Tencent Music Entertainment Group

Good evening and good morning and welcome to Tencent Music Entertainment Group's third quarter 2025 earnings conference call. I'm Nielsen Tu, head of IR. We announced our quarterly financial results earlier today before the U.S. market opened. The earnings release is now available on our IR website and via newswire services. During today's call, you'll hear from Mr. Kushan Pang, our executive chairman, and Mr. Ross Liao, our CEO, who will share an overview of our company's strategies and business updates. Then Ms. Shirley Hu, our CFO, will discuss our financial results before we open the call for questions. Before we continue, I refer you to the safe harbor statement in our earnings release, which applies to this call as we made following statements. Please note that we're discussing non-IFRS measures today, which are more thoroughly explained and reconciled to the most comparable measures reported under IFRS and the earnings release and filings with the SEC. All participants are muted at this time. After management's remarks, there will be a Q&A session. And please be advised that today's call is being recorded. With that, I'm very pleased to turn the call over to Kashen, Executive Chairman of TME. Kashen, please.

Thank you, Madison. Hello, everyone, and thank you for joining our call today. In the third quarter, we delivered another set of strong financial results. underpinned by the well-rounded performance of our online music business. Our ongoing innovations across content, services, and live experience continue to feel steady growth in our subscription business, while pushing momentum in non-subscription revenue, particularly in concerts and artist merchandise. Backed by our strong financial position and operational excellence, we are posted to further broaden our music service, unlock new growth opportunities, and create greater value for artists, partners, and users across the entire music industry. Now, let me share some highlights from this quarter. First, we further enriched our content coverage to include more offerings in different music genres and languages. For example, in pop music, we renewed the contract with DRAMAS, a leading Korean label, and partnerships with Jam Studio, Deng Jiqi, Jason Zhang Jie, and Lei Zhang's Zhang Yixing Studio, strengthening our collection of top hits. To better serve users' passions for game-related music, we partnered with Tencent Games to co-produce Agnes of Tomorrow , the 10th anniversary theme song performed by JJ Lin , for Honor of Kings . Performed as the final at the Honor of Kings 10th anniversary co-creation night, the song quickly garnered over 600 million social media mentions within two weeks of its release, engaged 280 cultural and tourism authorities nationwide. Standing out as one of the year's most impactful game soundtracks, We also collaborated with Blizzard Entertainment for the first time and introduced the 50 original soundtracks from iconic game titles, including World of Warcraft, and Hearthstone . To further enrich anime and K-pop music categories, we established strategic partnerships with renowned Japanese ACG label, King Records, and Korean label, Serial, offering popular anime songs and OSTs from hit dramas such as Boys Over Flowers, Hwayang Lanzi. Second, during the quarter, we successfully staged several large-scale international concerts and events, extending our reach beyond borders to tap into the international market opportunities. A prime example is the concert tour that we hosted for leading Korean artist G-Dragon. G-Dragon 2025 World Tour Wubbamash building on our success in the second quarter. This time we put on 14 additional show-off shows for him across six cities. including Sydney, Melbourne, and Kuala Lumpur, drawing over 150,000 attendees. The popularity of the tool lead to acceleration of live concert revenue growth, demonstrating our strength in delivering world-class entertainment experiences. Our annual flagship, TMEA Concerts, was another success and a highlight for the quarter. The event featured 35 different artists and groups and drew more than 10,000 attendees, underscoring its strategic importance as a well-anticipated premiere gathering within the music industry. Building on the momentum from TME8, this year we broke new ground and introduced another flagship concert's IP, TME Live International Music Awards, TMA. To celebrate the achievements of international artists and showcase their talents, The inaugural team featured 22 global renowned artists and groups from China and a number of Asian countries, including famous acolytes, Belgin, PPG, ASPA, and SMTR25. The two-day event immersed over 20,000 attendees in a vibrant atmosphere. We also organized and delivered several major concert tours for well-known artists like Fiona Seed, Xue Kaiqi, Tia Wei, Yuan Yawei, Angela Zhang, Zhang Shaohan, and Guy Zhouyan. The success of these shows illustrates TME's strength and impact in bordering artist fan bases, especially through interactions with younger audience. For instance, in Guy's most recent shows in Chongqing, through integrated online and offline promotional resources, we helped him attract more than 40,000 attendees, up from 10,000 in a single event in the third quarter. This marked a successful upgrade in concert scale, moving from arena level to stadium level. Together, these remarkable events have laid a solid foundation for TME to continue to grow at scale. As we further build out our performance pipeline, we are confident that there will be more exciting opportunities home and abroad to deliver large-scale and immersive live music experiences for users. Third, we continue to break new ground with artist partnerships, providing them with holistic support and leveraging our increasing promotional capability to enrich artist-centric offerings. For instance, during the quarter, we partnered with Tencent's hit title, Crossfire, 穿越火线, to produce Yuqi's Song Yuqi new song, COPDD. By seamlessly integrating this song into the game ecosystem and allowing users to earn in-game items through listening cards, we amplified its impact. The track sold to number two on the QQ Music new song chart within two days of its release. As another example, in this quarter, we premiered Lay Zhang's new digital album, Rock the Heavenly Palace, Laotian Gong, together with collectible card packages. This innovative approach not only boosted participation, but also lead the album to rank among the top of the 2025 bestseller charts. The production and release of Bailu's first physical album, My Odyssey, featuring two distinct version designs, marked another success. The album earned strong acclaim from fans and achieved outstanding sales performance. All of the above examples illustrate the power and fire wheel of our content and platform dual engine. Supported by our massive user base, fueled by expanding content ecosystem and constant innovations, we have reinforced the virtuous cycle, allowing us to design diverse services to address users' needs. With user interactions deepening and community engagement strengthening, It boosts the reach of quality content on our platform and attracts more attention from artists and labels, both home and abroad, feeling the sustainable growth of our ecosystem. Last but not least, on ESG, For seven consecutive years, we have proudly won the Music Gardens-based public welfare program, partnering with singers and teachers to support music education in rural areas. This year, we invited V-SYNC users to redeem their points accumulated through incentive ads to directly support the program, sparkling greater users' interest. Over 380,000 participants took part. Looking ahead, we will continue to leverage our dual-engine strategy, explore new opportunities and expand our reach, building a seamless, vibrant, all-in-one music service platform for music lovers. Now, I would like to hand it over to Ross for a deeper dive into our overall platform development. Ross, please go ahead. Thank you.

Thank you, Kasia. Hello, everyone. Our music ecosystem continues to strive in the third quarter, benefiting from our profound user insights and observational excellence. As we focus on enhancing the value proposition for user, This quarter, we achieved a steady growth in SVIP penetration and ARPPU. We are also building a diversified product portfolio, catering to different user cohorts to effectively expand our platform's reach to a broader audience. To this end, our commitment to harnessing AI to elevate users' experiences continued to empower us to remain at the forefront of delighting music users. First, on system integration, we were among the first to support Apple's Liquid Glass mode in iOS 26. and introduce the liquid glasses themes and the players on Android for optimized visual effects and better interactions. We also fully adapted our app for Harmony OS with core music features now largely aligned with what we offer on Android. Second, we upgraded the player interactive features and AI pod functionalities For example, we invited more enlightening designs and tokens on the playback page, creating delightful surprise across new touchpoints, which also proved effective in new sound promotions. We also pioneered multi-mode sound transition feature, AutoMix, offering seamless remix and a more immersive streaming experience. To effectively deepen engagement, we expanded our AI-powered Lyricist card feature, newly covering over 200 leading artists. The card collecting process is full of threats and fun, driving sharing among users and increased user activities. Our upgraded AI Assistant allows users to generate a personalized playlist with just one type or easily create their own original music. This has significantly lowered the barrier to creative expression and helped increase content consumption through recommendation. We are here to serve and delight. As a result, users can unlock additional tools and perks from our multi-point membership offerings. Whether a freemium user, a deeper value ads member, or a standard subscriber, we provide different services to cater to the distinct needs of users. In fact, recently, we started to see an increasing willingness of freemium users upgrading to ads members, which also led to increased time spent. For those looking to experience the ultimate service, our SAP offers an unparalleled range of freemium features. which have been crucial in driving SYIP adoption rate and average spend. Its penetration and ARPPO expanded both year-over-year and quarter-over-quarter as we introduce new privileges and innovative services that strengthen its value proposition and inspire the music appreciation in new ways. A new highlight to share. First, premium sound qualities remain a key draw for SVIP. As we accelerated its results, QQ Music newly introduced DTS bombing external speakers, became the top convention driver among audio qualities. Viper Airtel Sound 2.0 in Kugel Music. with its improved sound quality. Sound-classified and reduced data usage also proved to be highly effective in retaining SVIP loyalty. Second, our insight into content and the user provided us to provide creative offerings, which in turn helped boost SVIP uptake. For example, the digital album, an integral part of our content ecosystem, remains effective at the SYIP convention. Members highly appreciate their privileges access to digital albums alongside limited edition collectible NFC cards. Notable collaborations this quarter include Ethan Chang, Chen Yixun, Fair and Dreams, and Idol's self-titled Japanese EP, which has significantly boosted SYIP conventions. Another example is Starlight Cars. In the third quarter, we rolled out new starlight cards featuring popular artists such as Fiona Seed, aespa, Idol, and Things in Time's Shidai Shao Nian Tuan, which instantly became a big draw. We have also expanded artist partnerships to include more international musicians. including JYP's Yeezy, Japan's Joey Oatman, and Western artist Jake, replicating our success domestically. We recently extended our Starlight Card offerings to the Hong Kong and Thailand market through our music platform, Jokez. Third, we wrote out several target initiatives to reinforce the artist-fan connection and strengthen user loyalty through Babel. We expanded our artist routers by onboarding over a dozen musicians from domestic labels, such as Hu Xia, Nas Tide, and Ride, giving more fans the chance to interact directly with their favorite artists online. This, in turn, attracted a broader user base. We leveraged AI to further localize the bubble features and the functionalities, leading to improved user retention. The new and upgraded features include the in-app translation and the speak-to-text capabilities empowered by large AI models, as well as desktop shortcuts for quickly and spontaneous access. We also launched a limited edition badges to celebrate the key artist moments, such as new song release, birthdays, and the debut anniversaries. This compliment by unique fun-only perks, helped strengthen emotions ties between artists and the fans, resulting in improved rotation and engagement. In summary, we are pleased with the progress we have made in enhancing the value of an increasingly diverse use space. Moving forward, we remain committed to further enhancing our cost transit and the platform efficiency. We are well positioned to continue to shape the industry from music creation to enjoyment. With that, I would like to turn the call over to Shirley, our CFO for a deep dive into our financials.