SM Entertainment’s 99% Decline In Net Profit Shocks Netizens

SM Entertainment’s latest financial report has stunned netizens as the company revealed a drastic drop in its net profit. According to Herald Corp, SM’s operating profit for last year stood at approximately ₩87.5 billion KRW (about $60.1 million USD), reflecting a 22.8% decrease from the previous year. Meanwhile, the company’s total revenue saw a modest 3% increase, reaching ₩990 billion KRW (about $680 million USD).

However, what truly caught the public’s attention was the company’s net profit, which plummeted by 99.4%, leaving SM with only ₩465 million KRW (about $319,000 USD) in net earnings. Given that SM is one of the biggest entertainment companies in South Korea, this sharp decline has sparked widespread discussion.

Many are questioning how a company with multiple active artists, successful comebacks, and strong album sales could experience such a dramatic drop in net profit. Some speculate that major expenses — such as investments in new groups like RIIZE and other subsidiaries — may have contributed to the numbers. Others are comparing SM’s financial struggles to those of HYBE, which has also been criticized for its earnings report.

• “Are you sure this is SM Entertainment? It just says SM.”
• “How does an entertainment company even survive with only 400 million KRW in net profit…?”
• “This is even worse than HYBE, lol.”
• “Their artists were actively promoting and selling well… so where did all the money go?”
• “Didn’t RIIZE debut last year? Maybe they spent a lot on their debut.”