Tencent Stock: Third Quarter Results Exceed Expectations on Gaming and AI Revenue

TLDR

• Tencent recorded 192.9 billion yuan in Q3 revenue, exceeding analyst projections by 4 billion yuan.
• Gaming operations generated 42.8 billion yuan domestically and 20.8 billion yuan internationally, with international sales up 43%.
• The company’s net profit reached 63.1 billion yuan, beating estimates by nearly 8 billion yuan.
• AI-enhanced advertising brought in 36.2 billion yuan, representing a 21% year-over-year increase.
• The Yuanbao AI assistant attracted 32 million monthly users by September 2025.

Tencent delivered third-quarter revenue of 192.9 billion yuan for the period ending September 30. Analysts had forecast 188.9 billion yuan for the quarter.

The Shenzhen-based company reported net profit of 63.1 billion yuan. Wall Street expected 57.3 billion yuan.

Gaming operations drove much of the growth. Domestic gaming revenue increased 15% to 42.8 billion yuan. International gaming revenue surged 43% to 20.8 billion yuan.

“Honor of Kings” and “Peacekeeper Elite” maintained their momentum in the domestic market. “Delta Force” added fresh revenue as a new release. Supercell’s portfolio boosted international numbers.

Advertising revenue climbed 21% to 36.2 billion yuan. The company attributes this to AI-powered targeting tools that deliver better results for advertisers.

CEO Pony Ma highlighted the impact of AI investments. The technology now enhances ad targeting and game engagement across the platform.

AI Technology Gains Traction

The company’s AI push is showing measurable results. Research and development efficiency jumped 20% thanks to AI automation tools.

Ninety percent of Tencent engineers use CodeBuddy IDE. The smart programming tool runs on the company’s Hunyuan model.

Tencent launched Hunyuan Image 3.0 in September. The text-to-image generator outperformed Google DeepMind’s Nano Banana on a public leaderboard.

The Yuanbao chatbot reached 32 million monthly active users. It trails ByteDance’s Doubao and DeepSeek’s app in the Chinese market.

WeChat now includes AI from startup DeepSeek. The super app counts 1.41 billion monthly active users across Weixin and WeChat.

Revenue Performance by Division

Value-added services brought in 95.9 billion yuan, up 16% year-over-year. This category covers gaming and social media operations.

Fintech and business services generated 58.2 billion yuan, a 10% increase. Enterprise demand for AI services contributed to the growth. WeChat’s Mini Shop e-commerce platform also added revenue through service fees.

Capital expenditure for the quarter totaled 13 billion yuan. The previous quarter saw 19.1 billion yuan in capex. Management projects AI-focused spending will reach the low teens as a percentage of revenue in 2025.

The company stockpiled AI chips ahead of potential U.S. trade restrictions. Domestic chip alternatives remain available if needed.

Tencent released over 30 open-source AI models this year. The collection includes multiple 3D generation models.

Market Response

Shares traded at HK$656 on Thursday, down 0.15% before the earnings release. The stock is listed on the Hong Kong exchange.

Marketing services revenue grew 21% to 36.2 billion yuan in the September quarter, powered by improved AI targeting capabilities that help advertisers reach their audiences more effectively.

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