Hybe chairman Bang Si-hyuk / Yonhap

Hybe said Monday it recorded annual sales exceeding 2 trillion won ($1.397 billion) for the second consecutive year in 2024, despite the absence of BTS' group projects due to members' mandatory military service.

"The company's annual sales surpassed 2 trillion won for the second year in a row, driven by strong album, music and concert sales as well as remarkable growth in merchandise sales," the company said in a statement. "This marks the highest annual sales since the firm's founding."

According to a regulatory filing, Hybe's annual revenue reached 2.255 trillion won, up 3.5 percent from a year earlier. However, operating profit declined 37.5 percent to 184.8 billion won, while it posted a net loss of 3.4 billion won, turning from a net profit of 183.4 billion won the previous year.

For the fourth quarter, Hybe reported a net loss of 26 billion won, remaining in the red compared with a year earlier. Operating profit for the October-December period fell 26.7 percent year-on-year to 65.3 billion won, while sales rose 19.2 percent to 725.3 billion won.

The operating profit was 23.7 percent lower than the average market estimate reported by Yonhap Infomax, the financial data arm of Yonhap News Agency.

Hybe said revenue with direct artists' involvement dropped 1.8 percent from the previous year to 1.445 trillion won, while revenue with indirect artists' involvement increased 14.5 percent to 809.3 billion won.

In the artist-direct category, album and music sales --the largest segment -- fell 11.3 percent. However, concert revenue surged 25.6 percent, partially offsetting the decline in album and music sales. In 2024, Hybe artists, including BTS, Seventeen, Tomorrow X Together, Enhypen and NewJeans, held 147 concerts and 25 fan meet-and-greet events, generating the highest concert revenue in the company's history. Fourth-quarter concert revenue, in particular, doubled from the previous year to 188.9 billion won.

In the artist-indirect revenue category, merchandise and licensing revenue increased 29.1 percent year-on-year to a record-high 420 billion won.

Hybe attributed the decline in annual operating profit to shifts in artist-specific revenue shares and costs related to initial infrastructure investments.

"The absence of BTS' group activities due to military service, along with changes in artists' revenue shares caused by the debut of multiple new groups, impacted operating profit," the company explained. "Additionally, investments in the U.S. debut of Katseye, and infrastructure and personnel costs following the establishment of Hybe Latin America to support future growth also affected profit margins."

During a conference call on fourth-quarter earnings on Tuesday, Hybe CEO Lee Jae-sang said, "BTS' revenue share has significantly declined from its previous level of approximately 95 percent. While the members have released solo albums during their military service, the lack of group concerts has led to a notable drop in their revenue proportion."

He was responding to a question about the group's share of the company's total sales.

"Although I cannot disclose exact figures, the share was likely below 20 percent in 2024," he added.

BTS members Jin and J-Hope have already completed their military service and resumed activities. The remaining five members -- RM, V, Jimin, Jungkook and Suga -- are expected to be discharged or released from alternative service by June 2025.

Hybe projected profitability will improve in 2025 with the return of more BTS members.

The company also announced plans to debut new localized K-pop idol groups in the United States, Japan and Latin America as part of its "multi-home, multi-genre" strategy, which combines the K-pop system with regional cultures and characteristics. (Yonhap)