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Phoenix New Media(FENG) - 2023 Q4 - Annual Report
FENGPhoenix New Media(FENG)2024-04-25 10:18
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Revenue Composition - In 2023, advertising revenues accounted for 89.5% of total revenues, while paid services contributed 10.5%[316] - Total revenues for 2023 were comprised of 89.5% from advertising services and 10.5% from paid services[421] - Total revenues decreased by 11.9% to RMB 692.0 million (US97.5million)in2023fromRMB785.7millionin2022,primarilyduetodeclinesinnetadvertisingrevenuesandpaidservicesrevenues[469]−Netadvertisingrevenuesaccountedfor89.5 97.5 million) in 2023 from RMB 785.7 million in 2022, primarily due to declines in net advertising revenues and paid services revenues[469] - Net advertising revenues accounted for 89.5% of total revenues in 2023, down from 90.3% in 2021[462] - Paid services revenues decreased from RMB 89.0 million in 2022 to RMB 72.7 million (US10.2 million) in 2023, primarily due to the closure of certain E-commerce business lines[422] Advertising Performance - The mobile channel generated 73.7% of net advertising revenues, while the PC channel contributed 26.3% in 2023[317] - The advertising services generated significant revenue, with the top ten advertisers accounting for 18.9% of total gross advertising revenues in 2023[337] - Advertising revenues were generated 26.3% from PC channels and 73.7% from mobile channels in 2023[421] Paid Services - The company derived 48.0% of paid services revenues from paid content and 52.0% from E-commerce and others in 2023[318] - Paid services revenues comprised 48.0% from paid content and 52.0% from e-commerce and other services, contributing 5.0% and 5.5% to total revenues respectively in 2023[343] Financial Overview - The net loss for 2023 was 109.12million,comparedtoanetlossof109.12 million, compared to a net loss of 125.72 million in 2022[462] - Gross profit for 2023 was 227.88million,representingagrossmarginof32.9227.88 million, representing a gross margin of 32.9%[462] - Operating expenses in 2023 totaled 353.57 million, which is 51.0% of total revenues[462] - The company reported a non-GAAP adjusted net loss attributable to Phoenix New Media Limited of 87.22millionin2023[462]CostManagement−TotalcostofrevenuesdecreasedfromRMB597,397in2021toRMB548,505in2022,andfurthertoRMB464,145in2023,primarilyduetoeffectivecostcontrolmeasures[443]−OperatingexpensesdecreasedfromRMB769,029in2021toRMB428,637in2022,andtoRMB353,572in2023,reflectingstrictcostcontrolmeasures[448]EmployeeandManagement−Thenumberofemployeesdecreasedfrom893asofDecember31,2022,to743asofDecember31,2023,primarilyduetocostcontrolmeasuresandoptimizationofemployeestructure[350]−YushengSunhasbeentheChiefExecutiveOfficersinceMarch2023,bringingextensiveexperiencefromthetelevisionbroadcastingindustry[500]−QiLi,servingasadirectorsinceDecember2022,isresponsibleforfinancialbudgetingandcapitalinvestments[501]LegalandRegulatoryCompliance−ThecompanymustcomplywiththeNegativeListforMarketAccess,whichprohibitsnon−State−ownedcapitalfromengaginginnewsmedia−relatedbusinesses[373]−ThecompanyhasadoptedinternalprocedurestomonitorcontentonitsplatformstocomplywithPRClaws,butfacesuncertaintyregardingtheinterpretationofprohibitedcontent[363]−Thecompanyisatriskofbeingbannedfromitspaidmobilevideoservicesandvideoadvertisingservicesduetothelackoftherequiredlicense[366]InvestmentsandAcquisitions−ThecompanyhasinvestedatotalofRMB90.0millioninselectedventurecapitalfunds,withacarryingvalueofRMB73.2million(US87.22 million in 2023[462] Cost Management - Total cost of revenues decreased from RMB 597,397 in 2021 to RMB 548,505 in 2022, and further to RMB 464,145 in 2023, primarily due to effective cost control measures[443] - Operating expenses decreased from RMB 769,029 in 2021 to RMB 428,637 in 2022, and to RMB 353,572 in 2023, reflecting strict cost control measures[448] Employee and Management - The number of employees decreased from 893 as of December 31, 2022, to 743 as of December 31, 2023, primarily due to cost control measures and optimization of employee structure[350] - Yusheng Sun has been the Chief Executive Officer since March 2023, bringing extensive experience from the television broadcasting industry[500] - Qi Li, serving as a director since December 2022, is responsible for financial budgeting and capital investments[501] Legal and Regulatory Compliance - The company must comply with the Negative List for Market Access, which prohibits non-State-owned capital from engaging in news media-related businesses[373] - The company has adopted internal procedures to monitor content on its platforms to comply with PRC laws, but faces uncertainty regarding the interpretation of prohibited content[363] - The company is at risk of being banned from its paid mobile video services and video advertising services due to the lack of the required license[366] Investments and Acquisitions - The company has invested a total of RMB 90.0 million in selected venture capital funds, with a carrying value of RMB 73.2 million (US10.3 million) as of December 31, 2023[408] - The company holds 4,584,209 Series D1 convertible redeemable preferred shares of Particle, which are classified as available-for-sale debt investments[407] Cash Flow and Liquidity - As of December 31, 2023, the company had RMB 534.5 million (US75.3million)incash,cashequivalents,andrestrictedcash,asignificantincreasefromRMB105.0million(US75.3 million) in cash, cash equivalents, and restricted cash, a significant increase from RMB 105.0 million (US14.8 million) at the end of 2022[479] - The net cash used in operating activities for 2023 was RMB 60.8 million (US8.6million),primarilyduetoanetlossofRMB109.1million(US8.6 million), primarily due to a net loss of RMB 109.1 million (US15.4 million) adjusted by non-cash items[481] Corporate Structure and Relationships - As of March 31, 2024, Phoenix TV indirectly owned 55.0% of the company's ordinary shares and 61.4% of the voting power[319] - The company has a mutually beneficial relationship with Phoenix TV, promoting each other's brands and collaborating on major news events[321] Content and Production - The company provides over 39 interest-based verticals, including news, finance, technology, and entertainment, featuring integrated content[326] - The company’s original content production capabilities are a core competitive differentiation, focusing on in-depth commentary and investigative reporting[325] Market Environment - The competitive landscape includes major players like Baidu, Tencent, and ByteDance, with a focus on maintaining quality content and user experience to drive growth[346] - The company operates in a competitive new media industry influenced by factors such as China's economic growth and Internet penetration[423]