Company News
Mr.
Ms. Betty Ho, CFO of
Second Quarter 2019 Financial Results
REVENUES
Total revenues for the second quarter of 2019 were RMB395.1 million (
Net advertising revenues for the second quarter of 2019 were
Paid services revenues[1] for the second quarter of 2019 were
[1] Prior to 2019, paid services revenues comprised of (i) revenues from digital entertainment, which included MVAS and digital reading, and (ii) revenues from games and others, which included web-based games, mobile games, content sales, and other online and mobile paid services through the Company's own platforms. |
Beginning from January 1, 2019, paid services revenues have been re-classified and now comprised of (i) revenues from paid contents, which includes digital reading, audio books, paid videos, and other content-related sales activities, (ii) revenues from games, which includes web-based games and mobile games, (iii) revenues from MVAS, and (iv) revenues from others. For comparison purposes, the revenues from paid services for the quarters of 2018 have been retrospectively re-classified. |
COST OF REVENUES
Cost of revenues for the second quarter of 2019 was
- Content and operational costs for the second quarter of 2019 increased to
RMB156.4 million (US$22.7 million ) fromRMB108.9 million in the second quarter of 2018, primarily attributable to the consolidation of content and operational costs of Tianbo and Tadu, and due to an increase in IP production costs. - Revenue sharing fees to telecom operators and channel partners for the second quarter of 2019 increased to
RMB13.7 million (US$2.0 million ) fromRMB11.5 million in the second quarter of 2018, primarily attributable to the increase in revenue sharing fees paid to content providers by Tadu. - Bandwidth costs for the second quarter of 2019 increased to
RMB14.9 million (US$2.2 million ) fromRMB13.9 million in the second quarter of 2018. - Share-based compensation included in cost of revenues was
RMB1.9 million (US$0.3 million ) in the second quarter of 2019, as compared toRMB0.6 million the second quarter of 2018, primarily attributable to the restricted share units newly granted to some employees in 2019 under a restricted share unit scheme adopted in 2018 byFread Limited , a subsidiary of the Company.
GROSS PROFIT
Gross profit for the second quarter of 2019 decreased to RMB210.1 million (
To supplement the financial measures presented in accordance with the United States Generally Accepted Accounting Principles ("GAAP"), the Company has presented certain non-GAAP financial measures in this press release, which excludes the impact of certain reconciling items as stated in the "Use of Non-GAAP Financial Measures" section below. The related reconciliations to GAAP financial measures are presented in the accompanying "Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures."
Non-GAAP gross margin for the second quarter of 2019, which excluded share-based compensation, decreased to 53.7% from 63.3% in the second quarter of 2018.
OPERATING EXPENSES AND INCOME/(LOSS) FROM OPERATIONS
Total operating expenses for the second quarter of 2019 increased by 44.5% to
Loss from operations for the second quarter of 2019 was
Non-GAAP loss from operations for the second quarter of 2019, which excluded share-based compensation, was
OTHER INCOME OR LOSS
Other income or loss reflects interest income, interest expense, foreign currency exchange gain or loss, income or loss from equity method investments, net of impairments, and others, net[2]. Total net other income for the second quarter of 2019 was
- Interest income for the second quarter of 2019 decreased to
RMB4.6 million (US$0.7 million ) fromRMB13.6 million in the second quarter of 2018, primarily due to decrease in the loans granted to Particle, which were fully settled in the third quarter of 2018. - Interest expense for the second quarter of 2019 decreased to
RMB1.7 million (US$0.3 million ), fromRMB3.4 million in the second quarter of 2018, which was primarily due to the decrease in outstanding short-term bank loans as the Company repaid all of the short-term bank loans in the second quarter of 2019. - Foreign currency exchange gain for the second quarter of 2019 was
RMB2.9 million (US$0.4 million ), as compared toRMB16.2 million in the second quarter of 2018. This decrease was mainly caused by the less significant depreciation of Renminbi against US dollars in the second quarter of 2019, as compared to that of 2018, which generated less exchange gain in Renminbi denominated liabilities recorded in the Company's subsidiaries whose functional currency is not Renminbi. - Income from equity method investments, net of impairments, for the second quarter of 2019 was
RMB0.5 million (US$0.1 million ), as compared to loss from equity method investments, net of impairments, ofRMB0.4 million in the second quarter of 2018. The Company recognized income from equity method investments, net of impairments, ofRMB0.5 million (US$0.1 million ) as a result of the re-measurement of the previously held equity interests upon completion of the step acquisition in Tianbo onApril 1, 2019 , which was previously accounted using the equity method of accounting. - Others, net increased to
RMB4.8 million (US$0.7 million ) in the second quarter of 2019 fromRMB2.1 million in the second quarter of 2018, which was primarily attributable to the increase of the government subsidies received in the second quarter of 2019 as compared to that of 2018.
[2] "Others, net" primarily consists of government subsidies and litigation loss provisions. |
NET INCOME/(LOSS) ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED
Net loss attributable to
Non-GAAP net loss attributable to
For the second quarter of 2019, the Company's weighted average number of ADSs used in the computation of diluted net loss per ADS was 72,783,430. As of
[3] "ADS" means American Depositary Share of the Company. Each ADS represents eight Class A ordinary shares of the Company. |
CERTAIN BALANCE SHEET ITEMS
As of
As previously announced by the Company, on July 23, 2019, the Company entered into a supplemental agreement (the "Supplemental Agreement") to the share purchase agreement (the "SPA") dated March 22, 2019 between the Company and
Business Outlook
For the third quarter of 2019, the Company expects its total revenues to be between
All of the above forecasts reflect the Company's current and preliminary view on the market and operational conditions, which are subject to change.
Conference Call Information
The Company will hold a conference call at 9:00 p.m. U.S. Eastern Time on
To participate in the call, please use the dial-in numbers and conference ID below:
International: |
+65 67135090 |
Mainland China: |
4006208038 |
Hong Kong: |
+852 30186771 |
United States: |
+1 8456750437 |
United Kingdom: |
+44 2036214779 |
Australia: |
+61 290833212 |
Conference ID: |
2384599 |
A replay of the call will be available through
International: |
+61 2 8199 0299 |
Mainland China: |
4006322162 |
Hong Kong: |
+852 30512780 |
United States: |
+1 6462543697 |
Conference ID: |
2384599 |
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.ifeng.com.
Use of Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with the United States Generally Accepted Accounting Principles ("GAAP"),
Exchange Rate
This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of
About
Safe Harbor Statement
This announcement contains forward−looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward−looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as
For investor and media inquiries please contact:
Qing Liu
Email: investorrelations@ifeng.com
Tel: +1 (646) 405-4883
Email: investorrelations@ifeng.com
Phoenix New Media Limited |
|||||
Condensed Consolidated Balance Sheets |
|||||
(Amounts in thousands) |
|||||
December 31, |
June 30, |
June 30, |
|||
2018 |
2019 |
2019 |
|||
RMB |
RMB |
US$ |
|||
Audited* |
Unaudited |
Unaudited |
|||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
174,024 |
501,046 |
72,986 |
||
Term deposits and short term investments |
912,594 |
941,226 |
137,105 |
||
Restricted cash |
269,648 |
245,017 |
35,691 |
||
Accounts receivable, net |
484,113 |
609,344 |
88,761 |
||
Amounts due from related parties |
91,228 |
75,889 |
11,054 |
||
Prepayment and other current assets |
88,963 |
111,296 |
16,212 |
||
Total current assets |
2,020,570 |
2,483,818 |
361,809 |
||
Non-current assets: |
|||||
Property and equipment, net |
95,631 |
95,900 |
13,969 |
||
Intangible assets, net |
97,448 |
98,293 |
14,318 |
||
Goodwill |
338,288 |
361,074 |
52,596 |
||
Available-for-sale debt investments |
1,961,474 |
2,273,126 |
331,118 |
||
Equity investments, net |
33,694 |
13,236 |
1,928 |
||
Deferred tax assets |
60,160 |
70,649 |
10,292 |
||
Operating lease right-of- use assets, net** |
- |
100,122 |
14,584 |
||
Other non-current assets |
23,454 |
20,061 |
2,923 |
||
Total non-current assets |
2,610,149 |
3,032,461 |
441,728 |
||
Total assets |
4,630,719 |
5,516,279 |
803,537 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current liabilities: |
|||||
Short-term loans |
267,665 |
- |
- |
||
Accounts payable |
264,753 |
213,316 |
31,073 |
||
Amounts due to related parties |
25,218 |
18,683 |
2,721 |
||
Advances from customers |
54,601 |
71,481 |
10,412 |
||
Taxes payable |
101,386 |
129,324 |
18,838 |
||
Salary and welfare payable |
132,316 |
134,181 |
19,547 |
||
Deposits from proposed buyers of investments in Particle |
- |
687,470 |
100,141 |
||
Accrued expenses and other current liabilities |
227,328 |
589,616 |
85,888 |
||
Operating lease liabilities** |
- |
33,996 |
4,952 |
||
Total current liabilities |
1,073,267 |
1,878,067 |
273,572 |
||
Non-current liabilities: |
|||||
Deferred tax liabilities |
140,960 |
171,065 |
24,918 |
||
Long-term liabilities |
26,131 |
26,131 |
3,806 |
||
Operating lease liabilities** |
- |
67,830 |
9,881 |
||
Total non-current liabilities |
167,091 |
265,026 |
38,605 |
||
Total liabilities |
1,240,358 |
2,143,093 |
312,177 |
||
Shareholders' equity: |
|||||
Phoenix New Media Limited shareholders' equity: |
|||||
Class A ordinary shares |
17,487 |
17,499 |
2,549 |
||
Class B ordinary shares |
22,053 |
22,053 |
3,212 |
||
Additional paid-in capital |
1,604,588 |
1,605,745 |
233,903 |
||
Statutory reserves |
87,620 |
87,620 |
12,763 |
||
Retained earnings/(accumulated deficits) |
159,621 |
(30,231) |
(4,404) |
||
Accumulated other comprehensive income |
1,188,358 |
1,468,429 |
213,901 |
||
Total Phoenix New Media Limited shareholders' equity |
3,079,727 |
3,171,115 |
461,924 |
||
Noncontrolling interests |
310,634 |
202,071 |
29,436 |
||
Total shareholders' equity |
3,390,361 |
3,373,186 |
491,360 |
||
Total liabilities and shareholders' equity |
4,630,719 |
5,516,279 |
803,537 |
||
* Derived from audited financial statements included in the Company's Form 20-F dated April 26, 2019. |
|||||
** The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee recognize the assets and |
Phoenix New Media Limited |
|||||||||||||
Condensed Consolidated Statements of Comprehensive Income/(loss) |
|||||||||||||
(Amounts in thousands, except for number of shares and per share (or ADS) data) |
|||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
2018 |
2019 |
2019 |
2019 |
2018 |
2019 |
2019 |
|||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenues: |
|||||||||||||
Net advertising revenues |
317,344 |
215,984 |
324,738 |
47,303 |
560,792 |
540,722 |
78,765 |
||||||
Paid service revenues |
46,538 |
68,890 |
70,338 |
10,246 |
88,013 |
139,228 |
20,281 |
||||||
Total revenues |
363,882 |
284,874 |
395,076 |
57,549 |
648,805 |
679,950 |
99,046 |
||||||
Cost of revenues |
(134,296) |
(178,145) |
(184,951) |
(26,941) |
(263,040) |
(363,096) |
(52,891) |
||||||
Gross profit |
229,586 |
106,729 |
210,125 |
30,608 |
385,765 |
316,854 |
46,155 |
||||||
Operating expenses: |
|||||||||||||
Sales and marketing expenses |
(109,823) |
(120,572) |
(163,655) |
(23,839) |
(241,042) |
(284,227) |
(41,402) |
||||||
General and administrative expenses |
(41,808) |
(48,852) |
(65,380) |
(9,524) |
(76,206) |
(114,232) |
(16,640) |
||||||
Technology and product development |
(48,523) |
(59,441) |
(60,121) |
(8,758) |
(96,935) |
(119,562) |
(17,416) |
||||||
Total operating expenses |
(200,154) |
(228,865) |
(289,156) |
(42,121) |
(414,183) |
(518,021) |
(75,458) |
||||||
Income/(loss) from operations |
29,432 |
(122,136) |
(79,031) |
(11,513) |
(28,418) |
(201,167) |
(29,303) |
||||||
Other income/(loss): |
|||||||||||||
Interest income |
13,550 |
8,658 |
4,637 |
675 |
26,488 |
13,295 |
1,937 |
||||||
Interest expense |
(3,389) |
(2,903) |
(1,730) |
(252) |
(8,022) |
(4,633) |
(675) |
||||||
Foreign currency exchange gain/(loss) |
16,231 |
(2,167) |
2,922 |
426 |
1,100 |
755 |
110 |
||||||
(Loss)/income from equity investments, net |
(435) |
(3,968) |
521 |
76 |
(2,865) |
(3,447) |
(502) |
||||||
Others, net |
2,128 |
2,241 |
4,789 |
698 |
6,221 |
7,030 |
1,024 |
||||||
Income/(loss) before tax |
57,517 |
(120,275) |
(67,892) |
(9,890) |
(5,496) |
(188,167) |
(27,409) |
||||||
Income tax expense |
(8,498) |
(7,461) |
(2,977) |
(434) |
(3,774) |
(10,438) |
(1,520) |
||||||
Net income/(loss) |
49,019 |
(127,736) |
(70,869) |
(10,324) |
(9,270) |
(198,605) |
(28,929) |
||||||
Net loss attributable to noncontrolling |
222 |
7,999 |
754 |
110 |
971 |
8,753 |
1,275 |
||||||
Net income/(loss) attributable to Phoenix |
49,241 |
(119,737) |
(70,115) |
(10,214) |
(8,299) |
(189,852) |
(27,654) |
||||||
Net income/(loss) |
49,019 |
(127,736) |
(70,869) |
(10,324) |
(9,270) |
(198,605) |
(28,929) |
||||||
Other comprehensive income/(loss), net of |
5,287 |
725,403 |
(463,083) |
(67,456) |
51,651 |
262,320 |
38,211 |
||||||
Other comprehensive income/(loss), net of |
49,376 |
(27,193) |
44,944 |
6,547 |
14,362 |
17,751 |
2,586 |
||||||
Comprehensive income/(loss) |
103,682 |
570,474 |
(489,008) |
(71,233) |
56,743 |
81,466 |
11,868 |
||||||
Comprehensive loss attributable to |
222 |
7,999 |
754 |
110 |
971 |
8,753 |
1,275 |
||||||
Comprehensive income/(loss) attributable |
103,904 |
578,473 |
(488,254) |
(71,123) |
57,714 |
90,219 |
13,143 |
||||||
Net income/(loss) attributable to Phoenix |
49,241 |
(119,737) |
(70,115) |
(10,214) |
(8,299) |
(189,852) |
(27,654) |
||||||
Net income/(loss) per Class A and Class B |
|||||||||||||
Basic |
0.08 |
(0.21) |
(0.12) |
(0.02) |
(0.01) |
(0.33) |
(0.05) |
||||||
Diluted |
0.08 |
(0.21) |
(0.12) |
(0.02) |
(0.01) |
(0.33) |
(0.05) |
||||||
Net income/(loss) per ADS (1 ADS represents |
|||||||||||||
Basic |
0.68 |
(1.65) |
(0.96) |
(0.14) |
(0.11) |
(2.61) |
(0.38) |
||||||
Diluted |
0.67 |
(1.65) |
(0.96) |
(0.14) |
(0.11) |
(2.61) |
(0.38) |
||||||
Weighted average number of Class A and |
|||||||||||||
Basic |
580,976,381 |
582,187,109 |
582,267,440 |
582,267,440 |
580,102,974 |
582,227,496 |
582,227,496 |
||||||
Diluted |
584,945,765 |
582,187,109 |
582,267,440 |
582,267,440 |
580,102,974 |
582,227,496 |
582,227,496 |
||||||
Phoenix New Media Limited |
|||||||||||||
Condensed Segments Information |
|||||||||||||
(Amounts in thousands) |
|||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
2018 |
2019 |
2019 |
2019 |
2018 |
2019 |
2019 |
|||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenues: |
|||||||||||||
Net advertising service |
317,344 |
215,984 |
324,738 |
47,303 |
560,792 |
540,722 |
78,765 |
||||||
Paid services |
46,538 |
68,890 |
70,338 |
10,246 |
88,013 |
139,228 |
20,281 |
||||||
Total revenues |
363,882 |
284,874 |
395,076 |
57,549 |
648,805 |
679,950 |
99,046 |
||||||
Cost of revenues |
|||||||||||||
Net advertising service |
110,909 |
140,060 |
146,869 |
21,394 |
218,362 |
286,929 |
41,796 |
||||||
Paid services |
23,387 |
38,085 |
38,082 |
5,547 |
44,678 |
76,167 |
11,095 |
||||||
Total cost of revenues |
134,296 |
178,145 |
184,951 |
26,941 |
263,040 |
363,096 |
52,891 |
||||||
Gross profit |
|||||||||||||
Net advertising service |
206,435 |
75,924 |
177,869 |
25,909 |
342,430 |
253,793 |
36,969 |
||||||
Paid services |
23,151 |
30,805 |
32,256 |
4,699 |
43,335 |
63,061 |
9,186 |
||||||
Total gross profit |
229,586 |
106,729 |
210,125 |
30,608 |
385,765 |
316,854 |
46,155 |
Phoenix New Media Limited |
|||||||||||||
Condensed Information of Cost of Revenues |
|||||||||||||
(Amounts in thousands) |
|||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
2018 |
2019 |
2019 |
2019 |
2018 |
2019 |
2019 |
|||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenue sharing fees |
11,460 |
17,329 |
13,676 |
1,992 |
20,077 |
31,005 |
4,516 |
||||||
Content and operational costs |
108,937 |
146,961 |
156,346 |
22,774 |
214,721 |
303,307 |
44,182 |
||||||
Bandwidth costs |
13,899 |
13,855 |
14,929 |
2,175 |
28,242 |
28,784 |
4,193 |
||||||
Total cost of revenues |
134,296 |
178,145 |
184,951 |
26,941 |
263,040 |
363,096 |
52,891 |
Reconciliations of Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures |
|||||||||||||||||
(Amounts in thousands, except for number of ADSs and per ADS data) |
|||||||||||||||||
Three Months Ended June 30, 2018 |
Three Months Ended March 31, 2019 |
Three Months Ended June 30, 2019 |
|||||||||||||||
Non-GAAP |
Non-GAAP |
Non-GAAP |
|||||||||||||||
GAAP |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
GAAP |
Adjustments |
Non-GAAP |
|||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||||
Gross profit |
229,586 |
634 |
(1) |
230,220 |
106,729 |
1,441 |
(1) |
108,170 |
210,125 |
1,893 |
(1) |
212,018 |
|||||
Gross margin |
63.1% |
63.3% |
37.5% |
38.0% |
53.2% |
53.7% |
|||||||||||
Income/(loss) from |
29,432 |
3,390 |
(1) |
32,822 |
(122,136) |
3,987 |
(1) |
(118,149) |
(79,031) |
4,227 |
(1) |
(74,804) |
|||||
Operating margin |
8.1% |
9.0% |
(42.9)% |
(41.5)% |
(20.0)% |
(18.9)% |
|||||||||||
3,390 |
(1) |
3,987 |
(1) |
4,227 |
(1) |
||||||||||||
435 |
(2) |
3,968 |
(2) |
(521) |
(2) |
||||||||||||
Net income/(loss) |
49,241 |
3,825 |
53,066 |
(119,737) |
7,955 |
(111,782) |
(70,115) |
3,706 |
(66,409) |
||||||||
Net margin |
13.5% |
14.6% |
(42.0)% |
(39.2)% |
(17.7)% |
(16.8)% |
|||||||||||
Net income/(loss) per |
0.67 |
0.73 |
(1.65) |
(1.54) |
(0.96) |
(0.91) |
|||||||||||
Weighted average |
73,118,221 |
73,118,221 |
72,773,389 |
72,773,389 |
72,783,430 |
72,783,430 |
|||||||||||
(1) Share-based compensation |
|||||||||||||||||
(2) Loss/(income) from equity method investments, net of impairments |
|||||||||||||||||
Non-GAAP to GAAP reconciling items have no income tax effect. |
View original content:http://www.prnewswire.com/news-releases/phoenix-new-media-reports-second-quarter-2019-unaudited-financial-results-300899962.html
SOURCE