Tencent Posts 15% Revenue Growth in Q2 2025 as AI Lifts Games and Advertising

Overview

Tencent Holdings, the internet company headquartered in Shenzhen, announced its results for the second quarter of 2025 (April to June) on August 13, 2025. Total revenue was RMB184.5 billion, up 15% year on year, and gross profit rose 22% to RMB105.0 billion. Non-IFRS operating profit, a measure the company uses to reflect core earnings, increased 18% to RMB69.2 billion, lifting the operating margin to 38% from 36% a year earlier. On an IFRS basis, net profit attributable to equity holders rose 17% to RMB55.6 billion. Capital expenditure more than doubled, rising 119% to RMB19.1 billion.

Chairman and CEO Ma Huateng (Pony Ma) said the company had delivered double-digit growth in both revenue and non-IFRS operating profit as it invested in, and also benefited from, the use of AI.

Background

Tencent was founded in Shenzhen in 1998 and has been listed on the Main Board of the Hong Kong Stock Exchange since 2004. Built around its Weixin/WeChat and QQ communication platforms, it operates businesses in games, advertising, fintech services such as payments, and enterprise services including cloud computing, and is one of Shenzhen's best-known companies. In recent years it has stepped up its work in generative AI, developing its own HunYuan foundation models and promoting its AI-native app Yuanbao. The quarterly results drew attention as an indication of how these AI investments are feeding into revenue from existing businesses, at a time when many technology companies are increasing spending on computing infrastructure.

Key Points

Segment	Q2 2025 revenue	Year on year
Value-added services (VAS), total	RMB91.4 bn	+16%
of which Domestic Games	RMB40.4 bn	+17%
of which International Games	RMB18.8 bn	+35%
of which Social Networks	RMB32.2 bn	+6%
Marketing Services	RMB35.8 bn	+20%
FinTech and Business Services	RMB55.5 bn	+10%

• User base: Combined monthly active users of Weixin and WeChat reached 1.411 billion, up 3% year on year.
• Games: Domestically, the shooter Delta Force exceeded 20 million average daily active users. Internationally, monthly gross receipts of Supercell's Clash Royale rose to a seven-year high, and the newly released Dune: Awakening also contributed.
• Advertising: An upgraded advertising foundation model improved ad targeting and performance across Tencent's platforms.
• Business services: Higher demand for AI-related services, including GPU rental and API token usage, accelerated growth.
• AI technology: The company said its HunYuan 3D model ranked first on a Hugging Face 3D generation leaderboard.
• Shareholder returns: Tencent repurchased about 38.9 million shares for roughly HKD19.4 billion during the quarter.

Implications for Japan-Shenzhen Exchange

Tencent is a symbol of Shenzhen's digital industry, and its results are seen as one indicator of trends in games, digital content, advertising and AI. The strong rise in international games revenue points to the continuing global expansion of games involving Chinese companies, which is likely to draw growing attention from Japanese companies in the game and animation industries, both as potential partners and as competitors. Tencent's integration of AI into advertising and game production is also attracting interest as a reference case for Japanese firms considering their own digital marketing and content development. For Japanese companies and local governments that communicate with Chinese consumers, developments in the Weixin-centered ecosystem are likely to remain an important area of interest.

Outlook

Tencent has said it will extend AI-powered features further across Weixin, advertising and games, drive usage of its Yuanbao app and continue to upgrade the capabilities of its HunYuan models. The company has not given a specific outlook on how its increased capital expenditure will be reflected in future earnings, which will be tested in coming quarterly results. How the balance between AI investment and profitability develops is likely to remain a key point of interest for observers of Shenzhen's technology sector.

From the Association

The progress of Shenzhen's digital companies offers many insights for Japanese industry. The Association will continue to follow developments among Shenzhen companies and to provide a platform where Japanese and Shenzhen businesses can exchange information and deepen their ties.