The company has been expanding its music library through new partnerships and multi-year licensing deals. That, coupled with efforts to diversify its content base through long-form shows and live talk shows have helped lure more paying users to its music platform as well as advertisers.
Tencent Music and Sony Music Entertainment said on Monday they had signed a multi-year extension of their digital distribution agreement.
Total revenue of the company, controlled by Chinese tech giant Tencent Holdings Ltd (0700.HK), rose to 7.82 billion yuan ($1.21 billion) in the first quarter from a year earlier. Analysts were expecting revenue of 7.73 billion yuan, according to IBES data from Refinitiv.
Profit attributable to equity holders of the company rose to 926 million yuan ($143.82 million), from 887 million yuan a year earlier.
Excluding items, the company earned 69 yuan per American Depository Share (ADS), above estimates of 55 yuan per ADS.
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U.S.-listed shares of Tencent Music were down 1% in trading after the bell.
($1 = 6.4388 Chinese yuan renminbi)
Tencent Music was established in July 2016 with Tencent’s purchase of China Music Corporation to strengthen its music offerings.
On July 4, 2018, Sony/ATV Music Publishing acquired an equity stake in Tencent Music. In October 2018, the firm filed for IPOs of around $2 billion in the United States.
In December 2018, the company announced an IPO with the total value of shares around $1.23 billion, which includes 82 million ADS and 164 million regular shares priced around $13 – $15.
As of 2018, 46.6% of Tencent Music class A ordinary shares are owned by Spotify.
On January 30, 2019, SM Entertainment, the largest entertainment agency of South Korea entered into strategic partnership agreement with China’s Tencent Music that included music distribution and marketing in the Chinese market.