Tencent Holdings Limited

Good day and a good evening. Thank you for standing by. Welcome to Tencent Holdings Limited 2025 Third Quarter Results Announcement Webinar. I'm Wendy Huang from Tencent IR team. At this time, all participants are in a listen-only mode. After management's presentation, there will be a question and answer session. For participants who dial in by phone, if you wish to ask a question, please press 5 on your telephone to raise your hand. If you are accessing from the Tencent meeting or Woo meeting application, please click the raise hand button at the bottom left. And please be advised that today's webinar is being recorded. Before we start the presentation, we would like to remind you that it includes forward-looking statements, which are underlined by a number of risks and uncertainties and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of Tencent. This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to but not as a substitute for measures of the group's financial performance propelled in accordance with the IFRS. For a detailed discussion of risk factors and non-IFRS measures, please refer to our disclosure documents on the IR section of our website. Let me now introduce the management team on the webinar tonight. Our chairman and CEO, Paul Liman, will kick off with a short overview. President Martin Lau and Chief Strategy Officer James Mitchell will provide business review, and Chief Financial Officer John Lowe will conclude this financial discussion before we open the floor for questions. I will now pass it to Pauline.

Okay, thank you, Wendy. Good evening. Thank you, everyone, for joining us. During the third quarter of 2025, we achieved solid revenue and earning growth. reflecting healthy trends across games, marketing services, and fintech and business services. Our strategic investments in AI are benefiting us in business areas such as ad targeting and game engagement, as well as efficiency enhancement areas such as coding and game and video production. We are upgrading the team and architecture of our Huanyuan Foundation model, whose images and 3D generation models are now industry-leading. As Huanyuan's capabilities continue to improve, our investment in growing Yuanbao adoption and our efforts in developing energetic AI capabilities within WeChat will gain further traction. Looking at our financial numbers for the third quarter, total revenue was 193 billion RMB up 15% year-on-year. Gross profit was 109 billion RMB up 22% year-on-year. Non-IFI's operating profit was 73 billion RMB up 18% year-on-year. And non-IFI's net profit attributable to equity holders was 71 billion RMB up 18% year-on-year. Turning to our key services. for communication and social networks. Combine MAU of WeChat through year-on-year and quarter-on-quarter, 1.4 billion. For digital content, TME group is paying and solidifying its leadership position in music streaming. For games, Delta Force is now the top three game in China by gross receipts, while Violet successfully expanded from PC to mobile. And in AI, we enhanced Huanyuan large language models' complex reasoning capabilities, especially in coding, mathematics, and science. Our Huanyuan images generation Our model is ranked first globally on our path to imaging models by LLM Arena. And our 3D model is the top-ranked 3D generative model of acting face. I will now hand over to Martin for the business review.

Thank you, Pony, and good evening and good morning to everybody. For the third quarter of 2025, our total revenue was up 15% year-on-year, Bass represented 50% of our total revenue, within which social networks subsegment was 17%, domestic games subsegment was 22%, and international games was 11%. Marketing services was 19% of total revenue, and fintech and business services was 30% of total revenue. For the quarter, our gross profit was up 22% year-on-year to 109 billion RMB. VAS gross profit increased 23% year-on-year to 59 billion RMB, representing 54% of our total gross profit. Marketing services gross profit increased 29% year-on-year to 21 billion RMB, contributing 19% of total gross profit. And fintech and business services gross profit increased 15% year-on-year to 29 billion RMB, contributing 27% of total gross profit. Turning to business segments, value-added services revenue was 96 billion RMB, up 16% year-on-year. Social networks revenue was up 5% year-on-year to 32 billion RMB, driven by increased revenue from video accounts, live streaming service, music subscriptions, and minigames platform service fees. Music subscription revenue increased 17% year-on-year, boosted by growth in Apple and subscribers. Music subscribers grew 6% year-on-year to $126 million. Long-form video subscription revenue decreased 3% year-on-year. Apple was stable while video subscribers declined 2% year-on-year to $114 million due to the delay of drama series, Love's Ambition. Following its release at the end of the quarter, finally, Love's ambition ranked among the most viewed drama series in China year-to-date. Domestic games revenue grew by 15% year-on-year, primarily driven by Delta Force, Honor Kings, and Valorant. International games revenue increased by 43% year-on-year, or 42% in constant currency. which is an unusually rapid rate due to recognizing revenue up front on copy sales of Dying Light, The Beast, and also due to the consolidation of recently acquired studios. Moving to communications and social networks. For many shops, we're systematically building a more vibrant transaction ecosystem, resulting in continued rapid growth in GFB. We've enhanced mini-shop merchandise recommendations and thus sales conversions by leveraging our foundation model capabilities to better understand users' interests based on their content consumption within Weixin. We rolled out new features to enhance merchandise discovery innovation. For example, we added gifting capabilities, innovation order and cart page, leveraging innovation social graph. We also upgraded the image search feature innovation, which users can use to scan objects, identify them, and then shop for them in mini shops. We also enhanced AI features in Weixin to provide new services to users and to promote greater usage of Yuanbao with encouraging results. At Yuanbao feature in video accounts and official accounts comment boxes summarizes content and also encourages users to ask follow-up questions, and users like that feature a lot. We also enriched the Tencent news feed in Weixian with Yuanbao-generated content and facilitated user exploration of news-related topics via the Yuanbao app. Now, with that, I'll pass on to James.