Phoenix New Media Reports First Quarter 2019 Unaudited Financial Results

BEIJING, May 13, 2019 /PRNewswire/ -- Phoenix New Media Limited (NYSE: FENG) ("Phoenix New Media", "ifeng" or the "Company"), a leading new media company in China, today announced its unaudited financial results for the first quarter ended March 31, 2019.

Mr. Shuang Liu, CEO of Phoenix New Media, commented, "I am so pleased that our topline exceeded our expectations. In the first quarter of 2019, we continued to focus on enhancing our AI framework by further improving its synergies with our editorial system. The successful integration of human expertise and AI algorithms not only strengthened our ability to generate and distribute high-quality content, but also allowed us to maintain our professional journalism standards and provide unbiased, premium content to our users. In addition, our new growth initiatives in our content offering strategy, digital reading and our expansion in lifestyle related verticals have all out-performed our expectations.

Despite headwinds from macroeconomic uncertainties and industry challenges, we are confident that our ability to generate accurate and highly relevant sales leads in a variety of niche verticals can help our clients achieve a high ROI with a limited marketing budget."

Ms. Betty Ho, CFO of Phoenix New Media, further stated, "For the first quarter of 2019, our total revenues reached RMB284.9 million, exceeding the high end of our previous guidance as a result of the better than expected performance of the digital reading business of Tadu. The total consolidated paid services revenues for the first quarter of 2019 increased by 66.1% year over year to RMB68.9 million. However, our net advertising revenues for the first quarter of 2019 decreased to RMB216.0 million primarily as a result of macroeconomic uncertainties and increased competition. Looking ahead, we will continue to invest in the expansion of original content and to further diversify our product offerings. We are actively exploring potential investment in premium content and expect the synergies between our different businesses to enable us to enter into a fresh growth cycle."

First Quarter 2019 Financial Results

REVENUES

Total revenues for the first quarter of 2019 were RMB284.9 million (US$42.4 million), which were flat as compared with the same quarter last year, though the Company consolidated the revenues from Beijing Yitian Xindong Network Technology Co., Ltd. ("Yitian Xindong" or "Tadu") of RMB43.5 million (US$6.5 million), the advertising revenues were decreased due to macroeconomic headwind and intense competition.

Net advertising revenues for the first quarter of 2019 were RMB216.0 million (US$32.2 million), which represented a decrease of 11.3% from RMB243.4 million in the first quarter of 2018, primarily attributable to a 9.0% year-over-year decrease in PC advertising revenues and a 12.4% year-over-year decrease in mobile advertising revenues.

Paid services revenues([1]) for the first quarter of 2019 were RMB68.9 million (US$10.3 million), which represented an increase of 66.1% from RMB41.5 million in the first quarter of 2018. Revenues from paid contents for the first quarter of 2019 increased 147.8% to RMB52.9 million (US$7.9 million) from RMB21.4 million in the first quarter of 2018 primarily due to the inclusion of digital reading revenues from Tadu. Revenues from games for the first quarter of 2019 were RMB3.1 million (US$0.5 million), which represented a decrease of 35.0% from RMB4.8 million in the first quarter of 2018. Revenues from MVAS for the first quarter of 2019 were RMB7.9 million (US$1.2 million), which represented a decrease of 42.0% from RMB13.7 million in the first quarter of 2018. Revenues from others for the first quarter of 2019 were RMB5.0 million (US$0.7 million), which represented an increase of 200.8% from RMB1.6 million in the first quarter of 2018, mainly caused by the increase in revenues from commissions generated from online transactions.


                        [1] Prior to 2019, paid services revenues
                         comprised of (i) revenues from digital
                         entertainment, which included MVAS and
                         digital reading, and (ii) revenues from
                         games and others, which included web-based
                         games, mobile games, content sales, and
                         other online and mobile paid services
                         through the Company's own platforms.


             Beginning from January 1, 2019, paid
              services revenues have been re-classified
              and now comprised of (i) revenues from paid
              contents, which includes digital reading,
              audio books, paid videos, and other
              content-related sales activities, (ii)
              revenues from games, which includes web-
              based games and mobile games, (iii)
              revenues from MVAS, and (iv) revenues from
              others. For comparison purposes, the
              revenues from paid services for the
              quarters of 2018 have been retrospectively
              re-classified.

COST OF REVENUES

Cost of revenues for the first quarter of 2019 was RMB178.2 million (US$26.5 million), representing an increase of 38.4% from RMB128.7 million in the first quarter of 2018. The increase in cost of revenues was mainly due to:

    --  Content and operational costs for the first quarter of 2019 increased
        from RMB105.8 million in the first quarter of 2018 to RMB147.0 million
        (US$21.9 million), primarily attributable to an increase in IP
        production costs.
    --  Revenue sharing fees to telecom operators and channel partners for the
        first quarter of 2019 increased from RMB8.6 million in the first quarter
        of 2018 to RMB17.3 million (US$2.6 million), primarily attributable to
        the increase in revenue sharing fees paid to content providers by Tadu.
    --  Share-based compensation included in cost of revenues was RMB1.4 million
        (US$0.2 million) in the first quarter of 2019, as compared to RMB0.2
        million in the first quarter of 2018, primarily attributable to the
        newly granted restricted share units to some employees under a
        restricted share unit scheme adopted in 2018 by Fread Limited, a
        subsidiary of the Company.

The increase in cost of revenues was partially offset by decrease in bandwidth costs from RMB14.3 million in the first quarter of 2018 to RMB13.9 million (US$2.1 million) for the first quarter of 2019.

GROSS PROFIT

Gross profit for the first quarter of 2019 was RMB106.7 million (US$15.9 million), as compared to RMB156.2 million in the first quarter of 2018. Gross margin for the first quarter of 2019 decreased to 37.5% from 54.9% in the first quarter of 2018, mainly caused by the 38.4% year-over-year increase in cost of revenues for the first quarter of 2019 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 first quarter of 2019, which excluded share-based compensation, decreased to 38.0% from 55.0% in the first quarter of 2018.

OPERATING EXPENSES AND LOSS FROM OPERATIONS

Total operating expenses for the first quarter of 2019 increased by 6.9% from RMB214.0 million in the first quarter of 2018 to RMB228.8 million (US$34.1 million), primarily attributable to the inclusion of operating expenses from Tadu. Share-based compensation included in operating expenses was RMB2.5 million (US$0.4 million) in the first quarter of 2019, as compared to RMB3.2 million in the first quarter of 2018. As the Company recognized share-based compensation, net of estimated forfeitures, on a graded-vesting basis over the vesting term of the awards, there was less share-based compensation recognized in the first quarter of 2019 for share options granted prior to 2019.

Loss from operations for the first quarter of 2019 was RMB122.1 million (US$18.2 million), as compared to loss from operations of RMB57.9 million in the first quarter of 2018. Operating margin for the first quarter of 2019 decreased to negative 42.9% from negative 20.3% in the first quarter of 2018.

Non-GAAP loss from operations for the first quarter of 2019, which excluded share-based compensation, was RMB118.1 million (US$17.6 million), as compared to non-GAAP loss from operations of RMB54.4 million in the first quarter of 2018. Non-GAAP operating margin for the first quarter of 2019, which excluded share-based compensation, decreased to negative 41.5% from negative 19.1% in the first quarter of 2018.

OTHER INCOME OR LOSS

Other income or loss reflects interest income, interest expense, foreign currency exchange gain or loss, income or loss from equity method investments, net of impairments, and others, net([2]). Total net other income for the first quarter of 2019 was RMB1.9 million (US$0.3 million), as compared to net other loss of RMB5.2 million in the first quarter of 2018.

    --  Interest income for the first quarter of 2019 decreased to RMB8.7
        million (US$1.3 million) from RMB12.9 million in the first quarter of
        2018.
    --  Interest expense for the first quarter of 2019 decreased to RMB2.9
        million (US$0.4 million), from RMB4.6 million in the first quarter of
        2018, which was primarily due to the decrease in outstanding short-term
        bank loans in the first quarter of 2019, as compared to that of 2018.
    --  Foreign currency exchange loss for the first quarter of 2019 was RMB2.2
        million (US$0.3 million), as compared to foreign currency exchange loss
        of RMB15.1 million in the first quarter of 2018, which was mainly caused
        by the less significant appreciation of Renminbi against US dollars in
        the first quarter of 2019 as compared to that of 2018 that generated
        less exchange loss in Renminbi denominated liabilities recorded in the
        Company's subsidiaries whose functional currency is not Renminbi.
    --  Loss from equity method investments, net of impairments, for the first
        quarter of 2019 was RMB4.0 million (US$0.6 million), as compared to loss
        from equity method investments, net of impairment, of RMB2.4 million in
        the first quarter of 2018.
    --  Others, net, for the first quarter of 2019 decreased to RMB2.2 million
        (US$0.3 million), from RMB4.1 million in the first quarter of 2018.


                            [2] "Others, net" primarily
                             consists of government
                             subsidies and litigation loss
                             provisions.

NET LOSS ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Net loss attributable to Phoenix New Media Limited for the first quarter of 2019 was RMB119.7 million (US$17.8 million), as compared to net loss attributable to Phoenix New Media Limited of RMB57.5 million in the first quarter of 2018. Net margin for the first quarter of 2019 decreased to negative 42.0% from negative 20.2% in the first quarter of 2018. Net loss per diluted ADS([3]) in the first quarter of 2019 was RMB1.65 (US$0.25), as compared to net loss per diluted ADS of RMB0.79 in the first quarter of 2018.

Non-GAAP net loss attributable to Phoenix New Media Limited for the first quarter of 2019, which excluded share-based compensation and income or loss from equity method investments, net of impairments, was RMB111.8 million (US$16.7 million), as compared to non-GAAP net loss attributable to Phoenix New Media Limited of RMB51.7 million in the first quarter of 2018. Non-GAAP net margin for the first quarter of 2019 decreased to negative 39.2% from negative 18.2% in the first quarter of 2018. Non-GAAP net loss per diluted ADS in the first quarter of 2019 was RMB1.54 (US$0.23), as compared to non-GAAP net loss per diluted ADS of RMB0.71 in the first quarter of 2018.

For the first quarter of 2019, the Company's weighted average number of ADSs used in the computation of diluted net loss per ADS was 72,773,389. As of March 31, 2019, the Company had a total of 582,249,952 ordinary shares outstanding, or the equivalent of 72,781,244 ADSs.


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

CERTAIN BALANCE SHEET ITEMS

As of March 31, 2019, the Company's cash and cash equivalents, term deposits and short term investments and restricted cash were RMB1.75 billion (US$260.3 million). Restricted cash represents deposits placed as security for banking facilities granted to the Company, which are restricted in their withdrawal or usage. The increase of cash balance was due to the receipt of the US$100.0 million deposit from proposed buyers of investments in Particle Inc. ("Particle").

On February 23, 2019, the Company entered into a binding letter of intent (the "LOI") with an independent third party to sell 32% of the total outstanding shares of Particle on an as-if converted basis to such party or its designated entities (collectively referred to as the "Proposed Buyers") for a total consideration of US$448.0 million in cash. The proposed buyers have paid cash deposit of US$100.0 million to the Company, and the Company and the proposed buyers entered into the formal purchase agreement (the "SPA") on March 22, 2019 (the "Proposed Transactions"). Completion of the Proposed Transactions is still subject to certain closing conditions, though some of them have been met and some of them are progressing. There is no assurance that the Proposed Transactions will ever be closed. The fair value of available-for-sale debt investments in Particle increased from RMB1,959.5 million as of December 31, 2018 to RMB2,728.4 million (US$406.6 million) as of March 31, 2019, mainly due to the increased possibility of completing the Proposed Transactions based on the status of various closing conditions used in the valuation of available-for-sale debt investments in Particle for the first quarter of 2019.

Business Outlook

For the second quarter of 2019, the Company expects its total revenues to be between RMB374.1 million and RMB394.1 million; net advertising revenues are expected to be between RMB308.8 million and RMB323.8 million; and paid services revenues are expected to be between RMB65.3 million and RMB70.3 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 May 13, 2019 (May 14, 2019 at 9:00 a.m. Beijing/Hong Kong time) to discuss its first quarter 2019 unaudited financial results and operating performance.

To participate in the call, please use the dial-in numbers and conference ID below:



              International:                       
              +65 67135440



              Mainland China:                                   4001200654



              Hong Kong:                          
              +852 30186776



              United States:                      
              +1 8456750438



              United Kingdom:                                  08000159724



              Australia:                                        1300713759



              Conference ID:                                       5560416

A replay of the call will be available through May 21, 2019 by using the dial-in numbers and conference ID below:



              International:                     
              +61 290034211



              Mainland China:                                  4006322162



              Hong Kong:                         
              +852 30512780



              United States:                     
              +1 6462543697



              Conference ID:                                      5560416

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.ifeng.com.

Use of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with the United States Generally Accepted Accounting Principles ("GAAP"), Phoenix New Media Limited uses non-GAAP gross profit, non-GAAP gross margin, non-GAAP income or loss from operations, non-GAAP operating margin, non-GAAP net income or loss attributable to Phoenix New Media Limited, non-GAAP net margin and non-GAAP net income or loss per diluted ADS, each of which is a non-GAAP financial measure. Non-GAAP gross profit is gross profit excluding share-based compensation. Non-GAAP gross margin is non-GAAP gross profit divided by total revenues. Non-GAAP income or loss from operations is income or loss from operations excluding share-based compensation. Non-GAAP operating margin is non-GAAP income or loss from operations divided by total revenues. Non-GAAP net income or loss attributable to Phoenix New Media Limited is net income or loss attributable to Phoenix New Media Limited excluding share-based compensation and income or loss from equity method investments, net of impairments. Non-GAAP net margin is non-GAAP net income or loss attributable to Phoenix New Media Limited divided by total revenues. Non-GAAP net income or loss per diluted ADS is non-GAAP net income or loss attributable to Phoenix New Media Limited divided by weighted average number of diluted ADSs. The Company believes that separate analysis and exclusion of the aforementioned non-GAAP to GAAP reconciling items add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with the related GAAP financial measures to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that using these non-GAAP financial measures to evaluate its business allows both management and investors to assess the Company's performance against its competitors and ultimately monitor its capacity to generate returns for investors. The Company also believes that these non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of items like share-based compensation and income or loss from equity method investments, net of impairments, which have been and will continue to be significant and recurring in its business. However, the use of these non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using these non-GAAP financial measures is that they do not include all items that impact the Company's gross profit, income or loss from operations and net income or loss attributable to Phoenix New Media Limited for the period. In addition, because these non-GAAP financial measures are not calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider these non-GAAP financial measures in isolation from, or as an alternative to, the financial measures prepared in accordance with GAAP.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.7112 to US$1.00, the noon buying rate in effect on March 31, 2019 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

About Phoenix New Media Limited

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

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Phoenix New Media's strategic and operational plans, contain forward-looking statements. Phoenix New Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20-F and 6-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Phoenix New Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's goals and strategies; the Company's future business development, financial condition and results of operations; the expected growth of online and mobile advertising, online video and mobile paid services markets in China; the Company's reliance on online and mobile advertising and MVAS for a majority of its total revenues; the Company's expectations regarding demand for and market acceptance of its services; the Company's expectations regarding maintaining and strengthening its relationships with advertisers, partners and customers; the Company's investment plans and strategies, fluctuations in the Company's quarterly operating results; the Company's plans to enhance its user experience, infrastructure and services offerings; the Company's reliance on mobile operators in China to provide most of its MVAS; changes by mobile operators in China to their policies for MVAS; competition in its industry in China; and relevant government policies and regulations relating to the Company. Further information regarding these and other risks is included in the Company's filings with the SEC, including its registration statement on Form F-1, as amended, and its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Phoenix New Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries please contact:

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

ICR, Inc.
Jack Wang
Tel: +1 (646) 405-4883
Email: investorrelations@ifeng.com


                                                                                                
              
                Phoenix New Media Limited


                                                                                          
              
                Condensed Consolidated Balance Sheets


                                                                                                 
              
                (Amounts in thousands)


                                                                                                                         
              
                December 31,     March 31,      March 31,


                                             
              
                2018                                                                                2019           2019

                                                          ---

                                                                                                                              
              
                RMB     
     
        RMB     
     
        US$


                                                                                                                           
              
                Audited*       Unaudited      Unaudited



           
                ASSETS



           
                Current assets:



           Cash and cash equivalents                                                                                                                 174,024        295,729          44,065



           Term deposits and short term investments                                                                                                  912,594      1,194,317         177,959



           Restricted cash                                                                                                                           269,648        256,850          38,272



           Accounts receivable, net                                                                                                                  484,113        486,466          72,486



           Amounts due from related parties                                                                                                           91,228         89,374          13,317



           Prepayment and other current assets                                                                                                        88,963         94,066          14,016



           
                Total current assets                                                                                                       2,020,570      2,416,802         360,115




           
                Non-current assets:



           Property and equipment, net                                                                                                                95,631         88,217          13,145



           Intangible assets, net                                                                                                                     97,448         96,834          14,429



           Goodwill                                                                                                                                  338,288        338,288          50,406



           Available-for-sale debt investments                                                                                                     1,961,474      2,730,448         406,849



           Equity investments, net                                                                                                                    33,694         29,726           4,429



           Deferred tax assets                                                                                                                        60,160         55,978           8,341



           Operating lease right-of- use assets, net                                                                                                       -        93,551          13,940



           Other non-current assets                                                                                                                   23,454         18,070           2,693




           
                Total non-current assets                                                                                                   2,610,149      3,451,112         514,232



           
                Total assets                                                                                                               4,630,719      5,867,914         874,347




           
                LIABILITIES AND SHAREHOLDERS' EQUITY



           
                Current liabilities:



           Short-term loans                                                                                                                          267,665        242,406          36,120



           Accounts payable                                                                                                                          264,753        253,078          37,710



           Amounts due to related parties                                                                                                             25,218         18,070           2,693



           Advances from customers                                                                                                                    54,601         53,051           7,905



           Taxes payable                                                                                                                             101,386         95,159          14,179



           Salary and welfare payable                                                                                                                132,316         92,259          13,747



           Deposits from proposed buyers of investments in                                                                                                 -       673,350         100,332
      Particle



           Accrued expenses and other current liabilities                                                                                            227,328        264,347          39,388



           Operating lease liabilities                                                                                                                     -        27,195           4,052

                                                                                                                                                                                       ---


           
                Total current liabilities                                                                                                  1,073,267      1,718,915         256,126




           
                Non-current liabilities:



           Deferred tax liabilities                                                                                                                  140,960        216,084          32,198



           Long-term liabilities                                                                                                                      26,131         26,131           3,894



           Operating lease liabilities                                                                                                                     -        67,554          10,066

                                                                                                                                                                                       ---


           
                Total non-current liabilities                                                                                                167,091        309,769          46,158




           
                Total liabilities                                                                                                          1,240,358      2,028,684         302,284




           
                Shareholders' equity:



           Phoenix New Media Limited shareholders' equity:



           Class A ordinary shares                                                                                                                    17,487         17,494           2,607



           Class B ordinary shares                                                                                                                    22,053         22,053           3,286



           Additional paid-in capital                                                                                                              1,604,588      1,604,501         239,078



           Statutory reserves                                                                                                                         87,620         87,620          13,056



           Retained earnings                                                                                                                         159,621         39,884           5,943



           Accumulated other comprehensive income                                                                                                  1,188,358      1,886,567         281,107




           Total Phoenix New Media Limited shareholders' equity                                                                                    3,079,727      3,658,119         545,077



           Noncontrolling interests                                                                                                                  310,634        181,111          26,986




           
                Total shareholders' equity                                                                                                 3,390,361      3,839,230         572,063



           
                Total liabilities and shareholders' equity                                                                                 4,630,719      5,867,914         874,347






           * Derived from audited financial statements included in the Company's Form 20-F dated April 26, 2019.


                                                                                                                 
               Phoenix New Media Limited


                                                                                            
             
            Condensed Consolidated Statements of Comprehensive Income /(loss)


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




                                                                                                                                                                            
              
       Three Months Ended



                                                                                                                                                                                 March 31,                    December 31,  March 31,   March 31,


                                                                                                                                                                                      2018                             2018        2019         2019



                                                                                                                                                                                    RMB                           RMB          RMB         US$


                                                                                                                                                                                 Unaudited                     Unaudited    Unaudited   Unaudited





           
                Revenues:



             Net advertising revenues                                                                                                                                             243,448                          355,979     215,984       32,183



             Paid service revenues                                                                                                                                                 41,475                           43,255      68,890       10,265




           
                Total revenues                                                                                                                                            284,923                          399,234     284,874       42,448



           
                Cost of revenues                                                                                                                                        (128,744)                       (181,272)  (178,145)    (26,544)




           
                Gross profit                                                                                                                                              156,179                          217,962     106,729       15,904



           
                Operating expenses:



             Sales and marketing expenses                                                                                                                                       (131,219)                       (155,522)  (120,572)    (17,966)



             General and administrative expenses                                                                                                                                 (34,398)                        (44,670)   (48,852)     (7,279)



             Technology and product development expenses                                                                                                                         (48,412)                        (56,819)   (59,441)     (8,857)




           
                Total operating expenses                                                                                                                                (214,029)                       (257,011)  (228,865)    (34,102)




           
                Loss from operations                                                                                                                                     (57,850)                        (39,049)  (122,136)    (18,198)



           
                Other income/(loss):



             Interest income                                                                                                                                                       12,938                            8,608       8,658        1,290



             Interest expenses                                                                                                                                                    (4,633)                         (2,442)    (2,903)       (433)



             Foreign currency exchange loss                                                                                                                                      (15,131)                           (317)    (2,167)       (323)



             (Loss)/income from equity method investments, net                                                                                                                    (2,430)                           3,977     (3,968)       (591)
      of impairments



             Others, net                                                                                                                                                            4,093                            9,854       2,241          334




           
                Loss before tax                                                                                                                                          (63,013)                        (19,369)  (120,275)    (17,921)



             Income tax benefit/(expense)                                                                                                                                           4,724                         (20,220)    (7,461)     (1,112)




           
                Net loss                                                                                                                                                 (58,289)                        (39,589)  (127,736)    (19,033)



             Net loss attributable to noncontrolling interests                                                                                                                        749                            1,292       7,999        1,192




           
                Net loss attributable to Phoenix New Media Limited                                                                                                       (57,540)                        (38,297)  (119,737)    (17,841)




           
                Net loss                                                                                                                                                 (58,289)                        (39,589)  (127,736)    (19,033)



             Other comprehensive income, net of tax: fair value                                                                                                                    46,364                          462,558     725,403      108,088
      remeasurement for available-for-sale investments



             Other comprehensive loss, net of tax: foreign                                                                                                                       (35,014)                         (2,534)   (27,193)     (4,052)
      currency translation adjustment




           
                Comprehensive 
                (loss)/
                income                                                                                                    (46,939)                         420,435     570,474       85,003



             Comprehensive loss attributable to noncontrolling interests                                                                                                              749                            1,292       7,999        1,192



           
                Comprehensive 
                (loss)/
                income attributable to                                                                                    (46,190)                         421,727     578,473       86,195
      Phoenix New Media Limited




           
                Net 
                loss
                 attributable to Phoenix New Media Limited                                                                             (57,540)                        (38,297)  (119,737)    (17,841)



           Net loss per Class A and Class B ordinary share:



             Basic                                                                                                                                                                 (0.10)                          (0.07)     (0.21)      (0.03)



             Diluted                                                                                                                                                               (0.10)                          (0.07)     (0.21)      (0.03)



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



             Basic                                                                                                                                                                 (0.79)                          (0.53)     (1.65)      (0.25)



             Diluted                                                                                                                                                               (0.79)                          (0.53)     (1.65)      (0.25)



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



             Basic                                                                                                                                                            579,228,111                      582,137,314 582,187,109  582,187,109



             Diluted                                                                                                                                                          579,228,111                      582,137,314 582,187,109  582,187,109


                                                        
              
             Phoenix New Media Limited


                                                     
              
             Condensed Segments Information


                                                   
              
             (Amounts in 
                thousands)


                                          
       
       Three Months Ended



                                                  March 31,          
              
                December 31,       March 31,       March 31,


                                                       2018                                           2018             2019             2019



                                            
       
        RMB                  
              
                RMB       
     
        RMB      
     
        US$


                                                  Unaudited            
              
                Unaudited        Unaudited       Unaudited





     
                Revenues:



       Net advertising service                     243,448                                        355,979          215,984           32,183



       Paid service                                 41,475                                         43,255           68,890           10,265




     
                Total revenues                   284,923                                        399,234          284,874           42,448




     
                Cost of revenues



       Net advertising service                     107,453                                        166,652          140,060           20,869



       Paid service                                 21,291                                         14,620           38,085            5,675



                   Total cost of revenues           128,744                                        181,272          178,145           26,544




     
                Gross profit



       Net advertising service                     135,995                                        189,327           75,924           11,314



       Paid service                                 20,184                                         28,635           30,805            4,590



                   Total gross profit               156,179                                        217,962          106,729           15,904


                                                    
             
                Phoenix New Media Limited


                                               
          
                Condensed Information of Cost of Revenues


                                                  
          
                (Amounts in 
                thousands)


                                          
       
            Three Months Ended



                                                       March 31,             
              
                December 31,      March 31,       March 31,


                                                            2018                                              2018            2019             2019



                                            
        
            RMB                     
              
                RMB      
     
        RMB      
     
        US$


                                                       Unaudited               
              
                Unaudited       Unaudited       Unaudited





     Revenue sharing fees                                 8,617                                            13,201          17,329            2,582



     Content and operational costs                      105,784                                           153,866         146,961           21,898



     Bandwidth costs                                     14,343                                            14,205          13,855            2,064



     
                Total cost of revenues                128,744                                           181,272         178,145           26,544


                                                                                                                                                           
              
            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 March 31, 2018            Three Months Ended December 31, 2018                                                           Three Months Ended March 31, 2019

                                                                                                                                                                                                                                              ---

                                                                                                                            
        
        Non-GAAP                                                                                                                       
              
        Non-GAAP                                                              
        
        Non-GAAP


                                                                                       
        
                GAAP                          Adjustments                    
          
                Non-GAAP                    
              
                GAAP                                    Adjustments            
        
       Non-GAAP       
      
        GAAP                     Adjustments              
         
       Non-GAAP

                                                                                                                                                                                                                                                                                                                                                                                                               ---

                                                                                        
        
                RMB                  
        
          RMB                           
          
                RMB                       
              
                RMB                        
            
          RMB                   
       
        RMB          
      
        RMB             
        
          RMB                     
        
        RMB


                                                                                     
        
                Unaudited             
        
        Unaudited                                          Unaudited                                         Unaudited                 
              
        Unaudited                       Unaudited            Unaudited        
        
        Unaudited                          Unaudited



           
                Gross profit                                                                               156,179                     205               (1)                         156,384                                            217,962                                        2,469       (1)              220,431               106,729                         1,441         (1)               108,170



           Gross margin                                                                                              54.9%                                                                   55.0%                                             54.6%                                                                     55.2%                37.5%                                                         38.0%



           
                Loss from                                                                                 (57,850)                  3,450               (1)                        (54,400)                                          (39,049)                                       4,614       (1)             (34,435)            (122,136)                        3,987         (1)             (118,149)
      operations



           Operating margin                                                                                        (20.3)%                                                                 (19.1)%                                            (9.8)%                                                                    (8.6)%              (42.9)%                                                       (41.5)%


                                                                                                                                           3,450               (1)                                                                                                                         4,614       (1)                                                                  3,987         (1)


                                                                                                                                           2,430               (2)                                                                                                                       (3,977)      (2)                                                                  3,968         (2)




           
                Net loss                                                                                  (57,540)                  5,880                                          (51,660)                                          (38,297)                                         637                       (37,660)            (119,737)                        7,955                         (111,782)
      attributable to
      Phoenix New
      Media Limited




           Net margin                                                                                              (20.2)%                                                                 (18.2)%                                            (9.6)%                                                                    (9.4)%              (42.0)%                                                       (39.2)%



           Net loss per ADS-                                                                                        (0.79)                                                                  (0.71)                                            (0.53)                                                                    (0.52)               (1.65)                                                        (1.54)
      diluted



           Weighted average                                                                                     72,403,514                                                               72,403,514                                         72,767,164                                                                 72,767,164            72,773,389                                                     72,773,389
      number of ADSs
      used in computing
      diluted net loss per
      ADS







           (1) Share-based compensation



           (2) (Income)/loss from equity method investments, net of 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-first-quarter-2019-unaudited-financial-results-300848779.html

SOURCE Phoenix New Media Limited