Highlights
- SM Entertainment’s revenue rose 15% in the second quarter as concert tours and licensing insulated modest standalone margins.
- The company released a crowded 2nd-half pipeline including new albums from NCT 127, Taeyeon, and NCT Dream.
- Live events and IP licensing increasingly drive growth in the K-pop sector, as SM plans bigger global tours with its legacy and new-gen artists.
SM Entertainment recorded a 15% surge in April-June revenue to ₩349.6 billion (~ $246.3 million), while operating profit jumped 11% to ₩52.9B (~ $37.3M). Overseas touring, merchandise, licensing and subsidiary earnings drove the quarter, with TVXQ, Super Junior, EXO, aespa and NCT WISH lifting the company’s performance revenue. Concert-related merchandise demand, which includes NCT's 10th anniversary pop-up stores and releases by aespa, RIIZE and NCT WISH, further supported SM’s sales.
On a standalone basis, the revenue of the parent company alone rose by 9.2% to ₩240.6B (~ $169.5M). The surge is supported by a 27.9% increase in artist appearance fees, a 23.6% gain in concert revenue, and 22% growth in merchandise and licensing. However, despite delivering double-digit growth, operating profit of the company declined by 4.6%, while net profit fell 18.1%.
Touring Strategy Continues to Shape SM’s Earnings
The latest quarter was hardly an outlier. SM has dedicated the last few years to redefining its business supported by global touring and fan spending, as concerts steadily propel both ticket sales and merchandise demand. The strategy was already manifested in the first quarter of 2026, when the K-pop agency’s revenue climbed 20.6%, fueled by a 56% concert revenue surge from acts like Super Junior, NCT Dream, aespa, RIIZE and NCT WISH.
This profitability blueprint is a page taken straight from SM’s older financial playbook. In the second quarter of 2023, an expanded domestic and overseas concert schedule (+253.3%) lifted consolidated revenue and operating profit by 30% and 84%, respectively. A year later in 2024, first-quarter concert revenue still increased by 20.9% despite fewer performances, as larger stadium and arena shows produced more revenue per show.
With the 2026 schedule now in full swing, the upcoming touring schedule potentially leaves no room for a slowdown. For instance, aespa will open its next world tour at Seoul's Gocheok Sky Dome before moving towards North America and Europe. Simultaneously, TVXQ's U-Know Yunho, Super Junior unit 83z, Yesung, Ryeowook, NCT 127 and WayV are also scheduled to tour. Additionally, NCT WISH will be conducting a fan meeting tour in the second half.
Far from being just promotional tools, SM's concerts have grown into a structural launchpad for its entire multi-revenue ecosystem, which maximizes the lifetime value of the agency’s core IP well beyond the instantaneous ticket sales.
Red Velvet, NCT & Super Junior Power SM’s Next Release Cycle
To continuously feed this concert ecosystem, SM has prepared an aggressive music release slate for the rest of 2026, utilizing its global touring engine to sustain album sales and touring momentum. The third-quarter schedule began with Red Velvet releasing its first EP in 2 years this week titled Velvet Summer. Following which, NCT 127's full-length album Blingy, a solo EP from SHINee's Minho, a WayV EP and the debut single from HyoRiSoo, a Girls' Generation unit featuring Hyoyeon, Yuri and Sooyoung, will anchor the period.
The momentum is set to continue into the fourth quarter with full-length albums from Super Junior's Yesung, Girls' Generation's Taeyeon, NCT's Jaehyun and NCT Dream. These projects will arrive alongside EPs by TVXQ's Max Changmin, WayV's Xiaojun and NCT WISH, while rookie girl group Hearts2Hearts is also slated to return with a new single.
All in all, this coordinated combination of new music, global concert circuits, and growing intellectual property pipelines reinforces SM's expansion toward a business approach that treats live entertainment and deep fan monetization as a keystone sustaining growth even as conventional album sales potentially claim a smaller share of overall industry growth.
