Tencent Q4 Earnings Soar: 30% Surge In Net Income, Strong Performance From Games And AI
Tencent Holding Ltd reported fiscal fourth-quarter 2024 results, with revenue growing 11% year-on-year to CNY172.4 billion. Weixin and WeChat's monthly active users grew by 3% to 1.385 billion. Fee-based VAS subscriptions grew by 7% to 262 million. Mobile device MAU of QQ fell 5% to 524 million. Revenues from VAS increased by 14% to CNY79.0 billion.
Chinese gaming giant Tencent Holding Ltd TCEHY reported fiscal fourth-quarter 2024 results on Wednesday. Revenue grew 11% year-on-year to CNY172.4 billion ($24.0 billion), surpassing the analyst consensus estimate of CNY168.95 billion.
Key Highlights
Combined, the MAU of Weixin and WeChat grew by 3% Y/Y to 1.385 billion as of December 31, 2024. Fee-based VAS registered subscriptions grew 7% Y/Y to 262 million. Mobile device MAU of QQ fell 5% Y/Y to 524 million as of December 31, 2024. Revenues from VAS increased by 14% Y/Y to CNY79.0 billion.
International Games revenues were CNY16.0 billion, up 15% Y/Y, driven by strong performances from games including PUBG MOBILE and Brawl Stars along with the early access release of Path of Exile 2. Domestic Games revenues increased by 23% Y/Y to CNY33.2 billion, driven by games including VALORANT, Honour of Kings, Peacekeeper Elite, and DnF Mobile, along with contributions from newly released games, DnF Mobile and Delta Force.
Social Networks revenues rose by 6% Y/Y to CNY29.8 billion, supported by growth in app-based game virtual item sales, music subscription revenues, and Mini Games platform service fees. Revenues from Marketing Services increased by 17% Y/Y to CNY35.0 billion, aided by strong advertiser demand for Video Accounts, Mini Programs, and Weixin Search inventories.
Revenues from FinTech and Business Services increased by 3% Y/Y to CNY56.1 billion on higher revenues from wealth management services and consumer loan services. Gross profit climbed 17% Y/Y to CNY90.7 billion ($12.6 billion) in the quarter, with margin expansion of 53% from 50% in the prior year.
Adjusted operating profit surged 21% Y/Y to CNY59.5 billion, with the margin expanding 2.8ppt Y/Y to 34.5%. Adjusted net income attributable to equity holders increased by 30% Y/Y to CNY55.3 billion ($7.7 billion). Adjusted EPS of CNY5.91 beat the CNY5.46 analyst consensus estimate.
Financial Position and Future Plans
As of December 31, 2024, Tencent had CNY415.4 billion ($57.8 billion) in cash and equivalents and generated CNY155.3 billion ($21.6 billion) in free cash flow. In 2024, the company bought back around 307 million shares on the Hong Kong Stock Exchange for around HKD112.0 billion ($14.4 billion). For 2025, Tencent plans to raise the annual dividend by 32% to HKD4.50 per share and repurchase at least HKD80 billion ($10 billion) worth of shares.
CEO Statement
Ma Huateng, Chairman and CEO of Tencent, highlighted that AI-driven improvements to the advertising platform, increased engagement with Video Accounts, and growth in the core games led to achieved double-digit revenue growth while maintaining operational leverage in the quarter. He further added that the company has restructured the AI teams to focus on both rapid product innovation and in-depth model research. They also ramped up AI-related capital investments, along with increased R&D and marketing for AI-native products.
Price Action: TCEHY stock closed lower by 0.43% at $69.49 on Tuesday.
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