Tencent reported second-quarter revenues up 21 percent year-on-year to CNY 88.8 billion (USD 12.9 billion), accelerating growth from 16 percent in the first quarter. Its games business returned to revenue growth of 8 percent, and Tencent also benefitted from expansion in video streaming and payment services, offsetting a lowing ad market.
Adjusted EBITDA rose 25 percent to CNY 35.1 billion, and net profit increased 35 percent to CNY 24.1 billion. Free cash flow was up 27 percent year-on-year to CNY 20.7 billion in Q2.
The new FinTech and Business Services unit generated revenues of CNY 22.9 billion, up 37 percent year-on-year, as the company worked to expand acceptance of its mobile payment services. Revenue growth from Online Advertising slowed somewhat, to 16 percent to CNY 16.4 billion, due to the weaker economic climate, and Tencent said it expects to feel more of this in the second half of the year.
The remaining VAS activities were up 14 percent to CNY 48.1 billion. This included online games revenue up 8 percent to CNY 27.3 billion, driven largely by smartphone titles such as PUGB Mobile and Honour of Kings. Tencent said it launched ten new game titles in the quarter, compared to only one in Q1 when it faced regulatory restrictions in China. It was also preparing to launch season passes to further monetise its mobile games.
At its social network WeChat, the monthly active user base (including Weixin) reached 1.133 billion, up 7 percent from a year earlier. Smart device MAU at QQ totaled 707 million, broadly stable year-on-year.
Tencent Video subscriptions totaled 96.9 million at the end of June, up 30 percent year-on-year. Tencent said growth came from joint membership promotions. It also recorded over 490 million internet users in China watching at least one game in its streaming deal with the NBA during the past season.
