Tencent’s 2024 Performance: A Year of Resilient Growth and Strategic AI Investments

Tencent Holdings Limited, China’s leading technology and entertainment conglomerate, has delivered a strong financial performance for the fiscal year 2024. Despite ongoing regulatory challenges and global economic uncertainties, the company reported solid revenue growth, higher profitability, and significant investments in artificial intelligence (AI) to drive future expansion.

Financial Highlights: Steady Growth Across Key Segments

Tencent recorded total revenue of RMB 660.3 billion in FY24, reflecting an 8% year-on-year (YoY) increase. The company's gross profit surged 19% to RMB 349.2 billion, while operating profit grew 30% to RMB 208.1 billion. Net profit attributable to equity holders witnessed a remarkable 68% YoY increase, reaching RMB 194.1 billion.

In Q4 2024, revenue rose 11% YoY to RMB 172.4 billion, with double-digit growth in several business segments. The strong financial results were driven by revenue diversification, increased efficiencies, and Tencent's continued dominance in digital entertainment, advertising, and fintech services.

Key Business Segments Performance

1. Value-Added Services (VAS) – RMB 319.2 Billion (+7% YoY)

• Gaming Business Expands Evergreen Titles: Tencent’s gaming segment maintained robust performance, with domestic games revenue rising 10% YoY to RMB 139.7 billion, supported by titles such as Honor of Kings and VALORANT.

• International Games Growth: Revenue from international gaming climbed 9% YoY to RMB 58.0 billion, driven by strong demand for PUBG Mobile, Brawl Stars, and Path of Exile 2.

• Social Networks & Digital Content: Tencent Music achieved 121 million subscribers, while Tencent Video strengthened its market leadership with three self-commissioned dramas ranking in the top five industry-wide.

Revenue from international gaming climbed 9% YoY to RMB 58.0 billion, driven by strong demand for PUBG Mobile, Brawl Stars, and Path of Exile 2. Source: Tencent Investor Presentation 2024

2. Marketing Services – RMB 121.4 Billion (+20% YoY)

• Revenue from marketing services (formerly online advertising) experienced a 17% YoY surge in Q4, benefiting from enhanced AI-powered advertising capabilities and increased engagement on Tencent’s Weixin ecosystem, including Video Accounts and Mini Programs.

• Video Accounts' Monetization Success: The number of content creators earning revenue through Video Accounts doubled YoY, driving higher advertiser demand.

3. FinTech & Business Services – RMB 212.0 Billion (+4% YoY)

• FinTech Expansion: Tencent upgraded its risk control measures and optimized payment funding costs, leading to improved profitability in commercial payment services and wealth management solutions.

• Cloud Services Growth: Tencent Meeting's AI-powered features drove a 40% YoY increase in revenue, while WeCom (enterprise communication tool) more than doubled its revenue YoY.

AI Investments: Powering the Next Growth Phase

Tencent significantly ramped up its AI investments in 2024, focusing on multi-modal foundation models and AI-powered applications across gaming, advertising, and cloud services.

• HunYuan Foundation Model: Tencent’s proprietary AI model saw major advancements, with applications in ad targeting, content recommendation, and chatbot interactions.

• AI-Powered Video & Music Production: Tencent integrated AI into game development, video streaming, and music content creation, enhancing user engagement and content monetization.

• Enterprise AI Solutions: Tencent Cloud's AI cloud revenue doubled YoY, driven by demand for Hyper Computing Cluster (HCC) and Hyper Application Inventor (HAI), which facilitate AI model deployment for enterprises.

Shareholder Value & Capital Allocation

Tencent focused on enhancing shareholder returns through share repurchases and dividend payouts:

• HKD 112 billion worth of shares repurchased in FY24 (+127% YoY).

• HKD 32 billion in dividends paid (+39% YoY).

• Proposed 2024 dividend of HKD 4.50 per share (+32% YoY), subject to shareholder approval.

Outlook for 2025

Looking ahead, Tencent plans to continue its AI-driven strategy, further monetize its Weixin ecosystem, and expand its gaming portfolio. The company is also accelerating GPU investments to support internal AI applications and expand its cloud services for enterprises.

As Tencent positions itself at the forefront of China’s digital transformation, its commitment to AI, advertising technology, and financial services is expected to drive long-term sustainable growth.