Tencent FY2023 Q3 Earnings Release

2023 Third Quarter
Results Presentation
Nov 15, 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 7.1798 for 3Q2023 .
2
Cautionary Note

1. Overview

In billion RMB 3Q2023 3Q2022 YoY 2Q2023 QoQ
Total Revenue 154.6 140.1 +10% 149.2 +4%
Value -added Services 75.7 72.7 +4% 74.2 +2%
Social Networks 29.7 29.8 -0.4% 29.7 stable
Domestic Games 32.7 31.2 +5% 31.8 +3%
International Games 13.3 11.7 +14% 12.7 +5%
Online Advertising 25.7 21.5 +20% 25.0 +3%
FinTech and Business Services 52.0 44.8 +16% 48.6 +7%
Others 1.2 1.1 +3% 1.4 -18%
Gross Profit 76.5 62.0 +23% 70.8 +8%
Non -IFRS
Operating Profit 55.5 40.9 +36% 50.1 +11%
Operating Margin 35.9% 29.2% +6.7 ppt 33.6% +2.3ppt
Net Profit Attributable to Equity Holders 44.9 32.3 +39% 37.5 +20%
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 1,336m
QQ
• Mobile devices MAU at
558 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 Sep 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. Strategy Review

7
Weixin – Platform Continuously Enhancing Value to Users
Messaging – most indispensable and highest daily user frequency service
• DAU and daily messages sent per user consistently increase, benefitting from :
‒ Perpetual demand to communicate and interact among friends, family members, and colleagues
‒ Weixin chat meeting social networking needs through group functionalities and Moments
‒ Weixin chat enabling new forms of connections, such as with customer support services
Video Accounts – boosting engagement and incremental revenue
• Rapid growth in DAU and user time spent, both YoY and QoQ
• Short video complementary to our messaging, group chat, and social networking services ;does not cannibalise
their user time spent
• Substantial monetisation opportunities – advertising and eCommerce
1
Open platform – extending connectivity with external services 2
3
• Official Accounts :enable creators to share content with their followers
• Mini Programs :connect users with merchants and service providers, online and offline
‒ Several hundred million users interact with over 1 million unique Mini Programs on daily basis
‒ Mini Programs enable seamless conversion of user interactions into transactions and drive repeat sales,
facilitated over RMB 1.5 trillion GMV in 3Q23
‒ Dynamic community of merchants and service providers develop and update their own Mini Programs ,
providing ecosystem growth and innovation
• Mini Games :operate the largest casual game community in China

8
Weixin – New Services Generating High Incremental Margins
• Already incurred platform costs through P&L prior to monetisation
• Once Video Accounts attained critical mass, we further streamlined operating costs (e .g.,bandwidth, servers,
content) leveraging our technology infrastructure and platform expertise
• Now generating high contribution margin ad revenue, with long runway for growth given increasing video
views, low ad load compared to peers, and deployment of AI technology to boost ad click -through rates
• Video Accounts eCommerce GMV at early stage of development ;we book eCommerce technology service
fees on net basis, so healthy contribution margin
Video Accounts starting to contribute high quality revenue
Future monetisation also high quality and high margin
• Mini Games :contributing revenue through platform fees and advertisements ;we book platform fees on net
basis, so higher reported margin versus app -based games
• Weixin Search :increasing volume of transactions within Weixin driving rapid growth in commercial query
volume, enabling us to deploy high margin sponsored search business on own traffic

9
High Quality Revenue Growth Model – Revenue Mix Shift
and Cost Discipline Powering Operating Leverage
28%
16%
-1%
11% 10%
33%
12%
-2%
21%
23%
30%
7%
-4%
35% 36%
FY20 FY21 FY22 YTD23 3Q23
Revenue YoY (%) Non-IFRS Gross Profit YoY (%) Non-IFRS Operating Profit YoY (%)
Revenue mix shift
• Nurturing new, high quality revenue streams (e .g.,Video
Accounts in-feed ads, Video Accounts eCommerce
technology service fees, Mini Games platform service fees)
which contribute incremental revenue at higher margins
than group average
• Scaling back certain low -quality revenue streams (e .g.,
entertainment live streaming, SMS re -selling) which had
operated at lower margins than group average
One -time cost optimisation
• Streamlined operations by strategically exiting certain non –
core businesses
• Cut back overly aggressive spending on operations,
subsidies, and marketing activities
Ongoing cost discipline
• Moving toward a quality -not quantity -driven growth model
• Continuously improving operating efficiency, thoughtfully
allocating headcount, and effectively managing marketing
expenses to maintain a lean cost structure for future

10
Games – Investing for Long Term Growth
• Flagship evergreen franchises enjoy thriving popularity and
deliver consistent financial performance (e .g., HoK , LoL ,
Peacekeeper Elite)
• Recently released competitive multiplayer games demonstrate
our innovation and reinforce our leadership (e .g.,Fight of Golden
Spatula ,Arena Breakout ,VALORANT)
• We have some successful case studies in operating content –
driven games (e .g.,Naruto Mobile ,Lost Ark, NIKKE) but aspire
to, and are investing for, bigger hits
• We already operate the largest platform for casual games via
Mini Games ;we are also working on high production value app –
based casual games with industry -leading UGC capabilities
(e .g.,Dream Stars)
Durable and expanding franchise in
competitive multiplayer games
Investing to expand into content -driven and
casual games
Future games to watch include:
Expansion of our own IPs New titles in high potential genres
Dream Stars Nightingale
Bringing new IPs to mobile
Delta Force: Hawk Ops One Piece Monster Hunter Ash Echoes HoK World VALORANT Mobile Assassin’s Creed

3. Business Review

Revenue by Segment
23% 21% 22% 21% 21% 20% 22% 21% 21% 20% 21% 20% 19%
25% 22% 25% 23% 24% 21% 24% 24% 22% 19%
23% 21% 21%
8% 7%
7% 8% 8% 9% 8% 8% 9% 10%
9%
9% 9%
17% 18% 16% 17% 16% 15% 13% 14% 15% 17%
14% 17% 16%
26% 29% 29% 30% 30% 33%
32% 32%
32% 33%
32% 32% 34% 1%
3% 1% 1% 1% 2%
1% 1%
1% 1%
1% 1%
1%
125.4
133.7 135.3 138.3 142.4 144.2
135.5 134.0
140.1
145.0
150.0 149.2
154.6
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
Social Networks Domestic Games International Games Online Advertising FBS Others total
In billion RMB
12

29.8 29.7 29.7 29.7
31.2 32.7 31.8 32.7
11.7 13.3 12.7 13.3
72.7 75.7 74.2 75.7
3Q22 3Q23 2Q23 3Q23
Value – added Services
+5%
-0.4%
+3%
stable
Social Networks
In billion RMB
13
Domestic Games International Games
+14% +5%
Social Networks
• Revenue was stable YoY .Revenue from music – and games -related live
streaming services decreased while revenue from music subscriptions
and mini games increased
• Long -form video subscription revenue increased 2% YoY, benefitting from
higher ARPU .Video subscriptions declined slightly YoY, though grew QoQ,
to 117 million 1.Our exclusive drama series, Lost You Forever ,ranked #1
industry -wide 2in 3Q 23
• Music subscription revenue increased 42 % YoY . TME optimised user
operations, enriched membership privileges and deepened collaborations
with labels and artists .Music subscriptions grew 21 % YoY to 103 million 3
and ARPU was up 17 % YoY
Domestic Games
• Revenue grew 5% YoY, driven by new releases VALORANT and Lost Ark,
as well as key titles HoK and DnF
International Games
• Revenue increased 14 % YoY, or 7% in constant currency, as a recovery
for PUBG MOBILE, and sustained contributions from NIKKE, VALORANT
and Triple Match 3D, offset a tough comparison from Tower of Fantasy ’s
launch quarter
+4%
YoY
+2%
QoQ
1. As of Sep 30, 2023
2. Source: Enlightent , by video views across all online platforms in China for 3Q23
3. The average number of subscriptions as of the last day of each month during 3Q23

14
Communications & Social Networks
• Total video views increased over 50 % YoY, supported by
a thriving creator community and growing user mindshare
• Original content contributes large majority of our total
video views
• Promoted original content through enhanced
recommendation algorithms and traffic support programs
Cultivating original content creators on
Video Accounts
• QQ Channel enables users to create interest -based
communities (“Channels”) within QQ for people who
share same hobby, activity or membership
• Channels facilitate activities and discussions through
event management, collaboration, and communication
tools via text, voice and live streaming
• Host over 700 k active Channels across categories such
as colleges & universities, games, knowledge -based
content and music
Strengthening social ecosystem via
QQ Channel
Original content
creators
QQ Channel
covers 3,000+
colleges and
universities in
China

Domestic Games
Extending leadership
in MOBA and FPS genres Investing in content and casual genres Esports debut at Asian Games
1. Source: QuestMobile , for 1Q23 -3Q23
2. Source: data.ai, for 1Q23 -3Q23
3. Source: data.ai, for Aug 17 -Sep 16, 2023
Asian Games included esports as a medal
event for first time, demonstrating public
interest and government endorsement
We publish 4 of 7 titles selected for the Asian
Games -AoV Asian Games Version ,Peace
Elite Asian Games Version ,LoL ,EA Sports
FC Online
MOBA :HoK #1 by DAU and total time spent
across all mobile games YTD 1;LoL :Wild Rift
gross receipts up ~20 % YoY in 3Q23 and
consistently among top 10 mobile games by
gross receipts YTD 2
FPS : launched new titles with distinctive
gameplay – PC tactical first person game
VALORANT, mobile hero first person game
Hyper Legends
MMORPG : MapleStory : The Legends of
Maple ranked #4 among mobile games by
gross receipts in first month of launch 3,
successfully reached fans of Maple Story IP
Casual :Dream Stars ,in-house mobile party
game with UGC mode, has accumulated 27
million pre -registrations
15

International Games
PUBG MOBILE
Gross receipts and DAU resumed YoY
and QoQ growth in 3Q 23 ,benefitting
from appealing content and themed
events, such as Dragon Ball Super
collaboration
NIKKE
Maintained robust gross receipts
and DAU in 3Q 23 , led by high –
quality content updates, e.g.,
collaboration with NieR :Automata
Call of Duty Mobile
Monthly gross receipts achieved
record in July, driven by well –
received new season content,
including top -tier operator and new
4v4v4 Arena mode
16

21.5
25.7 25.0 25.7
3Q22 3Q23 2Q23 3Q23
Online Advertising
In billion RMB
+20%
YoY
+3%
QoQ
17
Overall
• Revenue increased 20 % YoY, bolstered by strong ad demand for Video
Accounts , mobile ad network and Weixin Search . Ad spend from local
services platforms and FMCG rose notably
• YoY revenue growth slowed versus previous quarter as :1)eCommerce has
become a bigger contributor and is seasonally weaker in the third quarter ;2)
Video Accounts ’in -feed ad monetisation started in 3Q 22
• We expanded our advertising AI models with more parameters to increase
targeting and attribution accuracy .Using our generative AI technology, we
are providing tools for automated text -to -image ad creation and smart ad size
optimisation to selected partners
Weixin
• Closed -loop ad revenue (ads linking to Mini Programs , Video Accounts,
Official Accounts and WeCom landing pages) increased over 30 % YoY,
accounting for more than half of Weixin ad revenue
• Video Accounts ad revenue grew notably QoQ, driven by increases in video
views and time spent, while ad load remained constant
Content Platforms
• Long -form video ad revenue increased YoY, benefitting from sponsorship of
top -tier drama series, variety shows and sports events
• Music ad revenue maintained robust YoY growth, driven by higher
impres sions for our ad -supported music streaming service

44.8
52.0 48.6 52.0
3Q22 3Q23 2Q23 3Q23
FinTech and Business Services
FinTech Services
• Revenue sustained teens YoY growth, benefitting from increases in commercial
payment activities and wealth management aggregated customer assets
• Mini Programs contributed to a greater portion of commercial payment volume, as
enhanced merchant solutions drove transactions in retail, travel & transportation,
and dining services
Business Services
• Revenue grew at a double -digit rate YoY ,faster than that in 2Q 23 . G ross margin
increased significantly YoY
– Cloud services revenue mainly benefitted from restructuring undertak en in prior
periods and from more spending by finance and automotive industries
– Fees collected on Video Accounts eCommerce transactions increased revenue
and improved margins
• Up grading Tencent Hunyuan , our proprietary foundation model
– Tencent Hunyuan Bot is being made available to a small, but expanding,
number of users via a M ini Program
– Tencent Hunyuan is powering generative AI functionalities with in our
productivity applications, such as meeting summarisation in Tencent Meeting
and content generation in Tencent Docs
– Enterprises customers can utilise Tencent Hunyuan in our cloud via APIs or
MaaS *, for functions such as coding, data analysis, and customer service
automation
18
In billion RMB
+16%
YoY
+7%
QoQ
*Model -as-a-Service

4. Financial Review

Income Statement
In billion RMB 3Q2023 3Q2022 YoY 2Q2023 QoQ
Revenue 154.6 140.1 +10% 149.2 +4%
COPS (78.1 ) (78.1) stable (78.4) -0.3%
Gross profit 76.5 62.0 +23% 70.8 +8%
Interest income 3.6 2.3 +51% 3.4 +3%
Other gains/(losses) , net 2.6 20.9 -87% (0.2) N/A
Operating expenses (34.2) (33.6) +2% (33.7) +1%
Operating profit 48.5 51.6 -6% 40.3 +20%
Finance costs (2.8) (2.0) +43% (3.4) -15%
Share of profit/( loss) of associates & JV s, net 2.1 (3.7) N/A 1.2 +81%
Income tax expense (11.0) (7.1) +55% (11.1) -1%
Net profit 36.8 38.8 -5% 27.0 +36%
Net profit attributable to equity holders 36.2 39.9 -9% 26.2 +38%
Diluted EPS in RMB 3.752 4.104 -9% 2.695 +39%
Non -IFRS
Operating Profit 55.5 40.9 +36% 50.1 +11%
Net profit attributable to equity holders 44.9 32.3 +39% 37.5 +20%
Diluted EPS in RMB 4.657 3.306 +41% 3.875 +20%
20

Non – IFRS Adjustments
In billion RMB IFRS
3Q20 23 SBC
Net (gains)/
losses from
investee
companies 1
Amortisation
of intangible
assets
Impairment
provision s/
(reversals) 2 SSV & CPP 3 Tax effects Non -IFRS
3Q20 23 YoY change QoQ change
Operating profit 48.5 5.7 (0.7) 1.4 0.3 0.3 – 55.5 +36% +11%
Net profit 36.8 6.9 (0.6) 2.7 0.3 0.3 (0.6) 45.8 +37% +19%
Net profit attributable
to equity holders 36.2 6.8 (0.6) 2.5 0.3 0.3 (0.6) 44.9 +39% +20%
Operating margin 31.4% 35.9% +6.7ppt +2.3ppt
Net margin 23.8% 29.6% +5.8ppt +3.7ppt
21
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.

50.9 53.3
45.1 48.8 46.4 42.7
36.7 40.6
46.3 44.2 41.7
48.9 52.3
Online Advertising (%)
52.6 51.5 55.1 52.9 53.0
48.7 50.4 50.6 51.7 49.8
53.9 54.0 55.5
Value -added Services (%)
Gross Margins
27.9 28.5
32.3 32.0
28.5 27.1
31.6 33.3 33.3 33.6 34.5
38.4 40.9
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
FinTech and Business Services (%)
22
45.2 44.0 46.3 45.4 44.1
40.1 42.1 43.2 44.2 42.6 45.5 47.5 49.5
Overall Gross Margin (%)

11.4
9.8 9.4 9.8
3Q22 3Q23 2Q23 3Q23
S&M
in billion RMB
Operating Expenses
23
R&D
in billion RMB
G&A (excl. R&D)
in billion RMB
7.1 7.9 8.3 7.9
3Q22 3Q23 2Q23 3Q23
15.1 16.5 16.0 16.5
3Q22 3Q23 2Q23 3Q23
Non -IFRS Non -IFRS Non -IFRS
+11%
YoY
-5%
QoQ
3Q23 S&M grew by 10% YoY or declined by 5% QoQ
+9%
YoY
+3%
QoQ
3Q23 R&D grew by 11% YoY and 4% QoQ 3Q23 G&A (excl. R&D) declined by 13% YoY or
grew by 3% QoQ
-14%
YoY
+5%
QoQ

30.4
28.5
31.6 31.0
28.7
23.0
27.0 27.4
29.2
27.2
32.3 33.6
35.9
Non -IFRS Operating Margin (%)
26.6 25.8 25.5 25.4
22.8
17.9 19.4
21.6
23.8
21.1 22.3
25.9
29.6
3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
Non -IFRS Net Margin (%)
Non – IFRS Margin Ratios
24

In billion RMB 3Q2023 3Q2022 YoY 2Q2023 QoQ
Operating CAPEX 6.6 1.1 +526% 3.0 +125%
Non -operating CAPEX 1.4 1.3 +6% 1.0 +37%
Total CAPEX 8.0 2.4 +237% 4.0 +103%
Operating Cash Flow 65.0 41.0 +59% 40.7 +60%
Less: CAPEX Paid (5.8) (5.0) +15% (3.0 ) +95%
Payments for media content (6.3) (6.4) -2% (6.3 ) +0.1%
Payments for lease liabilities (1.8) (2.0) -4% (1.5) +24%
Free Cash Flow 51.1 27.6 +85% 29.9 +71%
Total Cash 387.4 315.6 +23% 371.8 +4%
Less: Total Debt (351.0) (342.9) +2% (354.1) -0.9%
Net Cash/(Debt) 36.4 (27.3) N/A 17.7 +106%
CAPEX, FCF and Cash Position
25
• Repurchased ~48 million shares with an aggregated cost of ~ RMB14 billion during 3Q23
• As at 30 Sep 2023, the f air value of our shareholdings 1in listed investee companies (excluding subsidiaries) was ~RMB464
billion (USD65 billion) and the carrying book value of our unlisted investee companies was ~RMB347 billion (USD48 billion)
1. Including those held via special purpose vehicles, on an attributable basis.

5. Q&A

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