Tencent posts 90% Q4 profit on gaming boost
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The news: Tencent’s Q4 2024 profits beat expectations thanks to a surge in games and advertising revenue, clocking its fastest pace of growth in over a year.
The numbers: Tencent’s results show Q4 profit attributable to equity holders climbed 90% year-on-year to 51.3 billion yuan ($11.2 billion), compared with 46.03 billion yuan projected.
Tencent’s revenues increased above projections at 11% to 172.5 billion yuan for the three months ended December, while net income almost doubled.
Shares in Prosus NV, a major Tencent shareholder, gained more than 1% in Europe.
The context: One of the world’s biggest gaming companies, Tencent’s domestic games revenue in China rose 23% year-on-year to 33.2 billion yuan in the fourth quarter. Tencent attributed the jump to a low base in the prior year’s period, as well as growth in some of its hit games.
Tencent's international gaming revenue jumped 15% year-on-year to 16 billion yuan.
On top of gaming revenues in Q4, Tencent’s marketing business surged 17% year-on-year to 35 billion yuan as the company ramps up monetisation across social channels, including its 1.38 billion monthly users of WeChat.
The company also outlined its plans to plough spending into artificial intelligence infrastructure, indicating its intention to keep pace with Chinese rivals in the fast moving industry. The company has integrated DeepSeek's open-source models into a number of its services including WeChat search and the Yuanbao chatbot.
Tencent said that as the capabilities and benefits of AI become clearer, “we have stepped up our AI investments to meet our internal business needs, train foundation models and support surging demand for inference we are experiencing from our users. We intend to further increase our capital expenditures in 2025 and believe these AI investments will generate good economic returns and value.”
The company also unveiled plans to buy back at least HK$80 billion worth of shares and proposed a 32% rise in its annual dividend for 2025.
The sources: Tencent quarterly report, Bloomberg
