Game titles like Honor of Kings and Valorant remain key drivers of Tencent’s growth.

Chinese tech giant Tencent posted solid Q3 2024 financial results, reflecting its adaptability and growth across key sectors. The company’s unaudited report for the quarter ending September 30 showed year-on-year (YoY) growth in revenue, profit, and user metrics, underscoring Tencent’s focus on core areas like gaming, social networks, and digital services.

Tencent’s total revenue reached RMB 167.2 billion (USD 23.9 billion), an 8% YoY increase, with gross profit rising 16% to RMB 88.8 billion (USD 12.7 billion). Under non-IFRS standards, its operating profit grew by 19% to RMB 61.3 billion (USD 8.7 billion), bringing operating margins up from 33% to 37%. Profit attributable to equity holders saw an even sharper jump, climbing 33% to RMB 60.9 billion (USD 8.7 billion), bolstered by steady core operations.

Tencent’s cash reserves stood robust at RMB 425.5 billion (USD 60.7 billion), supported by a 14% increase in free cash flow to RMB 58.5 billion (USD 8.3 billion). This financial stability reflects strong fundamentals, particularly in high-growth areas.

The value-added services segment, which includes gaming and social networks, generated RMB 82.7 billion (USD 11.8 billion)—a 9% YoY gain. Domestic gaming revenue rose 14% to RMB 37.3 billion (USD 5.3 billion), fueled by major titles like Honor of Kings and Game for Peace, alongside popular titles Valorant and Dungeon & Fighter: Origins. International gaming revenue also performed well, increasing 9% (or 11% at constant currency) to RMB 14.5 billion (USD 2.1 billion), with PUBG Mobile and Brawl Stars delivering strong returns.

Social network revenue grew 4% to RMB 30.9 billion (USD 4.4 billion), largely driven by mobile game virtual item sales and a rise in music subscriptions, countering declines in live streaming revenue. Tencent’s WeChat ecosystem, including Channels, Mini Programs, and Search, saw high ad demand, with revenue from marketing services up 17% YoY to RMB 30 billion (USD 4.3 billion). Prominent advertising campaigns tied to the Paris 2024 Olympics provided a modest boost, with growth from gaming and e-commerce advertisers compensating for cutbacks in real estate and food and beverage advertising.

Tencent’s fintech and business services division saw mixed results. Wealth management services benefited from a growing user base and higher asset holdings, though consumer spending headwinds impacted payment services. Cloud services revenue was buoyed by rising demand for digital transformation services, with merchant technology fees contributing to this trend.

Transactions in WeChat Mini Programs exceeded RMB 2 trillion (USD 285 billion) this quarter, a double-digit increase. Expanded applications—such as food ordering, electric vehicle charging, and healthcare services—drove usage growth.

Tencent continued to push forward in artificial intelligence with Hunyuan Turbo, a next-generation foundational model based on a mixture of experts (MoE) architecture. This model, designed for efficiency, is said to offer twice the training and inference capabilities of its predecessor, Hunyuan Pro, while halving inference costs.

Tencent’s Q3 2024 results underscore its agility and operational excellence across a diverse business portfolio. With solid growth in gaming, advertising, and cloud services, Tencent is positioned to leverage its innovation pipeline and diverse revenue streams to capture future opportunities in China and beyond.

The stated USD conversions are based on figures provided in Tencent’s official third-quarter 2024 financial report.

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