Tencent's Second-Quarter Profit Surged 82%, Driven by Advertising, Gaming Segments

By Sherry Qin

Chinese technology giant Tencent Holdings reported a surge in second-quarter profit on sustained momentum in its advertising business and a turnaround in the key domestic gaming division after two quarters of declining revenues.

The videogame and social-media company said Wednesday that its net profit jumped 82% from a year earlier to 47.63 billion yuan, equivalent to $6.66 billion. The result was higher than the 41.47 billion yuan expected in a FactSet poll of analysts.

The Shenzhen-based company's gross profit margin expanded to 53% from 47% a year earlier, driven by high-margin revenue streams such as domestic games and video-accounts advertising.

Revenue for the period increased 8.0% to 161.12 billion yuan. Online advertising sales climbed 19%, benefiting from increased revenues from video accounts and long-form video.

Tencent's domestic game sales returned to growth, rising 9% from a year earlier after the robust debut of blockbuster title "Dungeon & Fighter Mobile" and higher revenue from "Valorant."

DnF Mobile consistently ranked No. 1 in daily gross billing for four weeks on iOS since its release in May and likely grossed about 5.5 billion yuan in the first 41 days, Citi analysts said in a research note.

Tencent's Hong Kong-listed stock has climbed nearly 30% this year, with most of the gains coming in the second quarter as investors piled in, attracted in part by the hit game's success.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

August 14, 2024 05:14 ET (09:14 GMT)

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