TMTPOST -- Tencent Holdings Ltd. defied   Wall   Street estimates   with faster-than-expected   top   and bottom   line for   the second quarter   of this year   as   artificial intelligence ( AI )   adoption is driving   its game and advertising businesses.

Credit：Tencent

Tencent on Wednesday posted total revenue of RMB184.5 billion   ( $25.7 billion )   for   the quarter   ended June 30, beating   an   average estimate   of   RMB179   billion, according to Bloomberg.   The revenue shattered the company ’ s quarterly   record   and maintained a double-digit   growth for a third straight   quarter. With a 15%   year-over-year ( YoY )   rise, the top   line   set   the fastest pace since the third quarter of 2021, and   accelerated   from a   13%   increase   three   months earlier, whereas   analysts   expected   the company   would deliver a 11%   YoY increase.

The bottom line of Chinese social media and video game giant   also   grew   stronger,   instead of    slowing   down.   On an IFRS basis, the profit attributable to equity holders of the company, or net income, surged 17% YoY to RMB   55.6 billion   from April   to June, while   analysts   estimated   net   income would add 6.7%   following a 14% YoY increase for the previous quarter. Diluted earnings per share ( EPS ) were RMB5.996   with a   20% YoY increase, compared with a gain of   17% for the first quarter.

The profit   reversed a slowdown   trend   showcased   for the first quarter   as Tencent ’ s high-margin businesses--domestic games   and   marketing   services such as   video accounts   helped offset rising AI   spending.   Tencent Chairman and CEO Pony Ma, or Ma Huateng   attributed the stellar growth to AI adoption.   "During the second quarter of 2025, we delivered   double-digit revenue and non-IFRS operating profit growth on a year-on-year basis, as we invested in, and   also benefitted from, utilising AI,"   Ma said in a statement.

Financial results of Tencent ’ s major segments suggested   its   investment in   AI   is   beginning   to   paying off.   Tencent ’ s bread-and-butter gaming   saw a double-digit YoY   growth for the third consecutive quarter. VAS ( value-added services ) , including game and social network business, generated RMB91.4   billion with a 16% YoY rise,   following a 17% increase   for the March quarter.

Domestic Games brought RMB40.4   billion, representing a YoY rise of 17% after a 24% increase for the preceding quarter. The solid growth benefited from recently released Delta Force and growth in revenues from evergreen games including Honour of Kings,   VALORANT, and Peacekeeper Elite, Tencent said.

Revenue from International Games grew   35% YoY to RMB18.8   billion, refreshing the quarterly record set from January to March   with a   23% YoY increase. Acceleration of International Games was driven by revenue   growth of   Supercell ’ s games and PUBG MOBILE, as well as   the contribution from newly released Dune: Awakenin.   Social Networks revenues rose 6% YoY to RMB32.2   billion, driven by growth in app-based game virtual item sales,   Video Accounts live streaming   revenue and music subscription revenue.

"Our games performed well in terms of users and revenue as evergreen   games such as Honour of Kings and Peacekeeper Elite evolve into platforms while increasing their usage of   AI, and as new games such as Delta Force broke out,"   said Ma.

Tencent said   the second quarter   saw   it deployed AI tools in games to accelerate content production, introduced AI-powered features enabling more realistic virtual teammates and non-player characters, used AI-powered marketing activities to increase user acquisition and engagement, contributing to the popularity and revenue growth of Domestic and International Games.

Revenues from Marketing Services   advanced to RMB35.8   billion for the second   quarter   with a 20% YoY   increase,   the same growth   rate   as   three months ago.   The growth was primarily due to AI-driven improvements to our advertising platform and enhancements   to the Weixin transaction ecosystem, which resulted in robust advertiser demand across Video Accounts, MiniPrograms and Weixin Search. Marketing Services revenues increased across most major industry categories   during the   second   quarter.

Marketing services revenue sustained rapid growth   as Tencent   upgraded its   advertising foundation model, leading to better performance of advertisements across   its   traffic platforms, commented   Ma.   Tencent said during the second quarter it expanded AI capabilities in advertisement creation, placement, recommendation and performance   analysis, enhancing advertising click-through rates and conversions, returns on investment for advertisers,   and growing marketing services revenue on our platforms.

Revenues from FinTech and Business Services popped   10% YoY to RMB55.5   billion, compared with a 5% YoY increase for the second   quarter. The revenue growth reflected higher revenues from consumer loan   services, commercial payment activities and wealth management services.   Tencent credited acceleration   of revenue   to    increased enterprise customer   demand for AI-related services, including GPU rental and API token usage, along with increased eCommerce   technology service fees.

Tencent   should remain relatively unaffected by U.S.   tariffs, though its fintech and ad divisions remain exposed to potential second-order effects, should China ’ s economic growth slow in the second   half of the year,   Bloomberg Intelligence   analyst Robert Lea expected.  

Lea   anticipated Tencent ’ s growth   to return   normalized   this year   with earnings growth decelerating to the mid-teen   percentage range   after an exceptional 2024. while geopolitical pressure and rising economic headwinds present risks to the second haf of the   year, Tencent is better positioned to navigate these than its e-commerce peers,   said the analyst.