Tencent Holdings Ltd Reports Strong Q3 Profit Growth

Investing.com — Tencent Holdings Ltd (HK:0700) reported stronger-than-expected profit growth for the third quarter, driven by gains in its gaming, advertising, and cloud businesses.

Profit attributable to shareholders soared 47% year-over-year to 53.23 billion yuan ($7.37 billion), surpassing an LSEG forecast of 46.18 billion yuan. Revenue, however, rose by 8% to 167.19 billion yuan, slightly below the analyst projection of 167.82 billion yuan.

Key Revenue Drivers

• Gaming remained a central revenue source for Tencent, with domestic gaming income rising 14% year-over-year to 37.3 billion yuan.
• Revenue from international games also grew, up 11% to 14.5 billion yuan in constant currency, highlighting the "evergreen potential" of both new and existing titles.

Marketing Services Growth

Marketing services, formerly known as online advertising, experienced a notable 17% increase to 29.99 billion yuan, marking it as one of the fastest-growing segments outside of gaming. Tencent attributed this growth to "robust advertiser demand" for its short video content, mini-programs, and search features within its messaging app, known as Weixin in China and WeChat globally.

User Engagement

The social media and gaming giant reported monthly active users (MAU) of Weixin/WeChat at 1.38 billion for the quarter, representing a 3% increase from a year prior.

AI Integration

Tencent also highlighted the impact of its in-house AI tools, reflecting the broader industry shift toward this burgeoning technology.

> "We are increasingly seeing tangible benefits of deploying AI across our products and operations including marketing services and cloud, and will continue investing in AI technology, tools and solutions that assist users and partners," the company stated in its earnings report.

The company noted growth in commercial queries and click-through rates within its WeChat app, driven by large language model (LLM) capabilities.