Tencent revenue growth further slowed in the fourth quarter of 2021, rising just 8% to US$22.6 billion – its slowest topline growth since going public in 2004, and even slower than the 13% revenue growth it saw in Q3 2021.
The Chinese tech giant’s Q4 operating profit rose 72% to US$17.2 billion from the same quarter last year, as per international financial reporting standards (IFRS). However, on a non-IFRS basis, its operating profit declined by 13% to US$5.2 billion.
Photo credit: Tencent
However, the company posted a 16% growth in revenue on an annual basis in 2021 to US$87.9 billion. Its reported net profit grew by 42% to US$35.7 billion for the year.
The topline of value-added services (VAS), Tencent’s main revenue driver, grew 7% in Q4 2021. Domestic games revenue inched up just 1% on the back of subdued earnings from Honour of Kings and new titles like Fight of The Golden Spatula and League of Legends: Wild Rift. On the other hand, International games revenue fared better in Q4, posting a 34% growth in revenue, driven by new content for Valorant and Clash Royale.
Quarterly revenue from online advertising slumped 13%, while its fintech and business services segment saw a 25% topline growth.
For the full year 2021, Tencent reported a 16% year-over-year revenue growth. Operating profit and net profit increased by 47% and 42%, respectively.
The VAS segment saw a 10% growth in 2021, whereas the fintech and business vertical grew 34%. Online advertising revenue was up 8%.
See also: Tencent’s financial health in 5 charts
Ma Huateng, Tencent’s chairperson and CEO, described 2021 as a “challenging year” as the company embraced changes and implemented certain measures to “reinforce the company’s long-term sustainability,” which hurt its revenue growth.
“We are proactively adapting to the new environment by managing costs, increasing efficiency, sharpening our focus on key strategic areas, and repositioning ourselves for sustainable long-term growth,” he said in a statement.
Editing by Collin Furtado and Arpit Nayak
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