Good evening and good morning, and welcome to Tencent Music Entertainment Group's Third Quarter 2024 Earnings Conference Call. I'm Millicent Tu at IR. We announced our quarterly financial results earlier today before the U.S. market opened. The earnings release is now available on our IR website and via NewsWire services. During today's call, you'll hear from Mr. Cussion Pang, our Executive Chairman, and Mr. Ross Liang, our CEO, who will share an overview of our company strategies and business updates. Then Ms. Shirley Hu, our CFO, will discuss our financial results before we open the call for questions. Before we continue, I'll refer you to the Safe Harbor statement in our earnings release, which applies to this call as we made forward-looking statements.
Please note that we'll discuss non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under IFRS in our earnings release and filings with the SEC. All participants are muted at this time. After management's remarks, there will be a Q&A session, and please be advised that today's call is being recorded. With that, I'll now turn over the call to Cussion, Executive Chairman of TME. Cussion, please.
Thank you, Millicent. Hello everyone, and thank you for joining our call today. The solid third quarter performance once again showcases our ability to deliver high-quality growth. Our balanced approach continues to drive both subscriber-base expansion and ARPPU growth. Online music services revenue grew by 20% year-over-year, contributing significantly to our 29% year-over-year increase in adjusted net profit. During the quarter, we prioritized deepening integrations across different products. It's evident that the synergies between our dual engines, our platform, and rival content ecosystem have become a powerful force, enabling us to unlock more value to users. Let me give you some examples. First, our ongoing efforts to strengthen partnerships with domestic and international record labels have continued to bear fruit, enhancing our music offerings and diversifying our content.
Recently, we renewed contracts with top Chinese labels like Yuehua Entertainment Group, [Foreign language], and Image Music Group, [Foreign language], including early access for new song releases from popular artists such as Silence Wang, Wang Sulong. Additionally, we formed a strategic cooperation with Galaxy Corporation, home to the global music sensation G-Dragon, to bring you more international music content, digital albums, and merchandise to our platform. Our scale and unique value proposition have enabled us to become the multi-year proprietary partner for G-Dragon's upcoming tour concerts in Asia and other regions. As our influence in the industry grows, an increasing number of record labels are working with us to launch innovative artist-fan interaction events focusing on new song releases, such as voice-based interactions, song guessing games, and music challenges.
Second, we have been partnering with A-listed artists and rising indie musicians to host offline music experiences and concerts, connecting them with their fans in creative ways. Two recent events demonstrated our success in this space. In September, we hosted TME Zebra Music Festival in Anhui, featuring a stellar lineup of artists, including Chen Chusheng, Joker Xue , Xue Zhiqian, and Zhang Yuan, as well as Tencent Musicians and other popular artists, Liu Yu , [distorted audio] , Zhao Lei, and [Foreign language]. This event attracted an impressive 65,000 fans over two days, earning widespread acclaim and impact. We also organized an offline concert for talented singer and songwriter, Yu Jiayun, marking his first-ever ticket show with over 10,000 attendees. Third, leveraging Tencent's powerful network and ecosystem, we continue to nurture our music content community that inspires interactive engagement.
In the third quarter, we collaborated with celebrities Karry Wang, Wang Junkai, and Esther Yu, Yu Shuxin to produce theme songs titled "The Hero: [Foreign language] and "Breaking News: [Foreign language] for popular games League of Legends: Wild Rift, and Peacekeeper Elite. These cross-promotions with Tencent Games, combined with designed in-game item redemptions, have led to impressive results. The popularity of these theme songs, which hit our top trending songs chart, Dianfeng Chaoliu Bang, and Chinese song chart Huayu Bang, has increased the user engagement, effectively bridging the music and gaming communities across platforms. We recognize that different users' cohorts have diverse music consumption needs and preferences. To address this, we are actively expanding unique benefits to our premium members.
For our super VIP members, we introduced priority access to extensive iconic digital albums from renowned artists such as Jay Chou, Jolin Tsai, and Wang Yibo, with new additions of multiple K-pop singers in the third quarter. We also enhanced SVIP privileges to include unique concerts and fan activities, such as presales for tickets to shows by G.E.M., Deng Ziqi, Mariah Carey, and Tia Ray, Yuan Yawei. These enhanced privileges have effectively driven growth in our SVIP memberships, and we will continue to unlock new opportunities for both music labels and artists. Last but not least, we published our inaugural ESG report in the third quarter, providing a comprehensive overview of our ESG tactics and achievements. This is just the beginning of our sustainability journey.
I'm also delighted to share that the Tencent Musician Platform was recently recognized as one of China's first model cases for the national copyright powerhouse strategy, honoring our contributions to safeguarding music copyrights. This recognition will further motivate and propel us to promote the music industry's healthy and sustainable development. In summary, our sustainable and long-term approach to achieving high-quality growth will carry us far and beyond what we have achieved so far. We remain dedicated to fostering a compassionate, inclusive, and thriving music ecosystem that benefits music labels, artists, users, and the broader industry. Now, I would like to turn the call over to Ross for more details on our overall platform development. Ross, please go ahead. Thank you.
Thank you, Cussion. Hello everyone. Alongside our content and user insights, our years of operational expertise have been a key driver in strengthening our industry position under Definition 18, our value proposition in a dynamic environment. Our third-quarter results once again demonstrated our ability to execute on strategies that retain users, attract new paying subscribers, and upgrade more members to premium services. These results boil down to our commitment to innovation and our increasing ability to meet users' evolving music consumption preferences. Let me start by sharing some progress on our product upgrades in the third quarter, which have been well received by our large user base. First, our deep understanding in users' needs enables us to further innovate our product features, bringing fresh experiences.
For example, recently, we launched the industry-first player interface featuring a horizontal screen as well as real-time interactive comment feature, promoting a deeper sense of community belonging. We also upgraded the top-trending songs chart, Dianfeng Chaoliu Bang, with interactive features attracting millions of participants. This has helped increase the chart's influence. Second, we continue to explore new technologies to enhance users' experiences. For example, we have leveraged large language models to streamline content production, further improving both efficiency and quality. Notably, in the third quarter, we deployed AI singing technology to create single Fairy Tale, [Foreign language], which quickly went viral on short video platforms. Our text-to-speech TTS technology also helped us create tens of thousands of audiobooks on our platform. Thanks to our efforts to expand our subscriber base, first, we optimized our operational and marketing efforts to drive new subscriber acquisition across various environments.
For example, centered on the Mid-Autumn Festival's theme event, we rewarded new users with subscription benefits through unique interactive features. This has positively contributed to paying user net adds. Second, we continue to improve our recommendation algorithm. One example is enhancing the novelty of tailored content suggestions, making it easier for users to discover music. This led to higher recommendation streaming share sequentially in the third quarter, which in turn improved Paying user conversion efficiency. Third, we collaborated with iconic IPs like Black Myth: Wukong, [Foreign language] , Crayon Shin-chan, [Foreign language], and Disney, allowing us to offer personalized interfaces that attract additional paying users. In terms of SVIP, our highly engaged subscribers, we are pleased to report that at the end of the third quarter, we reached an important milestone by surpassing 10 million.
The unique benefits of our SVIP plans are gaining traction, as shown by the high ARPPU and the longer time spent on our platform compared to other tiers of paying users. Let me provide more details on this achievement. First, our proprietary self-developed audio quality features have enhanced the listening experience for SVIP members. Standout examples from this quarter are QQ Music's premium sound, DTS sound quality, and Kugou Music's Viper Ultra Sound, which bring clear, more immersive audio to our users. Furthermore, we expanded our high-quality sound experience to in-car scenarios with Viper series audio quality designed for our SVIP membership, in Xiaomi, Li Auto, and new vehicles. Second, our enhanced long-form audio offerings have also had a positive impact on user willingness to renew their subscriptions.
We expanded our audiobook content library with original content and popular IPs across various genres, including hit TV dramas and films, comics, suspense, and children's stories. Third, these are just a few examples of the initial steps that we are taking to grow our SVIP memberships. Coupled with the growing depth of our content ecosystem, as Cussion discussed, we have a solid foundation for delivering richer content benefits. Moving forward, we will continue to focus on both unique content and product offerings, meeting the evolving needs of our users and delivering delightful music experiences. With that, I would like to turn the call over to Shirley, our CFO, for a deep dive into our financials.
Thank you, Ross, and greetings to everyone. I will now turn to our financial results. Our effective monetization of online music service and operational efficiency management continued to drive strong financial results in the third quarter of 2024. With strong performance in our music subscription and advertising business, we are pleased to see our revenue growth resume its growth trajectory on a year-over-year basis. IFRS net profit increased by 35% year-over-year to RMB 1.7 billion, and non-IFRS net profit rose by 29% year-over-year to RMB 1.9 billion. Total revenues in the third quarter of 2024 were RMB 7 billion, up by 7% year-over-year. Online music revenues increased by 20% year-over-year to RMB 5.5 billion. This increase was mainly driven by the strong expansion of our music subscription revenues, supplemented by growth in advertising revenues, as well as growth in revenues from offline performances.
Music subscription revenues in the third quarter of 2024 reached RMB 3.8 billion, representing a 20% increase year-over-year and a 3% rise sequentially. Monthly ARPPU was RMB 10.8, up 5% from RMB 10.3 in the same period last year. The number of online music paying users were 119 million, representing a 16% increase year-over-year with quarterly net adds of 2 million users, with the goal of achieving growth in both subscribers and monthly ARPPU. We have strategically focused on the SVIP membership program and enhanced membership benefits such as priority access to digital albums, pre-sale tickets to concerts, and fan activities, and high-quality audio and sound effects for mobile and in-car users. These benefits and features have helped us achieve an important milestone of passing 10 million SVIP members this quarter. Advertising revenues also had strong year-over-year growth, primarily due to the growth in Ad-supported media revenues.
We continued to innovate and diversify our product offerings and advertising formats. The attractive interactive features and enriched benefits we offered helped improve entrance rates for our Ad-supported advertising and enhanced user engagement and eCPM, and attracted more advertisers this quarter. Social entertainment services and other revenues were RMB 1.5 billion, down by 24% year-over-year. For social entertainment services, our top priority is safety in operation, and we will keep monitoring marketing conditions and the competitive landscape. Meanwhile, we continue to innovate and build new products and features to drive quality growth in areas such as WeSing membership and advertising in WeSing social entertainment. Our gross margin for Q3 reached 42.6%, representing an increase of 6.9 percentage points year-over-year due to a few factors. First, the expansion of our paying user base, the enhanced monthly ARPPU for online music, and the growth in advertising revenues have positively impacted our gross margin.
Second, we have been focused on ROC as a key metric to manage our content royalty costs. Third, the ramping up of our own content continues to help improve our gross margin. Lastly, the growth in WeSing memberships and advertising, WeSing social entertainment also positively impacts our gross margin. Moving on to operating expenses, in the third quarter of 2024, they amounted to RMB 1.2 billion, representing 17.4% of our total revenues, compared with 19.3% in the same period of last year. Selling and marketing expenses were RMB 220 million and remained relatively stable comparing with the same period of last year. Our ROI-focused approach for promotion expenses, together with product experience improvement, has contributed to the growth in online music MAUs. We will continue to invest in areas with long-term growth perspective, such as online music and content promotions.
General and administrative expenses were RMB 998 million, down by 5% year-over-year, primarily driven by lower employee-related expenses. Our effective tax rate for Q3 was 17.7%, compared to 12.2% in the same period of 2023. This increase was primarily attributed to the accrual of withholding tax of RMB 130 million, related to earnings to be remitted by our PRC subsidiaries to offshore entities. For Q3 2024, our net profit and net profit attributed to equity holders of the company were RMB 1.7 billion and RMB 1.6 billion, respectively. Non-IFRS net profit and Non-IFRS net profit attributed to equity holders of the company were RMB 1.9 billion and RMB 1.8 billion, respectively. The financial results for Q3 2024 have reflected an unrealized loss from foreign exchange due to the fluctuation of exchange rate between RMB and USD as of June 6th and September 30th, 2024.
Our diluted earnings per ADS this quarter was RMB 1.01, up 36% year-over-year. Non-IFRS diluted earnings per ADS increased to RMB 1.16, up 30% year-over-year. These results underscored our robust financial performance, enhanced operating efficiency, and the benefit from our share repurchase program. Under the share repurchase program announced in March 2023, as of September 30th, 2024, we have repurchased 42.1 million ADS from the open market for a total cash consideration of $335.5 million, of which approximately $100 million were repurchased in the third quarter of 2024. As of September 30th, 2024, our combined balance of cash equivalents, term deposits, and short-term investments were RMB 36 billion, as compared with RMB 35 billion as of June 30th, 2024. This combined balance was also affected by changes in the exchange rate of RMB to USD at different balance sheet dates.
Looking forward, we will continue to drive high-quality growth in our music business, such as expanding SVIP memberships and the advertising business, as well as operational efficiency improvement. We will also continue to invest in high-quality content, original content production, as well as innovative technologies to further improve user engagement and enhance user experience. We remain confident in the long-term healthy growth in the music industry and our business, and are dedicated to providing high-quality returns for our shareholders. This concludes our prepared remarks. We are now ready to take your questions.
Thank you, Shirley. If you are dialing in by phone, please press five to ask a question and then press six to unmute yourself. If you are accessing the call from the Tencent Meeting or web meeting application, please click the raise hand button at the bottom left.
For the benefit of all participants on today's call, please limit yourself to one question, and if you have an additional one, please re-enter the queue. If you ask the questions in Chinese, please, and we ask you to repeat them in English. The first question comes online from Liu Yang from Morgan Stanley.
[Foreign language]
Thank you very much. Thanks to the company for the presentation. I'd like to ask the first question. First question is regarding the outlook for Q4 of this year and the Q1 next year. From the presentation, I clearly noticed that Super VIP is progressing pretty well, especially based on the macroeconomic condition and the competition. Do you believe Super VIP is going to continue to boost our performance growth? Especially, what would be your outlook for Q4 of this year and the full year of next year? Thank you.
Okay, thanks for your questions. And I think this quarter's performance of TME once again testifies to the effectiveness of our high-quality growth strategy, which is owned by the balance of growth between our revenue and also the net profits, as well as the subscribers and the ARPPU. So for the midterm targets, I think our key priority is to continue to expand our paying user base. So at the same time, our commitment to grow the ARPPU is more than ever, which is proven by the strong initial results of our Super VIP plan that you have mentioned. We have already recorded over 10 million subscribers as of the end of September 2024.
As you may recall, our business journey, I think our strategy evolution is basically transitioning from the paid downloads to streaming and also upgrading our basic membership to Green Diamond membership, has given us a lot of insights and also accumulated experience. We are now pushing the boundaries to explore more diverse music scenarios and add more high-quality content, product features, and also user privileges to our new Super VIP membership, which we strongly believe that it will help us to broaden our user base and deepen our user loyalty as well, so it's going to be helping us to have a very healthy growth in the future. Last but not least, I think that I would like to point out that we are now back on track to resume a positive revenue growth in 2024, and looking into 2025, we are optimistic about our growth prospects.
Assuming the external environment stays stable, we expect to see an acceleration in both the top-line growth and mainly driven by the steady increase in the number of subscribers and the ARPPU, and also along with the improved profits and profit margins.
Okay, thank you. And the next question comes online from Lincoln Kong from Goldman Sachs. Lincoln, please.
Thank you, Management, for taking my question. Congrats on the pretty solid quarter. So my question would be on the member side. I think in the third quarter, we had a net addition of two million new subscribers. That's actually better than we earlier expected or our company's earlier target. Could Management share a bit more in terms of the reason behind it? And when we're thinking into fourth quarter, as we just passed Singles' Day, so could we have a bit more color in terms of the Singles' Day promotion intensity? How should we think about the fourth quarter new subscriber, especially compared versus the third quarter? Any color on the user retention part would be great. Thank you.
[Foreign language]
[Foreign language]
Thank you very much. Thanks for your question. And yes, indeed, in Q3, the performance is better than expectation. I think it's mainly because of our strategies. We still would like to keep a very stable operational strategy starting from this year to now.
[Foreign language]
At the same time, we also pay much attention to the ever-expanding privilege for the monthly subscribers. We are also at the same time continuing to stabilize the growth of the ARPPU. At the same time, in Q3, there are some festivals, especially the Mid-Autumn Festival. We are also leveraging the campaign and the marketing strategies to make sure we grow our subscriber base in a very healthy way.
[Foreign language]
Regarding the marketing strategies, and I think in Q4 of this year or Q1 of next year, we're still going to keep a very tight control over the marketing, because we want to seek for healthy and steady growth of our business and really retain the subscribers and the users within us, and more importantly, we really want our users to know the true value of the subscription business, especially the value of the content we provided to them. In that way, the user will stay with us and still be active on our platform.
[Foreign language]
In terms of the user or the subscriber privilege, in addition to the traditional content, and we were also trying to further improve the content quality. And besides the content, we also did a lot of job in order to improve the sound quality and the sound effect. For example, we continued our good cooperation with DTS, and at the same time, we also adopted the audio 3D in order to provide more privilege to our users. We also piloted some attempts in the in-car and the mobile end. But at the same time, we do hope that we will provide the good service and functionalities and the privilege to better improve the service to the subscribers, and more importantly, to make them feel happy. Especially recently, we also provide when listening to the song, and there are also some backing vocal privilege that have been provided to the user.
[Foreign language]
Overall speaking, regarding our operational strategy of the subscribers, we still would like to take the traditional and standard measures plus SVIP as a combo therapy. In that way, we can continue to improve the monetization efficiency of our platform.
[Foreign language]
Regarding the basic users, what we are trying to do is still based upon the subscriber base. We are going to continue to improve the size of the subscriber along with a very steady growth of the ARPPU. While at the same time, we also would like to emphasize on new user engagement and attention. And more importantly, for SVIP, we hope that we can continue to promote the primary user from the subscriber to SVIP in order to further drive up the ARPPU, because generally speaking, our SVIP size is still at a relatively low stage. So we hope it can go through for healthy and stable growth in the near future. That would also contribute to the future ARPPU improvement.
Thank you. And the next question comes from Alicia Yap from Citi. Alicia, please.
Hi, thank you. Good evening, Management. Thanks for taking my question. I have a follow-up question on the.
Hi, Alicia, we can't hear you.
Can you hear me better now? Can you hear me better now?
Okay, sorry about the technical issue. I think, Alicia, we'll go back to you later. Can we go to Roger Duan from Barclays, please? Roger, your line's open.
Hi, thank you very much, Management, for taking my question. So, so thank you, Management. So I have a follow-up also on SVIP program. So now we are over 10 million as of third quarter. So just try to get a sense of how many of that was added during the quarter. And other than that, how many was converted from the regular VIP program or how many of that was from like new users? Thank you.
[Foreign language]
[Foreign language]
Thank you very much. Thanks for your question. According to the statistics, majority of our SVIP users are still being upgraded from the traditional or the basic SVIP, but we are also keeping an eye on the new customer engagement. But in that way, responding to your question, majority of the existing SVIP are still being promoted or upgraded from the basic VIP account.
[Foreign language]
Anyway, interestingly speaking, according to the user profile as SVIP, we noticed that many of them are young users. This can also tell our service and the privilege we provided to the users are quite fit into their interest and need.
[Foreign language]
At the same time, we also keep an eye on the user of the EV, because we know that many of the EV users are indeed the young users. So we do want to further extend the cross-device privilege to our SVIP. But at the same time, recently we were also discussing combining SVIP with fan economy, and we were just wondering whether we can provide SVIP with the starlight card in order to make sure they get the rewards and incentives from us.
[Foreign language]
For that reason, we truly believe in the next few years our SVIP size still has ample room for further improvement, which will also contribute to the ever-increasing ARPPU. Thank you.
Thank you. And the next question from Zhang Lei from Bank of America. Zhang Lei , your line's open.
[Foreign language]
Thank you very much. Thanks to the Management Team. I also have a follow-up question regarding SVIP and ARPPU. And first of all, we do see that SVIP size continues to grow, reaching 10 million within this quarter, which is better than what expected. But it seems that ARPPU is not performing that well, especially being reflected in a single month of Q3. Would you mind to kindly walk us through the reason and how you are going to balance the user size growth along with the ARPPU growth? And to the Management Team, how are you going to expect that ARPPU growth in the near future when it is going to see a very good response from the ARPPU?
[Foreign language]
Thank you very much. Thanks for the question. I have to say that our SVIP size is not coming to 10 million over just one night. We were deep dive there for close to one year. We start everything from scratch. So it is indeed a result of the startup efforts. Where nowadays we already reach 10 million SVIP user, but regarding the ARPPU, the ARPPU has been accumulated and been performed in a continuous approach.
[Foreign language]
Just now, in my response to the previous questions, I have already mentioned in our existing model, and the majority of the SVIP customers are still the traditional subscribers. So, in response to your question, at least from the model perspective, we believe when SVIP size reaches 20 million-30 million, then you're going to see more response from ARPPU. In other words, it's going to be in line with the ever-increasing SVIP size growth, and that means that when the SVIP penetration continues to improve, it's also going to contribute more to ARPPU, but till now, I think what you need to say is how the ARPPU growth is going to continue, but we can't take ARPPU as an independent factor and assess it on a quarterly basis.
[Foreign language]
Just one more comment, and especially within our 10 million SVIP, I have to say its ARPPU is higher than our basic subscriber account.
Thank you, and the next question from Mizuho Fang Wei .
Thank you for taking my question. Just want to double-click on the 10 million Super VIP milestone. By the way, congrats on the 10 million milestone. Can you help share any color on the Super VIP kind of profile? You mentioned they tend to be more young users, right? What about by app, like a WeChat or like a QQ versus other Kugou apps, right? And you also highlighted some of the key drivers, for example, the premium audio quality, right? The long-form audio offering. Just curious if there is a way to rank them by effectiveness in this quarter. And then which area do you plan to focus on going forward to continue to drive the conversion? Thank you.
[Foreign language]
[Foreign language]
Thank you very much. Responding to the first part of your question, at least from our operations around that 10 million SVIP, half are coming from QQ Music and half from Kugou. It is still in line with our high-value user operation strategy.
[Foreign language]
As I mentioned in my presentation, and actually we do provide the full privilege to SVIP user, including the long-form audio and the high-quality sound effect and sound quality, and the first enjoyment of the digital album, as well as the user experience for cross devices listening experience.
[Foreign language]
Regarding additional privilege, as I have already mentioned, we do provide the backing vocals, where at the same time we also provide the ringtone editing at the Kugou app. But at the same time, we're also considering providing some physical material privilege. For example, if you are SVIP with us, we can surely provide you some peripherals, for example, like the calendars of the songs. And we're also planning the SVIP family package or the family membership package, because family membership package proved to be successful on the video website. We're also considering of referring this good practice to our SVIP business.
Okay, the next question comes from Wei Xiong from UBS.
[Foreign language]
Thank you very much. Thanks for the Management Team. I have a question regarding social and entertainment business. For social and entertainment business in Q3 of this year, the revenue actually stood better than what expected. The revenue decrease also being narrowed down. Is it possible for the Management Team to elaborate on the reasons? Is there any specific measure you take in order to continue to improve the business? And especially how we're going to take a look at the Q4 and the next year of social and entertainment business, how the growth rate might be, and what would be its contribution to the total revenue? Thank you.
[Foreign language]
Thank you very much. Thanks for your question. Regarding social entertainment business, there are two platforms. I think a good growth that is being identified are coming from Weixin on Weixin. Besides live streaming business, and we also provide other business, for example, advertisement business on Weixin, and especially its subscription business and the VIP business are all performing better than what we expected. So generally speaking, the better than expected Weixin performance continue to contribute to the revenue of social entertainment business.
[Foreign language]。
Compared with last year.
[Foreign language]
The second one is on Kugou, and on Kugou, especially on Kugou Live and live streaming, we did a very good design over the interactive games. It is more like a card collection mechanism and play, and which can help us to further implant the innovative play into the live streaming performance. So that's the reason we believe its revenue was better than what we expected, and I also believe that is also the reason its total contribution to the revenue growth is better than what we expected.
[Foreign language]
As we continue to solidify our middle desk for the live streaming service and also register a very stable performance in order to make sure more functionalities could be swapped from one platform to another. So in that way, I believe in the near future, the social and entertainment business is still going to have a very stable growth.
Okay, and the next question comes from Maggie Zhao. Maggie, your line is open.
Thank you for taking my question. Our MAU seems to have stabilized around 570 million in the past four quarters, and they actually added 5 million in 3Q. So could Management share with us the priority in your latest MAU strategy? Shall we actually expect MAU to return to any growth at some point? And how shall we think about future opportunities from deeper integration into the Weixin ecosystem? Thank you.
[Foreign language]
[Foreign language]
MAU, the MAU, the music.
[Foreign language]
Thank you very much. Thanks for the question and regarding our MAU strategy and growth, I think the key is still resting with the content, especially our self-commissioned content and unique content continue to drive up the MAU, and especially today, I mentioned while working with celebrities and artists of launching the album, but at the same time, the contents be displayed on different terminals, and in that way, we also have the self-made hits. Most importantly, those high-quality content continue to drive up MAU. That is the strategy for us to continue to improve MAU growth.
[Foreign language]
From the product functionality perspective, for the past one year, we continue to optimize the play experience and provide more innovative actions on the interactive with the users that can help us to further retain the users and continue to grow the MAU, and especially I was mentioning that MAU on the terminal end, the growth has been pretty helpful.
[Foreign language]
But at the same time, on QQ Music on this platform, and we find out the promotion and marketing over ROC really works, and it proved to be feasible. So that's the reason it can also help to drive out the MAU, and that's the reason we also would like to copy the successful story to Kugou.
[Foreign language]
But at the same time, I also would like to say that in-car DAU and IoT is still going to be a great growth driver in the near future, especially for the in-car business, and I think a great opportunity was there. And besides Kugou and the Kuwo version and Bodian app, we hope that we were going to keep an eye on new apps in order to further contribute to the growing MAU. [Foreign language]
[Foreign language]
Regarding the second part of the question, how we're going to keep an eye on WeChat Listen? We do believe WeChat Listen is a great platform with very good growth, but strategically speaking, we're also going to help WeChat Listen to gain a better growth. I think its business size looks okay, and hope in the near future it could also be an active platform and continue to lay a solid foundation for our self-commissioned content in the near future.
Thank you. In the interest of time, we take the last question from Thomas Chong from Jefferies. Thomas, your line is open.
Hi, good evening. Thanks, Management, for taking my question. My question is about operating expenses as well as a margin trend. Given that we already exceed 40% in terms of our GP margin, just want to get some more color regarding our 2025 and our long-term profit trend and margin trend. What are the key areas that we can get further leverage in our cost side? And on OpEx side, how should we think about as S&M expenses going forward and our non-IFRS earnings growth going forward? Thank you.
[Foreign language]
[Foreign language]
Thank you very much. Let me talk about the GP margin first. In Q3, our GP margin stood at 42.6%. We registered continued growth for a few quarters.
[Foreign language]
I'm talking about a few drivers. The first driver is the ever-increasing revenue from the music business and also the growth of our user base, our ARPPU, and also the rapid growth from the advertisement business all positively contribute to the GP margin.
[Foreign language]
For the second reason, it's because we adopt ROC in managing the cost. So that's the reason the cost on the copyrighted content and especially the content cost growth is actually lower than our music revenue growth.
[Foreign language]
The third driver is because that we have a more contribution from the self-commissioned content and the co-created content that also going to positively contribute to the GP margin.
[Foreign language]
But regarding the social business, and you can say we also took some better strategies and we continue to reduce the percentage of the live streaming share.
[Foreign language]
At the same time, the Super VIP revenue growth and advertising growth also contribute a lot to our social revenue margin improvement.
[Foreign language]
So look into Q4 of this year and 2025, and I do believe the factors mentioned above still going to play very important roles. But regarding the GP margin, besides a good improvement, I think maybe in 2025 the growth rate might lower than what we saw in 2024.
[Foreign language]
We're talking about the operating expenses. We foresee that in 2025, S&M expenses and the G&A expenses going to grow slightly, but its growth rate would be much lower than our revenue growth rate.
[Foreign language]
I do believe that in 2025, the adjusted net profit and the adjusted net profit rate still going to have a good growth momentum.
[Foreign language]
You also asked about effective tax rate, and at least from the operational perspective, we do believe effective tax rate going to remain unchanged.
[Foreign language]
But for this year, because we have many of the dividend that has been sent from the onshore companies to the offshore, so that's the reason it's generating many withholding tax, which makes our effective tax rate looks higher.
[Foreign language]
We're looking to next year. We may still have similar dividend programs, and we are also going to have the measures in place, but regarding the total size of the dividend, that has not been confirmed.
Okay, thank you. Thank you everyone for joining us today. If you have any further questions, please feel free to contact our IR team, and this concludes today's call. I thank you again and look forward to speaking to you next quarter.
Thank you very much. Thank you.
Thank you.
Bye.