Second-quarter revenue for the China-based multinational company rose 15% on strong gaming unit performance and ongoing AI investments.
Tencent has reported a 15% increase in second-quarter revenue, with the Chinese technology firm exceeding analysts’ expectations. It achieved revenues of 184.5 billion yuan ($25.7 billion), well above market estimates of 178.5 billion yuan.
These impressive results have largely been driven by the company’s major artificial intelligence (AI) investments. Tencent’s use of AI technology has led to enhanced targeting, increased engagement, and improved advertiser returns.
Gaming was also a major growth driver, with domestic revenue rising 17% year-on-year to 40.4 billion yuan. International gaming revenue also surged, rising 35% to 18.8 billion yuan, demonstrating Tencent’s wider global expansion efforts.
Elsewhere, marketing services revenue increased 20% to 35.8 billion yuan, helped by AI-powered advertising improvements. Operating profit reached 63.05 billion yuan, up from 57.31 billion yuan a year earlier, while net profit came in above forecasts at 55.6 billion yuan.
In terms of outgoings, quarterly capital expenditure was up 119% year-on-year, more than doubling to 19.1 billion yuan. The majority of this spending was directed towards AI upgrades in several areas including advertising, gaming, and social media services.
Gaming and music success boosts Tencent
Tencent’s positive Q2 results are largely down to the ongoing success of the company’s gaming unit. Its flagship titles including Honor of Kings, Peacekeeper Elite and the newly-released Delta Force have strengthened the firm’s domestic performance.
Moreover, industry data shows that Honor of Kings generated $13.94 billion in lifetime revenue, while PUBG Mobile earned $9.52 billion. To put into context, such figures exceed the typical total annual earnings of entire gaming companies.
The company’s music division also reported solid results, with subscriber numbers reaching 124 million. Growth came from both subscription and non-subscription music services, alongside rising concert and fan-based revenues.
AI remains key to Tencent’s growth
The Shenzhen-based tech multinational’s strong performance in Q2 can also be attributed to recent advancements and upgrades in AI technology. The company noted that improvements to its advertising platform and Weixin transaction ecosystem helped boost marketing services revenue by 20% to 35.8 billion yuan.
Tencent has developed its own large language model, HunYuan, launching the “Turbo S” version earlier this year. The company has also integrated third-party models, including DeepSeek, into platforms such as WeChat.
WeChat, known as Weixin in China, has over one billion monthly active users. Tencent’s AI assistant Yuanbao became China’s most-downloaded iPhone app in March after the DeepSeek integration.
CEO of Tencent, Ma Huateng said: “We are striving to bring further benefits of AI to consumers and enterprises through powering more use cases within Weixin, driving usage of our AI native app Yuanbao, and upgrading the capabilities of our HunYuan foundation models.”
Moving forward, Tencent is seeking to expand its cloud computing services into Europe, competing with Amazon, Microsoft and Google. These three companies currently control about 70% of the European cloud market.
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