Hybe, the agency behind BTS, reported record revenue and operating profit for the second quarter of 2026, driven primarily by a surge in concert revenue from BTS' Arirang tour, which began on April 9 in South Korea. Concert revenue soared 243.3% year-on-year and 630% quarter-on-quarter, marking a significant boost for the company [1]. However, despite these strong top-line results, Hybe's shares plummeted 16.09% on Tuesday, their worst single-day drop since June 2022, and extended losses to 16.31% on Wednesday, reaching the lowest level since September 2024. This sharp decline wiped out approximately 2.845 trillion won ($1.96 billion) in market capitalization within 24 hours [1].
The market's negative reaction was attributed to disappointing profitability. Hybe's operating margin for the quarter was 11.8%, falling short of SK Securities' expectation of 12.7% and Eugene Securities' forecast of 12.2% [1]. Analysts explained that while concert revenue was the main driver of the record results, it is a lower margin business due to higher artist-settlement costs, resulting in profitability that did not meet market expectations. The market had anticipated that higher-margin merchandise sales would lead growth, but the increased proportion of concert revenue put pressure on margins [1].
Looking ahead, Hybe announced plans for more than 200 additional concerts from all its artists in the second half of 2026, on top of 119 concerts in the first half, making 2026 the company's busiest year since 2021 [1]. All five brokerages reviewed by CNBC maintained a positive outlook on Hybe, with analysts highlighting the potential for improved earnings from increased merchandise production and the expansion of tours by new groups such as Cortis and Katseye. IM Securities also noted the promising growth of rookie groups and the return of girl group NewJeans, whose contract with Hybe subsidiary ADOR was confirmed as valid by a South Korean court in December 2024, binding the group until 2029 [1].
CONCLUSION
Despite record-breaking concert revenue fueled by BTS, Hybe's shares suffered a sharp decline due to lower-than-expected profit margins. Analysts remain optimistic about the company's future, citing upcoming concerts, merchandise sales, and the growth of new groups as potential drivers for improved earnings.