Tencent Music (NYSE: TME) reported Q3 EPS of $0.12, $0.01 better than the analyst estimate of $0.11. Revenue for the quarter came in at $1.12 billion versus the consensus estimate of $1.13 billion.

Financial and Operational Highlights

In the three months ended September 30, 2020:

• Online music paying users reached 51.7 million, increasing by 46% year-over-year. On a sequential basis, the number of online music paying users grew by 4.6 million, up from 4.4 million in the second quarter and 2.8 million in the first quarter of 2020, representing the largest net increase since 2016. Paying ratio was 8.0%, up from 7.2% in the second quarter of this year and 5.4% in the third quarter of last year.
• Total revenues were RMB7.58 billion (US$1.12 billion), an increase of 16.4% year-over-year, with online music subscription revenues growing by 55.0% year-over-year to RMB1.46 billion (US$215 million).
• Net profit attributable to equity holders of the Company was RMB1.13 billion (US$167 million).
• Non-IFRS net profit attributable to equity holders of the Company[1] was RMB1.35 billion (US$198 million).

"Third quarter results reflect significant progress in our ability to unlock the opportunities that are present in China's dynamic online music industry as we achieved 55% year-over-year growth in online music subscription revenue with increasing paying ratio. In addition, our overall gross margin expanded at a healthy clip compared with the prior quarter, thanks to the continuous execution of our business strategy and improving operational efficiency," said Mr. Cussion Pang, Chief Executive Officer of Tencent Music. "This strong performance reflects our philosophy of quality growth, investing with discipline and the unwavering pursuit to improve user satisfaction."

"Expansion of our music library and diversification of our content offering continued, with more video and long-form audio now available. We enriched online music streaming by adding visual, interactive and social attributes to our products, including offering a whole new level of online concert experiences through TME Live. For online social entertainment services, we are pleased to see sustained recovery. Operationally, we continue to focus on optimizing our product features, particularly those related to community building and video enrichment, to improve user experiences and enhance our long-term competitiveness," concluded Mr. Pang.

For earnings history and earnings-related data on Tencent Music (TME) click here.