China's largest social network operator reported net income of 23.29 billion yuan (US$3.65 billion) in the quarter ended March 31, beating average market expectations by about 30 per cent. Revenue reached 73.53 billion yuan, up 48 per cent from the same time past year, driven by online advertising, online games and messaging services. Now not available in China, it is scheduled to be launched there during the next couple of months.
Tencent reported a 111% rise in "other" revenue in the quarter to 15.96 billion yuan on growth in payment solutions and cloud services.
Tencent has been actively investing in areas including gaming, entertainment, autonomous driving and artificial intelligence.
Smartphone games revenue, the largest revenue contributor, was 21.7 billion yuan in the quarter.
"It is a matter of a fact that the competition is actually very heavy, there have been a lot of subsidies provided in the market by our market peers, and as a result we have to follow suit", Tencent President Martin Lau said on an earnings call.
Tencent has been on a shopping spree, expanding into different sectors including e-commerce and automobiles.
Tencent posted a 61 percent jump in net income to 23.3 billion yuan ($3.7 billion) in the three months ended March, outstripping the 17.4 billion-yuan average projection. Earlier Wednesday, Tencent shares were down 0.45% at HK$396.2.
Honour of Kings continues to be a core source of earnings.
Has Tencent lost its creative mojo? Not only is it increasing spent heavily on original content creation, it has invested in other streaming platforms. Revenue was 48% up on a year on year basis.
User numbers of Tencent's popular WeChat messenger app reached 1.04 billion.
Over the past year Tencent has completed 62 deals involving direct investments and mergers and acquisitions, according to data compiled by Bloomberg. Tencent said they now have more than a billion monthly active users, an increase of 11% from a year ago. The following month it led an investment of 617 million yuan in Pear Video, an online short video platform, that counts the listed unit of People's Daily as a shareholder.
Tencent, the world's largest videogame company, has lost nearly $90 billion of its market value since March, due to concerns about slowing growth and shrinking margins.
The internet giant has also plunged into offline retail sectors. In retail and e-commerce - traditionally viewed as rival Alibaba Group's turf - it has splashed out billions since 2017 on deals at home and overseas.