06:26 AM EDT, 08/12/2025 (MT Newswires) -- Tencent Music Entertainment ( TME ) reported better-than-expected second-quarter results on Tuesday, buoyed by double-digit revenue growth in its online music services business.

The Chinese music and audio entertainment platform company posted non-IFRS earnings of 1.66 renminbi ($0.23) per American depositary share for the June quarter, up from 1.19 renminbi the year before. The consensus on FactSet was for 1.48 renminbi. Revenue climbed 18% to 8.44 billion renminbi, topping the Street's view for 7.98 billion renminbi.

Revenue from online music services jumped 26% to 6.85 billion renminbi, driven by gains in music subscription and aided by growth in advertising services sales. Revenue from music subscriptions rose 17% to 4.38 billion renminbi, boosted by an improvement in the average revenue per paying user to 11.7 renminbi from 10.7 renminbi in the prior-year period.

Tencent's American depositary receipts inclined 4.2% in recent premarket activity.

"Our focus on product innovation to deliver immersive user experiences has driven solid growth in our online music business," Chief Executive Ross Liang said in the earnings release. "This is reflected in the continued expansion of both our subscriber base and ARPPU, along with deeper user engagement."

Monthly active users for Tencent's online music business decreased 3.2% year over year to 553 million, while paying users for the segment increased 6.3% to 124.4 million. Social entertainment services and other revenue fell 8.5% to 1.59 billion renminbi.

Cost of revenues widened by 13% to 4.69 billion renminbi, primarily due to increased intellectual property-related costs, as well as lower revenue-sharing fees due to the decline in social entertainment service sales. Total operating expenses edged higher to 1.16 billion renminbi from 1.15 billion renminbi in the 2024 quarter.