Hybe shares jump 10% as BTS world tour lifts earnings outlook

Shares in Hybe, the South Korean company behind K-pop group BTS, rose 10% on Friday as investors weighed an upbeat third-quarter earnings outlook driven by its artists' global concerts.

The gain outpaced South Korea's Kospi index, which rose 2.9%. Brokerage firm iM Securities expects Hybe's third-quarter revenue to reach 1.5 trillion won ($1.11 billion), up 106% from a year earlier, with operating profit projected at 172.2 billion won.

Concert revenue is expected to come in at 717 billion won, nearly tripling from a year earlier, according to iM Securities. A separate brokerage, Kyobo Securities, expects third-quarter concert revenue of 724.4 billion won.

BTS stadium tour drives attendance

BTS's world tour featured 16 stadium shows in North America and eight in Europe during the third quarter, the iM Securities report said. Alongside expanding tours by newer acts including Enhypen, Katseye and Cortis, that helped push concert attendance to nearly 3 million in the quarter, potentially a quarterly record for the company.

Western markets accounted for more than 70% of total concert attendance for the first time, reflecting Hybe's growing international reach as its newer artists expand their presence in North America and Europe. Despite currency headwinds, concert, merchandise and licensing revenues are expected to reach record levels, the report said.

Newer acts in focus

iM Securities said the profitability of newer bands such as Katseye and Cortis in Western markets will likely be key to reducing Hybe's reliance on BTS. Kyobo Securities said growth among younger artists "is becoming more visible alongside BTS' tour," noting that Cortis sells around 600,000 albums per month on average while Katseye is expanding overseas on the back of global streaming and album performance.

Higher royalty payments to established artists and initial touring costs for newer groups are expected to weigh on margins, though the brokerage forecasts Hybe will maintain a double-digit operating margin, supported by the scale of BTS's world tour.

CGS Securities analyst Jiwoo Oh told CNBC that concerts and appearances carry steeper costs for the company because of higher revenue sharing with artists, while merchandise, content and fan club businesses significantly boost its bottom line. In the second quarter of 2026, Hybe reported an 11.8% operating margin, with artist-direct revenue accounting for 72% of total sales and concerts alone for 45%. "We believe this demonstrates that stadium-scale operating leverage can more than offset the higher cost base associated with concerts," she said.

After Hybe reported second-quarter results on July 28, its shares fell sharply, wiping out as much as $1.96 billion in market capitalization in less than 24 hours, as analysts said profit margins missed expectations even though revenue and operating profit reached record highs.

iM Securities added that stronger-than-expected demand for additional BTS concerts in Japan and the Middle East, as well as encore performances, could lead to upward revisions to the company's 2027 earnings forecasts.

Source: CNBC.