Chinese tech company Tencent is a gaming giant and the parent company of WeChat, the ubiquitous social messaging app in China.
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Tencent on Wednesday posted a fourth-quarter beat on top and bottom line driven by a surge in gaming and advertising revenue.
Here’s how Tencent did in the fourth quarter of 2024 versus Refinitiv estimates:
- Revenue: 172.4 billion Chinese yuan ($23.9 billion), versus 168.9 billion yuan expected.
- Profit attributable to equity holders of the company: 51.3 billion yuan, compared with 46.03 billion yuan expected.
Revenue rose 11% year-on-year while profit was up 90% versus the same period in 2023.
Tencent is known as one of the world’s biggest gaming firms. Domestic games revenue in China rose 23% year-on-year to 33.2 billion yuan in the fourth quarter. Tencent said this hike was due to a low base in the prior year’s period, as well as growth in some of its hit games, including Honour of Kings and Peacekeeper Elite.
The annual growth rate for domestic games accelerated in the December quarter, compared with the previous three-month period.
International games revenue jumped 15% year-on-year to 16 billion. Over the past few years, Tencent has stepped up efforts overseas with games like PUBG Mobile, as the domestic games market slowed amid macroeconomic and regulatory headwinds.
While Tencent is one of the world’s biggest gaming companies, the tech giant has also placed a large focus on becoming a key artificial intelligence player in China over the last two years, putting out various AI models.
On Tuesday, the company launched its Hunyuan3D-2.0 model which can turn text or images into 3D graphics. In February, Tencent had unveiled Turbo S, an AI model designed to answer user queries as quickly as possible.
Investors are still watching as to how Tencent plans to monetize its AI investments.
The Shenzhen-headquartered firm’s AI push is emblematic of the current state of competition among China’s tech giants, which has been spurred on by startup DeepSeek and its highly efficient artificial intelligence model that was released earlier this year.
AI updates have been released thick and fast from companies including Alibaba and Baidu.
Last week, Alibaba launched a new version of its AI assistant app that will be powered by its own Qwen AI reasoning model. Baidu on Sunday released two new models including a new reasoning model.
Tencent is working with its own AI models as well as those of rivals. The company has its in-house AI chatbot called Yuanbao, which is based on its own Hunyuan foundational model as well as DeepSeek’s R1. Tencent has also sought to integrate DeepSeek’s technology across some of its other products, including WeChat’s search features in China.
This breaking news story is being updated.