(Yicai) May 15 -- Tencent Holdings’ revenue rose at the fastest clip in more than three years, beating expectations for the first quarter as the Chinese internet giant’s heavy investment in artificial intelligence started to yield tangible returns.

Revenue gained 13 percent to CNY180 billion (USD25.1 billion) in the three months ended March 31, the Shenzhen-based firm’s earnings report showed yesterday. That topped the CNY174.6 billion that analysts predicted. Net profit rose 14 percent to CNY47.8 billion (USD6.63 billion), while the operating margin widened to 39 percent from 37 percent.

“During the first quarter of 2025, our high-quality revenue streams sustained their solid growth trajectory,” said Chairman and Chief Executive Pony Ma. “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,” Ma noted, referring to the Tencent super app known internationally as WeChat.

The operating leverage from the company's high-quality revenue streams will help absorb these additional investments, contributing to a healthy financial performance and creating value for users and society, he added.

Income from the value-added services and social network segments climbed 17 percent and 7 percent to CNY92.1 billion and CNY32.6 billion, respectively. Domestic games revenue jumped 24 percent to CNY42.9 billion, driven by Honour of Kings and new releases Dungeon & Fighter Mobile and Delta Force, while the international figure rose 23 percent to CNY16.6 billion, fueled by Brawl Stars and PUBG Mobile. 

Monthly active users on Weixin/WeChat topped 1.4 billion in the period.

Revenue from marketing services rose 20 percent to CNY31.9 billion, boosted by strong advertiser demand for Video Accounts, Mini Programs, and Weixin Search, platforms enhanced by AI upgrades leading to higher user engagement.

Income from financial technology and business services grew 5 percent to CNY54.9 billion, mainly thanks to higher revenue from wealth management, consumer loan services, cloud services, and e-commerce technology fees.

Tencent's AI initiatives have yielded results, with its cloud audio-video solutions maintaining their top ranking in China by revenue for the seventh consecutive year. The company’s proprietary AI model Hunyuan has undergone successive enhancements, with its newest iterations achieving global leadership in key performance tests.

Tencent also became the first major Chinese tech firm to incorporate DeepSeek’s cost‑efficient AI technology into its core platforms.

Weixin Search has seen growth in usage and search volume, with monetization beginning last year, executives said on Tencent’s earnings conference call. 

"We've resolved the big immediate challenges, and that is translating into both better engagement and monetization trends with our existing games and also to greater confidence in our pipeline of new games," noted Chief Strategy Officer James Mitchell.

"With the right people running the games, then we get the right results," President Martin Lau added.

Tencent also reiterated its commitment to repurchase at least HKD100 billion (USD12.8 billion) of its own stock, with buyback plans ongoing regardless of share price fluctuations.

Tencent’s shares [HKG: 0700] closed 0.2 percent lower at HKD520 (USD66.59) in Hong Kong today. The stock has still climbed 25 percent so far this year. In New York yesterday, its over-the-counter shares [OTCM: TCEHY] closed 3.5 percent higher at USD67.88.

Editor: Martin Kadiev