Mobile gaming and advertising revenues were the key drivers behind Tencent’s stellar second-quarter results, with the Chinese internet giant posting 59% growth in revenues and 70% growth in profits.
The results, which again outstripped analyst expectations, build on a strong first quarter, with the gaming and entertainment giant posting revenue of RMB 56.6bn ($8.4bn) and profits of RMB 18.25bn ($2.7 bn).
Tencent’s hugely popular Honour of Kings smartphone game helped boost online games revenues by 39% to RMB 23.86m. While overall revenues for Value Added Services (VAS) grew 43% to RMB 36.8bn year-on-year.
Online advertising revenues jumped 55% year-on-year to total RMB 10.15bn and media advertising revenues grew 48% to RMB 4.07bn driven by the growth in traffic for Tencent Video and News services.
The increased popularity of live streaming, video and music helped grow revenues from social networks which topped RMB 12.95bn – a 51% increase.
WeChat’s total global users grew to 963 million monthly active users, an increase of 19.5% year-on-year and 25 million users compared to Q1. Meanwhile, QQ monthly active users dropped 5.4% to 850 million.
Tencent’s payment division Tencent Pay experienced “rapid” increase in transactions and along with the company’s cloud services contributed 177% revenue growth year-on-year.
Ma Huateng, chairman and CEO of Tencent said the company’s strong revenue growth was enabling it to reinvest in innovations and new technologies, specifically AI.
“We have also been increasing our investment in cloud services and AI technologies, which will enable us to serve our users and business partners even better into the future,” said Huateng.
“Artificial intelligence is a strategic initiative and we will continue to make long-term investments to strengthen our competence in machine learning, computer vision, speech recognition and natural language processing. Given the intensifying competitive nature of the industry, we expect our investment in new initiatives such as payment, cloud services and AI to increase, enabling us to serve our users and business partners even better into the future,” said a Tencent statement.