Latest news with #Yuanbao
Yahoo
15-05-2025
- Business
- Yahoo
Tencent Holdings Ltd (TCEHY) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and AI ...
Total Revenue: RMB180 billion, up 13% year on year. Gross Profit: RMB100 billion, up 20% year on year. Non-IFRS Operating Profit: RMB69 billion, up 18% year on year. Non-IFRS Net Profit Attributable to Equity Holders: RMB61 billion, up 22% year on year. Value-Added Services Revenue: RMB92 billion, up 17% year on year. Social Networks Revenue: RMB33 billion, up 7% year on year. Domestic Games Revenue: Up 24% year on year. International Games Revenue: Up 23% year on year. Marketing Services Revenue: RMB32 billion, up 20% year on year. Fintech and Business Services Revenue: RMB55 billion, up 5% year on year. Gross Margin: 56%, up 3 percentage points year on year. Operating Expenses: Selling and marketing expenses were RMB7.9 billion, up 4% year on year. R&D Expenses: RMB18.9 billion, up 21% year on year. Free Cash Flow: RMB47.1 billion, down 9% year on year. Net Cash Position: RMB90.2 billion, up 17% quarter on quarter. Warning! GuruFocus has detected 9 Warning Signs with STU:IGV0. Release Date: May 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Tencent Holdings Ltd (TCEHY) reported a 13% year-on-year increase in total revenue for Q1 2025, reaching RMB180 billion. Gross profit rose by 20% year-on-year to RMB100 billion, marking a significant improvement in profitability. The company's non-IFRS net profit attributable to equity holders increased by 22% year-on-year to RMB61 billion. Tencent's AI capabilities are contributing positively to various business segments, including advertising and gaming. The Weixin and WeChat platforms saw growth in monthly active users, reaching 1.4 billion, indicating strong user engagement. Finance costs increased by 37% year-on-year, primarily due to foreign exchange losses. Free cash flow decreased by 9% year-on-year, largely due to increased capital expenditures on GPUs and servers. Interest income declined by 12% year-on-year due to lower interest yields. There is a temporary narrowing of the gap between revenue and operating profit growth rates due to AI investments. The commercial payment volume experienced a slight decline year-on-year in Q1, reflecting potential macroeconomic challenges. Q: Can management comment about the outlook and differentiation of Weixin versus peers in the market, and strategies across various AI business models? A: Chi Ping Lau, President: We are developing agentic AI capabilities within Weixin, which will be unique due to its integration with the Weixin ecosystem, including social graphs and content ecosystems. In terms of AI business models, advertising is directly augmented by AI, improving targeting capabilities. GPU rental is currently a lower priority due to short supply, and subscriptions are not a mainstream model for AI in China. Q: What is the current progress with the Yuanbao integration into the Weixin ecosystem, and what synergies do you expect? A: Chi Ping Lau, President: Yuanbao is still in the early stages of development. Users are using it for questions and dialogues, and we plan to provide more linkage with the Weixin ecosystem. It's too early to summarize systematic synergies, but we expect more developments in the coming quarters. Q: Could you discuss the longer-term implications for growth in the domestic games segment and any regulatory changes affecting app stores? A: James Mitchell, Chief Strategy Officer: The first quarter benefited from easy comparisons, but we see a long runway for growth due to changes in game operations and AI utilization. Regarding app stores, there is a shift towards a fairer share of revenue for digital content creators, which is more advanced in China and expected to progress globally. Q: What are some notable user behavior changes post-AI integration into Tencent's business applications? A: Chi Ping Lau, President: It's too early for systematic analysis, but users are increasingly interacting with AI agents. We are in a discovery phase, adding functionalities and observing user engagement. Q: How is the US licensing requirement for high-end GPUs affecting Tencent's AI development and product launches? A: Chi Ping Lau, President: The situation is dynamic, but we have a strong stockpile of chips. We prioritize applications generating immediate returns, like advertising. We are optimizing software to manage GPU needs and exploring alternative chips for inference. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
CNBC
15-05-2025
- Business
- CNBC
Tencent bets on 1.4 billion user WeChat empire to get ahead in China's AI race
Tencent's WeChat app is indispensable for people in China. It has 1.4 billion monthly users and is the main messaging service in the country. But it is more than just a way to chat with friends and family. WeChat is often dubbed a super-app because, within the program, you can access many different features like mobile payments and services, such as gaming, booking flights and even paying utlity bills. Tencent executives think this will give it an edge in China's intensely competitive field of artificial intelligence, where tech giants are spending billions of dollars to get ahead. During a Wednesday earnings call, the Shenzhen-headquartered firm was asked about "agentic AI" — the current obsession of companies around the world. While various companies have differing takes on the phrase, it is broadly understood to refer to AI designed to carry out tasks on behalf of a user. For example, you can prompt the AI on a smartphone to book you a restaurant, and it will work to complete the task across various apps, such as your browser and maps. It's something akin to what Google is working on with Gemini on Android devices or other chatbots like OpenAI's ChatGPT. Tencent has its own chatbot called Yuanbao, which is based on the company's foundational model and that of DeepSeek, the startup that caused shockwaves across the world at the start of this year with its high-performing AI. Tencent said this will eventually be advanced enough to become a "general agentic AI." But it is competing with products from rival giants, including Alibaba's Quark chatbot and Baidu's Ernie. And Martin Lau, president of Tencent, admitted during an earnings call on Wednesday that this would be "not much different" to other agentic AI provided by its competitors. The executive nevertheless said there is a second product that will set it apart from its rivals — AI that sits within WeChat, or Weixin, as it's known in China. "Within the Weixin ecosystem there is the opportunity for us to create a pretty unique agentic AI that connects with the unique components of the Weixin ecosystem," Lau said. He mentioned various features of WeChat including content creation, messaging and Mini Programs — all apps that sit within WeChat. "[This] actually gets into all kinds of information as well as transactional and operative capabiltiies across many different verticals of applications. That will be extremely unique compared to other more general agentic AIs and that's sort of a very differentiated product for us," Lau said. Tencent has already started to launch AI tools in WeChat, including search and content generation. But Lau's comments speak to Tencent's longer term vision in China, where competition in AI continues to ramp up.
Yahoo
15-05-2025
- Business
- Yahoo
Tencent Holdings Ltd (TCEHY) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and AI ...
Total Revenue: RMB180 billion, up 13% year on year. Gross Profit: RMB100 billion, up 20% year on year. Non-IFRS Operating Profit: RMB69 billion, up 18% year on year. Non-IFRS Net Profit Attributable to Equity Holders: RMB61 billion, up 22% year on year. Value-Added Services Revenue: RMB92 billion, up 17% year on year. Social Networks Revenue: RMB33 billion, up 7% year on year. Domestic Games Revenue: Up 24% year on year. International Games Revenue: Up 23% year on year. Marketing Services Revenue: RMB32 billion, up 20% year on year. Fintech and Business Services Revenue: RMB55 billion, up 5% year on year. Gross Margin: 56%, up 3 percentage points year on year. Operating Expenses: Selling and marketing expenses were RMB7.9 billion, up 4% year on year. R&D Expenses: RMB18.9 billion, up 21% year on year. Free Cash Flow: RMB47.1 billion, down 9% year on year. Net Cash Position: RMB90.2 billion, up 17% quarter on quarter. Warning! GuruFocus has detected 9 Warning Signs with STU:IGV0. Release Date: May 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Tencent Holdings Ltd (TCEHY) reported a 13% year-on-year increase in total revenue for Q1 2025, reaching RMB180 billion. Gross profit rose by 20% year-on-year to RMB100 billion, marking a significant improvement in profitability. The company's non-IFRS net profit attributable to equity holders increased by 22% year-on-year to RMB61 billion. Tencent's AI capabilities are contributing positively to various business segments, including advertising and gaming. The Weixin and WeChat platforms saw growth in monthly active users, reaching 1.4 billion, indicating strong user engagement. Finance costs increased by 37% year-on-year, primarily due to foreign exchange losses. Free cash flow decreased by 9% year-on-year, largely due to increased capital expenditures on GPUs and servers. Interest income declined by 12% year-on-year due to lower interest yields. There is a temporary narrowing of the gap between revenue and operating profit growth rates due to AI investments. The commercial payment volume experienced a slight decline year-on-year in Q1, reflecting potential macroeconomic challenges. Q: Can management comment about the outlook and differentiation of Weixin versus peers in the market, and strategies across various AI business models? A: Chi Ping Lau, President: We are developing agentic AI capabilities within Weixin, which will be unique due to its integration with the Weixin ecosystem, including social graphs and content ecosystems. In terms of AI business models, advertising is directly augmented by AI, improving targeting capabilities. GPU rental is currently a lower priority due to short supply, and subscriptions are not a mainstream model for AI in China. Q: What is the current progress with the Yuanbao integration into the Weixin ecosystem, and what synergies do you expect? A: Chi Ping Lau, President: Yuanbao is still in the early stages of development. Users are using it for questions and dialogues, and we plan to provide more linkage with the Weixin ecosystem. It's too early to summarize systematic synergies, but we expect more developments in the coming quarters. Q: Could you discuss the longer-term implications for growth in the domestic games segment and any regulatory changes affecting app stores? A: James Mitchell, Chief Strategy Officer: The first quarter benefited from easy comparisons, but we see a long runway for growth due to changes in game operations and AI utilization. Regarding app stores, there is a shift towards a fairer share of revenue for digital content creators, which is more advanced in China and expected to progress globally. Q: What are some notable user behavior changes post-AI integration into Tencent's business applications? A: Chi Ping Lau, President: It's too early for systematic analysis, but users are increasingly interacting with AI agents. We are in a discovery phase, adding functionalities and observing user engagement. Q: How is the US licensing requirement for high-end GPUs affecting Tencent's AI development and product launches? A: Chi Ping Lau, President: The situation is dynamic, but we have a strong stockpile of chips. We prioritize applications generating immediate returns, like advertising. We are optimizing software to manage GPU needs and exploring alternative chips for inference. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Straits Times
15-05-2025
- Business
- Straits Times
Tencent sales grow fastest since 2021 in solid start to rocky year
encent is among the biggest beneficiaries of a Chinese tech renaissance triggered by DeepSeek. PHOTO: REUTERS Hong Kong – Tencent Holdings' revenue grew at its fastest pace in more than three years, affirming investors' expectations that China's gaming and social media leader will weather a potential global downturn in 2025. The WeChat operator reported a faster-than-anticipated 13 per cent rise in sales to 180.02 billion yuan (S$32.4 billion) in the March quarter. Net income rose 14 per cent to 47.8 billion yuan, missing estimates in part because of rising spending on AI research and initiatives. The numbers may lend confidence to investors who regard China's most valuable company as resistant to much of the economic turmoil surrounding the Trump administration's tariffs campaign. Its shares have gained more than 20 per cent in 2025. Yet Tencent runs a giant cloud, advertising and fintech services business vulnerable to economic shocks and a slowdown in domestic consumption. Tencent is among the biggest beneficiaries of a Chinese tech renaissance triggered by DeepSeek, whose January release of the R1 model upended the idea of US AI dominance and rekindled interest in homegrown technology. Tencent rushed to buy up AI chips around the end of 2024 to serve growing demand from cloud clients. Its apps, including WeChat and the ChatGPT-style Yuanbao, have gained users since integrating with DeepSeek's offering. To counter a plateauing home market, the world's biggest games publisher has also focused on grooming what it calls evergreen franchises – established titles that players will stick with through multiple versions and updates. 2024's breakout hits, Dungeon & Fighter Mobile and Delta Force, helped Tencent stem a contraction in its marquee business. But it remains to be seen whether players will stick around. Still, investors are betting it will successfully experiment with newer initiatives such as mini-games and the Hunyuan foundation model. Executives including billionaire founder Pony Ma have outlined plans to rely on both third-party and self-made models to win the AI race, mirroring a playbook that seeded Tencent's gaming leadership two decades ago. Many observers have drawn parallels between AI and the rise of smartphone apps – a tidal shift that will create new winners and threaten the old guard. Tencent's longtime foe Alibaba Group has only gotten more aggressive, pledging to spend billions to build data centers and investing in many of China's up-and-coming AI platforms. For now, WeChat remains Tencent's most reliable asset as it takes on bigger monetisation roles in area from advertising to mini-games and TikTok-style shopping. Though broader consumer sentiment remains shaky, Tencent has sought to introduce even more features to its all-in-one platform – including a gifting function that's received a mixed reception from both merchants and buyers. Tencent also remains the undisputed leader in mobile games. It earned roughly four times as much as the second closest publisher in 2024, according to Appfigures. It's unclear whether Tencent can replicate the success of last year. Its pipeline for 2025 includes highly anticipated titles like Honor of Kings: World and the Chinese rollouts of Path of Exile 2 and Goddess of Victory: Nikke. But few are considered sure-fire hits like DnF Mobile, which owed its success to loyal players trying out a fresh version of their PC favorite. In a deal announced in March, Tencent said it will invest about US$1 billion (S$1.3 billion) to acquire a 25 per cent stake in a new entity holding Ubisoft Entertainment's most celebrated intellectual properties. That could give the Chinese company a bigger say in shaping the future of global franchises like Assassin's Creed, which Tencent is adapting for mobile. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
14-05-2025
- Business
- Yahoo
TENCENT ANNOUNCES 2025 FIRST QUARTER RESULTS
Sustained High Quality Revenue GrowthOperating Leverage to Support Strategic AI Investments over Longer Term HONG KONG, May 14, 2025 /PRNewswire/ -- Tencent Holdings Limited (HKEX: 00700 (HKD Counter) and 80700 (RMB Counter), "Tencent" or "the Company"), a world-leading Internet and technology company in China, today announced the unaudited consolidated results for the quarter ended 31 March 2025 ("1Q2025"). Mr. Ma Huateng, Chairman and CEO of Tencent, said, "During the first quarter of 2025, our high-quality revenue streams sustained their solid growth trajectory. AI capabilities already contributed tangibly to 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. 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. We expect these strategic AI investments will create value for users and society, and generate substantial incremental returns for us over the longer term." 1Q2025 Financial HighlightsRevenues: +13% YoY, gross profit: +20% YoY, non-IFRS[1] operating profit: +18% YoY Total revenues were RMB180.0 billion (USD25.1 billion[2]), up 13% over the first quarter of 2024. Gross profit was RMB100.5 billion (USD14.0 billion), up 20% YoY. On a non-IFRS basis, which is intended to reflect core earnings by excluding certain one-time and/or non-cash items: Operating profit was RMB69.3 billion (USD9.7 billion), up 18% YoY. Operating margin increased to 39% from 37% last year. Profit for the period was RMB 62.7 billion (USD8.7 billion), up 22% YoY. Profit attributable to equity holders of the Company for the period was RMB61.3 billion (USD8.5 billion), up 22% YoY. Basic earnings per share were RMB6.735. Diluted earnings per share were RMB6.583. On an IFRS basis: Operating profit was RMB57.6 billion (USD8.0 billion), up 10% YoY. Operating margin decreased to 32% from 33% last year. Profit for the period was RMB49.7 billion (USD6.9 billion), up 17% YoY. Profit attributable to equity holders of the Company for the quarter was RMB47.8 billion (USD6.7 billion), up 14% YoY. Basic earnings per share were RMB 5.252. Diluted earnings per share were RMB5.129. Capital expenditure was RMB27.5 billion (USD3.8 billion), up 91% YoY. Total cash was RMB476.0 billion (USD66.3 billion) and free cash flow was RMB47.1 billion (USD6.6 billion), down 9% YoY. Net cash position totalled RMB90.2 billion (USD12.6 billion). As at 31 March 2025, fair value of our shareholdings[3] in listed investee companies (excluding subsidiaries) totalled RMB653.4 billion (USD91.0 billion) and the carrying book value of our shareholdings in unlisted investee companies (excluding subsidiaries) was RMB337.9 billion (USD47.1 billion). During the first quarter of 2025, the Company repurchased approximately 43.0 million shares on the Hong Kong Stock Exchange for a consideration of approximately HKD17.1 billion. [1] Non-IFRS adjustments excludes share-based compensation, M&A related impact such as net (gains)/losses from investee companies, amortisation of intangible assets, impairment provisions/(reversals), SSV & CPP, income tax effects and others [2] Figures stated in USD are based on USD1 to RMB7.1782 [3] Including those held via special purpose vehicles, on an attributable basis 1Q2025 Business Review and Outlook We provided more onboarding support for Mini Shops merchants, in order to enrich the range of branded product listings, contributing to rapid year-on-year growth in GMV. We rolled out AI features within Weixin to provide more interactive user experiences and increase productivity for content creators and developers. For example, we integrated our AI service Yuanbao as a Weixin contact, powered Weixin Search with large language models (LLMs), and provided a text-prompt image generating tool for Official Accounts. Tencent Video maintained its leading position in China's long-form video market with 117 million[4] video subscribers. Tencent Music sustained its industry leadership in China's music streaming market with 123 million[5] music subscribers. Several of our evergreen games, including Honour of Kings and CrossFire Mobile, achieved record high levels of gross receipts during the seasonally strong first quarter. Delta Force's domestic user base reached a post-launch record of 12 million peak DAU in April 2025. Delta Force became the sixth most popular mobile game by average DAU industry-wide[6], and the highest-DAU new game released in the last three years industry-wide. We upgraded our advertising technology platform with enhanced generative AI capabilities, such as improved image generation and video editing to accelerate advertisement creation, digital human solutions to facilitate live streaming activities, and deeper understanding of merchandise and user interests to deliver better recommendations. Tencent Cloud's audio and video solutions ranked first by revenue for the seventh consecutive year in China[7]. We enhanced the audio and video solutions' content generation, media processing and real-time interaction experience by integrating LLM capabilities. [4] The average daily number of paying users for the first quarter of 2025 [5] The average number of paying users as of the last day of each month during the first quarter of 2025 [6] By DAU among mobile games in domestic market during the first quarter of 2025, according to QuestMobile [7] During 2018-2024, according to IDC Operating Metrics As at 31 March 2025 As at 31 March 2024 Year- on-year change As at 31 December 2024 Quarter- on-quarter change(in millions, unless specified) Combined MAU of Weixin and WeChat 1,402 1,359 3 % 1,385 1 % Mobile device MAU of QQ 534 553 -3 % 524 2 % Fee-based VAS paying users 268 260 3 % 262 2 % 1Q2025 Management Discussion and Analysis Revenues from VAS increased by 17% year-on-year to RMB92.1 billion for the first quarter of 2025. Domestic Games revenues were RMB42.9 billion, representing a 24% year-on-year increase from a low base in the same period last year, driven by growth in revenues from Honour of Kings and Peacekeeper Elite, as well as contributions from recently released DnF Mobile and Delta Force. International Games revenues were RMB16.6 billion, reflecting a 23% year-on-year increase (22% increase on a constant currency basis), driven by growth in revenues from Brawl Stars, Clash Royale and PUBG MOBILE. Social Networks revenues rose by 7% year-on-year to RMB32.6 billion, driven by growth in app-based game virtual item sales, music subscription revenues and Mini Games platform service fees. Revenues from Marketing Services[8] were RMB31.9 billion for the first quarter of 2025, reflecting a 20% year-on-year increase. This growth was primarily due to robust advertiser demand for Video Accounts, Mini Programs and Weixin Search inventories, supported by higher user engagement, ongoing AI upgrades to our advertising platform, and improvements to the transaction ecosystem within Weixin. Marketing Services revenues increased across most major industry categories during the quarter. Revenues from FinTech and Business Services increased by 5% year-on-year to RMB54.9 billion for the first quarter of 2025. FinTech Services revenue growth was due to higher revenues from consumer loan services and wealth management services. Business Services revenue growth was driven by an increase in cloud services revenues and eCommerce technology service fees. For other detailed disclosure, please refer to our website or follow us via Weixin Official Account (Weixin ID: TencentGlobal). [8] Starting third quarter of 2024, we have renamed this revenue segment from "Online Advertising" to "Marketing Services" to better represent the breadth of our marketing solutions and accompanying technology services across our online marketing properties About Tencent Tencent uses technology to enrich the lives of Internet users. Our communication and social services, Weixin and QQ, connect users with each other and with digital content and services, both online and offline, making their lives more convenient. Our targeted marketing services helps advertisers reach out to hundreds of millions of consumers in China. Our FinTech and business services support partners' business growth and assist their digital upgrade. Tencent invests heavily in talent and technological innovation, actively promoting the development of the Internet industry. Tencent was founded in Shenzhen, China, in 1998. Tencent has been listed on the Main Board of the Stock Exchange of Hong Kong since 2004. Investor contact: IR@ contact: GC@ Non-IFRS Financial Measures To supplement the consolidated results of the Group ("the Company and its subsidiaries") prepared in accordance with IFRS, certain additional non-IFRS financial measures (in terms of operating profit, operating margin, profit for the period, profit attributable to equity holders of the Company, basic EPS and diluted EPS) have been presented in this press release. These unaudited non-IFRS financial measures should be considered in addition to, not as a substitute for, measures of the Group's financial performance prepared in accordance with IFRS. In addition, these non-IFRS financial measures may be defined differently from similar terms used by other companies. The Company's management believes that the non-IFRS financial measures provide investors with useful supplementary information to assess the performance of the Group's core operations by excluding certain non-cash items and certain impact of investment-related transactions. In addition, non-IFRS adjustments include relevant non-IFRS adjustments for the Group's major associates based on available published financials of the relevant major associates, or estimates made by the Company's management based on available information, certain expectations, assumptions and premises. Forward-Looking Statements This press release contains forward-looking statements relating to the business outlook, estimates of financial performance, forecast business plans and growth strategies of the Group. These forward-looking statements are based on information currently available to the Group and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realised in the future. Underlying these forward-looking statements are a lot of risks and uncertainties. In light of the risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as representations by the Board or the Company that the plans and objectives will be achieved, and investors should not place undue reliance on such statements. CONDENSED CONSOLIDATED INCOME STATEMENT RMB in millions, unless specifiedUnauditedUnaudited1Q2025 1Q20241Q2025 4Q2024 Revenues 180,022 159,501180,022 172,446 VAS 92,133 78,62992,133 79,022 Marketing Services 31,853 26,50631,853 35,004 FinTech and Business Services 54,907 52,30254,907 56,125 Others 1,129 2,0641,129 2,295 Cost of revenues (79,529) (75,631)(79,529) (81,793) Gross profit 100,493 83,870100,493 90,653 Gross margin 56 % 53 %56 % 53 % Selling and marketing expenses (7,866) (7,536)(7,866) (10,285) General and administrative expenses (33,664) (24,809)(33,664) (31,403) Other gains/(losses), net (1,397) 1,031(1,397) 2,513 Operating profit 57,566 52,55657,566 51,478 Operating margin 32 % 33 %32 % 30 % Net gains/(losses) from investments and others 1,407 6561,407 1,119 Interest income 3,748 4,2483,748 3,910 Finance costs (3,860) (2,826)(3,860) (2,512) Share of profit/(loss) of associates and joint ventures, net 4,581 2,1864,581 9,253 Profit before income tax 63,442 56,82063,442 63,248 Income tax expense (13,717) (14,169)(13,717) (11,781) Profit for the period 49,725 42,65149,725 51,467 Attributable to: Equity holders of the Company 47,821 41,88947,821 51,324 Non-controlling interests 1,904 7621,904 143 Non-IFRS operating profit 69,320 58,61969,320 59,475 Non-IFRS profit attributable to equity holders of the Company 61,329 50,26561,329 55,312 Earnings per share for profit attributable to equity holders of the Company (in RMB per share) - basic 5.252 4.4795.252 5.597 - diluted 5.129 4.3865.129 5.485 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME RMB in millions, unless specifiedUnaudited1Q2025 1Q2024 Profit for the period 49,725 42,651 Other comprehensive income, net of tax: Items that may be subsequently reclassified to profit or loss Share of other comprehensive income of associates and joint ventures 652 (337) Transfer of share of other comprehensive income to profit or loss upon disposal and deemed disposal of associates and joint ventures - (30) Transfer to profit or loss upon disposal of financial assets at fair value through other comprehensive income 1 1 Net gains from changes in fair value of financial assets at fair value through other comprehensive income 106 10 Currency translation differences 2,294 (3,929) Net movement in reserves for hedges (213) (782) Items that will not be subsequently reclassified to profit or loss Share of other comprehensive income of associates and joint ventures 522 (120) Net gains from changes in fair value of financial assets at fair value through other comprehensive income 26,361 15,918 Currency translation differences 370 (463) Net movement in reserves for hedges 6 -30,099 10,268 Total comprehensive income for the period 79,824 52,919 Attributable to: Equity holders of the Company 75,858 51,673 Non-controlling interests 3,966 1,246 OTHER FINANCIAL INFORMATION RMB in millions, unless specifiedUnaudited1Q2025 1Q2024 4Q2024 EBITDA (a) 73,817 65,094 63,917 Adjusted EBITDA (a) 81,559 69,259 69,579 Adjusted EBITDA margin (b) 45 % 43 % 40 % Interest and related expenses 3,386 3,044 3,340 Net cash/(debt)(c) 90,229 92,534 76,798 Capital expenditures (d) 27,476 14,359 36,578 Note: (a) EBITDA is calculated as operating profit minus other gains/(losses), net, and adding back depreciation of property, plant and equipment, investment properties as well as right-of-use assets, and amortisation of intangible assets and land use rights. Adjusted EBITDA is calculated as EBITDA plus equity-settled share-based compensation expenses (b) Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues (c) Net cash/(debt) represents period end balance and is calculated as cash and cash equivalents, plus term deposits and others, including highly liquid investment products held for treasury purpose, minus borrowings and notes payable (d) Capital expenditures primarily consist of investments in technology IT infrastructure (including computer equipment, components, and software), data centres, land user rights, office premises and intellectual properties (excluding media content) CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONRMB in millions, unless specifiedUnaudited AuditedAs at 31 March, 2025 As at 31 December, 2024 ASSETSNon-current assets Property, plant and equipment 91,72780,185 Land use rights 22,92823,117 Right-of-use assets 17,08517,679 Construction in progress 13,25012,302 Investment properties 900801 Intangible assets 207,641196,127 Investments in associates 305,487290,343 Investments in joint ventures 7,1387,072 Financial assets at fair value through profit or loss 202,869204,999 Financial assets at fair value through other comprehensive income 337,527302,360 Prepayments, deposits and other assets 49,95942,828 Other financial assets 9781,076 Deferred income tax assets 29,49028,325 Term deposits 98,06677,6011,385,0451,284,815 Current assets Inventories 427440 Accounts receivable 49,31148,203 Prepayments, deposits and other assets 102,015101,044 Other financial assets 4,4804,750 Financial assets at fair value through profit or loss 30,2129,568 Financial assets at fair value through other comprehensive income 5,4443,345 Term deposits 132,549192,977 Restricted cash 3,5443,334 Cash and cash equivalents 205,253132,519533,235496,180 Total assets 1,918,2801,780,995 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) RMB in millions, unless specified Unaudited Audited As at 31 March, 2025 As at 31 December, 2024 EQUITY Equity attributable to equity holders of the Company Share capital-- Share premium47,02043,079 Treasury shares(2,777)(3,597) Shares held for share award schemes(5,377)(5,093) Other reserves80,29147,129 Retained earnings921,297892,030 1,040,454973,548Non-controlling interests82,48480,348Total equity1,122,9381,053,896LIABILITIES Non-current liabilities Borrowings209,079146,521 Notes payable123,240130,586 Long-term payables 11,49510,201 Other financial liabilities4,8314,203 Deferred income tax liabilities20,07018,546 Lease liabilities13,40513,897 Deferred revenue4,4806,236386,600330,190Current liabilities Accounts payable125,488118,712 Other payables and accruals71,53284,032 Borrowings44,15152,885 Notes payable9,3268,623 Current income tax liabilities18,95616,586 Other tax liabilities5,1194,038 Other financial liabilities5,8466,336 Lease liabilities5,4425,600 Deferred revenue122,882100,097408,742396,909Total liabilities795,342727,099Total equity and liabilities1,918,2801,780,995 RECONCILIATIONS OF THE GROUP'S NON-IFRS FINANCIAL MEASURES TO THE NEAREST MEASURES PREPARED IN ACCORDANCE WITH IFRSAs reported Adjustments Non-IFRS RMB in millions, unless specified Share-based compensation (a) Net (gains)/losses from investee companies (b) Amortisation of intangible assets (c) Impairment provisions/ (reversals) (d) SSV & CPP (e) Income tax effects (f)Unaudited three months ended 31 March 2025 Operating profit 57,566 10,100 – 1,515 – 139 – 69,320 Share of profit/(loss) of associates and joint ventures, net 4,581 968 111 1,713 267 – – 7,640 Profit for the period 49,725 11,068 (31) 3,228 (689) 160 (769) 62,692 Profit attributable to equity holders 47,821 10,833 1,081 2,854 (719) 160 (701) 61,329 Operating margin 32 % 39 %Unaudited three months ended 31 March 2024 Operating profit 52,556 4,694 – 1,249 – 120 – 58,619 Share of profit/(loss) of associates and joint ventures, net 2,186 1,509 (459) 1,556 699 – – 5,491 Profit for the period 42,651 6,203 (1,476) 2,805 1,562 132 (535) 51,342 Profit attributable to equity holders 41,889 6,035 (1,449) 2,589 1,541 132 (472) 50,265 Operating margin 33 % 37 %Unaudited three months ended 31 December 2024 Operating profit 51,478 6,140 – 1,416 – 441 – 59,475 Share of profit/(loss) of associates and joint ventures, net 9,253 1,003 (3,799) 1,176 116 – – 7,749 Profit for the period 51,467 7,143 (6,888) 2,592 1,760 1,109 (706) 56,477 Profit attributable to equity holders 51,324 7,034 (6,931) 2,396 1,037 1,109 (657) 55,312 Operating margin 30 % 34 % Note: (a) Including put options granted to employees of investee companies on their shares and shares to be issued under investee companies' share-based incentive plans which can be acquired by the Group, and other incentives (b) Including net (gains)/losses on deemed disposals/disposals of investee companies, fair value changes arising from investee companies, and other expenses in relation to equity transactions of investee companies (c) Amortisation of intangible assets resulting from acquisitions (d) Mainly including impairment provisions/(reversals) for associates, joint ventures, goodwill and other intangible assets arising from acquisitions (e) Mainly including donations and expenses incurred for the Group's Sustainable Social Value and Common Prosperity Programme ("SSV & CPP") initiatives (f) Income tax effects of non-IFRS adjustments View original content: SOURCE Tencent
