Company News
"In the third quarter of 2017, we not only delivered solid financial and operating performance, but also achieved several important milestones," stated Mr.
We also further executed our content strategy during the third quarter. We continued to be a leading news distributor in
Looking ahead, we will remain focused on market share expansion. By leveraging our professional journalism, cutting-edge technology, extensive partnership resources as well as our branding power, we believe we can maintain our leading position in the highly competitive market."
Ms.
Third Quarter 2017 Financial Results
REVENUES
Total revenues for the third quarter of 2017 increased by 18.2% to
Net advertising revenues (net of advertising agency service fees) for the third quarter of 2017 increased by 17.0% to
Paid services revenues[1] for the third quarter of 2017 increased by 25.9% to
COST OF REVENUES
Cost of revenues for the third quarter of 2017 increased by 2.9% to
- Content and operational costs for the third quarter of 2017 decreased to
RMB110.5 million (US$16.6 million ) fromRMB119.5 million in the third quarter of 2016, primarily attributable to a decrease in advertisement-related content production cost and the Company's strict control of general operation costs. - Revenue sharing fees to telecom operators and channel partners for the third quarter of 2017 increased to
RMB27.9 million (US$4.2 million ) fromRMB16.6 million in the third quarter of 2016, primarily attributable to an increase in the sales of MVAS products. - Bandwidth costs for the third quarter of 2017 decreased to
RMB14.1 million (US$2.1 million ) fromRMB16.4 million in the third quarter of 2016, primarily due to the decrease in bandwidth purchase price as a result of intense competition. - Sales taxes and surcharges for the third quarter of 2017 increased to
RMB35.7 million (US$5.4 million ) fromRMB30.4 million in the third quarter of 2016. - Share-based compensation included in cost of revenues was
RMB0.9 million (US$0.1 million ) in the third quarter of 2017, as compared to negativeRMB5.1 million in the third quarter of 2016 resulting from the increase of estimated forfeiture rate of share-based awards based on the actual forfeiture rate in the quarter.
GROSS PROFIT
Gross profit for the third quarter of 2017 increased by 34.0% to
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 third quarter of 2017, which excluded share-based compensation, increased to 56.0% from 47.8% in the third quarter of 2016.
OPERATING EXPENSES AND INCOME FROM OPERATIONS
Total operating expenses for the third quarter of 2017 increased by 34.7% to
Income from operations for the third quarter of 2017 increased by 30.3% to
Non-GAAP income from operations for the third quarter of 2017, which excluded share-based compensation, increased by 99.1% to
OTHER INCOME/(LOSS)
Other income/(loss) reflects interest income, interest expense, foreign currency exchange gain/(loss), gain/(loss) from equity investments, including impairments, and others, net[4]. Total other income for the third quarter of 2017 was
- Interest income for the third quarter of 2017 increased to
RMB14.9 million (US$2.2 million ) fromRMB7.9 million in the third quarter of 2016, which was mainly due to the increase of interest bearing investments and receivables in the third quarter of 2017 as compared to that of 2016. - Interest expense for the third quarter of 2017 increased to
RMB5.7 million (US$0.9 million ), fromRMB1.6 million in the third quarter of 2016, which was primarily due to the increase in outstanding short-term bank loans in the third quarter of 2017 as compared to that of 2016. - Foreign currency exchange loss for the third quarter of 2017 was
RMB8.9 million (US$1.3 million ), as compared to foreign currency exchange gain ofRMB0.6 million in the third quarter of 2016, which was mainly caused by the appreciation of Renminbi against US dollars in the third quarter of 2017. - Gain from equity investments for the third quarter of 2017, including impairments, was
RMB1.0 million (US$0.1 million ), as compared to loss from equity investments ofRMB1.2 million in the third quarter of 2016. - Others, net, for the third quarter of 2017 increased to
RMB4.9 million (US$0.7 million ), fromRMB1.0 million in the third quarter of 2016, which was primarily attributable to the government subsidies received in the third quarter of 2017.
NET INCOME ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED
Net income attributable to
Non-GAAP net income attributable to
For the third quarter of 2017, the Company's weighted average number of ADSs used in the computation of diluted net income per ADS was 72,227,027. As of
CERTAIN BALANCE SHEET ITEMS
As of
Business Outlook
For the fourth quarter of 2017, the Company expects its total revenues to be between
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: |
7682549 |
A replay of the call will be available through
International: |
+61290034211 |
Mainland China: |
4006322162 |
Hong Kong: |
+85230512780 |
United States: |
+16462543697 |
Conference ID: |
7682549 |
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:
Email: investorrelations@ifeng.com
Rose Zu
Tel: +1 (646) 405-4883
Email: investorrelations@ifeng.com
[1] Prior to 2016, the Company's paid services revenues comprised mainly of revenues generated from MVAS and games and others. Digital reading was previously classified under "games and others." In order to align with the Company's overall strategies, digital reading was re-classified from "games and others", and digital reading together with MVAS was determined as "digital entertainment" starting from the financial statements as of and for the year ended December 31, 2016. Accordingly, the revenues from digital entertainment and the revenues from games and others for the first three quarters of 2016 have been reclassified. |
[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. |
[4] "Others, net" primarily consists of government subsidies. |
[5] "ADS" means American Depositary Share of the Company. Each ADS represents eight Class A ordinary shares of the Company. |
Phoenix New Media Limited |
|||||
Condensed Consolidated Balance Sheets |
|||||
(Amounts in thousands) |
|||||
December 31, |
September30, |
Septembe30, |
|||
2016 |
2017 |
2017 |
|||
RMB |
RMB |
US$ |
|||
Audited* |
Unaudited |
Unaudited |
|||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
202,694 |
337,696 |
50,756 |
||
Term deposits and short term investments |
781,298 |
574,799 |
86,393 |
||
Restricted cash |
354,602 |
364,167 |
54,735 |
||
Accounts receivable, net |
405,033 |
401,762 |
60,385 |
||
Amounts due from related parties |
156,260 |
281,959 |
42,379 |
||
Prepayment and other current assets |
64,069 |
70,733 |
10,631 |
||
Convertible loans due from a related party |
104,429 |
103,152 |
15,504 |
||
Total current assets |
2,068,385 |
2,134,268 |
320,783 |
||
Non-current assets: |
|||||
Property and equipment, net |
72,087 |
69,590 |
10,459 |
||
Intangible assets, net |
9,475 |
7,507 |
1,128 |
||
Available-for-sale investments |
939,432 |
1,192,556 |
179,243 |
||
Equity investments, net |
8,809 |
10,477 |
1,575 |
||
Deferred tax assets** |
54,307 |
59,448 |
8,935 |
||
Other non-current assets |
16,047 |
12,874 |
1,935 |
||
Total non-current assets |
1,100,157 |
1,352,452 |
203,275 |
||
Total assets |
3,168,542 |
3,486,720 |
524,058 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current liabilities: |
|||||
Short-term bank loans |
358,602 |
357,954 |
53,801 |
||
Accounts payable |
260,902 |
231,150 |
34,742 |
||
Amounts due to related parties |
18,720 |
21,970 |
3,302 |
||
Advances from customers |
27,825 |
69,316 |
10,417 |
||
Taxes payable |
75,652 |
82,131 |
12,344 |
||
Salary and welfare payable |
130,329 |
126,765 |
19,053 |
||
Accrued expenses and other current liabilities |
111,049 |
103,383 |
15,540 |
||
Total current liabilities |
983,079 |
992,669 |
149,199 |
||
Non-current liabilities: |
|||||
Deferred tax liabilities |
1,312 |
1,312 |
197 |
||
Long-term liabilities |
21,723 |
22,004 |
3,307 |
||
Total non-current liabilities |
23,035 |
23,316 |
3,504 |
||
Total liabilities |
1,006,114 |
1,015,985 |
152,703 |
||
Shareholders' equity: |
|||||
Phoenix New Media Limited shareholders' equity: |
|||||
Class A ordinary shares |
16,843 |
16,952 |
2,548 |
||
Class B ordinary shares |
22,053 |
22,053 |
3,315 |
||
Additional paid-in capital |
1,555,511 |
1,576,166 |
236,900 |
||
Statutory reserves |
77,946 |
77,946 |
11,715 |
||
Retained earnings |
195,069 |
220,720 |
33,175 |
||
Accumulated other comprehensive income |
298,346 |
562,626 |
84,563 |
||
Total Phoenix New Media Limited shareholders' |
2,165,768 |
2,476,463 |
372,216 |
||
Noncontrolling interests |
(3,340) |
(5,728) |
(861) |
||
Total shareholders' equity |
2,162,428 |
2,470,735 |
371,355 |
||
Total liabilities and shareholders' equity |
3,168,542 |
3,486,720 |
524,058 |
||
* Derived from audited financial statements included in the Company's Form 20-F dated April 28, 2017. ** In 2017, the Company adopted the guidance of ASU 2015-17 issued by FASB in November 2015, which |
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, |
|||||||
2016 |
2017 |
2017 |
2017 |
2016 |
2017 |
2017 |
|||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenues: |
|||||||||||||
Net advertising revenues |
310,439 |
338,725 |
363,124 |
54,578 |
879,052 |
942,933 |
141,724 |
||||||
Paid service revenues |
49,583 |
54,541 |
62,436 |
9,384 |
153,973 |
170,372 |
25,607 |
||||||
Total revenues |
360,022 |
393,266 |
425,560 |
63,962 |
1,033,025 |
1,113,305 |
167,331 |
||||||
Cost of revenues |
(182,927) |
(167,844) |
(188,185) |
(28,284) |
(521,603) |
(518,518) |
(77,934) |
||||||
Gross profit |
177,095 |
225,422 |
237,375 |
35,678 |
511,422 |
594,787 |
89,397 |
||||||
Operating expenses: |
|||||||||||||
Sales and marketing expenses |
(74,210) |
(118,769) |
(122,843) |
(18,463) |
(236,785) |
(337,074) |
(50,663) |
||||||
General and administrative |
(37,897) |
(35,865) |
(28,650) |
(4,306) |
(140,527) |
(96,466) |
(14,499) |
||||||
Technology and product |
(37,756) |
(45,791) |
(50,412) |
(7,577) |
(120,188) |
(140,831) |
(21,167) |
||||||
Total operating expenses |
(149,863) |
(200,425) |
(201,905) |
(30,346) |
(497,500) |
(574,371) |
(86,329) |
||||||
Income from operations |
27,232 |
24,997 |
35,470 |
5,332 |
13,922 |
20,416 |
3,068 |
||||||
Other income/(loss): |
|||||||||||||
Interest income |
7,943 |
13,493 |
14,922 |
2,243 |
24,328 |
41,073 |
6,173 |
||||||
Interest expense |
(1,554) |
(6,426) |
(5,700) |
(857) |
(3,283) |
(18,475) |
(2,777) |
||||||
Foreign currency exchange |
575 |
(7,890) |
(8,878) |
(1,334) |
1,122 |
(19,079) |
(2,868) |
||||||
(Loss)/gain from equity |
(1,242) |
1,127 |
968 |
145 |
(1,747) |
1,431 |
215 |
||||||
Others, net |
1,021 |
3,066 |
4,893 |
735 |
9,447 |
9,386 |
1,411 |
||||||
Income before tax |
33,975 |
28,367 |
41,675 |
6,264 |
43,789 |
34,752 |
5,222 |
||||||
Income tax expense |
(2,879) |
(4,215) |
(9,615) |
(1,445) |
(4,836) |
(11,489) |
(1,727) |
||||||
Net income |
31,096 |
24,152 |
32,060 |
4,819 |
38,953 |
23,263 |
3,495 |
||||||
Net loss attributable to |
599 |
779 |
834 |
125 |
1,879 |
2,388 |
359 |
||||||
Net income attributable to |
31,695 |
24,931 |
32,894 |
4,944 |
40,832 |
25,651 |
3,854 |
||||||
Net income |
31,096 |
24,152 |
32,060 |
4,819 |
38,953 |
23,263 |
3,495 |
||||||
Other comprehensive |
(39,610) |
256,588 |
33,832 |
5,085 |
(22,967) |
299,311 |
44,987 |
||||||
Other comprehensive |
2,920 |
(12,486) |
(18,778) |
(2,822) |
11,854 |
(35,031) |
(5,265) |
||||||
Comprehensive (loss)/income |
(5,594) |
268,254 |
47,114 |
7,082 |
27,840 |
287,543 |
43,217 |
||||||
Comprehensive loss |
599 |
779 |
834 |
125 |
1,879 |
2,388 |
359 |
||||||
Comprehensive (loss)/income |
(4,995) |
269,033 |
47,948 |
7,207 |
29,719 |
289,931 |
43,576 |
||||||
Net income attributable to |
31,695 |
24,931 |
32,894 |
4,944 |
40,832 |
25,651 |
3,854 |
||||||
Net income per Class A and |
|||||||||||||
Basic |
0.06 |
0.04 |
0.06 |
0.01 |
0.07 |
0.04 |
0.01 |
||||||
Diluted |
0.05 |
0.04 |
0.06 |
0.01 |
0.07 |
0.04 |
0.01 |
||||||
Net income per ADS (1 ADS |
|||||||||||||
Basic |
0.44 |
0.35 |
0.46 |
0.07 |
0.57 |
0.36 |
0.05 |
||||||
Diluted |
0.44 |
0.35 |
0.46 |
0.07 |
0.57 |
0.36 |
0.05 |
||||||
Weighted average number of |
|||||||||||||
Basic |
574,124,546 |
573,948,891 |
574,372,716 |
574,372,716 |
573,401,254 |
574,091,207 |
574,091,207 |
||||||
Diluted |
577,432,460 |
576,815,588 |
577,816,213 |
577,816,213 |
577,056,594 |
577,578,429 |
577,578,429 |
Phoenix New Media Limited |
||||||||||||||
Condensed Segments Information |
||||||||||||||
(Amounts in thousands) |
||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
September 30, |
September 30, |
||||||||
2016 |
2017 |
2017 |
2017 |
2016 |
2017 |
2017 |
||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
||||||||
Revenues: |
||||||||||||||
Net advertising service |
310,439 |
338,725 |
363,124 |
54,578 |
879,052 |
942,933 |
141,724 |
|||||||
Paid service |
49,583 |
54,541 |
62,436 |
9,384 |
153,973 |
170,372 |
25,607 |
|||||||
Total revenues |
360,022 |
393,266 |
425,560 |
63,962 |
1,033,025 |
1,113,305 |
167,331 |
|||||||
Cost of revenues |
||||||||||||||
Net advertising service |
151,770 |
141,459 |
149,000 |
22,395 |
424,035 |
421,584 |
63,365 |
|||||||
Paid service |
31,157 |
26,385 |
39,185 |
5,889 |
97,568 |
96,934 |
14,569 |
|||||||
Total cost of revenues |
182,927 |
167,844 |
188,185 |
28,284 |
521,603 |
518,518 |
77,934 |
|||||||
Gross profit |
||||||||||||||
Net advertising service |
158,669 |
197,266 |
214,124 |
32,183 |
455,017 |
521,349 |
78,359 |
|||||||
Paid service |
18,426 |
28,156 |
23,251 |
3,495 |
56,405 |
73,438 |
11,038 |
|||||||
Total gross profit |
177,095 |
225,422 |
237,375 |
35,678 |
511,422 |
594,787 |
89,397 |
Phoenix New Media Limited |
|||||||||||||
Condensed Information of Cost of Revenues |
|||||||||||||
(Amounts in thousands) |
|||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||
September30, 2016 |
June 30, 2017 |
September30, 2017 |
September30, 2017 |
September30, 2016 |
September30, 2017 |
September30, |
|||||||
2017 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|||||||
Revenue sharing fees |
16,559 |
15,052 |
27,891 |
4,192 |
54,687 |
60,263 |
9,058 |
||||||
Content and operational costs |
119,538 |
105,984 |
110,491 |
16,607 |
332,178 |
322,791 |
48,515 |
||||||
Bandwidth costs |
16,404 |
13,607 |
14,085 |
2,117 |
49,041 |
42,220 |
6,346 |
||||||
Sales taxes and surcharges |
30,426 |
33,201 |
35,718 |
5,368 |
85,697 |
93,244 |
14,015 |
||||||
Total cost of revenues |
182,927 |
167,844 |
188,185 |
28,284 |
521,603 |
518,518 |
77,934 |
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, 2016 |
Three Months Ended June 30, 2017 |
Three Months Ended September 30, 2017 |
|||||||||||||||||||
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 |
177,095 |
(5,115) |
(1) |
171,980 |
225,422 |
1,224 |
(1) |
226,646 |
237,375 |
949 |
(1) |
238,324 |
|||||||||
Gross margin |
49.2% |
47.8% |
57.3% |
57.6% |
55.8% |
56.0% |
|||||||||||||||
Income from |
27,232 |
(8,186) |
(1) |
19,046 |
24,997 |
5,460 |
(1) |
30,457 |
35,470 |
2,450 |
(1) |
37,920 |
|||||||||
Operating margin |
7.6% |
5.3% |
6.4% |
7.7% |
8.3% |
8.9% |
|||||||||||||||
(8,186) |
(1) |
5,460 |
(1) |
2,450 |
(1) |
||||||||||||||||
1,242 |
(2) |
(1,127) |
(2) |
(968) |
(2) |
||||||||||||||||
Net income |
31,695 |
(6,944) |
24,751 |
24,931 |
4,333 |
29,264 |
32,894 |
1,482 |
34,376 |
||||||||||||
Net margin |
8.8% |
6.9% |
6.3% |
7.4% |
7.7% |
8.1% |
|||||||||||||||
Net income per |
0.44 |
0.34 |
0.35 |
0.41 |
0.46 |
0.48 |
|||||||||||||||
Weighted average |
72,179,058 |
72,179,058 |
72,101,949 |
72,101,949 |
72,227,027 |
72,227,027 |
|||||||||||||||
(1) Share-based compensation |
|||||||||||||||||||||
(2) Loss/(gain) from equity investments, including impairments |
View original content:http://www.prnewswire.com/news-releases/phoenix-new-media-reports-third-quarter-2017-unaudited-financial-results-300554744.html
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