Tencent 2024 First Quarter Results Presentation

Key insights

6 takeaways

01
Tencent reported Q1 2024 total revenue of 159.5 billion RMB, a 6% year-over-year increase, with non-IFRS net profit rising 54% to 50.3 billion RMB.See it on page 4
02
Operating margins improved by 6.8 percentage points to 36.8%, driven by effective cost management and a strategic shift toward higher-margin revenue streams.See it on page 20
03
Online advertising revenue grew 26% year-over-year, serving as the primary growth engine due to AI-powered ad targeting and increased demand across content platforms.See it on page 13
04
FinTech and business services revenue grew 7% year-over-year, supported by cloud-based media solutions and rising enterprise adoption of communication tools.See it on page 14
05
Domestic gaming revenue declined 2% due to high comparative bases, while international gaming revenue grew 3% behind the performance of PUBG MOBILE and Brawl Stars.See it on page 9
06
Tencent maintains a strong liquidity position with 445.2 billion RMB in total cash and a net cash position of 92.5 billion RMB as of March 31, 2024.See it on page 21

Summary

Tencent’s first quarter 2024 results demonstrate steady financial growth and improved operational efficiency, driven by strong performance in online advertising and business services. The company reported total revenue of 159.5 billion RMB, a 6% increase year-over-year. Non-IFRS net profit attributable to equity holders rose significantly by 54% to 50.3 billion RMB, reflecting a robust expansion in profitability. The company’s operating margin improved by 6.8 percentage points year-over-year to 36.8%, signaling successful cost management and a shift toward higher-margin revenue streams.

The company’s diverse business segments showed varied performance. Online advertising emerged as a primary growth engine, with revenue increasing 26% year-over-year, bolstered by AI-powered ad targeting and strong demand across content platforms. FinTech and business services grew 7% year-over-year, with business services benefiting from cloud-based media solutions and increased enterprise adoption of communication tools. While the domestic games segment saw a 2% decline due to high comparative bases from the previous year, international games revenue grew 3%, supported by strong performance from titles such as PUBG MOBILE and Brawl Stars.

The report covers Tencent’s global operations for the three-month period ending March 31, 2024, with a primary focus on the Chinese market. Financial data is presented in Renminbi, with supplementary US dollar conversions provided at a fixed exchange rate. The analysis relies on internal company financial records and unaudited non-IFRS measures, which the company utilizes to provide a clearer view of core operational performance by excluding non-cash items and acquisition-related impacts. Tencent maintains a strong liquidity position, reporting 445.2 billion RMB in total cash and a net cash position of 92.5 billion RMB, while continuing to execute share repurchases to enhance shareholder value.