Tencent Holdings Limited (TCEHY) Announced Q2 2026 Earnings on August 12, 2026, Reporting "total revenue was RMB 204.8 billion, up 11% year-on-year."

Tencent Holdings Limited reported its financial results for the second quarter of 2026.

Chief Financial Officer John Lo announced that "total revenue was RMB 204.8 billion, up 11% year-on-year" and "Gross profit was RMB 118.4 billion, up 13% year-on-year" for the quarter. On a reported basis for the quarter, "operating profit was RMB 67.3 billion, up 12% year-on-year". On a non-IFRS basis, "operating profit was RMB 75.6 billion, up 9% year-on-year" and "Net profit attributable to equity holders was RMB 68.4 billion, up 9% year-on-year" for the quarter.

Executives noted that "Overall gross margin was 56%, up 3 percentage points year-on-year". On cash flow, "Free cash flow was negative RMB 13.8 billion" for the quarter, though John Lo explained that "Excluding the prepayments for compute procurement, our free cash flow would have been RMB 37.6 billion".Discussing strategic initiatives, the company emphasized its efforts to build an AI-enabled ecosystem.

Chief Executive Officer Pony Ma stated that "we are making substantial progress toward building a new AI-empowered Tencent in terms of intelligence, applications and infrastructure". At the application level, executives highlighted that "our WorkBuddy AI office productivity service and CodeBuddy AI coding tool are achieving user growth and are the clear leaders in the field in China today". Regarding infrastructure risk management, President Martin Lau noted that "The AI investments we're making are mostly in AI infrastructure" and "in the worst case... we can choose to rent that infrastructure out at cost recovery or even better prices via Tencent Cloud if needed".The company highlighted several business and product milestones across its divisions. In social networking, the "combined MAU of Weixin and WeChat grew year-on-year and quarter-on-quarter to 1.4 billion" and "video accounts total time spent grew over 20% in the second quarter". In digital content, management announced that "In May, we completed the acquisition of Ximalaya" which "strengthened our audio content and unlocked new synergies with the ecosystem IPs". In games, "new game Roco Kingdom World ranked first by average DAU and by gross receipts among all new games released in China industry-wide this year" and "Delta Force achieved lifetime high average DAU in the second quarter".Looking ahead, management outlined future model releases and dynamic capital allocation.

Martin Lau shared that "we're training a larger parameter model, Hunyuan 4, which we expect to release later this year". On capital returns, Chief Strategy Officer James Mitchell noted that "if we identify that there's superior returns from capital expenditure... then we'll steer more cash toward the capital expenditures than we had in the past and therefore, potentially less cash towards buybacks".

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