BEIJING, Nov. 11, 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 third quarter ended September 30, 2019.
Mr. Shuang Liu, CEO of Phoenix
New Media, commented, "Despite the continuing macroeconomic
headwinds, we have been able to revitalize and sustain the growth
of our businesses. Leveraging our continued professional journalism
and by combining our seasoned editorial daily picks and AI-powered
recommendation engine, we have improved our user acquisition,
retention, and engagement rates. During the third quarter, we
upgraded our iFeng app, expanded our proprietary content library,
advanced our in-house production capability, and enhanced our
vertical channels. As a result, we sharpened our competitive edge
and cultivated our monetization potential. While we continue to
optimize our cost structure, the first tranche of proceeds from the
Yidian transaction has provided us with sufficient working capital
to fuel our long-term growth engine. Looking ahead, we are
confident that we have the right team, strategy, and knowhow to
adapt to the changing market dynamics and thrive in the new media
industry."
Ms. Betty Ho, CFO of Phoenix New
Media, further stated, "In the third quarter of 2019, our total
revenues increased by 15.4% year-over-year, out of which,
total net advertising revenues increased by 16.4% and total
paid services revenues increased by 10.0% year-over-year,
mainly driven by the consolidation of revenues from Tianbo and
Tadu. As I pass the financial leadership role to our next CFO,
Edward Lu, we are confident that as
we continuing to optimize our product, to strengthen our content
initiatives, and with the adequate working capital resources, we
are well positioned for a renewed growth cycle."
Third Quarter 2019 Financial Results
REVENUES
Total revenues for the third quarter of 2019 were RMB380.2 million (US$53.2
million), representing an increase of 15.4% from
RMB329.3 million in the third quarter
of 2018. The increase was caused by the addition of consolidated
revenues of RMB40.3 million
(US$5.6 million) in the third quarter
of 2019 from Beijing Yitian Xindong Network Technology
Co., Ltd. ("Yitian Xindong" or "Tadu"), which has been
consolidated starting from December 28,
2018 and the consolidated revenues of RMB80.1 million (US$11.2
million) in the third quarter of 2019 from Beijing Fenghuang
Tianbo Network Technology Co., Ltd. ("Tianbo"), which has been
consolidated starting from April 1, 2019.
Net advertising revenues for the third quarter of 2019 were
RMB327.6 million (US$45.8 million), representing an increase
of 16.4% from RMB281.5 million in the third quarter of
2018. The increase was primarily attributable to the consolidation
of advertising revenues from Tianbo and Tadu. The Company's net
advertising revenues from traditional business decreased by 16.2%
due to the macroeconomic uncertainties and increased
competitions.
Paid services revenues[1] for the third quarter
of 2019 were RMB52.6 million
(US$7.4 million), which represented
an increase of 10.0% from RMB47.8
million in the third quarter of 2018. Revenues from paid
contents for the third quarter of 2019 increased by 39.5% to
RMB39.2 million (US$5.5 million) from RMB28.1 million in the third quarter of 2018,
primarily attributable to the consolidation of digital reading
revenues from Tadu, which was partially offset by a decrease in the
Company's traditional digital reading business due to the
regulatory tightening on digital reading sector in China. Revenues from games for the third
quarter of 2019 were RMB2.5 million
(US$0.3 million), which represented a
decrease of 27.8% from RMB3.4 million
in the third quarter of 2018. Revenues from MVAS for the third
quarter of 2019 were RMB1.7 million
(US$0.2 million), which represented a
decrease of 84.7% from RMB10.8
million in the third quarter of 2018. Revenues from others
for the third quarter of 2019 increased to RMB9.2 million (US$1.4
million) from RMB5.5 million
in the third quarter of 2018, representing an increase of 68.6%
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 third quarter of 2019 was RMB194.3 million (US$27.2
million), representing an increase of 27.6% from
RMB152.2 million in the third quarter
of 2018. The increase in cost of revenues was mainly due to the
following:
- Content and operational costs for the third quarter of 2019
increased to RMB161.6 million
(US$22.7 million) from RMB123.2 million in the third quarter of 2018,
primarily attributable to the consolidation of content and
operational costs of Tianbo and Tadu.
- Revenue sharing fees to telecom operators and channel partners
for the third quarter of 2019 increased to RMB17.4 million (US$2.4
million) from RMB14.3 million
in the third quarter of 2018, primarily attributable to the
increase in revenue sharing fees paid to content providers by
Tadu.
- Bandwidth costs for the third quarter of 2019 increased to
RMB15.3 million (US$2.1 million) from RMB14.7 million in the third quarter of
2018.
- Share-based compensation included in cost of revenues was
RMB1.9 million (US$0.3 million) in the third quarter of 2019, as
compared to RMB0.4 million the third
quarter of 2018, primarily attributable to the restricted share
units newly granted to some employees in 2019 under the restricted
share unit scheme adopted in 2018 by Fread Limited, a subsidiary of
the Company, and the options newly granted by the Company in
July 2019.
GROSS PROFIT
Gross profit for the third quarter of 2019 increased to
RMB186.0 million (US$26.0 million) from RMB177.1 million in the third quarter of 2018.
Gross margin for the third quarter of 2019 decreased to 48.9% from
53.8% in the third quarter of 2018, mainly attributable to a
decrease in gross margin of the Company's traditional advertising
business and the acquisition of Tadu, partially offset by the
margin contribution from Tianbo.
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 third quarter of 2019, which
excluded share-based compensation, decreased to 49.4% from 53.9% in
the third quarter of 2018.
OPERATING EXPENSES OR GAINS AND LOSS
FROM OPERATIONS
Total operating expenses for the third quarter of 2019 decreased
by 15.8% to RMB196.7 million
(US$27.5 million) from RMB233.7 million in the third quarter of 2018,
primarily attributable to the gain of RMB62.1 million arising from the changes in fair
value of financial assets-contingent returnable consideration and a
decrease in bad debt provision primarily caused by the collection
of previously fully-reserved receivables of RMB16.2 million in the third quarter of 2019,
which was partially offset by the consolidation of operating
expenses from Tianbo and Tadu. Share-based compensation included in
operating expenses was RMB3.4 million
(US$0.5 million) in the third quarter
of 2019, as compared to RMB2.1
million in the third quarter of 2018, mainly caused by the
options newly granted by the Company in July
2019.
Changes in fair value of financial assets-contingent returnable
consideration for the third quarter of 2019 was a gain of
RMB62.1 million (US$8.7 million), which represented the changes in
fair value of the Company's right to receive the contingent
returnable consideration in relation to the acquisition of Tadu,
subject to certain price adjustment mechanisms based on Tadu's
operating and financial performance in 2019 and 2020. The Company
recorded the financial assets-contingent returnable consideration
as prepayments and other current assets in the balance sheet. Based
on Tadu's estimated operating and financial performance in 2019,
the Company adjusted the fair value of financial assets-contingent
returnable consideration and recognized the changes in fair value
in the consolidated statements of comprehensive income/(loss) in
the third quarter of 2019.
Loss from operations for the third quarter of 2019 was
RMB10.8 million (US$1.5 million), as compared to RMB56.6 million in the third quarter of 2018.
Operating margin for the third quarter of 2019 was negative 2.8%,
as compared to negative 17.2% in the third quarter of 2018.
Non-GAAP loss from operations for the third quarter of 2019,
which excluded share-based compensation and changes in fair value
of financial assets-contingent returnable consideration, was
RMB67.6 million (US$9.5 million), as compared to RMB54.0 million in the third quarter of 2018.
Non-GAAP operating margin for the third quarter of 2019, which
excluded share-based compensation and changes in fair value of
financial assets-contingent returnable consideration, was negative
17.8%, as compared to negative 16.4% in the third quarter of
2018.
OTHER INCOME OR
LOSS
Other income or loss reflects interest income, interest expense,
foreign currency exchange gain, income or loss from equity method
investments, net of impairments, gain on disposal of convertible
loans due from a related party and others, net[2]. Total
net other income for the third quarter of 2019 was RMB19.6 million (US$2.7
million), as compared to RMB35.9
million in the third quarter of 2018.
- Interest income for the third quarter of 2019 decreased to
RMB8.1 million (US$1.1 million) from RMB12.3 million in the third 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 third quarter of 2019 decreased to
RMB0.3 million (US$0.04 million), from RMB3.1 million in the third 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 third quarter of 2019
was RMB6.1 million (US$0.9 million), which remained unchanged from
the third quarter of 2018.
- Income from equity method investments, net of impairments, for
the third quarter of 2019 was nil, as compared to RMB4.2 million of income from equity method
investments, net of impairments, in the third quarter of 2018.
- Gain on disposal of convertible loans due from a related party
for the third quarter of 2018 was RMB10.6
million, which was derived from the completion of the
assignment to Long De Cheng Zhang Culture Communication
(Tianjin) Co., Ltd. of the
Company's rights under a loan to Particle Inc. with a principal
amount of US$14.8 million originally
granted in August 2016 and with the
assignment price of approximately US$17.0
million. No such gain was recorded in the third quarter of
2019.
- Others, net decreased to RMB5.7
million (US$0.8 million) in
the third quarter of 2019 from RMB5.8
million in the third quarter of 2018.
[2]
"Others, net" primarily consists of government subsidies and
litigation loss provisions.
|
NET INCOME OR LOSS ATTRIBUTABLE TO
PHOENIX NEW MEDIA
LIMITED
Higher effective tax rate in the third quarter of 2019 was
mainly attributable to larger taxable profits for the Company's
subsidiaries as compared to the third quarter of 2018 after
considering the valuation allowance of deferred tax assets. Net
income attributable to Phoenix New Media Limited for the third
quarter of 2019 was RMB5.9 million (US$0.8 million), as compared to net loss
attributable to Phoenix New Media Limited of RMB16.6 million in the third quarter of
2018. Net margin for the third quarter of 2019 was positive 1.6%,
as compared to negative 5.0% in the third quarter of 2018. Net
income per diluted ADS[3] in the third quarter of
2019 was RMB0.08 (US$0.01), as
compared to net loss per diluted ADS of RMB0.23 in the third quarter of 2018.
Non-GAAP net loss attributable to Phoenix New Media Limited for
the third quarter of 2019, which excluded share-based compensation,
income or loss from equity method investments, net of impairments,
and changes in fair value of financial assets-contingent returnable
consideration, was RMB50.8 million (US$7.1 million), as compared to RMB18.3 million in the third quarter of
2018. Non-GAAP net margin for the third quarter of 2019 was
negative13.4%, as compared to negative 5.6% in the third
quarter of 2018. Non-GAAP net loss per diluted ADS in the third
quarter of 2019 was RMB0.70 (US$0.10), as compared to
RMB0.25 in the third quarter of
2018.
For the third quarter of 2019, the Company's weighted average
number of ADSs used in the computation of diluted net loss per ADS
was 72,790,541. As of September 30,
2019, the Company had a total of 582,324,325, ordinary
shares outstanding, or the equivalent of 72,790,541 ADSs.
CERTAIN BALANCE SHEET ITEMS
As of September 30, 2019, the
Company's cash and cash equivalents, term deposits and short term
investments and restricted cash were RMB2.06
billion (US$288.9 million),
which included RMB18.4 million
(US$2.6 million) from Tadu and
RMB131.3 million (US$18.4 million) from Tianbo.
As previously announced by the Company, the Company entered into
a share purchase agreement (the "SPA") with Run Liang Tai and its
designated entities (the "Proposed Buyers") on March 22, 2019
and entered into a supplemental agreement (the "Supplemental
Agreement") to the SPA on July 23, 2019 for its proposed sale
of 34% of the total outstanding shares of Particle Inc. ("Particle"
or "Yidian") (the "Proposed Transaction"). After the Company
executed the Supplemental Agreement, two shareholders of Particle,
Long De Cheng Zhang Culture Communication (Tianjin) Co., Ltd. and Long De Holdings
(Hong Kong) Co., Limited
(collectively, the "Long De Entities") notified the Company that
they intend to exercise their co-sale rights under the Shareholders
Agreement with respect to 16 million shares of Particle for a
total selling price of approximately RMB240 million while
reserving their rights to co-sell more shares up to the maximum
amount allowed under the Shareholders Agreement or fewer shares if
they can find other buyers for their shares. The Company is in
dispute with the Long De Entities as to whether the co-sale rights
were duly exercised and is still discussing with the Long De
Entities for an amicable resolution. If the Long De Entities are
able to validly exercise their co-sale rights, the Company may have
to reduce the Particle shares that it can sell in the Proposed
Transaction if it decides to proceed with the transaction, and the
proceeds to the Company from the transaction will be reduced
accordingly. Alternatively, the Company may decide to terminate the
Supplemental Agreement and reverse all transactions occurred under
the Supplemental Agreement. In such case, the Company may have to
resume its dispute with the Proposed Buyers under the original SPA.
Notwithstanding the dispute, shareholders of the Company's parent
company, Phoenix Media Investment (Holdings) Limited (HK: 2008), a
company listed on The Stock Exchange of Hong Kong ("Phoenix TV") approved the
Supplemental Agreement on October 22,
2019, and pursuant to the Supplemental Agreement, the
Proposed Buyers paid the Company a further cash deposit of
US$50 million in October 2019. The Company has transferred
94,802,752 preferred shares of Particle (the "First Batch of
Delivered Shares") to the Proposed Buyers, corresponding to
US$200 million of purchase price received before August 10, 2019. There can be no assurance that
the Company's disputes with the Long De Entities, or with the
Proposed Buyers under the original SPA will be resolved in the
Company's favor. There can be no assurance that the Proposed
Transaction with respect to the remaining preferred shares to be
delivered will ever be closed. The fair value of available-for-sale
debt investments in Particle of the Company increased from
RMB2,271.1 million as of June 30, 2019 to RMB3,153.2 million (US$441.1 million) as of September 30, 2019, mainly caused by the
adjustments to the assumptions used in valuation for the
available-for-sale debt investments in the third quarter of 2019 as
the Company transferred the First Batch of Delivered Shares to the
Proposed Buyers.
[3] "ADS" means American Depositary
Share of the Company. Each ADS represents eight Class A ordinary
shares of the Company.
|
Business Outlook
For the fourth quarter of 2019, the Company expects its total
revenues to be between RMB431.2
million and RMB451.2 million;
net advertising revenues are expected to be between RMB370.9 million and RMB385.9 million; and paid services revenues are
expected to be between RMB60.3
million and RMB65.3
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 8:00 p.m.
U.S. Eastern Time on November 11,
2019, (November 12, 2019 at 9:00
a.m. Beijing/Hong Kong time) to discuss its third
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:
|
1968979
|
A replay of the call will be available through November 18, 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:
|
1968979
|
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 and changes in fair value of
financial assets-contingent returnable consideration. 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,
income or loss from equity method investments, net of impairments,
and changes in fair value of financial assets-contingent returnable
consideration. 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, income or loss from equity
method investments, net of impairments, and changes in fair value
of financial assets-contingent returnable consideration, 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 RMB7.1477 to US$1.00, the noon buying rate in effect on
September 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,
|
|
September 30,
|
|
September 30,
|
|
2018
|
2019
|
|
2019
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
Audited*
|
|
Unaudited
|
|
Unaudited
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
174,024
|
|
169,157
|
|
23,666
|
Term deposits and
short term investments
|
|
912,594
|
|
1,764,261
|
|
246,829
|
Restricted
cash
|
|
269,648
|
|
131,441
|
|
18,389
|
Accounts receivable,
net
|
|
484,113
|
|
613,237
|
|
85,795
|
Amounts due from
related parties
|
|
91,228
|
|
71,843
|
|
10,051
|
Prepayment and other
current assets
|
|
88,963
|
|
186,548
|
|
26,099
|
Total current
assets
|
|
2,020,570
|
|
2,936,487
|
|
410,829
|
Non-current
assets:
|
|
|
|
|
|
|
Property and
equipment, net
|
|
95,631
|
|
110,116
|
|
15,406
|
Intangible assets,
net
|
|
97,448
|
|
97,729
|
|
13,673
|
Goodwill
|
|
338,288
|
|
361,074
|
|
50,516
|
Available-for-sale
debt investments
|
|
1,961,474
|
|
3,155,193
|
|
441,428
|
Equity investments,
net
|
|
33,694
|
|
13,236
|
|
1,852
|
Deferred tax
assets
|
|
60,160
|
|
72,318
|
|
10,118
|
Operating lease
right-of- use assets, net**
|
|
-
|
|
91,786
|
|
12,841
|
Other non-current
assets
|
|
23,454
|
|
20,258
|
|
2,834
|
Total non-current
assets
|
|
2,610,149
|
|
3,921,710
|
|
548,668
|
Total
assets
|
|
4,630,719
|
|
6,858,197
|
|
959,497
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
loans
|
|
267,665
|
|
-
|
|
-
|
Accounts
payable
|
|
264,753
|
|
218,704
|
|
30,598
|
Amounts due to
related parties
|
|
25,218
|
|
25,052
|
|
3,505
|
Advances from
customers
|
|
54,601
|
|
69,611
|
|
9,739
|
Taxes
payable
|
|
101,386
|
|
137,031
|
|
19,171
|
Salary and welfare
payable
|
|
132,316
|
|
156,132
|
|
21,845
|
Amounts received from
proposed buyers of investments in
Particle
|
|
-
|
|
1,419,633
|
|
198,614
|
Accrued expenses and
other current liabilities
|
|
227,328
|
|
289,275
|
|
40,471
|
Operating
lease liabilities**
|
|
-
|
|
34,734
|
|
4,859
|
Total current
liabilities
|
|
1,073,267
|
|
2,350,172
|
|
328,802
|
Non-current
liabilities:
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
140,960
|
|
256,956
|
|
35,949
|
Long-term
liabilities
|
|
26,131
|
|
26,131
|
|
3,656
|
Operating
lease liabilities**
|
|
-
|
|
58,469
|
|
8,180
|
Total non-current
liabilities
|
|
167,091
|
|
341,556
|
|
47,785
|
Total
liabilities
|
|
1,240,358
|
|
2,691,728
|
|
376,587
|
Shareholders'
equity:
|
|
|
|
|
|
|
Phoenix New Media
Limited shareholders' equity:
|
|
|
|
|
|
|
Class A ordinary
shares
|
|
17,487
|
|
17,499
|
|
2,448
|
Class B ordinary
shares
|
|
22,053
|
|
22,053
|
|
3,085
|
Additional paid-in
capital
|
|
1,604,588
|
|
1,608,241
|
|
225,001
|
Statutory
reserves
|
|
87,620
|
|
87,620
|
|
12,258
|
Retained
earnings/(accumulated deficits)
|
|
159,621
|
|
(24,304)
|
|
(3,400)
|
Accumulated other
comprehensive income
|
|
1,188,358
|
|
2,254,404
|
|
315,403
|
Total Phoenix New
Media Limited shareholders' equity
|
|
3,079,727
|
|
3,965,513
|
|
554,795
|
Noncontrolling
interests
|
|
310,634
|
|
200,956
|
|
28,115
|
Total
shareholders' equity
|
|
3,390,361
|
|
4,166,469
|
|
582,910
|
Total liabilities
and shareholders' equity
|
|
4,630,719
|
|
6,858,197
|
|
959,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
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
|
281,500
|
|
324,738
|
|
327,593
|
|
45,832
|
|
842,292
|
|
868,315
|
|
121,482
|
Paid service
revenues
|
47,840
|
|
70,338
|
|
52,626
|
|
7,363
|
|
135,853
|
|
191,854
|
|
26,841
|
Total
revenues
|
329,340
|
|
395,076
|
|
380,219
|
|
53,195
|
|
978,145
|
|
1,060,169
|
|
148,323
|
Cost of
revenues
|
(152,236)
|
|
(184,951)
|
|
(194,268)
|
|
(27,179)
|
|
(415,276)
|
|
(557,364)
|
|
(77,978)
|
Gross
profit
|
177,104
|
|
210,125
|
|
185,951
|
|
26,016
|
|
562,869
|
|
502,805
|
|
70,345
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
(140,998)
|
|
(163,655)
|
|
(154,969)
|
|
(21,681)
|
|
(382,040)
|
|
(439,196)
|
|
(61,446)
|
General and
administrative expenses
|
(41,692)
|
|
(65,380)
|
|
(43,131)
|
|
(6,034)
|
|
(117,898)
|
|
(157,363)
|
|
(22,016)
|
Technology and
product development expenses
|
(50,969)
|
|
(60,121)
|
|
(60,735)
|
|
(8,497)
|
|
(147,904)
|
|
(180,297)
|
|
(25,224)
|
Changes in fair value
of financial assets-contingent returnable
consideration
|
-
|
|
-
|
|
62,051
|
|
8,681
|
|
-
|
|
62,051
|
|
8,681
|
Total operating
expenses
|
(233,659)
|
|
(289,156)
|
|
(196,784)
|
|
(27,531)
|
|
(647,842)
|
|
(714,805)
|
|
(100,005)
|
Loss from
operations
|
(56,555)
|
|
(79,031)
|
|
(10,833)
|
|
(1,515)
|
|
(84,973)
|
|
(212,000)
|
|
(29,660)
|
Other
income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
12,349
|
|
4,637
|
|
8,106
|
|
1,134
|
|
38,837
|
|
21,401
|
|
2,994
|
Interest
expense
|
(3,080)
|
|
(1,730)
|
|
(252)
|
|
(35)
|
|
(11,102)
|
|
(4,885)
|
|
(683)
|
Foreign currency
exchange gain
|
6,066
|
|
2,922
|
|
6,134
|
|
858
|
|
7,166
|
|
6,889
|
|
964
|
Income/(loss) from
equity method investments, net of impairments
|
4,240
|
|
521
|
|
-
|
|
-
|
|
1,375
|
|
(3,447)
|
|
(482)
|
Gain on disposal of
convertible loans due from a related party
|
10,565
|
|
-
|
|
-
|
|
-
|
|
10,565
|
|
-
|
|
-
|
Others,
net
|
5,773
|
|
4,789
|
|
5,608
|
|
785
|
|
11,994
|
|
12,638
|
|
1,768
|
(Loss)/income
before tax
|
(20,642)
|
|
(67,892)
|
|
8,763
|
|
1,227
|
|
(26,138)
|
|
(179,404)
|
|
(25,099)
|
Income tax
benefit/(expense)
|
3,889
|
|
(2,977)
|
|
(6,732)
|
|
(942)
|
|
115
|
|
(17,170)
|
|
(2,402)
|
Net
(loss)/income
|
(16,753)
|
|
(70,869)
|
|
2,031
|
|
285
|
|
(26,023)
|
|
(196,574)
|
|
(27,501)
|
Net loss attributable
to noncontrolling interests
|
127
|
|
754
|
|
3,896
|
|
545
|
|
1,098
|
|
12,649
|
|
1,770
|
Net (loss)/income
attributable to Phoenix New Media Limited
|
(16,626)
|
|
(70,115)
|
|
5,927
|
|
830
|
|
(24,925)
|
|
(183,925)
|
|
(25,731)
|
Net
(loss)/income
|
(16,753)
|
|
(70,869)
|
|
2,031
|
|
285
|
|
(26,023)
|
|
(196,574)
|
|
(27,501)
|
Other comprehensive
income/(loss), net of tax: fair value
remeasurement for available-for-sale investments
|
52,111
|
|
(463,083)
|
|
734,931
|
|
102,821
|
|
103,762
|
|
997,251
|
|
139,521
|
Other comprehensive
income, net of tax: foreign currency
translation adjustment
|
39,966
|
|
44,944
|
|
51,044
|
|
7,141
|
|
54,328
|
|
68,795
|
|
9,625
|
Comprehensive
income/(loss)
|
75,324
|
|
(489,008)
|
|
788,006
|
|
110,247
|
|
132,067
|
|
869,472
|
|
121,645
|
Comprehensive loss
attributable to noncontrolling interests
|
127
|
|
754
|
|
3,896
|
|
545
|
|
1,098
|
|
12,649
|
|
1,770
|
Comprehensive
income/(loss) attributable to Phoenix New Media
Limited
|
75,451
|
|
(488,254)
|
|
791,902
|
|
110,792
|
|
133,165
|
|
882,121
|
-
|
123,415
|
Net (loss)/income
attributable to Phoenix New Media Limited
|
(16,626)
|
|
(70,115)
|
|
5,927
|
|
830
|
|
(24,925)
|
|
(183,925)
|
|
(25,731)
|
Net (loss)/income per
Class A and Class B ordinary share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
(0.03)
|
|
(0.12)
|
|
0.01
|
|
0.00
|
|
(0.04)
|
|
(0.32)
|
|
(0.04)
|
Diluted
|
(0.03)
|
|
(0.12)
|
|
0.01
|
|
0.00
|
|
(0.04)
|
|
(0.32)
|
|
(0.04)
|
Net (loss)/income per
ADS (1 ADS represents 8 Class A ordinary shares):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
(0.23)
|
|
(0.96)
|
|
0.08
|
|
0.01
|
|
(0.34)
|
|
(2.53)
|
|
(0.35)
|
Diluted
|
(0.23)
|
|
(0.96)
|
|
0.08
|
|
0.01
|
|
(0.34)
|
|
(2.53)
|
|
(0.35)
|
Weighted average
number of Class A and Class B ordinary shares
used in computing net (loss)/income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
581,962,548
|
|
582,267,440
|
|
582,324,325
|
|
582,324,325
|
|
580,729,644
|
|
582,259,624
|
|
582,259,624
|
Diluted
|
581,962,548
|
|
582,267,440
|
|
582,324,325
|
|
582,324,325
|
|
580,729,644
|
|
582,259,624
|
|
582,259,624
|
Phoenix New Media
Limited
|
Condensed Segments
Information
|
(Amounts in
thousands)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
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
|
281,500
|
|
324,738
|
|
327,593
|
|
45,832
|
|
842,292
|
|
868,315
|
|
121,482
|
Paid
services
|
47,840
|
|
70,338
|
|
52,626
|
|
7,363
|
|
135,853
|
|
191,854
|
|
26,841
|
Total
revenues
|
329,340
|
|
395,076
|
|
380,219
|
|
53,195
|
|
978,145
|
|
1,060,169
|
|
148,323
|
Cost of
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net advertising
service
|
132,519
|
|
146,869
|
|
162,926
|
|
22,794
|
|
350,881
|
|
449,855
|
|
62,937
|
Paid
services
|
19,717
|
|
38,082
|
|
31,342
|
|
4,385
|
|
64,395
|
|
107,509
|
|
15,041
|
Total cost of
revenues
|
152,236
|
|
184,951
|
|
194,268
|
|
27,179
|
|
415,276
|
|
557,364
|
|
77,978
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net advertising
service
|
148,981
|
|
177,869
|
|
164,667
|
|
23,038
|
|
491,411
|
|
418,460
|
|
58,545
|
Paid
services
|
28,123
|
|
32,256
|
|
21,284
|
|
2,978
|
|
71,458
|
|
84,345
|
|
11,800
|
Total gross
profit
|
177,104
|
|
210,125
|
|
185,951
|
|
26,016
|
|
562,869
|
|
502,805
|
|
70,345
|
Phoenix New Media
Limited
|
Condensed
Information of Cost of Revenues
|
(Amounts in
thousands)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
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
|
14,261
|
|
13,676
|
|
17,363
|
|
2,429
|
|
34,338
|
|
48,368
|
|
6,767
|
Content and
operational costs
|
123,281
|
|
156,346
|
|
161,600
|
|
22,609
|
|
338,002
|
|
464,907
|
|
65,043
|
Bandwidth
costs
|
14,694
|
|
14,929
|
|
15,305
|
|
2,141
|
|
42,936
|
|
44,089
|
|
6,168
|
Total cost of
revenues
|
152,236
|
|
184,951
|
|
194,268
|
|
27,179
|
|
415,276
|
|
557,364
|
|
77,978
|
Reconciliations of
Non-GAAP Results of Operations Measures to the Nearest Comparable
GAAP Measures
|
(Amounts in
thousands, except for number of ADSs and per ADS
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2018
|
|
Three Months Ended
June 30, 2019
|
|
Three Months Ended
September 30, 2019
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-
GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-
GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-
GAAP
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Gross
profit
|
177,104
|
|
442
|
(1)
|
177,546
|
|
210,125
|
|
1,893
|
(1)
|
212,018
|
|
185,951
|
|
1,879
|
(1)
|
187,830
|
Gross
margin
|
53.8%
|
|
|
|
53.9%
|
|
53.2%
|
|
|
|
53.7%
|
|
48.9%
|
|
|
|
49.4%
|
|
|
|
2,535
|
(1)
|
|
|
|
|
4,227
|
(1)
|
|
|
|
|
5,277
|
(1)
|
|
|
|
|
-
|
(2)
|
|
|
|
|
-
|
(2)
|
|
|
|
|
(62,051)
|
(2)
|
|
Loss from
operations
|
(56,555)
|
|
2,535
|
|
(54,020)
|
|
(79,031)
|
|
4,227
|
|
(74,804)
|
|
(10,833)
|
|
(56,774)
|
|
(67,607)
|
Operating
margin
|
(17.2)%
|
|
|
|
(16.4)%
|
|
(20.0)%
|
|
|
|
(18.9)%
|
|
(2.8)%
|
|
|
|
(17.8)%
|
|
|
|
2,535
|
(1)
|
|
|
|
|
4,227
|
(1)
|
|
|
|
|
5,277
|
(1)
|
|
|
|
|
-
|
(2)
|
|
|
|
|
-
|
(2)
|
|
|
|
|
(62,051)
|
(2)
|
|
|
|
|
(4,240)
|
(3)
|
|
|
|
|
(521)
|
(3)
|
|
|
|
|
-
|
(3)
|
|
Net (loss)/income
attributable
to Phoenix New
Media Limited
|
(16,626)
|
|
(1,705)
|
|
(18,331)
|
|
(70,115)
|
|
3,706
|
|
(66,409)
|
|
5,927
|
|
(56,774)
|
|
(50,847)
|
Net margin
|
(5.0)%
|
|
|
|
(5.6)%
|
|
(17.7)%
|
|
|
|
(16.8)%
|
|
1.6%
|
|
|
|
(13.4)%
|
Net (loss)/income
per
ADS-diluted
|
(0.23)
|
|
|
|
(0.25)
|
|
(0.96)
|
|
|
|
(0.91)
|
|
0.08
|
|
|
|
(0.70)
|
Weighted average
number
of ADSs used in computing
diluted net (loss)/income per ADS
|
72,745,318
|
|
|
|
72,745,318
|
|
72,783,430
|
|
|
|
72,783,430
|
|
72,790,541
|
|
|
|
72,790,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Share-based
compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Changes in fair
value of financial assets-contingent returnable
consideration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) 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-third-quarter-2019-unaudited-financial-results-300955446.html
SOURCE Phoenix New Media Limited