Tencent FY2023 Q2 Earnings Release

2023 Second Quarter
Results Presentation
Aug 16, 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 7.2258 for 2Q2023 .
2
Cautionary Note

1. Overview

In billion RMB 2Q2023 2Q2022 YoY 1Q2023 QoQ
Total Revenue 149.2 134.0 +11% 150.0 -0.5%
Value -added Services 74.2 71.7 +4% 79.3 -6%
Social Networks 29.7 29.2 +2% 31.0 -4%
Domestic Games 31.8 31.8 +0.1% 35.1 -9%
International Games 12.7 10.7 +19% 13.2 -4%
Online Advertising 25.0 18.6 +34% 21.0 +19%
FinTech and Business Services 48.6 42.2 +15% 48.7 -0.1%
Others 1.4 1.5 -10% 1.0 +38%
Gross Profit 70.8 57.9 +22% 68.2 +4%
Non -IFRS
Operating Profit 50.1 36.7 +37% 48.4 +4%
Operating Margin 33.6% 27.4% +6.2 ppt 32.3% +1.3ppt
Net Profit Attributable to Equity Holders 37.5 28.1 +33% 32.5 +15%
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 1,327m
QQ
• Mobile devices MAU at
571 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 Jun 30, 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
subscriptions
including video,
music, literature
FinTech
Cloud
Digital
Content

2. Business Review

Revenue by Segment
23% 23% 21% 22% 21% 21% 20% 22% 21% 21% 20% 21% 20%
26% 25% 22% 25% 23% 24% 21% 24% 24% 22% 19%
23% 21%
8% 8% 7%
7% 8% 8% 9% 8% 8% 9% 10%
9%
9%
16%
17% 18% 16% 17% 16% 15% 13% 14% 15% 17%
14% 17%
26%
26% 29% 29% 30% 30% 33%
32% 32%
32% 33%
32% 32%
1%
1%
3% 1% 1% 1% 2%
1% 1%
1% 1%
1% 1%
114.9
125.4
133.7 135.3 138.3 142.4 144.2
135.5 134.0
140.1
145.0
150.0 149.2
2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
Social Networks Domestic Games International Games Online Advertising FBS Others total
In billion RMB
7

29.2 29.7 31.0 29.7
31.8 31.8 35.1 31.8
10.7 12.7
13.2
12.7
71.7 74.2
79.3
74.2
2Q22 2Q23 1Q23 2Q23
Value – added Services
+0.1%
+2%
-9%
-4%
Social Networks
In billion RMB
8
Domestic Games International Games
+19% -4%
Social Networks
• Revenue was up 2% YoY, driven by increased revenue from mini games
and music subscriptions, partially offset by decline of revenue from music –
and games -related live streaming services
• Long -form video subscription revenue decreased 2% YoY . Video
subscriptions declined 5% YoY but increased 2% QoQ to 115 million .We
are applying Unreal Engine for producing animated series such as The
Land of Warriors , to streamline the workflow and enhance production
capacity and efficiency
• Music subscription revenue increased 37 % YoY, as both ARPU and
subscriptions grew at double -digit rates YoY .TME optimised operations and
enriched offerings in membership privileges and content to enhance users’
paying propensity for premium music content
Domestic Games
• Revenue was stable YoY at RMB 31 .8 billion, partly due to less commercial
content scheduling after a robust 1Q, while revenue from emerging
competitive eSports games, Arena Breakout and Fight of the Golden
Spatula ,increased
International Games
• Revenue grew 19 % YoY to RMB 12 .7 billion, or 12 % in constant currency,
driven by contributions from VALORANT, NIKKE and Triple Match 3D
+4%
YoY
-6%
QoQ

9
Communications & Social Networks
Significant user
engagement
growth
Strengthening
content
ecosystem
Expanding
monetisation
opportunities
• Total time spent almost doubled YoY in 2Q 23 ,driven by double -digit growth in DAU and much
faster growth in per user time spent
• Strong growth in user interactions, such as likes and comments
• Daily active creators and daily video uploads sustained robust YoY growth in 2Q 23
• Enhancing marketing tools that allow creators to boost content exposure, scaling their Video
Accounts presence, while contributing to our ad revenue
• Ad monetisation expanded significantly ;in -feed ads still in its early innings
• Cultivating high -margin new revenue stream in commissions ;live -streaming eCommerce GMV
increased by ~150 % YoY in 2Q 23 from low base
Video Accounts – rapid user growth and strengthening ecosystem bode well for expanding monetisation

10
Communications & Social Networks
Mini Games – the largest casual game platform built on Mini Programs
• Over 1.1 billion MAU ;time spent per DAU increased double -digit YoY in 2Q 23
• Approx .4 million developers
• Over 400 million MAU
• 300 K+ game developers – covering casual games, card games and many other types
• Over 100 Mini Games each achieved over RMB 10 million gross receipts in 2Q 23
Mini
Programs
Mini
Games
Compelling value proposition for developers
• Reduce entry barriers and launch costs for developers, via
social sharing, pre -existing log -in, and instant play infrastructure
• Extend reach to non -app users for developers with successful
app games, as they can port to Mini Games with minimal
development efforts
• Benefit from advancement in Mini Games infrastructure,
leveraging Tencent’s know -how and game technology
• Host the largest casual game community in China with
hundreds of millions of MAU
• Expand our audience and cultivate new gamers – over 50 % of
Mini Games MAU do not play Tencent app games ;half of MAU
are female
• Generate game distribution and ad revenues with high margins
and platform economics
Strategic value for Tencent

Domestic Games
Fight of the Golden Spatula
Naruto Mobile
VALORANT
• In past two years, we launched 3 games that are sustaining within top 10 mobile games by total
time spent 1
• Fight of the Golden Spatula :popularity of Set 9 release drove DAU to new milestone of 15 million
in June ;ranked #4 across all mobile games 1
• Arena Breakout :upgraded progression system and new game modes drove DAU to record high in
2Q 23 ;ranked #8 across all mobile games 1;expanded internationally in July
• VALORANT :most successful PC game release in our history by number of active users on launch
day ;became the most -watched new game on game live streaming platform in China 2
• Lost Ark :#1 MMOARPG on Steam with a thrilling combat system, captivating storyline, and vast
game world exploration ;became the most popular MMO game on live streaming platforms in China 3
11
1. Source: by total time spent in 2Q23, according to QuestMobile
2. Source: out of all games released since 2019, according to Huya
3. Source: Bojianger
• Naruto Mobile :gross receipts and average DAU hit all -time highs in 2Q 23 after seven years of
operation ;clear leader in fighting genre despite multiple competitive launches over the years
• DnF :DAU increased by double -digit % YoY in June, driven by 15 th anniversary content update
featur ing revisions to art style and improved combat visuals
Several recent games consistently growing into top tier evergreen titles
Proven evergreen titles demonstrating ongoing vitality
Successfully launched PC blockbusters in China

International Games
12
Gross receipts and DAU resumed YoY
growth in June, benefitting from
upgraded Royale Pass, new dinosaur –
themed game mode, and brand
collaborations with Bearbrick and Ducati
User engagement continued to grow due
to new characters, newly added
storylines with fully voiced scenes, and
successful thematic events
Gross receipts and DAU increased YoY,
driven by introduction of 1) popular new
agent (Gekko ) and items ; 2) Premier
game mode that provides professional
tournament experience for competitive
players
VALORANT: Sustained expansion PUBG MOBILE : Resumed growth NIKKE : Increased engagement

18.6
25.0
21.0
25.0
2Q22 2Q23 1Q23 2Q23
Online Advertising
Overall
• Revenue grew 34 % YoY to RMB 25 .0 billion, against a low -base quarter, and
outpacing industry growth .Outperformance was driven by robust demand for
Video Accounts ads and ongoing enhancement of machine learning on our
advertising platform
• Ad spend on our platforms grew at a double -digit year -on -year rate from
almost every major advertiser category
Weixin
• Weixin ad revenue increased YoY not only on Video Accounts but also on
Moments , Mini Programs and Official Accounts . As we launched new
functions to enhance vibrancy of Weixin’s commerce ecosystem, we
attracted merchants and brands to allocate more ad budget on multiple
Weixin properties
• Video Accounts ad revenue exceeded RMB 3.0 billion in 2Q 23 while ad load
remained low, underpinned by continuing growth in user time spent and
better ad targeting
Content Platforms
• Music ad revenue grew notably YoY, driven by ad -supported music service
and brand sponsorship of offline music events
Mobile Ad Network
• Revenue ramped up significantly YoY , benefitting from partnership with high
commercial value inventory owners ; upgraded infrastructure and enhanced
efficiency in matching advertisers’ demand with traffic supply
In billion RMB
+34%
YoY
+19%
QoQ
13

42.2
48.6 48.7 48.6
2Q22 2Q23 1Q23 2Q23
FinTech and Business Services
FinTech Services
• Revenue sustained double -digit YoY growth, mainly benefitting from the
recovery of offline and online commercial payment activities
• Wealth management users and AUM increased YoY as we provided better
investor education and services to meet increased user demand
• We have completed self -inspection and corresponding rectification for
Tenpay ,and upgraded the operational compliance capability of our payment
business . W e look forward to progressing our business and providing
innovative services under the supportive regulatory framework
Business Services
• Returned to low double digit YoY revenue growth in 2Q 23 , driven by fees
collected on Video Accounts live streaming eCommerce transactions and
modest growth of cloud services . G ross margin increased notably YoY due
to cost optimisation and new fee -based revenue stream s
• Launched Tencent Cloud Model -as -a-Service (MaaS )library of models and
solutions, which enables enterprises in multiple industries to develop
customised large models at higher efficiency and lower cost, leveraging our
proprietary vector database and high -performance computing cluster
services
14
In billion RMB
+15%
YoY
-0.1%
QoQ

3. Financial Review

Income Statement
In billion RMB 2Q2023 2Q2022 YoY 1Q2023 QoQ
Revenue 149.2 134.0 +11% 150.0 -0.5%
COPS (78.4) (76.1) +3% (81.8) -4%
Gross profit 70.8 57.9 +22% 68.2 +4%
Interest income 3.4 1.9 +76% 2.9 +15%
Other gains/(losses) , net (0.2) 4.4 N/A 0.9 N/A
Operating expenses (33.7) (34.1 ) -1% (31.6) +7%
Operating profit 40.3 30.1 +34% 40.4 -0.3%
Finance costs, net (3.4) (1.8) +82% (2.6) +24%
Share of profit/( loss) of associates & JV s, net 1.2 (4.5) N/A 0.1 +1349%
Income tax expense (11.1) (4.6) +144% (11.5) -3%
Net profit 27.0 19.2 +41% 26.4 +2%
Net profit attributable to equity holders 26.2 18.6 +41% 25.8 +1%
Diluted EPS in RMB 2.695 1.915 +41% 2.639 +2%
Non -IFRS
Operating Profit 50.1 36.7 +37% 48.4 +4%
Net profit attributable to equity holders 37.5 28.1 +33% 32.5 +15%
Diluted EPS in RMB 3.875 2.896 +34% 3.353 +16%
16

Non – IFRS Adjustments
In billion RMB IFRS
2Q20 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
2Q20 23 YoY change QoQ change
Operating profit 40.3 5.6 (0.2) 0.9 0.1 0.4 3.0 – 50.1 +37% +4%
Net profit 27.0 6.9 (0.3) 2.3 0.2 0.4 3.0 (0.9) 38.6 +33% +15%
Net profit attributable
to equity holders 26.2 6.7 (0.2) 2.1 0.2 0.4 3.0 (0.9) 37.5 +33% +15%
Operating margin 27.0% 33.6% +6.2ppt +1.3ppt
Net margin 18.1% 25.9% +4.3ppt +3.6ppt
17
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. Mainly including impairment provisions/(reversals) for associates, joint ventures, goodwill and other intangible assets ar ising from acquisitions.
3. Mainly including donations and expenses incurred for the Group’s Sustainable Social Value & Common Prosperity Programme initi atives.
4. Primarily non -recurring compliance -related costs (including the fine imposed by the PBOC on Tenpay which was disclosed in our announcement dated 7 July 2023) and expenses incurred for certain
litigation settlements of the Group

51.4 50.9 53.3
45.1 48.8 46.4 42.7
36.7 40.6
46.3 44.2 41.7
48.9
Online Advertising (%)
53.7 52.6 51.5 55.1 52.9 53.0
48.7 50.4 50.6 51.7 49.8
53.9 54.0
Value -added Services (%)
Gross Margins
28.9 27.9 28.5
32.3 32.0
28.5 27.1
31.6 33.3 33.3 33.6 34.5
38.4
2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
FinTech and Business Services (%)
18
46.3 45.2 44.0 46.3 45.4 44.1
40.1 42.1 43.2 44.2 42.6 45.5 47.5
Overall Gross Margin (%)

11.2
9.4 9.4 9.4
2Q22 2Q23 1Q23 2Q23
S&M
in billion RMB
Operating Expenses
19
R&D
in billion RMB
G&A (excl. R&D)
in billion RMB
7.9 8.3
7.0
8.3
2Q22 2Q23 1Q23 2Q23
15.0 16.0 15.2 16.0
2Q22 2Q23 1Q23 2Q23
Non -IFRS Non -IFRS Non -IFRS
+5%
YoY
+18%
QoQ
2Q23 S&M grew by 5% YoY and 19% QoQ
+7%
YoY
+5%
QoQ
2Q23 R&D grew by 10% YoY and 7% QoQ 2Q23 G&A (excl. R&D) declined by 14% YoY or
grew by 1% QoQ
-16%
YoY
-0.5%
QoQ

32.8
30.4 28.5
31.6 31.0
28.7
23.0
27.0 27.4 29.2
27.2
32.3 33.6
Non -IFRS Operating Margin (%)
27.2 26.6 25.8 25.5 25.4
22.8
17.9 19.4
21.6
23.8
21.1 22.3
25.9
2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
Non -IFRS Net Margin (%)
Non – IFRS Margin Ratios
20

In billion RMB 2Q2023 2Q2022 YoY 1Q2023 QoQ
Operating CAPEX 3.0 2.1 +43% 1.0 +191%
Non -operating CAPEX 1.0 0.9 +6% 3.4 -70%
Total CAPEX 4.0 3.0 +31% 4.4 -10%
Operating Cash Flow 40.7 35.7 +14% 62.3 -35%
Less: CAPEX Paid (3.0 ) (5.6) -47% (4.6) -36%
Payments for media content (6.3 ) (5.8) +7% (4.4) +41%
Payments for lease liabilities (1.5) (1.8) -20% (1.5) +0.2%
Free Cash Flow 29.9 22.5 +34% 51.8 -42%
Total Cash 371.8 315.9 +18% 370.5 +0.3%
Less: Total Debt (354.1) (336.3) +5% (339.0) +4%
Net Cash/(Debt) 17.7 (20.4) N/A 31.5 -44%
CAPEX, FCF and Cash Position
21
• Repurchased ~ 36 million shares with an aggregated cost of ~ RMB11 billion during 2Q23
• Paid cash dividend of RMB21 billion during 2Q23
• As at 30 Jun 2023, the f air value of our shareholdings 1in listed investee companies (excluding subsidiaries) was ~RMB435
billion (USD60 billion) and the carrying value of our unlisted investee companies was ~RMB347 billion (USD48 billion)
1. Including those held via special purpose vehicles, on an attributable basis.

4. Q&A

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