Futu News reported on May 17 that Tencent announced its results for the first quarter ending March 31, 2023. The financial report showed:

• Q1 revenue was 149.996 billion yuan (RMB, same below), an increase of 11% over the previous year;

• Q1 net profit was 25.838 billion yuan, an increase of 10% over the previous year;

• The adjusted net profit for Q1 was $32.538 billion, an increase of 27% over the previous year.

Furthermore, the number of consolidated monthly active accounts of WeChat and WeChat was 1,319 million, an increase of 2% over the previous year; the number of monthly active accounts on QQ mobile terminals was 597 million, an increase of 6% over the previous year.

Looking at the specific revenue segment:

• Value-added service business

Q1 revenue increased 9% year over year to RMB 79.3 billion. Game revenue in the international market increased 25% to RMB 13.2 billion. Excluding exchange rate fluctuations, the increase was 18%. This was driven by the strong performance of the recently released “Goddess of Victory: Nikki” and “Triple Match 3D” and the steady growth of “VALORANT”. Game revenue in the local market increased 6% to RMB 35.1 billion, benefiting from increased revenue from “Wang Zhe Rongyao”, “DnF” and “Crossing the Line of Fire”, as well as incremental revenue from the recently released “Breaking Through the Dark Zone”. Social networking revenue increased 6% to RMB 31 billion, driven by in-game virtual item sales and paid music membership services.

• Online advertising business

Q1 revenue increased 17% year over year to RMB 21 billion, thanks to new revenue sources for video accounts, increased advertising in applets, and the recovery of mobile advertising networks. Advertising spending in most industries increased year over year, thanks to a recovery in Chinese consumption, while our upgraded advertising infrastructure further amplified this benefit. Major e-commerce platforms are gradually acknowledging our service as a key user acquisition channel, thereby increasing advertising expenses with us.

• Fintech and corporate services business

Q1 revenue increased 14% year over year to RMB 48.7 billion. Compared to the fourth quarter of 2022, the year-on-year growth of fintech services accelerated, mainly due to the resumption of commercial payment activity due to a rebound in Chinese consumption. Revenue from the enterprise service business was revised to a year-on-year growth rate during the period, thanks to increased sales of some cloud services and the first revenue generated by technical service fees associated with live video delivery transactions.

Editor/Somer