Phoenix New Media Reports Second Quarter 2019 Unaudited Financial Results

BEIJING, Aug. 12, 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 second quarter ended June 30, 2019.

Mr. Shuang Liu, CEO of Phoenix New Media, commented, "Despite a challenging macroeconomic environment during the second quarter of 2019, we remained committed to the sustained growth and evolution of our business. During the second quarter, we continued to refine our combination of AI-powered content recommendation and seasoned editorial curation. Moreover, we further expanded our market-leading content library, which allowed us to explore additional monetization opportunities. Going forward, we are confident that our robust content recommendation system, premium brand equity, and innovative growth initiatives will further solidify our leadership in China's new media industry."

Ms. Betty Ho, CFO of Phoenix New Media, further stated, "In the second quarter of 2019, our total revenues reached RMB395.1 million, representing an 8.6% year-over-year growth and 38.7% sequential growth. Importantly, total revenues for paid services in the second quarter of 2019 increased by 51.1% year over year to RMB70.3 million, mainly driven by the outstanding performance of our digital reading business since the acquisition of Tadu. Also, our new business initiatives made material contributions to our growth as we continued to deliver a broad range of informative content in lifestyle-related categories such as real estate, food, and fashion. Our net advertising revenues for the second quarter of 2019 increased by 2.3% year over year to RMB324.8 million. Looking ahead, we will continue to invest in the development of AI technology, production of in-house content, and expansion of lifestyle verticals. We are confident that through our strategic allocation of capital and well-defined business objectives we will continue to generate long-term return to our shareholders."

Second Quarter 2019 Financial Results

REVENUES

Total revenues for the second quarter of 2019 were RMB395.1 million (US$57.5 million), representing an increase of 8.6% from RMB363.9 million in the second quarter of 2018. The increase was caused by the consolidated revenues of RMB49.2 million (US$7.2 million) in the second quarter of 2019 from Beijing Yitian Xindong Network Technology Co., Ltd. ("Yitian Xindong" or "Tadu") consolidated starting from December 28, 2018 and the consolidated revenues of RMB84.6 million (US$12.3 million), starting from April 1, 2019, from Beijing Fenghuang Tianbo Network Technology Co., Ltd. ("Tianbo"). The Company's net advertising revenues from traditional business decreased by 28.5% due to the macroeconomic uncertainties and increased competitions.

Net advertising revenues for the second quarter of 2019 were RMB324.8 million (US$47.3 million), representing an increase of 2.3% from RMB317.4 million in the second quarter of 2018. The increase was primarily attributable to the consolidation of advertising revenues from Tianbo. However, the Company's net advertising revenues from traditional business declined due to the above stated reason.

Paid services revenues([1]) for the second quarter of 2019 were RMB70.3 million (US$10.2 million), which represented an increase of 51.1% from RMB46.5 million in the second quarter of 2018. Revenues from paid contents for the second quarter of 2019 increased by 126.7% to RMB54.0 million (US$7.9 million) from RMB23.8 million in the second quarter of 2018, primarily due to the consolidation of digital reading revenues from Tadu. Revenues from games for the second quarter of 2019 were RMB2.6 million (US$0.4 million), which represented a decrease of 34.7% from RMB4.0 million in the second quarter of 2018. Revenues from MVAS for the second quarter of 2019 were RMB6.7 million (US$1.0 million), which represented a decrease of 62.0% from RMB17.5 million in the second quarter of 2018. Revenues from others for the second quarter of 2019 increased to RMB7.0 million (US$1.0 million) from RMB1.2 million in the second quarter of 2018, representing an increase of 513.4% year-over-year, which was mainly caused by the increase in revenues from E-commerce and online real estate related services.


                        [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 second quarter of 2019 was RMB185.0 million (US$26.9 million), representing an increase of 37.7% from RMB134.3 million in the second quarter of 2018. The increase in cost of revenues was mainly due to the following:

    --  Content and operational costs for the second quarter of 2019 increased
        to RMB156.4 million (US$22.7 million) from RMB108.9 million in the
        second quarter of 2018, primarily attributable to the consolidation of
        content and operational costs of Tianbo and Tadu, and due to an increase
        in IP production costs.
    --  Revenue sharing fees to telecom operators and channel partners for the
        second quarter of 2019 increased to RMB13.7 million (US$2.0 million)
        from RMB11.5 million in the second quarter of 2018, primarily
        attributable to the increase in revenue sharing fees paid to content
        providers by Tadu.
    --  Bandwidth costs for the second quarter of 2019 increased to RMB14.9
        million (US$2.2 million) from RMB13.9 million in the second quarter of
        2018.
    --  Share-based compensation included in cost of revenues was RMB1.9 million
        (US$0.3 million) in the second quarter of 2019, as compared to RMB0.6
        million the second quarter of 2018, primarily attributable to the
        restricted share units newly granted to some employees in 2019 under a
        restricted share unit scheme adopted in 2018 by Fread Limited, a
        subsidiary of the Company.

GROSS PROFIT

Gross profit for the second quarter of 2019 decreased to RMB210.1 million (US$30.6 million) from RMB229.6 million in the second quarter of 2018. Gross margin for the second quarter of 2019 decreased to 53.2% from 63.1% in the second quarter of 2018, mainly attributable to a combined effect of a decrease in gross margin of the Company's traditional advertising business and the margin contributions from Tianbo and Tadu.

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 excludes 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 2019, which excluded share-based compensation, decreased to 53.7% from 63.3% in the second quarter of 2018.

OPERATING EXPENSES AND INCOME/(LOSS) FROM OPERATIONS

Total operating expenses for the second quarter of 2019 increased by 44.5% to RMB289.1 million (US$42.1 million) from RMB200.2 million in the second quarter of 2018, primarily attributable to the consolidation of operating expenses from Tianbo and Tadu. Share-based compensation included in operating expenses was RMB2.3 million (US$0.3 million) in the second quarter of 2019, as compared to RMB2.8 million in the second 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 second quarter of 2019 for share options granted prior to 2019.

Loss from operations for the second quarter of 2019 was RMB79.0 million (US$11.5 million), as compared to income from operations of RMB29.4 million in the second quarter of 2018. Operating margin for the second quarter of 2019 decreased to negative 20.0% from positive 8.1% in the second quarter of 2018.

Non-GAAP loss from operations for the second quarter of 2019, which excluded share-based compensation, was RMB74.8 million (US$10.9 million), as compared to non-GAAP income from operations of RMB32.8 million in the second quarter of 2018. Non-GAAP operating margin for the second quarter of 2019, which excluded share-based compensation, decreased to negative 18.9% from positive 9.0% in the second 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 second quarter of 2019 was RMB11.1 million (US$1.6 million), as compared to RMB28.1 million in the second quarter of 2018.

    --  Interest income for the second quarter of 2019 decreased to RMB4.6
        million (US$0.7 million) from RMB13.6 million in the second quarter of
        2018, primarily due to decrease in the loans granted to Particle, which
        were fully settled in the third quarter of 2018.
    --  Interest expense for the second quarter of 2019 decreased to RMB1.7
        million (US$0.3 million), from RMB3.4 million in the second quarter of
        2018, which was primarily due to the decrease in outstanding short-term
        bank loans as the Company repaid all of the short-term bank loans in the
        second quarter of 2019.
    --  Foreign currency exchange gain for the second quarter of 2019 was RMB2.9
        million (US$0.4 million), as compared to RMB16.2 million in the second
        quarter of 2018. This decrease was mainly caused by the less significant
        depreciation of Renminbi against US dollars in the second quarter of
        2019, as compared to that of 2018, which generated less exchange gain in
        Renminbi denominated liabilities recorded in the Company's subsidiaries
        whose functional currency is not Renminbi.
    --  Income from equity method investments, net of impairments, for the
        second quarter of 2019 was RMB0.5 million (US$0.1 million), as compared
        to loss from equity method investments, net of impairments, of RMB0.4
        million in the second quarter of 2018. The Company recognized income
        from equity method investments, net of impairments, of RMB0.5 million
        (US$0.1 million) as a result of the re-measurement of the previously
        held equity interests upon completion of the step acquisition in Tianbo
        on April 1, 2019, which was previously accounted using the equity method
        of accounting.
    --  Others, net increased to RMB4.8 million (US$0.7 million) in the second
        quarter of 2019 from RMB2.1 million in the second quarter of 2018, which
        was primarily attributable to the increase of the government subsidies
        received in the second quarter of 2019 as compared to that of 2018.

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

NET INCOME/(LOSS) ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Net loss attributable to Phoenix New Media Limited for the second quarter of 2019 was RMB70.1 million (US$10.2 million), as compared to net income attributable to Phoenix New Media Limited of RMB49.2 million in the second quarter of 2018. Net margin for the second quarter of 2019 decreased to negative 17.7% from positive 13.5% in the second quarter of 2018. Net loss per diluted ADS([3]) in the second quarter of 2019 was RMB0.96 (US$0.14), as compared to net income per diluted ADS of RMB0.67 in the second quarter of 2018.

Non-GAAP net loss attributable to Phoenix New Media Limited for the second quarter of 2019, which excluded share-based compensation and income or loss from equity method investments, net of impairments, was RMB66.4 million (US$9.7 million), as compared to non-GAAP net income attributable to Phoenix New Media Limited of RMB53.1 million in the second quarter of 2018. Non-GAAP net margin for the second quarter of 2019 decreased to negative 16.8% from positive 14.6% in the second quarter of 2018. Non-GAAP net loss per diluted ADS in the second quarter of 2019 was RMB0.91 (US$0.13), as compared to non-GAAP net income per diluted ADS of RMB0.73 in the second quarter of 2018.

For the second quarter of 2019, the Company's weighted average number of ADSs used in the computation of diluted net loss per ADS was 72,783,430. As of June 30, 2019, the Company had a total of 582,324,325 ordinary shares outstanding, or the equivalent of 72,790,541 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 June 30, 2019, the Company's cash and cash equivalents, term deposits and short term investments and restricted cash were RMB1.69 billion (US$245.8 million), which included RMB251.6 million (US$36.7 million) from Tianbo and RMB16.3 million (US$2.4 million) from Tadu.

As previously announced by the Company, on July 23, 2019, the Company entered into a supplemental agreement (the "Supplemental Agreement") to the share purchase agreement (the "SPA") dated March 22, 2019 between the Company and Run Liang Tai Management Limited ("Run Liang Tai") for the sale of 32% of the total outstanding shares of Particle Inc. ("Particle" or "Yidian") to Run Liang Tai and its designated entities (the "Proposed Buyers") (the "Proposed Transaction"). The Company agrees to increase the number of Particle shares to be transferred to the Proposed Buyers from 199,866,509 shares to 212,358,165 shares while the total purchase price will remain unchanged at US$448 million. Instead of requiring full payment of the purchase price after satisfaction of all closing conditions, the Supplemental Agreement allows the Proposed Buyers to pay the purchase price in several installments. In addition to the deposit of US$100 million received in March 2019, the Proposed Buyers have paid the first installment of US$100 million to the Company according to the Supplemental Agreement. Unless otherwise agreed by both parties, the Proposed Buyers may pay the remaining purchase price on or before August 10, 2020. There can be no assurance that the Proposed Transaction will ever be closed. The fair value of available-for-sale debt investments in Particle decreased from RMB2,728.4 million as of March 31, 2019 to RMB2,271.1 million (US$330.8 million) as of June 30, 2019, mainly due to the decrease in the per-share value of Particle shares held by the Company as more shares would be transferred to the Proposed Buyers with the same total purchase price, and the time value of the purchase price used in the valuation of available-for-sale debt investments in Particle for the second quarter of 2019.

Business Outlook

For the third quarter of 2019, the Company expects its total revenues to be between RMB373.4 million and RMB393.4 million; net advertising revenues are expected to be between RMB312.0 million and RMB327.0 million; and paid services revenues are expected to be between RMB61.4 million and RMB66.4 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 12, 2019, (August 13, 2019 at 9:00 a.m. Beijing/Hong Kong time) to discuss its second 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 67135090



              Mainland China:                                 4006208038



              Hong Kong:                        
              +852 30186771



              United States:                    
              +1 8456750437



              United Kingdom:                  
              +44 2036214779



              Australia:                        
              +61 290833212



              Conference ID:                                     2384599

A replay of the call will be available through August 20, 2019, by using the dial-in numbers and conference ID below:



              International:                  
              +61 2 8199 0299



              Mainland China:                                 4006322162



              Hong Kong:                        
              +852 30512780



              United States:                    
              +1 6462543697



              Conference ID:                                     2384599

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 RMB6.8650 to US$1.00, the noon buying rate in effect on June 30, 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,       
        
        June 30,     
        
        June 30,


                                                                         
              
                2018                                                                                                             2019                   2019

                                                                                      ---

                                                                                                                                                                                        
              
         RMB              
        
        RMB          
        
        US$


                                                                                                                                                                                      
              
         Audited*        
        
        Unaudited    
        
        Unaudited



              
                ASSETS



              
                Current assets:



              Cash and cash equivalents                                                                                                                                                                       174,024                501,046                  72,986



              Term deposits and short term investments                                                                                                                                                        912,594                941,226                 137,105



              Restricted cash                                                                                                                                                                                 269,648                245,017                  35,691



              Accounts receivable, net                                                                                                                                                                        484,113                609,344                  88,761



              Amounts due from related parties                                                                                                                                                                 91,228                 75,889                  11,054



              Prepayment and other current assets                                                                                                                                                              88,963                111,296                  16,212



              
                Total current assets                                                                                                                                                             2,020,570              2,483,818                 361,809




              
                Non-current assets:



              Property and equipment, net                                                                                                                                                                      95,631                 95,900                  13,969



              Intangible assets, net                                                                                                                                                                           97,448                 98,293                  14,318



              Goodwill                                                                                                                                                                                        338,288                361,074                  52,596



              Available-for-sale debt investments                                                                                                                                                           1,961,474              2,273,126                 331,118



              Equity investments, net                                                                                                                                                                          33,694                 13,236                   1,928



              Deferred tax assets                                                                                                                                                                              60,160                 70,649                  10,292



              Operating lease right-of- use assets, net**                                                                                                                                                           -               100,122                  14,584



              Other non-current assets                                                                                                                                                                         23,454                 20,061                   2,923




              
                Total non-current assets                                                                                                                                                         2,610,149              3,032,461                 441,728



              
                Total assets                                                                                                                                                                     4,630,719              5,516,279                 803,537




              
                LIABILITIES AND SHAREHOLDERS' EQUITY



              
                Current liabilities:



              Short-term loans                                                                                                                                                                                267,665                                             -



              Accounts payable                                                                                                                                                                                264,753                213,316                  31,073



              Amounts due to related parties                                                                                                                                                                   25,218                 18,683                   2,721



              Advances from customers                                                                                                                                                                          54,601                 71,481                  10,412



              Taxes payable                                                                                                                                                                                   101,386                129,324                  18,838



              Salary and welfare payable                                                                                                                                                                      132,316                134,181                  19,547



              Deposits from proposed buyers of investments in Particle                                                                                                                                              -               687,470                 100,141



              Accrued expenses and other current liabilities                                                                                                                                                  227,328                589,616                  85,888



              Operating lease liabilities**                                                                                                                                                                         -                33,996                   4,952

                                                                                                                                                                                                                                                                ---


              
                Total current liabilities                                                                                                                                                        1,073,267              1,878,067                 273,572




              
                Non-current liabilities:



              Deferred tax liabilities                                                                                                                                                                        140,960                171,065                  24,918



              Long-term liabilities                                                                                                                                                                            26,131                 26,131                   3,806



              Operating lease liabilities**                                                                                                                                                                         -                67,830                   9,881

                                                                                                                                                                                                                                                                ---


              
                Total non-current liabilities                                                                                                                                                      167,091                265,026                  38,605




              
                Total liabilities                                                                                                                                                                1,240,358              2,143,093                 312,177




              
                Shareholders' equity:



              Phoenix New Media Limited shareholders' equity:



              Class A ordinary shares                                                                                                                                                                          17,487                 17,499                   2,549



              Class B ordinary shares                                                                                                                                                                          22,053                 22,053                   3,212



              Additional paid-in capital                                                                                                                                                                    1,604,588              1,605,745                 233,903



              Statutory reserves                                                                                                                                                                               87,620                 87,620                  12,763



              Retained earnings/(accumulated deficits)                                                                                                                                                        159,621               (30,231)                (4,404)



              Accumulated other comprehensive income                                                                                                                                                        1,188,358              1,468,429                 213,901




              Total Phoenix New Media Limited shareholders' equity                                                                                                                                          3,079,727              3,171,115                 461,924



              Noncontrolling interests                                                                                                                                                                        310,634                202,071                  29,436




              
                Total shareholders' equity                                                                                                                                                       3,390,361              3,373,186                 491,360



              
                Total liabilities and shareholders' equity                                                                                                                                       4,630,719              5,516,279                 803,537






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



              ** The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee recognize the assets and
    liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability relating to lease payments (the Lease Liability)
    in the statements of financial position for lease contracts having terms beyond 12 months period.


                                                                                                                
              
                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                          
              
                Six Months Ended

                                                                                                                                                                                                                 ---

                                                                   
       
         June 30,                         March 31,              
              
                June 30,               
              
        June 30,         
       
       June 30,      
       
       June 30,       
       
       June 30,


                                                                                  2018                              2019                                            2019                                    2019                      2018                   2019                    2019



                                                                     
       
          RMB             
        
               RMB                    
              
                RMB                    
              
        US$             
       
        RMB          
       
        RMB           
       
        US$


                                                                   
       
         Unaudited                        Unaudited                                      Unaudited                              Unaudited        
       
       Unaudited             Unaudited              Unaudited





           
                Revenues:



             Net advertising revenues                                         317,344                           215,984                                         324,738                                  47,303                   560,792                540,722                  78,765



             Paid service revenues                                             46,538                            68,890                                          70,338                                  10,246                    88,013                139,228                  20,281




           
                Total revenues                                        363,882                           284,874                                         395,076                                  57,549                   648,805                679,950                  99,046



           Cost of revenues                                                 (134,296)                        (178,145)                                      (184,951)                               (26,941)                (263,040)             (363,096)               (52,891)




           
                Gross profit                                          229,586                           106,729                                         210,125                                  30,608                   385,765                316,854                  46,155



           
                Operating expenses:



             Sales and marketing expenses                                   (109,823)                        (120,572)                                      (163,655)                               (23,839)                (241,042)             (284,227)               (41,402)



             General and administrative expenses                             (41,808)                         (48,852)                                       (65,380)                                (9,524)                 (76,206)             (114,232)               (16,640)



             Technology and product development                              (48,523)                         (59,441)                                       (60,121)                                (8,758)                 (96,935)             (119,562)               (17,416)
      expenses




           Total operating expenses                                         (200,154)                        (228,865)                                      (289,156)                               (42,121)                (414,183)             (518,021)               (75,458)




           
                Income/(loss) from operations                          29,432                         (122,136)                                       (79,031)                               (11,513)                 (28,418)             (201,167)               (29,303)



           
                Other income/(loss):



             Interest income                                                   13,550                             8,658                                           4,637                                     675                    26,488                 13,295                   1,937



             Interest expense                                                 (3,389)                          (2,903)                                        (1,730)                                  (252)                  (8,022)               (4,633)                  (675)



             Foreign currency exchange gain/(loss)                             16,231                           (2,167)                                          2,922                                     426                     1,100                    755                     110



            (Loss)/income from equity investments, net                          (435)                          (3,968)                                            521                                      76                   (2,865)               (3,447)                  (502)
      of impairments



             Others, net                                                        2,128                             2,241                                           4,789                                     698                     6,221                  7,030                   1,024




           
                Income/(loss) before tax                               57,517                         (120,275)                                       (67,892)                                (9,890)                  (5,496)             (188,167)               (27,409)



             Income tax expense                                               (8,498)                          (7,461)                                        (2,977)                                  (434)                  (3,774)              (10,438)                (1,520)




           
                Net income/(loss)                                      49,019                         (127,736)                                       (70,869)                               (10,324)                  (9,270)             (198,605)               (28,929)



             Net loss attributable to noncontrolling                              222                             7,999                                             754                                     110                       971                  8,753                   1,275
      interests




           
                Net income/(loss) attributable to Phoenix              49,241                         (119,737)                                       (70,115)                               (10,214)                  (8,299)             (189,852)               (27,654)
      New Media Limited




           
                Net income/(loss)                                      49,019                         (127,736)                                       (70,869)                               (10,324)                  (9,270)             (198,605)               (28,929)



             Other comprehensive income/(loss), net of                          5,287                           725,403                                       (463,083)                               (67,456)                   51,651                262,320                  38,211
      tax: fair value remeasurement for
      available-for-sale investments



             Other comprehensive income/(loss), net of                         49,376                          (27,193)                                         44,944                                   6,547                    14,362                 17,751                   2,586
      tax: foreign currency translation
      adjustment




           
                Comprehensive income/(loss)                           103,682                           570,474                                       (489,008)                               (71,233)                   56,743                 81,466                  11,868



             Comprehensive loss attributable to                                   222                             7,999                                             754                                     110                       971                  8,753                   1,275
      noncontrolling interests



           
                Comprehensive income/(loss) attributable              103,904                           578,473                                       (488,254)                               (71,123)                   57,714                 90,219                  13,143
      to Phoenix New Media Limited




           
                Net income/(loss) attributable to Phoenix              49,241                         (119,737)                                       (70,115)                               (10,214)                  (8,299)             (189,852)               (27,654)
      New Media Limited



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



             Basic                                                               0.08                            (0.21)                                         (0.12)                                 (0.02)                   (0.01)                (0.33)                 (0.05)



             Diluted                                                             0.08                            (0.21)                                         (0.12)                                 (0.02)                   (0.01)                (0.33)                 (0.05)



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



             Basic                                                               0.68                            (1.65)                                         (0.96)                                 (0.14)                   (0.11)                (2.61)                 (0.38)



             Diluted                                                             0.67                            (1.65)                                         (0.96)                                 (0.14)                   (0.11)                (2.61)                 (0.38)



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



             Basic                                                        580,976,381                       582,187,109                                     582,267,440                             582,267,440               580,102,974            582,227,496             582,227,496



             Diluted                                                      584,945,765                       582,187,109                                     582,267,440                             582,267,440               580,102,974            582,227,496             582,227,496


                                                                                        
          
          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,


                                                       2018                    2019                               2019                          2019              2018               2019                2019



                                            
       
        RMB             
     
        RMB             
        
                RMB                   
     
        US$       
     
        RMB        
     
        RMB         
     
        US$


                                                  Unaudited              Unaudited                         Unaudited                    Unaudited        Unaudited         Unaudited          Unaudited





     
                Revenues:



       Net advertising service                     317,344                 215,984                            324,738                        47,303           560,792            540,722              78,765



       Paid services                                46,538                  68,890                             70,338                        10,246            88,013            139,228              20,281




     
                Total revenues                   363,882                 284,874                            395,076                        57,549           648,805            679,950              99,046




     
                Cost of revenues



       Net advertising service                     110,909                 140,060                            146,869                        21,394           218,362            286,929              41,796



       Paid services                                23,387                  38,085                             38,082                         5,547            44,678             76,167              11,095



                   Total cost of revenues           134,296                 178,145                            184,951                        26,941           263,040            363,096              52,891




     
                Gross profit



       Net advertising service                     206,435                  75,924                            177,869                        25,909           342,430            253,793              36,969



       Paid services                                23,151                  30,805                             32,256                         4,699            43,335             63,061               9,186



                   Total gross profit               229,586                 106,729                            210,125                        30,608           385,765            316,854              46,155


                                                                                    
         
               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,


                                                       2018                    2019                                     2019                        2019              2018               2019                2019



                                            
       
        RMB             
     
        RMB             
              
                RMB                 
     
        US$       
     
        RMB        
     
        RMB         
     
        US$


                                                  Unaudited              Unaudited                               Unaudited                  Unaudited        Unaudited         Unaudited          Unaudited





     Revenue sharing fees                           11,460                  17,329                                   13,676                       1,992            20,077             31,005               4,516



     Content and operational costs                 108,937                 146,961                                  156,346                      22,774           214,721            303,307              44,182



     Bandwidth costs                                13,899                  13,855                                   14,929                       2,175            28,242             28,784               4,193



     
                Total cost of revenues           134,296                 178,145                                  184,951                      26,941           263,040            363,096              52,891


                                                                                                                                                     
              
                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, 2018                                   Three Months Ended March 31, 2019                                         Three Months Ended June 30, 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                                            229,586                                       634    (1)                     230,220                                            106,729                                                1,441        (1)              108,170               210,125                         1,893         (1)               212,018



           Gross margin                                                           63.1%                                                                      63.3%                                             37.5%                                                                              38.0%                53.2%                                                         53.7%


                         Income/(loss) from                                       29,432                                     3,390    (1)                      32,822                                          (122,136)                                               3,987        (1)            (118,149)             (79,031)                        4,227         (1)              (74,804)
      operations



           Operating margin                                                        8.1%                                                                       9.0%                                           (42.9)%                                                                            (41.5)%              (20.0)%                                                       (18.9)%


                                                                                                                          3,390    (1)                                                                                                                             3,987        (1)                                                                  4,227         (1)


                                                                                                                            435    (2)                                                                                                                             3,968        (2)                                                                  (521)        (2)


                         Net income/(loss)                                        49,241                                     3,825                             53,066                                          (119,737)                                               7,955                       (111,782)             (70,115)                        3,706                          (66,409)
      attributable to
      Phoenix New
      Media Limited




           Net margin                                                             13.5%                                                                      14.6%                                           (42.0)%                                                                            (39.2)%              (17.7)%                                                       (16.8)%



           Net income/(loss) per                                                   0.67                                                                        0.73                                             (1.65)                                                                             (1.54)               (0.96)                                                        (0.91)
      ADS-diluted



           Weighted average                                                  73,118,221                                                                  73,118,221                                         72,773,389                                                                          72,773,389            72,783,430                                                     72,783,430
      number of ADSs
      used in computing
      diluted net
      income/(loss) per
      ADS







           (1) Share-based compensation



           (2) Loss/(income) 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-second-quarter-2019-unaudited-financial-results-300899962.html

SOURCE Phoenix New Media Limited