Tencent profit jumps 62% as tech giant returns to growth on back of strong ad revenue, as video games business slows

The social media and video gaming giant saw revenue rise 6 per cent in the first quarter, with online advertising revenue growing 26 per cent

Video gaming sales, traditionally Tencent’s strongest revenue driver, fell by 0.9 per cent from a year ago, but it has benefited from easing regulatory scrutiny

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Signage for Tencent outside the company’s headquarters in Shenzhen on April 17, 2024. Photo: Bloomberg

Published: 5:02pm, 14 May 2024Updated: 10:54pm, 14 May 2024

Tencent Holdings, operator of China’s biggest social media app and the world’s largest video gaming business by revenue, reported a 62 per cent jump in profit to 41.9 billion yuan (US$5.8 billion) in the first quarter on the back of strong advertising revenue, marking the first quarterly profit growth since last June.

Profit was up significantly over its 25.8 billion yuan in profit a year ago, and it beat consensus estimates of 34.5 billion yuan by analysts surveyed by Bloomberg.

Revenue was also up 6 per cent for the quarter ended March, amid a rebound in the domestic economy and an easing regulatory environment.

Quarterly revenue for the Shenzhen-based internet giant reached 159.5 billion yuan, up from 150 billion yuan a year ago, marking its sixth consecutive quarter of growth. It beat consensus estimates of 158.8 billion yuan, according to analysts polled by Bloomberg.

“During the first quarter of 2024, several of our leading games in China and internationally started to benefit from team reorganisations we put in place, resulting in an increase in games gross receipts and creating a foundation for our games revenue to resume growth in future quarters,” Pony Ma Huateng, founder and chief executive of Tencent, said in a statement.

“We continue to cultivate high quality revenue streams including advertising in Video Accounts and Weixin Search, Mini Games platform service fees, and e-commerce technology service fees, contributing to our gross and operating profit growth outpacing our revenue growth,” he added.