Significant Progress in Hy Capabilities and Productivity AI Agents
Utilising AI to Grow Existing Core Businesses
HONG KONG, May 13, 2026 /PRNewswire/ — Tencent Holdings Limited (HKEX: 00700 (HKD Counter) and 80700 (RMB Counter), “Tencent” or “the Company”), a world-leading Internet and technology company in China, today announced the unaudited consolidated results for the quarter ended 31 March 2026 (“1Q2026”).
Mr. Ma Huateng, Chairman and CEO of Tencent, said, “We started 2026 by making significant initial progress on our new AI products, as well as continuing to utilise AI to grow our existing core businesses. The Hy3 preview model, built by our revamped team of AI researchers on re-architected AI infrastructure, is a leader in its parameter size class, delivering practical utility and cost efficiency, and has been top ranked in OpenRouter token measurements since April 28. Our productivity AI agent solutions have attained early traction, and we believe that our WorkBuddy is currently the most widely used productivity AI agent service in China. Our core businesses continued to grow their engagement, revenue and profit, providing the cash flow to fund our AI investments, as well as use cases for future AI deployment.”
1Q2026 Financial Highlights
Revenues: +9% YoY, gross profit: +11% YoY, non-IFRS operating profit: +9% YoY
Total revenues were RMB196.5 billion, up 9% over the first quarter of 2025 (“YoY”).
Gross profit was RMB111.3 billion, up 11% YoY.
On a non-IFRS basis, which is intended to reflect core earnings by excluding certain one-time and/or non-cash items:
Operating profit was RMB75.6 billion, up 9% YoY. Operating margin was largely stable at 38.5%.
Operating profit excluding new AI products[1] was RMB 84.4 billion, increased by 17% YoY. Operating margin excluding new AI products increased to 43.0% from 39.9% last year.
Net profit was RMB 69.8 billion, up 11% YoY.
Net profit attributable to equity holders of the Company was RMB67.9 billion, up 11% YoY.
Basic earnings per share were RMB7.517. Diluted earnings per share were RMB7.364.
On an IFRS basis:
Operating profit was RMB67.4 billion, up 17% YoY. Operating margin increased to 34.3% from 32.0% last year.
Net profit was RMB59.4 billion, up 19% YoY.
Net profit attributable to equity holders of the Company was RMB58.1 billion, up 21% YoY.
Basic earnings per share were RMB6.431. Diluted earnings per share were RMB6.302.
Capital expenditure was RMB31.9 billion, up 16% YoY.
Total cash was RMB533.7 billion, up 12%. Free cash flow was RMB56.7 billion, up 20% YoY. Net cash position totalled RMB146.9 billion, up 63%.
The fair value of our shareholdings[2] inlisted investee companies (excluding subsidiaries) totalled RMB547.1 billion as at 31 March 2026, compared with RMB672.7 billion as at 31 December 2025. The carrying book value of our shareholdings inunlisted investee companies (excluding subsidiaries) was RMB365.1 billion as at 31 March 2026, compared with RMB363.1 billion as at 31 December 2025.
During 1Q2026, the Company repurchased approximately 12.7 million shares on the Hong Kong Stock Exchange for an aggregate consideration of approximately HKD7.6 billion.
[1] Excludes revenues, costs and expenses for new AI products (Hy, Yuanbao, CodeBuddy, WorkBuddy, and QClaw)
[2] Including those held via special purpose vehicles, on an attributable basis
1Q2026 Management Discussion and Analysis
Revenues from VAS increased by 4% year-on-year to RMB96.1 billion for 1Q2026. Domestic Games revenues were RMB45.4 billion, up 6% YoY, with revenue growth lagging Domestic Games gross receipts growth, as the later timing of the Spring Festival period in 2026 versus 2025 shifted a portion of revenue recognition out of the current quarter. Domestic Games gross receipts grew at a teens percentage rate YoY, driven by existing evergreen games including Honour of Kings and Peacekeeper Elite, as well as more recent game releases including Delta Force, which has recently qualified for the definition of an evergreen game, and VALORANT Mobile. International Games revenues were RMB18.8 billion, up 13% YoY (14% on a constant-currency basis), primarily driven by higher revenues from Clash Royale, Wuthering Waves and VALORANT PC. Social Networks revenues decreased by 2% YoY to RMB31.9 billion, as the later timing of the Spring Festival period resulted in less revenue recognition for domestic app-based game item sales during 1Q2026 versus 1Q2025.
Revenues from Marketing Services were RMB38.2 billion for 1Q2026, up 20% YoY, improving from 17% YoY growth in 4Q2025. We upgraded our AI-driven ad recommendation model and expanded closed-loop marketing capabilities within the Weixin ecosystem, which improved ad performance and pricing. Advertising spending grew across most major industry categories during the quarter, with notable growth from Internet services, eCommerce and games categories.
Revenues from FinTech and Business Services increased by 9% YoY to RMB59.9 billion for 1Q2026. FinTech Services revenue growth was mainly due to higher revenues from commercial payment and wealth management services. Business Services revenues rose by 20% YoY, with growth led by increased cloud services revenues supported by higher demand across domestic and international markets, including demand for AI-related services, and a more favorable pricing environment, as well as higher eCommerce technology service fees arising from growth in Mini Shops GMV.
Operating Metrics
As at
31 March
2026
As at
31 March
2025
Year-
on-year
change
As at
31 December
2025
Quarter-
on-quarter
change
(in millions, unless specified)
Combined MAU of Weixin
and WeChat
1,432
1,402
2 %
1,418
1 %
Mobile device MAU of QQ
516
534
-3 %
508
2 %
Fee-based VAS subscriptions[3]
266
268
-0.7 %
267
-0.4 %
1Q2026 Business Review and Outlook
Several of our evergreen games[4] achieved life-time highs in quarterly gross receipts, including Honour of Kings, Peacekeeper Elite and Delta Force, while new game Roco Kingdom: World achieved substantial popularity.
Our automated campaign management solution AIM+ powered approximately 30% of our total marketing services spending from advertisers, gaining notable traction among mini game, mini drama and mini shop advertisers.
We scaled up the number of parameters and enhanced the algorithms for Video Accounts‘ content recommendation model, enabling delivery of more relevant content to users. Total time spent on Video Accounts grew over 20% year-on-year.
Mini Shops sustained a rapid year-on-year growth rate in GMV as we offered incentives for brand merchants and introduced coupon sharing features for frequent buyers.
Commercial payment volume grew at a faster year-on-year rate than 4Q2025, benefitting from ongoing increase in number of transactions and higher value per transaction in categories such as retail and dining services.
Tencent Cloud‘s productivity AI agent solutions achieved rapid growth and healthy retention rates. Among which, WorkBuddy was the most popular productivity AI agent service in China, measured by DAU.
In April, we launched the Hy3 preview large language model, building upon a revamped AI infrastructure. We believe the Hy3 preview model is currently best in class among similar-size models in terms of reasoning, agentic and coding capabilities, and has become the most used model on OpenRouter since April 28, measured by token usage.
[3] Average daily number of subscriptions during the quarter
[4] Evergreen games refer to domestic and international games surpassing average quarterly DAU of 5 million for mobile or 2 million for PC, and generating over RMB4 billion annual gross receipts
For other detailed disclosure, please refer to our website https://www.tencent.com/en-us/investors.html, or follow us via Weixin Official Account (Weixin ID: TencentGlobal)
About Tencent
Tencent uses technology to enrich the lives of Internet users.
Our communication and social services, Weixin and QQ, connect users with each other and with digital content and services, both online and offline, making their lives more convenient. Our targeted marketing services helps advertisers reach out to hundreds of millions of consumers in China. Our FinTech and business services support partners’ business growth and assist their digital upgrade.
Tencent invests heavily in talent and technological innovation, actively promoting the development of the Internet industry. Tencent was founded in Shenzhen, China, in 1998. Tencent has been listed on the Main Board of the Stock Exchange of Hong Kong since 2004.
Investor contact: IR@tencent.com
Media contact: GC@tencent.com
Non-IFRS Financial Measures
To supplement the consolidated results of the Group (“the Company and its subsidiaries”) prepared in accordance with IFRS, certain additional non-IFRS financial measures (in terms of operating profit, operating margin, profit for the period, profit attributable to equity holders of the Company, basic EPS and diluted EPS) have been presented in this press release. These unaudited non-IFRS financial measures should be considered in addition to, not as a substitute for, measures of the Group’s financial performance prepared in accordance with IFRS. In addition, these non-IFRS financial measures may be defined differently from similar terms used by other companies.
The Company’s management believes that the non-IFRS financial measures provide investors with useful supplementary information to assess the performance of the Group’s core operations by excluding certain non-cash items and certain impact of investment-related transactions. In addition, non-IFRS adjustments include relevant non-IFRS adjustments for the Group’s major associates based on available published financials of the relevant major associates, or estimates made by the Company’s management based on available information, certain expectations, assumptions and premises.
Forward-Looking Statements
This press release contains forward-looking statements relating to the business outlook, estimates of financial performance, forecast business plans and growth strategies of the Group. These forward-looking statements are based on information currently available to the Group and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realised in the future. Underlying these forward-looking statements are a lot of risks and uncertainties. In light of the risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as representations by the Board or the Company that the plans and objectives will be achieved, and investors should not place undue reliance on such statements.
CONDENSED CONSOLIDATED INCOME STATEMENT
RMB in millions, unless specified
Unaudited
1Q2026
1Q2025
4Q2025
Revenues
196,458
180,022
194,371
VAS
96,110
92,133
89,920
Marketing Services
38,171
31,853
41,116
FinTech and Business Services
59,885
54,907
60,818
Others
2,292
1,129
2,517
Cost of revenues
(85,193)
(79,529)
(86,082)
Gross profit
111,265
100,493
108,289
Gross margin
57 %
56 %
56 %
Selling and marketing expenses
(11,343)
(7,866)
(12,983)
General and administrative expenses
(33,800)
(33,664)
(36,283)
Other gains/(losses), net
1,253
(1,397)
1,315
Operating profit
67,375
57,566
60,338
Operating margin
34 %
32 %
31 %
Net gains/(losses) from investments and others
1,928
1,407
3,303
Interest income
4,025
3,748
4,784
Finance costs
(2,979)
(3,860)
(3,573)
Share of profit/(losses) of associates and joint
ventures, net
3,620
4,581
6,832
Profit before income tax
73,969
63,442
71,684
Income tax expense
(14,577)
(13,717)
(12,595)
Profit for the period
59,392
49,725
59,089
Attributable to:
Equity holders of the Company
58,093
47,821
58,260
Non-controlling interests
1,299
1,904
829
Non-IFRS operating profit
75,627
69,320
69,518
Non-IFRS profit attributable to equity
holders of the Company
67,905
61,329
64,694
Earnings per share for profit attributable to
equity holders of the Company
(in RMB per share)
– basic
6.431
5.252
6.433
– diluted
6.302
5.129
6.276
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
RMB in millions, unless specified
Unaudited
1Q2026
1Q2025
Profit for the period
59,392
49,725
Other comprehensive income, net of tax:
Items that may be subsequently reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures
(222)
652
Transfer of share of other comprehensive income to profit or loss upon disposal
and deemed disposal of associates and joint ventures
135
–
Net (losses)/gains from changes in fair value of financial assets at fair value
through other comprehensive income
(60)
106
Transfer to profit or loss upon disposal of financial assets at fair value through
other comprehensive income
(19)
1
Currency translation differences
(13,883)
2,294
Net movement in reserves for hedges
(5)
(213)
Items that will not be subsequently reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures
(330)
522
Net (losses)/gains from changes in fair value of financial assets at fair value
through other comprehensive income
(66,118)
26,361
Currency translation differences
(2,887)
370
Net movement in reserves for hedges
(3)
6
(83,392)
30,099
Total comprehensive income for the period
(24,000)
79,824
Attributable to:
Equity holders of the Company
(22,676)
75,858
Non-controlling interests
(1,324)
3,966
OTHER FINANCIAL INFORMATION
RMB in millions, unless specified
Unaudited
1Q2026
1Q2025
4Q2025
EBITDA (a)
84,167
73,817
77,126
Adjusted EBITDA (a)
89,617
81,559
83,048
Adjusted EBITDA margin (b)
46 %
45 %
43 %
Interest and related expenses
3,134
3,386
3,323
Net cash (c)
146,860
90,229
107,145
Capital expenditures (d)
31,936
27,476
19,632
Note:
(a) EBITDA is calculated as operating profit minus other gains/(losses), net, and adding back depreciation of property, plant and equipment, investment properties as well as right-of-use assets, and amortisation of intangible assets and land use rights. Adjusted EBITDA is calculated as EBITDA plus equity-settled share-based compensation expenses
(b) Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues
(c) Net cash represents period end balance and is calculated as cash and cash equivalents, plus term deposits and others, including highly liquid investment products held for treasury purposes, minus borrowings and notes payable
(d) Capital expenditures primarily consist of investments in IT infrastructure (including computer equipment, components, and software), data centres, land use rights, office premises and intellectual properties (excluding media content)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
RMB in millions, unless specified
Unaudited
Audited
As at
31 March, 2026
As at
31 December, 2025
ASSETS
Non-current assets
Property, plant and equipment
165,666
149,905
Land use rights
22,122
22,339
Right-of-use assets
17,353
17,367
Construction in progress
5,719
9,670
Investment properties
1,131
950
Intangible assets
199,008
205,999
Investments in associates
330,532
342,409
Investments in joint ventures
6,374
6,303
Financial assets at fair value through profit or loss
208,887
207,157
Financial assets at fair value through other
comprehensive income
298,052
356,640
Prepayments, deposits and other assets
45,424
24,540
Other financial assets
1,084
1,327
Deferred income tax assets
29,698
28,618
Term deposits
73,404
70,302
1,404,454
1,443,526
Current assets
Inventories
582
530
Accounts receivable
58,116
49,930
Prepayments, deposits and other assets
117,147
111,270
Other financial assets
3,779
4,201
Financial assets at fair value through profit or loss
27,627
35,929
Financial assets at fair value through other
comprehensive income
8,781
8,781
Term deposits
205,537
236,801
Restricted cash
7,597
6,977
Cash and cash equivalents
217,770
141,041
646,936
595,460
Total assets
2,051,390
2,038,986
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
RMB in millions, unless specified
Unaudited
Audited
As at
31 March, 2026
As at
31 December, 2025
EQUITY
Equity attributable to equity holders of the Company
Share capital
–
–
Share premium
68,575
63,796
Treasury shares
(1,060)
(3,450)
Shares held for share award schemes
(8,605)
(7,124)
Other reserves
7,640
90,494
Retained earnings
1,061,102
1,010,436
1,127,652
1,154,152
Non-controlling interests
83,975
86,913
Total equity
1,211,627
1,241,065
LIABILITIES
Non-current liabilities
Borrowings
207,881
208,369
Notes payable
124,350
126,204
Long-term payables
10,752
10,544
Other financial liabilities
3,679
2,879
Deferred income tax liabilities
23,591
21,684
Lease liabilities
13,074
13,280
Deferred revenue
2,564
2,210
385,891
385,170
Current liabilities
Accounts payable
141,748
121,127
Other payables and accruals
81,153
96,496
Borrowings
51,114
42,618
Notes payable
3,460
10,542
Current income tax liabilities
19,961
18,558
Other tax liabilities
6,130
3,723
Other financial liabilities
3,355
3,992
Lease liabilities
5,632
5,386
Deferred revenue
141,319
110,309
453,872
412,751
Total liabilities
839,763
797,921
Total equity and liabilities
2,051,390
2,038,986
RECONCILIATIONS OF THE GROUP’S NON-IFRS FINANCIAL MEASURES TO THE NEAREST MEASURES PREPARED IN ACCORDANCE WITH IFRS
As
reported
Adjustments
Non-IFRS
RMB in millions,
unless specified
Share-based
compensation (a)
Net (gains)/losses
from investee
companies (b)
Amortisation of
intangible assets (c)
Impairment
provisions/
(reversals) (d)
SSV & CPP (e)
Income
tax effects (f)
Unaudited three months ended 31 March 2026
Operating profit
67,375
6,534
–
1,578
–
140
–
75,627
Share of profit/(loss) of associates and
joint ventures, net
3,620
810
817
1,612
264
–
–
7,123
Profit for the period
59,392
7,344
(3,255)
3,190
2,467
765
(130)
69,773
Profit attributable to
equity holders
58,093
7,193
(3,342)
2,862
2,397
765
(63)
67,905
Operating margin
34 %
38 %
Unaudited three months ended 31 March 2025
Operating profit
57,566
10,100
–
1,515
–
139
–
69,320
Share of profit/(loss) of associates and
joint ventures, net
4,581
968
111
1,713
267
–
–
7,640
Profit for the period
49,725
11,068
(31)
3,228
(689)
160
(769)
62,692
Profit attributable to equity holders
47,821
10,833
1,081
2,854
(719)
160
(701)
61,329
Operating margin
32 %
39 %
Unaudited three months ended 31 December 2025
Operating profit
60,338
7,210
–
1,594
–
376
–
69,518
Share of profit/(loss) of associates and
joint ventures, net
6,832
773
(26)
1,522
46
–
–
9,147
Profit for the period
59,089
7,983
(7,479)
3,116
3,617
1,338
(953)
66,711
Profit attributable to equity holders
58,260
7,902
(7,515)
2,793
2,812
1,338
(896)
64,694
Operating margin
31 %
36 %
Note:
(a) Including put options granted to employees of investee companies on their shares and shares to be issued under investee companies’ share-based incentive plans which can be acquired by the Group, and other incentives
(b) Including net (gains)/losses on deemed disposals/disposals of investee companies, fair value changes arising from investee companies, and other expenses in relation to equity transactions of investee companies
(c) Amortisation of intangible assets resulting from acquisitions
(d) Mainly including impairment provisions/(reversals) for associates, joint ventures, goodwill and other intangible assets arising from acquisitions
(e) Mainly including donations and expenses incurred for the Group’s Sustainable Social Value and Common Prosperity Programme (“SSV & CPP”) initiatives
(f) Income tax effects of non-IFRS adjustments