Tencent Q2 2026: revenue $286B, AI capex up 176% year over year
On August 13 after market close, Tencent reported Q2 2026 revenue of RMB 204.785 billion, up 11% year over year, with capex of RMB 52.78 billion, up 176%. Free cash flow turned negative at RMB -13.8 billion. Pony Ma said compute purchases will jump significantly in Q3.
On August 13 after market close, Tencent Holdings reported its Q2 2026 financial results. Total revenue reached RMB 204.785 billion, up 11 percent year over year and slightly ahead of consensus. Non-IFRS operating profit was RMB 75.64 billion, up 9 percent. R&D spend rose 35 percent year over year to RMB 27.28 billion. Capital expenditure jumped 176 percent year over year to RMB 52.78 billion, pushing free cash flow to RMB -13.8 billion as the capex surge outpaced operating cash flow growth.
On the earnings call, Chairman and CEO Pony Ma stated that compute purchases will increase significantly in Q3, with the company building a new AI-empowered Tencent across intelligence, applications, and infrastructure layers. The report noted breakthrough user growth for WorkBuddy and CodeBuddy, with Hunyuan Hy3 token consumption consistently ranking among the top three globally since launch, and Hunyuan Hy4 planned for release in the near term.
The capex surge raised short-term cash flow concerns, but management noted that adjusting for compute prepayment items, free cash flow would have been RMB 37.6 billion, leaving the company with substantial cash flow flexibility. Tencent's quarterly capex now approaches the full-year level of some international cloud vendors, reflecting the scale of domestic hyperscaler commitment to AI infrastructure.