Tencent Announces 2025 First Quarter Results

Tencent Holdings Limited, a world-leading Internet and technology company in China, today announced the unaudited consolidated results for the quarter ended 31 March 2025 ("1Q2025").

Mr. Ma Huateng, Chairman and CEO of Tencent, said, "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 also stepped up our spending on new AI opportunities, such as the Yuanbao application and AI in Weixin. 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."

1Q2025 Financial Highlights

Revenues: +13% YoY, gross profit: +20% YoY, non-IFRS[1] operating profit: +18% YoY

• Total revenues were RMB180.0 billion (USD25.1 billion[2]), up 13% over the first quarter of 2024.
• Gross profit was RMB100.5 billion (USD14.0 billion), up 20% YoY.
• On a non-IFRS basis, which is intended to reflect core earnings by excluding certain one-time and/or non-cash items:
• Operating profit was RMB69.3 billion (USD9.7 billion), up 18% YoY. Operating margin increased to 39% from 37% last year.
• Profit for the period was RMB 62.7 billion (USD8.7 billion), up 22% YoY.
• Profit attributable to equity holders of the Company for the period was RMB61.3 billion (USD8.5 billion), up 22% YoY.
• Basic earnings per share were RMB6.735. Diluted earnings per share were RMB6.583.
• On an IFRS basis:
• Operating profit was RMB57.6 billion (USD8.0 billion), up 10% YoY. Operating margin decreased to 32% from 33% last year.
• Profit for the period was RMB49.7 billion (USD6.9 billion), up 17% YoY.
• Profit attributable to equity holders of the Company for the quarter was RMB47.8 billion (USD6.7 billion), up 14% YoY.
• Basic earnings per share were RMB 5.252. Diluted earnings per share were RMB5.129.
• Capital expenditure was RMB27.5 billion (USD3.8 billion), up 91% YoY.
• Total cash was RMB476.0 billion (USD66.3 billion) and free cash flow was RMB47.1 billion (USD6.6 billion), down 9% YoY. Net cash position totalled RMB90.2 billion (USD12.6 billion).
• As at 31 March 2025, fair value of our shareholdings[3] in listed investee companies (excluding subsidiaries) totalled RMB653.4 billion (USD91.0 billion) and the carrying book value of our shareholdings in unlisted investee companies (excluding subsidiaries) was RMB337.9 billion (USD47.1 billion). 
• During the first quarter of 2025, the Company repurchased approximately 43.0 million shares on the Hong Kong Stock Exchange for a consideration of approximately HKD17.1 billion.

[1] Non-IFRS adjustments excludes share-based compensation, M&A related impact such as net (gains)/losses from investee companies, amortisation of intangible assets, impairment provisions/(reversals), SSV & CPP, income tax effects and others  

[2] Figures stated in USD are based on USD1 to RMB7.1782  

[3] Including those held via special purpose vehicles, on an attributable basis

1Q2025 Business Review and Outlook

• We provided more onboarding support for Mini Shops merchants, in order to enrich the range of branded product listings, contributing to rapid year-on-year growth in GMV.
• We rolled out AI features within Weixin to provide more interactive user experiences and increase productivity for content creators and developers. For example, we integrated our AI service Yuanbao as a Weixin contact, powered Weixin Search with large language models (LLMs), and provided a text-prompt image generating tool for Official Accounts.
• Tencent Video maintained its leading position in China's long-form video market with 117 million[4] video subscribers. Tencent Music sustained its industry leadership in China's music streaming market with 123 million[5] music subscribers.
• Several of our evergreen games, including Honour of Kings and CrossFire Mobile, achieved record high levels of gross receipts during the seasonally strong first quarter.
• Delta Force's domestic user base reached a post-launch record of 12 million peak DAU in April 2025. Delta Force became the sixth most popular mobile game by average DAU industry-wide[6], and the highest-DAU new game released in the last three years industry-wide.
• We upgraded our advertising technology platform with enhanced generative AI capabilities, such as improved image generation and video editing to accelerate advertisement creation, digital human solutions to facilitate live streaming activities, and deeper understanding of merchandise and user interests to deliver better recommendations.
• Tencent Cloud's audio and video solutions ranked first by revenue for the seventh consecutive year in China[7]. We enhanced the audio and video solutions' content generation, media processing and real-time interaction experience by integrating LLM capabilities.

[4] The average daily number of paying users for the first quarter of 2025  

[5] The average number of paying users as of the last day of each month during the first quarter of 2025  [6] By DAU among mobile games in domestic market during the first quarter of 2025, according to QuestMobile  [7] During 2018-2024, according to IDC

1Q2025 Management Discussion and Analysis

Revenues from VAS increased by 17% year-on-year to RMB92.1 billion for the first quarter of 2025. Domestic Games revenues were RMB42.9 billion, representing a 24% year-on-year increase from a low base in the same period last year, driven by growth in revenues from Honour of Kings and Peacekeeper Elite, as well as contributions from recently released DnF Mobile and Delta Force. International Games revenues were RMB16.6 billion, reflecting a 23% year-on-year increase (22% increase on a constant currency basis), driven by growth in revenues from Brawl Stars, Clash Royale and PUBG MOBILE. Social Networks revenues rose by 7% year-on-year to RMB32.6 billion, driven by growth in app-based game virtual item sales, music subscription revenues and Mini Games platform service fees.

Revenues from Marketing Services[8] were RMB31.9 billion for the first quarter of 2025, reflecting a 20% year-on-year increase. This growth was primarily due to robust advertiser demand for Video Accounts, Mini Programs and Weixin Search inventories, supported by higher user engagement, ongoing AI upgrades to our advertising platform, and improvements to the transaction ecosystem within Weixin. Marketing Services revenues increased across most major industry categories during the quarter.

Revenues from FinTech and Business Services increased by 5% year-on-year to RMB54.9 billion for the first quarter of 2025. FinTech Services revenue growth was due to higher revenues from consumer loan services and wealth management services. Business Services revenue growth was driven by an increase in cloud services revenues and eCommerce technology service fees.

[8] Starting third quarter of 2024, we have renamed this revenue segment from "Online Advertising" to "Marketing Services" to better represent the breadth of our marketing solutions and accompanying technology services across our online marketing properties

Please see full earnings release: 

https://www.prnewswire.com/apac/news-releases/tencent-announces-2025-first-quarter-results-302455231.html

Source: Tencent  14 May, 2025, 19:18 CST   Photo: China Daily