SM Entertainment took a hit in Q3 while rival HYBE posted its best sales quarter yet. The K-pop giants had very different results, with SM's sales down 9.5% from last year to KRW 291.1 billion ($205.1 million). HYBE hit KRW 1.53 trillion ($1.08 billion), helped by BTS touring the globe.
And the gap got worse at the profit level. SM made KRW 35.5 billion ($25 million) from operations, a 26.4% drop. Its margin slid from 15% to 12.2%, while a KRW 44.7 billion net gain last year turned into a KRW 1.1 billion ($800,000) loss.
Currency moves did real damage here. A stronger Korean won hurt SM's foreign exchange results, while other costs rose to KRW 13.4 billion from KRW 1.1 billion. Financial income fell from KRW 4.6 billion to KRW 0.2 billion. Financial costs hit KRW 17.7 billion, versus KRW 9.6 billion in Q2.
Meanwhile, SM lost KRW 32.3 billion on non-operating items, compared with a KRW 8.7 billion gain last year. Earnings before tax plunged 94.3% to KRW 3.2 billion, below its KRW 4.4 billion tax bill. HYBE had currency issues as well, with CFO Kyung-Jun Lee linking most of its KRW 142.8 billion in non-operating costs to exchange valuations.
Back at SM's core business, sales dropped 22.8% to KRW 173.4 billion ($122.2 million). Music brought in KRW 47.1 billion ($33.2 million), down 51.3%. New album sales sank from 5.50 million units to 1.67 million, with the prior quarter reaching 5.67 million. Artists spent more effort on global events than local releases.
Not one new SM album reached a million units. NCT 127 came close with BLINGY at 970,000. WayV logged 240,000 for Vision Wings, SUPER JUNIOR-83z moved 150,000 with Promise, and Red Velvet reached 140,000 with Velvet Summer. Last year's lineup had bigger hits from NCT WISH, aespa, and NCT DREAM.
Live shows had a rough run as well. SM earned KRW 34.5 billion ($24.3 million) from concerts, down 34.2%. Its schedule had 13 aespa shows, 10 from U-KNOW, eight from EXO, and three from NCT 127. HYBE, on the flip side, saw concert sales jump 196.7% to a new peak.
But merch was a bright spot. SM gained 23.5% in sales from goods and licensing, reaching KRW 62.1 billion ($43.8 million). Fans bought items linked to BLINGY, EXO-MUNGCHIZ, and aespa's PUBG deal. Those sales led its main business, even as SM Brand Marketing fell 25.8% to KRW 14 billion after work moved in-house.
Elsewhere, ads, TV gigs, and event fees gave SM a 21.3% lift to KRW 29.2 billion ($20.6 million). More global festivals, award events, and brand work helped. Yet its main business profit still fell 29.2% to KRW 28.4 billion ($20 million).
The smaller companies had mixed results. Their total sales rose 12.1% to KRW 164.6 billion ($116 million), but profit from operations slipped 9.9% to KRW 12.2 billion. Together, they lost KRW 6 billion after tax.
Japan had a bad patch. SM Entertainment Japan took in KRW 23 billion, down 5.8%, while its profit plunged 89.4%. A weak yen and a shift toward fan events and small gigs hurt. DREAM MAKER fared far better, with concert work pushing sales up 223.2% to KRW 27.4 billion ($19.3 million).
KEYEAST also did well, as TV projects lifted sales 336.3% to KRW 15.8 billion. SM Life Design Group fell 58.7% to KRW 7.6 billion as album print jobs dried up. DearU grew 2.4% to KRW 22.8 billion ($16.1 million), helped by fresh Bubble acts and more users in China.
For the first nine months, SM still grew total sales 7.5% to KRW 919.8 billion. That matters, since the weak quarter broke a run of five straight quarters with double-digit growth. The prior quarter had gained 15.4%.
Next up, NCT DREAM and TAEYEON have full albums on the release slate, while an EXO unit has a mini album planned. NCT WISH has already sold 1.56 million copies of I SPY in its debut week, per Hanteo Chart.
Further out, SEULGI, JAEHYUN, and RIIZE have full albums planned for early 2027. aespa has nine Europe gigs set, with Manchester, London, Berlin, and Paris on the route. NCT WISH also has 17 Asia shows lined up for its second tour.
And the gap got worse at the profit level. SM made KRW 35.5 billion ($25 million) from operations, a 26.4% drop. Its margin slid from 15% to 12.2%, while a KRW 44.7 billion net gain last year turned into a KRW 1.1 billion ($800,000) loss.
Currency moves did real damage here. A stronger Korean won hurt SM's foreign exchange results, while other costs rose to KRW 13.4 billion from KRW 1.1 billion. Financial income fell from KRW 4.6 billion to KRW 0.2 billion. Financial costs hit KRW 17.7 billion, versus KRW 9.6 billion in Q2.
Meanwhile, SM lost KRW 32.3 billion on non-operating items, compared with a KRW 8.7 billion gain last year. Earnings before tax plunged 94.3% to KRW 3.2 billion, below its KRW 4.4 billion tax bill. HYBE had currency issues as well, with CFO Kyung-Jun Lee linking most of its KRW 142.8 billion in non-operating costs to exchange valuations.
Back at SM's core business, sales dropped 22.8% to KRW 173.4 billion ($122.2 million). Music brought in KRW 47.1 billion ($33.2 million), down 51.3%. New album sales sank from 5.50 million units to 1.67 million, with the prior quarter reaching 5.67 million. Artists spent more effort on global events than local releases.
Not one new SM album reached a million units. NCT 127 came close with BLINGY at 970,000. WayV logged 240,000 for Vision Wings, SUPER JUNIOR-83z moved 150,000 with Promise, and Red Velvet reached 140,000 with Velvet Summer. Last year's lineup had bigger hits from NCT WISH, aespa, and NCT DREAM.
Live shows had a rough run as well. SM earned KRW 34.5 billion ($24.3 million) from concerts, down 34.2%. Its schedule had 13 aespa shows, 10 from U-KNOW, eight from EXO, and three from NCT 127. HYBE, on the flip side, saw concert sales jump 196.7% to a new peak.
But merch was a bright spot. SM gained 23.5% in sales from goods and licensing, reaching KRW 62.1 billion ($43.8 million). Fans bought items linked to BLINGY, EXO-MUNGCHIZ, and aespa's PUBG deal. Those sales led its main business, even as SM Brand Marketing fell 25.8% to KRW 14 billion after work moved in-house.
Elsewhere, ads, TV gigs, and event fees gave SM a 21.3% lift to KRW 29.2 billion ($20.6 million). More global festivals, award events, and brand work helped. Yet its main business profit still fell 29.2% to KRW 28.4 billion ($20 million).
The smaller companies had mixed results. Their total sales rose 12.1% to KRW 164.6 billion ($116 million), but profit from operations slipped 9.9% to KRW 12.2 billion. Together, they lost KRW 6 billion after tax.
Japan had a bad patch. SM Entertainment Japan took in KRW 23 billion, down 5.8%, while its profit plunged 89.4%. A weak yen and a shift toward fan events and small gigs hurt. DREAM MAKER fared far better, with concert work pushing sales up 223.2% to KRW 27.4 billion ($19.3 million).
KEYEAST also did well, as TV projects lifted sales 336.3% to KRW 15.8 billion. SM Life Design Group fell 58.7% to KRW 7.6 billion as album print jobs dried up. DearU grew 2.4% to KRW 22.8 billion ($16.1 million), helped by fresh Bubble acts and more users in China.
For the first nine months, SM still grew total sales 7.5% to KRW 919.8 billion. That matters, since the weak quarter broke a run of five straight quarters with double-digit growth. The prior quarter had gained 15.4%.
Next up, NCT DREAM and TAEYEON have full albums on the release slate, while an EXO unit has a mini album planned. NCT WISH has already sold 1.56 million copies of I SPY in its debut week, per Hanteo Chart.
Further out, SEULGI, JAEHYUN, and RIIZE have full albums planned for early 2027. aespa has nine Europe gigs set, with Manchester, London, Berlin, and Paris on the route. NCT WISH also has 17 Asia shows lined up for its second tour.
