China's Tencent Music Entertainment Group (NYSE:TME) posted quarterly revenue in line with Wall Street estimates on Monday, as the audio streaming service struggles with easing demand amid stiff competition.
As part of a broader clampdown on the country's internet giants, Chinese regulators stripped Tencent Music of its exclusive contracts with big music labels in 2021, spurring competition from rivals such as Cloud Music and Bytedance-owned short video sharing platform Douyin.
Tencent Music said revenue fell 15.1% to 6.64 billion yuan ($979.03 million) in the first quarter ended March 31, in line with expectations, partly due to lower ad sales after a fresh bout of COVID-19 cases in China.
The company reported that online music paying users increased by 4 million from the prior quarter. The company had added about 5 million paying users in the fourth quarter.
Net income attributable to equity holders of the company fell 34.2% to 609 million yuan.
The firm's biggest revenue driver, social entertainment services, saw a 20.6% fall in the quarter. Meanwhile, paying users in the segment fell to 8.3 million from 9 million in the previous quarter.
U.S.-listed shares of Tencent Music rose 2.2% to $4.24 in extended trading, as the company reported adjusted earnings per American Depository Share (ADS) of 0.54 yuan, which scraped past estimates of 0.53 yuan per ADS.
($1 = 6.7822 Chinese yuan renminbi)
