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Tencent Holdings reported a 19% rise in net profit during the third quarter, driven by strong performances in gaming, marketing, and accelerated advancements in artificial intelligence investments.
For the three months ending September 30, net profit reached CNY63.1 billion (USD8.9 billion), up from CNY53.2 billion a year earlier, according to the company’s latest earnings release. Revenue increased by 15% to CNY192.9 billion (USD27.2 billion).
“During this quarter, we experienced solid growth in revenue and profits, reflecting positive trends across gaming, marketing services, as well as financial technology and business solutions,” stated Pony Ma, the company’s chairman and CEO. “Our strategic AI investments are already paying off in areas like targeted advertising and game engagement, while also boosting efficiency in coding and content production.”
Ma highlighted ongoing upgrades to the company’s HunYuan foundation model, noting that its image and 3D generation models are now industry leaders. As HunYuan’s capabilities continue to evolve, the company expects increased adoption of Yuanbao, alongside development efforts in agentic AI features within Weixin (WeChat), to gain further traction.
Revenue from domestic games grew 15% to CNY42.8 billion, mainly due to new game launches and increased earnings from established titles. International game revenue surged 43% to CNY20.8 billion, primarily driven by higher sales from games published by Supercell.
Marketing services revenue rose 21% to CNY36.2 billion, fueled by increased advertising impressions, greater user engagement, higher ad loads, and enhanced cost efficiency through AI-powered targeting. The company incorporated more advanced AI models to optimize ad rankings and improve conversion rates on platforms like Video Accounts, Mini Programs, and Weixin Search.
Growth in Video Accounts was notable, with significant increases in both advertising revenue and e-commerce gross merchandise volume as merchants leverage short-video formats for product discovery.
Fintech and business services revenue grew by 10% to CNY58.2 billion, with demand for cloud services improving driven by internet activity recovery and growing needs for AI training and inference.
Internationally, the company continues deploying high-end graphics processing units, such as A100 and H100, for cloud and gaming services, while growth in China was limited due to chip supply constraints.
Capital expenditures declined 24% to CNY13 billion, a change driven by supply chain factors rather than strategic reorientation. Management clarified that the company maintains a substantial reserve of top-tier accelerators, enough for ongoing AI training activities.
Despite lower capital spending, R&D investments increased nearly 28%, reaching CNY22.8 billion, largely due to planned expansions in AI projects and staffing.
Weixin’s ecosystem expanded in the third quarter, surpassing 1.4 billion monthly active users. AI enhancements in Video Accounts, Mini Programs, and Search are bolstering commercial activities. The company is integrating Yuanbao into comment and search functions to facilitate summarization and improve interaction, with long-term plans to develop agentic AI within Weixin for tasks like product recommendations and after-sales support.
Discussions with Apple regarding in-app payments for Weixin are ongoing and described as constructive. Most revenue from mini-games comes from in-app purchases rather than advertising.
Looking ahead, the company anticipates continued growth in advertising and international gaming markets, supported by active commercial activity in Video Accounts and Mini Programs, rising cloud demands, and further AI investments.
Operational efficiency will remain a focus, alongside disciplined spending and long-term growth initiatives within global gaming markets, according to management.
Following the report, Tencent’s shares traded slightly lower at HKD652 (USD83.91), after an earlier decline of up to 2.2%.
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