On March 18, Tencent released its performance report for the fourth quarter and the full year of 2025. Annual revenue grew by 14% year-on-year, and net profit attributable to shareholders under non-International Financial Reporting Standards increased by 17%, with a significant acceleration in growth compared to the previous year. Profitability continued to improve, with the annual gross margin rising from 53% to 56%, mainly due to the increase in the proportion of high-margin businesses and cost optimization.
In the fourth quarter, Tencent achieved revenue and net profit growth for the fifth consecutive quarter: revenue reached 194.4 billion yuan, a year-on-year increase of 13%; net profit attributable to shareholders under non-International Financial Reporting Standards was 64.694 billion yuan, a year-on-year increase of 17%. Both growth rates exceeded market expectations, providing strong support for the AI strategic layout.
In terms of capital expenditure, Tencent's total investment for the year reached 79.2 billion yuan, with R&amp;D expenditure of 85.75 billion yuan, both hitting record highs. This large-scale computing power deployment reflects the company's urgency in the technological race and validates that its core business has ample cash flow to support long-term investments.
AI has become the core driving force of a new round of growth. From advertising and gaming to cloud services, AI technology is fully penetrating core businesses. Strategically, Tencent is accelerating its layout in the AI agency field, aiming to reposition WeChat as a core entry point for the AI era. On the product side, the company has launched multiple AI-native products and is developing an AI Agent deeply integrated into WeChat. From the financial report, the commercial value of the AI strategy is accelerating its realization.
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Core financial data is as follows:
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<li>For the full year, the company's total revenue reached 751.766 billion yuan, a year-on-year increase of 14%.</li>
<li>Gross profit was 422.593 billion yuan, an increase of 21%, with the gross margin rising from 53% to 56%.</li>
<li>Operating profit reached 241.562 billion yuan, a year-on-year increase of 16%.</li>
<li>Annual profit was 229.801 billion yuan, an increase of 17%.</li>
<li>Profit attributable to equity holders of the company was 224.842 billion yuan, a year-on-year increase of 16%.</li>
<li>Under non-International Financial Reporting Standards, profit attributable to equity holders of the company was 259.626 billion yuan, a year-on-year increase of 17%.</li>
<li>Basic earnings per share were 24.749 yuan, an increase of 18% compared to the previous year. The board of directors proposed a final dividend of 5.30 HKD per share, an increase of 18% from 4.50 HKD last year.</li>
<li>Quarterly, fourth-quarter revenue was 194.371 billion yuan, a year-on-year increase of 13%;</li>
<li>Gross profit was 108.289 billion yuan, an increase of 19%;</li>
<li>Operating profit was 60.338 billion yuan, an increase of 17%;</li>
<li>Profit for the period was 59.089 billion yuan, an increase of 15%;</li>
<li>Profit attributable to equity holders of the company was 58.260 billion yuan, a year-on-year increase of 14%.</li>
<li>Under non-International Financial Reporting Standards, profit attributable to equity holders of the company was 64.694 billion yuan, a year-on-year increase of 17%</li>
<li>From the business segment perspective, the annual revenue from value-added services was 369.281 billion yuan, a year-on-year increase of 16%.</li>
<li>Among them, domestic game revenue was 164.2 billion yuan, an increase of 18%; international game revenue was 77.4 billion yuan, a significant increase of 33%, with annual revenue exceeding 10 billion USD; social network revenue was 127.7 billion yuan, an increase of 5%. Marketing service revenue was 144.973 billion yuan, a year-on-year increase of 19%. Financial technology and enterprise service revenue was 229.435 billion yuan, a year-on-year increase of 8%, with enterprise service revenue growth approaching 20%.</li>
<li>In terms of user ecosystem, the combined monthly active accounts of WeChat reached 1.418 billion, a year-on-year increase of 2%; the number of paid members for paid value-added services was 267 million, a year-on-year increase of 2%.</li>
<li>In terms of cash flow and investment, the company's year-end cash net amount was 107.145 billion yuan. Annual capital expenditure was 79.198 billion yuan, and R&amp;D expenditure reached 85.747 billion yuan, a year-on-year increase of 21%. During the year, the company repurchased shares for approximately 80 billion HKD.</li>
</ul>
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It is worth noting that shareholder returns continue to increase. The board of directors proposed a final dividend of 5.30 HKD per share, a year-on-year increase of 18%. A total of over 153 million shares were repurchased throughout the year, costing approximately 80 billion HKD, demonstrating management's confidence in long-term value. The year-end cash net amount reached 107.1 billion yuan, a significant increase compared to the beginning of the year.
Affected by seasonal factors and strategic investments, the net profit attributable to the parent company in the fourth quarter decreased by 8% quarter-on-quarter to 58.3 billion yuan. Game revenue experienced a seasonal decline, coupled with increased sales expenses due to heightened promotion of AI-native applications and games, which surged by 26% year-on-year, along with foreign exchange losses, exerting some pressure on short-term profits. Management clearly views AI investment as a strategic layout for future growth.
<h2>AI Investment Drives R&amp;D Growth, Deeply Embedded Accelerates Ecosystem Monetization</h2>
AI is the core narrative throughout this financial report. Annual R&amp;D expenditure was approximately 85.7 billion yuan, a year-on-year increase of about 21%, with employee costs and depreciation related to AI being the main sources of incremental growth. Annual general and administrative expenses increased by 21% year-on-year to 136.1 billion yuan, with AI investment being the primary driver.
At the product level, the Mix Yuan 3.0 large language model has reached an industry-leading position in multimodal capabilities such as 3D generation, text-to-image, and world modeling. AI-native products such as Yuanbao, WorkBuddy, and QClaw have initially validated their commercial value. Within the WeChat ecosystem, user engagement in small shops, mini-games, and content mini-programs has rapidly increased year-on-year, with the embedding of AI capabilities accelerating ecosystem monetization.
Annual capital expenditure reached 79.2 billion yuan, with a single-quarter high of 19.6 billion yuan in the fourth quarter, primarily used for AI infrastructure investment, reflecting Tencent's large-scale deployment of computing resources. Tencent clearly stated that the ample cash flow generated by core businesses provides a solid foundation for continued AI investment.
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<h2>AI-Driven Cloud Business Achieves Scaled Profitability for the First Time, Financial Technology Gross Margin Soars</h2>
The annual revenue of financial technology and enterprise services grew by 8% year-on-year to 229.4 billion yuan, with a relatively moderate growth rate, but the gross margin jumped from 47% to 51%, significantly improving profit quality.
In terms of segments, enterprise services (mainly cloud business) grew nearly 20%, clearly outpacing the high single-digit growth of financial technology. The rise in demand for AI-related cloud services, contributions from leading market PaaS and SaaS products, and cost improvements from supply chain optimization collectively drove Tencent Cloud to achieve scaled profitability, a milestone progress emphasized by Tencent's management in the earnings report.
In the financial technology sector, wealth management services, consumer loans, and commercial payments all achieved revenue growth, while the expansion of transaction volume in WeChat Mini Stores also boosted income from merchant technology service fees.
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<h2>Gaming: Steady Business Growth, AI Empowerment Drives Gross Margin Improvement</h2>
The gaming business remains the ballast of Tencent's value-added services segment. Annual revenue from the domestic market grew by 18% year-on-year to 164.2 billion yuan, with the strong rise of &#34;Delta Force&#34; being the biggest highlight, while &#34;Honor of Kings,&#34; &#34;Peacekeeper Elite,&#34; and the &#34;Valorant&#34; series (PC and mobile) all contributed to steady growth.
International market gaming revenue reached 77.4 billion yuan for the year, a year-on-year increase of 33% (32% at constant exchange rates), with annual revenue surpassing the $10 billion mark for the first time. Games under Supercell and &#34;PUBG MOBILE&#34; maintained strong momentum, while &#34;Ming Chao&#34; provided considerable incremental contributions.
Tencent specifically mentioned the application of AI in the gaming sector in its financial report, which involves deploying AI in games to accelerate content production, improve user experience, and enhance marketing effectiveness. This strategy effectively supported a structural improvement in the gross margin of self-developed games from 57% to 60%. It is worth noting that domestic game revenue in the fourth quarter declined by 11% quarter-on-quarter, which is a normal seasonal fluctuation.
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<h2>Advertising: AI Reshapes Commercialization, Video Accounts Become Core Engine</h2>
Marketing services revenue grew by 19% year-on-year to 145 billion yuan, ranking among the top in growth rates across various business segments, with gross margin also rising from 55% to 58%. In the fourth quarter, quarterly advertising revenue grew by 17% year-on-year to 41.1 billion yuan, and increased by 13% quarter-on-quarter, benefiting from seasonal effects combined with AI capability upgrades
The logic driving revenue growth is clear: first, AI-driven precise advertising targeting has increased ad prices; second, advertisers are using AI tools to create more creative materials, lowering the barriers to entry for advertising; third, the proportion of closed-loop advertising (where users click directly to mini-programs, WeChat shops, or mini-games, etc.) continues to rise, enhancing the conversion efficiency of ads.
Video accounts are the core carrier of advertising growth. The total user usage time for the year increased by over 20% year-on-year, with the upgrade of recommendation algorithms and the enrichment of content ecology working in synergy. Tencent achieved revenue growth above the industry average while maintaining an ad loading rate far below the industry average, indicating that the commercialization potential has not yet been fully released.
<h2>Users and Social: WeChat's monthly active users near 1.42 billion, QQ continues to face pressure</h2>
The combined monthly active accounts of WeChat and WeChat reached 1.418 billion by the end of the year, a year-on-year increase of 2%, and a slight quarter-on-quarter increase to a new high, showing that the moat of the WeChat ecosystem remains solid. The number of paid value-added service subscribers rose to 267 million, with both Tencent Video and Tencent Music achieving year-on-year growth in membership, and the latter's ARPU also increased accordingly.
The number of monthly active accounts on QQ's mobile platform continued its downward trend, dropping from 524 million in the same period last year to 508 million, a year-on-year decline of 3%, and a quarter-on-quarter decrease of about 9 million accounts. As a product aimed at younger users, the long-term trend of shrinking user scale for QQ is difficult to reverse against the backdrop of WeChat's complete dominance in the social scene.

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Tencent's performance is expected to grow steadily in 2025, with annual revenue reaching 751.8 billion yuan, a year-on-year increase of 14%. The non-International net profit attributable to shareholders is 259.6 billion yuan, up 17%, with growth accelerating compared to the previous year. Profitability continues to improve, with gross margin rising from 53% to 56%. AI has become the core driving force for growth, with annual R&D investment of 85.7 billion yuan and capital expenditure reaching 79.2 billion yuan. AI technology has fully penetrated core businesses such as advertising, gaming, and cloud services, accelerating the monetization of the WeChat ecosystem and helping the cloud business achieve scalable profitability

- On March 18, Tencent reported its fourth-quarter and annual earnings for 2025, with annual revenue increasing 14% year-on-year and net profit rising 17%.  
- The fourth quarter marked the fifth consecutive quarter of revenue and net profit growth, supporting Tencent's AI strategic investments, which are crucial for future growth.  
- Significant capital expenditures totaled 792 billion yuan for the year, primarily directed toward AI infrastructure, highlighting Tencent's commitment to enhancing its technological capabilities and long-term value.

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Tencent's Q4 revenue grew by 13% year-on-year, adjusted net profit increased by 17%, and cloud business achieved scaled profitability for the whole year | Earnings report insights