Chinese technology company Tencent is a gaming giant and parent company of WeChat, a ubiquitous social messaging app in China.
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Tencent Its top and bottom lines rose every year in the first quarter as growth accelerated in its main gaming business, reported Wednesday.
Although revenue exceeded expectations, its net profit fell.
Here is how Tencent estimates with LSEG in the first quarter of 2025:
Revenue rose 13% year-on-year, while net profit rose 14%.
Tencent is one of the world's largest gaming companies, with revenue from its popular titles driving overall performance. Sales revenue from China increased by 24% year-on-year to RMB 42.9 billion, thanks to performances of "King's Glory" and "peacekeeping elites" as well as new champions such as "DNF Mobile".
Its international gaming business has revenue totaled RMB 16.6 billion, a year-on-year increase of 23% driven by games such as "Brawl Stars" and "Pubg Mobile".
Tencent also operates WeChat - China's largest messaging app has more than 1.4 billion active users. The so-called super app allows users to do everything from mobile payments to playing games and booking flights.
A large user base has enabled Tencent to start monetizing the platform through advertising, and it has become a fast-growing business for Chinese tech giants.
Marketing service revenue increased by 20% year-on-year to RMB 31.9 billion in the first quarter. This is due to its "strong advertiser demand" for videos, searches and mini-program products in WeChat. Mini Programs are applications hosted in WeChat.
Tencent said capital expenditure totaled 27.5 billion yuan in the first quarter, up 91% from the same period last year as it continues to spend on work related to artificial intelligence.
The company summarized by the company has been talking about its AI capabilities, including its AI Chatbot, called Yuanbao, and its own underlying model Hunyuan.
"AI capabilities have made a significant contribution to our businesses such as performance advertising and evergreen gaming. We have also strengthened spending on new AI opportunities, such as Yuanbao apps and Weixin's AI," Tencent said in its revenue release.
“We believe that the operational leverage of 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.