Company News
Mr.
In addition, we have maximized users' satisfaction while optimizing our algorithms to effectively screen our content library to ensure full compliance with emerging regulations. Going forward, we will continue to leverage the credibility, authenticity and influence of our premium content and our brand to further fortify our leadership in the media industry in
Ms.
Adoption of ASC606
Beginning from
The impact of applying the new accounting standard on the Company's unaudited financial results as compared to the old accounting standard for the quarter ended
Three Months Ended June 30, 2018 |
|||||||||
Old |
Adjustments |
New |
|||||||
Sales Taxes And |
Barter |
Contract |
|||||||
(RMB in thousands) |
|||||||||
Revenues |
396,707 |
(34,337) |
91 |
- |
362,461 |
||||
Net advertising revenues |
347,337 |
(31,393) |
91 |
- |
316,035 |
||||
Paid services revenues |
49,370 |
(2,944) |
- |
- |
46,426 |
||||
Cost of revenues |
(167,284) |
34,337 |
(73) |
145 |
(132,875) |
||||
Gross profit |
229,423 |
- |
18 |
145 |
229,586 |
||||
Operating expenses |
(199,309) |
- |
(845) |
- |
(200,154) |
||||
Sales and marketing expenses |
(108,978) |
- |
(845) |
- |
(109,823) |
||||
Income from operations |
30,114 |
- |
(827) |
145 |
29,432 |
||||
Note: |
|||||||||
(1) This financial information for the three months ended June 30, 2018 was presented under the old accounting standard (ASC605). |
|||||||||
(2) This financial information for the three months ended June 30, 2018 was presented under the new accounting standard (ASC606). |
Second Quarter 2018 Financial Results
REVENUES
Total revenues for the second quarter of 2018 were
Net advertising revenues for the second quarter of 2018 were
Paid services revenues[1] for the second quarter of 2018 were
Under the old accounting standard ASC605, total revenues for the second quarter of 2018 would have been
Under the old accounting standard ASC605, net advertising revenues for the second quarter of 2018 would have been
Under the old accounting standard ASC605, paid services revenues for the second quarter of 2018 would have been
[1] Paid services revenues comprise of (i) revenues from digital entertainment, which includes MVAS and digital reading, and (ii) revenues from games and others, which includes web-based games, mobile games, content sales, and other online and mobile paid services through the Company's own platforms |
[2] Digital entertainment includes mobile value-added services delivered through telecom operators' platforms, or MVAS, and digital reading. |
[3] Games and others include web-based and mobile games, and other online and mobile paid services through the Company's own platforms |
COST OF REVENUES
Cost of revenues for the second quarter of 2018 was
- The sales taxes and surcharges were
RMB34.3 million (US$5.2 million ) in the second quarter of 2018, which was excluded from cost of revenues and recorded as a reduction item of revenues under the new accounting standard, as compared to sales taxes and surcharges ofRMB33.2 million in the second quarter of 2017, which was recorded as a component of cost of revenues under the old accounting standard ASC605. - Content and operational costs for the second quarter of 2018 increased slightly to
RMB107.5 million (US$16.2 million ) fromRMB106.0 million in the second quarter of 2017. - Revenue sharing fees to telecom operators and channel partners for the second quarter of 2018 decreased by 23.9% to
RMB11.5 million (US$1.7 million ) fromRMB15.1 million in the second quarter of 2017. The decrease was primarily attributable to a decrease in the sales of MVAS products. - Bandwidth costs for the second quarter of 2018 increased slightly to
RMB13.9 million (US$2.1 million ) fromRMB13.6 million in the second quarter of 2017. - Share-based compensation included in cost of revenues was
RMB0.6 million (US$0.1 million ) in the second quarter of 2018, as compared toRMB1.2 million in the second quarter of 2017. 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 2018 for share options granted prior to 2018.
GROSS PROFIT
Gross profit for the second quarter of 2018 was
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 excluded 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 2018, which excluded share-based compensation, was 63.5%, as compared to 57.6% in the second quarter of 2017.
OPERATING EXPENSES AND INCOME FROM OPERATIONS
Total operating expenses for the second quarter of 2018 decreased by 0.1% to
Income from operations for the second quarter of 2018 was
Non-GAAP income from operations for the second quarter of 2018, 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 investments, including impairments, and others, net[4]. Total net other income for the second quarter of 2018 was
- Interest income for the second quarter of 2018 was
RMB13.6 million (US$2.0 million ), as compared toRMB13.5 million in the second quarter of 2017. - Interest expense for the second quarter of 2018 decreased to
RMB3.4 million (US$0.5 million ), fromRMB6.4 million in the second quarter of 2017, which was primarily due to the decrease in both the carrying amount and the interest rates of the outstanding short-term bank loans in the second quarter of 2018 as compared to that in 2017. - Foreign currency exchange gain for the second quarter of 2018 was
RMB16.2 million (US$2.5 million ), as compared to foreign currency exchange loss ofRMB7.9 million in the second quarter of 2017, which was mainly caused by the depreciation of Renminbi against US dollars in the second quarter of 2018 that generated exchange gain in Renminbi denominated borrowings recorded in the Company's subsidiaries whose functional currency is not Renminbi. - Loss from equity investments, including impairments, for the second quarter of 2018 was
RMB0.4 million (US$0.07 million ), as compared to income from equity investments, including impairments, ofRMB1.1 million in the second quarter of 2017. - Others, net, for the second quarter of 2018 was
RMB2.1 million (US$0.3 million ), as compared toRMB3.1 million in the second quarter of 2017.
[4] "Others, net" primarily consists of government subsidies and litigation loss provisions. |
NET INCOME ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED
Net income attributable to
Non-GAAP net income attributable to
For the second quarter of 2018, the Company's weighted average number of ADSs used in the computation of diluted net income per ADS was 73,118,221. As of
[5] "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
Business Outlook
Based on the new accounting standard (ASC606), for the third quarter of 2018, the Company expects its total revenues to be between
If the old accounting standard (ASC605) were to be used, for the third quarter of 2018, the Company would expect 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
To participate in the call, please use the dial-in numbers and conference ID below:
International: |
+6567135440 |
Mainland China: |
4001200654 |
Hong Kong: |
+85230186776 |
United States: |
+18456750438 |
Conference ID: |
6098336 |
A replay of the call will be available through
International: |
+61290034211 |
Mainland China: |
4006322162 |
Hong Kong: |
+800963117 |
United States: |
+18554525696 |
Conference ID: |
6098336 |
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 Phoenix New Media Limited
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
Rose Zu
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, |
|||
2017 |
2018 |
2018 |
|||
RMB |
RMB |
US$ |
|||
Audited* |
Unaudited |
Unaudited |
|||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
362,862 |
236,580 |
35,753 |
||
Term deposits and short term investments |
737,657 |
776,050 |
117,279 |
||
Restricted cash |
336,700 |
307,000 |
46,395 |
||
Accounts receivable, net |
458,744 |
385,845 |
58,310 |
||
Amounts due from related parties |
187,214 |
199,034 |
30,079 |
||
Prepayment and other current assets |
57,458 |
58,910 |
8,903 |
||
Convertible loans due from a related party |
102,631 |
106,067 |
16,029 |
||
Total current assets |
2,243,266 |
2,069,486 |
312,748 |
||
Non-current assets: |
|||||
Property and equipment, net |
64,454 |
80,715 |
12,198 |
||
Intangible assets, net |
6,712 |
5,852 |
884 |
||
Available-for-sale investments |
1,196,330 |
1,265,490 |
191,245 |
||
Equity investments, net |
15,342 |
12,477 |
1,886 |
||
Deferred tax assets |
60,460 |
79,609 |
12,031 |
||
Other non-current assets |
12,544 |
14,797 |
2,236 |
||
Total non-current assets |
1,355,842 |
1,458,940 |
220,480 |
||
Total assets |
3,599,108 |
3,528,426 |
533,228 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current liabilities: |
|||||
Short-term loans |
330,000 |
308,047 |
46,553 |
||
Accounts payable |
262,657 |
239,898 |
36,254 |
||
Amounts due to related parties |
14,140 |
16,123 |
2,437 |
||
Advances from customers |
65,196 |
59,861 |
9,046 |
||
Taxes payable |
92,214 |
95,571 |
14,443 |
||
Salary and welfare payable |
134,471 |
94,803 |
14,327 |
||
Accrued expenses and other current liabilities |
173,253 |
120,216 |
18,167 |
||
Total current liabilities |
1,071,931 |
934,519 |
141,227 |
||
Non-current liabilities: |
|||||
Deferred tax liabilities |
1,312 |
1,312 |
198 |
||
Long-term liabilities |
24,714 |
25,321 |
3,827 |
||
Total non-current liabilities |
26,026 |
26,633 |
4,025 |
||
Total liabilities |
1,097,957 |
961,152 |
145,252 |
||
Shareholders' equity: |
|||||
Phoenix New Media Limited shareholders' equity: |
|||||
Class A ordinary shares |
17,180 |
17,471 |
2,640 |
||
Class B ordinary shares |
22,053 |
22,053 |
3,333 |
||
Additional paid-in capital |
1,587,575 |
1,596,689 |
241,297 |
||
Statutory reserves |
81,237 |
81,237 |
12,277 |
||
Retained earnings |
229,250 |
220,928 |
33,387 |
||
Accumulated other comprehensive income |
570,244 |
636,256 |
96,154 |
||
Total Phoenix New Media Limited shareholders' equity |
2,507,539 |
2,574,634 |
389,088 |
||
Noncontrolling interests |
(6,388) |
(7,360) |
(1,112) |
||
Total shareholders' equity |
2,501,151 |
2,567,274 |
387,976 |
||
Total liabilities and shareholders' equity |
3,599,108 |
3,528,426 |
533,228 |
||
* Derived from audited financial statements included in the Company's Form 20-F dated April 26, 2018. |
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 |
Six Months Ended |
||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
2017 |
2018 |
2018 |
2018 |
2017 |
2018 |
2018 |
|||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenues: |
|||||||||||||
Net advertising revenues |
338,725 |
242,861 |
316,035 |
47,760 |
579,809 |
558,896 |
84,462 |
||||||
Paid service revenues |
54,541 |
41,551 |
46,426 |
7,016 |
107,936 |
87,977 |
13,295 |
||||||
Total revenues |
393,266 |
284,412 |
362,461 |
54,776 |
687,745 |
646,873 |
97,757 |
||||||
Cost of revenues |
(167,844) |
(128,233) |
(132,875) |
(20,081) |
(330,333) |
(261,108) |
(39,460) |
||||||
Gross profit |
225,422 |
156,179 |
229,586 |
34,695 |
357,412 |
385,765 |
58,297 |
||||||
Operating expenses: |
|||||||||||||
Sales and marketing expenses |
(118,769) |
(131,219) |
(109,823) |
(16,597) |
(214,231) |
(241,042) |
(36,427) |
||||||
General and administrative expenses |
(35,865) |
(34,398) |
(41,808) |
(6,318) |
(67,816) |
(76,206) |
(11,517) |
||||||
Technology and product development |
(45,791) |
(48,412) |
(48,523) |
(7,333) |
(90,419) |
(96,935) |
(14,649) |
||||||
Total operating expenses |
(200,425) |
(214,029) |
(200,154) |
(30,248) |
(372,466) |
(414,183) |
(62,593) |
||||||
Income/(loss) from operations |
24,997 |
(57,850) |
29,432 |
4,447 |
(15,054) |
(28,418) |
(4,296) |
||||||
Other income/(loss): |
|||||||||||||
Interest income |
13,493 |
12,938 |
13,550 |
2,048 |
26,151 |
26,488 |
4,003 |
||||||
Interest expense |
(6,426) |
(4,633) |
(3,389) |
(512) |
(12,775) |
(8,022) |
(1,212) |
||||||
Foreign currency exchange (loss)/gain |
(7,890) |
(15,131) |
16,231 |
2,453 |
(10,201) |
1,100 |
166 |
||||||
Income/(loss) from equity investments, |
1,127 |
(2,430) |
(435) |
(66) |
463 |
(2,865) |
(433) |
||||||
Others, net |
3,066 |
4,093 |
2,128 |
322 |
4,493 |
6,221 |
940 |
||||||
Income/(loss) before tax |
28,367 |
(63,013) |
57,517 |
8,692 |
(6,923) |
(5,496) |
(832) |
||||||
Income tax (expense)/benefit |
(4,215) |
4,724 |
(8,498) |
(1,284) |
(1,874) |
(3,774) |
(570) |
||||||
Net income/(loss) |
24,152 |
(58,289) |
49,019 |
7,408 |
(8,797) |
(9,270) |
(1,402) |
||||||
Net loss attributable to noncontrolling interests |
779 |
749 |
222 |
34 |
1,554 |
971 |
147 |
||||||
Net income/(loss) attributable to Phoenix New |
24,931 |
(57,540) |
49,241 |
7,442 |
(7,243) |
(8,299) |
(1,255) |
||||||
Net income/(loss) |
24,152 |
(58,289) |
49,019 |
7,408 |
(8,797) |
(9,270) |
(1,402) |
||||||
Other comprehensive income, net of tax: fair |
256,588 |
46,364 |
5,287 |
799 |
265,479 |
51,651 |
7,806 |
||||||
Other comprehensive loss, net of tax: foreign |
(12,486) |
(35,014) |
49,376 |
7,462 |
(16,253) |
14,362 |
2,170 |
||||||
Comprehensive income/(loss) |
268,254 |
(46,939) |
103,682 |
15,669 |
240,429 |
56,743 |
8,574 |
||||||
Comprehensive loss attributable to |
779 |
749 |
222 |
34 |
1,554 |
971 |
147 |
||||||
Comprehensive income/(loss) attributable to |
269,033 |
(46,190) |
103,904 |
15,703 |
241,983 |
57,714 |
8,721 |
||||||
Net income/(loss) attributable to Phoenix New |
24,931 |
(57,540) |
49,241 |
7,442 |
(7,243) |
(8,299) |
(1,255) |
||||||
Net income/(loss) per Class A and Class B |
|||||||||||||
Basic |
0.04 |
(0.10) |
0.08 |
0.01 |
(0.01) |
(0.01) |
0.00 |
||||||
Diluted |
0.04 |
(0.10) |
0.08 |
0.01 |
(0.01) |
(0.01) |
0.00 |
||||||
Net income/(loss) per ADS (1 ADS represents 8 |
|||||||||||||
Basic |
0.35 |
(0.79) |
0.68 |
0.10 |
(0.10) |
(0.11) |
(0.02) |
||||||
Diluted |
0.35 |
(0.79) |
0.67 |
0.10 |
(0.10) |
(0.11) |
(0.02) |
||||||
Weighted average number of Class A and Class |
|||||||||||||
Basic |
573,948,891 |
579,228,111 |
580,976,381 |
580,976,381 |
573,943,337 |
580,102,974 |
580,102,974 |
||||||
Diluted |
576,815,588 |
579,228,111 |
584,945,765 |
584,945,765 |
573,943,337 |
580,102,974 |
580,102,974 |
||||||
* The Company adopted ASU 2016-1, Recognition and Measurement of Financial Assets and Financial Liabilities, beginning from January 1, 2018. After the adoption of |
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, |
|||||||
2017 |
2018 |
2018 |
2018 |
2017 |
2018 |
2018 |
|||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenues: |
|||||||||||||
Net advertising service |
338,725 |
242,861 |
316,035 |
47,760 |
579,809 |
558,896 |
84,462 |
||||||
Paid services |
54,541 |
41,551 |
46,426 |
7,016 |
107,936 |
87,977 |
13,295 |
||||||
Total revenues |
393,266 |
284,412 |
362,461 |
54,776 |
687,745 |
646,873 |
97,757 |
||||||
Cost of revenues |
|||||||||||||
Net advertising service |
141,459 |
107,289 |
110,022 |
16,627 |
272,584 |
217,311 |
32,841 |
||||||
Paid services |
26,385 |
20,944 |
22,853 |
3,454 |
57,749 |
43,797 |
6,619 |
||||||
Total cost of revenues |
167,844 |
128,233 |
132,875 |
20,081 |
330,333 |
261,108 |
39,460 |
||||||
Gross profit |
|||||||||||||
Net advertising service |
197,266 |
135,572 |
206,013 |
31,133 |
307,225 |
341,585 |
51,621 |
||||||
Paid services |
28,156 |
20,607 |
23,573 |
3,562 |
50,187 |
44,180 |
6,676 |
||||||
Total gross profit |
225,422 |
156,179 |
229,586 |
34,695 |
357,412 |
385,765 |
58,297 |
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, |
|||||||
2017 |
2018 |
2018 |
2018 |
2017 |
2018 |
2018 |
|||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenue sharing fees |
15,052 |
8,617 |
11,460 |
1,732 |
32,372 |
20,077 |
3,034 |
||||||
Content and operational costs |
105,984 |
105,273 |
107,516 |
16,249 |
212,300 |
212,789 |
32,158 |
||||||
Bandwidth costs |
13,607 |
14,343 |
13,899 |
2,100 |
28,135 |
28,242 |
4,268 |
||||||
Sales taxes and surcharges |
33,201 |
- |
- |
- |
57,526 |
- |
- |
||||||
Total cost of revenues |
167,844 |
128,233 |
132,875 |
20,081 |
330,333 |
261,108 |
39,460 |
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, 2017 |
Three Months Ended March 31, 2018 |
Three Months Ended June 30, 2018 |
|||||||||||||||
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 |
225,422 |
1,224 |
(1) |
226,646 |
156,179 |
205 |
(1) |
156,384 |
229,586 |
634 |
(1) |
230,220 |
|||||
Gross margin |
57.3% |
57.6% |
54.9% |
55.0% |
63.3% |
63.5% |
|||||||||||
Income/(loss) from |
24,997 |
5,460 |
(1) |
30,457 |
(57,850) |
3,450 |
(1) |
(54,400) |
29,432 |
3,390 |
(1) |
32,822 |
|||||
Operating margin |
6.4% |
7.7% |
-20.3% |
-19.1% |
8.1% |
9.1% |
|||||||||||
5,460 |
(1) |
3,450 |
(1) |
3,390 |
(1) |
||||||||||||
(1,127) |
(2) |
2,430 |
(2) |
435 |
(2) |
||||||||||||
Net income/(loss) |
24,931 |
4,333 |
29,264 |
(57,540) |
5,880 |
(51,660) |
49,241 |
3,825 |
53,066 |
||||||||
Net margin |
6.3% |
7.4% |
-20.2% |
-18.2% |
13.6% |
14.6% |
|||||||||||
Net income/(loss) |
0.35 |
0.41 |
(0.79) |
(0.71) |
0.67 |
0.73 |
|||||||||||
Weighted average |
72,101,949 |
72,101,949 |
72,403,514 |
72,403,514 |
73,118,221 |
73,118,221 |
|||||||||||
(1) Share-based compensation |
|||||||||||||||||
(2) Gain/(loss) from equity investments, including 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-unaudited-second-quarter-2018-financial-results-300696833.html
SOURCE