The entertainment powerhouse managing global phenomenon BTS, Hybe, has revealed a massive surge in first-quarter sales following the band’s highly anticipated musical return. However, an exceptional accounting charge stemming from a generous employee bonus scheme has temporarily pushed the agency into the red, Yonhap reports.
In a regulatory update published this Wednesday, Hybe confirmed that its revenue between January and March skyrocketed by 39.5% year-on-year to hit $468 mln. This figure represents an all-time high for the first quarter, a season traditionally marked by sluggish activity across the global music industry.
Despite this robust top-line performance, the company recorded an operating deficit of $131.8 mln. This is a severe contrast to the $14.5 mln profit achieved during the same timeframe last year and falls well short of the $28.6 mln profit forecast collated by financial data provider Yonhap Infomax. The total net loss for the period stood at $105 mln.
The sudden plunge into negative territory was primarily caused by a massive $170.9 mln one-off accounting expense. This was triggered when the company’s chairman and largest shareholder, Bang Si-hyuk, awarded personal shares to employees as a performance incentive.
Hybe was keen to stress that this was strictly a paper loss and did not involve any actual cash leaving the business. Factoring out this unique expense, the agency would have posted a healthy adjusted operating profit of $39.2 mln.
The power of «Arirang»
The financial uplift was heavily dependent on the «direct participation» of its artists through album sales, live performances and brand endorsements, which collectively brought in $270.6 mln. Revenue generated specifically from recorded music nearly doubled to reach $182 mln, a spike directly attributed to the phenomenal success of Arirang, the fifth studio album from BTS.
The record-breaking project shifted 3.98 mln units on its launch day alone. Global analytics provider Luminate highlighted that the LP sold 208,000 copies in its first week, setting an unmatched record for any music group since the firm began tracking data in 1991.
The album also made history by dominating the U.S. Billboard 200 chart for three consecutive weeks, a first for any K-pop act, while the lead single «Swim» secured the group their seventh number-one spot on the Billboard Hot 100.
Additional roster talent including Enhypen, Katseye and Cortis also provided vital contributions to the quarter’s success.
Meanwhile, secondary revenue streams classified as «indirect participation», encompassing fan club subscriptions, digital content, licensing and merchandise, climbed by 65.5% to yield $197.5 mln. This was largely driven by rabid demand for merchandise and advance ticket sales tied to the current BTS world tour.
Looking towards the summer, Hybe is projecting sustained growth in both revenue and operating profit for the second quarter. This confidence is anchored by an impending slate of new music from groups like Tomorrow X Together, TWS and ILLIT alongside the continued financial influx from the BTS global stadium tour.
Addressing investors during an earnings call, CEO Lee Jae-sang noted that the band’s ability to easily sell out venues with over 50,000 seats is a testament to their enduring cultural dominance.
