Shares of Tencent Music fell in after-hours trading Monday after the social entertainment firm missed revenue estimates for the March quarter.
Revenue for Tencent Music (TME) - Get Report grew 10% year-over-year to $891 million, lower than a FactSet analyst consensus of $903 million. Its quarterly EPS came in at 8 cents per share, in line with estimates.
Shares were down 3.4% in after-hours trading after Tencent Music posted its results.
"We achieved healthy first quarter performance primarily fueled by robust growth from online music subscription revenues," said Cussion Pang, CEO of Tencent Music. "While acknowledging the impact on our social entertainment services from the COVID-19 pandemic, we have started to see a moderate recovery recently."
Growth in Tencent Music's overall mobile users was modest, with mobile MAUs in its online music segment growing 0.5% year-over-year to 657 million, while mobile MAUs in social entertainment grew 13.3% to 256 million.
Paying users in online music and social entertainment grew 50.4% and 18.5%, respectively, to 42.7 million and 12.8 million.
Tencent Music is a joint venture between Spotify (SPOT) - Get Report and Chinese Internet giant Tencent, which offers a number of widely-used apps such as WeChat and QQ. Tencent Music publishes music-focused social apps, and earns money in a variety of ways, including music subscription packages, advertising, paid add-on features, digital music downloads and revenue share agreements with performers.
"Looking forward, we continue to be optimistic about the future of the broader music industry and are confident in the overall ecosystem and product pipelines that we are building," added Shirley Hu, CFO of Tencent Music. "We'll continue to focus on enhancing and expanding product and service offerings including long-form audio while maintaining core content investments."
Shares of Tencent Music were down 9% year to date heading into its first quarter earning release.