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.

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

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.

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

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

RMB in millions, unless specified

OTHER FINANCIAL INFORMATION 

RMB in millions, unless specified

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

RMB in millions, unless specified

RECONCILIATIONS OF THE GROUP'S NON-IFRS FINANCIAL MEASURES TO THE NEAREST MEASURES PREPARED IN ACCORDANCE WITH IFRS