Phoenix New Media Reports Third Quarter 2014 Unaudited Financial Results

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Phoenix New Media Reports Third Quarter 2014 Unaudited Financial Results
3Q14 Net Advertising Revenues Up 45.5% YoY
3Q14 Income from Operations was RMB70.1 million
3Q14 Adjusted Income from Operations Up 14.8% YOY to RMB87.9 million
3Q14 Diluted EPS was RMB0.90
3Q14 Adjusted Diluted EPS Up 13.6% YOY to RMB1.21
Live Conference Call to be Held at 7:00 PM U.S. Eastern Time on November 13

BEIJING, Nov. 13, 2014 /PRNewswire/ -- Phoenix New Media Limited (NYSE: FENG), a leading new media company in China ("Phoenix New Media", "PNM", "ifeng" or the "Company"), today announced its unaudited financial results for the third quarter ended September 30, 2014.

Third Quarter 2014 Highlights

  • Net advertising revenues increased by 45.5% year over year to RMB325.8 million (US$53.1 million).
  • Income from operations was RMB70.1 million (US$11.4 million). Adjusted income from operations[1] increased by 14.8% year over year to RMB87.9 million (US$14.3 million).
  • Net income attributable to Phoenix New Media Limited was RMB69.6 million (US$11.3 million). Adjusted net income attributable to Phoenix New Media Limited increased by 13.7% year over year to RMB93.3 million (US$15.2 million).
  • Net income per diluted ADS[2] was RMB0.90(US$0.15). Adjusted net income per diluted ADS increased by 13.6% year over year to RMB1.21(US$0.20).

[1] An explanation of the Company's non-GAAP financial measures is included in the section entitled "Use of Non-GAAP Financial Measures" below, and 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".


[2] "ADS" means American Depositary Share of the Company. Each ADS represents eight Class A ordinary shares of the Company.

"We are very pleased with our strong financial performance in the third quarter," stated Mr. Shuang Liu, CEO of Phoenix New Media. "We are particularly proud of the significant progress ifeng continues to achieve with regards to new advertising initiatives and the growth of our in-house video content production capabilities. On the native advertising side, we partnered with some well-known international brands on innovative native advertisement projects which have turned out to be immensely successful in terms of viewership and revenue contributions. As we expand in the native advertising arena, we are also exploring personalized marketing, as characterized by our strategic investment in the personalized news-feed mobile app, Yidian Zixun. Looking ahead, as we continue to improve our mobile product development and content generation capabilities, we are confident in our ability to remain firmly ahead of the curve in capitalizing on emerging trends in order to continuously expand our user base, strengthen monetization efforts and in turn deliver long-term value to our shareholders. "

Mr. Ya Li, President of Phoenix New Media, stated, "In the third quarter, the incremental revenue growth and operating margin improvement were largely supported by the strong 45.5% year-over-year growth in net advertising revenues. As we have strengthened our advertising capabilities, we continue to invest in our platform by enhancing our mobile product offering and supporting the steady growth of our verticals. Our auto, real estate, fashion, finance, and sports verticals have continued to pick up momentum in attracting new users, serving to further elevate our brand recognition and provide us with future monetization opportunities. Furthermore, on the video side, the ongoing success of several of our in-house productions, which are co-developed with Phoenix TV, continues to demonstrate the strong potential of our convergence strategy and has enabled us to implement multiple monetization strategies that aim to diversify and streamline the content distribution process."

Third Quarter 2014 Financial Results

REVENUES

Total revenues for the third quarter of 2014 increased by 14.0% to RMB431.8 million (US$70.3 million) from RMB378.7 million in the same period last year.

Net advertising revenues (net of advertising agency service fees), for the third quarter of 2014 increased by 45.5% to RMB325.8 million (US$53.1 million) from RMB223.8 million in the same period last year, primarily due to an increase in average revenue per advertiser ("ARPA") of 36.6% year over year to RMB0.9 million (US$0.1 million) and an increase in the total number of advertisers of 6.5% year over year to 358.

Paid service revenues for the third quarter of 2014 decreased by 31.6% to RMB106.0 million (US$17.3 million) from RMB154.9 million in the same period last year. Mobile value-added services ("MVAS")[3] revenues for the third quarter of 2014 decreased by 41.2% to RMB77.9 million (US$12.7 million) from RMB132.4 million in the same period last year, primarily due to a decrease in revenues generated from wireless value-added services with telecom operators. Games and others[4] revenues for the third quarter of 2014 increased by 25.2% to RMB28.1 million (US$4.6 million) from RMB22.5 million in the same period last year, due to the increase of non-recurring content sales.

[3] MVAS includes wireless value-added services, or WVAS, mobile video, mobile digital reading, mobile games and other paid services through China's three telecom operators' platforms.


[4] Games and others include web-based games, content sales, and other online and mobile paid services through the Company's own platforms.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues for the third quarter of 2014 increased by 4.3% to RMB202.9 million (US$33.1 million) from RMB194.4 million in the same period last year, primarily due to an increase in content and operational costs and sales taxes and surcharges, offset by a decrease in revenue sharing fees. Content and operational costs for the third quarter of 2014 increased to RMB104.3 million (US$17.0 million) from RMB75.5 million in the same period last year, primarily due to an increase in staff-related costs and advertisement-related content production costs. Revenue sharing fees to telecom operators and channel partners for the third quarter of 2014 decreased to RMB43.9 million (US$7.1 million) from RMB76.2 million in the same period last year, primarily due to a decrease in MVAS revenues. Sales taxes and surcharges for the third quarter of 2014 increased to RMB33.9 million (US$5.5 million) from RMB24.4 million in the same period last year due to the growth in net advertising revenues. Bandwidth costs for the third quarter of 2014 increased to RMB20.8 million (US$3.4 million) from RMB18.3 million in the same period last year, primarily due to traffic growth over both PC and mobile platforms. Share-based compensation included in cost of revenues for the third quarter of 2014 was RMB5.7 million (US$0.9 million), compared to RMB1.9 million in the same period last year. The year-over-year increase in share-based compensation was primarily due to newly granted stock options in the last 12 months.

Gross profit for the third quarter of 2014 increased by 24.2% to RMB228.9 million (US$37.3 million) from RMB184.3 million in the same period last year. Gross margin for the third quarter of 2014 increased to 53.0% from 48.7% in the same period last year, mainly due to the less contribution to total revenues from relatively lower margin paid services revenues. Adjusted gross margin, which excludes share-based compensation, for the third quarter of 2014 increased to 54.3% from 49.2% in the same period last year.

OPERATING EXPENSES AND INCOME FROM OPERATIONS

Total operating expenses for the third quarter of 2014 increased by 44.8% to RMB158.8 million (US$25.9 million) from RMB109.7 million in the same period last year. The increase in operating expenses was primarily attributable to the increase in expenses associated with the Company's marketing and promotional initiatives and staff-related expenses relating to technology and product development. Share-based compensation included in operating expenses for the third quarter of 2014 was RMB12.2 million (US$2.0 million), compared to RMB0.04 million in the same period last year. The year-over-year increase in share-based compensation was primarily due to newly granted stock options in the last 12 months.

Income from operations for the third quarter of 2014 was RMB70.1 million (US$11.4 million), compared to RMB74.6 million in the same period last year, due to the increase in expenses associated with the Company's marketing and promotional initiatives, staff-related expenses relating to technology and product development and share-based compensation, also partially offset by the increase in the Company's gross profit. Operating margin for the third quarter of 2014 was 16.2%, compared to 19.7% in the same period last year.

Adjusted income from operations, which excludes share-based compensation, for the third quarter of 2014 increased by 14.8% to RMB87.9 million (US$14.3 million) from RMB76.6 million in the same period last year.Adjusted operating margin for the third quarter of 2014 increased to 20.4% from 20.2% in the same period last year.

OTHER INCOME

Other income reflects interest income, foreign currency exchange gain or loss, gain on disposition of subsidiaries and acquisition of equity investments, loss from equity investments, and others, net[5]. Interest income for the third quarter of 2014 increased to RMB12.4 million (US$2.0 million) from RMB8.9 million in the same period last year. Foreign currency exchange loss for the third quarter of 2014 was RMB0.2 million (US$0.04 million), compared to foreign currency exchange gain of RMB3.0 million in the same period last year.

[5] "Others, net" primarily consists of government subsidies.

NET INCOME ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Net income attributable to Phoenix New Media Limited for the third quarter of 2014 was RMB69.6 million (US$11.3 million), compared to RMB80.0 million in the same period last year, due to the decrease in income from operations which stated above and the increase in the loss from equity investments. Net margin for the third quarter of 2014 was 16.1%, compared to 21.1% in third quarter of 2013.Net income per diluted ADS in the third quarter of 2014 was RMB0.90(US$0.15), compared to RMB1.04 in the same period last year.

Adjusted net income attributable to Phoenix New Media Limited, which excludes share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments, for the third quarter of 2014 increased by 13.7% to RMB93.3 million (US$15.2 million) from RMB82.0 million in the same period last year. The total amount of share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments for the third quarter of 2014 was RMB23.7 million (US$3.9 million), compared to RMB 2.0 million in the same period last year. Adjusted net margin for the third quarter of 2014 was 21.6%, compared to 21.7% in the same period last year. Adjusted net income per diluted ADS in the third quarter of 2014 increased by 13.6% to RMB1.21(US$0.20) from RMB1.06 in the same period last year.

As of September 30, 2014, the Company's cash and cash equivalents and term deposits and short term investments were RMB1.36 billion (US$222.2 million).

For the third quarter of 2014, the Company's weighted average number of ADSs used in the computation of diluted net income per ADS was 77,318,496. As of September 30, 2014, the Company had a total of 604,695,029 ordinary shares outstanding, or the equivalent of 75,586,879 ADSs.

Business Outlook

For the fourth quarter of 2014, the Company expects its total revenues to be between RMB439 million and RMB459 million. Net advertising revenues are expected to be between RMB329 million and RMB339 million. Paid service revenues are expected to be between RMB110 million and RMB120 million. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which are subject to change.

Share Repurchase Program

As of September 30, 2014, the Company had repurchased an aggregate amount of 1,844,059 American Depositary Shares ("ADSs") at an aggregate cost of approximately US$18.7 million on the open market, pursuant to the share repurchase program approved by the board in May 2014. Under the share repurchase program, the Company has been authorized to repurchase up to US$50 million of its outstanding ADSs over a period not exceeding twelve (12) months beginning on May 14, 2014, the effective date of the program. The Company expects to continue to implement its share repurchase program in a manner consistent with market conditions and the interest of its shareholders, subject to the restrictions relating to volume, price and timing under applicable law.

Conference Call Information

The Company will hold a conference call at 7:00 p.m. U.S. Eastern Time on November 13, 2014 (November 14, 2014 at 8:00 a.m.Beijing / Hong Kong time) to discuss its third quarter 2014 unaudited financial results and operating performance.

To participate in the call, please dial the following numbers:

International:

+6567239385

Mainland China:

4001200654

Hong Kong:

+85230186776

United States:

+18456750438

Conference ID:

25806247

A replay of the call will be available through November 20, 2014 by dialing the following numbers:

International:

+61290034211

Mainland China:

4006322162

Hong Kong: 

+85230512780

United States: 

+16462543697

Conference ID: 

25806247

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 adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted net income attributable to Phoenix New Media Limited, adjusted net margin and adjusted net income per diluted ADS, each of which is a non-GAAP financial measure. Adjusted gross profit is gross profit excluding share-based compensation. Adjusted gross margin is adjusted gross profit divided by total revenues. Adjusted income from operations is income from operations excluding share-based compensation. Adjusted operating margin is adjusted income from operations divided by total revenues. Adjusted net income attributable to Phoenix New Media Limited is net income attributable to Phoenix New Media Limited excluding share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments. Adjusted net margin is adjusted net income attributable to Phoenix New Media Limited divided by total revenues. Adjusted net income per diluted ADS is adjusted net income attributable to Phoenix New Media Limited divided by weighted average number of diluted ADSs. The Company believes that separate analysis and exclusion of the non-cash impact of share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments add clarity to the constituent parts of its performance. The Company reviews adjusted net income together with net income 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 multiple 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 its investors. The Company also believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation, gain on disposition of subsidiaries and acquisition of equity investments, and loss from equity investments. Share-based compensation and loss from equity investments have been and will continue to be significant and recurring in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. 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 RMB6.1380 to US$1.00, the noon buying rate in effect on September 30, 2014 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 platform across Internet, mobile and TV channels 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 and through their mobile devices. Phoenix New Media's platform includes its ifeng.com channel, consisting of its ifeng.com website and web-based game platform, its video channel, comprised of its dedicated video vertical and mobile video services, and its mobile channel, including its mobile Internet website, mobile applications and 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 the online and mobile advertising, online video and mobile paid service markets in China; the Company's reliance on online advertising and MVAS for the majority of its total revenues; the Company's expectations regarding demand for and market acceptance of its services; the Company's expectations regarding the retention and strengthening of its relationships with advertisers, partners and customers; fluctuations in the Company's quarterly operating results; the Company's plans to enhance its user experience, infrastructure and service 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
Matthew Zhao
Email: investorrelations@ifeng.com

ICR, Inc.
In Beijing, China: Jeremy Peruski
In New York City: Katherine Knight
Tel: +1 (646) 277-1276
Email: investorrelations@ifeng.com

 

Phoenix New Media Limited

Condensed Consolidated Balance Sheets

(Amounts in thousands)


December 31,


September 30,


September 30,

2013

2014


2014


RMB


RMB


US$


Revised


Unaudited


Unaudited







ASSETS






Current assets:






Cash and cash equivalents

845,138


613,025


99,874

Restricted cash

10,000


-


-

Term deposits and short term investments

556,672


750,801


122,320

Accounts receivable, net

353,379


496,883


80,952

Amounts due from related parties

125,158


198,838


32,395

Prepayment and other current assets

27,911


101,555


16,545

Deferred tax assets

22,779


24,056


3,919

Total current assets

1,941,037


2,185,158


356,005

Non-current assets:






Property and equipment, net

95,126


92,967


15,146

Intangible assets, net

7,919


7,079


1,153

Equity investments

-


19,435


3,166

Other non-current assets

12,678


15,292


2,492

Total non-current assets

115,723


134,773


21,957

Total assets

2,056,760


2,319,931


377,962

LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






Accounts payable

218,604


259,321


42,248

Amounts due to related parties

21,034


25,105


4,090

Advances from customers

10,732


20,537


3,346

Taxes payable

58,140


87,582


14,269

Salary and welfare payable

98,831


97,467


15,879

Accrued expenses and other current liabilities

62,153


86,936


14,164

Total current liabilities

469,494


576,948


93,996

Long-term liabilities

12,231


16,116


2,626

Total liabilities

481,725


593,064


96,622

Shareholders' equity






Phoenix New Media Limited shareholders' equity






Class A ordinary shares

18,530


18,824


3,067

Class B ordinary shares

22,053


22,053


3,593

Additional paid-in capital

1,734,993


1,772,633


288,797

Treasury stock

-


(107,642)


(17,537)

Statutory reserves

50,330


50,330


8,200

Retained earnings/(Accumulated deficit)

(194,601)


21,583


3,516

Accumulated other comprehensive loss

(60,127)


(53,780)


(8,762)

Total Phoenix New Media Limited shareholders' equity

1,571,178


1,724,001


280,874

Noncontrolling interests

3,857


2,866


466

Total shareholders' equity

1,575,035


1,726,867


281,340

Total liabilities and shareholders' equity

2,056,760


2,319,931


377,962

 

Phoenix New Media Limited

Condensed Consolidated Statements of Comprehensive Income

(Amounts in thousands, except for number of shares and per share (or ADS) data)
















Three Months Ended


Nine Months Ended


September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,


2013


2014


2014


2014


2013


2014


2014


RMB


RMB


RMB


US$


RMB


RMB


US$


Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Unaudited















Revenues:














Net advertising revenues

223,831


290,968


325,756


53,072


599,797


851,649


138,750

Paid service revenues

154,910


119,905


106,017


17,272


424,569


348,146


56,720

Total revenues

378,741


410,873


431,773


70,344


1,024,366


1,199,795


195,470

Cost of revenues

(194,434)


(197,501)


(202,889)


(33,054)


(511,710)


(574,261)


(93,558)

Gross profit

184,307


213,372


228,884


37,290


512,656


625,534


101,912

Operating expenses:














Sales and marketing expenses

(65,839)


(72,823)


(80,541)


(13,122)


(185,337)


(230,097)


(37,487)

General and administrative expenses

(16,604)


(26,436)


(36,933)


(6,017)


(70,756)


(96,071)


(15,652)

Technology and product development expenses

(27,224)


(33,045)


(41,345)


(6,736)


(79,306)


(105,177)


(17,135)

Total operating expenses

(109,667)


(132,304)


(158,819)


(25,875)


(335,399)


(431,345)


(70,274)

Income from operations

74,640


81,068


70,065


11,415


177,257


194,189


31,638

Other income:














Interest income

8,860


12,617


12,428


2,025


23,253


37,070


6,039

Foreign currency exchange gain/(loss)

3,008


139


(231)


(38)


15,150


(6,960)


(1,134)

Gain on disposition of subsidiaries and acquisition of equity investments

-


4,658


-


-


-


22,351


3,641

Loss from equity investments

-


(4,026)


(5,855)


(954)


-


(11,422)


(1,861)

Others, net

2,769


6,577


5,681


926


7,423


18,048


2,940

Income before tax

89,277


101,033


82,088


13,374


223,083


253,276


41,263

Income tax expense

(9,235)


(15,941)


(13,545)


(2,207)


(26,396)


(38,083)


(6,204)

Net income

80,042


85,092


68,543


11,167


196,687


215,193


35,059

Net loss/(income) attributable to noncontrolling interests

-


(630)


1,018


166


-


991


161

Net income attributable to Phoenix New Media Limited

80,042


84,462


69,561


11,333


196,687


216,184


35,220

Net income

80,042


85,092


68,543


11,167


196,687


215,193


35,059

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

(3,722)


(784)


(20)


(3)


(17,581)


6,347


1,034

Comprehensive income

76,320


84,308


68,523


11,164


179,106


221,540


36,093

Comprehensive
loss/(income) attributable to noncontrolling interests

-


(630)


1,018


166


-


991


161

Comprehensive income attributable to Phoenix
New Media Limited

76,320


83,678


69,541


11,330


179,106


222,531


36,254

Net income attributable to Phoenix New Media
Limited

80,042


84,462


69,561


11,333


196,687


216,184


35,220

Net income per Class A and Class B ordinary share:














Basic

0.13


0.14


0.12


0.02


0.32


0.36


0.06

Diluted

0.13


0.14


0.11


0.02


0.32


0.35


0.06

Net income per ADS (1 ADS represents 8 Class A ordinary shares):














Basic

1.07


1.12


0.92


0.15


2.59


2.87


0.47

Diluted

1.04


1.09


0.90


0.15


2.52


2.79


0.45

Weighted average number of Class A and Class B ordinary shares used in computing net income per share:














Basic

599,683,858


604,231,733


602,442,619


602,442,619


607,657,461


602,873,027


602,873,027

Diluted

617,788,630


622,050,594


618,547,971


618,547,971


623,179,760


620,892,502


620,892,502

 

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 September 30, 2013


Three Months Ended June 30, 2014


Three Months Ended September 30, 2014




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

184,307


1,929

(1)

186,236


213,372


2,439

(1)

215,811


228,884


5,660

(1)

234,544

Gross margin

48.7%




49.2%


51.9%




52.5%


53.0%




54.3%

Income from operations

74,640


1,973

(1)

76,613


81,068


8,443

(1)

89,511


70,065


17,872

(1)

87,937

Operating margin

19.7%




20.2%


19.7%




21.8%


16.2%




20.4%




























8,443

(1)

















4,026

(2)





17,872

(1)





1,973

(1)





(4,658)

(3)





5,855

(2)


Net income attributable to Phoenix New Media Limited

80,042


1,973


82,015


84,462


7,811


92,273


69,561


23,727


93,288

Net margin

21.1%




21.7%


20.6%




22.5%


16.1%




21.6%

Net income per
 ADS -- diluted

1.04




1.06


1.09




1.19


0.90




1.21

Weighted average number of ADSs used in computing diluted net income per ADS

77,223,579




77,223,579


77,756,324




77,756,324


77,318,496




77,318,496


(1) Excludes share-based compensation

(2) Excludes loss from equity investments

(3) Excludes gain on disposition of a subsidiary and acquisition of equity investment


Details of cost of revenues are as follows:


Three Months Ended


September 30,


June 30,


September 30,


September 30,


2013


2014


2014


2014


RMB


RMB


RMB


US$

(Amounts in thousands)

Unaudited


Unaudited


Unaudited


Unaudited

Revenue sharing fees

76,182


59,210


43,882


7,149

Content and operational costs

75,538


83,729


104,347


17,000

Bandwidth costs

18,331


19,933


20,771


3,384

Sales taxes and surcharges

24,383


34,629


33,889


5,521

Total cost of revenues

194,434


197,501


202,889


33,054

SOURCE Phoenix New Media Limited

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