Live Conference Call to be Held at
8:00 PM U.S. Eastern Time on
November 12, 2018
BEIJING, Nov. 12, 2018 /PRNewswire/ -- Phoenix New Media
Limited (NYSE: FENG) ("Phoenix New Media", "ifeng" or the
"Company"), a leading new media company in China, today announced its unaudited financial
results for the quarter ended September 30,
2018.
"This is a very difficult quarter for us with the slowdown of
the macroeconomics and the 14-day suspension of ifeng News mobile
application and WAP website as well as some channels on ifeng.com
from September 26, 2018," Mr.
Shuang Liu, CEO of Phoenix New Media
commented, "However, we have reviewed and improved our internal
operating procedures to ensure that we continue to produce
top-tier, informative and regulatory compliant content. We have
enhanced our content operations team, particularly in video,
bolstering our capabilities to deliver outstanding original
content. We will continue to execute our long-term strategy to
diversify our growth drivers, pushing beyond our core business of
news and current affairs into lifestyle-related verticals to help
our users cultivate a healthy, happy and fulfilling lifestyle."
Ms. Betty Ho, CFO of Phoenix New
Media, further stated, "Our total revenues experienced a 16.6%
year-over-year decrease to RMB355.0
million under the old accounting standard, mainly due to
market condition and the tightening of rules and regulations on
advertisements for certain specific industries in addition to the
impact of the suspension. However, we have implemented a series of
initiatives to cultivate a sustainable growth by strengthening our
content operations and diversifying our revenue streams, to prepare
for the macroeconomic uncertainties in the following quarters."
Adoption of ASC606
Beginning from January 1, 2018,
the Company adopted a new accounting standard of ASC606, Revenue
from Contracts with Customers (the "new accounting standard").
The financial data presented in the Company's financial statements
for the quarter and the nine months ended September 30, 2018 are in accordance with the new
accounting standard while all financial data presented for the
quarter and the nine months ended September
30, 2017 are in accordance with ASC605, Revenue
Recognition (the "old accounting standard").
The impact of applying the new accounting standard on the
Company's unaudited financial results as compared to the old
accounting standard for the quarter ended September 30, 2018 was as follows:
|
Three
Months Ended September 30,
2018
|
|
|
|
Adjustments
|
|
|
|
Old
Accounting Standard
(1)
|
|
Sales
Taxes And
Surcharges
|
|
Barter
Transactions
|
|
Contract
Fulfillment Costs
|
|
New
Accounting Standard
(2)
|
|
(RMB in
thousands)
|
Revenues
|
354,999
|
|
(29,647)
|
|
3,339
|
|
-
|
|
328,691
|
Net advertising
revenues
|
304,642
|
|
(27,765)
|
|
3,339
|
|
-
|
|
280,216
|
Paid services
revenues
|
50,357
|
|
(1,882)
|
|
-
|
|
-
|
|
48,475
|
Cost of
revenues
|
(181,104)
|
|
29,647
|
|
(157)
|
|
27
|
|
(151,587)
|
Gross
profit
|
173,895
|
|
-
|
|
3,182
|
|
27
|
|
177,104
|
Operating
expenses
|
(233,396)
|
|
-
|
|
(263)
|
|
-
|
|
(233,659)
|
Sales and marketing
expenses
|
(140,735)
|
|
-
|
|
(263)
|
|
-
|
|
(140,998)
|
Loss from
operations
|
(59,501)
|
|
-
|
|
2,919
|
|
27
|
|
(56,555)
|
|
|
Note:
|
|
(1)
|
This financial
information for the three months ended September 30, 2018 was
presented under the old accounting standard (ASC605).
|
(2)
|
This financial
information for the three months ended September 30, 2018 was
presented under the new accounting standard (ASC606).
|
Third Quarter 2018 Financial Results
REVENUES
Total revenues for the third quarter of 2018 were RMB328.7 million (US$47.9
million) under the new accounting standard, which
represented a decrease of 22.8% from RMB425.6 million in the third quarter of
2017.
Net advertising revenues for the third quarter of 2018 were
RMB280.2 million (US$40.8 million) (net of advertising agency
service fees and sales taxes and surcharges) under the new
accounting standard, which represented a decrease of 22.8% from
RMB363.1 million in the third quarter
of 2017.
Paid services revenues[1] for the third quarter of 2018
decreased by 22.4% to RMB48.5 million
(US$7.1 million) from RMB62.4 million in the third quarter of 2017.
Revenues from digital entertainment[2] for the third
quarter of 2018 decreased by 42.7% to RMB30.2 million (US$4.4
million) from RMB52.6 million
in the third quarter of 2017. Revenues from games and
others[3] for the third quarter of 2018 increased by
86.6% to RMB18.3 million
(US$2.7 million) from RMB9.8 million in the third quarter of 2017.
Under the old accounting standard ASC605, total revenues for the
third quarter of 2018 would have been RMB355.0 million (US$51.7
million), which would have represented a decrease of 16.6%
from RMB425.6 million in the third
quarter of 2017.
Under the old accounting standard ASC605, net advertising
revenues for the third quarter of 2018 would have been RMB304.6 million (US$44.4
million), which would have represented a decrease of 16.1%
from RMB363.1 million in the third
quarter of 2017, primarily attributable to a 2.9% year-over-year
decrease in mobile advertising revenues and a 35.8% year-over-year
decrease in PC advertising revenues. The decrease was mainly due to
the market condition and the tightening of rules and regulations on
advertisements for certain specific industries in addition to
impact of the suspension from September 26,
2018.
Under the old accounting standard ASC605, paid services revenues
for the third quarter of 2018 would have been RMB50.4 million (US$7.3
million), which would have represented a decrease of 19.3%
from RMB62.4 million in the third
quarter of 2017. Under the old accounting standard ASC605, revenues
from digital entertainment for the third quarter of 2018 would have
been RMB31.9 million (US$4.6 million), which would have represented a
decrease of 39.5% from RMB52.6
million in the third quarter of 2017, due to a 65.6%
decrease in the
MVAS revenues mainly resulting from the decline in users' demand
for services provided through telecom operators in China. Under the old accounting standard
ASC605, revenues from online digital reading for the third quarter
of 2018 would have been RMB19.6
million (US$2.9 million),
which would have represented an increase of 14.2% from RMB17.2 million (US$2.6
million) in the third quarter of 2017. Under the old
accounting standard ASC605, revenues from games and others for the
third quarter of 2018 would have been RMB18.5 million (US$2.7
million), which would have represented an increase of 88.9%
from RMB9.8 million in the third
quarter of 2017, primarily attributable to the revenues generated
from licensing "Adventure in the skies", a
martial arts literature IP owned by the Company, to a film
production company.
COST OF REVENUES
Cost of revenues for the third quarter of 2018 was RMB151.6 million (US$22.1
million) under the new accounting standard, which
represented a decrease of 19.4% from RMB188.2 million in the third quarter of 2017.
Under the old accounting standard ASC605, cost of revenues for the
third quarter of 2018 would have been RMB181.1 million (US$26.4
million), which would have represented a decrease of 3.8%
from RMB188.2 million in the third
quarter of 2017. The decrease in cost of revenues under the new
accounting standard was mainly due to:
- The sales taxes and surcharges were RMB29.6 million (US$4.3
million) in the third quarter of 2018, which was excluded
from cost of revenues and recorded as a reduction item of revenues
under the new accounting standard, as compared to sales taxes and
surcharges of RMB35.7 million in the
third quarter of 2017, which was recorded as a component of cost of
revenues under the old accounting standard ASC605.
- Content and operational costs for the third quarter of 2018
increased to RMB122.6 million
(US$17.9 million) from RMB110.5 million in the third quarter of 2017,
primarily attributable to an increase in advertisement-related
content production cost.
- Revenue sharing fees to telecom operators and channel partners
for the third quarter of 2018 decreased to RMB14.3 million (US$2.1
million) from RMB27.9 million
in the third quarter of 2017, primarily attributable to a decrease
in the sales of MVAS products.
- Bandwidth costs for the third quarter of 2018 increased
slightly to RMB14.7 million
(US$2.1 million) from RMB14.1 million in the third quarter of
2017.
- Share-based compensation included in cost of revenues was
RMB0.4 million (US$0.1 million) in the third quarter of 2018, as
compared to RMB0.9 million in the
third quarter of 2017. As the Company recognized share-based
compensation, net of estimated forfeitures, on a graded-vesting
basis over the vesting term of the awards, there was less
share-based compensation recognized in the third quarter of 2018
for share options granted prior to 2018.
GROSS PROFIT
Gross profit for the third quarter of 2018 was RMB177.1 million (US$25.8
million), as compared to RMB237.4
million in the third quarter of 2017. Gross margin for the
third quarter of 2018 decreased to 53.9% from 55.8% in the third
quarter of 2017. The decrease in gross margin was primarily
attributable to the more significant decrease in revenues as
compared to the decrease in cost of revenues under the new
accounting standard as explained above.
To supplement the financial measures presented in accordance
with the United States Generally Accepted Accounting Principles
("GAAP"), the Company has presented certain non-GAAP financial
measures in this press release, which excluded the impact of
certain reconciling items as stated in the "Use of Non-GAAP
Financial Measures" section below. The related reconciliations to
GAAP financial measures are presented in the accompanying
"Reconciliations of Non-GAAP Results of Operation Measures to the
Nearest Comparable GAAP Measures."
Non-GAAP gross margin for the third quarter of 2018, which
excluded share-based compensation, decreased to 54.0% from 56.0% in
the third quarter of 2017.
OPERATING EXPENSES AND INCOME/(LOSS) FROM
OPERATIONS
Total operating expenses for the third quarter of 2018 increased
by 15.7% to RMB233.7 million
(US$34.0 million) from RMB201.9 million in the third quarter of 2017,
primarily attributable to an increase in traffic acquisition
expenses. Share-based compensation included in operating expenses
was RMB2.1 million (US$0.3 million) in the third quarter of 2018, as
compared to RMB1.5 million in the
third quarter of 2017. The increase in share-based compensation was
mainly due to the newly granted share-based awards after the third
quarter of 2017.
Loss from operations for the third quarter of 2018 was
RMB56.6 million (US$8.2 million), as compared to income from
operations of RMB35.5 million in the
third quarter of 2017. Operating margin for the third quarter of
2018 decreased to negative 17.2% from positive 8.3% in the third
quarter of 2017, which was primarily due to the decrease in
revenues resulting from the impact of the temporary service
suspension and the slowdown of the macroeconomics.
Non-GAAP loss from operations for the third quarter of 2018,
which excluded share-based compensation, was RMB54.0 million (US$7.9
million), as compared to Non-GAAP income from operations of
RMB37.9 million in the third quarter
of 2017. Non-GAAP operating margin for the third quarter of 2018,
which excluded share-based compensation, decreased to negative
16.4% from positive 8.9% in the third quarter of 2017.
OTHER INCOME OR LOSS
Other income or loss reflects interest income, interest expense,
foreign currency exchange gain or loss, gain or loss from equity
method investments, including impairments, and others,
net[4]. Total net other
income for the third quarter of 2018 was RMB35.9 million (US$5.2
million), as compared to RMB6.2
million in the third quarter of 2017.
- Interest income for the third quarter of 2018 decreased to
RMB12.3 million (US$1.8 million) from RMB14.9 million in the third quarter of
2017.
- Interest expense for the third quarter of 2018 decreased to
RMB3.1 million (US$0.4 million), from RMB5.7 million in the third quarter of 2017,
which was primarily due to the decrease in outstanding short-term
bank loans in the third quarter of 2018 as compared to that of
2017.
- Foreign currency exchange gain for the third quarter of 2018
was RMB6.1 million (US$0.9 million), as compared to foreign currency
exchange loss of RMB8.9 million in
the third quarter of 2017, which was mainly caused by the
depreciation of Renminbi against US dollars in the third quarter of
2018 that generated exchange gains in Renminbi denominated
borrowings recorded in the Company's subsidiaries whose functional
currency is not Renminbi.
- Gain from equity method investments for the third quarter of
2018, including impairments, was RMB4.2
million (US$0.6 million), as
compared to gain from equity method investments of RMB1.0 million in the third quarter of 2017.
- Gain on disposal of convertible loans due from a related party
for the third quarter of 2018 was RMB10.6
million (US$1.5 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.
- Others, net, for the third quarter of 2018 increased to
RMB5.8 million (US$0.8 million), from RMB4.9 million in the third quarter of 2017.
NET INCOME/(LOSS) ATTRIBUTABLE TO
PHOENIX NEW MEDIA
LIMITED
Net loss attributable to Phoenix New Media Limited for the third
quarter of 2018 was RMB16.6 million
(US$2.4 million), as compared to net
income attributable to Phoenix New Media Limited of RMB32.9 million in the third quarter of 2017. Net
margin for the third quarter of 2018 decreased to negative 5.1%
from positive 7.7% in the third quarter of 2017. Net loss per
diluted ADS[5] in the
third quarter of 2018 was RMB0.23
(US$0.03), as compared to net income
per diluted ADS of RMB0.46 in the
third quarter of 2017.
Non-GAAP net loss attributable to Phoenix New Media Limited for
the third quarter of 2018, which excluded share-based compensation
and gain or loss from equity method investments, including
impairments, was RMB18.3 million
(US$2.7 million), as compared to
non-GAAP net income attributable to Phoenix New Media Limited of
RMB34.4 million in the third quarter
of 2017. Non-GAAP net margin for the third quarter of 2018
decreased to negative 5.6% from positive 8.1% in the third quarter
of 2017. Non-GAAP net loss per diluted ADS in the third quarter of
2018 was RMB0.25 (US$0.04), as compared to Non-GAAP net income per
diluted ADS of RMB0.48 in the third
quarter of 2017.
For the third quarter of 2018, the Company's weighted average
number of ADSs used in the computation of diluted net income per
ADS was 72,745,318. As of September 30,
2018, the Company had a total of 582,129,950 ordinary shares
outstanding, or the equivalent of 72,766,244 ADSs.
CERTAIN BALANCE SHEET ITEMS
As of September 30, 2018, the
Company's cash and cash equivalents, term deposits and short term
investments and restricted cash were RMB1.42
billion (US$206.9 million).
Restricted cash represents deposits placed as security for banking
facilities granted to the Company, which are restricted in their
withdrawal or usage.
Business Outlook
Based on the new accounting standard (ASC606), for the fourth
quarter of 2018, the Company expects its total revenues to be
between RMB376.1 million and
RMB399.1 million; net advertising
revenues are expected to be between RMB338.5
million and RMB356.5 million;
and paid services revenues are expected to be between RMB37.6 million and RMB42.6 million.
If the old accounting standard (ASC605) were to be used, for the
fourth quarter of 2018, the Company would expect its total revenues
to be between RMB414.2 million and
RMB437.2 million, its net advertising
revenues to be between RMB374.0
million and RMB392.0 million,
and its paid services revenues to be between RMB40.2 million and RMB45.2 million.
All of the above forecasts reflect the Company's current and
preliminary view on the market and operational conditions, which
are subject to change.
Conference Call Information
The Company will hold a conference call at 8:00 p.m. U.S. Eastern Time on November 12, 2018 (November 13, 2018 at 9:00
a.m. Beijing/Hong Kong time) to discuss its third quarter
2018 unaudited financial results and operating performance.
To participate in the call, please use the dial-in numbers and
conference ID below:
International:
|
+65
67135440
|
Mainland
China:
|
4001200654
|
Hong Kong:
|
+852
30186776
|
United
States:
|
+1
8456750438
|
Conference
ID:
|
6289139
|
A replay of the call will be available through November 19, 2018 by using the dial-in numbers
and conference ID below:
International:
|
+61290034211
|
Mainland
China:
|
4006322162
|
Hong Kong:
|
+85230512780
|
United
States:
|
+16462543697
|
Conference
ID:
|
6289139
|
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 gain or loss from equity method
investments, including impairments. Non-GAAP net margin is non-GAAP
net income or loss attributable to Phoenix New Media Limited
divided by total revenues. Non-GAAP net income or loss per diluted
ADS is non-GAAP net income or loss attributable to Phoenix New
Media Limited divided by weighted average number of diluted ADSs.
The Company believes that separate analysis and exclusion of the
aforementioned non-GAAP to GAAP reconciling items add clarity to
the constituent parts of its performance. The Company reviews these
non-GAAP financial measures together with the related GAAP
financial measures to obtain a better understanding of its
operating performance. It uses these non-GAAP financial measures
for planning, forecasting and measuring results against the
forecast. The Company believes that using these non-GAAP financial
measures to evaluate its business allows both management and
investors to assess the Company's performance against its
competitors and ultimately monitor its capacity to generate returns
for investors. The Company also believes that these non-GAAP
financial measures are useful supplemental information for
investors and analysts to assess its operating performance without
the effect of items like share-based compensation and gain or loss
from equity method investments, including impairments, which have
been and will continue to be significant and recurring in its
business. However, the use of these non-GAAP financial measures has
material limitations as an analytical tool. One of the limitations
of using these non-GAAP financial measures is that they do not
include all items that impact the Company's gross profit, income or
loss from operations and net income or loss attributable to Phoenix
New Media Limited for the period. In addition, because these
non-GAAP financial measures are not calculated in the same manner
by all companies, they may not be comparable to other similarly
titled measures used by other companies. In light of the foregoing
limitations, you should not consider these non-GAAP financial
measures in isolation from, or as an alternative to, the financial
measures prepared in accordance with GAAP.
Exchange Rate
This announcement contains translations of certain RMB amounts
into U.S. dollars ("USD") at specified rates solely for the
convenience of the reader. Unless otherwise stated, all
translations from RMB to USD were made at the rate of RMB6.8680 to US$1.00, the noon buying rate in effect on
September 30, 2018 in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or USD amounts referred could be
converted into USD or RMB, as the case may be, at any particular
rate or at all. For analytical presentation, all percentages are
calculated using the numbers presented in the financial statements
contained in this earnings release.
About Phoenix New Media Limited
Phoenix New Media Limited (NYSE: FENG) is a leading new media
company providing premium content on an integrated Internet
platform, including PC and mobile, in China. Having originated from a leading global
Chinese language TV network based in Hong
Kong, Phoenix TV, the Company enables consumers to access
professional news and other quality information and share
user-generated content on the Internet through their PCs and mobile
devices. Phoenix New Media's platform includes its PC channel,
consisting of ifeng.com website, which comprises interest-based
verticals such as news, finance, fashion, military and digital
reading, and interactive services; its mobile channel, consisting
of mobile news applications, mobile video application, HTML5-based
mobile Internet websites, and mobile digital reading application;
and its operations with the telecom operators that provides content
and mobile value-added services.
Safe Harbor Statement
This announcement contains forward−looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward−looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
the business outlook and quotations from management in this
announcement, as well as Phoenix New Media's strategic and
operational plans, contain forward−looking statements. Phoenix New
Media may also make written or oral forward−looking statements in
its periodic reports to the U.S. Securities and Exchange Commission
("SEC") on Forms 20−F and 6−K, in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Statements that are not historical facts, including
statements about Phoenix New Media's beliefs and expectations, are
forward−looking statements. Forward−looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward−looking statement, including but not limited to the
following: the Company's goals and strategies; the Company's future
business development, financial condition and results of
operations; the expected growth of online and mobile advertising,
online video and mobile paid services markets in China; the Company's reliance on online and
mobile advertising and MVAS for a majority of its total revenues;
the Company's expectations regarding demand for and market
acceptance of its services; the Company's expectations regarding
maintaining and strengthening its relationships with advertisers,
partners and customers; fluctuations in the Company's quarterly
operating results; the Company's plans to enhance its user
experience, infrastructure and services offerings; the Company's
reliance on mobile operators in China to provide most of its MVAS; changes by
mobile operators in China to their
policies for MVAS; competition in its industry in China; and relevant government policies and
regulations relating to the Company. Further information regarding
these and other risks is included in the Company's filings with the
SEC, including its registration statement on Form F−1, as amended,
and its annual reports on Form 20−F. All information provided in
this press release and in the attachments is as of the date of this
press release, and Phoenix New Media does not undertake any
obligation to update any forward−looking statement, except as
required under applicable law.
[1]
|
Paid services
revenues comprise of (i) revenues from digital entertainment, which
includes MVAS and digital reading, and (ii) revenues from games and
others, which includes web-based games, mobile games, content
sales, and other online and mobile paid services through the
Company's own platforms.
|
[2]
|
Digital entertainment
includes mobile value-added services delivered through telecom
operators' platforms, or MVAS, and digital reading.
|
[3]
|
Games and others
include web-based and mobile games, content sales, and other online
and mobile paid services through the Company's own
platforms.
|
[4]
|
"Others, net"
primarily consists of government subsidies and litigation loss
provisions.
|
[5]
|
"ADS" means American
Depositary Share of the Company. Each ADS represents eight Class A
ordinary shares of the Company.
|
For investor and media inquiries please contact:
Phoenix New Media Limited
Qing Liu
Email: investorrelations@ifeng.com
ICR, Inc.
Rose Zu
Tel: +1 (646) 405-4883
Email: investorrelations@ifeng.com
Phoenix New Media
Limited
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
thousands)
|
|
December
31,
|
|
September
30,
|
|
September
30,
|
2017
|
2018
|
|
2018
|
|
RMB
|
|
RMB
|
|
US$
|
|
Audited*
|
|
Unaudited
|
|
Unaudited
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
362,862
|
|
169,153
|
|
24,629
|
Term deposits and
short term investments
|
737,657
|
|
935,359
|
|
136,191
|
Restricted
cash
|
336,700
|
|
316,600
|
|
46,098
|
Accounts receivable,
net
|
458,744
|
|
414,616
|
|
60,369
|
Amounts due from
related parties
|
187,214
|
|
83,412
|
|
12,145
|
Prepayment and other
current assets
|
57,458
|
|
74,365
|
|
10,828
|
Convertible loans due
from a related party
|
102,631
|
|
-
|
|
-
|
Total current
assets
|
2,243,266
|
|
1,993,505
|
|
290,260
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
64,454
|
|
96,355
|
|
14,030
|
Intangible assets,
net
|
6,712
|
|
5,504
|
|
801
|
Available-for-sale
investments
|
1,196,330
|
|
1,367,826
|
|
199,159
|
Equity investments,
net
|
15,342
|
|
16,717
|
|
2,434
|
Deferred tax
assets
|
60,460
|
|
91,470
|
|
13,318
|
Other non-current
assets
|
12,544
|
|
16,009
|
|
2,331
|
Total non-current
assets
|
1,355,842
|
|
1,593,881
|
|
232,073
|
Total
assets
|
3,599,108
|
|
3,587,386
|
|
522,333
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
loans
|
330,000
|
|
268,289
|
|
39,064
|
Accounts
payable
|
262,657
|
|
228,761
|
|
33,308
|
Amounts due to related
parties
|
14,140
|
|
20,948
|
|
3,050
|
Advances from
customers
|
65,196
|
|
63,526
|
|
9,250
|
Taxes
payable
|
92,214
|
|
102,804
|
|
14,969
|
Salary and welfare
payable
|
134,471
|
|
106,761
|
|
15,545
|
Accrued expenses and
other current liabilities
|
173,253
|
|
123,840
|
|
18,030
|
Total current
liabilities
|
1,071,931
|
|
914,929
|
|
133,216
|
Non-current
liabilities:
|
|
|
|
|
|
Deferred tax
liabilities
|
1,312
|
|
1,312
|
|
191
|
Long-term
liabilities
|
24,714
|
|
25,306
|
|
3,685
|
Total non-current
liabilities
|
26,026
|
|
26,618
|
|
3,876
|
Total
liabilities
|
1,097,957
|
|
941,547
|
|
137,092
|
Shareholders'
equity:
|
|
|
|
|
|
Phoenix New Media
Limited shareholders' equity:
|
|
|
|
|
|
Class A ordinary
shares
|
17,180
|
|
17,486
|
|
2,546
|
Class B ordinary
shares
|
22,053
|
|
22,053
|
|
3,211
|
Additional paid-in
capital
|
1,587,575
|
|
1,599,914
|
|
232,952
|
Statutory
reserves
|
81,237
|
|
81,237
|
|
11,828
|
Retained
earnings
|
229,250
|
|
204,301
|
|
29,747
|
Accumulated other
comprehensive income
|
570,244
|
|
728,334
|
|
106,047
|
Total Phoenix New
Media Limited shareholders' equity
|
2,507,539
|
|
2,653,325
|
|
386,331
|
Noncontrolling
interests
|
(6,388)
|
|
(7,486)
|
|
(1,090)
|
Total
shareholders' equity
|
2,501,151
|
|
2,645,839
|
|
385,241
|
Total liabilities
and shareholders' equity
|
3,599,108
|
|
3,587,386
|
|
522,333
|
|
* Derived from
audited financial statements included in the Company's Form 20-F
dated April 26, 2018.
|
Phoenix New Media
Limited
|
Condensed
Consolidated Statements of Comprehensive Income
|
(Amounts in
thousands, except for number of shares and per share (or ADS)
data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2017
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
advertising revenues
|
363,124
|
|
316,035
|
|
280,216
|
|
40,800
|
|
942,933
|
|
839,112
|
|
122,177
|
Paid service
revenues
|
62,436
|
|
46,426
|
|
48,475
|
|
7,058
|
|
170,372
|
|
136,452
|
|
19,868
|
Total
revenues
|
425,560
|
|
362,461
|
|
328,691
|
|
47,858
|
|
1,113,305
|
|
975,564
|
|
142,045
|
Cost of
revenues
|
(188,185)
|
|
(132,875)
|
|
(151,587)
|
|
(22,071)
|
|
(518,518)
|
|
(412,695)
|
|
(60,090)
|
Gross
profit
|
237,375
|
|
229,586
|
|
177,104
|
|
25,787
|
|
594,787
|
|
562,869
|
|
81,955
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing expenses
|
(122,843)
|
|
(109,823)
|
|
(140,998)
|
|
(20,530)
|
|
(337,074)
|
|
(382,040)
|
|
(55,626)
|
General and
administrative expenses
|
(28,650)
|
|
(41,808)
|
|
(41,692)
|
|
(6,070)
|
|
(96,466)
|
|
(117,898)
|
|
(17,166)
|
Technology and
product development expenses
|
(50,412)
|
|
(48,523)
|
|
(50,969)
|
|
(7,421)
|
|
(140,831)
|
|
(147,904)
|
|
(21,535)
|
Total operating
expenses
|
(201,905)
|
|
(200,154)
|
|
(233,659)
|
|
(34,021)
|
|
(574,371)
|
|
(647,842)
|
|
(94,327)
|
Income/(loss) from
operations
|
35,470
|
|
29,432
|
|
(56,555)
|
|
(8,234)
|
|
20,416
|
|
(84,973)
|
|
(12,372)
|
Other
income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
14,922
|
|
13,550
|
|
12,349
|
|
1,798
|
|
41,073
|
|
38,837
|
|
5,655
|
Interest
expense
|
(5,700)
|
|
(3,389)
|
|
(3,080)
|
|
(448)
|
|
(18,475)
|
|
(11,102)
|
|
(1,616)
|
Foreign
currency exchange (loss)/gain
|
(8,878)
|
|
16,231
|
|
6,066
|
|
883
|
|
(19,079)
|
|
7,166
|
|
1,043
|
Gain/(loss)
from equity method investments, including impairments
|
968
|
|
(435)
|
|
4,240
|
|
617
|
|
1,431
|
|
1,375
|
|
200
|
Gain on
disposal of convertible loans due from a related party
|
-
|
|
-
|
|
10,565
|
|
1,538
|
|
-
|
|
10,565
|
|
1,538
|
Others,
net
|
4,893
|
|
2,128
|
|
5,773
|
|
841
|
|
9,386
|
|
11,994
|
|
1,746
|
Income/(loss)
before tax
|
41,675
|
|
57,517
|
|
(20,642)
|
|
(3,005)
|
|
34,752
|
|
(26,138)
|
|
(3,806)
|
Income tax
(expense)/benefit
|
(9,615)
|
|
(8,498)
|
|
3,889
|
|
566
|
|
(11,489)
|
|
115
|
|
17
|
Net
income/(loss)
|
32,060
|
|
49,019
|
|
(16,753)
|
|
(2,439)
|
|
23,263
|
|
(26,023)
|
|
(3,789)
|
Net loss
attributable to noncontrolling interests
|
834
|
|
222
|
|
127
|
|
18
|
|
2,388
|
|
1,098
|
|
160
|
Net income/(loss)
attributable to Phoenix New Media Limited
|
32,894
|
|
49,241
|
|
(16,626)
|
|
(2,421)
|
|
25,651
|
|
(24,925)
|
|
(3,629)
|
Net
income/(loss)
|
32,060
|
|
49,019
|
|
(16,753)
|
|
(2,439)
|
|
23,263
|
|
(26,023)
|
|
(3,789)
|
Other
comprehensive income, net of tax: fair value remeasurement for
available-for-sale investments**
|
33,832
|
|
5,287
|
|
52,111
|
|
7,588
|
|
299,311
|
|
103,762
|
|
15,108
|
Other
comprehensive (loss)/income, net of tax: foreign currency
translation adjustment
|
(18,778)
|
|
49,376
|
|
39,966
|
|
5,819
|
|
(35,031)
|
|
54,328
|
|
7,910
|
Comprehensive
income
|
47,114
|
|
103,682
|
|
75,324
|
|
10,968
|
|
287,543
|
|
132,067
|
|
19,229
|
Comprehensive
loss attributable to noncontrolling interests
|
834
|
|
222
|
|
127
|
|
18
|
|
2,388
|
|
1,098
|
|
160
|
Comprehensive
income attributable to Phoenix New Media Limited
|
47,948
|
|
103,904
|
|
75,451
|
|
10,986
|
|
289,931
|
|
133,165
|
|
19,389
|
Net income/(loss)
attributable to Phoenix New Media Limited
|
32,894
|
|
49,241
|
|
(16,626)
|
|
(2,421)
|
|
25,651
|
|
(24,925)
|
|
(3,629)
|
Net
income/(loss) per Class A and Class B ordinary
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.06
|
|
0.08
|
|
(0.03)
|
|
0.00
|
|
0.04
|
|
(0.04)
|
|
(0.01)
|
Diluted
|
0.06
|
|
0.08
|
|
(0.03)
|
|
0.00
|
|
0.04
|
|
(0.04)
|
|
(0.01)
|
Net
income/(loss) per ADS (1 ADS represents 8 Class A ordinary
shares):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
0.46
|
|
0.68
|
|
(0.23)
|
|
(0.03)
|
|
0.36
|
|
(0.34)
|
|
(0.05)
|
Diluted
|
0.46
|
|
0.67
|
|
(0.23)
|
|
(0.03)
|
|
0.36
|
|
(0.34)
|
|
(0.05)
|
Weighted average
number of Class A and Class B ordinary shares used in computing net
income/(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
574,372,716
|
|
580,976,381
|
|
581,962,548
|
|
581,962,548
|
|
574,091,207
|
|
580,729,644
|
|
580,729,644
|
Diluted
|
577,816,213
|
|
584,945,765
|
|
581,962,548
|
|
581,962,548
|
|
577,578,429
|
|
580,729,644
|
|
580,729,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
The Company adopted ASU 2016-1, Recognition and Measurement of
Financial Assets and Financial Liabilities, beginning
from January 1, 2018. After the adoption of this new accounting
standard, the Company measures long-term equity investments, other
than those accounted for under the equity method, at fair value
through earnings. As investments in Particle meet the definition of
debt securities, which are recorded as available-for-sale
investments, there is no impact by the adoption of ASU 2016-1 on
the available-for-sale investments in Particle and the changes in
their fair value continue to be recorded in other comprehensive
income.
|
Phoenix New Media
Limited
|
Condensed Segments
Information
|
(Amounts in
thousands)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2017
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
advertising service
|
363,124
|
|
316,035
|
|
280,216
|
|
40,800
|
|
942,933
|
|
839,112
|
|
122,177
|
Paid
service
|
62,436
|
|
46,426
|
|
48,475
|
|
7,058
|
|
170,372
|
|
136,452
|
|
19,868
|
Total
revenues
|
425,560
|
|
362,461
|
|
328,691
|
|
47,858
|
|
1,113,305
|
|
975,564
|
|
142,045
|
Cost of
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
advertising service
|
149,000
|
|
110,022
|
|
132,066
|
|
19,229
|
|
421,584
|
|
349,377
|
|
50,870
|
Paid
service
|
39,185
|
|
22,853
|
|
19,521
|
|
2,842
|
|
96,934
|
|
63,318
|
|
9,220
|
Total cost of
revenues
|
188,185
|
|
132,875
|
|
151,587
|
|
22,071
|
|
518,518
|
|
412,695
|
|
60,090
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
advertising service
|
214,124
|
|
206,013
|
|
148,150
|
|
21,571
|
|
521,349
|
|
489,735
|
|
71,307
|
Paid
service
|
23,251
|
|
23,573
|
|
28,954
|
|
4,216
|
|
73,438
|
|
73,134
|
|
10,648
|
Total gross
profit
|
237,375
|
|
229,586
|
|
177,104
|
|
25,787
|
|
594,787
|
|
562,869
|
|
81,955
|
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,
|
|
2017
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue sharing
fees
|
27,891
|
|
11,460
|
|
14,261
|
|
2,076
|
|
60,263
|
|
34,338
|
|
5,000
|
Content and
operational costs
|
110,491
|
|
107,516
|
|
122,632
|
|
17,856
|
|
322,791
|
|
335,421
|
|
48,838
|
Bandwidth
costs
|
14,085
|
|
13,899
|
|
14,694
|
|
2,139
|
|
42,220
|
|
42,936
|
|
6,252
|
Sales taxes and
surcharges
|
35,718
|
|
-
|
|
-
|
|
-
|
|
93,244
|
|
-
|
|
-
|
Total cost of
revenues
|
188,185
|
|
132,875
|
|
151,587
|
|
22,071
|
|
518,518
|
|
412,695
|
|
60,090
|
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, 2017
|
|
Three Months Ended
June 30, 2018
|
|
Three Months Ended
September 30, 2018
|
|
|
|
Non-GAAP
|
|
|
|
|
|
Non-GAAP
|
|
|
|
|
|
Non-GAAP
|
|
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Gross
profit
|
237,375
|
|
949
|
(1)
|
238,324
|
|
229,586
|
|
634
|
(1)
|
230,220
|
|
177,104
|
|
442
|
(1)
|
177,546
|
Gross
margin
|
55.8%
|
|
|
|
56.0%
|
|
63.3%
|
|
|
|
63.5%
|
|
53.9%
|
|
|
|
54.0%
|
Income/(loss) from
operations
|
35,470
|
|
2,450
|
(1)
|
37,920
|
|
29,432
|
|
3,390
|
(1)
|
32,822
|
|
(56,555)
|
|
2,535
|
(1)
|
(54,020)
|
Operating
margin
|
8.3%
|
|
|
|
8.9%
|
|
8.1%
|
|
|
|
9.1%
|
|
(17.2%)
|
|
|
|
(16.4%)
|
|
|
|
2,450
|
(1)
|
|
|
|
|
3,390
|
(1)
|
|
|
|
|
2,535
|
(1)
|
|
|
|
|
(968)
|
(2)
|
|
|
|
|
435
|
(2)
|
|
|
|
|
(4,240)
|
(2)
|
|
Net income/(loss)
attributable to Phoenix New Media Limited
|
32,894
|
|
1,482
|
|
34,376
|
|
49,241
|
|
3,825
|
|
53,066
|
|
(16,626)
|
|
(1,705)
|
|
(18,331)
|
Net margin
|
7.7%
|
|
|
|
8.1%
|
|
13.6%
|
|
|
|
14.6%
|
|
(5.1%)
|
|
|
|
(5.6%)
|
Net income/(loss) per
ADS -- diluted
|
0.46
|
|
|
|
0.48
|
|
0.67
|
|
|
|
0.73
|
|
(0.23)
|
|
|
|
(0.25)
|
Weighted average
number of ADSs used in computing diluted net income/(loss) per
ADS
|
72,227,027
|
|
|
|
72,227,027
|
|
73,118,221
|
|
|
|
73,118,221
|
|
72,745,318
|
|
|
|
72,745,318
|
|
(1) Share-based
compensation
|
(2) Loss/(gain) from
equity method investments, including 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-2018-unaudited-financial-results-300748633.html
SOURCE Phoenix New Media Limited