China's Tencent Music Entertainment Group on Monday beat quarterly profit estimates, driven by strong growth in subscription revenue and advertising sales from its music streaming platform.
The company has been expanding its music library through new partnerships and multi-year licensing deals. That, coupled with efforts to diversify its content base through long-form shows and live talk shows have helped lure more paying users to its music platform as well as advertisers.
Tencent Music and Sony Music Entertainment said on Monday they had signed a multi-year extension of their digital distribution agreement.
Total revenue of the company, controlled by Chinese tech giant Tencent Holdings Ltd, rose to 7.82 billion yuan ($1.21 billion) in the first quarter from a year earlier. Analysts were expecting revenue of 7.73 billion yuan, according to IBES data from Refinitiv.
Profit attributable to equity holders of the company rose to 926 million yuan ($143.82 million), from 887 million yuan a year earlier.
Excluding items, the company earned 69 yuan per American Depository Share (ADS), above estimates of 55 yuan per ADS.
U.S.-listed shares of Tencent Music were once down more than 2% in trading after the bell.
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