Good evening and good morning, and welcome to Tencent Music Entertainment Group's Third Quarter 2025 Earnings Conference Call. I'm Millicent T., Head of Investor Relations. We announced our quarterly financial results earlier today before the U.S. market opened. The earnings release is now available on our Investor Relations website and through Newswire services. During today's call, you'll hear from Mr. Cussion Pang, our Executive Chairman, and Mr. Ross Liang, our CEO, who will provide an overview of our company's strategies and business updates. Then Ms. Shirley Hu, our CFO, will discuss our financial results before we open the floor for questions. Before we proceed, I would like to refer you to the safe harbor statement in our earnings release, which is applicable to this call as we will be making forward-looking statements. Please be aware that we will discuss non-IFRS measures today, which are explained and reconciled to the most comparable measures reported under IFRS in our earnings release and filings with the SEC. And please note that today's call is being recorded. With that, I am very pleased to turn the call over to Cussion, Executive Chairman of TME. Cussion, please.

Thank you, Millicent. Hello, everyone, and thank you for joining our call today. In the third quarter, we delivered another set of strong financial results, underpinned by the well-rounded performance of our online music business. Our ongoing innovations across content, services and live experience continue to fuel steady growth in our subscription business, while pushing momentum in non-subscription revenue, particularly in concerts and artist merchandise. Backed by our strong financial position and operational excellence, we are poised to further broaden our music service, unlock new growth opportunities and create greater value for artists, partners and users across the entire music industry. Now let me share some highlights from this quarter. First, we further enriched our content coverage to include more offerings in different music genres and languages. For example, in pop music, we renewed the contract with dramas, a leading Korean label, and partnerships with notable studios, strengthening our collection of top hits. To better serve users' passions for game-related music, we partnered with Tencent Games to co-produce Atlas of Tomorrow, an anniversary theme song performed by JJ Lin for Honor of Kings. This song quickly garnered over 600 million social media mentions within 2 weeks of its release, engaging 280 cultural and tourism authorities nationwide, standing out as one of the year's most impactful game soundtracks. We also collaborated with Blizzard Entertainment for the first time and introduced 50 original soundtracks from iconic game titles, including World of Warcraft and Hearthstone. To further enrich the anime and K-pop music categories, we established strategic partnerships with renowned Japanese ACG label, King Records, and Korean Label Serial, offering popular anime songs and OSTs from dramas such as Boys Over Flowers. Second, during the quarter, we successfully staged several large-scale international concerts and events, extending our reach beyond borders to tap into international market opportunities. A prime example is the concert tour that we hosted for leading Korean artist, G-Dragon. G-Dragon's 2025 World Tour, Ubermensch, building on our success in the second quarter, saw us host an additional 14 shows across 6 cities, including Sydney, Melbourne, and Kuala Lumpur, drawing over 150,000 attendees. The popularity of the tour led to acceleration of live concert revenue growth, demonstrating our strength in delivering world-class entertainment experiences. Our annual flagship TMEA concert was another success and highlight for the quarter. The event featured 35 different artists and groups and drew more than 10,000 attendees, underscoring its strategic importance as a well-anticipated premier gathering within the music industry. Building on the momentum from TMEA, this year, we broke new ground and introduced another flagship concert IP, TME Live International Music Awards, TIMA, to celebrate the achievements of international artists and showcase their talents. The inaugural TIMA featured 22 globally renowned artists and groups from China and a number of Asian countries, immersing over 20,000 attendees in a vibrant atmosphere. We also organized and delivered several major concert tours for well-known artists. The success of these shows illustrates TME's strength and impact in reaching artist fan bases, especially through interactions with younger audiences. For instance, in Guy's most recent shows in Chongqing, through integrated online and offline promotional resources, we helped him attract more than 40,000 attendees, up from 10,000 in a single event in the third quarter. This marked a successful upgrade in concert scale, moving from arena level to stadium level. Together, these remarkable events have laid a solid foundation for TME to continue to grow at scale. As we further build out our performance pipeline, we are confident that there will be more exciting opportunities at home and abroad to deliver large-scale and immersive live music experiences for users. Third, we continue to break new ground with artist partnerships, providing them with holistic support and leveraging our increasing promotional capability to enrich artist-centric offerings. For instance, during the quarter, we partnered with Tencent's hit title, Crossfire, to produce new song COPDD by seamlessly integrating this song into the game ecosystem and allowing users to earn in-game items through listening tasks. We amplified its impact, with the track reaching #2 on the QQ Music New Song chart within 2 days of its release. As another example, in this quarter, we premiered Lejiang's new digital album, Rock the Heavenly Palace, together with collectible card packages. This innovative approach not only boosted participation but also led the album to rank among the top of the 2025 bestseller charts. The production and release of Bai Lu's first physical album, My Odyssey, featuring two distinct version designs, marked another success. The album earned strong acclaim from fans and achieved outstanding sales performance. All of the above examples illustrate the power and flywheel of our content and platform dual engine. Supported by our massive user base, fueled by an expanding content ecosystem and constant innovation, we have reinforced the virtuous cycle, allowing us to design diverse services to address users' needs, with user interactions deepening and community engagement strengthening, thereby boosting the reach of quality content on our platform and attracting more attention from artists and labels, both at home and abroad, fueling the sustainable growth of our ecosystem. Last but not least, on ESG, for seven consecutive years, we have proudly won the Music Garden Space Public Welfare Program, partnering with singers and teachers to support music education in rural areas. This year, we invited WeSing users to redeem their points accumulated through incentive efforts to directly support the program, sparking greater user interest. Over 380,000 participants took part. Looking ahead, we will continue to leverage our dual engine strategy, explore new opportunities and expand our reach, building a seamless all-in-one music service platform for music lovers. Now I would like to hand it over to Ross for a deeper dive into our overall platform development. Ross, please go ahead. Thank you.

Thank you, Cussion. Hello, everyone. Our music ecosystem continued to thrive in the third quarter, benefiting from our profound user insights and operational excellence. As we focus on enhancing the value proposition for users, this quarter, we achieved a steady growth in penetration and ARPPU. We are also building a diversified product portfolio catering to different user cohorts to effectively expand our platform's reach to a broader audience. To this end, our commitment to harnessing AI to elevate users' experiences continues to propel us to remain at the forefront of delighting music users. First, on system integration, we were among the first to support Apple's Liquid Glass mode in iOS 26 and introduced Liquid Glass themes and players on Android for optimized visual effects and better interactions. We also fully adapted our app for HarmonyOS, with core music features now largely aligned with what we offer on Android. Second, we upgraded player interactive features and AI-powered functionalities. For example, we embedded more engaging designs and tokens on the playback page, creating delightful threads across new touch points, which also proved effective in new song promotions. We also pioneered a multimode sound transition feature, Automix, offering seamless remix and a more immersive streaming experience. To effectively deepen engagement, we expanded our AI-powered lyrics card feature, newly covering over 200 leading artists. The card collecting process is full of enjoyment and fun, driving sharing among users and increasing user activity. Our upgraded AI assistant allows users to generate a personalized playlist with just one type or easily create their own original music. This has significantly lowered the barrier to creative expression and helped increase content consumption through recommendations. We are here to serve and delight. As a result, users can unlock additional tools and perks from our multipoint membership offerings, whether a freemium user, a deeper value-add member, or a standard subscriber. We provide different services to cater to the distinct needs of users. In fact, recently, we started to see an increasing value of freemium users upgrading to paid members, which also led to increased time spent. For those looking to experience the premium service, our SIP offers an unparalleled range of freemium features, which have been crucial in driving SIP adoption rate and average spend. Its penetration and ARPPU expanded both year-over-year and quarter-over-quarter as we introduced new privileges and innovative services that strengthened its value proposition and inspire music appreciation in new ways. A few highlights to share. First, premium sound quality remains our key draw for users as we accelerated its results. QQ Music newly introduced DTS Booming External Speaker, becoming the top convention driver among audio qualities. Viper Ultra Sound 2.0 from Kugou Music, with its improved sound quality and clarity, also proved highly effective in retaining premium loyalty. Second, our insight into content and user propelled us to provide creative offerings, which in turn helped boost revenue. For example, the digital album, an integral part of our content ecosystem, remains effective at driving premium commissions. Members highly appreciate their privileged access to digital albums alongside limited edition collectible cards. Notable collaborations this quarter include a self-titled Japanese EP, which significantly boosted premium commissions. Another example is our Starlight cards. In the third quarter, we rolled out new Starlight cards featuring popular artists, instantly becoming a big draw. We also expanded artist partnerships to include more international musicians, replicating our success domestically. We recently extended our Starlight card offerings to the Hong Kong and Thailand markets through our music platform. Third, we rolled out several targeted initiatives to reinforce the artist-fan connection and strengthen user loyalty through our platform. We expanded our artist roster by onboarding over a dozen musicians from domestic labels, giving more fans the chance to interact directly with their favorite artists online. This, in turn, attracted a broader user base. We leveraged AI to further localize the platform's features and functionalities, leading to improved user retention. The new and upgraded features include in-app translation and speech-to-text capabilities empowered by large AI models as well as desktop shortcuts for quick and spontaneous access. We also launched limited edition badges to celebrate key artist moments such as new sound releases, birthdays, and debut anniversaries. This, complemented by exclusive perks, helped strengthen emotional ties between artists and fans, resulting in improved retention and engagement. In summary, we are pleased with the progress we have made in enhancing the value for an increasingly diverse user base. Moving forward, we remain committed to further enhancing our core strengths and platform efficiency. We are well-positioned to continue to shape the industry from music creation to enjoyment. With that, I would like to turn the call over to Shirley, our CFO, for a deep dive into our financials.

Thank you, Ross, and greetings, everyone. Let me now turn to our financial results. In Q3 2025, our total revenues grew 21% year-on-year to RMB 8.5 billion, marking the highest revenue growth since Q1 2021. This was a result of continued growth momentum in music subscriptions, together with robust growth in offline performances, advertising services, and artist-related merchandise sales. Online music revenues grew over 27% year-on-year to RMB 7 billion. Music subscription revenues grew 70% year-on-year to RMB 4.5 billion in Q3 2025, driven by continued growth in monthly ARPPU and subscriber base. Monthly ARPPU reached RMB 11.9 this quarter compared to RMB 10.8 in the same period last year, primarily driven by expansion in the SVIP membership program. This quarter, we continued to broaden and strengthen the SVIP benefits. For example, QQ Music newly introduced the DTS Booming External Speaker and we expanded Starlight cards with more popular artists, both features aimed at driving SVIP adoption. Additionally, our multipronged membership offerings across ADS membership, standard memberships, and SVIP membership also contributed to improved user engagement and conversion. All of these efforts have laid down the foundation for the healthy growth of our subscription business. Advertising revenue continued its strong growth trajectory on a year-on-year basis, primarily driven by a more diversified product portfolio and innovative advertising formats such as an ad-supported model. Offline performances and artist-related merchandise sales delivered triple-digit year-on-year revenue growth this quarter. In Q3, we successfully held multiple concerts, both domestically and internationally. In overseas markets, we hosted 14 shows for G-Dragon across 6 cities, achieving robust ticket sales. In the domestic market, we successfully hosted concerts for high-profile artists as well. Additionally, we provided concert-related merchandise sales during the concert, which opened more artist connection opportunities and, in turn, contributed to revenue growth in artist-related merchandise sales. Social entertainment services and other revenues were RMB 1.5 billion, down by 3% year-on-year. Our gross margin in Q3 2025 was 43.5%, up 0.9 percentage points year-on-year. The increase was mainly attributable to strong growth in music subscription and advertising revenues alongside a lower revenue sharing ratio in social entertainment services. At the same time, new growth areas such as offline performances and artist-related merchandise sales have a lower gross margin. The revenue mix shift may cause gross margin fluctuations in different periods. Diversification in revenues offers the possibility for further growth in our revenue and gross profit and helps us cultivate a more comprehensive one-stop music services ecosystem. Moving on to operating expenses. They amounted to RMB 1.3 billion, representing 15.5% of our total revenues in Q3 2025 compared with 70.4% in the same period last year. Selling and marketing expenses were RMB 216 million, up by 18% year-on-year, primarily due to higher content promotion expenses and channel spending. We keep monitoring market conditions and increase spending as needed with financial discipline. General and administrative expenses were RMB 1.05 billion, up by 5% year-on-year, primarily due to growth in employee-related expenses. Our effective tax rate for Q3 2025 was 70.7% and remained relatively stable compared with the same period in 2024. We accrued withholding income tax of RMB 118 million this quarter. For Q3, our net profit increased by 29% to RMB 2.2 billion and net profit attributable to equity holders of the company increased by 36% to RMB 2.2 billion. Non-IFRS net profit increased by 28% to RMB 2.5 billion and non-IFRS net profit attributable to equity holders of the company increased by 33% to RMB 2.4 billion. Our diluted earnings per ADS this quarter was RMB 1.38, up by 37% year-on-year, and the non-IFRS diluted earnings per ADS was RMB 1.44, up by 33% year-on-year. As of September 30, 2025, our combined balances of cash, cash equivalents, term deposits, and short-term investments were RMB 36.1 billion compared to RMB 34.9 billion as of June 30, 2025. This combined balance was impacted by the repayment of USD 300 million for the same year’s unsecured loans in Q3 2025, and it was also affected by changes in the exchange rate of RMB to USD at different balance sheet dates. Looking forward, we will put more effort into IP cultivation and self-produced content while keeping product innovation to foster a vibrant and comprehensive music ecosystem. With solid growth in our core business and increased product diversification, such as offline performance and artist-related merchandise, we are well-positioned and are confident in the high-quality growth of our business. This concludes our prepared remarks. Operator, we are ready to open the call for questions.

And the first question comes from Liu Yang at Morgan Stanley.

I would like to ask about the fourth quarter this year and the 2026 outlook for the business.

Thank you for your questions. With our comprehensive high-quality growth strategy, we achieved another quarter of strong results in both revenue and profit. We maintain our leadership in the music consumption and creation space and are optimistic about delivering solid outcomes. On the music subscription front, our diverse membership offerings better meet users' varied needs. The number of paying users and average revenue per paying user grew consistently, and we saw healthy user retention and engagement. The penetration of our premium offerings and average revenue per paying user increased year-over-year and quarter-over-quarter. Additionally, our recently launched ad memberships are gaining traction, which will help us derive more value from freemium users. On the non-subscription side, our One Stop music entertainment service platform will continue to drive user demand and business growth. First, our varied and innovative ad formats will create value for both advertisers and users, supporting steady growth in Q4. Second, in our rapidly expanding live concerts business, we have made significant international progress, contributing to substantial year-over-year revenue growth. Lastly, in the fan-based economy, we have developed a range of new product combinations and service formats that will help artists and music labels unlock additional commercial value. Therefore, for 2025, we remain optimistic about strong performance from our online music services, which will further drive revenue and profit growth for the company. Looking ahead to 2026, we are focused on implementing our dual engine strategy for platform and content ecosystems. With the solid foundation we have built along with new initiatives, we anticipate sustained healthy growth in our music subscription business, although at a slightly slower pace due to its already high base. The contribution from non-subscription businesses to overall performance will continue to rise and is expected to outpace the growth of the subscription business.

And then the next question comes from Goldman Sachs, Lincoln.

A very solid quarter in the third quarter. So I just want to quickly touch on the industry landscape here, especially for the music streaming business. I think recently, there is a bit of a market concern over some music app competition in terms of the faster MAU ramp-up or potential high budgets for the purchase of music content. So I just want to wonder management's thoughts; do you see anything changed in terms of the competition landscape at all? And also, our strategy to further enhance our leadership in terms of content differentiation, user mindset, and overall service offering to consumers.

Thank you for your question. In terms of competition, we continue to see the same players in the music industry, along with growth from other platforms. At TME, we view competition as a normal aspect of our business, which has been a part of our journey for the past 20 years since the launch of QQ Music. Throughout our development, we have faced various competitors, and I would like to address this from both platform and content perspectives. The music application sector remains a traditional streaming business, where we emphasize recommendation and user experience. Our competitive advantage continues to lie in our extensive music library and our user asset management that we've built over the years. Additionally, TME leads the industry in sound quality, offering high fidelity and collaborating with high-quality sound equipment to expand our content offerings. We've also diversified our services beyond basic products to create a richer music experience for users. Recent initiatives, like the Starlight Card and user engagement features, have attracted younger audiences and driven positive results that aren't seen in competing products. Our social entertainment and leasing products show strong commercial potential, further solidifying our traditional business strengths. While many focus on changes in mobile applications, it's essential to consider user rates and content availability across various devices. On our PC platforms, we maintain a large subscriber base, and in-car services have high penetration, particularly through our partnership with Harmony OS. Our focus on product innovation and user experience will help us continue to lead the market. Regarding patents and copyrights, TME offers comprehensive, high-quality application content in the industry. We not only release a variety of songs but also collaborate with creators to co-produce diverse musical content. Our partnerships with Tencent Games and Tencent Video to create original soundtrack songs have been well-received. Importantly, we engage in comprehensive collaborations that extend beyond traditional song partnerships, including organizing concerts and fostering a fan-based economy. Our goal is to provide the best possible content for our users, highlighting our unique strengths, while also facilitating artist tours and performances to enhance subscription growth.

And the next question comes from Alicia Yap from Citigroup.

Congrats on the solid results. I have a question regarding the music concert. Could management share with us what would be your 2026 pipeline for music concerts? How should we think about modeling the revenue growth from music concert merchandising and digital album sales? What are the challenges and opportunities in pursuing music concerts business and ensuring sustainable steady long-term growth?

The concert business is a significant commitment for TME, and we view it as a long-term investment. Over the past few years, we have achieved a lot from various perspectives. Firstly, in terms of artist tours, we continue to organize tours for the top artists in our industry, while also featuring popular artists in our own concerts. We have dedicated considerable resources to enhance concert performances, which not only improves our brand experience but also strengthens our partnerships. For instance, we successfully executed G-Dragon's tour in the Asia Pacific region, which was a great success. By learning from these events, we are able to replicate effective strategies for future large-scale concerts. We are proud of what we have accomplished. In addition to bringing more top artists for tours and performances, we will utilize our proprietary IP, such as TMEA and TIMA, to further elevate concert experiences, integrating our online and offline music resources while continuing collaborations within the musical ecosystem. This approach ensures our audience enjoys high-quality music experiences, which gives us a competitive edge. By arranging performances for these leading artists, we also aim to provide more benefits to our users, thereby supporting the growth of our subscription business. We are dedicated to revitalizing the fan-based economy by offering primary privileges that have been very well received.

And the next question comes from Jefferies and Thomas Chong.

My question is about our subscription services. Given that we have been strengthening our ARPPU growth, while maintaining our steady net adds, I just want to get some color regarding how we should think about our 2026 growth driver for subscription services. How should we perceive the growth momentum for ARPPU and net adds? I'm curious if we are seeing competitive dynamics changing in the market environment. Would there be any changes in terms of the growth driver, i.e., launching more lower-priced packages to drive subscriber growth. Might the ARPPU not be as fast as what we previously expected? Regarding our SVIP subscribers and penetration, can management talk about the goals in 2026?

Regarding our overall target for 2026, we are still aiming for steady growth in our subscriber base. The growth will come from several aspects. First, we will leverage high-quality content to expand. We will provide unique, high-quality content by collaborating with our IP partners. The second growth driver may come from special content privileges, as starting in 2026, we plan to extend offerings beyond traditional music content and explore opportunities with Starlight Cards, Earth-Like concerts, and merchandise. We don't only offer music content but also continue to develop merchandise to pursue sustainable business growth. Another key growth driver for the subscription business will include functional privileges, incorporating sound quality, effects, ringtone editing, and AI-empowered sound writing—differentiated features in the market. Generally speaking, we'll continue consolidating and innovating on both content and functionalities. This approach will help us grow our subscription business and achieve ARPPU growth. Regarding low-priced packages, this isn't new to us, and we've observed this trend for several years. We have been prepared, as reflected in our freemium model adopted three years ago. The model starts with free services, advancing to ad-supported modes, then standard users, and finally SVIPs, creating a multipronged membership approach to grow our user base. For the ad-supported model, we recognize its competitors in the market, but our commercial data shows single user engagement levels yield favorable results compared to other competitors. Regarding SVIP, as mentioned earlier, SVIP continues to be a critical part of our business, and penetration ratios and ARPPU for SVIP continue to grow as we anticipated.

And the next question comes from Maggie Ye from CLSA.

This is regarding gross profit and gross margin. In light of the potential revenue mix change, thanks to very robust growth in offline performance and artist-related merchandise. How should we think about the profitability of these initiatives and their impact on our overall trend in gross profit and margins?

From what we see now regarding our online music business, we continue to maintain growth in both subscription and advertisement sectors. However, we are implementing ongoing optimization efforts in our content cost structure and efficiency. I genuinely believe that growth in our subscription and advertisement business will positively impact gross profit margins. However, as you may notice, the advertising business experiences seasonal fluctuations that can affect gross margins. We aim to promote development in live performances and growth in merchandise for artists, which will require additional upfront investments in artist-related intellectual property and may initially negatively impact gross margins. That said, these business initiatives offer diversified musical experiences and increased value for users, ultimately improving efficiency overall. In the long run, we hope our investments will drive revenue and gross profit growth as a whole. As we approach Q4, we expect continued revenue growth in both advertising and subscription sectors. By year-end, contributions from sales of live events and artist merchandise will also enhance overall revenue. Consequently, we anticipate the Q4 gross profit margin will be higher than that of Q3. Looking ahead to 2026, we remain optimistic about revenue growth and gross profit margins.

So thank you, everyone, for joining us today. If you have any further questions, please feel free to contact our IR team. This concludes today's call. Thank you very much again, and we look forward to seeing you next quarter. Goodbye.

Thank you very much again, and we look forward to seeing you next quarter. Goodbye.