big girls don’t cry 𝗘𝗡╸ˎˊ˗⁷ᯓ★

BEYOND THE NUMBERS | 01 WHERE DOES HYBE'S MONEY COME FROM? As HYBE prepares to release its Q3 2026 financial results, understanding how the company generates revenue is an important first step to help evaluating its business performance and management decisions. HYBE is commonly associated with the artists under its labels, but its business extends far beyond producing and selling music. The company operates through a multi-label structure supported by various business divisions involved in concerts, merchandise, licensing, content production, distribution, and fan platforms. These activities are closely connected, allowing HYBE to generate revenue from different aspects of an artist's career and public presence. To understand the company's financial performance, we must first examine where its revenue comes from, how it is generated, and what these figures actually represent. ★ HYBE'S BUSINESS STRUCTURE HYBE operates as a parent company with multiple subsidiaries, including entertainment labels and businesses providing services related to music, intellectual property, and fan engagement. Its entertainment labels are responsible for activities such as artist management, music production, and talent development, while other divisions support activities such as concert organization, merchandise production, licensing, and content distribution. This structure allows HYBE to participate in several stages of the entertainment business. For example, when an artist releases an album, the commercial activities surrounding that release may involve music production, physical distribution, streaming platforms, promotional appearances, merchandise, and concerts. Although different entities may be responsible for these activities, they can all contribute to HYBE's consolidated financial performance. "Consolidated revenue" refers to the revenue reported for the parent company and its controlled subsidiaries as a group, after eliminating transactions between those companies. Therefore, when HYBE announces its quarterly revenue, it is generally reporting the combined results of its consolidated business operations, not the earnings of one particular artist or label. This distinction is important because the performance of one artist, one tour, or one album cannot automatically explain the financial results of the entire company. ★ HOW HYBE CLASSIFIES ITS REVENUE HYBE divides much of its revenue into two main categories: Artist direct-involvement revenue refers to activities in which artists participate directly, including recorded music, concerts, advertising, and appearances. Artist indirect-involvement revenue refers to activities based on artist-related intellectual property, content, and fan engagement that do not necessarily require artists to participate directly in every transaction. Both categories are essential to understanding HYBE's business model. According to HYBE's 2025 annual financial disclosures, the company generated approximately KRW 2.65 trillion in total revenue, distributed across six main business categories. — Recorded music: KRW 773.0 billion (29.17%) — Concerts: KRW 763.9 billion (28.83%) — Advertising and appearances: KRW 147.2 billion (5.55%) — Merchandise and licensing: KRW 570.6 billion (21.53%) — Content: KRW 258.8 billion (9.77%) — Fan clubs and other activities: KRW 136.4 billion (5.15%) These figures demonstrate that HYBE's financial activities are not limited just to music sales. Concerts, merchandise, content, and other fan-related services together represent a substantial part of the company's revenue. ⤷ ARTIST DIRECT-INVOLVEMENT REVENUE The first category includes commercial activities that depend directly on artists' participation. — Recorded music Recorded-music revenue includes earnings associated with physical albums, digital music sales, and music streaming. When an artist releases music, revenue can be generated through multiple distribution channels, including physical retailers and digital platforms. However, the price paid by a consumer does not necessarily become revenue for HYBE in full. Depending on the transaction, distributors, retailers, streaming services, and other commercial partners may retain portions of the payment. Likewise, revenue received by the company is not equivalent to the artist's personal earnings. — Concerts and live performances Concert revenue includes activities such as world tours, concerts, fan meetings, and other live events. Concerts can be especially important because they generate demand not only for tickets but also for related commercial activities, including merchandise and additional fan experiences. However, concert revenue must be distinguished from concert profit. Organizing a tour involves significant expenses, including venue rental, production, transportation, staff, equipment, and logistics. That means, higher concert revenue does not necessarily mean that profits increase by the same amount. — Advertising and appearances HYBE also generates revenue through advertising partnerships, commercial endorsements, and artist appearances. These arrangements may involve companies paying for promotional services, advertising campaigns, or other commercial activities connected to artists. The revenue recorded by HYBE depends on the contractual arrangements involved. Together, recorded music, concerts, and advertising and appearances represented approximately 63.55% of HYBE's total revenue in 2025. This demonstrates the financial importance of activities directly involving artists. ⤷ ARTIST INDIRECT-INVOLVEMENT REVENUE This category includes activities that generate revenue through artist-related products, content, and intellectual property. — Merchandise and licensing Merchandise includes official products such as photocards, clothing, accessories, collectibles, and light sticks. Licensing involves allowing other businesses to use protected intellectual property, such as artist-related designs, trademarks, characters, or other commercial properties, under agreed conditions. These activities allow HYBE to generate revenue beyond album releases and live performances. For instance, an official product may continue generating sales without requiring an artist to participate in every individual transaction. — Content production and distribution HYBE also generates revenue through various forms of content, including documentaries, video productions, and other entertainment products. Some content is distributed through third-party services, while other products are offered through the company's own business channels. Content may generate revenue through direct purchases, paid access, licensing, or distribution agreements. — Fan clubs and other services Paid memberships and related fan-oriented services are another source of revenue. These services may provide access to membership benefits, exclusive products, or other experiences, depending on the offering. They contribute to the commercial relationship between artists, fans, and the company. Importantly, indirect involvement does not mean that artists have no connection to these products. Rather, it means that the commercial transaction does not necessarily require the artist's direct participation at the moment of purchase. In 2025, HYBE's indirect-involvement categories represented approximately 36.45% of total revenue. ★ THE ROLE OF FAN PLATFORMS AND DISTRIBUTION An important part of HYBE's business strategy involves the connection between entertainment labels, distribution channels, and fan platforms. Weverse, operated by Weverse Company, provides an environment where fans can interact with artists and access various services and commercial offerings. Its shopping services also provide channels through which certain official albums, merchandise, and other products can be purchased. However, it is important to understand that purchases made through Weverse do not all belong to one separate revenue category. Depending on the product, its revenue may be recorded under music, merchandise, content, or another appropriate business category. Similarly, HYBE's business relationships with external distributors and platforms affect how revenue is recognized and shared. This means that a purchase of an album, concert ticket, or membership cannot automatically be treated as an identical amount of profit received by HYBE. Understanding these distinctions is essential when discussing the company's financial performance or the potential economic effects of changes in consumer spending. ★ REVENUE DOES NOT MEAN PROFIT One of the most important distinctions in financial reporting is the difference between revenue and profit. Revenue represents earnings generated through business activities before the relevant expenses are deducted. Operating profit is the amount remaining after operating costs and expenses are accounted for. These expenses may include production, personnel, marketing, business operations, and other costs associated with running the company. Net profit or loss reflects the financial result after additional items, such as financial expenses and taxes, are considered. A company can therefore report increasing revenue while experiencing lower profitability. HYBE's 2025 results provide a useful example. Although the company reported approximately KRW 2.65 trillion in annual revenue, its operating profit was approximately KRW 49.9 billion. This demonstrates why strong sales figures should not automatically be interpreted as equally strong profits. When evaluating quarterly results, it is necessary to examine both revenue and profitability, as well as the explanations provided for changes in financial performance. ★ WHY DOES THIS MATTER TO FANS? Fans contribute to the entertainment industry's commercial activity through the products and services they choose to purchase. Albums, merchandise, concerts, memberships, and paid content represent different ways in which consumer demand can translate into revenue. However, consumer spending does not provide a direct measure of how much an individual artist earns, nor does it automatically demonstrate that a company's management practices are appropriate. Understanding the sources of corporate revenue helps explain why consumer spending is a very important subject in discussions about accountability. Fans are entitled to understand how the companies they support operate and to make informed decisions about where their money goes. ★ WHY UNDERSTANDING THE NUMBERS MATTERS FOR Q3 As HYBE prepares to publish its Q3 results, financial information will help us evaluate how its different business activities performed during the reporting period. Revenue changes may be influenced by factors such as the timing of album releases, the number and scale of concerts, merchandise demand, distribution arrangements, and other business developments. It will therefore be important to examine the figures in context rather than drawing conclusions from increases or decreases alone. At the same time, ENVOICE believes that evaluating an entertainment company's performance should extend beyond financial results. Artists are fundamental to the production of music, performances, and much of the intellectual property that supports these businesses. While financial disclosures can provide useful information about revenue and profit, they cannot independently establish whether artists receive sufficient rest, whether schedules are sustainable, or how much influence artists have over decisions affecting their careers. These matters require separate consideration, reliable information, and meaningful transparency. — ✦ — Financial performance represents only one part of corporate responsibility. A company's ability to generate revenue does not, by itself, demonstrate that its artists are being managed responsibly. This is why ENVOICE considers financial education an important part of its advocacy. Our objective is not simply to examine how much money HYBE generates, but to encourage informed discussions about the relationship between commercial success, corporate decisions, and the welfare of the artists who contribute to that success. As the Q3 reporting period comes into focus, we encourage ENGENEs to examine the available information carefully, distinguish verified facts from assumptions, and continue asking meaningful questions about corporate responsibility. Because understanding where the money comes from is the first step toward understanding the business behind the artists. — ✦ — Transparency and accountability are essential to responsible corporate governance. Management decisions must always reflect a commitment to artists first. 엔진은 기업의 책임을 요구합니다 #Q3_Hold_HYBE_Accountable #BoycottHYBE_DemandTransparency