Tencent Clocks First Quarterly Revenue Decline As China's Tech Crackdown, Macro Slowdown Weighs

Tencent Holding Ltd TCEHY registered its first-ever revenue decline after its workforce shrank almost 5%, Bloomberg reports.
The first-quarter FY22 revenue declined worse than estimated by 3% to 134 billion yuan ($19.8 billion) in the June quarter.
The net income also missed estimates, plunging 56% to 18.6 billion yuan.
Tencent's businesses, from advertising to cloud computing and gaming, battled China's double whammy of property slump and COVID-19 lockdowns from Shanghai to Shenzhen.
China's domestic tech crackdown had already hurt the sector ahead of the macro slowdown.
However, online advertising revenue declined by 18%, better than analyst consensus.
The adjusted net income of 28.1 billion yuan beat the consensus by 15%.
Tencent prioritized international games, cloud software, and WeChat video to stay in the game versus ByteDance Ltd's TikTok.
The fintech and business services segment, including cloud computing, is now Tencent's fastest growth engine.
However, Tencent's cloud revenue suffered a mild decline after the company cut loss-making contracts and ventured into services beyond infrastructure.
Tencent looks to divest its $24 billion stake in food delivery firm Meituan MPNGY to win the regulators' favors.
Alibaba Group Holding Limited BABA and Tencent recently submitted the algorithm details of some of their products to China's top internet watchdog.
Price Action: TCEHY shares closed higher by 1.28% at $38.80 on Tuesday.