Tencent Q2 2026 Revenue Up 11%, Gaming Local Growth 17%, AI Capex Surges 176%

Tencent Holdings released its second-quarter 2026 results on August 12. The company reported quarterly revenue of RMB 204.79 billion, up 11% year on year. Profit attributable to equity holders reached RMB 56.02 billion, up 0.7% year on year. On a Non-IFRS basis, profit for the period was RMB 68.42 billion, up 9% year on year. Non-IFRS operating profit was RMB 75.64 billion, up 9% year on year; excluding the impact of new AI products, Non-IFRS operating profit grew 19% to RMB 86.1 billion.

In gaming, Tencent's second-quarter gaming revenue rose 11% year on year. Domestic market gaming revenue was RMB 47.3 billion, up 17%, driven by four core titles including Delta Force and Valorant. International gaming revenue was RMB 18.6 billion, up 4% at constant exchange rates, mainly driven by Wuthering Waves and Valorant; on a nominal currency basis, it declined 0.8% year on year due to exchange rate effects. Tencent's Miniclip title "Arrows - Puzzle Escape" became the world's most downloaded mobile game in the second quarter.

Fintech and enterprise services revenue grew 9% year on year, with cloud services benefiting from incremental AI contributions, international expansion, and growing demand for general cloud services.

Capital expenditure in the second quarter reached RMB 52.78 billion, up 176% year on year, primarily for AI computing power procurement. The company said operating cash flow included substantial AI-related prepayments to support upgrades to the Hunyuan Hy model, inference needs for WorkBuddy and CodeBuddy, WeChat AI initiatives, and growing cloud service demand from external customers. The quarter recorded negative free cash flow of RMB 13.8 billion; excluding prepayments for AI computing power procurement, free cash flow was RMB 37.6 billion.

On AI products, Tencent released the official version of Hunyuan Hy3 in July 2026. Within one week of launch, call volume grew more than 68 times compared with the previous generation model. Measured by OpenRouter token consumption, it consistently ranked among the top three globally. A larger-parameter model, Hy4, is planned for release soon. AI office efficiency service WorkBuddy and AI programming tool CodeBuddy achieved user growth and are leading in their respective fields in China. WeChat AI assistant "Xiaowei" has started small-scale gray testing, driven by a customized model WeLM focused on privacy and WeChat scenarios. As of the end of the first half of 2026, WeChat users numbered 1.439 billion, up 2% year on year.