Earnings and sales exceed market expectations

K-pop powerhouse Hybe Co. said Tuesday it posted over 1 trillion won (US$761.3 million) in sales in the first half of this year on the back of strong album and concert revenue, surpassing the milestone for the first time. 

The entertainment agency behind K-pop supergroup BTS, NewJeans and Seventeen said in a regulatory filing that it posted a net income of 117.4 billion won in the second quarter, up 18.7 percent from a year earlier.

Operating income was down 7.9 percent on-year to 81.3 billion won in the April-June period due to one-off costs from BTS Festa 2023, an event celebrating the K-pop juggernaut's 10th anniversary of its debut, and the Weverse Con Festival, Hybe's annual joint-label concert, the company said.

Sales rose 21.2 percent to 621 billion won in the second quarter.

The earnings and sales exceeded market expectations. The average estimate of net profit by analysts stood at 62.9 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The cover of "Beyond the Story: 10-year Record of BTS," K-pop juggernaut BTS' book commemorating their 10th debut anniversary, is seen in this photo provided by BigHit Music. (PHOTO NOT FOR SALE) (Yonhap)

By sector, sales from albums, concerts and appearance fees surged 33.9 percent on-year to 436.3 billion won, with concert revenue jumping 85.4 percent in the wake of eased COVID-19 pandemic restrictions.

Revenue from merchandising, licensing and fan community platforms slipped 1 percent to 184.5 billion won due to sluggish content sales.

In the first half, Hybe's sales rose 29.4 percent to 1.03 trillion won, marking the first time the company has surpassed the milestone since its foundation in 2005. Its operating profit increased 6.8 percent to 133.9 billion won in the half-year period.

The company attributed the surge to strong album sales by major artists, including BTS member Suga, Seventeen, Tomorrow X Together (TXT) and Le Sserafim.

Hybe's music labels sold a combined 22.7 million copies of albums in the first half of this year, already surpassing the 22.2 million copies sold last year.

K-pop girl group NewJeans performs at the Lollapalooza music festival in Chicago on Aug. 3, 2023, in this photo provided by its record label, Ador, which is under K-pop powerhouse Hybe. (PHOTO NOT FOR SALE) (Yonhap)

In May, Suga debuted at No. 2 on the Billboard 200 main albums chart with his first full-length solo album, D-Day, and went on tours in 10 cities across North America, Southeast Asia and Japan.

Seventeen's 10th EP released in April, FML, sold 6.2 million copies, making it the biggest-selling K-pop album of all time.

Girl group Le Sserafim's first full-length album, Unforgiven, sold over 1 million copies on the day of its release in May.

The company's fan community platform, Weverse, kept breaking its record by surpassing 100 million downloads in June and surpassing 10 million monthly active users as of the end of July.

Hybe said it will launch new integrated services on Weverse and expand its artist lineup under a partnership agreement with SM Entertainment.

"We will enhance the Weverse existing platform and launch new services, while attracting 13 artists from SM Entertainment by the end of this year to improve profitability," Hybe CEO Park Ji-won said in a conference call.

Looking forward, Hybe expects robust third-quarter earnings on the back of the global success of BTS member Jungkook's solo project and girl group NewJeans.

In July, Jungkook topped the Billboard Hot 100 songs chart with his first solo single, Seven, and NewJeans' second EP, "Get Up," topped the Billboard 200 main albums chart for the first time since its debut a year ago.