Tencent Holdings Misses On Q1 Revenue

by Anusuya Lahiri, Benzinga Editor
May 20, 2021 8:29 AM | 2 min read |
  • Tencent Holdings Ltd TCEHY reported first-quarter FY21 revenue growth of 25% year-on-year to $20.6 billion (RMB135.3 billion), missing the analyst consensus of $20.87 billion.
  • Revenues from VAS rose 16% Y/Y to RMB72.4 billion, Games revenues increased 17% Y/Y to RMB43.6 billion, and Social networks revenues rose 15% Y/Y to RMB28.8 billion.
  • Revenues from Online Advertising rose 23% Y/Y to RMB21.8 billion, Social and other advertising revenues increased 27% Y/Y to RMB18.5 billion, and Media advertising revenues rose 7% Y/Y to RMB3.3 billion.
  • Revenues from FinTech and Business Services rose 47% Y/Y to RMB39 billion, while Revenue from Other rose 39% Y/Y to RMB2 billion.
  • Combined MAU of Weixin and WeChat rose 3.3% Y/Y to 1.2 billion; Mobile device MAU of QQ declined 12.6% Y/Y to 606.4 million; Fee-based VAS registered subscriptions rose 14.3% Y/Y to 225.7 million.
  • Gross margin contracted 300 basis points to 46%.
  • Non-GAAP operating profit rose 20% Y/Y to $6.5 billion (RMB42.8 billion), and the margin contracted 100 basis points to 32%.
  • Net profit rose 22% Y/Y to $5 billion (RMB33.1 billion), with a net margin of 26%. EPS was RMB3.415.
  • Adjusted EBITDA rose 17% Y/Y to RMB52.9 billion, but the margin contracted 300 basis points to 39%.
  • Tencent held $39.4 billion (RMB258.8 billion) in cash and equivalents, and its Free cash flow declined 15% Y/Y to RMB33.2 billion.
  • Capital expenditures rose 26% Y/Y to RMB7.7 billion.
  • Tencent was stepping up investment in areas including business services and enterprise software, high-production-value games, and short-form video to tap the expanding opportunities in the various verticals operated by the company enabled by technology innovation and increasing acceptance of digital solutions among users and businesses, Chair and CEO Ma Huateng said.
  • Price action: TCEHY shares are up by 0.14% at $78.84 in the premarket session on the last check Thursday.
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