Tencent Holdings Ltd · HKEX:700
Tencent — Q4 2024 Earnings Presentation
31 slides from Tencent's earnings presentation, Mar 19, 2025
Slide 1: 2024 Fourth Quarter and Annual Results Presentation
2024 Fourth Quarter and Annual Results Presentation Mar 19, 2025 1
Slide 2: Cautionary Note
Cautionary Note This presentation may contain forward-looking statements relating to the forecasts, targets, outlook, estimates of financial performance, opportunities, challenges, business developments, business plans and growth strategies of Tencent Holdings Limited (the “Company” or “Tencent”) an
Slide 3: 1. Overview
1. Overview 3
Slide 4: 2024 Annual Highlights
2024 Annual Highlights Reinforcing long-term franchise value of our key services • Deepened Weixin ecosystem via launch of Mini Shops and upgrade of Weixin Search • Grew Video Accounts user time rapidly YoY, benefitting from enhanced algorithms and more local content; number of creators that generat
Slide 5: Financial Highlights
Financial Highlights In billion RMB 4Q2024 YoY QoQ FY2024 YoY Total Revenue 172.4 +11% +3% 660.3 +8% Value-added Services 79.0 +14% -4% 319.2 +7% Social Networks 29.8 +6% -3% 121.5 +2% Domestic Games1 33.2 +23% -11% 139.7 +10% International Games 16.0 +15% +10% 58.0 +9% Marketing Services2 35.0 +17%
Slide 6: 2. Investing in AI for Growth
2. Investing in AI for Growth
Slide 7: Investing in AI for Growth
Investing in AI for Growth 1 Building HY Foundation Model: significant investment and progress 2 Adopting multi-model strategy to provide best AI experience to users 3 Accelerating AI integration into enterprise-facing services 4 Unlocking growth multiplier for existing businesses 5 Stepping up inve
Slide 8: Building HY Foundation Model: Significant Investment and Progress
Building HY Foundation Model: Significant Investment and Progress Thesis ➢ Established AI lab in 2016. Since 2023, investing heavily in our proprietary HY Foundation Model ➢ Investment in HY allows us to: 1) develop end-to-end foundation model capabilities in terms of infrastructure, algorithm, trai
Slide 9: Adopting Multi-Model Strategy to Provide Best AI Experience to Users
Adopting Multi-Model Strategy to Provide Best AI Experience to Users Multi-model strategy Consumer-facing applications • Seek to provide best user experience leveraging all Yuanbao, breakout AI-native application available models • Users can select among multiple models (CoT reasoning • Different AI
Slide 10: Accelerating AI Integration into Enterprise-facing Services
Accelerating AI Integration into Enterprise-facing Services • Hyper Computing Cluster (HCC) enables enterprises to run high-performance AI training and inference with low latency IaaS and elastic scalability • Hyper Application Inventor (HAI) provides “one click” deployment of mainstream foundation
Slide 11: Unlocking Growth Multiplier for Existing Businesses
Unlocking Growth Multiplier for Existing Businesses AI enhances entertainment content AI boosts ad targeting & ad content creation production & experience • Enhanced our ad system with neural network AI Games capabilities since 2015 • Adopted machine learning technology in our PvP games • Rebuilt ou
Slide 12: Stepping Up Investment in AI
Stepping Up Investment in AI CAPEX (billion USD) Realign teams for AI • Reorganised our AI teams to sharpen focus on both fast product innovation and deep model research Deploy CAPEX on AI • Support internal business needs, such as ad tech, content 10.7 recommendation and games • Train foundation mo
Slide 13: 3. Business Review
3. Business Review
Slide 14: Revenue
Revenue Revenue Growth (YoY %) +0.1% -3% -2% +0.5% +11% +11% +10% +7% +6% +8% +8% +11% -1% +10% +8% 660.3 Revenue by Segment (billion RMB) 1% 172.4 609.0 167.2 1% 161.1 1% 554.6 159.5 1% 154.6 155.2 1% 1% 150.0 149.2 1% 32% 145.0 1% 1% 140.1 1% 1% 135.5 1% 33% 134.0 1% 32% 33% 1% 1% 33% 31% 32% 32%
Slide 15: Gross Profit
Gross Profit Gross Profit Growth (YoY %) -9% -8% -1% +7% +19% +22% +23% +25% +23% +21% +16% +17% -3% +23% +19% Gross Profit by Segment (billion RMB) 349.2 88.8 90.7 85.9 83.9 76.5 77.6 293.1 29% 29% 29% 70.8 28% 68.2 28% 238.7 28% 62.0 61.9 28% 31% 57.1 57.9 25% 26% 24% 19% 24% 26% 18% 22% 17% 19% 2
Slide 16: Value-added Services
Value-added Services Revenue in billion RMB Social Networks +7% • 4Q24 revenue up 6% YoY, driven by increased revenue from app-based games YoY item sales, music subscriptions, and Mini Games platform service fees +14% -4% YoY QoQ 319.2 298.4 • Music subscription revenue increased 18% YoY, as subscri
Slide 17: Communications & Social Networks
Communications & Social Networks Mini Shops Weixin Search • Mini Shops, our platform for indexed and standardised • Weixin Search continued solid growth in QV and revenue merchandise, is introducing several new features to stimulate new and repeat transactions • Integrating HunYuan and DeepSeek LLM
Slide 18: Domestic Games
Domestic Games Appealing content boosted evergreen games during 4Q24 • HoK: Gross receipts grew by double-digit % YoY on higher DAU, IP tie-in with Detective Conan • VALORANT: Gross receipts more than doubled YoY on higher DAU, collaborations with EDG and Arcane S.2 • Fight of the Golden Spatula: Gr
Slide 19: International Games
International Games Brawl Stars Path of Exile 2 Warframe • Ranked #3 mobile game by DAU • Action RPG with highly customisable • Major expansion pack Warframe: in international markets in 20241 and in-depth character development 1999 boosted DAU and gross system receipts in 4Q24 • Gross receipts grew
Slide 20: Marketing Services
Marketing Services Revenue in billion RMB Overall +20% YoY • 4Q24 revenue grew 17% YoY, benefitting from higher user engagement and ongoing AI upgrade of advertising platform +17% +17% YoY QoQ • Enhanced AI models facilitate more holistic understanding of users’ interests and how users are respondin
Slide 21: FinTech and Business Services
FinTech and Business Services Revenue in billion RMB FinTech Services +4% • Revenue resumed low single-digit YoY growth in 4Q24, benefitting from YoY improved commercial payment volume, and increases in wealth +3% +6% management and consumer loan services YoY QoQ • Commercial payment revenue improve
Slide 22: 4. Financial Review
4. Financial Review
Slide 23: Income Statement
Income Statement In billion RMB 4Q2024 YoY QoQ FY2024 YoY Revenue 172.4 +11% +3% 660.3 +8% COPS (81.7) +5% +4% (311.1) -2% Gross profit 90.7 +17% +2% 349.2 +19% Operating expenses (41.7) +9% +8% (149.1) +8% Other gains, net 2.5 +27% -16% 8.0 +70% Operating profit 51.5 +24% -3% 208.1 +30% Net gains f
Slide 24: Non-IFRS Adjustments
Non-IFRS Adjustments Net (gains)/ Amortisation IFRS losses from Impairment SSV & Tax Non-IFRS YoY QoQ Non-IFRS YoY In billion RMB SBC of intangible 4Q2024 investee provisions2 CPP3 effects 4Q2024 change change FY2024 change assets companies1 Operating profit 51.5 6.2 - 1.4 - 0.4 - 59.5 +21% -3% 237.
Slide 25: Gross Margins
Gross Margins 52.6 53.3 53.1 52.6 49.5 50.0 52.9 47.5 48.1 44.2 45.5 42.1 43.2 42.6 43.1 Overall Gross Margin (%) 57.3 57.0 57.5 55.9 53.9 54.0 55.5 56.9 53.7 54.3 50.4 50.6 51.7 50.6 49.8 Value-added Services (%) 56.8 55.6 57.7 55.4 52.3 54.8 53.0 48.9 50.6 46.3 44.2 40.6 41.7 42.3 36.7 Marketing S
Slide 26: Operating Expenses
Operating Expenses S&M R&D G&A (excl. R&D) in billion RMB in billion RMB in billion RMB -6% +9% +21% +11% +8% +4% YoY QoQ YoY QoQ YoY QoQ 11.0 10.3 10.3 19.8 17.9 19.8 10.8 11.6 11.2 11.6 9.4 16.4 4Q23 4Q24 3Q24 4Q24 4Q23 4Q24 3Q24 4Q24 4Q23 4Q24 3Q24 4Q24 +6% +10% +7% YoY YoY YoY 34.2 36.4 64.1 70.
Slide 27: Non-IFRS Operating Margin
Non-IFRS Operating Margin 36.8 36.6 36.3 36.0 34.5 33.4 31.7 31.5 30.9 30.0 27.3 25.8 25.6 25.2 25.1 (%) 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 FY2022 FY2023 FY2024 27
Slide 28: CAPEX, FCF and Cash Position
CAPEX, FCF and Cash Position In billion RMB 4Q2024 YoY QoQ FY2024 YoY Operating CAPEX 34.9 +421% +138% 63.4 +267% Non-operating CAPEX 1.7 +103% -31% 13.4 +102% Total CAPEX 36.6 +386% +114% 76.8 +221% Operating Cash Flow 54.0 +0.2% -31% 258.5 +16% Less: CAPEX Paid (39.0) +317% +225% (72.1) +218% Paym
Slide 29: Share Repurchase and Annual Dividend
Share Repurchase and Annual Dividend • Repurchased ~307 million shares for a consideration of ~HKD112 billion to shareholders during FY2024 In millions 2024 2023 YoY Issued shares, at 1 January 9,483 9,569 -0.9% Shares issued for employee share option and share award schemes 58 55 +5% Shares repurch
Slide 30: Overview / Investing in AI for Growth / Business Review / Financial Review / Q&A
in fF wns Overview Investing in Al for Growth Business Review Financial Review Q&A
Slide 31: Thank you!
Tencent Holdings Limited 2024 Fourth Quarter and Annual Results Presentation Thank you! https://www.tencent.com/ir