Shares of Hybe, the company behind K-pop supergroup BTS, surged 10% on Friday as investors weighed an upbeat third-quarter earnings outlook fueled by its artistes' global concerts.
Hybe's third-quarter revenue is expected to reach 1.5 trillion won ($1.11 billion), up 106% from a year earlier, while operating profit is projected at 172.2 billion won, according to local brokerage firm iM Securities. Concert revenue is expected to come in at 717 billion won, nearly tripling from a year earlier.
The share price gain on Friday outperformed the broader Kospi, which rose 2.9%.
BTS' ongoing world tour featured 16 stadium shows in North America and eight in Europe during the third quarter.
Thiat, alongside expanding tours by newer acts including Enhypen, Katseye and Cortis, helped drive concert attendance to nearly 3 million during the quarter, potentially marking a quarterly record for the company, the report said.
Western markets accounted for more than 70% of total concert attendance for the first time, reflecting Hybe's growing international reach as its newer artistes expand their presence in North America and Europe, according to the report. Despite currency headwinds, concert, merchandise and licensing revenues are expected to reach record levels.
Concert margin outlook
While higher royalty payments to established artistes and initial touring costs for newer groups are expected to weigh on margins, the brokerage forecasts Hybe to maintain a double-digit operating margin, supported by the scale of BTS' world tour.
CGS Securities analyst Jiwoo Oh told CNBC after Hybe's second-quarter earnings that while concerts and appearances carry steeper costs for the company due to higher revenue sharing with artistes, merchandise, content and fan club businesses help boost the companies bottom line significantly.
She also pointed out that in its second quarter, Hybe delivered an 11.8% operating margin in the second quarter of 2026, with artist-direct revenue accounting for 72% of total sales and concerts alone accounting for 45% of total sales.
"We believe this demonstrates that stadium-scale operating leverage can more than offset the higher cost base associated with concerts," she added.
After Hybe reported second-quarter results on July 28, the company's shares crashed, wiping out as much as $1.96 billion in market cap in less than 24 hours.
Analysts said then that the sell-off was caused as profit margins missed expectations, despite revenue and operating profit reaching record highs, according to analysts.
Rookies step up
The iM Securities report said that the profitability of newer bands such as Katseye and Cortis in Western markets will be likely key to reducing the company's reliance on BTS, the report showed.
Still, stronger-than-expected demand for additional BTS concerts in Japan and the Middle East, as well as encore performances, could also lead to upward revisions to the company's 2027 earnings forecasts, iM Securities added.
Kyobo Securities, which expects third-quarter concert revenue to reach 724.4 billion won, expressed optimism around Hybe's newer acts, stating "growth among younger artists is becoming more visible alongside BTS' tour."
Cortis is selling around 600,000 albums per month on average, demonstrating strong fandom demand, the brokerage said, while Katseye is expanding its overseas presence on the back of global streaming and album performance.