K-pop agency HYBE reported on Thursday a disappointing lower-than-expected profit for the first quarter of 2024 due to challenges related to artists on hiatus and increased spending on rookie groups.

According to Korea JoongAng Daily, the operating profit of 14.4 billion won ($10.43 million) for this year's first quarter is significantly below market expectations of 17.2 billion won. The company's operating profit plummeted 73 percent compared to last year. 

Q1 2024 Profits of HYBE

Quarterly revenue dropped by 12 percent to 360.9 billion won, lower than the 380.4 billion won market consensus. HYBE's net profit returned to a modest 2.9 billion won, far short of the 25.4 billion won analysts had forecast. 

The decline in profits was attributed to several factors impacting the company's operations. HYBE cited the hiatus of existing artists as a key contributor to the lower-than-expected financial performance. 

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Artists That Have Gone on Hiatus

The absence of popular artists during this period likely impacted the company's revenue streams, typically generated by their activities.

HYBE also incurred significant costs associated with rookie groups' debut and promotional activities. HYBE oversees multiple subsidiary labels, which house various artists, including BTS, TXT, NewJeans, Seventeen, and more. 

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