FENG [Phoenix New Media] 6-K: Phoenix New Media Reports Second Quarter 2019 Unaudited

Ticker: FENG, Company: Phoenix New Media Ltd, Type: 6-K, Date: 2019-08-12
Original SEC Filing: Click here


Webplus: FENG/20190812/6-K/2_EX-99.1/000.htm SEC Original: d791021dex991.htm
Phoenix New Media Reports Second Quarter 2019 Unaudited Financial Results Live Conference Call to be Held at 9:00 PM U.S. Eastern Time on August 12, 2019 BEIJING, China, August 13, 2019 – 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



EX-99.1 2 d791021dex991.htm EX-99.1

Exhibit 99.1

Phoenix New Media Reports Second Quarter 2019 Unaudited Financial Results

Live Conference Call to be Held at 9:00 PM U.S. Eastern Time on August 12, 2019

BEIJING, China, August 13, 2019 – 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 ofAI-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 ofin-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.

1


Paid services revenues1 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 fromE-commerce and online real estate related services.

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.

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 includedweb-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 beenre-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 includesweb-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 retrospectivelyre-classified.

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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 certainnon-GAAP financial measures in this press release, which excludes the impact of certain reconciling items as stated in the “Use ofNon-GAAP Financial Measures” section below. The related reconciliations to GAAP financial measures are presented in the accompanying “Reconciliations ofNon-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 tonon-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, net2. 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.

2

“Others, net” primarily consists of government subsidies and litigation loss provisions.

3


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 there-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.

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 ADS3 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 tonon-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 tonon-GAAP net income per diluted ADS of RMB0.73 in the second quarter of 2018.

3

“ADS” means American Depositary Share of the Company. Each ADS represents eight Class A ordinary shares of the Company.

4


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.

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 ofavailable-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 theper-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 ofavailable-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.

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To participate in the call, please use thedial-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 thedial-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 ofNon-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 usesnon-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 andnon-GAAP net income or loss per diluted ADS, each of which is anon-GAAP financial measure.Non-GAAP gross profit is gross profit excluding share-based compensation.Non-GAAP gross margin isnon-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 isnon-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 isnon-GAAP net income or loss attributable to Phoenix New Media Limited divided by total revenues.Non-GAAP net income or loss per diluted ADS isnon-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 aforementionednon-GAAP to GAAP reconciling items add clarity to the constituent parts of its performance. The Company reviews thesenon-GAAP financial measures together with the related GAAP financial measures to obtain a better understanding of its operating performance. It uses thesenon-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that using thesenon-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 thesenon-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 thesenon-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using thesenon-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 thesenon-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 thesenon-GAAP financial measures in isolation from, or as an alternative to, the financial measures prepared in accordance with GAAP.

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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.

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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 Forms20-F and6-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 FormF-1, as amended, and its annual reports on Form20-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

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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 leaseright-of- use assets, net**

100,122 14,584

Othernon-current assets

23,454 20,061 2,923

Totalnon-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

Totalnon-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

Additionalpaid-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 Form20-F dated April 26, 2019.

**

The Company adopted the new leasing guidance (ASU2016-2) started from January 1, 2019, which requires that a lessee recognize the assets and liabilities that arise from operating leases. The Company recognized aright-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.

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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 expenses

(48,523 ) (59,441 ) (60,121 ) (8,758 ) (96,935 ) (119,562 ) (17,416 )

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 of impairments

(435 ) (3,968 ) 521 76 (2,865 ) (3,447 ) (502 )

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 interests

222 7,999 754 110 971 8,753 1,275

Net income/(loss) attributable to Phoenix New Media Limited

49,241 (119,737 ) (70,115 ) (10,214 ) (8,299 ) (189,852 ) (27,654 )

Net income/(loss)

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

Other comprehensive income/(loss), net of tax: fair value remeasurement foravailable-for-sale investments

5,287 725,403 (463,083 ) (67,456 ) 51,651 262,320 38,211

Other comprehensive income/(loss), net of tax: foreign currency translation adjustment

49,376 (27,193 ) 44,944 6,547 14,362 17,751 2,586

Comprehensive income/(loss)

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

Comprehensive loss attributable to noncontrolling interests

222 7,999 754 110 971 8,753 1,275

Comprehensive income/(loss) attributable to Phoenix New Media Limited

103,904 578,473 (488,254 ) (71,123 ) 57,714 90,219 13,143

Net income/(loss) attributable to Phoenix New Media Limited

49,241 (119,737 ) (70,115 ) (10,214 ) (8,299 ) (189,852 ) (27,654 )

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

10


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

11


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

12


Reconciliations ofNon-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 operations

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

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) attributable to Phoenix New Media Limited

49,241 3,825 53,066 (119,737 ) 7,955 (111,782 ) (70,115 ) 3,706 (66,409 )

Net margin

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

Net income/(loss) perADS-diluted

0.67 0.73 (1.65 ) (1.54 ) (0.96 ) (0.91 )

Weighted average number of ADSs used in computing diluted net income/(loss) per ADS

73,118,221 73,118,221 72,773,389 72,773,389 72,783,430 72,783,430

(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.

13


Webplus: FENG/20190812/6-K/1/000.htm SEC Original: d791021d6k.htm
TABLE OF CONTENTS 2 PHOENIX NEW MEDIA LIMITED Betty Yip Ho Chief Financial Officer



6-K 1 d791021d6k.htm FORM 6-K


TABLE OF CONTENTS

Exhibit 99.1 — Press release: Phoenix New Media Reports Second Quarter 2019 Unaudited Financial Results

2


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PHOENIX NEW MEDIA LIMITED
By:

/s/ Betty Yip Ho

Name: Betty Yip Ho
Title: Chief Financial Officer
Date: August 13, 2019

3

Company Info:

Ticker: FENG, Company: Phoenix New Media Ltd, Type: 6-K, Date: 2019-08-12CIK: 0001509646, Location: F4, SIC: 4833, SIC Desc: TELEVISION BROADCASTING STATIONS
Business Phone & Address:
SINOLIGHT PLAZA, FL.16, NO.4 QIYANG RD.,, WANGJING, CHAOYANG DISTRICT
Beijing 100102

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