Tencent FY2024 Q2 Earnings Release

Aug 14, 2024
2024 Second Quarter
Results Presentation

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 $1 to RMB 7.1268 for 2Q2024 .
2
Cautionary Note

1. Overview

In billion RMB 2Q2024 2Q2023 YoY 1Q2024 QoQ
Total Revenue 161.1 149.2 +8% 159.5 +1%
Value -added Services 78.8 74.2 +6% 78.6 +0.2%
Social Networks 30.3 29.7 +2% 30.5 -0.6%
Domestic Games 34.6 31.8 +9% 34.5 +0.2%
International Games 13.9 12.7 +9% 13.6 +2%
Online Advertising 29.9 25.0 +19% 26.5 +13%
FinTech and Business Services 50.4 48.6 +4% 52.3 -4%
Others 2.0 1.4 +46% 2.1 -4%
Gross Profit 85.9 70.8 +21% 83.9 +2%
Non -IFRS
Operating Profit 58.4 46.1 +27% 58.6 -0.3%
Operating Margin 36.3% 30.9% +5.4ppt 36.8% -0.5ppt
Net Profit Attributable to Equity Holders 57.3 37.5 +53% 50.3 +14%
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 1,371m
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 1. All rankings above refer to China market, unless otherwise stated . Company data as of Mar 31, 2024
2. IDC Quarterly Public Cloud Services Tracker, 1Q24
3. IDC China Cloud Conferencing Market Share report, 2023
IaaS
• Large scale, high -performance
IaaS network
PaaS
• #2 by revenue 2
SaaS
• #1 standalone cloud
conferencing solution by
revenue 3
China
• #1 by users and
revenue
Global
• #1 by revenue
Premium Content
• #1 by paid
subscriptions
including video,
music, literature
FinTech
Cloud
Digital
Content

1. Overview
2. Business Review

Revenue
7
21% 21% 20% 22% 21% 21% 20% 21% 20% 19% 18% 19% 19%
23% 24% 21% 24% 24% 22% 19% 23% 21% 21% 18% 22% 21%
8% 8% 9% 8% 8% 9% 10%
9% 9% 9%
9%
8% 9%
17% 16% 15% 13% 14% 15% 17%
14% 17% 16% 19%
17% 19%
30% 30% 33% 32% 32% 32% 33% 32% 32% 34% 35% 33% 31% 1% 1% 2%
1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
138.3 142.4 144.2
135.5 134.0 140.1 145.0 150.0 149.2 154.6 155.2 159.5 161.1
2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24
Social Networks Domestic Games International Games Online Advertising FBS Others
+20% +13% +8% +0.1% -3% -2% +0.5% +11% +11% +10% +7% +6% +8%
Revenue Growth (YoY %)
Revenue by Segment (billion RMB)

+18% +11% -2% -9% -8% -1% +7% +19% +22% +23% +25% +23% +21%
61% 64% 61% 64% 63% 61% 57%
63% 57% 55% 48%
54% 52%
18% 17%
16% 12% 13% 16% 18%
13% 17% 18% 22%
17% 19% 21% 20%
23% 24% 24%
24% 26%
25% 26%
28% 31%
28% 28%
62.7 62.7
57.8 57.1 57.9
62.0 61.9
68.2 70.8
76.5 77.6
83.9 85.9
2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24
Value-added Services Online Advertising FinTech and Business Services Others
Gross Profit
8
Gross Profit Growth (YoY %)
Gross Profit by Segment (billion RMB)

Social Networks
29.7 30.3 30.5 30.3
31.8 34.6 34.5 34.6
12.7
13.9 13.6 13.9
74.2
78.8 78.6 78.8
2Q23 2Q24 1Q24 2Q24
Domestic Games International Games
+6%
YoY
+0.2%
QoQ
+9%
+2%
+0.2%
-0.6%
+9% +2%
Value – added Services
In billion RMB
9
Social Networks
• Revenue returned to positive growth, up 2% YoY, driven by increased
revenue from music and video subscriptions, Mini Games platform service
fees, and app -based games item sales, partially offset by decreased revenue
from music – and games -related live streaming services
• Long -form video subscription revenue increased 12 % YoY, as average daily
video subscriptions increased 13 % YoY to 117 million 1. During 1H24 , out of
the top three most -watched drama series on China online video platforms 2,
the first and second were produced by New Classics Media and broadcast by
Tencent Video , and all three were based on China Literature web novel IPs
• Music subscription revenue increased 29 % YoY, supported by growth in
subscriptions and ARPU
Domestic Games
• Revenue resumed growth to 9% YoY mainly driven by VALORANT and new
title DnF Mobile . Gross receipts grew faster than revenue
International Games
• Revenue increased 9% YoY in both RMB and constant currency, driven by
PUBG MOBILE and Supercell’s games . Gross receipts grew substantially
faster than revenue
1. The average daily number of subscriptions for 2Q24
2. Source: Enlightent, by video views across all online platforms in China for 1H24

10
Communications & Social Networks
10
a
Video Accounts
• Total user time spent increased substantially YoY, benefitting from enhanced algorithms and more local content
• Number of creators that generated closed -loop revenue from Video Accounts more than tripled YoY in 2Q 24
• We are enhancing transaction capabilities, systematically, to deliver seamless shopping experience to users and
drive sales for merchants
a
• Total user time spent increased over 20 % YoY in 2Q 24
• GMV facilitated by Mini Programs grew double -digit % YoY in 2Q 24
• Mini Games total gross receipts increased over 30 % YoY . Over 140 mini games each achieved over RMB 10
million gross receipts in 2Q 24
Mini Programs
a
• Community -based platform (“Channels”) in which moderators can manage and present content & events via
customisable tools, while users can interact via text, image and live streaming
• Grew out of QQ , recently upgraded and rebranded, users can now join Channels from Weixin and games, as
well as QQ
• Gained notable popularity among game players and university students, who are early adopters and promoters
of Channels’ advanced functionalities
Tencent Channels

Domestic Games
11
Revitalised evergreen titles
Naruto Mobile
• Peacekeeper Elite gross receipts grew by double –
digit % YoY in 2Q 24 on appealing Egyptian – and
anime -themed outfits ; DAU resumed YoY growth in
July, benefitting from new extraction shooter game
mode, Metro Royale
• Naruto Mobile monthly average DAU reached new
milestone of 10 million in May : 1) marketing activities
with KOLs and short -form video clips boosted new
player acquisition, and 2) enriched themed content re –
engaged existing user base
Impactful new releases
DnF Mobile
• DnF Mobile emerged as one of the most successful
mobile games in China ; attracted fans of DnF IP with
compelling mobile reinterpretation of proven PC
gameplay coupled with our operational capabilities,
resulting in an expansion of DnF franchise
• Need for Speed Mobile attracts millions of DAUs with
a range of driving activities within an open -world
experience

International Games
Average DAU and gross
receipts increased double -digit
% YoY in 2Q 24 , benefitting
from new Mecha Fusion mode,
Golden Moon event, and lion –
themed outfit
PUBG MOBILE
Gross receipts grew more than
tenfold YoY in 2Q 24 . Average
DAU achieved historical high
and ranked #3 mobile game 1,
due to frequent content
updates and social features
Brawl Stars
Squad Busters
MAU grew YoY in 2Q 24 ,
benefitting from popular
eSports events and high
quality content updates such
as new agent (Clove) and first
VALORANT map with no
outer boundaries (Abyss)
VALORANT
1. Source: by average DAU in 2Q24, Sensor Tower
Casual action game with real
time strategy elements and
Supercell character collection .
The game has established
critical mass in the key North
America and Western Europe
regions . Supercell will add new
game modes and social features
in future
12

Online Advertising
In billion RMB
25.0
29.9
26.5
29.9
2Q23 2Q24 1Q24 2Q24
+19%
YoY
+13%
QoQ
13
Overall
• Revenue grew 19 % YoY, driven by increased ad spend from most
categories, particularly games, eCommerce and education
• Upgraded machine learning platform to analyse user interests over a
longer time horizon, and to process signals more frequently
Video Accounts
• Video Accounts ad revenue increased 80 % + YoY, fueled by rising
engagement and strong demand for live streaming promotions
Content Platforms
• Tencent Video ad revenue grew 30 % + YoY amid weak branded ad spend
in the market, as our popular self -commissioned drama series attracted
sponsorship ad spend
Mobile Ad Network
• Ad network revenue dropped YoY, as certain internet services companies
reduced their overall advertising budgets

48.6 50.4 52.3 50.4
2Q23 2Q24 1Q24 2Q24
+4%
YoY
-4%
QoQ
FinTech and Business Services
FinTech Services
• Revenue slowed to low single digit growth YoY
• Commercial payment revenue growth moderated as number of transactions
continued to increase at healthy rate YoY, but average value per transaction
declined YoY
• Consumer loan services revenue decreased YoY as WeBank and Tencent
adopted more cautious credit extension policies
• Wealth management fees grew double -digit % YoY, benefitting from
increases in number of users and aggregated customer assets
Business Services
• Revenue grew at a teens rate YoY ,mainly driven by cloud services and fees
collected on Video Accounts eCommerce transaction s. Gross profit
increased significantly YoY due to increased contribution of higher -margin
revenue streams, as well as improved efficiency
• WeCom and Tencent Meeting each grew revenue robustly YoY
• Generating increasing AI -related revenue through our high performance
computing infrastructure, model library services, and AI -powered platform
solutions for enterprises
14
In billion RMB

1. Overview

3. Financial Review

Income Statement
In billion RMB 2Q2024 2Q2023 YoY 1Q2024 QoQ
Revenue 161.1 149.2 +8% 159.5 +1%
COPS (75.2) (78.4) -4% (75.6) -0.5%
Gross profit 85.9 70.8 +21% 83.9 +2%
Operating expenses (36.7) (33.7) +9% (32.3) +13%
Other gains/(losses) , net 1 1.5 (0.8) N/A 1.0 +44%
Operating profit 1 50.7 36.3 +40% 52.6 -3%
Net gains/(losses) from investments and others 1 (0.7) 0.6 N/A 0.6 N/A
Interest income 1 3.9 3.4 +13% 4.2 -9%
Finance costs (3.1 ) (3.4) -5% (2.8 ) +10%
Share of profit of associates & JV s, net 7.7 1.2 +566% 2.2 +253%
Income tax expense (10.1) (11.1) -9% (14.1) -28%
Net profit 48.4 27.0 +79% 42.7 +13%
Net profit attributable to equity holders 47.6 26.2 +82% 41.9 +14%
Diluted EPS in RMB 4.994 2.695 +85% 4.386 +14%
Non -IFRS
Operating profit 1 58.4 46.1 +27% 58.6 -0.3%
Net profit attributable to equity holders 57.3 37.5 +53% 50.3 +14%
Diluted EPS in RMB 6.014 3.875 +55% 5.263 +14%
Weighted average number of shares in million 2 9,445 9,625 -1.9% 9,484 -0.4%
16
1. Starting 4Q23, we present investment -related gains/(losses), donations and others (previously within “Other gains/(losses), net” ) and interest income below operating profit line to better reflect results of day -to-day operations 2. Weighted average number of shares for calculation of diluted EPS includes the dilutive effect of share options and awarded sh are s as determined under the treasury stock method.

Non – IFRS Adjustments
In billion RMB IFRS
2Q20 24 SBC
Net (gain s)/
losses from
investee
companies 1
Amortisation
of intangible
assets
Impairment
provision s2 SSV & CPP 3 Tax effects Non -IFRS
2Q20 24 YoY change QoQ change
Operating profit 50.7 6.2 – 1.3 – 0.2 – 58.4 +27% -0.3%
Share of profit of
associates & JVs, net 7.7 0.9 (0.1) 1.4 – – – 9.9 +156% +80%
Net profit 48.4 7.1 (3.7) 2.7 3.5 1.0 (0.6) 58.4 +51% +14%
Net profit attributable
to equity holders 47.6 7.0 (3.7) 2.4 3.5 1.0 (0.5) 57.3 +53% +14%
Operating margin 31.5% 36.3% +5.4ppt -0.5ppt
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 for associates, joint ventures, goodwill and other intangible assets arising from a cqu isitions.
3. Mainly including donations and expenses incurred for the Group’s Sustainable Social Value & Common Prosperity Programme initi atives.

48.8 46.4 42.7
36.7 40.6
46.3 44.2 41.7
48.9 52.3 56.8 54.8 55.6
Online Advertising (%)
52.9 53.0
48.7 50.4 50.6 51.7 49.8
53.9 54.0 55.5 53.7
57.3 57.0
Value -added Services (%)
Gross Margins
32.0 28.5 27.1 31.6 33.3 33.3 33.6 34.5 38.4 40.9 43.9 45.6 47.6
2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24
FinTech and Business Services (%)
18
45.4 44.1
40.1 42.1 43.2 44.2 42.6
45.5 47.5 49.5 50.0 52.6 53.3
Overall Gross Margin (%)

9.4 10.2 9.1 10.2
2Q23 2Q24 1Q24 2Q24
S&M
in billion RMB
Operating Expenses
19
R&D
in billion RMB
G&A (excl. R&D)
in billion RMB
16.0 17.3 15.7 17.3
2Q23 2Q24 1Q24 2Q24
Non -IFRS Non -IFRS Non -IFRS
8.3 9.2
7.5
9.2
2Q23 2Q24 1Q24 2Q24
+10%
YoY
+21%
QoQ
2Q24 S&M grew by 11 % YoY and 21% QoQ
+8%
YoY
+10%
QoQ
2Q24 R&D grew by 7% YoY and 8% QoQ 2Q24 G&A (excl. R&D) grew by 3% YoY and 3% QoQ
+9%
YoY
+12%
QoQ

28.9
27.3
21.7
25.6 25.2
27.3
25.1
30.0
30.9
33.4
31.7
36.8 36.3
2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24
(%)
Non – IFRS Operating Margin
20

In billion RMB 2Q2024 2Q2023 YoY 1Q2024 QoQ
Operating CAPEX 7.2 3.0 +144% 6.6 +8%
Non -operating CAPEX 1.5 1.0 +53% 7.8 -80%
Total CAPEX 8.7 4.0 +121% 14.4 -39%
Operating Cash Flow 54.1 40.7 +33% 72.3 -25%
Less: CAPEX Paid (5.9) (3.0 ) +100% (15.2) -61%
Payments for media content (6.2) (6.3 ) -0.9% (3.7) +68%
Payments for lease liabilities (1.6) (1.5) +11% (1.5) +9%
Free Cash Flow 40.4 29.9 +35% 51.9 -22%
Total Cash 415.2 371.8 +12% 445.2 -7%
Less: Total Debt (343.4) (354.1) -3% (352.7) -3%
Net Cash 71.8 17.7 +305% 92.5 -22%
CAPEX, FCF and Cash Position
21
• Repurchased ~104 million shares with an aggregated cost of ~RMB34.2 billion and paid cash dividend of ~RMB28.9 billion
during 2Q24
• As at 30 Jun 2024, the f air value of our shareholdings 1 in listed investee companies (excluding subsidiaries) was ~RMB565
billion (USD79 billion) and the carrying book value of our unlisted investments was ~RMB327 billion (USD46 billion)
1. Including those held via special purpose vehicles, on an attributable basis.

1. Overview
4. Q&A

Tencent Holdings Limited
2024 Second Quarter Results Presentation
Thank you!
https://www.tencent.com/ir