Phoenix New Media(FENG) - 2025 Q2 - Quarterly Report

Executive Summary This section provides an overview of Phoenix New Media's Q2 2025 financial results and the CEO's strategic commentary on content and monetization efforts Company Announcement & CEO Statement Phoenix New Media announced its unaudited financial results for the second quarter ended June 30, 2025, with the CEO highlighting the company's commitment to enhancing content depth and impact, and actively exploring diverse collaboration and monetization opportunities, which are translating into positive user feedback and business growth - Phoenix New Media Limited (NYSE: FENG) announced unaudited financial results for Q2 2025[1] - CEO Yusheng Sun emphasized the company's focus on enhancing content depth and impact, and exploring diverse collaboration and monetization opportunities[2] - These efforts are leading to positive user feedback and business growth, laying a solid foundation for sustainable development[2] Second Quarter 2025 Financial Results (GAAP) This section details Phoenix New Media's GAAP financial performance for Q2 2025, covering revenues, costs, operating expenses, and net loss Revenues Total revenues for Q2 2025 increased by 11.2% year-over-year, primarily driven by a significant increase in paid services revenues, which offset a slight decrease in net advertising revenues | Metric | Q2 2025 (RMB million) | Q2 2024 (RMB million) | YoY Change (%) | | :---------------------- | :-------------------- | :-------------------- | :------------- | | Total revenues | 187.1 | 168.3 | 11.2% | | Net advertising revenues| 153.3 | 154.7 | -0.9% | | Paid services revenues | 33.8 | 13.6 | 148.5% | - The increase in total revenues was primarily due to the year-over-year increase in the Company's paid services revenues[3] Total Revenues Total revenues for Q2 2025 increased by 11.2% year-over-year, primarily driven by a significant increase in paid services revenues | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | YoY Change (%) | | :----------- | :-------------------- | :-------------------- | :-------------------- | :------------- | | Total revenues | 187.1 | 26.1 | 168.3 | 11.2% | - The increase in total revenues was primarily due to the year-over-year increase in the Company's paid services revenues[3] Net Advertising Revenues Net advertising revenues experienced a slight decrease of 0.9% year-over-year in Q2 2025 | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | YoY Change (%) | | :---------------------- | :-------------------- | :-------------------- | :-------------------- | :------------- | | Net advertising revenues| 153.3 | 21.4 | 154.7 | -0.9% | Paid Services Revenues Paid services revenues significantly increased by 148.5% year-over-year, driven by digital reading services, despite a decrease in e-commerce and other revenues | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | YoY Change (%) | | :---------------------- | :-------------------- | :-------------------- | :-------------------- | :------------- | | Paid services revenues | 33.8 | 4.7 | 13.6 | 148.5% | | - Revenues from paid contents | 30.7 | 4.3 | 5.9 | 420.3% | | - Revenues from E-commerce and others | 3.1 | 0.4 | 7.7 | -59.7% | - The significant increase in paid contents revenues was driven by digital reading services offered through mini-programs on third-party applications[4] - Revenues from E-commerce and others decreased as the Company scaled down its E-commerce business[4] Cost of Revenues and Gross Profit Cost of revenues decreased due to strict cost control measures, leading to a substantial 40.7% increase in gross profit and an improved gross margin of 49.2%, primarily attributable to higher margins from digital reading services | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | YoY Change (%) | | :---------------- | :-------------------- | :-------------------- | :-------------------- | :------------- | | Cost of revenues | 95.1 | 13.3 | 102.9 | -7.6% | | Gross profit | 92.0 | 12.8 | 65.4 | 40.7% | | Gross margin | 49.2% | - | 38.9% | +10.3 pp | - The decrease in cost of revenues was a result of the Company's strict cost control measures[5] - The increase in gross margin was mainly attributable to higher gross margin of the digital reading services offered through mini-programs[6] Operating Expenses and Loss from Operations Total operating expenses increased by 33.5% year-over-year, mainly due to higher sales and marketing expenses for digital reading services. Despite this, the loss from operations improved to RMB7.2 million, and the operating margin improved to negative 3.9% | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | YoY Change (%) | | :---------------------- | :-------------------- | :-------------------- | :-------------------- | :------------- | | Total operating expenses| 99.2 | 13.8 | 74.3 | 33.5% | | Loss from operations | (7.2) | (1.0) | (8.9) | -19.1% | | Operating margin | -3.9% | - | -5.3% | +1.4 pp | - The increase in total operating expenses was primarily attributable to higher sales and marketing expenses incurred for the digital reading services offered through mini-programs[8] Other Income or Loss Total net other income decreased to RMB2.1 million in Q2 2025 from RMB4.7 million in Q2 2024. This was influenced by lower net interest income, an increased foreign currency exchange loss, and a reduced loss from equity method investments, while fair value changes in investments were almost nil | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | YoY Change (RMB million) | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------------- | :----------------------- | | Total net other income | 2.1 | 0.3 | 4.7 | -2.6 | | Net interest income | 6.1 | 0.9 | 8.8 | -2.7 | | Foreign currency exchange loss | (1.0) | (0.14) | (0.7) | -0.3 | | Loss from equity method investments, including impairment | (3.1) | (0.4) | (5.7) | +2.6 | | Fair value changes in investments, net | ~0.0 | ~0.0 | 2.4 | -2.4 | Net Loss Attributable to Phoenix New Media Limited Net loss attributable to Phoenix New Media Limited increased to RMB10.4 million in Q2 2025, resulting in a higher negative net margin of 5.5% and an increased net loss per basic and diluted ordinary share | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | YoY Change (RMB million) | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------------- | :----------------------- | | Net loss attributable to Phoenix New Media Limited | (10.4) | (1.5) | (5.5) | -4.9 | | Net margin | -5.5% | - | -3.2% | -2.3 pp | | Net loss per basic and diluted ordinary share | (0.02) | (0.00) | (0.01) | -0.01 | Second Quarter 2025 Financial Results (Non-GAAP) This section presents Phoenix New Media's Q2 2025 financial results on a non-GAAP basis, excluding specific items to provide a clearer view of operational performance Non-GAAP Gross Margin Non-GAAP gross margin, which excludes share-based compensation, increased significantly to 49.2% in Q2 2025 from 38.9% in the same period of 2024 | Metric | Q2 2025 | Q2 2024 | | :------------------ | :------ | :------ | | Non-GAAP gross margin | 49.2% | 38.9% | Non-GAAP Loss from Operations Non-GAAP loss from operations, excluding share-based compensation, improved to RMB7.2 million, with the non-GAAP operating margin improving to negative 3.8% from negative 5.3% year-over-year | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | | Non-GAAP loss from operations | (7.2) | (1.0) | (8.9) | | Non-GAAP operating margin | -3.8% | - | -5.3% | Non-GAAP Net Loss Attributable to Phoenix New Media Limited Non-GAAP net loss attributable to Phoenix New Media Limited, after excluding share-based compensation, equity investment impacts, and fair value changes, increased to RMB7.2 million, resulting in a non-GAAP net margin of negative 3.9% and a higher non-GAAP net loss per ADS | Metric | Q2 2025 (RMB million) | Q2 2025 (US$ million) | Q2 2024 (RMB million) | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Non-GAAP net loss attributable to Phoenix New Media Limited | (7.2) | (1.0) | (2.1) | | Non-GAAP net margin | -3.9% | - | -1.3% | | Non-GAAP net loss per basic and diluted ADS | (0.60) | (0.08) | (0.18) | Balance Sheet Highlights This section summarizes key aspects of Phoenix New Media's balance sheet as of June 30, 2025 Cash and Cash Equivalents As of June 30, 2025, Phoenix New Media maintained a strong liquidity position with total cash and cash equivalents, term deposits, short-term investments, and restricted cash amounting to RMB982.3 million | Metric | As of June 30, 2025 (RMB million) | As of June 30, 2025 (US$ million) | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash and cash equivalents, term deposits and short term investments and restricted cash | 982.3 | 137.1 | Business Outlook This section provides Phoenix New Media's financial forecast for the upcoming quarter, including revenue expectations and a cautionary note on macroeconomic uncertainties Third Quarter 2025 Forecast For the third quarter of 2025, Phoenix New Media expects total revenues to be between RMB203.4 million and RMB218.4 million, with specific forecasts for net advertising and paid services revenues, while acknowledging the uncertainty of the macroeconomic environment | Metric | Q3 2025 Forecast (RMB million) | | :---------------------- | :----------------------------- | | Total revenues | 203.4 - 218.4 | | Net advertising revenues| 168.4 - 178.4 | | Paid services revenues | 35.0 - 40.0 | - All forecasts reflect the current and preliminary view of management and are subject to changes and substantial uncertainty, particularly due to the macroeconomic environment[16] Supplementary Information This section provides additional context, including conference call details, explanations of non-GAAP measures, exchange rate information, company background, and a safe harbor statement Conference Call Information The company will host a conference call on August 12, 2025, at 9:30 p.m. U.S. Eastern Time to discuss its Q2 2025 unaudited financial results, with advance registration required - A conference call to discuss Q2 2025 unaudited financial results and operating performance will be held on August 12, 2025, at 9:30 p.m. U.S. Eastern Time[18] - Participants must register in advance to receive dial-in numbers and a unique access PIN[19] - A live and archived webcast will be available on the Company's investor relations website[20] Use of Non-GAAP Financial Measures Phoenix New Media utilizes non-GAAP financial measures, including gross profit, operating income/loss, and net income/loss, by excluding share-based compensation, income/loss from equity investments, and fair value changes. These measures are used to provide clarity on performance, aid in planning and forecasting, and allow for better comparison with competitors, despite their inherent limitations as analytical tools - Non-GAAP financial measures (gross profit, gross margin, income/loss from operations, operating margin, net income/loss, and per diluted ADS) are presented to supplement GAAP financial statements[20] - These non-GAAP measures exclude share-based compensation, income or loss from equity investments (including impairment), and fair value changes in investments, net[20] - The Company believes these measures add clarity to performance, aid in planning and forecasting, and help assess performance against competitors, but acknowledge their limitations as analytical tools[20] Exchange Rate The report uses an exchange rate of RMB7.1636 to US$1.00 for all RMB to USD conversions, based on the noon buying rate on June 30, 2025, as released by the Federal Reserve Board - All translations from RMB to USD were made at the rate of RMB7.1636 to US$1.00[21] - This rate was the noon buying rate in effect on June 30, 2025, in the H.10 statistical release of the Federal Reserve Board[21] About Phoenix New Media Limited Phoenix New Media Limited is a leading new media company in China, providing premium content on integrated PC and mobile Internet platforms. Originating from Phoenix TV, it offers professional news and quality information through various digital channels - Phoenix New Media Limited (NYSE: FENG) is a leading new media company in China[22] - It provides premium content on an integrated Internet platform, including PC and mobile[22] - The company originated from Phoenix TV and offers professional news and quality information through its ifeng.com website, mobile news/video/digital reading applications, and operations with telecom operators[22] Safe Harbor Statement & Investor Contact The announcement includes a safe harbor statement regarding forward-looking statements, which are subject to inherent risks and uncertainties. Contact information for investor and media inquiries is also provided - The announcement contains forward-looking statements made under the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995[23] - These statements involve inherent risks and uncertainties, and actual results could differ materially from expectations[23] - For investor and media inquiries, contact Muzi Guo at investorrelations@ifeng.com[24] Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of comprehensive income, segment information, cost of revenues, and non-GAAP reconciliations Unaudited Condensed Consolidated Balance Sheets The unaudited condensed consolidated balance sheets present the company's financial position as of December 31, 2024, and June 30, 2025, detailing assets, liabilities, and shareholders' equity | Metric | Dec 31, 2024 (RMB thousands) | June 30, 2025 (RMB thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | Total assets | 1,711,927 | 1,594,893 | | Total liabilities | 598,517 | 521,827 | | Total shareholders' equity | 1,113,410 | 1,073,066 | Unaudited Condensed Consolidated Statements of Comprehensive Income/(loss) This statement provides the unaudited condensed consolidated results of operations for the three and six months ended June 30, 2024, and 2025, including detailed revenue, cost, expense, and net loss figures | Metric | Three Months Ended June 30, 2024 (RMB thousands) | Three Months Ended June 30, 2025 (RMB thousands) | | :-------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total revenues | 168,318 | 187,153 | | Gross profit | 65,400 | 92,022 | | Loss from operations | (8,939) | (7,211) | | Net loss attributable to Phoenix New Media Limited | (5,461) | (10,355) | Unaudited Condensed Segments Information The segment information breaks down revenues, cost of revenues, and gross profit by the Net advertising service and Paid services segments for the three and six months ended June 30, 2024, and 2025 | Segment | Three Months Ended June 30, 2024 (RMB thousands) | Three Months Ended June 30, 2025 (RMB thousands) | | :---------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenues: | | | | Net advertising service | 154,691 | 153,307 | | Paid services | 13,627 | 33,846 | | Gross profit: | | | | Net advertising service | 59,963 | 63,954 | | Paid services | 5,437 | 28,068 | Unaudited Condensed Information of Cost of Revenues This section provides a detailed breakdown of the cost of revenues, categorizing them into revenue sharing fees, content and operational costs, and bandwidth costs for the reported periods | Cost Category | Three Months Ended June 30, 2024 (RMB thousands) | Three Months Ended June 30, 2025 (RMB thousands) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue sharing fees | 2,585 | 1,671 | | Content and operational costs | 93,630 | 88,219 | | Bandwidth costs | 6,703 | 5,241 | | Total cost of revenues| 102,918 | 95,131 | Unaudited Reconciliations of Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures This reconciliation table details the adjustments made to GAAP figures to arrive at non-GAAP measures for gross profit, loss from operations, and net loss attributable to Phoenix New Media Limited, primarily by excluding share-based compensation, equity investment impacts, and fair value changes | Metric | GAAP Q2 2024 (RMB thousands) | Adjustments Q2 2024 (RMB thousands) | Non-GAAP Q2 2024 (RMB thousands) | GAAP Q2 2025 (RMB thousands) | Adjustments Q2 2025 (RMB thousands) | Non-GAAP Q2 2025 (RMB thousands) | | :-------------------------------------- | :--------------------------- | :---------------------------------- | :------------------------------- | :--------------------------- | :---------------------------------- | :------------------------------- | | Gross profit | 65,400 | 53 (1) | 65,453 | 92,022 | 7 (1) | 92,029 | | Loss from operations | (8,939) | 81 (1) | (8,858) | (7,211) | 7 (1) | (7,204) | | Net loss attributable to Phoenix New Media Limited | (5,461) | 3,341 (1,2,3) | (2,120) | (10,355) | 3,132 (1,2,3) | (7,223) | (1) Share-based compensation (2) Loss from equity investments, net of impairment (3) Fair value changes in investments, net