Tencent FY2024 Q3 Earnings Release

Nov 13, 2024
2024 Third 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 7.0074 for 3Q2024 .
2
Cautionary Note

1. Overview

In billion RMB 3Q2024 3Q2023 YoY 2Q2024 QoQ
Total Revenue 167.2 154.6 +8% 161.1 +4%
Value -added Services 82.7 75.7 +9% 78.8 +5%
Social Networks 30.9 29.7 +4% 30.3 +2%
Domestic Games 1 37.3 32.7 +14% 34.6 +8%
International Games 14.5 13.3 +9% 13.9 +5%
Marketing Services 2 30.0 25.7 +17 % 29.9 +0.4 %
FinTech and Business Services 53.1 52.0 +2 % 50.4 +5%
Others 1.4 1.2 +28% 2.0 -29%
Gross Profit 88.8 76.5 +16% 85.9 +3%
Non -IFRS
Operating Profit 61.3 51.7 +19% 58.4 +5%
Operating Margin 36.6% 33.4% +3.2ppt 36.3% +0.3ppt
Net Profit Attributable to Equity Holders 59.8 44.9 +33% 57.3 +4%
Financial Highlights
1. 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
2. Starting this quarter, we have renamed this revenue segment from ‘Online Advertising’ to ‘Marketing Services’ to better repre sen t the breadth of our marketing solutions and accompanying technology
services across our online marketing properties.
4

Weixin & WeChat
• #1 mobile community
• MAU at 1,382m
QQ
• Mobile devices MAU at
562 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 Sep 30, 2024
2. IDC Quarterly Public Cloud Services Tracker, 2Q24
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% 20% 22% 21% 21% 20% 21% 20% 19% 18% 19% 19% 18%
24% 21% 24% 24% 22% 19% 23% 21% 21% 18% 22% 21% 22%
8% 9% 8% 8% 9% 10%
9% 9% 9%
9%
8% 9% 9%
16% 15% 13% 14% 15% 17%
14% 17% 16% 19%
17% 19% 18%
30% 33% 32% 32% 32% 33% 32% 32% 34% 35% 33% 31% 32% 1% 2%
1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
142.4 144.2
135.5 134.0 140.1 145.0 150.0 149.2 154.6 155.2 159.5 161.1 167.2
3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24
Social Networks Domestic Games International Games Marketing Services FinTech and Business Services Others
+13% +8% +0.1% -3% -2% +0.5% +11% +11% +10% +7% +6% +8% +8%
Revenue Growth (YoY %)
Revenue by Segment (billion RMB)

+11% -2% -9% -8% -1% +7% +19% +22% +23% +25% +23% +21% +16%
64% 61% 64% 63% 61% 57%
63% 57% 55% 48%
54% 52% 53%
17%
16% 12% 13% 16% 18%
13% 17% 18% 22%
17% 19% 18% 20%
23% 24% 24%
24% 26%
25% 26%
28% 31%
28% 28% 29%
62.7
57.8 57.1 57.9
62.0 61.9
68.2 70.8
76.5 77.6
83.9 85.9 88.8
3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24
Value-added Services Marketing Services FinTech and Business Services Others
Gross Profit
8
Gross Profit Growth (YoY %)
Gross Profit by Segment (billion RMB)

Social Networks
29.7 30.9 30.3 30.9
32.7
37.3 34.6 37.3
13.3
14.5
13.9
14.5
75.7
82.7
78.8
82.7
3Q23 3Q24 2Q24 3Q24
Domestic Games International Games
+9%
YoY
+5%
QoQ
+14%
+4%
+8%
+2%
+9% +5%
Value – added Services
In billion RMB
9
Social Networks
• Revenue was up 4% YoY, driven by increased revenue from music subscriptions,
app -based games item sales and Mini Games platform service fees, partially
offset by decreased revenue from music – and games -related live streaming
services
• Music subscription revenue increased 20 % YoY, benefitting from enhanced
recommendation algorithms, enriched content offerings and upgraded audio
quality . Music subscriptions grew 16 % YoY to 119 million 1
• Long -form video subscription revenue increased 4% YoY . Video subscriptions
grew 6% YoY to 116 million, benefitting from popular animated and drama series .
Our exclusive drama series She And Her Girls became the highest -rated 2
domestic drama series industry -wide since 2015
Domestic Games
• Revenue grew 14 % YoY, reflecting growth from HoK and Peacekeeper Elite,
record -setting performance from VALORANT, and full -quarter contribution of DnF
Mobile
International Games
• Revenue increased 9% YoY, or 11 % in constant currency, driven by PUBG
MOBILE and Brawl Stars . Revenue growth lagged gross receipt growth due to
deferral periods, which lengthened for certain games
1. The average number of subscriptions as of the last day of each month during 3Q24
2. Source: Douban, as of Nov 12, 2024

10
Communications & Social Networks
10
a
• GMV facilitated by Mini Programs grew high teens % YoY and exceeded RMB 2 trillion in 3Q 24 , benefit ting
from better coverage and solutions for use cases including food ordering, electric vehicle charging, and
medical services
• Enrich ed our content offering beyond Mini Games with increasingly popular Mini Dramas
a
• Mini Shops is our platform for indexed and standardised merchandise, where merchants can operate
storefronts similar to those in eCommerce marketplaces, while leveraging Weixin social interactions,
content services, and payment capabilities
• For consumers, we enhanced user interface for order tracking, extended return periods, and provided
express refund services
• For merchants, we made onboarding easier by streamlining admission procedure and lowering deposit
requirements, and enabled shoppable SKU -level links in Official Accounts, Mini Programs , Weixin Search
and Video Accounts
Mini Shops
Mini Programs
a
• Mobile device MAU returned to YoY growth in 3Q 24
• Comprehensively upgraded back end infrastructure, facilitating faster enhancements to user experience
• Added and popularised powerful new functionalities, such as Tencent Channels for interest -based user
interactions
QQ

Domestic Games
11 1. Source: data.ai, 3Q24
Launched new games with evergreen potential
• DnF Mobile : Ranked #2 by gross receipts 1 among all mobile games in 3Q 24 . Will release major
content update for Chinese New Year to enhance user engagement
• Delta Force : Our first multi -platform FPS targeting global market ; achieved good average user
daily time spent and player retention rates, and several million DAUs . Will add campaign mode and
launch internationally in coming months
Flagship evergreen games delivered healthy growth
• HoK : Gross receipts grew YoY in 3Q 24 , benefitting from Chinese Valentine -themed event in
collaboration with Tencent Comics IP Fox Spirit Matchmaker, and top -tier martial arts -themed outfit
• Peacekeeper Elite : Gross receipts increased double -digit % YoY in 3Q 24 , continuing recent
rebound, driven by items based on Neon Genesis Evangelion and upgradable outfit inspired by
Chinese ink -painting
Several proven evergreen games set new records
• Naruto Mobile : Average DAU set historical high of over 10 million in 3Q 24 , as gameplay adapted
from a Naruto animated movie and new ninjas attracted millions of new players . Gross receipts
grew robustly YoY on higher paying user penetration for season passes
• VALORANT : Average DAU and gross receipts reached new highs ; largest contributor to our PC
game gross receipts and revenue in 3Q 24 . First victory from a Chinese team in global Valorant
Champions tournament attracted new players and boosted sales of eSports -themed items VALORANT
Honour of Kings
Delta Force

International Games
12
PUBG MOBILE Brawl Stars
• Continued among top 3 mobile
games by DAU in international
markets 1; gross receipts grew
several times YoY, benefitting from
Mega Boxes and IP collaboration
with SpongeBob SquarePants
VALORANT
• Gross receipts increased by over
30 % YoY in 3Q 24 , benefitting from
launch of console version in 5 key
markets and eSports -themed
weapon items
• Gross receipts grew by double –
digit % YoY and achieved record
high in 3Q 24 , benefitting from
Egyptian -themed outfits and
Lamborghini brand collaboration
1. Source: data.ai, 3Q24

Marketing Services
In billion RMB
25.7
30.0 29.9 30.0
3Q23 3Q24 2Q24 3Q24
+17%
YoY
+0.4%
QoQ
13
Overall
• Revenue grew 17 % YoY, with strength in games and eCommerce
categories, outweighing weakness in real estate and food & beverage .
Paris Olympics cushioned industry -wide weakness in brand ad revenue in
3Q 24 , but this positive factor will be absent in 4Q 24
• Leveraged Tencent Hunyuan to facilitate tagging and categorisation of
content and ad materials . Upgraded machine learning platform to deliver
more accurate ad targeting
Weixin
• Video Accounts marketing services revenue increased over 60 % YoY . As
we systematically strengthen transaction capabilities in Weixin , advertisers
increasingly utilise our marketing tools to boost content exposure and drive
sales conversion
• Mini Programs marketing services revenue grew robustly YoY, as our mini
games and mini dramas provided high -value rewarded video ad inventory
and generated incremental closed -loop demand
• Weixin Search revenue more than doubled YoY, benefitting from
increased commercial queries and improved CTR . We utilised LLM
capabilities to facilitate understanding of complex queries and content ,
enhancing relevance of search results

52.0 53.1 50.4 53.1
3Q23 3Q24 2Q24 3Q24
+2%
YoY
+5 %
QoQ
FinTech and Business Services
FinTech Services
• Revenue was flat YoY, decrease in payment revenue offset by increase in
wealth management services revenue
• For commercial payment, number of transactions continued to increase at
healthy rate YoY while average value per transaction declined YoY
• For wealth management, number of users and aggregated customer assets
increased YoY
Business Services
• Revenue grew YoY, mainly driven by cloud services and fees collected on
eCommerce transaction s. Gross profit increased notably YoY due to
increased contribution from higher -margin revenue streams, as well as
improved efficiency
• Revenue from GPU -powered services, primarily for AI computing, grew
swiftly YoY and represented teens percentage of IaaS revenue
• Released Tencent Hunyuan Turbo with heterogeneous MoE 1 architecture,
which doubled training and inference efficiency and halved inference cost
versus Hunyuan Pro
• Tencent Cloud increased international revenue significantly YoY . We
leveraged our domain expertise in areas such as games and live streaming
to win new customers
14
In billion RMB
1. Mixture of Experts is a deep learning technique that boosts overall performance by using a mixture of multiple expert models and enhances efficiency and scalability of training and inference by
dynamically routing inputs to the appropriate experts for processing

1. Overview

3. Financial Review

Income Statement
In billion RMB 3Q2024 3Q2023 YoY 2Q2024 QoQ
Revenue 167.2 154.6 +8% 161.1 +4%
COPS (78.4) (78.1 ) +0.3% (75.2) +4%
Gross profit 88.8 76.5 +16% 85.9 +3%
Operating expenses (38.5) (34.2) +12% (36.7) +5%
Other gains , net 1 3.0 2.0 +47% 1.5 +100%
Operating profit 1 53.3 44.3 +20% 50.7 +5%
Net gains/(losses) from investments and others 1 3.1 0.6 +396% (0.7) N/A
Interest income 1 4.0 3.6 +14% 3.9 +4%
Finance costs (3.5) (2.8) +27% (3.1 ) +13%
Share of profit of associates & JV s, net 6.0 2.1 +187% 7.7 -22%
Income tax expense (8.9) (11.0) -19% (10.1) -12%
Net profit 54.0 36.8 +47% 48.4 +12%
Net profit attributable to equity holders 53.2 36.2 +47% 47.6 +12%
Diluted EPS in RMB 5.644 3.752 +50% 4.994 +13%
Non -IFRS
Operating profit 1 61.3 51.7 +19% 58.4 +5%
Net profit attributable to equity holders 59.8 44.9 +33% 57.3 +4%
Diluted EPS in RMB 6.340 4.657 +36% 6.014 +5%
Weighted average number of shares in million 2 9,360 9,597 -2.5% 9,445 -0.9%
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
3Q20 24 SBC
Net (gain s)/
losses from
investee
companies 1
Amortisation
of intangible
assets
Impairment
provision s2 SSV & CPP 3 Tax effects Non -IFRS
3Q20 24 YoY change QoQ change
Operating profit 53.3 6.4 – 1.4 – 0.2 – 61.3 +19% +5%
Share of profit of
associates & JVs, net 6.0 1.0 0.1 1.4 – – – 8.5 +78% -14%
Net profit 54.0 7.4 (6.6) 2.8 3.8 0.3 (0.8) 60.9 +33% +4%
Net profit attributable
to equity holders 53.2 7.2 (6.7) 2.6 3.8 0.3 (0.6) 59.8 +33% +4%
Operating margin 31.9% 36.6% +3.2ppt +0.3ppt
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.

46.4 42.7
36.7 40.6
46.3 44.2 41.7
48.9 52.3 56.8 54.8 55.6 53.0
Marketing Services (%)
53.0
48.7 50.4 50.6 51.7 49.8
53.9 54.0 55.5 53.7
57.3 57.0 57.5
Value -added Services (%)
Gross Margins
28.5 27.1 31.6 33.3 33.3 33.6 34.5 38.4 40.9 43.9 45.6 47.6 47.8
3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24
FinTech and Business Services (%)
18
44.1
40.1 42.1 43.2 44.2 42.6 45.5 47.5 49.5 50.0 52.6 53.3 53.1
Overall Gross Margin (%)

9.8
11.2 10.2 11.2
3Q23 3Q24 2Q24 3Q24
S&M
in billion RMB
Operating Expenses
19
R&D
in billion RMB
G&A (excl. R&D)
in billion RMB
16.5 17.9 17.3 17.9
3Q23 3Q24 2Q24 3Q24
Non -IFRS Non -IFRS Non -IFRS
7.9
9.4 9.2 9.4
3Q23 3Q24 2Q24 3Q24
+19%
YoY
+3%
QoQ
3Q24 S&M grew by 22 % YoY and 4% QoQ
+9%
YoY
+4%
QoQ
3Q24 R&D grew by 9% YoY and 6% QoQ 3Q24 G&A (excl. R&D) grew by 5% YoY and 5% QoQ
+14%
YoY
+9%
QoQ

27.3
21.7
25.6 25.2
27.3
25.1
30.0
30.9
33.4
31.7
36.8 36.3 36.6
3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24
(%)
Non – IFRS Operating Margin
20

In billion RMB 3Q2024 3Q2023 YoY 2Q2024 QoQ
Operating CAPEX 14.7 6.6 +122% 7.2 +104%
Non -operating CAPEX 2.4 1.4 +74% 1.5 +57%
Total CAPEX 17.1 8.0 +114% 8.7 +96%
Operating Cash Flow 78.1 65.0 +20% 54.1 +44%
Less: CAPEX Paid (12.0) (5.8) +108% (5.9) +103%
Payments for media content (5.6) (6.3) -11% (6.2) -10%
Payments for lease liabilities (2.0) (1.8) +3% (1.6) +16%
Free Cash Flow 58.5 51.1 +14% 40.4 +45%
Total Cash 425.5 387.4 +10% 415.2 +2%
Less: Total Debt (330.0) (351.0) -6% (343.4) -4%
Net Cash 95.5 36.4 +162% 71.8 +33%
CAPEX, FCF and Cash Position
21
• Repurchased ~95 million shares with an aggregated cost of ~RMB32.6 billion (HKD35.9 billion)
• As at 30 Sep 2024, the f air value of our shareholdings 1 in listed investee companies (excluding subsidiaries) was ~RMB612
billion (USD87 billion) and the carrying book value of our shareholdings in unlisted investee companies (excluding
subsidiaries) was ~RMB328 billion (USD47 billion)
1. Including those held via special purpose vehicles, on an attributable basis.

1. Overview
4. Q&A

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