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Phoenix New Media Reports Unaudited Second Quarter 2018 Financial Results
Live Conference Call to be Held at 9:00 PM U.S. Eastern Time on August 14, 2018

BEIJING, Aug. 14, 2018 /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, 2018.

Mr. Shuang Liu, CEO of Phoenix New Media commented, "We made significant progress on product innovation and content enrichment in the second quarter of 2018. We further enhanced our content production capabilities focusing on providing users with premium, original, unbiased, and exclusive content in the forms of news reports, live broadcasts, as well as documentaries and talk shows in video series format based on our original creation.

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 China."

Ms. Betty Ho, CFO of Phoenix New Media, further stated, "We are delighted to deliver solid financial results in the second quarter of 2018. The advertising revenue generated from our FENG app has increased by 43.2% year-over-year in the second quarter of 2018 under the old accounting standard. In order to diversify our content, we are looking for new investment opportunities in lifestyle related verticals, such as travel, health and fashion, to expand our user base and improve retention rate. Looking ahead, we will remain committed to investing in content and product innovations to strengthen our competitive edge while focusing on improving our profitability and maintaining our growth momentum."

Adoption of ASC606

Beginning from January 1, 2018, the Company adopted a new accounting standard of ASC606, Revenue from Contracts with Customers (the "new accounting standard"). The financial data presented in the Company's financial statements for the quarter and the six months ended June 30, 2018 are in accordance with the new accounting standard while all financial data presented for the quarter and the six months ended June 30, 2017 are in accordance with ASC605, Revenue Recognition (the "old accounting standard").

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 June 30, 2018 was as follows:


Three Months Ended June 30, 2018


 

Old
Accounting
Standard(1)

Adjustments

New
Accounting
Standard(2)



Sales Taxes And
Surcharges


Barter
Transactions


Contract
Fulfillment
Costs



(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 RMB362.5 million (US$54.8 million) under the new accounting standard, which represented a decrease of 7.8% from RMB393.3 million in the second quarter of 2017.

Net advertising revenues for the second quarter of 2018 were RMB316.0 million (US$47.8 million) (net of advertising agency service fees and sales taxes and surcharges) under the new accounting standard, which represented a decrease of 6.7% from RMB338.7 million in the second quarter of 2017.

Paid services revenues[1] for the second quarter of 2018 were RMB46.5 million (US$7.0 million) under the new accounting standard, which represented a decrease of 14.9% from RMB54.5 million in the second quarter of 2017. Revenues from digital entertainment[2] for the second quarter of 2018 were RMB37.8 million (US$5.7 million) under the new accounting standard, which represented a decrease of 17.0% from RMB45.6 million in the second quarter of 2017. Revenues from games and others[3] for the second quarter of 2018 were RMB8.7 million (US$1.3 million) under the new accounting standard, which represented a decrease of 3.5% from RMB9.0 million in the second quarter of 2017.

Under the old accounting standard ASC605, total revenues for the second quarter of 2018 would have been RMB396.7 million (US$60.0 million), which would have represented an increase of 0.9% from RMB393.3 million in the second quarter of 2017.

Under the old accounting standard ASC605, net advertising revenues for the second quarter of 2018 would have been RMB347.3 million (US$52.5 million), which would have represented an increase of 2.5% from RMB338.7 million in the second quarter of 2017, primarily attributable to a 23.0% year-over-year increase in mobile advertising revenues that was partially offset by a 26.6% year-over-year decrease in PC advertising revenues.

Under the old accounting standard ASC605, paid services revenues for the second quarter of 2018 would have been RMB49.4 million (US$7.5 million), which would have represented a decrease of 9.5% from RMB54.5 million in the second quarter of 2017. Under the old accounting standard ASC605, revenues from digital entertainment for the second quarter of 2018 would have been RMB40.1 million (US$6.1 million), which would have represented a decrease of 12.0% from RMB45.6 million in the second quarter of 2017, due to a 29.3% decrease in the MVAS revenues mainly resulting from the decline in users' demand for services provided through telecom operators in China. Under the old accounting standard ASC605, revenues from games and others for the second quarter of 2018 would have been RMB9.3 million (US$1.4 million), which would have represented an increase of 3.3% from RMB9.0 million in the second quarter of 2017, primarily attributable to the increase in revenues derived from other new businesses while the revenues generated from web-based games operated on the Company's own platforms were still declining.

[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 RMB132.9 million (US$20.1 million) under the new accounting standard, which represented a decrease of 20.8% from RMB167.8 million in the second quarter of 2017. Under the old accounting standard ASC605, cost of revenues for the second quarter of 2018 would have been RMB167.3 million (US$25.3 million), which would have represented a decrease of 0.3% from RMB167.8 million in the second quarter of 2017. The decrease in cost of revenues under the new accounting standard was mainly due to:

  • 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 of RMB33.2 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) from RMB106.0 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) from RMB15.1 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) from RMB13.6 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 to RMB1.2 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 RMB229.6 million (US$34.7 million), as compared to RMB225.4 million in the second quarter of 2017. Gross margin for the second quarter of 2018 increased to 63.3% from 57.3% in the second quarter of 2017. The increase in gross margin was primarily attributable to the increase in gross profit as well as the decrease in revenues under the new accounting standard as explained above.

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 RMB200.2 million (US$30.2 million) from RMB200.4 million in the second quarter of 2017. Share-based compensation included in operating expenses was RMB2.8 million (US$0.4 million) in the second quarter of 2018, as compared to RMB4.2 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.

Income from operations for the second quarter of 2018 was RMB29.4 million (US$4.4 million), as compared to RMB25.0 million in the second quarter of 2017. Operating margin for the second quarter of 2018 was 8.1%, as compared to 6.4% in the second quarter of 2017, which was primarily attributable to the decrease in revenues under the new accounting standard.

Non-GAAP income from operations for the second quarter of 2018, which excluded share-based compensation, was RMB32.8 million (US$5.0 million), as compared to RMB30.5 million in the second quarter of 2017. Non-GAAP operating margin for the second quarter of 2018, which excluded share-based compensation, was 9.1%, as compared to 7.7% in the second quarter of 2017.

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 RMB28.1 million (US$4.2 million), as compared to RMB3.4 million in the second quarter of 2017.

  • Interest income for the second quarter of 2018 was RMB13.6 million (US$2.0 million), as compared to RMB13.5 million in the second quarter of 2017.
  • Interest expense for the second quarter of 2018 decreased to RMB3.4 million (US$0.5 million), from RMB6.4 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 of RMB7.9 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, of RMB1.1 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 to RMB3.1 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 Phoenix New Media Limited for the second quarter of 2018 was RMB49.2 million (US$7.4 million), as compared to RMB24.9 million in the second quarter of 2017. Net margin for the second quarter of 2018 was 13.6%, as compared to 6.3% in the second quarter of 2017. Net income per diluted ADS[5] in the second quarter of 2018 was RMB0.67 (US$0.10), as compared to RMB0.35 in the second quarter of 2017.

Non-GAAP net income attributable to Phoenix New Media Limited for the second quarter of 2018, which excluded share-based compensation and income or loss from equity investments, including impairments, was RMB53.1 million (US$8.0 million), as compared to RMB29.3 million in the second quarter of 2017. Non-GAAP net margin for the second quarter of 2018 was 14.6%, as compared to 7.4% in the second quarter of 2017. Non-GAAP net income per diluted ADS in the second quarter of 2018 was RMB0.73 (US$0.11), as compared to RMB0.41 in the second quarter of 2017.

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 June 30, 2018, the Company had a total of 581,908,702 ordinary shares outstanding, or the equivalent of 72,738,588 ADSs.

[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 June 30, 2018, the Company's cash and cash equivalents, term deposits and short term investments and restricted cash were RMB1.32 billion (US$199.4 million). Restricted cash represents deposits placed as security for banking facilities granted to the Company, which are restricted in their withdrawal or usage.

Business Outlook

Based on the new accounting standard (ASC606), for the third quarter of 2018, the Company expects its total revenues to be between RMB376.1 million and RMB391.1 million; net advertising revenues are expected to be between RMB342.7 million and RMB352.7 million; and paid services revenues are expected to be between RMB33.4 million and RMB38.4 million.

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 RMB413.2 million and RMB428.2 million, its net advertising revenues to be between RMB378.0 million and RMB388.0 million, and its paid services revenues to be between RMB35.2 million and RMB40.2 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 14, 2018 (August 15, 2018 at 9:00 a.m. Beijing/Hong Kong time) to discuss its second quarter 2018 unaudited financial results and operating performance.

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 August 20, 2018 by using the dial-in numbers and conference ID below:

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"), 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 investments, including 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 investments, including 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 RMB6.6171 to US$1.00, the noon buying rate in effect on June 29, 2018 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 such as news, finance, fashion, military and digital reading, and interactive services; its mobile channel, consisting of mobile news applications, mobile video application, HTML5-based mobile Internet websites, and mobile digital reading application; and its operations with the telecom operators that provides content 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 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; 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.
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
      expenses

(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,
      including impairments

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
      Media Limited

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
      value remeasurement for available-for-sale
      investments*

256,588


46,364


5,287


799


265,479


51,651


7,806

  Other comprehensive loss, net of tax: foreign
      currency translation adjustment

(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
      noncontrolling interests

779


749


222


34


1,554


971


147

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

269,033


(46,190)


103,904


15,703


241,983


57,714


8,721

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

24,931


(57,540)


49,241


7,442


(7,243)


(8,299)


(1,255)

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














  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
      Class A ordinary shares):














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














  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
this new accounting standard, the Company measures long-term equity investments other than equity method investments at fair value through earnings. As investments in
Particle meet the definition of debt securities, which are recorded as available-for-sale investments, there is no impact by the adoption of ASU 2016-1 on the available-for-
sale investments in Particle and the changes in their fair value continue to be recorded in other comprehensive income.

 

 

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
      operations

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)
      attributable to
      Phoenix New
      Media Limited

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) 
      per ADS--diluted

0.35




0.41


(0.79)




(0.71)


0.67




0.73

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

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.

 

 


 

Cision View original content:http://www.prnewswire.com/news-releases/phoenix-new-media-reports-unaudited-second-quarter-2018-financial-results-300696833.html

SOURCE Phoenix New Media Limited