On August 12, Tencent Holdings (00700.HK) released its second-quarter financial results, with AI serving as the core theme throughout the quarter: from completing a reconstruction and launching Hy3 preview within less than three months, to rapidly iterating to the official version of Hy3, and then planning to launch Hy4 with a larger parameter scale in the near future, Huan Yuan is forming a stable and systematic model development capability; Tencent has initially established an advantage in the office intelligence field, with multiple products working simultaneously; WeChat's AI assistant "Xiaowei" was launched in June and continues to expand its gray-scale testing scope.

The fundamentals of Tencent remained solid this quarter: revenue reached 204.79 billion yuan, an increase of 11% year-over-year; Non-IFRS operating profit reached 75.64 billion yuan, up 9% year-over-year. If excluding the impact of new AI products (mainly Hy, Yuanbao, CodeBuddy, WorkBuddy, and Xiaowei), Non-IFRS operating profit increased by 19% to 86.1 billion yuan.

A strong business model and robust fundamentals support more substantial AI investment: R&D expenditure for this quarter reached 27.28 billion yuan, up 35% year-over-year; capital expenditures reached 52.78 billion yuan, up 176% year-over-year, with a 65% increase quarter-over-quarter. If excluding prepayments for computing power procurement, free cash flow reached 37.6 billion yuan. As AI contributes more incremental value to core businesses, the positive feedback loop between investment, implementation, and business returns is gradually strengthening.

Ma Huateng, Chairman and CEO of Tencent, stated: "As we enter the third quarter of this year, we are building a new, AI-powered Tencent at three levels: intelligence, applications, and infrastructure, and have made significant progress. In the intelligence layer, the official version of Hy3 provides users with a widely applicable and cost-effective model, laying the foundation for the Hy series models to reach industry-leading levels. In the application layer, AI office efficiency service WorkBuddy and AI programming tool CodeBuddy achieved breakthrough user growth and are now leading in their respective fields in China. In the infrastructure layer, we have significantly increased computing power procurement, which will help convert application and model usage into revenue. At the same time, we continue to refine our existing businesses, with marketing services revenue continuing to grow, several new games performing well, and WeChat video number playback volume growing rapidly."

Hy3 performance and usage rise together, Hy4 is about to take over, and the model base continues to strengthen

After a comprehensive reconstruction of infrastructure such as pre-training and reinforcement learning, Huan Yuan quickly completed the iteration of Hy3 from preview to official version this quarter, and the upcoming Hy4 will further enhance model performance and multimodal capabilities.

As a core achievement of this iteration, Hy3 demonstrates higher "intelligent density," achieving intelligent levels comparable to domestic and international flagship models with two to five times larger parameter scales, but with relatively smaller parameters.

Model and AI product Co-Design (collaborative design) has also become an important path for Huan Yuan's iteration and upgrading. Currently, Hy3 has been quickly integrated into products such as WorkBuddy, CodeBuddy, Yuanbao, ima, and Marvis, bringing obvious experience improvements. Among them, the task resolution rate of WorkBuddy increased from 72% to 90%.

Improved model capabilities have led to a rapid increase in usage. According to OpenRouter's token consumption, Hy3 has consistently ranked among the top three globally since its launch. Additionally, the daily token usage of Hy3 is seven times that of the preview version, reflecting faster user adoption and rising paid demand.

User choices provide more direct feedback. Among users who selected models in WorkBuddy, 60% chose Hy3; after integrating with ima Copilot, Hy3 became the most used model on the platform within 72 hours.

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WorkBuddy continues to lead, Xiaowei expands gray-scale testing, and AI products achieve large-scale deployment

While model iteration accelerates, Tencent's AI products begin to move from single breakthroughs to scaling up: WorkBuddy, CodeBuddy, and other office agents show clear growth momentum. The enterprise WeChat AI assistant "Dayuan" was launched, and the native WeChat AI assistant "Xiaowei" continues to expand its gray-scale testing. The creative intelligent agent Miora, which shares the same architecture as WorkBuddy, has also gone live full-time.

Among these, office agents first formed a matrix advantage. WorkBuddy achieved rapid user growth and healthy user retention rates, with strong user willingness to subscribe and recharge tokens. Thanks to strong harness engineering capabilities, a rich selection of models, and an industry-leading skill library, WorkBuddy has become a leading AI-native office intelligence agent in China.

According to the E-consulting "Market Insight Report on Chinese Office Intelligence Platforms Q2 2026", the PC access volume of WorkBuddy reached 20.97 million times in June, ranking first among similar products domestically, exceeding the combined access volumes of the second and third places; in the monthly access volume top ten list, Tencent occupied four positions, with WorkBuddy, CodeBuddy, QClaw, and Marvis all included.

Based on its own ecosystem advantages, Tencent is amplifying the differentiated competitiveness of office intelligence agents. WorkBuddy can integrate with WeChat and Enterprise WeChat, deeply entering real work scenarios. Recently, it also connected document and knowledge base workflows, and launched the "Human-Machine Dual Writing" function, exploring a new form of Office in the AI era.

Outside of personal office, the application boundaries of Tencent's office agents are also expanding into enterprises and industries. Currently, WorkBuddy has been applied in over 50 industries, covering areas such as government affairs, production, and life services, and has been implemented in scenarios like Guangdong government affairs and Shenzhen Port. The enterprise version of WorkBuddy has been officially launched, with commercialization and ecological cooperation proceeding simultaneously.

The AI layout in the enterprise segment continues to deepen into existing collaboration channels. In the second quarter, Enterprise WeChat launched several AI functions including recording face-to-face meetings and intelligent documents, and introduced the intelligent assistant "Dayuan," directly embedded in the workflow, covering scenarios such as group chats, to-do lists, and emails. It can complete tasks such as chat summaries, document and table reading and writing, and project progress summaries, and connect external WeChat group chats, more naturally integrating into the enterprise collaboration process.

Outside of office and enterprise scenarios, Tencent's AI products are also accelerating into personal life scenarios. The native WeChat AI assistant "Xiaowei" launched in June continues to expand its gray-scale testing, with entry points extending from the main entrance of WeChat's home screen to more scenarios such as Moments, official accounts, and video numbers. Xiaowei is based on the self-developed WeLM model by the WeChat team, focusing on user privacy, WeChat scenario adaptation, and inference efficiency, while enhancing personalized AI experiences through official accounts and video numbers.

Yuanbao continues to strengthen core experiences such as search and voice recognition, and reuses the accumulated AI atomic capabilities in products like WeChat, WorkBuddy, and QQ Browser.

AI drives cloud service growth, games and advertising maintain growth, and several long-standing games see record daily active users

In the second quarter, all three of Tencent's major business segments achieved growth, with the contribution of AI core businesses deepening. Among them, financial technology and enterprise services revenue increased by 9% to 60.29 billion yuan, with cloud services becoming the most direct contributor to AI-driven growth.

Specifically, the growth in demand for model inference, intelligent body operation, and AI-native applications has driven increased demand for computing power, MaaS, and API calls. AI products and services such as WorkBuddy and CodeBuddy also contributed new revenue. Tencent Cloud's overseas business continued to expand rapidly, with this quarter supporting Indonesia's leading operator XLSMART in a large-scale public cloud migration and applying WorkBuddy and CodeBuddy AI capabilities in the migration process; general cloud service demand also maintained growth.

In gaming, AI has become an important force driving business growth and has been deeply integrated into the entire player experience, development production, and operation service chain. For example, "Delta Operation" uses Agents to improve operational efficiency and leverages Hy3D capabilities to optimize the scene-end hand integration production pipeline.

At the same time, the exploration of AI and gameplay integration continues. The AI NPC gameplay of "PUBG Mobile" has accumulated 167 million users, with the highest daily active users reaching 17.7 million; the new game "Kingdom of Roche: World" introduced a game-native Coach Agent "Scarlett" for complex gameplay decision-making, which has effectively promoted PVP ice-breaking and activity since its launch, increasing PVP activation by 20%, and improving win rates after users engaged with the features, thus enhancing the gameplay experience.

In terms of business performance, the game revenue for this quarter reached 65.9 billion yuan, up 11% year-over-year, returning to double-digit growth. Domestic market revenue reached 47.3 billion yuan, up 17% year-over-year. The growth drivers mainly come from four core products: "Delta Operation," "Valorant," "Valorant: Energy Operation," and "Kingdom of Roche: World." Among them, the daily active users of "Delta Operation" and "Valorant" both reached historic highs this quarter, maintaining Tencent's leading position in the shooting category and competitive arena.

International game market revenue reached 18.6 billion yuan, up 4% year-over-year on a fixed exchange rate basis, mainly driven by "Arknights" and "VALORANT"; meanwhile, Miniclip under Tencent achieved a breakthrough success in the international market, with the product "Arrows - Puzzle Escape" becoming the top downloaded mobile game globally in the second quarter.

In marketing services, AI continues to drive improvements in advertising campaign efficiency. Marketing services revenue for this quarter reached 43.57 billion yuan, up 22% year-over-year, continuing to grow faster than the industry. The customer coverage of the "Tencent Marketing AIM+" smart advertising product matrix remains above 80%, with AI creative capabilities improving material production efficiency by nearly 80%.

The advertising recommendation model "Scaling Up" has been upgraded to build a new generation of advertising training and inference infrastructural technology base. Taking the video number advertising recommendation scenario as an example, the scale of the ultra-large sorting model increased by 30 times, and the computational workload increased by 24 times, with these capabilities now extended to more WeChat scenarios such as official accounts and mini programs.

AI is also accelerating integration into WeChat's existing products and ecosystem. In addition to launching the AI assistant Xiaowei, the appeal of the mini program ecosystem to developers continues to grow, with AI-native applications accelerating their emergence, and AI application mini programs growing nearly 40% in half a year. The "WeChat Mini Program Growth Plan" has increased the large model token quota to 1 billion, attracting 63,000 mini programs to participate, with over 60% coming from individual developers; official accounts have launched AI one-click formatting and are conducting gray-scale testing of AI avatars, improving content creation and user service efficiency; WeChat Pay has launched the "AI Dedicated Card," which is the first to be integrated with WorkBuddy, allowing users to express consumer needs to the intelligent agent, experiencing an automated consumer cycle from intelligent recommendations, ordering to payment.

Rich AI capabilities continue to activate the WeChat ecosystem. This quarter, the combined monthly active accounts of WeChat and WeChat reached 1.439 billion, with the total user usage time of the video number increasing by more than 20% year-over-year, driven by increasingly rich content for young users, upgrades in interactive functions, and a new content mixing system; during this year's "618" shopping festival, the transaction amount in the store and card package scenarios increased by 537%, becoming a new place for merchants' development, with the number of brands achieving a transaction volume of millions increasing by more than 200%, and the number of merchants achieving a transaction volume of millions increasing by 564%; mini program overseas services have further expanded, with the monthly transaction count in Southeast Asia increasing by 160% year-over-year.