Greetings! Thank you for joining us for HYBE's 2025 Q4 earnings call. This is Kim Jin-oo, Head of Financial Strategy. I'll be moderating today's conference, which will proceed through consecutive interpretation. Today, CEO Lee Jae-sang will present fiscal year 2025 highlights, including Q4 results and future plans, and CFO Lee Kyung-jun will present earnings highlights, followed by a Q&A session. Please note that today's earnings call is based on preliminary consolidated estimates under K-IFRS and subject to change during an external audit.
[Foreign language]
Good afternoon. This is Lee Jae-sang, CEO of HYBE. Thank you for joining today's earnings call. In 2025, artists of HYBE Music Group demonstrated outstanding musical influence in the global market, signifying further evolution of the company's global business model. After completing their military service, J-Hope and Jin successfully came back and conducted solo activities.
In 2025, major HYBE artists, including SEVENTEEN, Tomorrow X Together, and ENHYPEN, held a combined total of 279 large-scale global concerts, thereby dramatically expanding touchpoints with their fans. 2025 was also a year when HYBE's multi-home, multi-genre strategy delivered potential results. In addition to KATSEYE, who has already been producing unparalleled results, the artist IPs in the respective regions, including &TEAM in Korea and &AUDITION, TRAINEE A, and LE SSERAFIM in the Latin region, gained significant market influence and led qualitative growth of the artist portfolio. Thanks to these wide-ranging activities and enhancement in business structure, fiscal year 2025 revenue posted ₩2.6499 trillion. The solid YOY growth trend and yet another record-breaking revenue demonstrates sustainable growth potential of HYBE.
[Foreign language].
Let me present the planned activities of BTS, who will provide the strongest growth momentum for HYBE in 2026. As of June 2025, all BTS members have completed their military service and announced an upcoming comeback as a whole group. On March 20th, they will open the prelude to a new journey with their fifth regular album, Arirang.
Th e new album, to be released in about four years, will be immediately followed by the largest world tour ever by mobilizing HYBE's global operational capabilities. The first confirmed schedule alone includes 82 shows in 34 cities around the world, which is the most ever for a single tour by a K-pop artist. When additional shows are confirmed for Japan and the Middle East, the impact of the BTS tour will be further amplified. This tour is a large-scale stadium tour to be held in about four years after the BTS Permission to Dance on Stage Tour in 2022. We expect it to mark an emotional reunion, bringing global fans of BTS together again through music.
[Foreign language]
Let me now report on recorded music results. In 2024, amid overall stagnation in the album market, HYBE maintained solid influence in the market, accounting for approximately 30% of the total album sales, the highest share following last year, with cumulative annual sales of approximately 19.6 million copies based on Circle Chart statistics. The energy of the fandom, maintained through album activities, served as a catalyst for overall revenue growth, including concert and merchandise sales.
Since the last earnings call, meaningful results have been delivered by major artists. First, Seventeen increased its artist IP utilization with a special unit activity by DK and Seungkwan, showcasing unique charm and appeal of individual members. TXT demonstrated their influence in the Japanese market yet again, with their Japanese regular album, The Star Chapter: SANCTUARY, ranking first on the Oricon weekly and combined charts. In addition, Yeonjun confirmed his strong competitiveness as a solo artist IP, with his first album selling more than 600,000 copies during the first week, and landing on the tenth place on Billboard 200. ENHYPEN achieved the fourth double million seller in their history, with their mini sixth album, ROMANCE: UNTOLD, selling 2.07 million copies during the first week.
Furthermore, KATSEYE became a million seller in their debut year, adding to HYBE's already strong artist lineups. These achievements are well reflected in the streaming performance as well. HYBE Music Groups artists enjoyed a total of 3.7 billion streams in 2024, accounting for about 3% of the total streams in the year, according to the global Spotify 200 chart. As a result, in 2024, the share of streaming sales is approximately 37% of the total recorded music revenue, showing that music by HYBE artists continues to be consumed in the global streaming market, serving as a stable revenue stream.
[Foreign language]
Let me now report on the results of the global concerts by HYBE Music Group artists. In 2025, 250 concerts and 29 fan meetings were successfully held in total, resulting in the highest concert revenue in the company's history. According to the 2025 Box Score Annual Report by Billboard, our global ranking in the top promoter category rose five places from the prior year to fourth place, making HYBE one of the Big Four.
In addition, in the top tour category, three out of four K-pop teams belong to HYBE, reaffirming the strong ticket power of HYBE artists. With the first solo tours in 12 years since debut, J-Hope was ranked 14th on Pollstar's Global Concert Tour Chart, the highest place as a Korean solo artist, and Jin was ranked fifth place on the Asia Focus Chart, being the only solo artist to be ranked.
Seventeen held 49 concert shows in 22 cities, demonstrating increased audience mobilization power compared to the previous year, while TXT and ENHYPEN solidified their status as global touring artists, attracting a total of 550,000 people and 480,000 people, respectively. In addition, LE SSERAFIM's first North American tour, and the team's first Asia tour, and BND's first solo tour since debut, were all concluded successfully, showcasing global concert competitiveness of HYBE artists.
[Foreign language]
Let me now move on to major achievements made by artists of labels and management under HYBE America in the mainstream market. First, in the Q4 of 2025, BMLG reaffirmed its unrivaled position in the industry as a powerhouse of country music, capturing both critical and popular acclaim. Riley Greene made history by becoming the first artist since Taylor Swift in 2013 to top Billboard's Country Airplay with two consecutive self-written songs.
Furthermore, at the prestigious 2025 CMA Awards, he achieved major success by winning three awards, which is the most awards on the day, including Single of the Year. Our global artist IP portfolio has been expanding for management and label business. HYBE America signed a management contract with Tyla, who broke the daily streaming record of the previous hit, Water, with her new song, Chanel, and set a new record for the most streams by an African artist.
She sold out her Tokyo Arena concert and worked with Bratz, a global fashion doll brand, for a character collaboration, further expanding her artist IP business and solidifying her position as a global pop icon. A new artist by hip-hop label QC, is gaining traction in the local market by focusing on melodic hip-hop and R&B with sensual melodies over hip-hop beats. He's contributing to expanding the musical scope and diversifying the fan base of the label by adding pop sounds to the strong hip-hop colors that characterize QC music.
His recent single, Gas Station Love, has been included in the major playlist of Amazon Music, and he made the 2026 Artists to Watch list by Pandora. Positive evaluation by local critics and industry experts allows us to look forward to his future activities. Likewise, HYBE America is continuing to expand its influence in the North American market through record-breaking achievements by top-tier artists in diverse genres and solid label operation.
[Foreign language]
Let me now move on to Katseye, the group that has achieved the most overwhelming growth in the global music industry. Their success in 2025 is significant in two major aspects. First, they have secured unrivaled popularity and musical status in the local mainstream pop market. As of the Q4 , Katseye has gained thirty-six million Spotify monthly listeners, one of the highest among the global girl groups. With the title track Gabriella staying on Billboard Hot 100 for twenty-eight weeks in a row, the group recently had two songs in the top thirty at the same time.
As a girl group, this is the first since Destiny's Child, which means that Katseye has established itself as a mainstream artist, following in the footsteps of legendary girl groups in the North American market. Their popularity resulted in nominations for major categories at the sixty-eighth Grammy Awards and entry into the UK Official Chart, further solidifying their position as a key IP in the global pop market. Second, Katseye has proven the scalability of their artist IP to go beyond the typical pop artist by applying hype fandom business know-how.
This approach has produced significant financial returns as well. Their first solo tour, The Beautiful Chaos Tour, sold out every single show, and the amount of tour merch purchased per person not only exceeded other pop artists, but also achieved a top-tier level comparable to that of K-pop groups who tour extensively in North America.
Furthermore, their album sales are solid, far exceeding those of other local artists who mainly rely on large retail channels in North America. These achievements suggest that Katseye is creating differentiated results in both markets based on their popularity as a global pop artist and the strong fandom, a characteristic of K-pop artists. Having enjoyed great success in 2025, Katseye is expected to serve as a sustainable growth driver for HYBE through a significant expansion of the tour scale.
[Foreign language]
In particular, Quartus clearly represents qualitative growth of artist IPs that HYBE is pursuing. Despite being a debut group, Quartus has set new standards in the market with music, content, and performance that showcases their identity as a young creator crew. What sets Quartus apart from other teams is that the members participated in the entire production process, including music, choreography, and video, and thus created their own unique color.
The stories that a teenage group can share, and high-quality content that reflect their genuine sincerity have resonated with listeners, creating a momentum for extended life of their music and sustainable value creation. Their unique and original identity has made a great appeal to diverse global industries beyond music. Recently, Quartus became the first K-pop artist to be selected as a headliner for the NBA Crossover Concert Series, and they became the first Korean group to sign a partnership with Red Bull.
They also carried out cross-genre collaborations including sports, gaming, and film. Quartus was invited to sing a new original soundtrack for a major Hollywood animation. One of the tracks in their debut album, titled Go, was used as a soundtrack for popular game NBA 2K26, Season Four. This rapid growth is the result of the vision of Big Hit Music, a label within HYBE Music Group, to provide the best musical experience by respecting artists' creativity and actively supporting their creative activities.
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In addition, aespa topped the charts as soon as their debut in Japan, and new lineups, including KATSEYE, made a successful debut in the Latin market, further demonstrating how HYBE's system can be applied in a flexible manner to other genres and regions. Based on these solid achievements in 2025, HYBE aims to further diversify its territory in the global music industry in 2026.
First, in the new year, a new girl group will debut in Korea, and a global girl group is being prepared to follow the successful model of KATSEYE. Also, as was previously mentioned, efforts are being made in full swing to debut a local boy group in collaboration with legendary producer Ryan Tedder. Furthermore, we're trying an innovative artist IP growth model by combining storytelling and music through the project with Zico's Universe that has more than 100 million subscribers. We are also working on a project optimized for local culture in India to further expand our global influence. In short, 2026 will be an important year for HYBE when these diverse global artist IPs are successfully established, in addition to the resumption of BTS activities.
[Foreign language]
Finally, I'd like to report on Weverse Hybe's platform business. In 2025, Weverse achieved a significant return to profitability on an annual basis by strengthening business fundamentals through improvement in profit structure and operational efficiency. This achievement was driven by bringing in diverse artists, operating e-commerce in a strategic manner, and diversifying its revenue model through digital business, business expansion such as advertising and subscription services. At the same time, the platform fundamentally improved its cost structure by streamlining the organizational structure and SG&A expenses, thereby establishing a solid financial foundation. Furthermore, BTS resuming their activities, key artists achieving growth, and the accompanying e-commerce revenue growth and digital business growth are expected to drive improved financial performance of Weverse in 2026.
[Foreign language]
Now, CFO Lee Kyung Jun will report on the financial results.
[Foreign language]
Good afternoon, this is CFO Lee Kyung Jun. Let me report on Hybe's consolidated financial results for fiscal year 2025. The consolidated revenue posted ₩2,640.9 billion, up 18% year- over- year. Hybe has once again broken its sales record, building on its market dominance. Yet, we posted ₩49.9 billion in operating profit, with the OP margin of 1.9%. This decline in OP margin is mainly due to preemptive investments for mid to long-term growth and costs incurred in the process of improving the profit structure.
[Foreign language]
The first factor that affected our bottom line was preemptive expansion of our global artist IP portfolio. In 2025, Hybe has clearly proven that its production systems do work in basically all parts of the world, with successful debut of Quartus in Korea, in Japan, and new artists in the Latin market. As costs tend to be recognized mainly in the beginning of debut, they put pressure on the operating margin in the short term. However, just as you can see in the cases of KATSEYE and N Team, these new artists will become valuable key assets that will further enhance Hybe's profit structure.
The second factor is the process of improving operational efficiency of our U.S. business. We have been transitioning from the management-centered business structure to a label-based, integrated IP business model to reduce volatility in business performance and generate more stable profits. One-off costs incurred during this process were recognized in the second half of 2025. However, these were necessary measures aimed at improving mid to long term profitability of the North American business through business restructuring, which will in turn start to produce visible financial impact in 2026.
In short, Hybe focused on realigning the business structure and improving business fundamentals in 2025 to achieve medium to long-term growth, and we will do our utmost to ensure that these efforts will be aligned with the resumption of BTS activities and growth of other major artist IPs to deliver more solid and stable financial performance in 2026.
[Foreign language]
Let me now give you more details on the Q4 results. The consolidated revenue remained at a solid level, similar on a year-over-year basis, with ₩716.4 billion. Revenue with direct artist involvement, including recorded music, concerts, and appearances, was ₩436.3 billion, accounting for 61% of the total revenue, while revenue with indirect artist involvement, including merch, licensing, and content, recorded ₩280.1 billion, taking up the remaining 39%. In Q4, we posted ₩4.6 billion in operating profit, which was affected by the initial marketing and operational costs for Architect Land of Exile, a game which was released in October last year, cost for debut of , our new artist IP in Latin America, and costs incurred during our North American business restructuring that began in Q3.
[Foreign language]
Next, allow me to provide more details on the impairment losses recognized as non-operating losses to help our shareholders better understand the situation. As was explained through the Q3 earnings call and the letter to shareholders, HYBE has been restructuring its U.S. business model from a management-centered structure to a label-centered model. In this process, approximately ₩200 billion of impairment losses were recognized in the Q4 , which has resulted from a more conservative and strict revaluation of HYBE America, currently in the middle of business restructuring.
Please note that these are accounting losses with no actual cash outflow, and the new business structure is expected to deliver greater financial rewards compared to the previous artist management centered business. The value chain that HYBE has established in the U.S., including talent development, production, and marketing, is proven to be competitive, as demonstrated by the global success of KATSEYE. Based on the proven success formula, HYBE will pursue a full-fledged expansion of local artist IP lineups in the U.S.
Preparations are underway for the next global girl group, based on the production system of KATSEYE, and a boy group project in collaboration with legendary producer Ryan Tedder, and a project with Geffen's Universe, capitalizing on its 100 million subscriber base. When these global IPs become fully operational, HYBE America will emerge as a key growth driver of HYBE. We will do our utmost to return the trust of our shareholders and investors, not through vague expectations, but through solid performance and tangible results that will be proven over time.
[Foreign language].
Let me now give you more details by revenue category. In the Q4 , recorded music sales and concert sales were slightly down year- over- year to ₩218 billion and ₩175.1 billion, respectively, because we had fewer artist comebacks and tours in the quarter. Recorded music sales were driven by NMIXX, whose Korean debut album became a million seller, as well as BOYNEXTDOOR, IVE, and aespa, and Yeonjun, while concert sales were mainly led by SEVENTEEN, who successfully concluded their tour in the U.S. and Japan, as well as TXT, LE SSERAFIM, and IVE.
Within the category of revenue with indirect artist involvement, merch and licensing revenue recorded ₩142.9 billion, down 6% year- over- year, while content sales were ₩100.6 billion, up 61% year- over- year. In the Q4 , merch sales were driven by increased tour activities, and content sales were contributed by Season 2 of Are You Sure?
starring Jimin and Jungkook, as well as year-end season's greetings by diverse artists. Moving on to KPIs of Weverse, our global superfan platform, average MAU fell slightly QOQ to approximately 11.2 million in the Q4 , while total transaction volume and monthly average revenue per paying user saw QOQ growth.
[Foreign language].
In closing, let me announce a new shareholder return policy for the next three years. HYBE considers enhancing shareholder value to be a core management goal, and has decided to overhaul its existing dividend policy to achieve this goal in a more practical and transparent manner. The first shareholder return policy, announced at the end of 2023, marked the beginning of our full-fledged shareholder return. In this process, we received valuable feedback from the market that demanded more predictability and transparency around our dividend policy.
As a result, HYBE conducted in-depth review of voices of our shareholders and held internal discussions to establish a new three year shareholder return policy. The highlight of the new policy is a shift of the basis for dividend payouts from the previous net profit to consolidated free cash flow, reflecting underlying cash-generating capacity. From 2025 to 2027, HYBE will use up to 30% of its free cash flow as distributable income to minimize volatility from non-cash profits and losses, and establish a predictable policy that allows shareholders to easily estimate the size of dividends. In addition, we are introducing a minimum dividend system to guarantee a minimum DPS of ₩500, regardless of short term changes in our earnings.
This is to significantly strengthen downside stability and ensure that shareholders have clear visibility into dividends. HYBE is the first K-content company to introduce this advanced shareholder return model, which signifies the company's commitment to shareholder return amid uncertainties in the external environment. We will continue to listen to our shareholders and share fruits of growth with them in a transparent manner. We promise to continuously enhance shareholder value based on our solid core business performance and become a more trusted company. Thank you!
[Foreign language]
[Foreign language]
Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone.
[Foreign language].
The first question will be provided by Chang Lee from NH Investment and Securities. Please go ahead with your question.
[Foreign language]
I'm Lee Hwajeong from NH Investment and Securities. I'd like to ask one question. You reported that Weverse has turned profit this year in 2025 on an annual basis. So I'd like to understand which revenue categories contributed to improved profitability of Weverse, and if you expect greater earnings going forward for 2026, what kind of outlook do you have for Weverse?
[Foreign language]
I'm CEO. Let me address your question. As you may remember from our previous earnings call, since I took office as CEO of HYPE, we've been working with Weverse Management and CFO as well for about a year to improve the fundamental business capabilities of Weverse. As was communicated earlier, as of the Q3 on a cumulative basis, Weverse already turned a profit, and this is mainly thanks to the growth of the digital business, including digital membership and Weverse DM, as well as other of these independent profit models that continue to generate profit regardless of artist activities.
So the digital business has contributed - has been growing at an annual rate of 30% and is accounting for more than 10% of the total revenue of Weverse, thus providing more stability in the profit structure. Furthermore, we have been increasing efficiency in the commerce operation for several months, and this has led to a better profit structure for commerce activities as well. We were able to continue to recruit artists in Japan because we already have so many Korean artists on Weverse.
So Japan was our next target market, where Yoasobi, Mrs. GREEN APPLE, and Katari Single and other influential Japanese artists have joined the platform. As you know, Weverse is a global platform, and it is an innovative model, but we do have limited resources, so we were not able to work on all major markets such as Korea, Japan, Europe and North America.
Rather, as we have already succeeded in Korea, we've decided to focus on the Japanese market. As for the traffic, as of the Q4 , our MAU is 11.2 million, and in January, it has already increased by 15%. Moving forward for 2026, we expect a lot of impact, a positive impact from BTS resumption of activities, which will lead to dramatic increase in traffic and commerce for Weverse. As I mentioned earlier, we will continue to increase our Japanese lineup for the platform. As we have already a pool of Japanese artists on Weverse, we will add more services and continue to drive commerce transactions as well.
For digital business, we will try to increase our profitability as well. In doing so, we will focus on IPs that can contribute to better commerce and increase the transaction. Now, what is important for Weverse from the CEO's perspective, is whether we will continue to maintain this profit trend or not. From the very beginning, Weverse was created as a global platform, and we already have a huge lineup of Korean artists. So we are generating profit in Korean market, but we believe that our presence has to expand further in the Japanese market, which means that we have to invest in marketing and we have to invest in other promotional activities.
So in short, we will continue to go through the cycle of having profit in the already established market while making some losses in the new markets where we enter for our target markets. So we don't really want to continue to maintain this profit structure as is, because we want to grow this platform to be a truly global platform.
So in some of the established markets, we will continue to generate profits, but in the new markets where we enter, we have to make investments for future growth, which may lead to some decline in profits to a certain extent. But this is the cycle that we expect going forward, and this is the intention of the management. Thank you.
The following question will be presented by Kihoon Lee from Hana Securities. Please go ahead with your question.
Uh,
I'm Lee Kihoon from Hana Securities. I'd like to ask one question, which is about Quartus. I've been analyzing the K-pop market for the past ten years, and Quartus seems to be rather an unprecedented case, with huge album sales, not just for the first week, but also on an ongoing basis. As of January, I understand that they have sold more than 1.7 million copies. On an annual basis, this will be ranked about fifth or sixth place among the total K-pop artists.
I wonder whether the first week sales was lower for some reason or maybe there was some successful promotions in other markets later. I know that BTS mentioned Quartus a couple of times, so this may have had an impact. I'd like to understand your analysis of the success behind Quartus , and if there's any guidance or any color that you can provide us regarding the future of Quartus , we would appreciate it.
Yeah.
I'm CFO. Let me address your question. First of all, as you mentioned, their album sales have continued even after the first week, and which means that there has been an increased growth of the fandom for Quartus on an ongoing basis. There are two main reasons why. First of all, Quartus is a very attractive and talented group of artists. Secondly, we have applied promotional strategies that are quite different from the existing K-pop approaches. For instance, we produced music videos for all tracks on the album with the participation of the members, and all music videos were released.
In addition, a variety of other promotional strategies were applied. So in short, there was a combination of the appeal and attractiveness of Quartus members and the new promotional strategies that Hybe has applied, and these were well received in the market. That is why, since debut, Quartus has been gaining more and more people to their fandom, and this has been maintained ever since.
[Foreign language]
I'm CEO. I'd like to add some comments. Quartus debuted in September in 2025, and as I'm sure you've been following the K-content industry, this was indeed unprecedented. When you listen to their music, they have their unique feel and originality. Also, we applied promotional strategies that were quite atypical, and many of our marketing and promotional activities were atypical and unusual, and these were all intentional and planned. In just three months, Quartus sold more than 1.3 million physical copies, which is unprecedented, and it means that they are a huge debut group. Indeed, their advertising prices are similar to those who have more than three or four years of experience.
When you look at the global Spotify global daily streaming, you can confirm that Quartus popularity in the global market is indeed quite bigger than you would ever imagine. So they are growing popularity in the world as well, and that is why they were invited to an NBA related show, as well as got on a partnership with an FNB brand, and they're receiving many calls from global brands as well. Quartus was able to sell more than 1.9 million copies, their first album, in just five months. In this process, a lot of works have been made by, for instance, BP, Kim Soyoung of Big Hit Entertainment, Big Hit Music, as well as the production team, the management team, and the protocol team, and so many producers, as well as the guidance and leadership of Mr. Bang himself.
So a lot of resources have been invested, and we were able to employ differentiated and unprecedented marketing approaches. You can see that Quartus was the result of concerted efforts at the group, at the company level. This is also the result of what Hybe can do after accumulating seven or eight years of experience in the global market with its network and its know-how. All of these capabilities have led to the success of Cat's Eye in North America and the growth of Santos Bravo in the Latin genre. Indeed, we believe that we have opened the K-pop era 3.0.
[Foreign language]
Thank you. This is the end of the Q4 conference call for HYBE. Thank you for tuning in.