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Here are three key takeaways from Tencent Holdings’ results from the first quarter of 2024:
1. Growth powered by ads revenue
Total revenues rose to US$22.5 billion, marking a 6% year-over-year uptick. This was driven by strong growth in Tencent’s online advertising business, which was up by 26% year on year to US$4 billion. The company attributed this to increased user engagement as well as an “ongoing enhancement” of its AI-powered advertising infrastructure.
2. Profit up by 30% year on year
The company’s non-IFRS operating profit jumped 30% year over year to US$8.3 billion, and the operating margin expanded to 37%. The growth in operating profit margins was attributed to “high-quality revenue streams” such as in advertising, platform service fees for its Mini Games business, and ecommerce tech service fees.
3. Investment in technology and shareholder returns
Management highlighted ongoing investments in AI technology, platform enhancements, and high-production-value content. At the same time, the company’s also focusing on shareholder returns through increased dividends and a share buyback plan with a target of over HK$100 billion (US$12.8 billion) for 2024. This showed up in the sharp increase in capital expenditures to almost US$2 billion in Q1 2024 from US$608 million in the same period last year.
See also: Asia tech firms go big on buybacks, but outcomes are mixed
This article was written with the help of AI.
Currency converted from Hong Kong dollar to US dollar: US$1 = HK$.
Editing by Simon Huang and Dhania Putri Sarahtika
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