Tencent posts 41% profit growth in Q2, with its gaming business topping $6 billion in revenue

Tencent has shared its financial results for the second quarter of 2023 ended June 30. Although the Chinese tech giant posted growth in key business metrics, they were below analysts’ expectations.

Key takeaways

• According to its Q2 earnings release, Tencent reached 149.2 billion yuan ($20.6 billion) in total revenue, up 11% year-over-year. According to Reuters, analysts expected revenue to be 151.73 billion ($20.8 billion).
• Net profit was 26.2 billion yuan ($3.6 billion), up 41% compared to the same period last year. It was below analysts’ expectations of 33.41 billion yuan ($4.58 billion).
• In the first half of 2023, Tencent reached 299.2 billion yuan ($41.4 billion) in revenue, up 11% year-over-year.
• Net revenue was 52 billion yuan ($7.2 billion), up 24% year-over-year.

Tencent’s quarterly revenue by segment

How did Tencent’s gaming business perform in Q2?

• Domestic games revenue reached 31.8 billion yuan ($4.36 billion), flat from the same period last year.
• International games revenue grew 19% year-over-year to 12.7 billion yuan ($1.74 billion).
• Combined, these segments accounted for 30% of the company’s total revenue in Q2, or 44.5 billion yuan ($6.1 billion).
• Tencent expects its domestic games to resume year-over-year growth in Q3, thanks to promising metrics of Naruto Mobile, Arena Breakout, and DnF, as well as the recent launches of Valorant and Lost Ark in China as the main drivers of its domestic games revenue.
• The growth in its international games revenue was due to the strong performance of Valorant, Goddess of Victory: Nikke, and PUBG Mobile. The latter resumed its year-over-year growth in terms of revenue and DAU in June.

• Mini Games, casual titles working on WeChat’s Mini Programs, currently have over 400 million MAU. There are also over 300k game developers on the platform.
• Over 100 Mini Games also topped 10 million yuan ($1.4 million) in gross revenue in the second quarter.