HYBE revenues soar 83.8% to $391m in Q2… despite BTS hiatus announcement

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June was a challenging month for HYBE. On June 15, the South Korea-based entertainment giant’s flagship K-pop group revealed that they would be taking a break to pursue solo projects.

The shock news spooked investors in the publicly-traded K-pop company, causing HYBE’s shares to fall by nearly 25% on June 15, wiping around $1.5 billion from its market cap value.

Today (August 3), the Seoul-headquartered music company has published its financial results for the three months ended June 30 (Q2 2022), revealing soaring revenues, driven by strong album sales and a robust “Artist Direct-involvement” business.

According to new investor filings, HYBE generated revenues of South Korea Won (KRW) 512,218 billion in the three months ended June 30.

That Q2 revenue figure converts to approximately USD $391 million at current exchange rates, up by 83.8% year-over-year.

HYBE’s Q2 revenue of 512,218 billion KRW in Q2 was up 79.7% versus the prior quarter (Q1) when the company generated 284,974 billion KRW (approx. $217.4m).

HYBE’s Q1 and Q2 2022 results follow a year in which the company broke the billion dollar annual revenue barrier for the first time, reporting revenues of 1.257 trillion KRW for FY 2021, approximately USD $1.098 billion at annual average exchange rates (per the IRS), and up by 58% YoY.

One key factor in HYBE’s revenue growth over the past year was its $1 billion acquisition of Scooter Braun’s Ithaca Holdings, which took place in Q2 (April) last year.

Digging deeper into HYBE’s investor filing reveals that the company’s operating expenses rose to 423,907 billion KRW ($323.6m) in Q2, up 69.2% YoY from 250,599 billion KRW ($191,3m) in Q2 2021.

The firm’s operating profit grew by a whopping 215.3% YoY, however, from 28,010 billion KRW ($21.3m) in Q2 2021 to 88,310 billion KRW ($67.4m) in Q2 2022.

 

HYBE’s biggest revenue driver in Q2 was its ‘Artist Direct Involvement’  business line, which generated revenues of 325,883 KRW billion, up 153.4% YoY. Those earnings convert to $248.7 million (see below).

HYBE’s ‘Artist Direct Involvement’ business line was its biggest revenue source for the second straight quarter in Q2.



The company’s ‘Artist Direct Involvement’ business line overtook HYBE’s ‘Artist Indirect-Involvement’ business line in Q1 2022, generating 153.6 billion KRW in Q1 2022.

‘Artist Indirect-Involvement’ business activities were HYBE’s main revenue driver in every quarter of 2021, including Q1 (ending March 31), Q2 (the three months to the end of June), Q3 (the three months to the end of September) and Q4 (ending December 31).

It was also the company’s biggest revenue driver across the FY 2021, generating 733 billion KRW ($640m at annual average exchange rates) last year – up 72.8% YoY.

In Q2 2022, HYBE’s ‘Artist Indirect-Involvement’ business activities generated revenues of 186,335 billion KRW ($142.2m), up 24.2% YoY.


HYBE’s second biggest revenue source in Q2 was album sales, driven by releases in the quarter from groups such as BTS and Seventeen.

The company’s album sales grew 97.1% YoY, from 107,012 billion KRW ($81.7m) in Q2 2021 to 210,890 billion KRW ($161m) in Q2 2022.

HYBE revenues from merchandising and licensing also soared in Q2, by 97.2% YoY, from 50,099 billion KRW ($38.2m) in Q2 2021, to 98,783 billion KRW ($75.4m) in Q2 2022.

Revenues from HYBE’s ‘Contents’ business, meanwhile, fell 22.6% YoY to 70,693 billion KRW ($53.9m). HYBE also reveals within its investor filing that Monthly Active Users of its fan-community app WeVerse fell by 6% versus Q1 2022 (see below).

The WeVerse app, which pulls together content made by and for Big Hit artists including music videos, teasers, movies, merch sales and even live streams, has been cited by HYBE as one of the key drivers behind its success during the pandemic.

In spite of seeing its WeVerse MAUs decline, HYBE’s revenues derived from its ‘Fan club etc’ business line grew 96% YoY to 16,858 billion KRW ($12.8m).



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