HYBE Corporation’s Q3 2024 Earnings Report: Significant Loss and Public Controversy
On November 5, 2024, HYBE Corporation unveiled its “Q3 2024 Earnings Report,”revealing a staggering 98.6% decrease in net profit. In addition, the conglomerate reported a 25.4% decline in consolidated operating profit, amounting to 54.2 billion KRW (approximately $39.3 million), a notable drop from the previous year.
Sales revenue for the quarter reached 527.8 billion KRW (around $382 million), reflecting a 1.9% year-on-year (YoY) decline. The net profit for Q3 2024 was recorded at a mere $1 million (about 1.4 billion KRW). However, there was a bright spot: revenue from fan club subscriptions on Weverse increased by 31.8% YoY, reaching over 204.9 billion KRW (approximately $148.6 million).
A closer look at the components of the total sales revenue reveals that over 323 billion KRW (approximately $234.3 million) originated from direct album sales and concert ticket sales. Notably, the company experienced an 18.8% decrease in album and music sales and a 14.8% drop in concert ticket sales when compared with Q3 2023.
Controversy Surrounding Internal Report Impacts Reputation
A significant controversy arose when an internal document titled “Industry Trends Report”was brought to light during a National Assembly Audit on October 24, 2024. The document, comprising over 18,000 pages, allegedly contained disparaging remarks about popular idol groups such as Stray Kids, BLACKPINK, EXO, IVE, NCT, NMIXX, and aespa, tarnishing HYBE’s public image and potentially influencing its financial performance for Q3 2024.
Despite these setbacks, HYBE’s newly debuted group KATSEYE made headlines with their inaugural EP, SIS, successfully charting on the Billboard 200 and Top Current Album Sales. Additionally, their single “Touch”featured on the Billboard Bubbling Under Hot 100, providing a much-needed boost to HYBE’s quarterly income.
Public Response and Corporate Accountability
The fallout from the “Industry Trends Report”prompted a strong public backlash. CEO Lee Jae-sang issued an apology on October 29, 2024, acknowledging the gravity of the situation. He described the controversial document as a compilation of public opinions related to “industry trends and issues.”In his statement posted on the company’s official website, he expressed:
“As the CEO of HYBE, I would like to apologize regarding the Hive monitoring document. […] The document was created in the process of collecting various responses and public opinions on industry trends and issues.”
He further stated:
“It was shared with only some leaders for the purpose of understanding the market and artist fan opinions, but the content of the document was very inappropriate. I acknowledge all my mistakes on behalf of the company and feel responsible for the fact that it contained provocative and crude expressions toward K-pop artists…”
Furthermore, reports from Ilgan Sports revealed that HYBE took decisive action by terminating the employment of the Weverse executive responsible for compiling the contentious report on October 29, 2024.
For further details, you can read more in the original source here.
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