Tencent’s Net Revenue and Profit Declines in 2022, Q4 Net Profit Increases By 19%

Leading Chinese tech firm Tencent released its 2022 Q4 and full-year financial report on March 22. The financial report shows that the company’s Q4 revenue was 144.95 billion yuan ($21.06 billion), a year-on-year increase of 1%; The net profit was 106.27 billion yuan, up 12% year-on-year. Under non-IFRS, net profit totaled 29.71 billion yuan, up 19% year-on-year.

In 2022, Tencent‘s revenue was 554.552 billion yuan, down 1% year-on-year, and its net profit was 188.243 billion yuan, down 16% year-on-year. Under non-IFRS, the net profit was 115.649 billion yuan, down 7% year-on-year.

According to the report, as of the end of the fourth quarter of last year, the combined monthly active accounts of WeChat and WeChat international version were 1.313 billion, up 3.5% year-on-year. Total usage time of WeChat continued to increase in 2022. WeChat Moments usage time in Q4 was roughly stable compared with the same period last year, while the usage time of mini programs and WeChat Channels is now twice and three times that of the same period of last year, both exceeding the usage time of WeChat Moments. Monthly activity of QQ in Q4 was 572 million, up 3.6% year-on-year.

In the fourth quarter, Tencent‘s international game business contributed 33% of total game revenue, while Q4’s total game revenue contributed 28% in 2021. In terms of network ads, year-on-year growth of revenue resumed in the fourth quarter of 2022. Average daily commercial payments also resumed double-digit year-on-year growth since the first quarter of 2003.

Tencent continued to increase its investment in R&D. In the fourth quarter, its R&D expenditure increased by 13.5% year-on-year, and the annual R&D expenditure reached 61.4 billion yuan. Since 2019, Tencent‘s accumulated R&D expenditure has exceeded 182.6 billion yuan.

In 2022 Q4, the number of paid members for value-added services was 234 million, down 1.1% year-on-year.

According to the financial report, by the end of 2022, the company had 108,436 employees, a decrease of 4,335 compared with the same period of last year, and the total salary of the company was 111.182 billion yuan, compared with 95.523 billion yuan in the same period of last year.

SEE ALSO: Tencent Fires A 47-Year-Old Front-End Expert

According to the financial report, the revenue of value-added services business for the year ended December 31, 2022 decreased by 1% year-on-year to 287.6 billion yuan. Due to the implementation of protection laws for minors and the release of fewer new games in China, the Chinese gaming industry experienced a period of adjustment, and Tencent‘s revenue decreased by 4% year-on-year to 123.9 billion yuan.

“League of Legends: Wild Rift” and “Teamfight Tactics Mobile” have seen their revenues increase, while the recently released “Return to Empire” and “Arena Breakout” have contributed new revenues. Meanwhile, revenues of some existing games such as “Honor of Kings” and “Game for Peace” have declined. Gaming revenue in the international market increased 3% to 46.8 billion yuan, with an increase of 5% after excluding the impact of exchange rate and Supercell-related adjustments in the fourth quarter of 2021.

Tencent pointed out that it is investing heavily in the construction of AI and cloud technology, and is applying AI capabilities not only to industrial scenarios such as quality inspection and intelligent manufacturing, but also to many social fields such as medical care, helping the elderly, biodiversity conservation and agriculture to solve social pain points.

In the field of AI large models (eg, pre-training large model), Tencent mixed-AI large model covers basic models such as NLP (natural language processing), CV (computer vision), multimodal and many industry and domain models, and also launched a trillion Chinese NLP pre-training model. In the future, Tencent will continue to invest in large model technology to promote product innovation and operational efficiency.