HYBE’s net income dropped 86% in the second quarter of 2024 as total revenue improved 3.1% to a quarterly record of 640 billion won ($482 million), the company announced Tuesday (Aug. 6). 

The South Korean K-pop giant breaks its financial results into two main categories: segments with direct artist involvement such as recorded music and concerts, and those with indirect-artist involvement such as fan clubs, licensing and merchandise. In the second quarter, indirect revenue streams grew 17.4% to 217 billion won ($163 million). Direct revenue fell 2.9% to 424 billion won ($319 million) as concerts dropped 8.6% to 144 billion won ($108 million) while recorded music improved 1.5% to 250 billion won ($188 million). 

Operating profit—total revenue less cost of sales and operating expenses—dropped 37.4% to 51 billion won ($38 million), a smaller decline than experienced by net income because of a sharp drop in non-operating income. Earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of the company’s cash profit from operations, fell 24.6% to 79 billion won ($59 million). 

Results for the first six months of the year were, across the board, a bit worse than a year earlier. Although total revenue topped 1 trillion won ($741 million) for the second consecutive year, that amount was 2.9% lower than a year earlier. First-half operating profit, net income and EBITDA were also lower than the first half of 2023. 

HYBE sold fewer albums in the first half of the year but dominated sales charts in South Korea and Japan. Led by Seventeen’s 4.4 million albums sold in the first half of the year, HYBE had 9 of the top 20 artists ranked by album sales in South Korea. Seventeen’s Best Album ’17 is Right Here’ ranked second in Japanese album sales with 423,000 units while its SEVENTEENTH Heaven: 11th Mini Album ranked No. 6 with 242,000 units. In the U.S., Tomorrow X Together’s Minisode 3: TOMORROW ranked No. 2 in CD sales behind Taylor Swift’s The Tortured Poets Department. 

Streaming accounted for 35% of recorded music revenue, up from the first half of 2023. In a first-of-its-kind breakdown of the company’s streaming revenue, HYBE revealed that domestic streaming revenue for HYBE’s labels South Korea was 18 billion won ($18 million), less than half the amount from full-year 2023. (It did not provide first-half streaming revenue figures for those labels’ streaming revenue outside of South Korea). HYBE’s U.S. labels—Big Machine Label Group and Quality Control—also had streaming revenue of 61 billion won in the first half. 

Weverse, HYBE’s social media platform, had 9.6 million monthly active users, up from 9.2 million in the first quarter and even with the 9.6 million MAUs a year earlier. Beyond traditional social media functions, Weverse also has an e-commerce element, Weverse Shop, and live streams artist chats and concerts. Ariana Grande joined the platform in July, joining HYBE artists such as BTS and ENHYPEN and non-HYBE acts such as BLACKPINK and NCT-127.

This is a transformational time for the company built on the global success of boy band BTS but now expanding into new markets and initiatives. In July, HYBE named Jason Jaesang Lee as its new CEO to lead its growth strategy that was announced on Aug. 1. Dubbed “HYBE 2.0,” the plan reorganizes the company to drive global expansion and focus on tech-driven initiatives. HYBE Music Group APAC combines its record labels in South Korea and Japan. The Scooter Braun-led HYBE America will bring management to its label operations. Social media platform Weverse will launch a subscription membership tier. HYBE is also accelerating its efforts in gaming, AI, audio and voice technology.