Phoenix New Media Reports Fourth Quarter and Fiscal Year 2015 Unaudited Financial Results

4Q15 Mobile Advertising Revenues Up 118% YOY

Live Conference Call to be Held at 8:00 PM U.S. Eastern Time on March 8

Mar 08, 2016, 17:00 ET from Phoenix New Media Limited

BEIJING, March 8, 2016 /PRNewswire/ -- Phoenix New Media Limited (NYSE: FENG), a leading new media company in China ("Phoenix New Media", "ifeng" or the "Company"), today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2015.

"I'm glad to announce that we beat our guidance for the quarter and close out a challenging year on solid footing despite of numerous headwinds," stated Mr. Shuang Liu, CEO of Phoenix New Media. "In late 2015, we adjusted and solidified our business strategy to characterize our strategic foray into the emerging frontiers of news delivery, consumption and targeted digital advertising solutions. Through these strategic initiatives, we expect to continue to lead in the development and implementation of cutting-edge targeting technologies that more accurately match users with their desired content and advertisers with their target audience. By staying at the forefront of this rapid evolution in the consumption of news and broader interest-based content, our goal is to build upon our core media DNA and proprietary content expertise in order to continue to provide our users with the high-quality content they've come to expect from us and our advertisers with the enhanced advertising solutions they have come to demand."

Mr. Ya Li, president of Phoenix New Media, stated, "Though 2015 was a tough year for PC advertising, we are excited about the development of our suite of mobile products, which carry enormous monetization potential down the road. The number of average daily active user of Yidian Zixun had grown 4 times year-over-year to over 20 million by the end of 2015. As we continue to amass a larger and stickier user community for our mobile products, we are simultaneously developing personalized, interest-based advertising solutions which we aim to implement later this year. With the soft macroeconomic outlook and the ongoing mobile transition, it is likely that we will continue facing challenges, but we are optimistic about the future potential of our business."

Fourth Quarter 2015 Financial Results

REVENUES

Total revenues for the fourth quarter of 2015 were RMB430.8 million (US$66.5 million), as compared to RMB438.1 million in the fourth quarter of 2014.

Net advertising revenues (net of advertising agency service fees) for the fourth quarter of 2015 increased by 2.3% to RMB346.2 million (US$53.4 million) from RMB338.5 million in the fourth quarter of 2014, primarily due to the 118.2% year-over-year growth in mobile advertising revenues,  which was partially offset by the decrease in PC advertising revenues.

Paid service revenues for the fourth quarter of 2015 decreased by 15.0% to RMB84.6 million (US$13.1 million) from RMB99.6 million in the fourth quarter of 2014, primarily due to the decrease of mobile value-added services ("MVAS")[1] revenue, which decreased by 15.0% to RMB59.6 million (US$9.2 million) in the fourth quarter of 2015 from RMB70.1 million in the fourth quarter of 2014. Revenues from games and others[2] for the fourth quarter of 2015 were RMB25.0 million (US$3.9 million), as compared to RMB29.4 million in the fourth quarter of 2014. The decrease in revenues from games and others was primarily due to a decrease in revenues generated from web-based games on the Company's game platform.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues for the fourth quarter of 2015 was RMB207.0 million (US$32.0 million), as compared to RMB207.4 million in the fourth quarter of 2014. The slight decrease in cost of revenues was primarily due to decreases in content and operational costs, bandwidth costs and sales taxes and surcharges, offset by an increase in revenue sharing fees. Revenue sharing fees to telecom operators and channel partners in the fourth quarter of 2015 increased to RMB46.6 million (US$7.2 million) from RMB35.3 million in the fourth quarter of 2014, mainly due to the increased sales of higher revenue sharing products. Content and operational costs for the fourth quarter of 2015 decreased to RMB106.6 million (US$16.5 million) from RMB114.4 million in the fourth quarter of 2014, due to the decrease in share-based compensation. Bandwidth costs for the fourth quarter of 2015 decreased to RMB19.7 million (US$3.0 million) from RMB21.7 million in the fourth quarter of 2014. Sales taxes and surcharges for the fourth quarter of 2015 decreased to RMB34.2 million (US$5.3 million) from RMB35.9 million in the fourth quarter of 2014. Share-based compensation included in cost of revenues was negative RMB7.3 million (negative US$1.1 million) in the fourth quarter of 2015, as compared to RMB5.2 million in the fourth quarter of 2014, primarily due to adjustment of the estimated forfeiture rate of share-based awards.

Gross profit for the fourth quarter of 2015 was RMB223.7 million (US$34.5 million), as compared to RMB230.7 million in the fourth quarter of 2014. Gross margin for the fourth quarter of 2015 was 51.9% as compared to 52.7% in the fourth quarter of 2014. Adjusted gross margin[3], which excludes share-based compensation, for the fourth quarter of 2015 was 50.2%, as compared to 53.9% in the fourth quarter of 2014.

OPERATING EXPENSES AND INCOME FROM OPERATIONS

Total operating expenses for the fourth quarter of 2015 were RMB186.7 million (US$28.8 million), as compared to RMB187.2 million in the fourth quarter of 2014. Share-based compensation included in operating expenses was RMB1.3 million (US$0.2 million) in the fourth quarter of 2015, as compared to RMB10.7 million in the fourth quarter of 2014, primarily due to adjustment of the estimated forfeiture rate of share-based awards.

Adjusted income from operations for the fourth quarter of 2015, which excludes share-based compensation, was RMB31.1 million (US$4.8 million), as compared to RMB59.4 million in the fourth quarter of 2014. Adjusted operating margin for the fourth quarter of 2015, which excludes share-based compensation, was 7.2%, as compared to 13.6% in the fourth quarter of 2014. The decrease was mainly due to the decrease in adjusted gross margin and the increase in mobile traffic acquisition expenses and bad debt provision.

Income from operations for the fourth quarter of 2015 was RMB37.0 million (US$5.7 million), as compared to RMB43.4 million in the fourth quarter of 2014. Operating margin for the fourth quarter of 2015 was 8.6%, as compared to 9.9% in the fourth quarter of 2014.

OTHER INCOME/(LOSS)

Other income/(loss) reflects interest income, net, foreign currency exchange gain or loss, loss from equity investments, impairment of equity investments and others, net[4]. Total other income for the fourth quarter of 2015 was RMB10.8 million (US$1.7 million), as compared to RMB13.8 million in the fourth quarter of 2014. Loss from equity investments for the fourth quarter of 2015 decreased to RMB0.15 million (US$0.02 million) from RMB7.1 million in the fourth quarter of 2014. Interest income, net, for the fourth quarter of 2015 was RMB6.8 million (US$1.0 million), as compared to RMB9.5 million in the fourth quarter of 2014. Foreign currency exchange gain for the fourth quarter of 2015 was RMB0.7 million (US$0.1 million), as compared to RMB0.9 million in the fourth quarter of 2014. Impairment of equity investments was RMB9.6 million (US$1.5 million) for the fourth quarter of 2015, which was primarily due to the impairment of equity investments in Lifeix Inc. and Shenzhen Fenghuang Jingcai Network Technology Co., Ltd.

NET INCOME ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Adjusted net income attributable to Phoenix New Media Limited for the fourth quarter of 2015, which excludes share-based compensation, loss from equity investments and impairment of equity investments, was RMB44.9 million (US$6.9 million), as compared to RMB62.7 million in the fourth quarter of 2014. Adjusted net margin for the fourth quarter of 2015 was 10.4%, as compared to 14.3% in the fourth quarter of 2014. Adjusted net income per diluted ADS[5] in the fourth quarter of 2015 was RMB0.62 (US$0.10), as compared to RMB0.84 in the fourth quarter of 2014.

Net income attributable to Phoenix New Media Limited for the fourth quarter of 2015 was RMB41.1 million (US$6.3 million), as compared to RMB46.9 million in the fourth quarter of 2014. Net margin for the fourth quarter of 2015 was 9.5% as compared to 10.7% in the fourth quarter of 2014. Net income per diluted ADS in the fourth quarter of 2015 was RMB0.57 (US$0.09), as compared to RMB0.63 in the fourth quarter of 2014.

As of December 31, 2015, the Company's cash and cash equivalents, term deposits and short term investments and restricted cash were RMB1.21 billion (US$186.1 million).

For the fourth quarter of 2015, the Company's weighted average number of ADSs used in the computation of diluted net income per ADS was 72,328,186. As of December 31, 2015, the Company had a total of 570,576,214 ordinary shares outstanding, or the equivalent of 71,322,027 ADSs.

Fiscal Year 2015 Financial Results

REVENUES

Total revenues for fiscal year 2015 were RMB1.61 billion (US$248.4 million), as compared to RMB1.64 billion in fiscal year 2014.

Net advertising revenues (net of advertising agency service fees) for fiscal year 2015 increased by 3.1% to RMB1.23 billion (US$189.3 million) from RMB1.19 billion in fiscal year 2014. This increase was primarily due to the 114.2% year-over-year growth in mobile advertising revenues, which was partially offset by the decrease in PC advertising revenues. Total number of advertisers increased by 15.2% to 705 in 2015 while average revenue per advertiser ("ARPA") decreased by 10.5% to RMB1.74million (US$0.3 million) in 2015.

Paid service revenues for fiscal year 2015 decreased by 14.5% to RMB382.7 million (US$59.1 million) from RMB447.7 million in fiscal year 2014. The decrease was mainly due to the decrease in revenues generated from mobile value-added services with telecom operators and web-based games on the Company's game platform.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues for fiscal year 2015 were RMB829.4 million (US$128.0 million), as compared to RMB781.6 million in fiscal year 2014. The increase in cost of revenues was mainly due to increased revenue sharing fees and content and operational costs. Share-based compensation included in cost of revenues was RMB6.3 million (US$0.98 million) in fiscal year 2015, compared to RMB16.3 million in fiscal year 2014. The decrease in share-based compensation included in cost of revenues was mainly due to adjustment of the estimated forfeiture rate of share-based awards.

Gross profit for fiscal year 2015 was RMB779.8 million (US$120.4 million), as compared to RMB856.2 million in fiscal year 2014. Gross margin for fiscal year 2015 was 48.5%, as compared to 52.3% in fiscal year 2014. The decrease was mainly due to increased revenue sharing fees, and content and operational costs. Adjusted gross margin, which excludes share-based compensation, for fiscal year 2015 was 48.9%, as compared to 53.3% in fiscal year 2014.

OPERATING EXPENSES AND INCOME FROM OPERATIONS

Total operating expenses for fiscal year 2015 were RMB700.8 million (US$108.2 million), as compared to RMB618.6 million in fiscal year 2014. The increase in operating expenses was primarily attributable to the increase in expenses associated with mobile traffic acquisition and bad debt provision. Share-based compensation included in operating expenses decreased to RMB28.0 million (US$4.3 million) in fiscal year 2015 from RMB36.9 million in fiscal year 2014.

Adjusted income from operations, which excludes share-based compensation, for fiscal year 2015 was RMB113.3 million (US$17.5 million), as compared to RMB290.8 million in fiscal year 2014. Adjusted operating margin for fiscal year 2015 was 7.0%, as compared to 17.8% in fiscal year 2014. The decrease was mainly due to the decrease in adjusted gross margin and the increase in mobile traffic acquisition expenses and bad debt provision.

Income from operations for fiscal year 2015 was RMB79.0 million (US$12.2 million), as compared to RMB237.6 million in fiscal year 2014. Operating margin for fiscal year 2015 was 4.9%, as compared to 14.5% in fiscal year 2014.

NET INCOME ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Adjusted net income attributable to Phoenix New Media Limited for fiscal year 2015, which excludes share-based compensation, loss from equity investments, gain on disposition of subsidiaries and acquisition of equity investments, gain on disposal of an equity investment and acquisition of available-for-sale securities and impairment of equity investments, was RMB145.2 million (US$22.4 million), as compared to RMB305.2 million in fiscal year 2014. Adjusted net margin for fiscal year 2015 was 9.0%, as compared to 18.6% in fiscal year 2014. Adjusted net income per diluted ADS for fiscal year 2015 was RMB2.00 (US$0.31), as compared to RMB3.97 in fiscal year 2014.

Net income attributable to Phoenix New Media Limited for fiscal year 2015 was RMB73.6 million (US$11.4 million), as compared to RMB263.1 million in fiscal year 2014. Net margin for fiscal year 2015 was 4.6%, as compared to 16.1% in fiscal year 2014. Net income per diluted ADS for fiscal year 2015 was RMB1.01 (US$0.16), as compared to RMB3.42 in fiscal year 2014. 

Business Outlook

For the first quarter of 2016, the Company expects its total revenues to be between RMB290 million and RMB305 million. Net advertising revenues are expected to be between RMB245 million and RMB255 million. Paid service revenues are expected to be between RMB45 million and RMB50 million. These 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 March 8, 2016 (March 9, 2016 at 9:00 a.m. Beijing / Hong Kong time) to discuss its fourth quarter and fiscal year 2015 unaudited financial results and operating performance.

To participate in the call, please use the dial-in numbers and conference ID below:

International: 

+6567135440

Mainland China:        

4001200654

Hong Kong:   

+85230186776

United States:

+18456750438

Conference ID:          

56586311

A replay of the call will be available through March 16, 2016 by using the dial-in numbers and conference ID below:

International:

+61290034211

Mainland China:        

4006322162

Hong Kong:             

+85230512780

United States: 

+16462543697

Conference ID:          

56586311

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"), Phoenix New Media Limited uses adjusted gross profit, adjusted gross margin, adjusted income from operations, adjusted operating margin, adjusted net income attributable to Phoenix New Media Limited, adjusted net margin and adjusted net income per diluted ADS, each of which is a non-GAAP financial measure. Adjusted gross profit is gross profit excluding share-based compensation. Adjusted gross margin is adjusted gross profit divided by total revenues. Adjusted income from operations is income from operations excluding share-based compensation. Adjusted operating margin is adjusted income from operations divided by total revenues. Adjusted net income attributable to Phoenix New Media Limited is net income attributable to Phoenix New Media Limited excluding share-based compensation, loss from equity investments, gain on disposition of subsidiaries and acquisition of equity investments, gain on disposal of an equity investment and acquisition of available-for-sale securities, and impairment of equity investments. Adjusted net margin is adjusted net income attributable to Phoenix New Media Limited divided by total revenues. Adjusted net income per diluted ADS is adjusted net income attributable to Phoenix New Media Limited divided by weighted average number of diluted ADSs. The Company believes that separate analysis and exclusion of the non-cash impact of share-based compensation, loss from equity investments, gain on disposition of subsidiaries and acquisition of equity investments, gain on disposal of an equity investment and acquisition of available-for-sale securities, impairment of equity investments add clarity to the constituent parts of its performance. The Company reviews adjusted net income together with net income to obtain a better understanding of its operating performance. It uses these non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that using multiple measures to evaluate its business allows both management and investors to assess the Company's performance against its competitors. The Company also believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation, impairment of equity investments, gain on disposition of subsidiaries and acquisition of equity investments, loss from equity investments and gain on disposal of an equity investment and acquisition of available-for-sale securities. Share-based compensation and loss from equity investments have been and will continue to be significant and recurring in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured 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 non-GAAP financial measure in isolation from, or as an alternative to, the financial measures prepared in accordance with U.S. 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 RMB6.4778 to US$1.00, the noon buying rate in effect on December 31, 2015 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 platform across Internet, mobile and TV channels 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 and through their mobile devices. Phoenix New Media's platform includes its ifeng.com channel, consisting of its ifeng.com website and web-based game platform, its video channel, comprised of its dedicated video vertical and mobile video services, and its mobile channel, including its mobile Internet website, mobile applications and mobile value-added services.

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 Forms 20−F and 6−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; 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 Form F−1, as amended, and its annual reports on Form 20−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
Matthew Zhao
Email: investorrelations@ifeng.com

ICR, Inc.
In Beijing, China: Charles Eveslage
In New York City: Vera Tang
Tel: +1 (646) 277-1215
Email: investorrelations@ifeng.com

[1] MVAS includes wireless value-added services, or WVAS, mobile video, mobile digital reading, mobile games and other paid services through China's three telecom operators' platforms.

[2] Games and others include web-based games, content sales, and other online and mobile paid services through the Company's own platforms.

[3] An explanation of the Company's non-GAAP financial measures is included in the section entitled "Use of Non-GAAP Financial Measures" below, and 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".

[4] "Others, net" primarily consists of government subsidies.

[5] "ADS" means American Depositary Share of the Company. Each ADS represents eight Class A ordinary shares of the Company.

 

Phoenix New Media Limited

Condensed Consolidated Balance Sheets

(Amounts in thousands)



December 31,


December 31,


December 31,

2014

2015


2015


RMB


RMB


US$


Audited*


Unaudited


Unaudited







ASSETS






Current assets:






Cash and cash equivalents

1,285,847


310,669


47,959

Term deposits and short term investments

40,000


769,681


118,818

Restricted cash

-


125,000


19,297

Accounts receivable, net

493,569


506,351


78,167

Amounts due from related parties

176,224


124,677


19,247

Prepayment and other current assets

42,703


58,574


9,042

Deferred tax assets

24,565


35,963


5,552

Total current assets

2,062,908


1,930,915


298,082

Non-current assets:






Property and equipment, net

89,694


80,537


12,433

Intangible assets, net

14,913


12,404


1,915

Available-for-sale investment

77,093


513,994


79,347

Equity investments, net

68,880


11,610


1,792

Other non-current assets

13,342


17,746


2,739

Total non-current assets

263,922


636,291


98,226

Total assets

2,326,830


2,567,206


396,308

LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities:






Short-term loan

-


131,046


20,230

Accounts payable

271,599


289,148


44,637

Amounts due to related parties

22,489


19,368


2,990

Advances from customers

17,587


15,239


2,352

Taxes payable

88,938


93,120


14,375

Salary and welfare payable

105,073


114,028


17,603

Accrued expenses and other current liabilities

86,307


80,891


12,487

Total current liabilities

591,993


742,840


114,674

Non-current liabilities:






Deferred tax liabilities

1,312


1,312


203

Long-term liabilities

16,867


18,368


2,836

Total non-current liabilities

18,179


19,680


3,039

Total liabilities

610,172


762,520


117,713

Shareholders' equity:






Phoenix New Media Limited shareholders' equity:






Class A ordinary shares

17,278


16,733


2,583

Class B ordinary shares

22,053


22,053


3,404

Additional paid-in capital

1,587,227


1,551,104


239,449

Treasury stock

(13,379)


-


-

Statutory reserves

65,968


70,311


10,854

Retained earnings

52,852


122,093


18,848

Accumulated other comprehensive (loss)/income

(15,341)


23,341


3,604

Total Phoenix New Media Limited shareholders' equity

1,716,658


1,805,635


278,742

Noncontrolling interests

-


(949)


(147)

Total shareholders' equity

1,716,658


1,804,686


278,595

Total liabilities and shareholders' equity

2,326,830


2,567,206


396,308


* Derived from audited financial statements included in the Company's Form 20-F dated April 30, 2015.

 


Phoenix New Media Limited


Condensed Consolidated Statements of Comprehensive Income


(Amounts in thousands, except for number of shares and per share (or ADS) data)

















Three Months Ended


Twelve Months Ended


December 31,


September 30,


December 31,


December 31,


December 31,


December 31,


December 31,


2014


2015


2015


2015


2014


2015


2015


RMB


RMB


RMB


US$


RMB


RMB


US$


Unaudited


Unaudited


Unaudited


Unaudited


Audited*


Unaudited


Unaudited















Revenues:














  Net advertising revenues            

338,509


300,042


346,190


53,443


1,190,158


1,226,516


189,342

  Paid service revenues

99,556


90,377


84,579


13,057


447,702


382,680


59,076

Total revenues

438,065


390,419


430,769


66,500


1,637,860


1,609,196


248,418

Cost of revenues

(207,371)


(209,841)


(207,028)


(31,960)


(781,632)


(829,386)


(128,035)

Gross profit

230,694


180,578


223,741


34,540


856,228


779,810


120,383

Operating expenses:














  Sales and marketing expenses

(100,680)


(83,568)


(82,756)


(12,776)


(330,777)


(346,133)


(53,434)

  General and administrative expenses

(41,747)


(45,715)


(60,020)


(9,265)


(137,818)


(183,989)


(28,403)

  Technology and product development expenses

(44,819)


(42,992)


(43,958)


(6,786)


(149,996)


(170,714)


(26,354)

Total operating expenses

(187,246)


(172,275)


(186,734)


(28,827)


(618,591)


(700,836)


(108,191)

Income from operations

43,448


8,303


37,007


5,713


237,637


78,974


12,192

Other income/(loss):














  Interest income, net

9,465


5,858


6,754


1,043


46,535


27,906


4,308

  Foreign currency exchange gain/(loss)

901


2,711


743


115


(6,059)


(1,054)


(163)

  Gain on disposition of subsidiaries and acquisition of equity investments

7,309


-


-


-


29,660


-


-

  Loss from equity investments

(7,116)


(2,703)


(149)


(23)


(18,538)


(32,239)


(4,977)

  Gain on disposal of an equity investment and acquisition of available-for- sale securities

-


-


-


-


-


4,643


717

  Impairment of equity investments

-


-


(9,622)


(1,485)


-


(9,622)


(1,485)

  Others, net

3,213


10,965


13,066


2,016


21,261


29,294


4,522

Income before tax

57,220


25,134


47,799


7,379


310,496


97,902


15,114

  Income tax expense

(10,294)


(4,271)


(7,158)


(1,105)


(48,377)


(25,517)


(3,939)

Net income

46,926


20,863


40,641


6,274


262,119


72,385


11,175

  Net (income)/loss attributable to noncontrolling interests

(19)


332


422


65


972


1,199


185

Net income attributable to Phoenix New Media Limited

46,907


21,195


41,063


6,339


263,091


73,584


11,360

Net income

46,926


20,863


40,641


6,274


262,119


72,385


11,175

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

40,283


(3,008)


13,376


2,065


40,283


15,869


2,450

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

(1,844)


(4,026)


27,220


4,202


4,503


22,813


3,522

Comprehensive income

85,365


13,829


81,237


12,541


306,905


111,067


17,147

  Comprehensive (income)/loss attributable to noncontrolling interests

(19)


332


442


65


972


1,199


185

Comprehensive income attributable to Phoenix New Media Limited

85,346


14,161


81,659


12,606


307,877


112,266


17,332

Net income attributable to Phoenix New Media Limited

46,907


21,195


41,063


6,339


263,091


73,584


11,360

Net income per Class A and Class B ordinary share:














  Basic

0.08


0.04


0.07


0.01


0.44


0.13


0.02

  Diluted

0.08


0.04


0.07


0.01


0.43


0.13


0.02

Net income per ADS (1 ADS represents 8 Class A ordinary shares):














  Basic

0.64


0.30


0.57


0.09


3.52


1.03


0.16

  Diluted

0.63


0.29


0.57


0.09


3.42


1.01


0.16

Weighted average number of Class A and Class B ordinary shares used in computing net income per share:














  Basic

582,018,815


571,085,620


572,175,288


572,175,288


597,616,623


571,247,723


571,247,723

  Diluted

595,974,339


579,594,405


578,625,484


578,625,484


614,620,110


580,785,256


580,785,256
















* Derived from audited financial statements included in the Company's Form 20-F dated April 30, 2015.

 

Phoenix New Media Limited

Condensed Segments Information

(Amounts in thousands)



Three Months Ended


Twelve Months Ended


December 31,


September 30,


December 31,


December 31,


December 31,


December 31,


December 31,


2014


2015


2015


2015


2014


2015


2015


RMB


RMB


RMB


US$


RMB


RMB


US$


Unaudited


Unaudited


Unaudited


Unaudited


Audited*


Unaudited


Unaudited















Revenues:














Net advertising service

338,509


300,042


346,190


53,443


1,190,158


1,226,516


189,342

  Paid service

99,556


90,377


84,579


13,057


447,702


382,680


59,076

Total revenues

438,065


390,419


430,769


66,500


1,637,860


1,609,196


248,418

Cost of revenues














  Net advertising service

150,515


142,043


143,144


22,098


522,553


557,421


86,051

  Paid service

56,856


67,798


63,884


9,862


259,079


271,965


41,984

Total cost of revenues

207,371


209,841


207,028


31,960


781,632


829,386


128,035

Gross profit














  Net advertising service

187,994


157,999


203,046


31,345


667,605


669,095


103,291

  Paid service

42,700


22,579


20,695


3,195


188,623


110,715


17,092

Total gross profit

230,694


180,578


223,741


34,540


856,228


779,810


120,383


* Derived from audited financial statements included in the Company's Form 20-F dated April 30, 2015.

 


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 December 31, 2014


Three Months Ended September 30, 2015


Three Months Ended December 31, 2015




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

230,694


5,225

(1)

235,919


180,578


4,139

(1)

184,717


223,741


(7,289)

(1)

216,452

Gross margin      

52.7%




53.9%


46.3%




47.3%


51.9%




50.2%

Income from operations

43,448


15,972

(1)

59,420


8,303


12,045

(1)

20,348


37,007


(5,957)

(1)

31,050

Operating margin

9.9%




13.6%


2.1%




5.2%


8.6%




7.2%




15,972

(1)











(5,957)

(1)





7,116

(2)





12,045

(1)





149

(2)





(7,309)

(3)





2,703

(2)





9,622

(5)


Net income attributable to Phoenix New Media Limited

46,907


15,779


62,686


21,195


14,748


35,943


41,063


3,814


44,877

Net margin

10.7%




14.3%


5.4%




9.2%


9.5%




10.4%

Net income per ADS—diluted

0.63




0.84


0.29




0.50


0.57




0.62

Weighted average number of ADSs used in computing  diluted net income per ADS

74,496,792




74,496,792


72,449,301




72,449,301


72,328,186




72,328,186

 


Twelve Months Ended December 31, 2014


Twelve Months Ended December 31, 2015





Non-GAAP






Non-GAAP





GAAP


Adjustments


Non-GAAP


GAAP


Adjustments


Non-GAAP



RMB


RMB


RMB


RMB


RMB


RMB



Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Unaudited


Gross profit

856,228


16,295

(1)

872,523


779,810


6,335

(1)

786,145


Gross margin       

52.3%




53.3%


48.5%




48.9%


Income from operations

237,637


53,181

(1)

290,818


78,974


34,354

(1)

113,328


Operating margin

14.5%




17.8%


4.9%




7.0%











34,354

(1)






53,181

(1)





32,239

(2)






18,538

(2)





(4,643)

(4)






(29,660)

(3)





9,622

(5)



Net income attributable to Phoenix New Media Limited

263,091


42,059


305,150


73,584


71,572


145,156


Net margin

16.1%




18.6%


4.6%




9.0%


Net income per ADS—diluted

3.42




3.97


1.01




2.00


Weighted average number of ADSs used in computing diluted net income per ADS

76,827,514




76,827,514


72,598,157




72,598,157















(1) Excludes share-based compensation

(2) Excludes loss from equity investments

(3) Excludes gain on disposition of subsidiaries and acquisition of equity investments

(4) Excludes gain on disposal of an equity investment and acquisition of available for sales securities

(5) Excludes impairment of equity investments

 

Details of cost of revenues are as follows:








Three Months Ended


Twelve Months Ended


December 31,


September 30,


December 31,


December 31,


December 31,


December 31,


December 31,


2014


2015


2015


2015


2014


2015


2015


RMB


RMB


RMB


US$


RMB


RMB


US$

(Amounts in thousands)

Unaudited


Unaudited


Unaudited


Unaudited


Audited*


Unaudited


Unaudited

Revenue sharing fees

35,304


51,576


46,603


7,194


192,076


216,973


33,495

Content and operational costs

114,400


107,812


106,585


16,454


376,555


406,741


62,790

Bandwidth costs

21,738


20,696


19,662


3,035


83,233


83,170


12,839

Sales taxes and surcharges

35,929


29,757


34,178


5,277


129,768


122,502


18,911

Total cost of revenues

207,371


209,841


207,028


31,960


781,632


829,386


128,035


* Derived from audited financial statements included in the Company's Form 20-F dated April 30, 2015.

SOURCE Phoenix New Media Limited



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