Tencent Beats Analyst Expectations in Q4 as Company Reports Big Revenue Increases

By Thomas Price Wednesday, March 24, 2021

As the final results for the fiscal year 2020 finally begin coming in, many companies have faced significant struggles amid the economically turbulent year. While this remains true, Chinese gaming and social media company Tencent reported strong numbers across the board in their recently released Q4 earnings report. Business boomed for the company as increases in revenue and profit helped to beat out analyst expectations for the final quarter of the year, leading to excitement from investors before the market opened.

Tencent logo on a building.

Tencent’s Earnings vs. Analyst Expectations

In Tencent’s Q4 earnings report, the company generated $20.486 billion in total revenue. In comparison to the same fiscal quarter in 2019, the company saw an increase in revenue of 26%. This increase in total business also beat out analyst expectations which pegged the company to generate just $20.257 billion in revenue.

Another major highlight for the company is how seamlessly a larger revenue pool translated into total profit as well. In fact, the gaming and social media company reeled in an impressive $9.099 billion in profit during the quarter. When comparing this figure to Q4 in 2019, Tencent saw an increase in profits of 165%.

The strength of the business seen in the Q4 report can largely be attributed to the major boost seen in the gaming section of the company as revenue generated from online games outpaced overall growth at an increase of 29%. This roughly translates to $5.991 billion in revenue from the online games portion of business alone. Tencent also reported strong growth in revenue from both fintech and business services as well as value-added services, which saw increases of 28% and 29%, respectively.

The strong numbers reported across the board for the business look to see strong enthusiasm from investors as the market opens for the day.

Tencent Looking Forward in the Future

While the company provided no specific guidance for the following quarter, Tencent did provide outlooks to what may be ahead across all sectors of their business. On their social media app Weixin, the company’s over 1.2 billion users will continue to see new features added to increase engagement, including games, picture posting tools, and easier content sharing. On the gaming side of business, Tencent expects to maintain a stronghold on partnered titles along with developed titles such as Honour of Kings, which once again was the top-grossing mobile game in China.

In a statement released alongside the Q4 report, chairman and CEO of Tencent, Ma Huateng, said, “While 2020 was a year of unprecedented challenges, solid results across all our businesses testify to our focus on user value, technology innovation and business sustainability. We extended our leading position in the consumer internet space with enriched content and innovations across our products, while making notable progress in international expansion, starting with games.”

He went on to add, “We also further penetrated into industrial internet with our flagship SaaS products and upgraded cloud infrastructure. We will continue to implement Tech for Good and work with industry partners to bring value enhancing products and services to users, enterprises and society as a whole.”

About the Author

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Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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