Tencent Holdings reported better-than-expected Q3 results, with both revenue and net profit showing significant growth. The international games segment stood out as a key driver of performance.

On November 13, Tencent's latest earnings report revealed Q3 revenue of 192.87 billion yuan, surpassing market estimates of 188.8 billion yuan. Net profit reached 63.13 billion yuan, significantly exceeding the projected 55.88 billion yuan, marking a 13% increase.

The company's core gaming business continued its upward trajectory. International game revenue surged to 20.8 billion yuan, far outpacing the estimated 18.13 billion yuan. Domestic game revenue also outperformed at 42.8 billion yuan, slightly above the forecast of 42.27 billion yuan.

**Key Financial Metrics** - Operating profit: 63.55 billion yuan (vs. estimate of 63.11 billion yuan) - Adjusted net profit: 70.55 billion yuan (vs. estimate of 65.97 billion yuan) - Value-added services revenue: 95.9 billion yuan (vs. estimate of 93.36 billion yuan), driven by gaming, video, and music subscriptions. - Fintech and business services revenue: 58.2 billion yuan (in line with estimates of 58.14 billion yuan) - Other net income: 483 million yuan (vs. estimate of 351 million yuan) - Monthly active users for WeChat/WeChat: 1.41 billion (meeting expectations) - Sales and marketing expenses: 11.47 billion yuan (above estimate of 10.14 billion yuan)

**Enterprise Services Growth** Fintech and business services revenue rose 10% YoY to 58.2 billion yuan, supported by growth in commercial payments and consumer lending. Enterprise services revenue grew by double digits, fueled by cloud services (including rising demand for AI-related solutions) and higher merchant service fees from WeChat Mini Shops.

**R&D and Capex** Tencent's Q3 R&D spending hit a record 22.82 billion yuan, up 28% YoY, while capital expenditures fell 24% YoY to 12.98 billion yuan.

**Gaming Highlights** - Domestic game revenue rose 15% YoY to 42.8 billion yuan, driven by new releases like *Delta Action* and sustained performance of *Honor of Kings* and *Peacekeeper Elite*. - International game revenue jumped 43% YoY (42% at constant currency) to 20.8 billion yuan, aided by contributions from Supercell titles, newly acquired studios, and the PC/console game *Dying Light: Beasts of Prey*. - Social network revenue grew 5% to 32.3 billion yuan, supported by live-streaming, music subscriptions, and mini-game platform fees.