Tencent Holdings report The report said that although the company is increasing spending on artificial intelligence, second-quarter revenue rose about 11% due to strong revenue from advertising and games. Reuters. The company reported unaudited consolidated results for the quarter ended June 30.
Revenue was 204.8 billion yen ($30.3 billion), above the 202.2 billion yen consensus of analysts surveyed by LSEG. However, IFRS net profit attributable to shareholders rose 0.7% year-on-year to 56 billion yen ($8.3 billion), below analysts’ expectations of 61.8 billion yen. Net profit (non-IFRS) attributable to the company’s shareholders amounted to 68.4 billion yen ($10.1 billion, up 9%).
Capital expenditures in the second quarter reached 52.8 billion yen (US$7.8 billion), an increase of 176% over the same period last year and an increase of 66% over the first quarter. Capital expenditures will be approximately 79 billion yen in 2025 and 77 billion yen in 2024. The company has stated that it will further increase investment in artificial intelligence in the second half of this year.
Image source: Tencent
«We are confident in the possibility of making significant investments in artificial intelligence because it not only has huge potential for growth but also has clear protections against negative consequences. “ ——Tencent President Liu Chiping reportedly said in a conference call with analysts register. He said that if Tencent rents computing power in the way that New Cloud does, it will “quickly make a substantial profit” because it receives bids for computing power “with a profit of more than 30% compared to the price we paid a few months ago.”
Chief Strategy Officer James Mitchell said demand for computing resources is so high that Tencent will be able to recoup its capital expenditures “Almost immediately”. Mr. Liu pointed out that Tencent “We are pursuing a broader strategy to devote a significant portion of our new computing resources to building our own state-of-the-art models and deploying, promoting and positioning our own AI applications as a market leader in the Chinese market.”
If the company can provide “We can achieve superior intelligence through advanced models and market-leading artificial intelligence applications…In the long term, we can achieve superior economic returns.”“The person in charge of Tencent said. Profits will come from token sales for services like WorkBuddy, an office assistant that Tencent says is a group of people who can “Scheduling, executing and running tasks in parallel, returning complete results from start to finish in a single thread”. Tencent also provides code generation tool CodeBuddy, which Mitchell said can speed up cloud migration projects, thereby creating more opportunities for Tencent’s cloud services.
Tencent’s value-added services revenue (including gaming business) grew 8% to 98.4 billion yen ($14.6 billion). Marketing services revenue grew 22% to 43.6 billion yen ($6.5 billion) as artificial intelligence drove advertising and pricing changes in the service ecosystem such as WeChat messaging, payments and social media. Revenue from financial technology and business services grew 9% to 60.3 billion yen ($8.9 billion), with demand for artificial intelligence-related cloud services remaining a key driver of growth.
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