BEIJING/SINGAPORE: Tencent Holdings reported a 9% rise in first-quarter revenue to 196.5 billion yuan ($28.94 billion) on Wednesday, but fell short of the 198.96 billion yuan forecast by analysts.
The Shenzhen-based company's revenue growth was driven by a strong gaming performance, with domestic gaming revenue rising 6% and international gaming revenue climbing 13%.
Although China's largest social media and gaming company benefited from robust demand for its games and expanding artificial intelligence services, its net profit was 58.1 billion yuan, below estimates of 61.42 billion yuan.
Flagship titles including "Honour of Kings" and "Peacekeeper Elite" continued to drive user engagement, while tactical shooter "Delta Force" also contributed to the gains.
Online advertising revenue increased 20% to 38.2 billion yuan, boosted by AI-enhanced ad targeting capabilities.
Tencent last month unveiled Hunyuan 3.0, its most advanced large language model to date and its first major release since hiring former OpenAI researcher Yao Shunyu to lead development of its proprietary AI platform.
The launch underscores Tencent's efforts to close the gap with rivals ByteDance and Alibaba, which analysts say have been more aggressive in AI investment and deployment.
Tencent said in March it would ramp up AI spending this year, including investment in proprietary models. President Martin Lau said the company plans to increase capital expenditure in 2026, without specifying the amount.
The tech giant's total capex reached about 79 billion yuan last year, up from 77 billion yuan in 2024. First-quarter capex was 31.9 billion yuan, versus 27.5 billion yuan a year earlier.
Tencent spent 1 billion yuan promoting its Yuanbao AI chatbot during the Lunar New Year holiday period as it seeks market share in China's increasingly competitive AI sector.
($1 = 6.7902 Chinese yuan renminbi) - Reuters
