SM Entertainment reported a 15.4% YoY rise in second-quarter revenue to KRW 349.6 billion ($233 million).
That’s according to the South Korea-based K-pop company’s latest quarterly report, published on Wednesday (August 5).
The growth was driven by SM‘s concert and merchandising/licensing businesses, along with revenue growth across its subsidiaries.
Operating profit rose 11.0% YoY to KRW 52.9 billion ($35.3 million), which SM attributed to revenue growth at both parent and subsidiary level and to lower operating costs.
Net income, however, fell 5.6% YoY to KRW 29.2 billion ($19.5 million).
SM said the decline was “primarily due to valuation losses on equity investments, impairment losses on investment assets, and higher income tax expenses.”
The company’s income tax expense jumped 52.8% YoY to KRW 12.8 billion, even as its pre-tax income rose 6.9%.
At parent-company level, revenue grew 9.2% YoY to KRW 240.6 billion ($160 million).
Concert revenue climbed 23.6% YoY to KRW 41.6 billion ($27.7 million), which SM said was “driven by the expansion of tours by our legacy IPs.”
SUPER JUNIOR wrapped its 20th-anniversary SUPER SHOW 10 tour with three encore shows in Seoul, while EXO played 19 concerts across 10 Asian cities on its sixth solo tour.
aespa, meanwhile, staged five shows across Jakarta and Japan on its SYNK: aeXIS LINE tour, TVXQ! performed twice at Nissan Stadium in Japan, and NCT WISH held five dates on its first concert tour.
Revenue from merchandising and licensing grew 22.0% YoY to KRW 77.9 billion ($51.9 million), which SM said reflected “ongoing IP-based monetization.”
The company tied that growth to pop-up events and concert merchandise, including a nine-day NCT 10th-anniversary pop-up in Seoul and an aespa pop-up run across seven cities.
Revenue from physical albums and digital music fell 8.2% YoY to KRW 90.9 billion ($60.6 million), which SM attributed to lower sales volumes from new releases.
New-album sales totaled 5.67 million copies in the quarter, down from 6.03 million a year earlier.
aespa‘s second full-length album, LEMONADE, sold 1.06 million copies and debuted at No. 9 on the Billboard 200.
RIIZE‘s second mini-album, II, sold 1.4 million copies, which SM said was the group’s fourth consecutive million-selling release.
NCT WISH‘s first full-length album, Ode to Love, sold 1.92 million copies, while girl group Hearts2Hearts sold 620,000 copies of its second mini-album, Lemon Tang.
The result extends a run of concert- and merchandise-led growth for SM, which posted record fourth-quarter revenue of KRW 319 billion ($219.4 million) in Q4 2025.
Second-quarter revenue was also up 25.3% from the KRW 279.1 billion the company generated in the first quarter of 2026.
Domestic rival HYBE, the company behind BTS, also posted a record quarter last month, with revenue more than doubling YoY to KRW 1.45 trillion ($967 million) on the back of BTS’s ARIRANG world tour.
Aggregate revenue across SM‘s subsidiaries rose 25.5% YoY to KRW 177.7 billion ($118 million), with their combined operating profit up 61.2% YoY to KRW 13.0 billion.
Concert-production unit DREAM MAKER grew revenue 178.5% YoY to KRW 41.6 billion on more domestic shows, while actor-management firm KEYEAST grew 263.3% to KRW 10.7 billion on a new TV series.
Fan-platform subsidiary DearU, which SM consolidated onto its balance sheet in 2025, grew revenue 15.7% YoY to KRW 23.4 billion on a subscription price increase.
aespa, meanwhile, will perform across Brazil, Chile, Peru, Mexico, the US and Canada in the second half of 2026 as part of its 2026-27 world tour, SYNK: COMPLæXITY.
NCT 127 will open its fifth tour, NEO CITY: SEOUL – THE REDLINE, in Seoul on September 18, while YESUNG marks the 10th anniversary of his solo debut with a seven-show Asia run in the fourth quarter.
Looking ahead, SM said it would “continue to balance the global expansion of our legacy artists with the stable growth of our rookie artists, while further strengthening our diversified IP portfolio to enable sustained value creation across our artist roster.”Music Business Worldwide
SM Entertainment, a leading K-pop company based in South Korea, reported a significant 15.4% year-over-year increase in its second-quarter revenue, reaching KRW 349.6 billion (approximately $233 million). This growth, detailed in the company’s quarterly report published on August 5, was largely driven by the success of its concert and merchandising/licensing ventures, as well as an overall rise in revenue from its subsidiaries.
The company’s operating profit also showed an upward trend, climbing 11.0% year-over-year to KRW 52.9 billion ($35.3 million). This improvement was attributed to enhanced revenue streams from both the parent company and its subsidiaries, alongside a reduction in operating costs. However, net income saw a decline, falling 5.6% year-over-year to KRW 29.2 billion ($19.5 million). SM Entertainment explained this downturn was mainly due to valuation losses on equity investments, impairment losses on investment assets, and an increase in income tax expenses, which surged by 52.8% year-over-year to KRW 12.8 billion.
At the parent-company level, revenue experienced a growth of 9.2% year-over-year, amounting to KRW 240.6 billion ($160 million). Concert revenue specifically soared by 23.6% year-over-year to KRW 41.6 billion ($27.7 million), driven by the expansion of tours from established intellectual properties (IPs). Notable achievements included SUPER JUNIOR’s successful completion of its 20th-anniversary SUPER SHOW 10 tour, which featured three encore shows in Seoul, and EXO’s sixth solo tour encompassing 19 concerts across 10 Asian cities. Additionally, aespa held five shows in Jakarta and Japan as part of its SYNK: aeXIS LINE tour, while TVXQ! performed at Nissan Stadium in Japan, and NCT WISH conducted five dates on its inaugural concert tour.
Merchandising and licensing revenue also saw a robust increase of 22.0% year-over-year to KRW 77.9 billion ($51.9 million), a growth attributed to ongoing monetization strategies linked to the company’s IPs. SM points to the success of pop-up events and concert merchandise, such as a nine-day NCT 10th-anniversary pop-up event in Seoul and an aespa pop-up that spanned seven cities.
Conversely, revenue from physical album sales and digital music dipped by 8.2% year-over-year to KRW 90.9 billion ($60.6 million). This decline was linked to lower sales volumes from new releases, with new-album sales totaling 5.67 million copies during the quarter, a decrease from 6.03 million in the previous year. Despite the overall dip in album sales, aespa’s second full-length album, LEMONADE, sold 1.06 million copies and debuted at No. 9 on the Billboard 200. RIIZE’s second mini-album, II, marked the group’s fourth consecutive million-selling release with 1.4 million copies sold, while NCT WISH’s first full-length album, Ode to Love, achieved 1.92 million sales. Additionally, girl group Hearts2Hearts sold 620,000 copies of its second mini-album, Lemon Tang.
This second-quarter performance builds on a pattern of concert and merchandise-led growth for SM Entertainment, following a record-setting fourth-quarter revenue of KRW 319 billion ($219.4 million) in Q4 2025. The company’s second-quarter revenue also reflects a 25.3% increase compared to the KRW 279.1 billion earned in the first quarter of 2026.
In comparison, domestic rival HYBE, the agency behind the globally renowned group BTS, reported a record quarter as well, with revenues more than doubling year-over-year to KRW 1.45 trillion ($967 million), fueled by BTS’s ARIRANG world tour.
Aggregate revenue across SM’s subsidiaries rose 25.5% year-over-year to KRW 177.7 billion ($118 million), with combined operating profit soaring by 61.2% year-over-year to KRW 13.0 billion. The concert-production unit DREAM MAKER experienced an impressive revenue growth of 178.5% year-over-year to KRW 41.6 billion, primarily due to an increase in domestic shows. Meanwhile, the actor-management firm KEYEAST reported a remarkable 263.3% growth to KRW 10.7 billion, driven by a new TV series. DearU, a fan-platform subsidiary that SM consolidated onto its balance sheet in 2025, also grew, with a revenue increase of 15.7% year-over-year to KRW 23.4 billion, attributed to a rise in subscription prices.
Looking ahead, SM Entertainment has exciting plans for its artists. aespa is set to perform in Brazil, Chile, Peru, Mexico, the US, and Canada as part of its 2026-27 world tour, SYNK: COMPLæXITY. NCT 127 will launch its fifth tour, NEO CITY: SEOUL – THE REDLINE, in Seoul on September 18, while YESUNG will celebrate the 10th anniversary of his solo debut with a seven-show tour across Asia in the fourth quarter.
In summary, SM Entertainment is focused on maintaining a balance between expanding the global presence of its legacy artists while ensuring steady growth for its rookie artists. The company aims to strengthen its diversified IP portfolio to foster sustained value creation across its artist roster, positioning itself favorably for future success in the competitive K-pop industry.
