Tencent Holdings, China’s largest technology company and the world’s biggest video game firm, reported year-on-year growth in both revenue and profit for the first quarter on Wednesday, driven by strong momentum in its core gaming division.
The company posted revenue of CN¥180.02 billion (US$25 billion), beating LSEG’s consensus estimate of ¥174.63 billion. That marked a 13% year-on-year increase.
Net profit came in at ¥47.8 billion, a 14% rise from the same period last year, though it fell short of the ¥52.2 billion expected by analysts.
Operating profit rose 18% to ¥69.3 billion (US$9.7 billion), and operating margin improved to 39%, up from 37% a year earlier.
Profit for the period surged 22% to ¥62.7 billion (US$8.7 billion), while diluted earnings per share reached ¥6.583, ahead of the ¥6.34 forecast.
Tencent’s core gaming business led growth. Revenue from domestic games surged 24% year-on-year to ¥42.9 billion, while international gaming revenue climbed 23% to ¥16.6 billion, reflecting a recovery in player spending and a strong performance for new content.
The company is also increasingly monetising its WeChat ecosystem, which now serves over 1.4 billion monthly active users.
Marketing services revenue rose 20% to ¥31.9 billion, with Tencent citing “robust advertiser demand” across its video accounts, mini programs, and WeChat search functions.
Capital expenditure soared 91% year-on-year to ¥27.5 billion, as Tencent aggressively invested in artificial intelligence infrastructure and projects, signalling a strategic shift toward long-term AI innovation.
Mr. Ma Huateng, Chairman and CEO of Tencent, noted, “During the first quarter of 2025, our high-quality revenue streams sustained their solid growth trajectory. AI capabilities already contributed tangibly to businesses, such as performance advertising and evergreen games.
"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.
"We expect these strategic AI investments will create value for users and society, and generate substantial incremental returns for us over the longer term.”
At the time of writing, Tencent Holdings (HSI: 700) stock was trading at HKD$521.0, up 3% from Tuesday's close of $506.0. The company's market cap stands at $4.58 trillion.
