Chinese tech giant Tencent Holdings Ltd. has reported a 15% surge in second-quarter revenue, driven by robust growth in its gaming division and strategic investments in artificial intelligence (AI). The company's impressive Q2 earnings have set the stage for future success, as it continues to leverage AI capabilities across various platforms.
Tencent's revenue reached an astonishing 184.504 billion yuan ($25.7 billion) for the quarter ended June 30, a significant increase from 161.117 billion yuan in the same period last year. Operating profit climbed to 63.052 billion yuan, marking a notable growth of 10% year-over-year. The company's domestic gaming revenue rose 17% year-on-year to 40.4 billion yuan, fueled by the success of newly launched "Delta Force" and enduring titles such as "Honor of Kings," "VALORANT," and "Peacekeeper Elite." International gaming revenue surged an impressive 35% to 18.8 billion yuan, led by "PUBG Mobile" and the debut of "Dune: Awakening."
The company's AI-driven enhancements to its advertising platform and Weixin transaction ecosystem also played a crucial role in driving growth. Marketing services revenue jumped 20% year-on-year to 35.8 billion yuan, as Tencent utilized AI capabilities to optimize its advertising offerings.
"Tencent is committed to harnessing the power of AI to drive innovation and growth across our various business segments," said CEO Ma Huateng. "During the second quarter of 2026, we delivered double-digit revenue and non-IFRS operating profit growth on a year-on-year basis, as we invested in, and also benefitted from, utilizing AI."
Capital expenditures soared 119% to 19.1 billion yuan, reflecting Tencent's aggressive push to upgrade its AI capabilities across gaming, advertising, and social media.
Tencent Music, a subsidiary of the company, exceeded expectations with 124 million subscribers, up from 123 million in Q1. Citi analyst Alicia Yap noted that growth in both subscription and non-subscription revenue contributed to the strong performance.
Looking ahead, Yap predicted that Tencent Music is poised for "faster-than-previously expected full year growth," citing momentum in fan-driven economies, concerts, and advertising.
Tencent is also expanding its cloud computing footprint, with plans to enter the European market and compete with U.S. hyperscalers Amazon, Microsoft, and Google. The company's AI capabilities will play a crucial role in powering its cloud computing services, enabling it to provide more innovative solutions to customers.
"We are striving to bring further benefits of AI to consumers and enterprises through powering more use cases within Weixin, driving usage of our AI native app Yuanbao, and upgrading the capabilities of our HunYuan foundation models," Huateng said.