Nikada
Tencent (OTCPK:TCEHY) (OTCPK:TCTZF) Q2 earnings and revenue rose but fell short of analysts expectations.
Profit attributable to equity holders of the company grew 41% year-over-year to RMB26.17B verus consensus estimate of RMB33.42B, according to a CNBC report.
EPS was RMB2.695, compared to RMB1.915 in Q2 2022.
Q2 revenue grew 11% year-over-year to RMB149.21B but fell short of analysts’ consensus estimates of RMB151.73B.
“During the second quarter of 2023, we sustained a solid revenue growth rate, along with a gravitation toward high quality revenue streams with better margins. This transition, combined with careful cost discipline developed in the previous year, resulted in profit growth exceeding revenue growth,” the company said in a press release on Wednesday.
The video game giant and operator of the WeChat messaging app also saw total revenue decline quarter-over-quarter, by 1% as in Q1 the company generated RMB149.99B.
“We achieved notably rapid growth in advertising business, benefitting from deploying machine learning on our advertising platform and from Video Accounts monetisation,” Tencent added.
The combined monthly active users, or MAU, of the messaging/social media apps Weixin and WeChat rose 2% yearr-over-year to 1.327B.
The company noted that Weixin user engagement increased healthily, benefitting from user time spent growth across Video Accounts, Mini Programs and Moments.
Video Accounts total user time spent almost doubled year-on-year. Mini Programs exceeded 1.1 billion MAU.
Tencent Video subscriptions declined 5% year-on-year but grew 2% quarter-on-quarter to 115 million, benefitting from the company’s original animated series and drama series. Music subscriptions reached 100 million in June 2023, according to Tencent.
Revenue from VAS (value-added services) segment grew 4% year-over-year to RMB74.2B. International Games revenues increased by 19% to RMB12.7B. Domestic Games revenues were stable at RMB31.8B.
Revenues from Online Advertising rose 34% year-over-year to RMB25B, while revenues from FinTech and Business Services grew 15% year-on-year to RMB48.6B.
As at June 30, the Group had net cash of RMB17.7B, compared to net cash of RMB31.5B as at March 31. The decline was mainly due to cash outflows for dividend payments and share buybacks, largely financed by free cash flow generation, the company added.
“We will continue to drive innovation, including through generative AI, where we are providing a library of models to our partners via our Tencent Cloud Model-as-a-Service (MaaS) offering, as well as refining our proprietary foundation model,” said Tencent.