Tencent Music Entertainment Group beat Wall Street estimates for quarterly profit on Monday, as more users paid for its music streaming services.
The company, controlled by Chinese tech giant Tencent Holdings Ltd, said paid users of its online music service jumped 27.4% to 28.4 million in the first quarter ended March 31.
Its revenue jumped 39% to 5.74 billion yuan ($834.73 million), but fell short of analysts’ estimates of 5.797 billion yuan.
“As our users increasingly consume music content through streaming services, we are riding on this trend to gradually transition into a pay-for-streaming model over the coming years,” Chief Executive Officer Cussion Pang said in a statement.
Tencent Music generates only a fraction of revenue from music-subscription packages and, instead, relies heavily on services popular in China such as online karaoke and live streaming. Spotify is a stakeholder in Tencent Music.
Separately, the company said co-President and Director Guomin Xie had resigned due to personal reasons and named Zhenyu Xie as its chief technology officer.
The company reported net income of 986 million yuan ($143.39 million) for the latest quarter.