Tencent FY2023 Q1 Earnings Release

2023 First Quarter
Results Presentation
May 17, 2023

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 ”)and its group
companies .These forward -looking statements are based on information currently available to Tencent and are stated here on the basis of the outlook at
the time that this presentation was produced .The Company undertakes no obligation to publicly update any forward -looking statement, whether written
or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise .The forward -looking statements
are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control .The forward -looking statements may
prove to be incorrect and may not be realised in the future . Underlying the forward -looking statements are a large number of risks and
uncertainties .Therefore you should not rely on any of these forward -looking statements .Please see our various other public disclosure documents for a
detailed discussion of those risks and uncertainties .
This presentation also contains some unaudited non -IFRS financial measures which should be considered in addition to, but not as a substitute for,
measures of the Company’s financial performance prepared in accordance with IFRS .In addition, these non -IFRS financial measures may be defined
differently from similar terms used by other companies .The Company’s management believes that the non -IFRS financial measures provide investors
with useful supplementary information to assess the performance of the Company ’s core operations by excluding certain non -cash items and certain
impact of acquisitions .For further explanation of our non -IFRS measures and reconciliations between our IFRS and non -IFRS results, please refer to our
earnings announcement .
In addition, information relating to other companies and the market in general presented in these materials has been obtained from publicly available
information and other sources .The accuracy and appropriateness of that information has not been verified by Tencent and cannot be guaranteed .All
materials contained within this presentation are protected by copyright law and may not be reproduced, distributed, transmitted, displayed, published or
broadcast without the prior, express written consent of Tencent .
The reporting currency of the company is Renminbi .For the purpose of this presentation, all figures quoted in US dollars are based on the exchange rate
of US $1to RMB 6.8717 for 1Q2023 .
2
Cautionary Note

1. Overview

In billion RMB 1Q2023 1Q2022 YoY 4Q2022 QoQ
Total Revenue 150.0 135.5 +11% 145.0 +3%
Value -added Services 79.3 72.7 +9% 70.4 +13%
Social Networks 31.0 29.1 +6% 28.6 +8%
Domestic Games 35.1 33.0 +6% 27.9 +26%
International Games 13.2 10.6 +25% 13.9 -5%
Online Advertising 21.0 18.0 +17% 24.7 -15%
FinTech and Business Services 48.7 42.8 +14% 47.2 +3%
Others 1.0 2.0 -50% 2.7 -63%
Gross Profit 68.2 57.1 +19% 61.9 +10%
Non -IFRS
Operating Profit 48.4 36.5 +32% 39.4 +23%
Operating Margin 32.3% 27.0% +5.3 ppt 27.2% +5.1ppt
Net Profit Attributable to Equity Holders 32.5 25.5 +27% 29.7 +10%
Financial Highlights
Domestic Games refers to our games business in the PRC excluding the Hong Kong Special Administrative Region, the Macao Speci al Administrative Region and Taiwan
4

Weixin & WeChat
• #1 mobile community
• MAU at 1,319m
QQ
• Mobile devices MAU at
597 m
Mobile Payment
• #1 by MAU & DAU
Mobile Browser
• #1 by MAU
Mobile Security
• #2 by MAU
Key Services Update
Games
Communications
& Social Networks
Utilities
5 All rankings above refer to China market, unless otherwise stated. Ranking for PaaS is based on IDC Quarterly Public Cloud Services Tracke r report. Company data as of Mar 31, 2023
IaaS
• Large scale, high -performance
IaaS network
PaaS
• #2 by revenue
SaaS
• #1 standalone cloud
conferencing app
China
• #1 by users and
revenue
Global
• #1 by revenue
Premium Content
• #1 by paid
subscription
including video,
music, literature
FinTech
Cloud
Digital
Content

2. Business Review

Revenue by Segment
23% 23% 23% 21% 22% 21% 21% 20% 22% 21% 21% 20% 21%
28% 26% 25% 22% 25% 23% 24% 21% 24% 24% 22% 19%
23%
7% 8% 8% 7%
7% 8% 8% 9% 8% 8% 9% 10%
9% 16% 16%
17% 18% 16% 17% 16% 15% 13% 14% 15% 17%
14% 25%
26%
26% 29% 29% 30% 30% 33%
32% 32%
32% 33%
32%
1%
1%
1%
3% 1% 1% 1% 2%
1% 1%
1% 1%
1%
108.1
114.9
125.4
133.7 135.3 138.3 142.4 144.2
135.5 134.0
140.1
145.0
150.0
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Social Networks Domestic Games International Games Online Advertising FBS Others total
In billion RMB
7

29.1 31.0 28.6 31.0
33.0 35.1
27.9
35.1
10.6
13.2
13.9
13.2
72.7
79.3
70.4
79.3
1Q22 1Q23 4Q22 1Q23
Value – added Services
+6%
+6%
+26%
+8%
Social Networks
In billion RMB
8
Domestic Games International Games
+25% -5%
Social Networks
• Revenue was up 6% YoY, reflecting growth of in -game item sales
and music subscription revenue
• Long -form video subscription revenue decreased 6% YoY due to
delayed content releases . We are enhancing our content and
extending our collaboration with short -form video services to expand
long -form content popularity and capture more monetisation
opportunities
• Music subscription revenue increased 30 % YoY, driven by growth in
paying users and ARPU .We upgraded the listening experience and
strengthened cooperation with labels and artists, improving user
engagement and paying propensity
Domestic Games
• Revenue resumed growth to 6% YoY, benefitting from growth in HoK ,
DnF, CrossFire Mobile and 3Q 22 released game Arena Breakout
International Games
• Revenue increased 25 % YoY, or 18 % in constant currency .Growth
was driven by robust performance of VALORANT, and 2022 releases
of NIKKE and Triple Match 3D
+9%
YoY
+13%
QoQ

• Deployed a new cross -platform architecture to optimise development efficiency,
strengthen security and enhance graphical experience
Upgraded technology for better user experience
Communications & Social Networks
9
a
• Upgraded our creator onboarding support with greater traffic incentives, wider
creator coverage and more effective content creation tools
• Enhanced eCommerce infrastructure ,enabling creators to benefit from sales
commissions associated with eCommerce transactions
• Daily active creators and video uploads more than doubled YoY, while
creators with 10 k+ followers more than tripled YoY
Nurturing Video Accounts creator community with enhanced
traffic and monetisation support
An eCommerce -focused
Video Account
Video Accounts
Shop
Promote a live
streaming show
For customers
to connect
with creator
(on WeCom)

Domestic Games
10 1. Ranking by gross receipts among action games released between Jan 1 –May 16, 2023, according to data.ai
Strong performance of most popular games
• HoK achieved record high gross receipts in 1Q 23 on highly appealing ShanHaiJing -themed outfits
coupled with targeted marketing programs
• CrossFire PC reached all -time high gross receipts in 1Q 23 on promotions targeting Internet cafés .
CrossFire Mobile set historical high gross receipts in 1Q 23 on virtual idol group themed content
Expansion in high potential genres
• Fight of the Golden Spatula ,an auto -battler released in Aug 2021 ,increased gross receipts by more
than 30 % YoY in 1Q 23 and reached record high average DAU of over 10 million in April 2023
• Arena Breakout ,an extraction shooter released in Jul 2022 ,grew and achieved new milestones in
DAU and gross receipts in 1Q 23
• Metal Slug :Awakening ranked #1 among new action games 1released YTD, as we moved classic
arcade game IP to mobile and multiplayer experience
Resumed solid growth with a healthier user base
• As a result of our continued and dedicated minor protection program, users aged under 18
contributed 0.4% of 1Q 23 domestic games total time spent and 0.7% of total gross receipts,
significantly reduced from 1Q 20 level
• W e continue to take our societal responsibility with regard to games content and minor protection
very seriously 1Q20 1Q23
Time spent from
users aged under 18
1Q20 1Q23
Gross receipts from
users aged under 18
-96% -90%
New game mode for Arena Breakout
Virtual idol group from CrossFire Mobile

International Games
11
VALORANT :
New items and
game mode
1Q 23 gross receipts increased by
over 30 % YoY, driven by more active
users, popular Japan – and alien –
themed weapon items
DAU resumed QoQ growth, benefitting
from new combat features and
enhanced PvP gameplay
New map editing tool facilitates user –
generated content, enhancing user
engagement and longevity
Triple Match 3D :
Breakthrough in
match games
Broke into top 10 match games
ranking 1,leveraging creative gameplay
and Miniclip’s effective user acquisition
Miniclip achieved record high gross
receipts in 1Q 23
1. Top 10 match games by gross receipts in 1Q23, according to data.ai
PUBG MOBILE :
Enhanced gameplay

18.0
21.0
24.7
21.0
1Q22 1Q23 4Q22 1Q23
Online Advertising
Overall
• Revenue was up 17 % against a 1Q 22 base period which included
several percentage -point contribution from Beijing Winter Olympics
• Ad spend grew YoY across most categories, benefitting from
consumption recovery . Large eCommerce platforms increasingly
recognised us as a key user acquisition channel and boosted ad spend
• Upgraded our machine learning advertising platform to include deep –
learning model and standard product unit (SPU) database, delivering
higher conversions for advertisers
Weixin
• Weixin outpaced overall ad business, contributing over half of total ad
revenue . Video Accounts revenue ramped up as we attracted new
advertisers and incremental spending from existing advertisers ;eCPM
sustained at a premium level
Content Platforms
• Music ad grew primarily due to monetisation of ad -supported music
content, while long -form video ad declined with fewer releases of popular
content
Mobile Ad Network
• Revenue increased robustly YoY, as we increased ad inventory in high –
conversion -rate properties and attracted spending from ROI -focused
eCommerce platform advertisers
12
In billion RMB
+17%
YoY
-15%
QoQ

42.8
48.7 47.2 48.7
1Q22 1Q23 4Q22 1Q23
FinTech and Business Services
FinTech Services
• Revenue resumed double -digit YoY growth, mainly benefitting from
the recovery of payment activities . Within commercial payment,
offline activities rebounded more sharply than online
• YoY revenue growth in wealth management and consumer loans
remained healthy
Business Services
• YoY revenue growth turned positive in 1Q 23 , benefitting from
stabilisation for our cloud services after a period of extensive
restructuring, and initial contribution from technology support fee
collected on Video Accounts live streaming eCommerce transactions .
G ross margin increased notably YoY due to reduction in loss -making
activities, cost optimisation and new revenue streams
• Tencent Smart Transportation solutions are assisting the digitalisation
of large -scale transportation projects, such as smart highway s in
Sichuan and metro systems in Guangzhou ,leveraging our strengths
in cloud infrastructure, digital map and 3D rendering technologies
13
In billion RMB
+14%
YoY
+3%
QoQ

3. Financial Review

Income Statement
In billion RMB 1Q2023 1Q2022 YoY 4Q2022 QoQ
Revenue 150.0 135.5 +11% 145.0 +3%
COPS (81.8) (78.4) +4% (83.1) -2%
Gross profit 68.2 57.1 +19% 61.9 +10%
Interest income 2.9 1.7 +71% 2.5 +15%
Other gains, net 0.9 13.1 -93% 85.8 -99%
Operating expenses (31.6) (34.7) -9% (33.4) -5%
Operating profit 40.4 37.2 +9% 116.8 -65%
Finance costs, net (2.6) (1.9) +37% (3.7) -28%
Share of profit/( loss) of associates & JV s, net 0.1 (6.3) N/A (1.6) N/A
Income tax expense (11.5) (5.3) +118% (4.6) +151%
Net profit 26.4 23.7 +11% 106.9 -75%
Net profit attributable to equity holders 25.8 23.4 +10% 106.3 -76%
Diluted EPS in RMB 2.639 2.404 +10% 10.977 -76%
Non -IFRS
Operating Profit 48.4 36.5 +32% 39.4 +23%
Net profit attributable to equity holders 32.5 25.5 +27% 29.7 +10%
Diluted EPS in RMB 3.353 2.620 +28% 3.042 +10%
15

Non – IFRS Adjustments
In billion RMB IFRS
1Q20 23 SBC
Net (gains)/
losses from
investee
companies 1
Amortisation
of intangible
assets
Impairment
provision s/
(reversals) 2
SSV &
CPP 3 Others 4 Tax effect Non -IFRS
1Q20 23 YoY change QoQ change
Operating profit 40.4 5.8 (0.6) 1.1 0.2 1.5 – – 48.4 +32% +23%
Net profit 26.4 7.3 (5.2) 2.2 1.9 1.5 – (0.7) 33.4 +27% +9%
Net profit attributable
to equity holders 25.8 7.1 (5.2) 2.1 1.9 1.5 – (0.7) 32.5 +27% +10%
Operating margin 27.0% 32.3% +5.3ppt +5.1ppt
Net margin 17.6% 22.3% +2.9ppt +1.2ppt
16
Note:
1. Including net (gains)/losses on deemed disposals/disposals of investee companies, fair value changes arising from investee companies, and other expenses in relation to equity transactions of investee companies.
2. Impairment provisions/(reversals) for associates, joint ventures, goodwill and other intangible assets arising from acquis itions.
3. Mainly including donations and expenses incurred for the Group’s Sustainable Social Value & Common Prosperity Programme initiatives.
4. Mainly including non -recurring compliance -related costs and expenses incurred for certain litigation settlements of the Company and/or arising from investee companies.

49.2 51.4 50.9 53.3
45.1 48.8 46.4 42.7
36.7 40.6
46.3 44.2 41.7
Online Advertising (%)
59.0
53.7 52.6 51.5 55.1 52.9 53.0
48.7 50.4 50.6 51.7 49.8
53.9
Value Added Services (%)
Gross Margins
27.9 28.9 27.9 28.5
32.3 32.0
28.5 27.1
31.6 33.3 33.3 33.6 34.5
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
FinTech and Business Services (%)
17
48.9 46.3 45.2 44.0 46.3 45.4 44.1
40.1 42.1 43.2 44.2 42.6 45.5
Overall Gross Margin (%)

11.2
9.4
11.4
9.4
1Q22 1Q23 4Q22 1Q23
S&M
in billion RMB
Operating Expenses
18
R&D
in billion RMB
G&A (excl. R&D)
in billion RMB
8.1
7.0
6.1
7.0
1Q22 1Q23 4Q22 1Q23
15.4 15.2 15.9 15.2
1Q22 1Q23 4Q22 1Q23
Non -IFRS Non -IFRS Non -IFRS
-13%
YoY
+15%
QoQ
1Q23 S&M declined by 14% YoY or grew by 14% QoQ
-1%
YoY
-5%
QoQ
1Q23 R&D grew by 4% YoY or declined by 7% QoQ 1Q23 G&A (excl. R&D) declined by 7% YoY and 19% QoQ
-16%
YoY
-17%
QoQ

32.9 32.8
30.4 28.5
31.6 31.0
28.7
23.0
27.0 27.4 29.2 27.2
32.3
Non -IFRS Operating Margin (%)
25.9 27.2 26.6 25.8 25.5 25.4
22.8
17.9 19.4
21.6
23.8
21.1 22.3
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Non -IFRS Net Margin (%)
Non – IFRS Margin Ratios
19

In billion RMB 1Q2023 1Q2022 YoY 4Q2022 QoQ
Operating CAPEX 1.0 5.2 -81% 1.9 -47%
Non -operating CAPEX 3.4 1.8 +91% 3.8 -9%
Total CAPEX 4.4 7.0 -37% 5.7 -22%
Operating Cash Flow 62.3 33.8 +84% 35.6 +75%
Less: CAPEX Paid (4.6) (8.2) -44% (5.6) -17%
Payments for media content (4.4) (8.9) -50% (5.3) -17%
Payments for lease liabilities (1.5) (1.5) -1% (1.6) -5%
Free Cash Flow 51.8 15.2 +240% 23.1 +124%
Total Cash 370.5 304.1 +22% 319.6 +16%
Less: Total Debt (339.0) (315.1) +8% (334.4) +1%
Net Cash/(Debt) 31.5 (11.0) N/A (14.8) N/A
CAPEX, FCF and Cash Position
20
• Repurchased ~12.5 million shares with an aggregated cost of ~ RMB4.0 billion during 1Q23
• As at 31 Mar 2023, the f air value of our shareholdings 1in listed investee companies (excluding subsidiaries) was
~RMB473 billion (USD69 billion) and the carrying value of our unlisted investee companies was ~RMB332 billion (USD48
billion)
1. Including those held via special purpose vehicles, on an attributable basis.

4. Q&A

Tencent Holdings Limited
2023 First Quarter Results Presentation
Thank you!
https://www.tencent.com/ir