Chinese gaming giant Tencent Holding Ltd (OTC:TCEHY) reported fiscal fourth-quarter 2024 results on Wednesday.

Revenue grew 11% year-on-year to CNY172.4 billion ($24.0 billion), quashing the analyst consensus estimate of CNY168.95 billion.

Combined, the MAU of Weixin and WeChat grew by 3% Y/Y to 1.385 billion as of December 31, 2024.

Fee-based VAS registered subscriptions grew 7% Y/Y to 262 million. Mobile device MAU of QQ fell 5% Y/Y to 524 million as of December 31, 2024.

Revenues from VAS increased by 14% Y/Y to CNY79.0 billion. International Games revenues were CNY16.0 billion, up 15% Y/Y, due to strong performances from games including PUBG MOBILE and Brawl Stars along with the early access release of Path of Exile 2.

Domestic Games revenues increased by 23% Y/Y to CNY33.2 billion, driven by games including VALORANT, Honour of Kings, Peacekeeper Elite, and DnF Mobile, along with contributions from newly released games, DnF Mobile and Delta Force.

Social Networks revenues rose by 6% Y/Y to CNY29.8 billion, supported by growth in app-based game virtual item sales, music subscription revenues and Mini Games platform service fees.

Revenues from Marketing Services upped 17% Y/Y to CNY35.0 billion, aided by strong advertiser demand for Video Accounts, Mini Programs, and Weixin Search inventories.

Revenues from FinTech and Business Services upped 3% Y/Y to CNY56.1 billion on higher revenues from wealth management services and consumer loan services.

Gross profit climbed 17% Y/Y to CNY90.7 billion ($12.6 billion) in the quarter, with margin expansion of 53% from 50% a prior-year quarter.

Adjusted operating profit surged 21% Y/Y to CNY59.5 billion, with the margin expanding 2.8ppt Y/Y to 34.5%.

Adjusted net income attributable to equity holders increased 30% Y/Y to CNY55.3 billion ($7.7 billion). Adjusted EPS of CNY5.91 beat the CNY5.46 analyst consensus estimate.

As of December 31, 2024, Tencent had CNY415.4 billion ($57.8 billion) in cash and equivalents and generated CNY155.3 billion ($21.6 billion) in free cash flow.

In 2024, the company bought back around 307 million shares on the Hong Kong Stock Exchange for around HKD112.0 billion ($14.4 billion).

For 2025, Tencent plans to raise the annual dividend by 32% to HKD4.50 per share and repurchase at least HKD80 billion ($10 billion) worth of shares.

Ma Huateng, Chairman and CEO of Tencent, highlighted that AI-driven improvements to the advertising platform, increased engagement with Video Accounts, and growth in the core games led to achieved double-digit revenue growth while maintaining operational leverage in the quarter.

He further added that the company has restructured the AI teams to focus on both rapid product innovation and in-depth model research. They also ramped up AI-related capital investments, along with increased R&D and marketing for AI-native products.

Price Action: TCEHY stock closed lower by 0.43% at $69.49 on Tuesday.

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