Company News
Mr.
Ms.
Third Quarter 2019 Financial Results
REVENUES
Total revenues for the third quarter of 2019 were
Net advertising revenues for the third quarter of 2019 were
Paid services revenues[1] for the third quarter of 2019 were
[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. |
COST OF REVENUES
Cost of revenues for the third quarter of 2019 was
- Content and operational costs for the third quarter of 2019 increased to
RMB161.6 million (US$22.7 million ) fromRMB123.2 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 ) fromRMB14.3 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 ) fromRMB14.7 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 toRMB0.4 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 byFread Limited , a subsidiary of the Company, and the options newly granted by the Company inJuly 2019 .
GROSS PROFIT
Gross profit for the third quarter of 2019 increased to
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
Changes in fair value of financial assets-contingent returnable consideration for the third quarter of 2019 was a gain of
Loss from operations for the third quarter of 2019 was
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
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
- Interest income for the third quarter of 2019 decreased to
RMB8.1 million (US$1.1 million ) fromRMB12.3 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 ), fromRMB3.1 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 toLong De Cheng Zhang Culture Communication (Tianjin) Co., Ltd. of the Company's rights under a loan toParticle Inc. with a principal amount ofUS$14.8 million originally granted inAugust 2016 and with the assignment price of approximatelyUS$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 fromRMB5.8 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
Non-GAAP net loss attributable to
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
CERTAIN BALANCE SHEET ITEMS
As of
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
[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
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
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
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"),
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
About
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
For investor and media inquiries please contact:
Qing Liu
Email: investorrelations@ifeng.com
Tel: +1 (646) 405-4883
Email: investorrelations@ifeng.com
Phoenix New Media Limited |
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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 |
- |
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 |
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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 |
- |
- |
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 |
52,111 |
(463,083) |
734,931 |
102,821 |
103,762 |
997,251 |
139,521 |
||||||
Other comprehensive income, net of tax: foreign currency |
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 |
|||||||||||||
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 |
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Condensed Segments Information |
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(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 |
Non- |
GAAP |
Non-GAAP |
Non- |
GAAP |
Non-GAAP |
Non- |
|||||||||
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 |
(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 |
(0.23) |
(0.25) |
(0.96) |
(0.91) |
0.08 |
(0.70) |
|||||||||||
Weighted average number |
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