SM's operating profit surges 62.2% in the fourth quarter, 'earnings surprise' ... sales reach 319 billion won, achieving the best quarterly performance in company history.

SM Entertainment (hereinafter "SM," CEO Jang Cheol-hyeok and Tak Young-jun) achieved its highest quarterly performance in the fourth quarter of 2025.

Samsung Electronics announced on the 11th that it recorded sales of 319 billion won and operating profit of 54.6 billion won for the fourth quarter of 2025. This represents a 16.6% increase in sales and a 62.2% increase in operating profit compared to the same period last year. The results exceeded market expectations, delivering an earnings surprise, and the operating profit margin also improved by 4.8 percentage points to 17.1% compared to the same period last year, proving enhanced profitability. Net income also turned positive at 27.4 billion won, enhancing the company's value.

According to separate criteria, it recorded sales of 202.2 billion won and operating profit of 39.5 billion won, an increase of 12.1% and 10.2% respectively compared to the same period last year. Net income for the period increased by 106.5% from the previous year to 29.3 billion won.

This result reflects the expansion of global tours for key IPs such as NCT DREAM, aespa, RIIZE, and NCT WISH, as well as the revenue generated from merchandise (MD) and licensing businesses utilizing artist IPs. Additionally, improved performance from major subsidiaries such as SM C&C and SM Japan, along with the consolidation effect of Dear U, also had a positive impact on the consolidated results.

Following this earnings announcement, SM shared specific implementation directions for its 'SM NEXT 3.0' strategy, which focuses on sustainable growth structure.

Tak Young-jun, co-CEO, explained, "SM NEXT 3.0 is a strategy that focuses on building a sustainable growth structure, not short-term external expansion or speed competition," and "through a multi-creative system that enhances the autonomy and efficiency of production organizations, we are creating more predictable and reproducible results across all aspects of IP planning and production."

He also added, "We will steadily promote the development of new IP and global expansion strategies, simultaneously strengthening external growth, profitability, and the long-term competitiveness of IP."

Jang Cheol-hyeok, co-CEO, said, "The global expansion of 'SM NEXT 3.0' is designed with a focus on sustainability and efficiency." He added, "SM will actively utilize strategic partnerships and maximize the visibility of results and execution efficiency during the expansion process by segmenting target regions according to the characteristics of each IP and market conditions."

SM is expected to continue its growth in album, music, and performance sales this first half of the year, backed by a strong lineup of artists. In the first quarter, new albums from EXO and Irene, as well as NCT JNJM and Hearts2Hearts, will be released one after another. In the second quarter, new albums from Taeyong, aespa, and NCT WISH, along with mini-albums from RISE and Hearts2Hearts, and a single from Ryuk, are all anticipated.

The concert sector continues to be actively engaged, centered around the global stage. In the first quarter, performances were held across Asia by Super Junior, celebrating their 20th anniversary tour that has been ongoing since last year, along with NCT DREAM, Esma, RISE, NCT WISH, and Taeyong. In the second quarter, EXO's tour, TVXQ's Nissan Stadium performance, and Hikaru Nakamura's first U.S. showcase took place.

Jo Kwang-hyeong reporter theseman@naver.com