10:38 AM EDT, 08/13/2024 (MT Newswires) -- Tencent Music Entertainment's ( TME ) second-quarter top-line declined on a yearly basis mainly due to lower revenue in the company's social entertainment services segment, partially offset by gains in its online music unit.

The Chinese music and audio entertainment platform on Tuesday reported revenue of 7.16 billion renminbi ($1 billion) for the June quarter, down from 7.29 billion renminbi a year earlier. The consensus on Capital IQ was for revenue of 7.14 billion renminbi.

Monthly active users in Tencent's online music business decreased 3.9% to 571 million, while mobile MAUs in its social entertainment business declined by 32% to 93 million.

Revenue from online music services jumped 28% to 5.42 billion renminbi, driven by gains in music subscription and advertising. Social entertainment services and other revenue tumbled 43% to 1.74 billion renminbi, impacted by adjustments to certain live-streaming interactive functions and stricter compliance procedures implemented form last year.

Tencent's American depositary receipts declined 16% in Tuesday's trading session.

"We are pleased to report another quarter of robust results, driven by the strong performance of our online music services," Executive Chairman Cussion Pang said in a statement. "We remain optimistic about the music industry's long-term potential and are committed to sustainably achieving our mid- to long-term goals."

Revenue from music subscriptions climbed about 29% to 3.74 billion renminbi, as the number of paying users climbed 18% to 117 million amid membership privileges, among other factors, the company said. Social entertainment's paying users rose 5.3%.

Non-IFRS earnings increased to 1.19 renminbi per ADS from 0.97 renminbi in the prior-year quarter, ahead of the Street's view for 1.18 renminbi. Cost of revenues decreased 13% to 4.15 billion renminbi, which Tencent said can be attributed to a decline in revenue-sharing fees due to lower social entertainment service sales. Total operating expenses narrowed 8.5% to 1.15 billion renminbi.

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