SM Entertainment (hereinafter SM, co-CEOs Jang Cheol-hyeok·Tak Young-jun) achieved its highest fourth-quarter results on a consolidated basis for the fourth quarter of 2025.
SM said in its earnings disclosure on the 11th that it recorded consolidated fourth-quarter revenue of 319 billion won and operating profit of 54.6 billion won for the fourth quarter of 2025. This represents increases of 16.6% in revenue and 62.2% in operating profit year over year, an earnings surprise that exceeded market expectations, and operating margin improved to 17.1%, up 4.8 percentage points from the same period last year, demonstrating improved profitability. Net income also turned to a profit of 27.4 billion won, increasing corporate value.
On a separate basis, it recorded revenue of 202.2 billion won and operating profit of 39.5 billion won, increases of 12.1% and 10.2% year over year, respectively, and net income rose 106.5% year over year to 29.3 billion won.
This performance reflects the expanded global tours of core IP such as NCT DREAM·aespa·RIIZE·NCT WISH and the full reflection in results of merchandise and licensing businesses using artist IP, and was also positively affected on consolidated results by improved performance of major subsidiaries including SM C&C and SM Japan and the consolidation of DearU.
SM then shared the specific implementation directions of the "SM NEXT 3.0" strategy, which focuses on a sustainable growth structure, along with this earnings announcement.
Co-CEO Tak Young-jun said of "SM NEXT 3.0," "It is a strategy focused on building a sustainable growth structure rather than short-term size expansion or speed competition," and explained that "through a multi-creative system that increases the autonomy and efficiency of production organizations, we are creating more predictable and reproducible results across IP planning and production." He added, "We will pursue balanced development of new IP cultivation and global expansion strategies to simultaneously strengthen scale growth, profitability and the long-term competitiveness of IP."
Co-CEO Jang Cheol-hyeok said, "The global expansion of 'SM NEXT 3.0' has been designed to prioritize sustainability and efficiency. In line with this, SM will actively leverage strategic partnerships and segment target regions according to the characteristics of each IP and market conditions to maximize the visibility of results and execution efficiency during the expansion process."
SM is expected to continue growth in album, music and concert sales in the first half of 2026, backed by a strong artist lineup. In the first quarter, new releases including EXO and Irene's full-length albums as well as NCT JNJM and Hearts2Hearts are scheduled to be released in succession, and in the second quarter, full-length albums from Taeyong, aespa and NCT WISH, mini albums from RIIZE and Hearts2Hearts, and a single from Ryeowook are expected.
The concert sector will also remain active with a global focus. In the first quarter, led by Super Junior's 20th anniversary tour that has continued since last year, NCT DREAM, aespa, RIIZE, NCT WISH and Taeyong will perform across Asia, and in the second quarter EXO tours, TVXQ!'s Nissan Stadium concert and Hearts2Hearts' first U.S. showcase will take place.
[Photo] SM Entertainment
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