“HYBE requires immediate scrutiny.”
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While HYBE Labels is embroiled in corporate controversies, the Q1 2024 fiscal figures for K-Pop’s “Big Four” companies—HYBE, SM Entertainment, JYP Entertainment, and YG Entertainment—are presenting some eye-opening surprises for many observers.
The chart below illustrates the revenues earned by each label in the first quarter of 2024. The color codes are blue for HYBE, peach for SM, green for JYP, and gray for YG. Note that revenue is expressed as the total income generated by the sale of goods and services before any costs or expenses are deducted.
HYBE generated a revenue of 360.9 billion won ($264.0 million USD), followed by SM with 220 billion won ($160.9 million USD), JYP with 136.5 billion won ($99.9 million USD), and YG trailing with 87.3 billion won ($63.9 million USD).
The subsequent chart details the operating profit for each entity. Operating profit signifies a company’s earnings after all operating expenses are removed but before accounting for debt, taxes, and certain exceptional items.
HYBE’s operating profit stood at 14.4 billion won ($10.5 million USD), SM’s at 15.5 billion won ($11.3 million USD), JYP’s led at 33.6 billion won ($24.6 million USD), while YG registered a loss at -7 billion won (-$5.1 million USD).
The final graph outlines the net profit accrued by the “Big Four”. Net income is the residual profit after all relevant costs and expenses have been subtracted from the sales revenue for the given period, here being Q1 of 2024.
Despite HYBE’s top revenue, they posted the second-lowest net income at 2.9 billion won ($2.1 million USD), with SM reporting a net income of 12.4 billion won ($9.1 million USD), JYP the highest at 31.4 billion won ($23.0 million USD), and YG at the bottom with 400 million won ($292.6k USD).
Korean netizens have notably critiqued HYBE for the vast gap between their revenue and net profits.
- “What happened, where did HYBE’s money go? The net profit tells a story.”
- “Is HYBE’s situation not concerning?”
- “A tax audit for HYBE seems necessary, where did the finances go?”
- “JYP seems to manage well.”
- “With only 2.9 billion won earned from 360 billion in sales, where is HYBE’s expenditure?”
- “This situation calls for answers.”
- “HYBE’s financial practices should be examined.”
- “The more we delve, the more peculiar it gets.”
- “JYP shows sound management.”
- “Despite its many subsidiaries and investments, SM maintains good profits.”
- “HYBE’s expenditure is questionable.”
- “Greater profits could come from managing subsidiaries better.”
What are your views on these startling financial outcomes from the first quarter?
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FAQ Section
Why is there such a significant difference between HYBE’s revenue and net profit?
Discrepancies between revenue and net profit can be attributed to various costs such as operating expenses, financial obligations, and other non-operating costs. The exact reasons behind HYBE’s particular situation would require an in-depth look at their expenditure and financial practices.
What does operating profit indicate?
Operating profit reflects a company’s profit from its core business operations, excluding costs associated with debt, taxes, and one-off or unusual expenses.
Can a company have high revenue but low net profit?
Yes, a company can have high revenue but still end up with a low net profit if it incurs high costs or expenses relative to its income.
Why might a company like YG Entertainment incur a loss?
Losses can arise from many factors, such as a decline in sales, increased costs, inefficient operations, or significant investments that have not yet yielded returns.
What contributes to JYP Entertainment’s strong financial performance?
JYP’s performance is likely due to effective management strategies, successful artist promotions, and profitable business ventures, but detailed financial analysis would provide more clarity.
What comes next after these first-quarter reports?
These reports may prompt shareholder meetings, strategy revisions, and in some cases, regulatory scrutiny, depending on the concerns raised by the financial figures.
Conclusion
The first-quarter business results of 2024 for the “Big Four” K-Pop labels unearth some notable insights into their financial health and operations. While HYBE’s low net profit relative to its high revenue has raised eyebrows, JYP’s strong financial performance stands out positively. On the other hand, YG’s loss indicates challenges that require attention. These reports underscore the importance of transparency and efficient management within major entertainment labels, and they can significantly influence the confidence of investors, fans, and industry onlookers alike.