Chinese tech giant Tencent posts 13% revenue jump as growth at key gaming unit surges

Tencent on Wednesday reported an annual rise in its top and bottom line in the first quarter fuelled by accelerated growth in its key gaming business.

While revenue beat expectations, its net profit fell short.

Here's how Tencent did in the first quarter of 2025 versus LSEG estimates:

Revenue rose 13% year-on-year, while net profit was up 14%.

Tencent is one of the world's largest gaming companies, with revenues from its hit titles driving its overall performance. Domestic games revenue, which is sales from China, rose 24% year-on-year to 42.9 billion yuan thanks to the performance of "Honor of Kings" and "Peacekeeper Elite," as well as that of newer titles like "DnF Mobile."

Revenue from its international gaming business totaled 16.6 billion yuan, a 23% year-on-year rise driven by games such as "Brawl Stars" and "PUBG Mobile."

Tencent also runs WeChat — China's biggest messaging app that boasts over 1.4 billion monthly active users. The so-called super app allows users to do everything from mobile payments to playing games and booking flights.

The huge userbase has allowed Tencent to start monetizing the platform through advertising, and it has become a fast-growing business for the Chinese tech giant.

Marketing services revenue grew 20% year-on-year in the first quarter to 31.9 billion yuan. Tencent this was due to "robust advertiser demand" for its video, search and Mini Program product within WeChat. Mini Programs are apps that are hosted within WeChat.

Tencent said its capital expenditures for the first quarter totaled 27.5 billion yuan, up 91% from the same period last year, as it continues to spend on its artificial intelligence-related efforts.

The Shenzhen-headquartered company has been talking up its AI capabilities, including its AI chatbot called Yuanbao, as well as its own foundational model Hunyuan.

"AI capabilities already contributed tangibly to our businesses, such as performance advertising and evergreen games. We also stepped up our spending on new AI opportunities, such as the Yuanbao application and AI in Weixin," Tencent said in its earnings release.

"We believe the operating leverage from our existing high-quality revenue streams will help absorb the additional costs associated with these AI-related investments and contribute to healthy financial performance during this investment phase."

Martin Lau, president of Tencent said during an earnings call on Wednesday that many of the business' investments in chips and AI are already generating revenue for the company. For example, Tencent is using AI to improve ad targeting and boost user engagement in games, Lau noted.

When asked about Washington's tightened chip export curbs to China, Lau said that the situation is changing and "dynamic." He added that Tencent has a "pretty strong stockpile of chips and the company is focusing on how to make its AI processes more efficient.