Tencent Holdings Ltd · HKEX:700
Tencent — Q2 2024 Earnings Presentation
23 slides from Tencent's earnings presentation, Aug 14, 2024
Slide 1: 2024 Second Quarter Results Presentation
2024 Second Quarter Results Presentation Aug 14, 2024
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
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Slide 4: Financial Highlights
Financial Highlights In billion RMB 2Q2024 2Q2023 YoY 1Q2024 QoQ Total Revenue 161.1 149.2 +8% 159.5 +1% Value-added Services 78.8 74.2 +6% 78.6 +0.2% Social Networks 30.3 29.7 +2% 30.5 -0.6% Domestic Games 34.6 31.8 +9% 34.5 +0.2% International Games 13.9 12.7 +9% 13.6 +2% Online Advertising 29.9 2
Slide 5: Key Services Update
Key Services Update Weixin & WeChat • #1 mobile community China • MAU at 1,371m • #1 by users and QQ revenue Games • Mobile devices MAU at Global 571m • #1 by revenue Mobile Payment Premium Content Digital • #1 by MAU & DAU FinTech • #1 by paid Content subscriptions including video, music, literatur
Slide 6: 2. Business Review
1. Overview 2. Business Review
Slide 7: Revenue
Revenue Revenue Growth (YoY %) +20% +13% +8% +0.1% -3% -2% +0.5% +11% +11% +10% +7% +6% +8% Revenue by Segment (billion RMB) 159.5 161.1 154.6 155.2 1% 1% 150.0 149.2 1% 1% 142.4 144.2 145.0 1% 1% 138.3 140.1 1% 1% 2% 135.5 134.0 1% 1% 1% 1% 31% 33% 32% 34% 35% 32% 30% 33% 32% 33% 30% 32% 32% 17% 19
Slide 8: Gross Profit
Gross Profit Gross Profit Growth (YoY %) +18% +11% -2% -9% -8% -1% +7% +19% +22% +23% +25% +23% +21% 83.9 85.9 Gross Profit by Segment (billion RMB) 76.5 77.6 70.8 28% 68.2 28% 62.7 62.7 62.0 61.9 28% 31% 57.8 57.1 57.9 26% 25% 21% 20% 24% 26% 19% 24% 17% 23% 24% 18% 13% 17% 17% 22% 18% 16% 16% 12%
Slide 9: Value-added Services
Value-added Services In billion RMB Social Networks +6% +0.2% • Revenue returned to positive growth, up 2% YoY, driven by increased YoY QoQ revenue from music and video subscriptions, Mini Games platform service fees, and app-based games item sales, partially offset by decreased revenue 78.8 78.6 78
Slide 10: Communications & Social Networks
Communications & Social Networks • Total user time spent increased substantially YoY, benefitting from enhanced algorithms and more local content • Number of creators that generated closed-loop revenue from Video Accounts more than tripled YoY in 2Q24 a Video Accounts • We are enhancing transaction
Slide 11: Domestic Games
Domestic Games Revitalised evergreen titles Impactful new releases • Peacekeeper Elite gross receipts grew by double- • DnF Mobile emerged as one of the most successful digit % YoY in 2Q24 on appealing Egyptian- and mobile games in China; attracted fans of DnF IP with anime-themed outfits; DAU resum
Slide 12: International Games
International Games PUBG MOBILE Brawl Stars Average DAU and gross Gross receipts grew more than receipts increased double-digit tenfold YoY in 2Q24. Average % YoY in 2Q24, benefitting DAU achieved historical high from new Mecha Fusion mode, and ranked #3 mobile game1, Golden Moon event, and lion- du
Slide 13: Online Advertising
Online Advertising In billion RMB Overall +19% +13% YoY QoQ • Revenue grew 19% YoY, driven by increased ad spend from most categories, particularly games, eCommerce and education • Upgraded machine learning platform to analyse user interests over a longer time horizon, and to process signals more fr
Slide 14: FinTech and Business Services
FinTech and Business Services In billion RMB FinTech Services +4% -4% YoY QoQ • Revenue slowed to low single digit growth YoY • Commercial payment revenue growth moderated as number of transactions continued to increase at healthy rate YoY, but average value per transaction declined YoY • Consumer l
Slide 15: 3. Financial Review
1. Overview 3. Financial Review
Slide 16: Income Statement
Income Statement In billion RMB 2Q2024 2Q2023 YoY 1Q2024 QoQ Revenue 161.1 149.2 +8% 159.5 +1% COPS (75.2) (78.4) -4% (75.6) -0.5% Gross profit 85.9 70.8 +21% 83.9 +2% Operating expenses (36.7) (33.7) +9% (32.3) +13% Other gains/(losses), net1 1.5 (0.8) N/A 1.0 +44% Operating profit1 50.7 36.3 +40%
Slide 17: Non-IFRS Adjustments
Non-IFRS Adjustments Net (gains)/ Amortisation IFRS losses from Impairment Non-IFRS In billion RMB SBC of intangible SSV & CPP3 Tax effects YoY change QoQ change 2Q2024 investee provisions2 2Q2024 assets companies1 Operating profit 50.7 6.2 - 1.3 - 0.2 - 58.4 +27% -0.3% Share of profit of associates
Slide 18: Gross Margins
Gross Margins 52.6 53.3 49.5 50.0 47.5 45.4 44.1 44.2 45.5 42.1 43.2 42.6 40.1 Overall Gross Margin (%) 55.5 57.3 57.0 52.9 53.0 53.9 54.0 53.7 50.4 50.6 51.7 48.7 49.8 Value-added Services (%) 56.8 54.8 55.6 52.3 48.8 46.4 46.3 48.9 42.7 44.2 41.7 40.6 36.7 Online Advertising (%) 45.6 47.6 43.9 38.
Slide 19: Operating Expenses
Operating Expenses S&M R&D G&A (excl. R&D) in billion RMB in billion RMB in billion RMB +10% +21% +8% +10% +9% +12% YoY QoQ YoY QoQ YoY QoQ 17.3 17.3 16.0 15.7 10.2 10.2 9.2 9.2 9.4 9.1 8.3 7.5 2Q23 2Q24 1Q24 2Q24 2Q23 2Q24 1Q24 2Q24 2Q23 2Q24 1Q24 2Q24 Non-IFRS Non-IFRS Non-IFRS 2Q24 S&M grew by 11
Slide 20: Non-IFRS Operating Margin
Non-IFRS Operating Margin 36.8 36.3 33.4 31.7 30.9 30.0 28.9 27.3 27.3 25.6 25.1 25.2 21.7 (%) 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 20
Slide 21: CAPEX, FCF and Cash Position
CAPEX, FCF and Cash Position In billion RMB 2Q2024 2Q2023 YoY 1Q2024 QoQ Operating CAPEX 7.2 3.0 +144% 6.6 +8% Non-operating CAPEX 1.5 1.0 +53% 7.8 -80% Total CAPEX 8.7 4.0 +121% 14.4 -39% Operating Cash Flow 54.1 40.7 +33% 72.3 -25% Less: CAPEX Paid (5.9) (3.0) +100% (15.2) -61% Payments for media
Slide 22: 4. Q&A
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Slide 23: Thank you!
Tencent Holdings Limited 2024 Second Quarter Results Presentation Thank you! https://www.tencent.com/ir