TENCENT ANNOUNCES 2025 FIRST QUARTER RESULTS

Sustained High Quality Revenue Growth Operating Leverage to Support Strategic AI Investments over Longer Term

Tencent Holdings Limited (HKEX: 00700 (HKD Counter) and 80700 (RMB Counter), “Tencent” or “the Company”), a world-leading Internet and technology company in China, today announced the unaudited consolidated results for the quarter ended 31 March 2025 (“1Q2025”).

Mr. Ma Huateng, Chairman and CEO of Tencent, said, “During the first quarter of 2025, our high-quality revenue streams sustained their solid growth trajectory. AI capabilities already contributed tangibly to businesses,such as performance advertising and evergreen games. We also stepped up our spending on new AI opportunities, such as the Yuanbao application and AI in Weixin. We believe the operating leverage from our existing high-quality revenue streams will help absorb the additional costs associated with these AI-related investments and contribute to healthy financial performance during this investment phase. We expect these strategic AI investments will create value for users and society, and generate substantial incremental returns for us over the longer term.”

1Q2025Financial Highlights Revenues: +13% YoY,gross profit: +20% YoY, non-IFRS[1] operating profit: +18% YoY

— Total revenues were RMB180.0 billion (USD25.1 billion[2]), up13% over the first quarter of 2024.

— Gross profitwas RMB100.5 billion(USD14.0 billion), up 20% YoY.

— On anon-IFRS basis, which is intended to reflect core earnings by excluding certain one-time and/or non-cash items:

— Operating profitwas RMB69.3billion (USD9.7 billion), up 18% YoY. Operating margin increased to 39% from 37% last year.

— Profit for theperiod was RMB62.7 billion (USD8.7billion), up 22% YoY.

— Profit attributable to equity holders of the Companyfor the period was RMB61.3 billion (USD8.5 billion), up 22% YoY.

— Basic earnings per share were RMB6.735. Diluted earnings per share were RMB6.583.

— On anIFRS basis:

— Operating profit was RMB57.6 billion (USD8.0 billion), up 10%YoY. Operating margin decreased to 32% from 33% last year.

— Profit for the period was RMB49.7 billion (USD6.9 billion), up 17%YoY.

— Profit attributable to equity holders of the Company for the quarter was RMB47.8 billion (USD6.7 billion), up 14% YoY.

— Basic earnings per share were RMB 5.252. Diluted earnings per share were RMB5.129.

— Capital expenditure was RMB27.5 billion (USD3.8 billion), up 91% YoY.

— Total cash was RMB476.0billion (USD66.3billion) and free cash flow was RMB47.1billion (USD6.6billion), down 9% YoY. Net cash position totalled RMB90.2 billion (USD12.6 billion).

— As at 31 March 2025, fair value of our shareholdings[3] in listed investee companies (excluding subsidiaries) totalled RMB653.4billion (USD91.0 billion)and the carrying book value of our shareholdings in unlisted investee companies (excluding subsidiaries) was RMB337.9 billion (USD47.1 billion).

— During the first quarter of 2025, the Company repurchased approximately 43.0 million shares on the Hong Kong Stock Exchange for a consideration of approximately HKD17.1 billion.

[1]Non-IFRS adjustments excludes share-based compensation, M&A related impact such asnet (gains)/losses from investee companies, amortisation of intangible assets, impairment provisions/(reversals), SSV & CPP, income tax effects and others[2]Figures stated in USD are based on USD1 to RMB7.1782[3]Including those held via special purpose vehicles, on an attributable basis

1Q2025Business Review and Outlook

— We provided more onboarding support for Mini Shops merchants, in order to enrich the range of branded product listings, contributing to rapid year-on-year growth in GMV.

— We rolled out AI features within Weixin to provide more interactive user experiences and increase productivity for content creators and developers. For example, we integrated our AI service Yuanbao as a Weixin contact, powered Weixin Search with large language models (LLMs), and provided a text-prompt image generating tool for Official Accounts.

— Tencent Video maintained its leading position in China's long-form video market with 117 million[4] video subscribers. Tencent Music sustained its industry leadership in China's music streaming market with 123 million[5] music subscribers.

— Several of our evergreen games, including Honour of Kings and CrossFire Mobile, achieved record high levels of gross receipts during the seasonally strong first quarter.

— Delta Force's domestic user base reached a post-launch record of 12 million peak DAU in April 2025. Delta Force became the sixth most popular mobile game by average DAU industry-wide[6], and the highest-DAU new game released in the last three years industry-wide.

— We upgraded our advertising technology platform with enhanced generative AI capabilities, such as improved image generation and video editing to accelerate advertisement creation, digital human solutions to facilitate live streaming activities, and deeper understanding of merchandise and user interests to deliver better recommendations.

— Tencent Cloud's audio and video solutions ranked first by revenue for the seventh consecutive year in China[7]. We enhanced the audio and video solutions' content generation, media processing and real-time interaction experience by integrating LLM capabilities.

[4]The average daily number of paying users for the first quarter of 2025[5]The average number of paying users as of the last day of each month during the first quarter of 2025[6]By DAU among mobile games in domestic market during the first quarter of 2025, according to QuestMobile[7]During 2018-2024, according to IDC

Operating Metrics

As at As at Year- As at Quarter- 31March 31 March on-year 31 December on-quarter 2025 2024 change 2024 change (in millions, unless specified)Combined MAU of Weixin 1,402 1,359 3% 1,385 1%and WeChatMobile device MAU of QQ534 553 -3% 524 2%Fee-based VAS paying 268 260 3% 262 2%users

1Q2025Management Discussion and Analysis

Revenues from VAS increased by 17% year-on-year to RMB92.1 billion for the first quarter of 2025. Domestic Games revenues were RMB42.9 billion, representing a 24% year-on-year increase from a low base in the same period last year, driven by growth in revenues from Honour of Kings and Peacekeeper Elite, as well as contributions from recently released DnF Mobile and Delta Force. International Games revenues were RMB16.6 billion, reflecting a 23% year-on-year increase (22% increase on a constant currency basis), driven by growth in revenues from Brawl Stars, Clash Royale and PUBG MOBILE. Social Networks revenues rose by 7% year-on-year to RMB32.6 billion, driven by growth in app-based game virtual item sales, music subscription revenues and Mini Games platform service fees.

Revenues from Marketing Services[8]were RMB31.9 billion for the first quarter of 2025, reflecting a 20% year-on-year increase. This growth was primarily due to robust advertiser demand for Video Accounts, Mini Programs and Weixin Search inventories, supported by higher user engagement, ongoing AI upgrades to our advertising platform, and improvements to the transaction ecosystem within Weixin. Marketing Services revenues increased across most major industry categories during the quarter.

Revenues from FinTech and Business Services increased by 5% year-on-year to RMB54.9 billion for the first quarter of 2025. FinTech Services revenue growth was due to higher revenues from consumer loan services and wealth management services. Business Services revenue growth was driven by an increase in cloud services revenues and eCommerce technology service fees.

For other detailed disclosure, please refer to our website https://www.tencent.com/en-us/investors.html, or follow us via Weixin Official Account (Weixin ID: TencentGlobal).

[8]Starting third quarter of 2024, we have renamed this revenue segment from “Online Advertising”to “Marketing Services”to better represent the breadth of our marketing solutions and accompanying technology services across our online marketing properties

AboutTencent

Tencent uses technology to enrich the lives of Internet users.

Our communication and social services, Weixin and QQ, connect users with each other and with digital content and services, both online and offline, making their lives more convenient. Our targetedmarketing serviceshelps advertisers reach out to hundreds of millions of consumers in China. Our FinTech and business services support partners' business growth and assist their digital upgrade.

Tencent invests heavily in talent and technological innovation, actively promoting the development of the Internet industry. Tencent was founded in Shenzhen, China, in 1998. Tencent has been listed on the Main Board of the Stock Exchange of Hong Kong since 2004.

Investor contact: IR@tencent.com Media contact: GC@tencent.com

Non-IFRS Financial Measures

To supplement the consolidated results of the Group (“the Company and its subsidiaries”) prepared in accordance with IFRS, certain additional non-IFRS financial measures (in terms of operating profit, operating margin, profit for the period, profit attributable to equity holders of the Company, basic EPS and diluted EPS) have been presented in this press release. These unaudited non-IFRS financial measures should be considered in addition to, not as a substitute for, measures of the Group's financial performance prepared in accordance with IFRS. In addition, these non-IFRS financial measures may be defined differently from similar terms used by other companies.

The Company's management believes that the non-IFRS financial measures provide investors with useful supplementary information to assess the performance of the Group's core operations by excluding certain non-cash items and certain impact of investment-related transactions. In addition, non-IFRS adjustments include relevant non-IFRS adjustments for the Group's major associates based on available published financials of the relevant major associates, or estimates made by the Company's management based on available information, certain expectations, assumptions and premises.

Forward-Looking Statements

This press release contains forward-looking statements relating to the business outlook, estimates of financial performance, forecast business plans and growth strategies of the Group. These forward-looking statements are based on information currently available to the Groupand are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realised in the future. Underlying these forward-looking statements are a lot of risks and uncertainties. In light of the risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as representations by the Board or the Company that the plans and objectives will be achieved, and investors should not place undue reliance on such statements.

CONDENSED CONSOLIDATED INCOME STATEMENTRMB in millions, unless specified Unaudited Unaudited 1Q2025 1Q2024 1Q2025 4Q2024Revenues 180,022 159,501 180,022 172,446VAS 92,133 78,629 92,133 79,022Marketing Services 31,853 26,506 31,853 35,004FinTech and Business Services 54,907 52,302 54,907 56,125Others 1,129 2,064 1,129 2,295Cost of revenues (79,529) (75,631) (79,529) (81,793)Gross profit 100,493 83,870 100,493 90,653Gross margin 56% 53% 56% 53%Selling and marketing expenses (7,866) (7,536) (7,866) (10,285)General and administrative expenses (33,664) (24,809) (33,664) (31,403)Other gains/(losses), net (1,397) 1,031 (1,397) 2,513Operating profit 57,566 52,556 57,566 51,478Operating margin 32% 33% 32% 30%Net gains/(losses) from investments 1,407 656 1,407 1,119and othersInterest income 3,748 4,248 3,748 3,910Finance costs (3,860) (2,826) (3,860) (2,512)Share of profit/(loss) of associates and 4,581 2,186 4,581 9,253joint ventures, netProfit before income tax 63,442 56,820 63,442 63,248Income tax expense (13,717) (14,169) (13,717) (11,781)Profit for the period 49,725 42,651 49,725 51,467Attributable to:Equity holders of the Company 47,821 41,889 47,821 51,324Non-controlling interests 1,904 762 1,904 143Non-IFRS operating profit 69,320 58,619 69,320 59,475Non-IFRS profit attributable to equity 61,329 50,265 61,329 55,312holders of the CompanyEarnings per share for profitattributable to equity holders ofthe Company(in RMB per share)- basic 5.252 4.479 5.252 5.597- diluted 5.129 4.386 5.129 5.485CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMERMB in millions, unless specified Unaudited 1Q2025 1Q2024Profit for the period 49,725 42,651Other comprehensive income, net of tax:Items that may be subsequently reclassified to profit or lossShare of other comprehensive income of associates and joint ventures 652 (337)Transfer of share of other comprehensive income to profit or loss upon disposal – (30)and deemed disposal of associates and joint venturesTransfer to profit or loss upon disposal of financial assets at fair value through 1 1other comprehensive incomeNet gains from changes in fair value of financial assets at fair value through other 106 10comprehensive incomeCurrency translation differences 2,294 (3,929)Net movement in reserves for hedges (213) (782)Items that will not be subsequently reclassified to profit or lossShare of other comprehensive income of associates and joint ventures 522 (120)Net gains from changes in fair value of financial assets at fair value through 26,361 15,918other comprehensive incomeCurrency translation differences 370 (463)Net movement in reserves for hedges 6 – 30,099 10,268Total comprehensive income for the period 79,824 52,919Attributable to:Equity holders of the Company 75,858 51,673Non-controlling interests 3,966 1,246OTHER FINANCIAL INFORMATIONRMB in millions, unless specified Unaudited 1Q2025 1Q2024 4Q2024EBITDA (a) 73,817 65,094 63,917Adjusted EBITDA (a) 81,559 69,259 69,579Adjusted EBITDA margin (b) 45% 43% 40%Interest and related expenses 3,386 3,044 3,340Net cash/(debt)(c) 90,229 92,534 76,798Capital expenditures (d) 27,476 14,359 36,578Note:(a) EBITDA is calculated as operating profit minus other gains/(losses), net, and adding back depreciation of property, plant and equipment,investment properties as well as right-of-use assets, and amortisation of intangible assets and land use rights. Adjusted EBITDA is calculated asEBITDA plus equity-settled share-based compensation expenses(b) Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues(c) Net cash/(debt) represents period end balance and is calculated as cash and cash equivalents, plus term deposits and others, including highlyliquid investment products held for treasury purpose, minus borrowings and notes payable(d) Capital expenditures primarily consist of investments in technology IT infrastructure (including computer equipment, components, and software),data centres, land user rights, office premises and intellectual properties (excluding media content)CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONRMB in millions, unless specified Unaudited Audited As at As at 31 March, 2025 31 December, 2024ASSETSNon-current assetsProperty, plant and equipment 91,727 80,185Land use rights 22,928 23,117Right-of-use assets 17,085 17,679Construction in progress 13,250 12,302Investment properties 900 801Intangible assets 207,641 196,127Investments in associates 305,487 290,343Investments in joint ventures 7,138 7,072Financial assets at fair value through profit or loss 202,869 204,999Financial assets at fair value through other 337,527 302,360comprehensive incomePrepayments, deposits and other assets 49,959 42,828Other financial assets 978 1,076Deferred income tax assets 29,490 28,325Term deposits 98,066 77,601 1,385,045 1,284,815Current assetsInventories 427 440Accounts receivable 49,311 48,203Prepayments, deposits and other assets 102,015 101,044Other financial assets 4,480 4,750Financial assets at fair value through profit or loss 30,212 9,568Financial assets at fair value through other 5,444 3,345comprehensive incomeTerm deposits 132,549 192,977Restricted cash 3,544 3,334Cash and cash equivalents 205,253 132,519 533,235 496,180Total assets 1,918,280 1,780,995CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)RMB in millions, unless specified Unaudited Audited As at As at 31 March, 2025 31 December, 2024EQUITYEquity attributable to equity holders of the CompanyShare capital – -Share premium 47,020 43,079Treasury shares (2,777) (3,597)Shares held for share award schemes (5,377) (5,093)Other reserves 80,291 47,129Retained earnings 921,297 892,030 1,040,454 973,548Non-controlling interests 82,484 80,348Total equity 1,122,938 1,053,896LIABILITIESNon-current liabilitiesBorrowings 209,079 146,521Notes payable 123,240 130,586Long-term payables 11,495 10,201Other financial liabilities 4,831 4,203Deferred income tax liabilities 20,070 18,546Lease liabilities 13,405 13,897Deferred revenue 4,480 6,236 386,600 330,190Current liabilitiesAccounts payable 125,488 118,712Other payables and accruals 71,532 84,032Borrowings 44,151 52,885Notes payable 9,326 8,623Current income tax liabilities 18,956 16,586Other tax liabilities 5,119 4,038Other financial liabilities 5,846 6,336Lease liabilities 5,442 5,600Deferred revenue 122,882 100,097 408,742 396,909Total liabilities 795,342 727,099Total equity and liabilities 1,918,280 1,780,995RECONCILIATIONS OF THE GROUP'S NON-IFRS FINANCIAL MEASURES TO THE NEAREST MEASURES PREPARED IN ACCORDANCE WITH IFRS As Adjustments Non-IFRS reportedRMB in millions, Share-based Net (gains)/losses Amortisation of Impairment SSV & CPP Incomeunless specified compensation (a) frominvestee intangible assets (c) provisions/ (reversals) (e) tax effects companies (b) (d) (f) Unaudited three months ended 31 March2025Operating profit 57,566 10,100 – 1,515 – 139 – 69,320Share of profit/(loss) of associates 4,581 968 111 1,713 267 – – 7,640and joint ventures, netProfit for the period 49,725 11,068 (31) 3,228 (689) 160 (769) 62,692Profit attributable to 47,821 10,833 1,081 2,854 (719) 160 (701) 61,329equity holdersOperating margin 32% 39% Unaudited three months ended 31 March 2024Operating profit 52,556 4,694 – 1,249 – 120 – 58,619Share of profit/(loss) of associates and 2,186 1,509 (459) 1,556 699 – – 5,491joint ventures, netProfit for the period 42,651 6,203 (1,476) 2,805 1,562 132 (535) 51,342Profit attributable to equity holders 41,889 6,035 (1,449) 2,589 1,541 132 (472) 50,265Operating margin 33% 37% Unaudited three months ended 31 December 2024Operating profit 51,478 6,140 – 1,416 – 441 – 59,475Share of profit/(loss) of associates and 9,253 1,003 (3,799) 1,176 116 – – 7,749joint ventures, netProfit for the period 51,467 7,143 (6,888) 2,592 1,760 1,109 (706) 56,477Profit attributable to equity holders 51,324 7,034 (6,931) 2,396 1,037 1,109 (657) 55,312Operating margin 30% 34%Note:(a) Including put options granted to employees of investee companies on their shares and shares to be issued under investee companies' share-based incentive plans which can be acquired by the Group, and other incentives(b) Including net (gains)/losses on deemed disposals/disposals of investee companies, fair value changes arising from investee companies, and other expenses in relation to equity transactions of investee companies(c) Amortisation of intangible assets resulting from acquisitions(d) Mainly including impairment provisions/(reversals) for associates, joint ventures, goodwill and other intangible assets arising from acquisitions(e) Mainly including donations and expenses incurred for the Group's Sustainable Social Value and Common Prosperity Programme (“SSV & CPP”) initiatives(f) Income tax effects of non-IFRS adjustments

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