Tencent Holdings said second-quarter 2026 revenue rose 11% year on year to 204.79 billion yuan, slightly beating expectations, but a record 52.78 billion yuan of capital expenditure on AI infrastructure pushed free cash flow to negative 13.8 billion yuan and left reported profit short of market forecasts. Profit attributable to equity holders rose 0.7% to 56.022 billion yuan, while Non-IFRS profit attributable to shareholders increased 9% to 68.4 billion yuan; Tencent said free cash flow would have been 37.6 billion yuan excluding prepayments for computing power procurement. Chairman and CEO Ma Huateng said Tencent is building an AI-empowered company across intelligence, applications and infrastructure, and the company said Non-IFRS operating profit growth would have been 19% excluding losses from newer AI products including Hy, Yuanbao, CodeBuddy, WorkBuddy and Xiaowei. Domestic games revenue climbed 17% to 47.3 billion yuan and marketing services rose 22% to 43.6 billion yuan, while net cash fell to 58.2 billion yuan from 146.9 billion yuan at the end of March as Tencent stepped up R&D, absorbed associate and joint-venture losses, issued new senior notes and continued share repurchases.