Tencent Music Entertainment Group (NYSE:TME) reported its first-quarter results on Tuesday.

The company reported quarterly revenues of $1.01 billion, which is in line with the street view. Revenues increased 8.7% year over year, primarily due to strength in online music services, partially offset by a decline in revenues from social entertainment services and others.

China’s online music and audio entertainment platform’s adjusted EPADS of 19 cents (1.37 Chinese yuan) was in line with the analyst consensus estimate.

Also Read: Tencent Music’s Q4 Revenue Beats Street View, But Monthly Active Users Fall Over 3%

Revenues from music subscriptions were $581 million, representing 16.6% Y/Y growth.

Monthly active users (MAUs) for online music declined by 4.0% Y/Y to 555 million. Paying users for online music grew by 8.3% Y/Y to 122.9 million. The monthly average revenue per user (ARPPU) for online music grew by 7.5% Y/Y to 11.4 million Chinese yuan.

Gross margin increased to 44.1% from 40.9%, primarily due to strong revenue growth from music subscriptions and advertising services and the ramp-up of its content.

Net profit attributable to equity holders of the company was $591 million, representing 201.8% Y/Y growth.

In the first quarter, the company we received a 2% equity interests of Universal Music Group through a distribution-in-kind from one of the associates, which was designated as financial assets at fair value through other comprehensive income, and recognized a gain of $327 million on deemed disposal of this associate.

Total cash, equivalents, term deposits, and short-term investments as of March 31, 2025, were $5.19 billion.

On March 17, 2025, the company’s board of directors declared a cash dividend of 9 cents per ordinary share, or 18 cents per ADS, for the year ended December 31, 2024.

Executive Chairman Cussion Pang said following a good start to the year, the company remains on track and well positioned to achieve sustainable growth in 2025 and beyond.

Price Action: TME shares are trading lower by 3.22% to $13.87 at last check on Tuesday.

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This article Tencent Music Q1 Paying User Growth More Than Offsets Monthly Active User Loss originally appeared on Benzinga.com

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