SM Posts Q3 Operating Profit of 35.5 Billion Won... "RIIZE Full-Length Album, aespa European Tour Next Year"

Revenue at 291.1 billion won... Operating profit down 26.4%
New-release sales fall 70%, while merchandise and advertising revenue rise
"Expanding smaller-scale concerts to strengthen global fan base"

SM Entertainment headquarters in Seoul. Photo courtesy of SM.

SM Entertainment reported in a regulatory filing on November 4 that it posted consolidated revenue of 291.1 billion won and operating profit of 35.5 billion won in the third quarter of this year. The figures were down 9.5% and 26.4%, respectively, from the same period last year. It recorded a net loss of 1.1 billion won, partly due to foreign-exchange losses stemming from the stronger won.

Sales of new releases in the third quarter fell by 3.83 million copies, from 5.5 million last year to 1.67 million this year. Revenue from recorded music and digital music at SM's headquarters totaled 47.1 billion won, down 51.3% from a year earlier. Concert revenue also declined 34.2% to 34.5 billion won.

SM explained, "As we held a range of overseas performances to strengthen our global fan base and smaller-scale performances to engage with fans, activities for new releases in Korea decreased. As a result, revenue from recorded music, digital music and concerts fell, as did operating profit at some of our major affiliates."

Revenue from merchandise (MD) and licensing at SM's headquarters rose 23.5% from last year to 62.1 billion won. Concert merchandise for aespa and NCT 127, EXO character merchandise, and collaborations with games contributed to the increase. Revenue from appearances, including advertising and events, also rose 21.3% to 29.2 billion won.

DearU, which operates a fan communication platform, posted operating profit of 9.2 billion won, up 5.6% from last year, on subscriber growth and more efficient server operations. Concert producer Dream Maker and drama production company KEYEAST returned to profitability. In contrast, SM C&C's losses widened as music-related content production costs increased, while SM Life Design Group's operating profit fell due to lower revenue from album printing.

SM will continue to roll out new releases in the fourth quarter and into the first quarter of next year. NCT WISH and RIIZE released new albums in October, and NCT DREAM will release a full-length album on November 9. Taeyeon's full-length album and a mini-album by an EXO unit are also scheduled for release before the end of this year.

RIIZE. Provided by SM Entertainment.

In the first quarter of next year, RIIZE will release a full-length album, while Hearts2Hearts will release a mini-album. Red Velvet's Seulgi and NCT's Jaehyun are also planning to release full-length albums. NCT members Jeno and Jaemin will release singles in Japan, while Chenle will release one in China.

SM will also expand its overseas performances. In the first quarter of next year, aespa will tour nine European cities, including London, Paris, Stockholm and Berlin. NCT WISH has already sold out its first concert, scheduled for January 15-16, 2027, at Gocheok Sky Dome. The group will then continue its tour in major Asian cities. WayV will perform in major Chinese cities, including Beijing and Shanghai, while Max Changmin and Minho will also hold solo concerts in Japan and elsewhere.

SM said, "We plan to build a balanced intellectual property (IP) portfolio by actively expanding the activities of our established artists, fostering the growth of newer artists and entering new markets."

This content was produced with the assistance of AI translation services.