Tencent sees record quarterly earnings thanks to fintech, won’t lose sight of gaming business
Internet giant Tencent Holdings Ltd has unveiled its quarterly earnings, with profits that have broken records and smashed expectations.
The company puts its profit increase, following a challenging 2018, down to a rise in the value of its investments.
For the first quarter of this year (and the last of the financial year), the company saw 17% growth in net profit, which reached $3.93bn and massively exceeded expectations of analysts.
The company also benefitted from a 46% rise in “net other gains” which includes revenue from investments. Now more than ever, Tencent it looking to diverse sources to gain revenue, such as the industrial services sector, having created a specific Cloud and Smart Industries Group.
A significant contributor to this successful beginning to 2019 was the “FinTech and Business Services” segment, which includes payment and cloud services, and saw a revenue increase of 44%.
Traditionally, the gaming segment where Tencent cut its teeth has been the single largest revenue generator, and while this is still the case it did see a 2% fall, marking perhaps how Tencent has diversified recently and continues to grow in other sectors such as fintech.
Martin Lau, the organisation’s President, said in an earnings call: “From an operating perspective the business is still in investment mode, so in addition to the capital expenditure the business is also generating some operating losses.”
While its net profit was a record, the company has experienced its slowest revenue growth since going public, following on from a slow 2018, as it works on diversifying and manages various acquisitions. Some investors have focused on the disappointing 16% sales gain and as such shares dropped 1.9% following the results announcement – however, throughout this year they have gained 19%.
COO Mark Ren was quick to point out that the company will still focus on its gaming secoor: “We want to attract the gamers, we want to retain the gamers and, over time, work on the monetisation.”
The company’s video streaming service, as well as it social and gaming platforms, also had a significant impact on revenue through advertising.
Harnessing APIs to unlock and operationalise your data
Data is the fuel that powers modern businesses. It’s widely accepted that unlocking insight from data is key to driving successful digital transformation and competitive advantage. Yet the gap between understanding the importance of data-driven insight and being able to achieve it remains stubbornly wide, as critical information remains locked away in silos. To overcome these challenges, businesses must try a new approach. API-led connectivity offers a reusable, standardised way to integrate data across multiple platforms, systems, and applications. When done right, it can be the fast-track to IT and business teams productivity, innovation, and growth.
A data explosion
The past decade has seen a data explosion. Analyst firm IDC predicted that over 59 zettabytes (ZBs) of data would be “created, captured, copied, and consumed” in the world last year alone. In the next three years it’s predicted to continue growing at a CAGR of 26%, during which time more data will have been created than during the past 30 years. At the top of any CIO or business leader’s wish-list is the ability to extract insight from these vast troves of information in order to make more effective decisions. According to McKinsey, data-driven companies are 1.5 times more likely to report revenue growth of greater than 10%.
Unfortunately, just like much of the population for much of the last 12 months, data is locked down and isolated. MuleSoft’s 2021 Connectivity Benchmark report reveals that data silos and existing IT infrastructure are making it difficult for most firms to integrate new technologies and make changes to IT systems and applications. In fact, currently less than third of enterprise applications on average are integrated, so there is still significant room for improvement. Those organisations that are able to connect the dots between their data stand to realise increased customer engagement, business transformation and innovation benefits.
Journey towards API-led integration
Legacy custom code point-to-point integration may have been fine a decade ago when enterprises ran relatively few applications. But today’s businesses need something altogether more agile. Point-to-point can be expensive and complex, which means IT ends up spending too much of its time on maintenance and not enough on innovation.
This is where APIs come in, offering a more seamless and cost-effective way to drive integration through discoverability, self-service, and reuse. Rather than building the same point-to-point integration for use in 10 different projects, which requires each to be maintained individually as unique sets of code, a single API can be developed to be reused across them all. An API-led approach therefore means companies only have to unlock each data set just once to empower business teams across the organisation to use that data in their own projects.
The value of this approach can be extended even further with today’s low-code tools, which support drag-and-drop integrations. This can help to ease the burden on IT teams and empower business users to deliver their own integration projects.
The LendingTree experience
One company that has driven major improvements through reusable APIs is online loans marketplace LendingTree. Originally its 16 different business units were operating with siloed, incomplete data, meaning 360-degree customer insight was impossible—affecting sales and the end-user experience. The firm was not able to capture or analyse call centre data, limiting its ability to improve experiences for its customers.
Using APIs to draw in data from multiple systems and databases in real-time, LendingTree was able to consolidate its customer data on Salesforce to create a single source of truth for cross-departmental teams. This approach empowers service agents by giving them access to individuals’ loan application history from a single console, drastically reducing the time it takes them to consolidate various sources of customer data. As such, its API-led integration approach has allowed LendingTree to free up time and resources to launch new capabilities faster.
The future’s digital
Organisations have been affected in many different ways by the COVID-19 pandemic. But across the board, the desire among business leaders over the coming months will be to emerge from the crisis stronger than ever. Data-driven insight will be vital to this achievement, as businesses push ahead with digital innovation. API-led integration can help them to ensure that data strategies are long-lasting and sustainable, paving the way for long-term success and a brighter digital future.