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China’s Tencent Music Entertainment Group posted total revenues of RMB8.93 billion ($1.32 billion) for the second quarter of 2026 – a 5.8% year-over-year gain – as its music services arm delivered double-digit growth
and the newly integrated Ximalaya platform began contributing to the bottom line.
Music-related services revenues reached $1.12 billion, up 11% year-over-year, with membership services alone accounting for $706 million, an 8.1% increase. Ximalaya, the long-form audio platform whose acquisition closed on May 18, contributed $60 million in revenue during the quarter – its first period fully consolidated into TME’s financial statements.
On a non-IFRS basis – a reporting framework that strips out items such as share-based compensation and acquisition-related amortization to give a cleaner view of operating performance – adjusted EBITDA came in at $480 million, up 5.2% year-over-year. Non-IFRS net profit attributable to equity holders rose 4.4% to $396 million. On the same non-IFRS basis, diluted earnings per ADS – each ADS, or American Depositary Share, represents two of TME’s Class A ordinary shares and is the unit in which the stock trades in New York – reached RMB1.70 ($0.25), compared with RMB1.66 in the same period of 2025. The company’s cash, cash equivalents, term deposits and short-term investments stood at $6.52 billion as of June 30. During the quarter TME also repurchased 43.5 million ADSs for approximately $400 million.
“Concerts, merchandise, and other IP-driven experiences drove another quarter of solid growth in our marketing and consumption services,” executive chair Cussion Pang said, adding that the Ximalaya deal had “broadened our reach and enriched our ecosystem.”
“The addition of Ximalaya is an exciting milestone that will allow us to deliver an even richer audio experience and serve our users more effectively,” CEO Ross Liang added. “Together, we are shaping the future of music and audio entertainment and unlocking long-term growth.”
On the product side, TME introduced vertical swipe-based discovery and expanded freemium access during the quarter, changes designed to lift daily time spent per user. The company also deepened its links with the wider Tencent ecosystem, strengthening music content distribution through Weixin Video Accounts and partnering with Weixin Pay to drive traffic to lightweight apps including Bodian Music and Kugou Concept. A recent tie-up with Weixin XiaoWei lets users call up songs, build playlists, and stream music through simple voice commands.
The company’s IP-focused content push gathered further momentum. Partnerships with Dream Music Group were extended to cover content co-creation, physical merchandise, and live events. TME also aligned with Huace Film & TV, Ruyi Film, and Zhejiang Satellite TV to bring original soundtracks and music variety shows to its platform. On the artist development side, the quarter produced releases including Zhou Shen’s “Blaze into Bloom” and Liu Yuning’s “Borrow a Little Light from Ordinary Days,” while rapper Gai’s Real G tour was elevated to stadium scale and actor-singer Steven Zhang embarked on his first-ever arena tour, New Journey.
Fan-engagement revenue streams continued to diversify. SVIP benefits expanded to include digital albums and tailored gift packages for artists including Renjun, Lay Zhang, Aespa, and Riize. Three fan meetings for SM Entertainment’s trainee group SMTR25 were held in Macau, drawing large crowds with robust merchandise sales. TME’s proprietary international IP event TIMA also moved to a larger venue amid growing fan enthusiasm. Physical releases from Kun, Chen Chusheng, Eazin Poe, and Zhou Shen were met with strong demand.
Social entertainment services and others declined 16.4% year-over-year to $196 million, while gross margin settled at 44.2%, roughly flat with the 44.4% recorded in the same quarter of 2025. The company noted that Ximalaya’s consolidation had a positive impact on gross margin during the period.
TME operates QQ Music, Kugou Music, Kuwo Music, WeSing, and, following the acquisition, Ximalaya. The group is listed on the New York Stock Exchange and the Hong Kong Stock Exchange.
