Phoenix New Media(US:FENG)2022-05-10 04:55Financial Data and Key Metrics Changes - Total revenues for Q1 2022 were RMB 175.4 million, down from RMB 226.1 million in the same period last year, reflecting a significant decline [16] - Net advertising revenues decreased to RMB 158.4 million from RMB 201.3 million year-over-year, primarily due to reduced advertising spending amid macroeconomic uncertainties [16] - Loss from operations was RMB 106.8 million, compared to RMB 41.9 million in the same period last year, indicating a worsening operational performance [17] - Non-GAAP net loss attributable to the company was RMB 79.6 million, up from RMB 27.8 million in the same period last year, highlighting increased financial strain [18] Business Line Data and Key Metrics Changes - Paid services revenues fell to RMB 17 million from RMB 24.8 million year-over-year, driven by reduced content spending from certain customers [16] - Revenues from e-commerce and others decreased to RMB 12.4 million from RMB 14.3 million in the same period last year, indicating challenges in this segment as well [17] Market Data and Key Metrics Changes - The advertising business was significantly impacted by the nationwide COVID resurgence, leading to reduced budgets from advertisers across various industries [21][22] - The overall consumption environment remains weak due to the ongoing pandemic, affecting client advertising and brand marketing budgets [22] Company Strategy and Development Direction - The company aims to enhance its competitive edge by improving original content production and monetization capabilities, particularly in the renewable energy sector [7][8] - Future plans include a deeper focus on carbon neutrality and clean energy, aligning with advertisers' strategies to reduce carbon footprints [7] - The company is also exploring new business opportunities in the real estate sector despite facing headwinds from COVID and regulatory challenges [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of macroeconomic uncertainties on advertising demand and operational execution due to COVID lockdowns [22] - The company is committed to enhancing its advertising fundamentals and improving original content to drive sustainable growth [23] - The goal is to achieve breakeven for the core portal business within the next two to three years while making progress in new initiatives [27] Other Important Information - As of March 31, 2022, the company's cash and cash equivalents totaled RMB 1.41 billion, approximately USD 222.8 million, providing a buffer for ongoing operations [18] - The company forecasts total revenues for Q2 2022 to be between RMB 198.6 million and RMB 218.6 million, indicating cautious optimism for recovery [19] Q&A Session Summary Question: Impact of Omicron pandemic on ad business and growth outlook - Management confirmed that the COVID resurgence has significantly impacted revenues, with many advertisers cutting back on budgets due to weak consumption [21][22] Question: Current profitability and breakeven expectations - Management highlighted that the decrease in advertising revenue is the main cause of extended losses, with a focus on cost management and operational efficiency to achieve breakeven in the next two to three years [26][27]