Tencent's Q1 Revenue Soars as AI Investments Yield Results in Gaming and Advertising

China's Tencent posts forecast-beating Q1 revenue on gaming growth

Beijing (AFP) - Chinese internet giant Tencent on Wednesday reported a better-than-expected increase in first-quarter revenue, propelled by growth in gaming as the firm's strategic drive into artificial intelligence deepens. Shenzhen-based Tencent is the operator of China's multifunctional app WeChat and a major player in the global gaming industry. The firm also has a presence in cloud computing, entertainment and AI -- the latter of which has seen a boost in interest among Chinese tech giants following the shock release of advanced chatbot DeepSeek this year. Tencent's revenue in the three months ended March 31 was 180.0 billion yuan ($25.0 billion), a filing to the Hong Kong Stock Exchange showed, up 13 percent compared to the same period last year. The figure came in slightly higher than a Bloomberg estimate of 175.7 billion yuan. In a breakdown of sales, Tencent said that revenue from domestic games increased 24 percent year-on-year, while international games saw a 23 percent rise. Net profits also charted a moderate increase during the first quarter, the results showed, jumping 14 percent year-on-year to reach 47.8 billion yuan. "AI capabilities already contributed tangibly to our businesses, such as performance advertising and evergreen games," the firm said in a statement. Tencent added that it has ramped up spending on "new AI opportunities", including integrated features within the WeChat app. Chinese tech giants have been funnelling resources into the competitive field of AI since the release of DeepSeek's chatbot in January. The little-known Chinese company caused a global stir because it appeared to have developed the chatbot at a fraction of the price of Western industry leaders such as the United States's OpenAI. Tencent this year began trialling its own AI model which it says can outpace DeepSeek. Tencent was among the tech firms caught up in a sweeping domestic crackdown that began in 2020 with officials calling off the massive, planned listing of Alibaba-linked fintech company Ant Group. Beijing has signalled renewed friendliness toward tech firms in recent months, but broad restrictions on video game access for minors still stand.

Tencent Q1 revenue rises 13% on AI, gaming boost

Tencent Holdings saw a revenue jump in the first quarter fuelled by gaming and AI advertising. Domestic gaming revenue increased significantly. International gaming also registered positive numbers. The company is investing heavily in AI development. They integrated DeepSeek technology across platforms like WeChat. Marketing services also benefited from AI upgrades.Tencent Holdings, China's biggest technology company by market capitalisation, posted a 13% rise in first-quarter revenue on Wednesday, boosted by growth in gaming and AI-enhanced advertising. Tencent, also the world's largest video game company and operator of the WeChat messaging platform, reported revenue of 180 billion yuan ($24.97 billion) for the quarter ended March 31. The results exceeded the 174.6 billion yuan average estimate from analysts polled by LSEG. Net profit for the quarter was 47.8 billion yuan, compared with analyst expectations of 52.2 billion yuan, LSEG data showed. The revenue growth was led by robust performance in the gaming segment, as the company benefited from regulatory easing in China's gaming sector following stringent restrictions in previous years. For the quarter, domestic gaming revenue rose by 24% to 42.9 billion yuan, and international gaming revenue climbed 23% to 16.6 billion yuan. Titles that drove the growth included "Dungeon & Fighter Mobile", launched in May 2024, and shooting game "Delta Force," which debuted in September. Tencent has increased its AI investments, and in March said it would allocate a low double-digit percentage of 2025 revenue to capital expenditure, primarily for AI development. This follows the company's 39 billion yuan AI-focused spending in the fourth quarter of 2024. The company has developed its own proprietary large language model Hunyuan, and in March made public a version called T1. It has also been among the most open of its peers to adopting third-party technology. Tencent became the first major Chinese tech company to integrate technology from DeepSeek, a Chinese AI startup that gained prominence early this year with its release of AI models that rival Western counterparts at lower development costs. The DeepSeek integration has been rolled out across Tencent's core products, including WeChat -- the company's flagship messaging and payment platform with over 1 billion active users -- and Yuanbao, Tencent's AI assistant. Revenues from marketing services for the quarter were 17.7 billion, up 22% year-on-year, partly because of robust AI-driven adtech upgrades whose benefits include more targeted advertising. The company's FinTech and Business Services segment, which includes consumer loans, wealth management and cloud services, posted revenue of 27.6 billion yuan, a 16% increase. ($1 = 7.2086 Chinese yuan renminbi)

Tencent Says AI Spending Is Yielding Results | PYMNTS.com

Chinese tech giant Tencent says its artificial intelligence (AI) investments have begun paying off. In releasing its quarterly earnings on Wednesday (May 14), the company's CEO noted that its AI capabilities had "contributed tangibly" to its gaming and advertising businesses. Revenue was up 13% year over year to 180 billion yuan ($25 billion). "We also stepped up our spending on new AI opportunities, such as the Yuanbao application and AI in Weixin," CEO Ma Huateng said, referring to the company's super app. "We believe the operating leverage from our existing high-quality revenue streams will help absorb the additional costs associated with these AI-related investments and contribute to healthy financial performance during this investment phase," Ma added. "We expect these strategic AI investments will create value for users and society, and generate substantial incremental returns for us over the longer term." A report on the earnings by the Wall Street Journal (WSJ) cites analysis from Citi calling the results "a stronger-than-expected print." It also pointed to analysts from Morgan Stanley, who argued that ongoing AI advertising tech improvements could make Tencent's ad venue growth more solid than its peers. That is largely down to the valuable user data it can glean from Wexin, and its international cousin, WeChat, which had 1.4 billion monthly active users as of the end of March. The report also noted that worries about American tariffs have curbed a recent rally in Chinese tech stocks sparked by the arrival of domestic AI startups such as DeepSeek. However, Tencent has something of an edge, the WSJ added, in that it makes most of its revenue in China. The company's stock is up 25% this year, although stricter U.S. controls on AI chips could hinder its plans to ramp up its AI efforts. In other AI news, PYMNTS wrote Wednesday about the rise of large transaction models (LTMs), a new type of generative AI model adapted to financial crime and positioned to revolutionize security, efficiency and operational effectiveness in financial services. "For years, payments players and banks have employed traditional machine learning (ML) models to enhance transaction processing and improve user experiences by boosting conversion rates and reducing fraud," PYMNTS wrote. "These approaches, built on clearly defined features like BIN numbers, ZIP codes, and payment methods, have delivered substantial gains, but their conventional approach has intrinsic limitations." Cognizant of these constraints, businesses are increasingly taking a radically different route, the report added: transformer-based models, known for their transformative impact in the field of natural language processing (NLP).

Tencent Profit Rises but Misses Expectations

Tencent Holdings reported another quarter of solid earnings, with the continued growth of its core gaming business backing an emboldened push into artificial intelligence. Tencent, the largest Chinese company by market capitalization, said Wednesday that first-quarter net profit rose 14% from a year earlier to 47.82 billion yuan, equivalent to $6.64 billion. That missed the 52.12 billion yuan estimated by analysts in a FactSet poll. Revenue increased 13% to 180.02 billion yuan, topping analyst expectations. Its bread-and-butter gaming business maintained strong momentum during the quarter, with the domestic division delivering a 24% sales gain, boosted by a low base and legacy titles "Honor of Kings" and "Peacekeeper Elite." Revenue from the international gaming business rose 23%. The Chinese technology giant has ramped up AI investment in recent quarters to compete against rivals and enhance its offerings in gaming, social media, digital payments and cloud services. The company on Wednesday said its AI capabilities have already contributed tangibly to its ad and games businesses. Tencent's capital expenditure surged more than 300% in the fourth quarter as it snapped up graphics processing units--and it plans to accelerate spending further. Company president Martin Lau said after the 2024 results that its capex will likely reach a low-teens percentage of revenue this year. For the first quarter, capital spending almost doubled from a year ago to 27.48 billion yuan but was down from the 36.58 billion yuan recorded in the final quarter of 2024. While it has stepped up spending on new AI opportunities, such as the Yuanbao application and AI in Weixin, the company said its operating leverage from existing high-quality revenue streams could help absorb the additional costs and contribute to healthy financial performance during this investment phase.

Tencent Posts Solid Results as AI Investments Start to Pay Off -- Update

Tencent Holdings' revenue growth accelerated in the first quarter as its core gaming business remained strong and ramped-up spending on artificial intelligence began to pay off. The company, China's largest by market capitalization, said Wednesday that AI capabilities have started to contribute tangibly to its advertisement and game businesses. Tencent's first-quarter revenue climbed 13% from a year earlier to 180.02 billion yuan, equivalent to $24.98 billion, topping analysts' expectations. That marked a pickup from the single-digit growth seen in previous quarters. The Chinese technology giant has been investing more and more in AI to compete against rivals and enhance its offerings in gaming, social media, digital payments and cloud services. Tencent's capital expenditure surged more than 300% in the fourth quarter as it snapped up graphics processing units--and it plans to accelerate spending further. Company president Martin Lau said after the 2024 results that its capex will likely account for a low-teen percentage of revenue this year. First-quarter capital spending almost doubled from a year ago to 27.48 billion yuan but was down from the 36.58 billion yuan recorded in the final quarter of 2024. Analysts say that Tencent's increased spending and use of multiple AI models, both third-party and its own, will drive monetization and could lead to the creation of a powerful AI ecosystem. Its net profit rose 14% to 47.82 billion yuan during the quarter, missing the 52.12 billion yuan estimated by analysts in a FactSet poll. Tencent's bread-and-butter gaming business maintained strong momentum, with the domestic division delivering a 24% sales gain, boosted by a low base and legacy titles "Honor of Kings" and "Peacekeeper Elite," as well as last year's breakout hit "Dungeon & Fighter Mobile." Revenue from the international gaming business increased 23%. AI-powered ad targeting and creation helped lift Tencent's marketing services revenue by 20% in the first three months of the year despite challenging macro conditions. Citi analysts viewed the results as "a stronger-than-expected print," supported by continued levers of sustainable growth of high-margin revenue streams and signs of AI-enhancing benefit. Continuous AI advertising tech upgrades could make Tencent's ad revenue growth more durable than that of global peers, Morgan Stanley analysts said in a recent note. That is largely due to the valuable user data it can use from the mini-programs and payment services embedded in its popular do-everything app, Weixin. Weixin and its overseas version, WeChat, had a combined 1.40 billion monthly active users as of the end of March. Tencent said operating leverage from existing high-quality revenue streams can help absorb the costs of investing more in new opportunities, such as its Yuanbao chatbot application and AI features on Weixin. The company's use of AI and solid earnings performances have helped make it one of the hottest Chinese tech stocks of 2025. Data from Wind showed that Tencent was one of the top three most purchased stocks via the Hong Kong Southbound Connect program over the past three months. Concerns about U.S. tariffs have taken some of the wind out of the broader rally in Chinese tech shares, tempering enthusiasm about the emergence of homegrown AI startups like DeepSeek. Tencent's business is relatively resilient to tariff risks as it makes most of its revenue in China. The stock is still up 25% so far this year, but tightened U.S. controls on advanced chips could disrupt AI ramp-up efforts. The U.S. government said last month that Nvidia will now need a license to export its H20 processors to China and several other countries. Chinese AI players, including Tencent, use the chips to power their AI efforts. Still, analysts think Tencent's strong H20 chip inventory will likely leave it less exposed to the latest U.S. restrictions. There is also a growing number of domestic substitutes for the chip. Coming earnings from Tencent's peers Alibaba and Baidu will offer a broader picture of how the Chinese tech industry is holding up amid the pressure.

China's Tencent quarterly revenue up 13% on AI, gaming boost

BEIJING (Reuters) -Tencent Holdings, China's biggest technology company by market capitalisation, posted a 13% rise in first-quarter revenue on Wednesday, boosted by growth in gaming and AI-enhanced advertising. Tencent, also the world's largest video game company and operator of the WeChat messaging platform, reported revenue of 180 billion yuan ($24.97 billion) for the quarter ended March 31. The results exceeded the 174.6 billion yuan average estimate from analysts polled by LSEG. Net profit for the quarter was 47.8 billion yuan, compared with analyst expectations of 52.2 billion yuan, LSEG data showed. The revenue growth was led by robust performance in the gaming segment, as the company benefited from regulatory easing in China's gaming sector following stringent restrictions in previous years. For the quarter, domestic gaming revenue rose by 24% to 42.9 billion yuan, and international gaming revenue climbed 23% to 16.6 billion yuan. Titles that drove the growth included "Dungeon & Fighter Mobile", launched in May 2024, and shooting game "Delta Force," which debuted in September. Tencent has increased its AI investments, and in March said it would allocate a low double-digit percentage of 2025 revenue to capital expenditure, primarily for AI development. This follows the company's 39 billion yuan AI-focused spending in the fourth quarter of 2024. The company has developed its own proprietary large language model Hunyuan, and in March made public a version called T1. It has also been among the most open of its peers to adopting third-party technology. Tencent became the first major Chinese tech company to integrate technology from DeepSeek, a Chinese AI startup that gained prominence early this year with its release of AI models that rival Western counterparts at lower development costs. The DeepSeek integration has been rolled out across Tencent's core products, including WeChat - the company's flagship messaging and payment platform with over 1 billion active users - and Yuanbao, Tencent's own AI assistant. Revenues from marketing services for the quarter were 17.7 billion, up 22% year-on-year, partly because of robust AI-driven adtech upgrades whose benefits include more targeted advertising. The company's FinTech and Business Services segment, which includes consumer loans, wealth management and cloud services, posted revenue of 27.6 billion yuan, a 16% increase. ($1 = 7.2086 Chinese yuan renminbi) (Reporting by Liam Mo and Brenda Goh; Editing by Christian Schmollinger, Emelia Sithole-Matarise and Barbara Lewis)