners' net loss reached KRW 265.2bn.

In 1Q26, revenue hit a first-quarter record of KRW 698.3bn but the operating loss was KRW 196.6bn and the owners' net loss KRW 158.5bn, because shares worth KRW 255bn contributed by the largest shareholder as an employee bonus pool were recognised as accounting expense; the company called it a non-cash one-off and reported adjusted operating profit of KRW 58.5bn, an 8.4% margin.

In 2Q26, revenue of KRW 1.450tn, operating profit of KRW 170.9bn and owners' net profit of KRW 102.3bn were all quarterly records, lifting the operating margin to about 11.8%.

However, the 2Q gross margin slipped to 32% from 43% in the prior quarter, as a larger share of concert revenue, which carries high artist royalty costs, raised the cost ratio.

Operating cash flow declined from KRW 347.1bn in 2022 and KRW 310.6bn in 2023 to KRW 151.6bn in 2024 and KRW 107.5bn in 2025, while the debt-to-equity ratio improved from 71.9% in 2023 to 54.5% in 2025.

First-half 2026 operating profit remains negative on a cumulative basis and the latest four quarters combined still show an owners' net loss, so one record quarter does not yet settle the full-year picture.

In the global music industry, streaming growth is maturing and value is shifting toward fandom-driven revenue such as concerts, merchandise and platforms. In K-pop, album sales track fandom size while concert revenue depends on show count, attendance and ticket pricing, so major IP tour cycles amplify earnings swings.

HYBE ranked fourth globally in Billboard's 2025 Boxscore annual Top Promoters list, up five places, and three of the four K-pop acts in Billboard's 2025 Top Tours were HYBE artists.

In recorded music it also held a leading domestic position, with about 19.6mn cumulative units and roughly a 30% share on Korea's 2025 annual Circle Chart. Structurally, a rising concert mix brings higher royalty and production costs, so top-line growth and margin expansion do not always move together.

Localised group strategies are being pursued by all four major K-pop houses, and HYBE points to overseas momentum at KATSEYE and CORTIS.

On the platform side, management said Weverse is in the first stage of expanding its Japanese artist roster and plans to lift platform margins by recruiting commerce-driving artists and growing the digital business mix.

By contrast, HYBE's US arm posted a net loss of KRW 323.1bn in 2025, a wider loss than the prior year, according to a June 2026 Dailypop report, showing overseas expansion has not yet translated fully into profit.

The activity calendar the company has disclosed is weighted to the second half. HYBE said 12 acts staged 119 shows in the first half and more than 200 are scheduled in the second half, with merchandise and licensing revenue expected to rise alongside tours and offline events.

On tour scale, CEO Lee Jae-sang said on the February 2026 call that the first confirmed plan alone covers 82 shows in 34 cities worldwide, the most ever for a single K-pop artist tour. Platform metrics have been improving: Weverse monthly active users hit a record 13.37mn in 1Q26 and rose again to 14.43mn in 2Q26.

On capital returns, a three-year policy announced with the 2025 results shifted the dividend basis to consolidated free cash flow to reduce non-cash volatility, earmarking up to 30% of 2025-2027 free cash flow for shareholder returns and introducing a minimum dividend framework.

Strategically, Lee said 2026 is when various global IPs settle into their markets and that results should improve on stronger e-commerce capability and growth in the in-house digital business.

The open question is margin: whether gross and operating margins can hold near 2Q levels as the concert mix grows in the second half, and how much the post-renewal BTS royalty structure shows up in reported numbers.