Hybe shares slide as BTS concerts lift sales but squeeze margins
Hybe posted record quarterly results on BTS tour revenue, but shares fell after analysts flagged weaker-than-expected profit margins.
By Maya Okafor · Markets Writer
· 3 min read
Hybe shares BTS concerts became an awkward market story this week: the K-pop agency reported record quarterly revenue and operating profit, yet investors punished the stock. For everyday investors, the move is a reminder that strong sales do not always translate into the profitability the market expects.
Shares of Hybe fell 16.09% on Tuesday, their worst session since June 2022, according to CNBC. The stock extended losses on Wednesday, dropping as much as 16.31% to its lowest level since September 2024. CNBC reported that as much as 2.845 trillion won, or about $1.96 billion, was erased from Hybe’s market value in less than 24 hours.
The selloff came after Hybe, South Korea’s largest K-pop agency, released second-quarter results showing record revenue and operating profit. According to Hybe’s earnings materials, revenue reached 1.45 trillion won in the second quarter of 2026, up 105.5% from a year earlier and 107.6% from the prior quarter.
Operating profit, which is profit from the company’s main business before items such as taxes and some financing costs, rose 159.3% from a year earlier to 170.9 billion won. Net profit climbed 610.1% to 109.8 billion won, according to Hybe.
Why did Hybe shares fall after BTS concerts?
Analysts said the issue was margin, meaning how much profit the company keeps from each unit of revenue. Hybe’s operating margin was 11.8% in the quarter, below SK Securities’ estimate of 12.7% and Eugene Securities’ expectation of 12.2%, CNBC reported.
The main driver of the quarter was concert revenue, which jumped 243.3% from a year earlier and 630% from the previous quarter. CNBC attributed the surge largely to BTS’ Arirang tour, which began April 9 in South Korea.
Concerts can bring in a lot of revenue, but analysts said they tend to leave less profit at the company than some other parts of the K-pop business. SK Securities analyst Park Jun-hyung wrote in a July 29 note that the larger share of tour revenue increased artist-settlement costs, weighing on profitability versus expectations.
IM Securities analyst Hwang Ji-won made a similar point, saying concert revenue from mature artists such as BTS is relatively low-margin and that the greater concert mix added cost pressure. Kiwoom Securities analyst Lim Soo-jin said the market had expected more of Hybe’s growth to come from merchandise, which carries higher margins. Analysts previously told CNBC that merchandise margins can reach 50%.
What Hybe said about the rest of 2026
Hybe said in its earnings release that its artists are expected to perform more than 200 concerts in the second half of 2026. That would come after 119 concerts in the first half and would mark the company’s highest concert count since 2021, according to Hybe.
Despite the sharp stock drop, CNBC said all five brokerages it reviewed remained positive on the company. Kiwoom’s Lim said additional merchandise production in the second half, along with more touring from new groups Cortis and Katseye, is likely to support earnings.
IM Securities also cited growth from rookie groups and the return of NewJeans as factors that could help Hybe’s results. NewJeans had been involved in a long-running contract dispute with Hybe beginning in 2024. CNBC reported that a South Korean court ruled in December that NewJeans’ contract with Hybe subsidiary ADOR remains valid, keeping the group contractually tied to ADOR until 2029.
This story draws on original reporting from CNBC.
