South Korea's entertainment giant Hybe Corporation reported a significant net loss for the third quarter of 2025, marking a dramatic reversal from the previous year's profit. The K-pop powerhouse posted a net loss of 52 billion won ($35.8 million) for the July-September period, a sharp contrast to the 1.4 billion won profit recorded during the same quarter last year.
The company's financial performance was heavily impacted by one-time costs associated with restructuring its North American operations and increased investments in global artist intellectual property development. Hybe also recorded an operating loss of 42.2 billion won, compared to an operating profit of 54.2 billion won in the previous year. Despite the losses, the company saw revenue growth of 37.8 percent, reaching 727.2 billion won for the quarter.
In a shareholder letter released Monday afternoon, Hybe CEO Lee Jae-sang explained that the profitability decline was due to temporary, strategic factors. He specifically highlighted the one-off costs incurred during the North American business restructuring and proactive investments in expanding the company's global artist intellectual property portfolio. "The combination of the two factors caused the operating profit margin to fall by approximately 12 percentage points during the quarter," Lee stated.
The CEO asked shareholders for understanding, emphasizing that these costs stemmed from "structural changes for future profitability improvement and investments for mid-to-long-term growth." He expressed confidence that these strategic moves would position the company for stronger performance in the coming periods.
Looking ahead, Lee projected a financial rebound beginning in the fourth quarter. He forecasted that performance would incrementally improve as "most of the one-off factors reflected in the third quarter" are expected to be resolved. The company anticipates that the temporary nature of these costs will allow for a return to profitability.
Hybe expects significant improvement in earnings starting next year, driven primarily by the highly anticipated return of its flagship group BTS. The global superstars are preparing to release a new album and launch a world tour, which is expected to generate substantial revenue for the company. This comeback represents a major catalyst for Hybe's financial recovery.
The company also outlined its long-term growth strategy, which includes strengthening profitability through its "multi-home, multi-genre" artist development approach. This strategy aims to diversify the company's roster and reduce dependence on any single act or market. Additionally, Hybe plans to leverage its Weverse fan community platform and continue restructuring its "next entertainment" business segment to support its long-term growth vision.
"We'll be able to achieve stable profitability with an operating profit margin of double digits or more in the mid-to-long term," Lee confidently stated. This projection reflects the company's belief that current investments and restructuring efforts will yield significant returns once implemented and the market stabilizes.
