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Tencent sees strong rebound in online advertising business in the fourth quarter...

 2 years ago
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Tencent sees strong rebound in online advertising business in the fourth quarter

Tencent sees strong rebound in online advertising business in the fourth quarter

9 hours ago

Chinese gaming and social network giant Tencent reported its fourth-quarter earnings on Wednesday, with an unexpectedly strong rebound in its online advertising business.

Total revenues came in at 145.0 billion yuan ($20.8 billion),  an increase of 0.5% over the fourth quarter of 2021.

Revenue from value-added services decreased by 2% year-on-year to 70.4 billion yuan.

Domestic games revenue fell 6% to 27.9 billion yuan due to year-on-year lower gross cash receipts in the previous quarters.

International games revenues rose 5% to 13.9 billion yuan. Revenue growth was driven by key franchises VALORANT and League of Legends, as well as the successful launches of GODDESS OF VICTORY: NIKKE and Warhammer 40,000: Darktide.

Social network revenue fell 2% to 28.6 billion yuan, mainly due to decreased revenues from music- and games-related live streaming services.

Fintech and business services revenue fell 1% year-on-year to 47.2 billion yuan in the fourth quarter of 2022.

However, the online advertising business rebounded unexpectedly strongly in the quarter, with revenue in that segment up 15%, which helped offset declines in domestic games and fintech revenue.

Profit for the period was 30.6 billion yuan ($4.4 billion), up 19% year-on-year. Net profit margin rose to 21% from 18% last year.

Profit attributable to the company's shareholders was 29.7 billion yuan ($4.3 billion) in the quarter, up 19% from a year earlier.

Full-year 2022 revenue was 554 billion yuan, while net profit fell 16% to 188.2 billion yuan ($27 billion).

Tencent Chairman and CEO Pony Ma Huateng said on an earnings call that the company will focus this year on generating more revenue from its existing core business.

During the earnings call, Martin Lau, president of Tencent, talked about the company's foray into generative artificial intelligence (AI), saying that the company is rapidly advancing its proprietary foundation model, Hunyuan, and plans to gradually roll out its own AI foundation models.

Reuters reported last month that Tencent was working on a ChatGPT-like chatbot named the "HunyuanAide" that will incorporate Tencent's Hunyuan AI model.

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