SM Entertainment Q3 operating profit falls 26.4% to 35.5 billion won, slightly above forecasts
SM Entertainment reported preliminary third-quarter 2026 consolidated revenue of 291.1 billion won and operating profit of 35.5 billion won on November 4, down 9.5% and 26.4% year over year.
SM Entertainment's third quarter came in weaker year over year but slightly ahead of expectations. Preliminary consolidated operating profit was 35.5 billion won on revenue of 291.1 billion won, and the company swung to a 1.1 billion won net loss.
SM attributed the decline to fewer domestic releases while it prioritized overseas concerts and smaller fan shows. Appearance revenue and merchandise/licensing both grew more than 20%.
The company also laid out its next releases. Q4 brings full albums from NCT DREAM and Taeyeon and an EXO unit (Kai and Sehun) mini album. Q1 2027 lineup includes full albums from RIIZE, Seulgi and Jaehyun and a Hearts2Hearts mini album, along with concerts including NCT WISH's sold-out Gocheok Sky Dome dates and aespa's European tour.
Confirmed
- In a November 4 regulatory filing, SM reported preliminary Q3 2026 consolidated revenue of 291.1 billion won (-9.5% YoY) and operating profit of 35.5 billion won (-26.4%), with a net loss of 1.1 billion won.
- Separate (standalone) revenue was 173.4 billion won (-22.8%), with operating profit of 28.4 billion won (-29.2%) and net income of 11.1 billion won (-65.7%).
- Appearance revenue rose 21.3% to 29.2 billion won and MD/licensing revenue rose 23.5% to 62.1 billion won.
- SM said fewer domestic releases, as it focused on overseas concerts and small fan shows, lowered album, music and concert revenue.
- SM's planned Q1 2027 releases include full albums from RIIZE, Seulgi and Jaehyun, a Hearts2Hearts mini album, a SUPER JUNIOR-83z single, an NCT JNJM Japanese single and a Chenle Chinese single.
Reported by other outlets
- Yonhap reports the operating profit was 2% above the Yonhap Infomax consensus of 34.8 billion won.
- Money Today reports the net loss was driven by foreign exchange losses from a stronger won, and that DEAR U's operating profit rose 5.6% to 9.2 billion won.
- Per Yonhap and Money Today, Dream Maker and KeyEast returned to profit, SM C&C's losses widened and SM Life Design Group's profit fell on lower album printing sales.
Analysis
2FC NEWSROOM: With merchandise and licensing up as album revenue fell, SM's quarter depended on its touring and IP businesses. The busy Q4 and Q1 release calendar is how it plans to bring album sales back.