China’s tech giant Tencent outperformed expectations in the second quarter, increasing its revenue by 15% year-over-year. The company achieved revenue of 184.5 billion yuan ($25.7 billion), boosted by strong game sales and AI integrations; exceeding analyst estimates of 178.5 billion yuan.
The gaming sector was again the main growth engine. Domestic revenue increased by 17% to 40.4 billion yuan, while international revenue jumped 35% to 18.8 billion yuan. Honor of Kings and Dungeon & Flagship games like Fighter Mobile have been influential in this rise. Advertising revenue also increased by 20% to 35.8 billion yuan, with AI-powered targeting technologies playing a significant role. Net profit was 55.6 billion yuan, exceeding expectations (52.3 billion yuan). Tencent has rapidly increased its AI investments over the past two years. Capital expenditures, which were 76.8 billion yuan in 2024, are expected to reach a “low percentage teens” of revenues in 2025. Capital expenditures more than doubled year-on-year in the second quarter, reaching 19.1 billion yuan. The company’s self-developed language model, Hunyuan, was updated with the “Turbo S” version in February. Additionally, Tencent, which integrates DeepSeek technology into its platforms including WeChat, has made its AI assistant, Yuanbao, the most downloaded iPhone app in China. The company’s self-developed language model, Hunyuan, was updated with the “Turbo S” version in February.
