TENCENT(HK:00700) Huan Qiu Lao Hu Cai Jing·2025-05-15 10:36Core Insights - Tencent reported Q1 2025 revenue of 1800.2 billion yuan, a 13% year-on-year increase, with net profit at 478.2 billion yuan, up 14% [1] - The company's operating profit (Non-IFRS) reached 693 billion yuan, reflecting an 18% growth, while gross profit was 1005 billion yuan with a gross margin of 56% [1] - Tencent's gross profit and operating profit growth rates have outpaced revenue growth for ten consecutive quarters [1] Business Performance - The value-added services segment, primarily driven by gaming, generated revenue of 921 billion yuan, a 17% increase year-on-year, with domestic game revenue rising 24% to 429 billion yuan [1] - Internationally, revenue from games like PUBG MOBILE and Brawl Stars grew by 23% [1] - The marketing services segment saw revenue of 319 billion yuan, a 20% increase, attributed to AI-driven advertising systems enhancing precision and boosting advertiser investment [2] AI Integration and Investment - Tencent's AI capabilities have been integrated across all business units, with significant contributions to advertising and gaming [1][2] - The company reported capital expenditures of 274.8 billion yuan, a 91% increase, representing 15% of revenue, while R&D spending reached 189.1 billion yuan, up 21% [2] - The CEO emphasized that high-quality existing revenue will help absorb additional costs from AI investments, which are expected to yield long-term returns [2]