SM Entertainment swings to a loss as album and concert revenue slides
South Korean label SM Entertainment swung to a net loss in the third quarter of 2026, recording a loss of KRW 1.1 billion (USD $0.8 million). A year earlier it had made a profit of KRW 44.7 billion, according to Music Business Worldwide. The company blamed the loss mainly on foreign exchange losses caused by the strengthening of the Korean won, the currency it reports in.
The loss came on the back of falling sales. Total revenue for the quarter was KRW 291.1 billion (USD $205.1 million), down 9.5% from a year earlier. Revenue at the parent company, which covers the listed business without its subsidiaries, fell 22.8% to KRW 173.4 billion (USD $122.2 million).
Album sales took the sharpest hit. Revenue from physical albums and digital music fell 51.3% to KRW 47.1 billion (USD $33.2 million). New albums sold 1.67 million copies in the quarter, down from 5.50 million a year earlier. Those figures count what fans bought, not what they streamed.
Concerts fell too. Parent-company concert revenue dropped 34.2% year on year. The picture was different in the second quarter, when concert revenue climbed 23.6% to KRW 41.6 billion (USD $27.7 million), and the label reported that revenue had risen 15.4% to $233 million overall, driven by concerts and merchandise.
Operating profit, the money left from running the business before tax and financing costs, fell 26.4% to KRW 35.5 billion (USD $25.0 million). Its operating margin, the share of revenue that remains as operating profit, narrowed from 15.0% to 12.2%. Pre-tax income fell 94.3% to KRW 3.2 billion.
For the artists on the label, the calendar keeps moving. NCT WISH released its fourth mini-album, 'I SPY', on October 12, and SM says it is the group's fourth consecutive million-selling album. RIIZE put out the single 'Insomnia' at midnight on October 26, with its music video on the SMTOWN channel on YouTube, according to SM Entertainment.
Fans have dates to plan around. aespa will hold its 2026 fan meeting, titled "MY I Miss You ae", on November 28 and 29 at Korea University's Hwajeong Gymnasium in Seoul, to mark its sixth debut anniversary. SM Classics Live, a touring show featuring singers Ryeowook of Super Junior, Yuri of Girls' Generation and Wendy of Red Velvet, has stops in Hanoi and Taipei in November. The company also says SM Classics has been invited to perform at the 55th Hong Kong Arts Festival in March 2027.
A live show is a long chain of work. Each tour stop needs venue staff, sound and lighting crews, drivers and freight, so a dip in concert income is felt well beyond the stage. SM's quarterly figures show the business is leaning harder on its live shows and merchandise than it did a year ago.
The loss is a currency story as much as a sales story. The label's numbers show that a stronger won can shrink a profit on paper even when the music business is still running. Its next quarterly results will show whether album and concert income recover from this quarter's drop.
