Tencent Just Crushed Q4 2024 Earnings: Here’s What Investors Need to Know

TradingKey - It’s been a large ride upwards for Chinese technology stocks so far in 2025. The Hang Seng TECH Index, which tracks 30 of the largest Chinese technology stocks listed in Hong Kong, has soared by 35% so far this year.

One of the biggest component stocks of that index is Tencent Holdings Ltd (HKEX: 0700) (OTC: TCEHY). The online gaming and WeChat operator has once again proven why it remains a dominant force in the tech industry. 

Tencent reported strong Q4 2024 results on Wednesday (19 March), exceeding expectations on both revenue and earnings. But beyond the numbers, Tencent is making aggressive moves in Artificial Intelligence (AI), expanding its gaming empire, and rewarding shareholders handsomely.

This isn’t just another earnings beat. It’s a sign that Tencent is evolving into an AI-driven powerhouse while maintaining its leadership in gaming, digital advertising, and fintech. Here are some key takeaways for the company’s earnings. 

Strong quarter with revenue and profit growth

Tencent’s Q4 2024 revenue came in at RMB 172.4 billion (US$23.8 billion), an 11% increase from the same period in the previous year and surpassing analyst estimates. Earnings per share (EPS) landed at RMB 5.91, slightly above expectations. 

More importantly, the company showed significant profitability gains. Gross profit rose by 17% year-on-year to RMB 90.7 billion, while non-IFRS net profit attributable to equity holders surged 30% to RMB 55.3 billion.

Tencent’s gross profit rises significantly in Q4 2024

Source: Tencent’s Q4 2024 and FY2024 Results Presentation

The key driver behind this financial strength is Tencent’s shift toward higher-margin businesses. Over the past few years, Tencent has been streamlining its operations, moving away from lower-margin segments and doubling down on gaming, advertising, and AI-powered services. 

That strategy is clearly paying off, with non-IFRS operating profit growing 21% year-on-year to RMB 59.5 billion.

Gaming remains revenue powerhouse

Tencent’s gaming division continues to be a core revenue driver, with domestic gaming revenue growing by 23% year-on-year to RMB 33.2 billion. 

Titles like Honor of Kings, Peacekeeper Elite, and VALORANT remain highly popular, benefiting from Tencent’s ability to sustain long-term engagement through content updates, in-game events, and AI-driven game enhancements.

International gaming revenue was also strong, rising 15% year-on-year to RMB 16 billion. Games such as Brawl Stars, PUBG Mobile, and Path of Exile 2 contributed to this growth. 

Tencent has long been focused on creating evergreen gaming franchises; games that remain popular and generate revenue for years rather than fading quickly after launch. That strategy is working, as several of its biggest titles continue to attract and retain players at high levels.

Looking ahead, Tencent is integrating AI more deeply into game development. AI-driven tools are improving 3D content production, optimising matchmaking in multiplayer games, and even assisting new players with AI-powered coaching. 

AI is more than just a buzzword for Tencent

While AI has become a common talking point for tech companies, Tencent is putting its money where its mouth is. The company has been aggressively integrating AI across its ecosystem, and the results are already showing.

Its proprietary HunYuan Foundation Model has advanced significantly, incorporating new multimodal AI capabilities that enhance text, image, video, and 3D generation. Perhaps more importantly, AI is being used to improve Tencent’s current offerings.

Weixin Search – one of Tencent’s core platforms – now relies on AI to improve the relevance of search results, with AI-powered queries accounting for more than 90% of search volume.

But the real AI breakout is Yuanbao, Tencent’s AI-native assistant. Since launching, Yuanbao’s daily active users have surged 20-fold in just two months, making it the third-most popular AI mobile application in China. Tencent is also bringing AI-powered enhancements to WeChat, video accounts, and fintech products, ensuring that AI is deeply embedded in the company’s most profitable segments.

Digital advertising is booming, fintech stagnant

While some tech giants are struggling in the advertising sector, Tencent is thriving. Marketing services revenue jumped 17% year-on-year to RMB 35 billion, thanks to AI-powered ad targeting and increased user engagement. 

Video Accounts, one of Tencent’s most important advertising platforms, saw revenue soar by 60% year-on-year, as AI-enhanced recommendations boosted ad performance.

Tencent is also seeing strong advertising revenue growth from Weixin Search and Mini Programs. AI-driven ad placements and new ad formats have significantly improved click-through rates, making Tencent’s ad inventory more valuable to advertisers. 

With its AI-powered advertising solutions gaining traction, Tencent is well-positioned to continue outperforming the broader digital ad industry.

Meanwhile, Tencent’s Fintech and Business Services revenue grew modestly at 3% year-on-year. While commercial payment volumes stabilised, pricing pressures in the market have limited revenue expansion. 

The fintech business, however, remains highly profitable, with improved risk controls and lower funding costs helping Tencent optimise its financial services operations.

Tencent rewarding shareholders generously

Despite its heavy investment in AI, Tencent isn’t forgetting about its shareholders. The company repurchased HK$112 billion (US$14.4 billion) worth of shares in 2024 and has committed to buying back at least HK$80 billion in 2025. On top of that, Tencent is increasing its annual dividend by 32%, proposing a payout of HK$4.50 per share.

Tencent is striking a rare balance; it’s investing aggressively in next-generation AI technologies while maintaining a culture of strong cash returns to investors. For long-term shareholders, this is exactly what you want to see.

Tencent continues returning capital to shareholders

Source: Tencent’s Q4 2024 and FY2024 Results Presentation

Bottom line for Tencent investors?

Tencent is proving it can execute on multiple fronts – AI, gaming, digital advertising, and fintech – while delivering impressive profit growth. Its deep integration of AI across its platforms is already generating real revenue, and the company’s commitment to shareholder returns remains strong. 

The biggest thing to watch moving forward will be Tencent’s AI monetisation strategy. With its growing dominance in AI search, gaming, and cloud, Tencent is well-positioned for long-term success. 

If you’re looking for a tech stock that’s adapting to the AI revolution while continuing to deliver strong financial performance, Tencent is one to keep on your radar.