Phoenix New Media Reports Second Quarter 2019 Unaudited Financial Results

Company News

Phoenix New Media Reports Second Quarter 2019 Unaudited Financial Results
Live Conference Call to be Held at 9:00 PM U.S. Eastern Time on August 12, 2019

BEIJING, Aug. 12, 2019 /PRNewswire/ --Phoenix New Media Limited (NYSE: FENG) ("Phoenix New Media", "ifeng" or the "Company"), a leading new media company in China, today announced its unaudited financial results for the second quarter ended June 30, 2019.

Mr. Shuang Liu, CEO of Phoenix New Media, commented, "Despite a challenging macroeconomic environment during the second quarter of 2019, we remained committed to the sustained growth and evolution of our business. During the second quarter, we continued to refine our combination of AI-powered content recommendation and seasoned editorial curation. Moreover, we further expanded our market-leading content library, which allowed us to explore additional monetization opportunities. Going forward, we are confident that our robust content recommendation system, premium brand equity, and innovative growth initiatives will further solidify our leadership in China's new media industry."

Ms. Betty Ho, CFO of Phoenix New Media, further stated, "In the second quarter of 2019, our total revenues reached RMB395.1 million, representing an 8.6% year-over-year growth and 38.7% sequential growth. Importantly, total revenues for paid services in the second quarter of 2019 increased by 51.1% year over year to RMB70.3 million, mainly driven by the outstanding performance of our digital reading business since the acquisition of Tadu. Also, our new business initiatives made material contributions to our growth as we continued to deliver a broad range of informative content in lifestyle-related categories such as real estate, food, and fashion. Our net advertising revenues for the second quarter of 2019 increased by 2.3% year over year to RMB324.8 million. Looking ahead, we will continue to invest in the development of AI technology, production of in-house content, and expansion of lifestyle verticals. We are confident that through our strategic allocation of capital and well-defined business objectives we will continue to generate long-term return to our shareholders."

Second Quarter 2019 Financial Results

REVENUES

Total revenues for the second quarter of 2019 were RMB395.1 million (US$57.5 million), representing an increase of 8.6% from RMB363.9 million in the second quarter of 2018. The increase was caused by the consolidated revenues of RMB49.2 million (US$7.2 million) in the second quarter of 2019 from Beijing Yitian Xindong Network Technology Co., Ltd. ("Yitian Xindong" or "Tadu") consolidated starting from December 28, 2018 and the consolidated revenues of RMB84.6 million (US$12.3 million), starting from April 1, 2019, from Beijing Fenghuang Tianbo Network Technology Co., Ltd. ("Tianbo"). The Company's net advertising revenues from traditional business decreased by 28.5% due to the macroeconomic uncertainties and increased competitions.

Net advertising revenues for the second quarter of 2019 were RMB324.8 million (US$47.3 million), representing an increase of 2.3% from RMB317.4 million in the second quarter of 2018. The increase was primarily attributable to the consolidation of advertising revenues from Tianbo. However, the Company's net advertising revenues from traditional business declined due to the above stated reason.

Paid services revenues[1] for the second quarter of 2019 were RMB70.3 million (US$10.2 million), which represented an increase of 51.1% from RMB46.5 million in the second quarter of 2018. Revenues from paid contents for the second quarter of 2019 increased by 126.7% to RMB54.0 million (US$7.9 million) from RMB23.8 million in the second quarter of 2018, primarily due to the consolidation of digital reading revenues from Tadu. Revenues from games for the second quarter of 2019 were RMB2.6 million (US$0.4 million), which represented a decrease of 34.7% from RMB4.0 million in the second quarter of 2018. Revenues from MVAS for the second quarter of 2019 were RMB6.7 million (US$1.0 million), which represented a decrease of 62.0% from RMB17.5 million in the second quarter of 2018. Revenues from others for the second quarter of 2019 increased to RMB7.0 million (US$1.0 million) from RMB1.2 million in the second quarter of 2018, representing an increase of 513.4% year-over-year, which was mainly caused by the increase in revenues from E-commerce and online real estate related services.

[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 RMB185.0 million (US$26.9 million), representing an increase of 37.7% from RMB134.3 million in the second quarter of 2018. The increase in cost of revenues was mainly due to the following:    

  • Content and operational costs for the second quarter of 2019 increased to RMB156.4 million (US$22.7 million) from RMB108.9 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) from RMB11.5 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) from RMB13.9 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 to RMB0.6 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 by Fread Limited, a subsidiary of the Company.

GROSS PROFIT

Gross profit for the second quarter of 2019 decreased to RMB210.1 million (US$30.6 million) from RMB229.6 million in the second quarter of 2018. Gross margin for the second quarter of 2019 decreased to 53.2% from 63.1% in the second quarter of 2018, mainly attributable to a combined effect of a decrease in gross margin of the Company's traditional advertising business and the margin contributions from Tianbo and Tadu.

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 RMB289.1 million (US$42.1 million) from RMB200.2 million in the second quarter of 2018, primarily attributable to the consolidation of operating expenses from Tianbo and Tadu. Share-based compensation included in operating expenses was RMB2.3 million (US$0.3 million) in the second quarter of 2019, as compared to RMB2.8 million in the second quarter of 2018. As the Company recognized share-based compensation, net of estimated forfeitures, on a graded-vesting basis over the vesting term of the awards, there was less share-based compensation recognized in the second quarter of 2019 for share options granted prior to 2019. 

Loss from operations for the second quarter of 2019 was RMB79.0 million (US$11.5 million), as compared to income from operations of RMB29.4 million in the second quarter of 2018. Operating margin for the second quarter of 2019 decreased to negative 20.0% from positive 8.1% in the second quarter of 2018.

Non-GAAP loss from operations for the second quarter of 2019, which excluded share-based compensation, was RMB74.8 million (US$10.9 million), as compared to non-GAAP income from operations of RMB32.8 million in the second quarter of 2018. Non-GAAP operating margin for the second quarter of 2019, which excluded share-based compensation, decreased to negative 18.9% from positive 9.0% in the second quarter of 2018.

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 RMB11.1 million (US$1.6 million), as compared to RMB28.1 million in the second quarter of 2018.

  • Interest income for the second quarter of 2019 decreased to RMB4.6 million (US$0.7 million) from RMB13.6 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), from RMB3.4 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 to RMB16.2 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, of RMB0.4 million in the second quarter of 2018. The Company recognized income from equity method investments, net of impairments, of RMB0.5 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 on April 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 from RMB2.1 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 Phoenix New Media Limited for the second quarter of 2019 was RMB70.1 million (US$10.2 million), as compared to net income attributable to Phoenix New Media Limited of RMB49.2 million in the second quarter of 2018. Net margin for the second quarter of 2019 decreased to negative 17.7% from positive 13.5% in the second quarter of 2018. Net loss per diluted ADS[3] in the second quarter of 2019 was RMB0.96(US$0.14), as compared to net income per diluted ADS of RMB0.67 in the second quarter of 2018.

Non-GAAP net loss attributable to Phoenix New Media Limited for the second quarter of 2019, which excluded share-based compensation and income or loss from equity method investments, net of impairments, was RMB66.4 million (US$9.7 million), as compared to non-GAAP net income attributable to Phoenix New Media Limited of RMB53.1 million in the second quarter of 2018. Non-GAAP net margin for the second quarter of 2019 decreased to negative 16.8% from positive 14.6% in the second quarter of 2018. Non-GAAP net loss per diluted ADS in the second quarter of 2019 was RMB0.91(US$0.13), as compared to non-GAAP net income per diluted ADS of RMB0.73 in the second quarter of 2018. 

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 June 30, 2019, the Company had a total of 582,324,325 ordinary shares outstanding, or the equivalent of 72,790,541 ADSs.

[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 June 30, 2019, the Company's cash and cash equivalents, term deposits and short term investments and restricted cash were RMB1.69 billion (US$245.8 million), which included RMB251.6 million (US$36.7 million) from Tianbo and RMB16.3 million (US$2.4 million) from Tadu.

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 Run Liang Tai Management Limited ("Run Liang Tai") for the sale of 32% of the total outstanding shares of Particle Inc. ("Particle" or "Yidian") to Run Liang Tai and its designated entities (the "Proposed Buyers") (the "Proposed Transaction"). The Company agrees to increase the number of Particle shares to be transferred to the Proposed Buyers from 199,866,509 shares to 212,358,165 shares while the total purchase price will remain unchanged at US$448 million. Instead of requiring full payment of the purchase price after satisfaction of all closing conditions, the Supplemental Agreement allows the Proposed Buyers to pay the purchase price in several installments. In addition to the deposit of US$100 million received in March 2019, the Proposed Buyers have paid the first installment of US$100 million to the Company according to the Supplemental Agreement. Unless otherwise agreed by both parties, the Proposed Buyers may pay the remaining purchase price on or before August 10, 2020. There can be no assurance that the Proposed Transaction will ever be closed. The fair value of available-for-sale debt investments in Particle decreased from RMB2,728.4 million as of March 31, 2019 to RMB2,271.1 million (US$330.8 million) as of June 30, 2019, mainly due to the decrease in the per-share value of Particle shares held by the Company as more shares would be transferred to the Proposed Buyers with the same total purchase price, and the time value of the purchase price used in the valuation of available-for-sale debt investments in Particle for the second quarter of 2019.

Business Outlook

For the third quarter of 2019, the Company expects its total revenues to be between RMB373.4 million and RMB393.4 million; net advertising revenues are expected to be between RMB312.0 million and RMB327.0 million; and paid services revenues are expected to be between RMB61.4 million and RMB66.4 million.

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 August 12, 2019, (August 13, 2019 at 9:00 a.m.Beijing/Hong Kong time) to discuss its second quarter 2019 unaudited financial results and operating performance.

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 August 20, 2019, by using the dial-in numbers and conference ID below:

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"), Phoenix New Media Limited uses non-GAAP gross profit, non-GAAP gross margin, non-GAAP income or loss from operations, non-GAAP operating margin, non-GAAP net income or loss attributable to Phoenix New Media Limited, non-GAAP net margin and non-GAAP net income or loss per diluted ADS, each of which is a non-GAAP financial measure. Non-GAAP gross profit is gross profit excluding share-based compensation. Non-GAAP gross margin is non-GAAP gross profit divided by total revenues. Non-GAAP income or loss from operations is income or loss from operations excluding share-based compensation. Non-GAAP operating margin is non-GAAP income or loss from operations divided by total revenues. Non-GAAP net income or loss attributable to Phoenix New Media Limited is net income or loss attributable to Phoenix New Media Limited excluding share-based compensation and income or loss from equity method investments, net of impairments. Non-GAAP net margin is non-GAAP net income or loss attributable to Phoenix New Media Limited divided by total revenues. Non-GAAP net income or loss per diluted ADS is non-GAAP net income or loss attributable to Phoenix New Media Limited divided by weighted average number of diluted ADSs. The Company believes that separate analysis and exclusion of the aforementioned non-GAAP to GAAP reconciling items add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with the related GAAP financial measures to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that using these non-GAAP financial measures to evaluate its business allows both management and investors to assess the Company's performance against its competitors and ultimately monitor its capacity to generate returns for investors. The Company also believes that these non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of items like share-based compensation and income or loss from equity method investments, net of impairments, which have been and will continue to be significant and recurring in its business. However, the use of these non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using these non-GAAP financial measures is that they do not include all items that impact the Company's gross profit, income or loss from operations and net income or loss attributable to Phoenix New Media Limited for the period. In addition, because these non-GAAP financial measures are not calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider these non-GAAP financial measures in isolation from, or as an alternative to, the financial measures prepared in accordance with 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 RMB6.8650 to US$1.00, the noon buying rate in effect on June 30, 2019, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

About Phoenix New Media Limited

Phoenix New Media Limited (NYSE: FENG) is a leading new media company providing premium content on an integrated Internet platform, including PC and mobile, in China. Having originated from a leading global Chinese language TV network based in Hong Kong, Phoenix TV, the Company enables consumers to access professional news and other quality information and share user-generated content on the Internet through their PCs and mobile devices. Phoenix New Media's platform includes its PC channel, consisting of ifeng.com website, which comprises interest-based verticals and interactive services; its mobile channel, consisting of mobile news applications, mobile video application, digital reading applications and mobile Internet website; and its operations with the telecom operators that provides mobile value-added services.

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 Phoenix New Media's strategic and operational plans, contain forward−looking statements. Phoenix New Media may also make written or oral forward−looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20−F and 6−K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Phoenix New Media's beliefs and expectations, are forward−looking statements. Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward−looking statement, including but not limited to the following: the Company's goals and strategies; the Company's future business development, financial condition and results of operations; the expected growth of online and mobile advertising, online video and mobile paid services markets in China; the Company's reliance on online and mobile advertising and MVAS for a majority of its total revenues; the Company's expectations regarding demand for and market acceptance of its services; the Company's expectations regarding maintaining and strengthening its relationships with advertisers, partners and customers; the Company's investment plans and strategies, fluctuations in the Company's quarterly operating results; the Company's plans to enhance its user experience, infrastructure and services offerings; the Company's reliance on mobile operators in China to provide most of its MVAS; changes by mobile operators in China to their policies for MVAS; competition in its industry in China; and relevant government policies and regulations relating to the Company. Further information regarding these and other risks is included in the Company's filings with the SEC, including its registration statement on Form F−1, as amended, and its annual reports on Form 20−F. All information provided in this press release and in the attachments is as of the date of this press release, and Phoenix New Media does not undertake any obligation to update any forward−looking statement, except as required under applicable law.

For investor and media inquiries please contact:

Phoenix New Media Limited
Qing Liu
Email: investorrelations@ifeng.com 

ICR, Inc.
Jack Wang
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
liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability relating to lease payments (the Lease Liability)
in the statements of financial position for lease contracts having terms beyond 12 months period.

 

 

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
     expenses

(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
     of impairments

(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
     interests

222


7,999


754


110


971


8,753


1,275

Net income/(loss) attributable to Phoenix
     New Media Limited

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
     tax: fair value remeasurement for
     available-for-sale investments

5,287


725,403


(463,083)


(67,456)


51,651


262,320


38,211

  Other comprehensive income/(loss), net of
     tax: foreign currency translation
     adjustment

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
     noncontrolling interests

222


7,999


754


110


971


8,753


1,275

Comprehensive income/(loss) attributable
     to Phoenix New Media Limited

103,904


578,473


(488,254)


(71,123)


57,714


90,219


13,143

Net income/(loss) attributable to Phoenix
     New Media Limited

49,241


(119,737)


(70,115)


(10,214)


(8,299)


(189,852)


(27,654)

Net income/(loss) per Class A and Class B
     ordinary share:














  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
     8 Class A ordinary shares):














  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
     Class B ordinary shares used in computing
     net income/(loss) per share:














  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
     operations

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) 
     attributable to
     Phoenix New
     Media Limited

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
     ADS-diluted

0.67




0.73


(1.65)




(1.54)


(0.96)




(0.91)

Weighted average
     number of ADSs
     used in computing
     diluted net
     income/(loss) per
     ADS

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.

Cision View original content:http://www.prnewswire.com/news-releases/phoenix-new-media-reports-second-quarter-2019-unaudited-financial-results-300899962.html

SOURCE Phoenix New Media Limited

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