For Immediate Release

TENCENT ANNOUNCES 2023 FIRST QUARTER RESULTS
Hong Kong, May 17, 2023 – Tencent Holdings Limited (“Tencent” or the “Company”, 00700.HK), a leading
provider of Internet value-added services in China, today announced the unaudited consolidated results forthe first quarter (“1Q2023”) ended Mar 31, 2023.

1Q2023 Key Highlights
Revenues: +11% YoY, non-IFRS1 profit attributable to equity holders of the Company: +27% YoY
▪
▪

▪

▪

Total revenues were RMB150 billion (USD21.8 billion2), an increase of 11% over the first quarter of 2022(“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 RMB48.4 billion (USD7 billion), an increase of 32% YoY. Operating marginincreased to 32% from 27% last year.
Profit for the period was RMB33.4 billion (USD4.9 billion), an increase of 27% YoY. Net marginincreased to 22% from 19% last year.
Profit attributable to equity holders of the Company for the quarter was RMB32.5 billion(USD4.7 billion), an increase of 27% YoY.
Basic earnings per share were RMB3.431. Diluted earnings per share were RMB3.353.
On an IFRS basis:- Operating profit was RMB40.4 billion (USD5.9 billion), an increase of 9% YoY. Operating margin
was stable at 27%.
- Profit for the period was RMB26.4 billion (USD3.8 billion), an increase of 11% YoY. Net margin
was stable at 18%.
- Profit attributable to equity holders of the Company for the quarter was RMB25.8 billion (USD3.8
billion), an increase of 10% YoY.
- Basic earnings per share were RMB2.725. Diluted earnings per share were RMB2.639.
Total cash were RMB370.5 billion (USD53.9 billion) at the end of the period.

Mr. Ma Huateng, Chairman and CEO of Tencent, said, “During the first quarter of 2023, we achieved solid
revenue growth as our payment volumes benefitted from, and facilitated, domestic consumption recovery,
our games revenue improved, and our advertising revenue sustained rapid growth. Our non-IFRS net profit
increased at a faster pace, reflecting a positive revenue mix shift, operational efficiencies, and an easy baseperiod. We are investing in our AI capabilities and cloud infrastructure to embrace the opportunities brought
by foundation models, and expect AI to be a growth multiplier that enables us to better serve our users,
customers, and society at large.”

1Q2023 Financial Review
Revenues from VAS increased by 9% to RMB79.3 billion for the first quarter of 2023 on a year-on-year basis.
1 Non-IFRS adjustments excludes share-based compensation, M&A related impact such as net (gains)/losses from investee

companies, amortisation of intangible assets and impairment provision/(reversals), SSV & CPP, income tax effects and others
2 Figures stated in USD are based on USD1 to RMB6.8717

Page 1 of 10

International Games revenues increased by 25% to RMB13.2 billion, or up 18% excluding the impact of
currency fluctuations, driven by the strong performance of recently launched GODDESS OF VICTORY:NIKKE and Triple Match 3D, as well as the robust growth of VALORANT. Domestic Games revenues grewby 6% to RMB35.1 billion, with increased revenues from established titles such as Honour of Kings, Dungeon
and Fighter and CrossFire Mobile, as well as recently launched title Arena Breakout. Social Networks
revenues increased by 6% to RMB31 billion, driven by in-game virtual item sales and our music subscription
service.
Revenues from Online Advertising increased by 17% to RMB21 billion for the first quarter of 2023 on a yearon-year basis, driven by the addition of Video Accounts as a new advertising revenue stream, growth inadvertising activities within Mini Programs and the recovery of our mobile ad network. Most industry
categories experienced year-on-year growth in ad spend, which we attribute to the consumption recovery in
China, amplified by our enhanced advertising infrastructure. Large eCommerce platforms increasingly
recognised our services as a key user acquisition channel and increased their ad spend with us.
Revenues from FinTech and Business Services increased by 14% year-on-year to RMB48.7 billion for the
first quarter of 2023. FinTech Services year-on-year growth accelerated versus the fourth quarter of 2022,
primarily driven by the recovery of commercial payment activities due to a consumption rebound in China.
Business Services revenues returned to positive year-on-year growth during this period, due to increased
sales of certain cloud services, as well as initial revenues generated via technology support fee related to live
streaming eCommerce transactions within Video Accounts.

Other Key Financial Information for 1Q2023
EBITDA was RMB52.7 billion, up 38% YoY. Adjusted EBITDA was RMB57.8 billion, up 25% YoY.
Capital expenditures were RMB4.4 billion, down 37% YoY.
Free cash flow was RMB51.8 billion, up 240% YoY.
As at March 31, 2023, net cash position totalled RMB31.5 billion. Fair value of our shareholdings 3 in listed
investee companies (excluding subsidiaries) totalled RMB472.8 billion (USD68.8 billion) and the carrying
value of unlisted investee companies was RMB332.5 billion (USD48.4 billion). During the first quarter, theCompany repurchased approximately 12.5 million shares on the Hong Kong Stock Exchange for an
aggregate consideration of approximately RMB4 billion.

Operating Metrics
As at
31 March
2023
Combined MAU of
Weixin and WeChat

3

As at
YearAs at
31 March
on-year31 December
2022change2022(in millions, unless specified)

Quarter-onquarterchange

1,319

1,288

2%

1,313

stableMobile device MAU of QQ

597

564

6%

572

4%

Fee-based VAS registeredsubscriptions

226

239

-5%

234

-3%

Including those held via special purpose vehicles, on an attributable basis

Page 2 of 10

Business Progress and Outlook
Communications and Social Networks
Within Weixin, Video Accounts consumption continued to grow with rapid increases in time spent and video
views. We are nurturing the creator community for Video Accounts by upgrading onboarding support withgreater traffic incentives, wider creator coverage and more effective content creator tools. In addition, we
have enhanced the eCommerce infrastructure, enabling creators to benefit from sales commissions
associated with eCommerce transactions. The Video Accounts creator community is increasingly vibrant: thenumber of daily active creators and daily video uploads more than doubled year-on-year while the number ofcreators with over 10,000 followers more than tripled year-on-year.
For QQ, we deployed a new architecture to optimise development efficiency, strengthen security and improve
graphical experience. This new architecture will significantly enhance future product deployments of QQ
across multiple platforms.
Digital Content
Long-form video subscriptions decreased 9% year-on-year to 113 million while subscription revenue
decreased 6% year-on-year, primarily due to delayed content releases. We are enhancing our content tocater to evolving user demands. In April 2023, we released a self-commissioned drama series, The Long
Season, which became the highest-rated domestic drama series in the past five years, according to the
Douban review aggregation website 4. We are extending our collaboration with short-form video services toexpand our long-form content popularity and capture more monetisation opportunities. Music subscription
revenue grew 30% year-on-year as we upgraded the listening experience and strengthened cooperation withlabels and artists, enhancing user engagement and paying propensity.
Domestic GamesAs a result of our continued and dedicated Minor protection program, Minors contributed 0.4% of total timespent and 0.7% of total gross receipts for our domestic games during the first quarter of 2023, down by 96%
and 90% respectively from the same period three years ago.
We resumed revenue growth as several of our most popular games delivered robust performances. Honourof Kings released ShanHaiJing-themed outfits with targeted marketing programs, generating record-highgross receipts in the first quarter of 2023. CrossFire PC, a game we operated since 2008, attracted returning
players with promotions targeting Internet cafes. CrossFire Mobile, which we released in 2015, added popular
content based on a virtual idol group created for the game. Both CrossFire PC and CrossFire Mobile achieved
record-high gross receipts in the first quarter of 2023.
Our recently launched game titles in high potential genres also reached new milestones. Fight of the Golden
Spatula, an auto-battler game we released in 2021, increased gross receipts by more than 30% year-on-year
in the first quarter of 2023, and achieved a record-high average DAU of over 10 million in April 2023. Arena
Breakout, an extraction shooter game we released in July 2022, grew and attained record-high DAU andgross receipts in the first quarter of 2023.
International Games4

As of May 16, 2023

Page 3 of 10

VALORANT increased MAU year-on-year with the release of a new map and a new agent. The game’s grossreceipts increased by more than 30% year-on-year in the first quarter of 2023, driven by popular Japanthemed and alien-themed weapon items.
PUBG Mobile resumed sequential growth in DAU, benefitting from new combat features and enhanced
player-versus-player gameplay. We introduced a map editing tool to facilitate user-generated content,
enhancing user engagement and longevity.
Our subsidiary Miniclip launched Triple Match 3D in April 2022, which became a breakout success in thehighly competitive match game genre. Leveraging creative gameplay and effective user acquisition, Triple
Match 3D is the only title released within the last two years that is ranked among the top 10 games in thegenre5.
Online Advertising
We upgraded our machine learning advertising platform to incorporate our deep-learning model andstandard product unit (SPU) database, delivering better targeting and higher conversions for advertisers.
Video Accounts attracted new advertisers and incremental spending from existing advertisers. Video
Accounts’ average eCPM sustained at a premium level versus those of other short-form video platforms,
reflecting advertisers’ recognition of our capability to route video views to Mini Program transactions within
the Weixin app.
For our mobile ad network, on the supply side, we increased advertising inventory in high-conversion-rate
properties, such as smart phone manufacturers’ apps, while on the demand side, we attracted higher
spending from ROI-focused advertisers, such as eCommerce platforms.
FinTechGrowth in commercial payment activities improved significantly. Offline commercial payment activities
rebounded more sharply than online commercial payment, benefitting from people going out-and-about.
Cloud and Other Business Services
Business Services year-on-year revenue growth turned positive with notable increase in gross margin in thefirst quarter of 2023. Our Smart Transportation solutions are assisting the digitalisation of large-scaletransportation projects. For example, we leveraged our expertise in areas such as cloud infrastructure, digital
map and 3D rendering technologies for smart highway projects in Sichuan and metro systems in Guangzhou.
The initial monetisation of technology support fee for live streaming eCommerce transactions also contributed
to the revenue growth.

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: Tencent_IR):

5

Source: Top 10 match games by gross receipts in 1Q2023, according to data.ai

Page 4 of 10

###

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 digitalcontent and services, both online and offline, making their lives more convenient. Our targeted advertising
service helps advertisers reach out to hundreds of millions of consumers in China. Our FinTech and businessservices support our partners’ business growth and assist their digital upgrade.
Tencent invests heavily in talent and technological innovation, actively promoting the development of theInternet industry. Tencent was founded in Shenzhen, China, in 1998. Shares of Tencent (00700.HK) arelisted on the Main Board of the Stock Exchange of Hong Kong.
Investor contact: IR@tencent.com
Media contact: GC@tencent.com
Non-IFRS Financial Measures
To supplement the consolidated results of the Group prepared in accordance with IFRS, certain additional non-IFRS
financial measures (in terms of operating profit, operating margin, profit for the period, net margin, profit attributable toequity 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 defineddifferently from similar terms used by other companies.
The Company’s management believes that the non-IFRS financial measures provide investors with usefulsupplementary 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 nonIFRS 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 Company. These forward-looking statements are
based on information currently available to the Company and are stated herein on the basis of the outlook at the time ofthis 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 Boardor the Company that the plans and objectives will be achieved, and investors should not place undue reliance on suchstatements.

Page 5 of 10

CONSOLIDATED INCOME STATEMENTRMB in millions, unless specified

1Q2022
135,471
72,73817,98842,768
1,977(78,397)
57,07442%
1,737
13,133(8,058)(26,669)
37,21727%(1,935)

Unaudited
1Q2023
149,986
79,337
20,964
48,701
984(81,804)
68,182
45%
2,963
944
(7,018)(24,642)
40,42927%(2,650)

4Q2022
144,954
70,417
24,66047,244
2,633(83,132)
61,82243%
2,582
85,854(6,115)(27,314)
116,82981%(3,658)80
37,859(11,465)
26,39418%(6,280)29,002(5,269)23,73318%

80
37,859(11,465)
26,39418%(1,692)
111,479(4,575)
106,90474%

25,838556

23,413320

25,838556

106,268
636

Non-IFRS profit attributable to equity
holders of the Company

32,53825,54532,53829,711

Earnings per share for profit
attributable to equity holders of
the Company(in RMB per share)- basic- diluted

2.725
2.639

2.455
2.404

2.725
2.639

11.17310.977

Revenues
VAS
Online Advertising
FinTech and Business Services
OthersCost of revenues
Gross profit
Gross margin
Interest income
Other gains/(losses), net
Selling and marketing expenses
General and administrative expenses
Operating profit
Operating margin
Finance costs, net
Share of profit/(loss) of associates andjoint ventures, net
Profit before income tax
Income tax expense
Profit for the period
Net margin
Attributable to:Equity holders of the Company
Non-controlling interests

Unaudited
1Q2023
149,986
79,337
20,964
48,701
984(81,804)
68,182
45%
2,963
944
(7,018)(24,642)
40,42927%(2,650)Page 6 of 10

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
RMB in millions, unless specified

Profit for the period
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
Transfer of share of other comprehensive income to profit or loss upon disposal
and deemed disposal of associates and joint ventures
Transfer to profit or loss upon disposal of financial assets at fair value throughother comprehensive income
Net gains/(losses) from changes in fair value of financial assets at fair value
through other comprehensive income
Currency translation differences
Other fair value (losses)/gains, net
Items that will not be subsequently reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures
Loss from changes in fair value of assets held for distribution
Net gains/(losses) from changes in fair value of financial assets at fair value
through other comprehensive income
Currency translation differences
Total comprehensive income for the period
Attributable to:Equity holders of the Company
Non-controlling interests

Unaudited
1Q2023
1Q2022
26,39423,733

(662)

(50)

14

-

1

-

22
(1,200)(1,151)(16)(4,461)
3,217

(154)
(29,991)

187(17,130)

34,362(2,846)(1,605)24,789(58,850)(142)(77,245)(53,512)23,612
1,177(52,277)(1,235)OTHER FINANCIAL INFORMATIONRMB in millions, unless specified
Unaudited
1Q2023

4Q2022

1Q2022

EBITDA (a)52,65644,00238,283Adjusted EBITDA (a)57,81149,606

46,102Adjusted EBITDA margin (b)

39%

34%

34%

Interest and related expenses

2,800

2,826

2,103

Net cash/(debt) (c)31,508(14,832)(11,035)

Capital expenditures (d)

4,411

5,651

6,971

Note:
(a)

(b)
(c)
(d)

EBITDA is calculated as operating profit minus interest income and 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.
Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues.
Net cash/(debt) represents period end balance and is calculated as cash and cash equivalents, plus term deposits and others, minus borrowings andnotes payable.
Capital expenditures consist of additions (excluding business combinations) to property, plant and equipment, construction in progress, investment
properties, land use rights and intangible assets (excluding video and music content, game licences and other content).

Page 7 of 10

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONRMB in millions, unless specified
Unaudited

AuditedAs atMarch 31, 2023

As at
December 31, 2022

Property, plant and equipment

50,13453,978Land use rights

17,90518,046

Right-of-use assets

22,524

Construction in progress

20,52912,196

Investment properties

555

559

Intangible assets

162,230

161,802

Investments in associates

245,659

246,043

Investments in joint ventures

6,702

6,672

202,670

206,085

224,187
34,259185,247
36,752Other financial assets

5,313

6,987

Deferred income tax assets

29,61829,882

Term deposits

31,07028,336

1,043,027

1,012,142

Inventories

2,015

2,333

Accounts receivable

45,41045,467

Prepayments, deposits and other assets

83,597

76,685871

1,278

Financial assets at fair value through profit or loss

33,941

27,963

Term deposits

151,143

104,776

Restricted cash

3,874

2,783

Cash and cash equivalents

153,328

156,739

Assets held for distribution-

147,965474,179

565,989

1,517,206

1,578,131

ASSETS
Non-current assets

Financial assets at fair value through profit or loss
Financial assets at fair value through othercomprehensive income
Prepayments, deposits and other assets

9,229

Current assets

Other financial assets

Total assets

Page 8 of 10

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
RMB in millions, unless specified
Unaudited
As atMarch 31, 2023

Audited
As at
December 31, 2022

62,425(1,541)(4,412)(22,201)
744,21262,418(1,868)(4,226)(40,914)705,981

778,483

721,391

Non-controlling interests

62,89061,469Total equity

841,373782,860

LIABILITIES
Non-current liabilities
Borrowings
Notes payable
Long-term payables
Other financial liabilities
Deferred income tax liabilities
Lease liabilities
Deferred revenue

166,408
146,704
12,232
5,711
13,927
16,926
3,529

163,668
148,669
9,067
5,574
12,162
18,424
3,503

365,437

361,067

102,31753,70525,921
16,639
4,518
4,024
6,127
97,145-92,381
61,13911,58010,446
13,488
4,698
3,937
6,354
82,216
147,965

310,396434,204

675,833

795,271

1,517,206

1,578,131

EQUITY
Equity attributable to equity holders of the Company
Share capital
Share premium
Treasury shares
Shares held for share award schemes
Other reserves
Retained earnings

Current liabilities
Accounts payable
Other payables and accruals
Borrowings
Notes payable
Current income tax liabilities
Other tax liabilities
Other financial liabilities
Lease liabilities
Deferred revenue
Dividends payable for distribution in specie

Total liabilities
Total equity and liabilities

Page 9 of 10

RECONCILIATIONS OF IFRS TO NON-IFRS RESULTS
RMB in millions,
unless specifiedAs
reported

Share-based
compensation(a)

Net (gains)/losses
from investee
companies (b)Adjustments
Amortisation of
Impairment
intangible assets
provisions/(c)(reversals) (d)SSV &CPP (e)Others (f)Incometax effects(g)

Non-IFRS

Unaudited three months ended March 31, 2023
Operating profit

40,429

5,844

(658)

998

241

1,526

9

–

48,389Profit for the period
Profit attributable toequity holders

26,394

7,313(5,224)

2,271

1,862

1,526

9

(706)

33,44525,838

7,094(5,224)

2,098

1,852

1,526

9

(655)

32,538Operating margin27%

Net margin

18%

32%
22%
Unaudited three months ended December 31, 2022

Operating profit

116,829

5,680(107,945)

1,241

22,007

1,600

14

–

39,426

Profit for the period
Profit attributable toequity holders

106,904

7,217(107,955)

2,601

23,7001,600

206(3,717)30,556106,268

7,124(107,928)

2,420

23,6931,600

206(3,672)

29,711

Operating margin81%

Net margin

74%

27%
21%
Unaudited three months ended March 31, 2022

Operating profit

37,217

8,136(18,559)

1,388

7,003

1,348

5

–

36,538

Profit for the period
Profit attributable toequity holders

23,733

9,635(18,552)

3,163

7,832

1,348

5

(868)

26,29623,413

9,452(18,542)

2,857

7,827

1,348

5

(815)

25,545

Operating margin

27%

27%

Net margin

18%

19%

Note:
(a)
(b)
(c)
(d)
(e)
(f)
(g)

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
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
Amortisation of intangible assets arising from acquisitions
Mainly including impairment provisions/(reversals) for associates, joint ventures, goodwill and other intangible assets arising from acquisitions
Mainly including donations and expenses incurred for the Group’s Sustainable Social Value and Common Prosperity Programme ("SSV & CPP”) initiatives
Mainly including non-recurring compliance-related costs and expenses incurred for certain litigation settlements of the Group and/or arising from investee companies
Income tax effects of non-IFRS adjustments

Page 10 of 10