Tencent’s Profit Soars 47% in Q3, Driven by Gaming, Advertising, and Cloud Services
Chinese tech giant Tencent has reported a staggering 47% year-on-year increase in profit, exceeding expectations and driven by significant growth in its gaming, advertising, and cloud services divisions.
Gaming Remains a Key Driver
Tencent’s gaming unit continued to be a major contributor to the company’s success, with domestic revenue rising 14% year-on-year to 37.3 billion yuan. International games revenue also saw a notable 11% increase to 14.5 billion yuan on a constant currency basis. The company attributed this growth to the “evergreen potential” of its existing and new games.
Advertising Services Surge
Marketing services revenue, which includes online advertising, surged 17% year-on-year to 29.99 billion yuan, making it one of the fastest-growing categories outside gaming. This growth was driven by robust advertiser demand for Tencent’s short-videos, mini programs, and search features within its popular messaging app, Weixin (WeChat overseas).
Weixin User Base Expands
The global monthly average user base for Weixin rose 3% from last year to 1.38 billion in the third quarter. Advertising spend from games and e-commerce also gained ground, more than offsetting a revenue drop from real estate and food and beverage.
AI Technology Boosts Growth
Tencent highlighted the benefits of employing its self-developed artificial intelligence tools, which have contributed significantly to its growth. The company noted that it is “increasingly seeing tangible benefits of deploying AI across our products and operations including marketing services and cloud.”
Search and Mini Programs Drive Growth
Search within the Weixin app saw significant growth in commercial queries and click-through rates, thanks to large language model capabilities. Additionally, Tencent’s mini programs’ gross merchandise value expanded by the “high teens” from last year to more than 2 trillion yuan, as users increasingly used the app for ordering food, electric vehicle charging, and medical services.
Overall, Tencent’s strong Q3 performance demonstrates the company’s continued dominance in the gaming, advertising, and cloud services sectors, with AI technology playing an increasingly important role in driving growth.
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