HYBE’s revenue declines significantly, but TWS and ILLIT have successful debuts.

K-pop powerhouse HYBE experienced a decline in total revenue, marking its lowest numbers in two years. The company revealed that its recorded music segment dropped to its lowest level in seven quarters. This news came to light on Thursday, May 2nd, sending shockwaves through the industry.

In the first quarter of this year, HYBE reported a revenue of 360.9 billion won ($271.5 million), which was a significant 12.1% decrease compared to the previous year. The operating profit also took a hit, falling by a staggering 72.6% to 14.4 billion won ($10.8 million) from the prior-year period.

Surprisingly, despite these disappointing results, HYBE’s share price remained relatively stable. Initially rising by 1.7% to 205,500 won ($149.23), it later dipped to 201,500 won ($146.33) by midday, representing a mere 0.2% decrease. However, the stock had seen a 13.7% decline year to date and dropped by 12.6% in the previous week due to news of potential legal issues involving the CEO of its ADOR imprint.

The company’s Earnings before interest, taxes, depreciation, and amortization (EBITDA) also took a hit, dropping by 45% year over year to 39.8 billion won ($29.9 million). This marked the lowest EBITDA since the first quarter of 2021, painting a concerning picture for HYBE’s profitability.

While concerts revenue saw a positive growth of 74.5% year over year, amounting to 44 billion won ($33.1 million), other segments like merchandising and licensing, as well as contents, experienced declines of 11.9% and 29.8%, respectively. This mixed performance across different categories added to the complexity of HYBE’s financial situation.

Weverse, the social media platform owned by HYBE, faced challenges with a decline in monthly active users (MAUs) for the second consecutive quarter. After peaking at 10.6 million MAUs in the third quarter of 2023, the numbers decreased to 10.1 million in the fourth quarter and further dropped to 9.2 million in the first quarter of the year. Both average revenue per paying user and total payment amounts also fell below levels seen in the previous years.