SM Entertainment Revenue Up 19% on New Releases From RIIZE & NCT WISH, Strong Merch Sales

SM Entertainment’s consolidated revenue jumped 19.3% to 302.9 billion KRW ($216.5 million) in the second quarter, the company announced Wednesday (Aug. 6). 

Driven by a 1.9 million-unit increase in new album sales, album and digital music revenue of 99.0 billion KRW ($70.8 million) was up 37.9% from the prior-year period. RIIZE’s Odyssey sold 1.93 million units, NCT WISH’s The 2nd Mini Album sold 1.34 million copies and aespa’s “Dirty Work” single sold 900,000 units. In total, SM Entertainment’s new release sales totaled 5.79 million units in the quarter. 

Concert revenue of 33.6 billion KRW ($24.0 million) was down 1.9% year over year. The SMTOWN 30th anniversary concerts were held in London, Los Angeles and Mexico City. TVXQ! hosted three concerts at the Tokyo Dome. NCT 127 performed six times in Japan and Macau. Ten performed 15 concerts, NCT WISH had 10 performances and SHINee held three concerts. 

Merchandise and licensing revenue rose 39.6% to 63.9 billion KRW ($45.7 million). The company attributed the increase to concert merchandise sales, an NCT WISH exhibition pop-up sale and a RIIZE character pop-up event. 

Operating profit — sales minus cost of sales and operating expenses — rose 47.3% to 114.5 billion KRW ($101.1 million). Net income nearly tripled to 30.9 billion KRW ($22.1 million). 

“Moving forward, SM Entertainment remains committed to sustainable growth, not by focusing solely on short-term earnings, but by leveraging the structural competitiveness of our IP and building sustainable revenue models,” CEO Cheol-hyuk Jang said in a statement. “We will continue to strengthen our IP portfolio across generations by establishing a virtuous cycle in which long-standing IPs generate stable profits while newer IPs realize their growth potential through performance-based results.”

Revenue from SM Entertainment’s subsidiaries grew 25.4% to 141.5 billion KRW ($101 million). SM Entertainment Japan rose 38.6% to 26.0 billion KRW ($18.6 million). SM Culture & Concerts, an advertising and talent agency, fell 24.2% to 21.1 billion KRW ($15.1 million). SM Brand Marketing rose 38.2% to 19.5 billion KRW ($13.9 million) due to an increase in album and merchandise sales. DREAM MAKER, a subsidiary focused on concerts and live events, rose 99% to 14.9 billion KRW ($10.6 million) from concerts by SHINee and NCT 127. KEYEAST, a talent management agency, fell 81.7% to 3.0 billion KRW ($2.1 million) due to fewer drama broadcasts. 

SM Entertainment has a busy release schedule in the second half of the year. Two major albums were released in July: SUPER JUNIOR’s 12th album, released in connection with the group’s 20th anniversary, NCT DREAM’s fifth album, Go Back to the Future. Other releases in the third quarter include mini-albums from aespa and NCT WISH. In the fourth quarter, SM Entertainment will have an album by Taeyeon, a single from RIIZE and mini-albums from NCT DREAM, WayV and Hearts2Hearts. 

The back half of the year’s touring schedule includes tours by RIIZE, NCT DREAM, WayV, aespa, RIIZE and SUPER JUNIOR.