Prime Highlights:
Tencent’s profit for Q4 2024 surged 90%, reaching 51.3 billion yuan, driven by strong gaming and advertising revenue.
Total revenue for the quarter was 172.4 billion yuan ($23.9 billion), exceeding analysts’ expectations and marking an 11% year-on-year increase.
Key Background:
Tencent, China’s tech giant and the parent company of WeChat, reported impressive financial results for the fourth quarter of 2024, with a 90% surge in profit. The company attributed the strong performance to a surge in both gaming and advertising revenue, alongside significant investments in artificial intelligence (AI).
For Q4, Tencent posted revenues of 172.4 billion Chinese yuan ($23.9 billion), exceeding analysts’ expectations of 168.9 billion yuan. Profits attributable to equity holders reached 51.3 billion yuan, surpassing the forecast of 46.03 billion yuan. This marks an 11% year-on-year revenue growth, while profit soared by 90% compared to the same period in 2023.
Tencent’s gaming revenue saw significant growth, driven by hits like Honor of Kings and PUBG Mobile. Domestic gaming revenue rose 23%, and international gaming revenue climbed 15%. Additionally, Tencent’s advertising business, primarily through WeChat, grew 17% year-on-year to reach 35 billion yuan. The company highlighted AI’s growing role in boosting its financial performance. AI-driven innovations have enhanced Tencent’s advertising services and cloud computing capabilities. Its AI-powered advertising infrastructure has contributed to improved ad relevance, driving advertiser demand. Tencent’s AI cloud revenue reportedly doubled, although chip shortages have limited growth in cloud services.
Capital expenditure has more than tripled in 2024, reaching 76.8 billion yuan, as Tencent invests in servers, GPUs, and AI-related infrastructure. This increased spending is expected to drive continued growth across gaming, advertising, and AI services. As competition in China’s tech sector intensifies, Tencent remains focused on leveraging AI to further strengthen its market position, particularly in consumer-facing applications like WeChat and its AI chatbot Yuanbao.
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