Expansion of key IP global tours and utilization of artist IP contributed to this success.
The 'SM NEXT 3.0' strategy aims for sustainable growth and future achievements.
[TVDaily Reporter Kim Hangil] SM Entertainment (hereafter SM) has announced remarkable financial results for the fourth quarter of 2025, achieving record figures. According to the report released on the 11th, SM recorded consolidated revenues of 319 billion KRW and an operating profit of 54.6 billion KRW in Q4. This represents an increase of 16.6% in revenue and 62.2% in profit compared to the same period last year, surpassing market expectations and demonstrating improved profitability with an operating margin of 17.1%. The net profit also turned to a positive 27.4 billion KRW. On a standalone basis, revenues increased by 12.1% and operating profit by 10.2% year-on-year, with net profit reaching 29.3 billion KRW, up 106.5%.
These impressive results can be attributed to global tours of key IPs such as NCT DREAM, aespa, RIIZE, and NCT WISH, coupled with a robust licensing and MD business that leverages artist IP. The positive contributions from subsidiaries like SM C&C and SM Japan, as well as the integration of Dear U, also enhanced the consolidated results.
In conjunction with this announcement, SM shared their focus on sustainable growth through the 'SM NEXT 3.0' strategy. Co-CEO Tak Young-jun explained that the strategy prioritizes building a sustainable growth structure rather than just short-term expansion, highlighting a new multi-creative system to streamline IP planning and production. Co-CEO Jang Cheol-hyuk emphasized the importance of a targeted global expansion strategy tailored to the distinct characteristics of each IP to maximize efficiency and visibility in the growth process. In the first half of 2026, SM is set to continue its momentum with a strong lineup of artists, including regular albums from EXO and Irene, along with new releases from NCT JNJM and Hearts2Hearts. Concerts will also be actively held globally, featuring a wide array of performances from various artists including NCT DREAM and aespa.
The remarkable surge in operating profit at SM Entertainment showcases the success of its recent IP-focused strategy. Key artists are actively expanding their reach and enhancing connections with fans, thereby increasing the value of artist IP. Notably, emerging artists like RIIZE and aespa are garnering significant interest in global markets, contributing to revenue diversification.
Furthermore, the 'SM NEXT 3.0' strategy is profound as it aims for sustainable growth rather than merely repeating past successes. This is expected to maximize efficiency and creativity within the production organization, thereby enabling the nurturing of new IPs and strengthening competitive edges in global markets. This strategy will play a crucial role in driving overall growth in the K-POP industry.
SM's artists are set to solidify their presence on the global stage with their diverse genres and musical characteristics. With a series of concerts and album releases slated, particularly from Super Junior and other groups, fans can anticipate a thrilling trajectory ahead. In times when engagement with fans is vital, enhancing artist IP will allow for authentic fan experiences.
This article is KOSTAR’s reinterpretation of a story originally reported by TVDaily.
Photo: SM
