China's tech giant Tencent reported a drop in quarterly revenue, the first it has seen since it went public in 2004, in its latest earnings report on Wednesday.

The company's revenue in the April-June quarter fell 3 percent from a year earlier to 134 billion yuan ($20 billion), as online advertising revenue dented, while its gaming business suffers from tighter regulations and weaker user spending.

Net profit attributable to equity holders slashed 56 percent year-on-year to 18.6 billion yuan.

Revenues from online advertising shrank 18 percent for the quarter as many companies in the Internet services, education and finance sector cut advertising spending.

Tencent has exited some non-core businesses, trimmed operating expenses while enhanced business efficiency during the second quarter, said Pony Ma, chairman and chief executive officer of the company.

"We generate approximately half of our revenues from FinTech and Business Services as well as online advertising that directly contributes to, and benefit from, overall economic activity, which should position us for revenue growth as China's economy expands," said Ma in the earnings report.

Revenue from the gaming business, Tencent's main source of revenue, fell 1 percent from a year earlier. The global gaming industry is cooling down after a period of rapid growth boosted by the COVID-19 pandemic.

In the domestic market, the world's largest game developer is still grappling with delays in the regulators' approval of new games, as well as last year's policy of limiting the gaming time among minors.

Tencent's chief strategy officer James Mitchell rejected media reports that his company plans to sell its $24 billion stake in food delivery firm Meituan on Monday, calling the report inaccurate.