Seoul: Hybe, the company behind K-pop sensation BTS, reported a significant increase in first-quarter revenue driven by the band's comeback. However, the company faced an operating loss due to a one-time accounting cost associated with stock-based compensation for employees.
According to Yonhap News Agency, Hybe announced in a regulatory filing that its revenue for the January-March period surged 39.5 percent year-on-year to 698.3 billion won (US$468 million), setting a new record for the first quarter, which is usually a less active period for the music industry. Despite the revenue growth, the company recorded an operating loss of 196.6 billion won, compared to a profit of 21.6 billion won from the previous year, falling short of the market consensus of a 42.6 billion-won profit as compiled by Yonhap Infomax.
The net loss for Hybe was reported at 156.7 billion won. The company attributed this to a 255 billion-won one-off expense resulting from Chairman Bang Si-hyuk, the largest shareholder, granting shares from his personal holdings as employee incentives. Hybe clarified that this expense did not involve an actual cash outflow. Excluding this one-off cost, the adjusted operating profit stood at 58.5 billion won.
Revenue from activities involving "direct participation" from artists, such as album and music sales, concerts, and advertising, climbed 25.2 percent on-year to 403.7 billion won. The sales of BTS' fifth full-length album, "Arirang," which was released last month, significantly boosted this figure, with album and music sales nearly doubling to 271.5 billion won. The album achieved remarkable success, selling 3.98 million copies on its first day and topping the U.S. Billboard 200 chart for three consecutive weeks. Its lead single, "Swim," also reached No. 1 on the Billboard Hot 100 chart.
Other Hybe artists, including Enhypen, Katseye, and Cortis, contributed to the company's growth. Revenue from artists' "indirect participation," encompassing merchandise, licensing, content, and fan club memberships, increased by 65.5 percent to 294.7 billion won, bolstered by robust demand for tour-related goods and presales for the ongoing BTS world tour.
Hybe anticipates further revenue and operating profit growth in the second quarter, driven by new releases from various groups, including Tomorrow X Together, TWS, and ILLIT, as well as the inclusion of sales from the BTS tour. CEO Lee Jae-sang highlighted the global appeal of BTS during a conference call, noting that sold-out shows at stadiums with capacities exceeding 50,000 seats underscore the worldwide expansion of K-pop. He emphasized the strong fan turnout across North America, Europe, and Asia as evidence of this growth.