Phoenix New Media ((FENG)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Phoenix New Media presented a mixed outlook, reflecting both significant achievements and ongoing challenges. The company reported notable successes in content innovation and a remarkable increase in paid services revenue. However, these positive developments were tempered by a decline in net advertising revenue and an increase in operating expenses and net losses, indicating substantial challenges ahead. While Phoenix New Media is making strategic expansions in new advertising sectors, existing challenges continue to impact its financial performance.
Paid Services Revenue Surge
Phoenix New Media experienced a significant surge in paid services revenue, reaching CNY 34.7 million, a 141% increase year-on-year from CNY 14.4 million. This growth was primarily driven by revenue generated from digital reading services offered through mini programs on third-party applications.
Cost of Revenues Decrease
The company successfully decreased its cost of revenues by 15.1%, bringing it down to CNY 92.5 million from CNY 109 million in the same period of last year. This reduction reflects improved operational efficiencies.
New Content Innovations and Partnerships
Phoenix New Media launched innovative content offerings such as KCA Link and a new column ‘Why It Is,’ which garnered over 100,000 WeChat reads. These initiatives have led to new commercial partnerships and increased brand trust and visibility, demonstrating robust engagement and social impact.
Expansion in New Advertising Sectors
Despite existing challenges, Phoenix New Media expanded its reach in finance, e-commerce, consumer goods, and electronics sectors. This strategic expansion has shown good progress, indicating potential for future growth.
Net Advertising Revenue Decline
The company faced a decline in net advertising revenues, which fell to CNY 120.5 million compared to CNY 138.6 million in the same period of last year. This decline highlights ongoing challenges in the advertising sector.
Operating Expenses Increase
Total operating expenses rose by 25.6% to CNY 101.1 million, up from CNY 80.5 million, primarily due to higher sales and marketing expenses. This increase in expenses has contributed to the financial challenges faced by the company.
Increased Loss from Operations
Phoenix New Media reported a loss from operations of CNY 38.4 million, compared to CNY 36.5 million in the same period of last year. This increase in operational losses underscores the financial difficulties the company is navigating.
Net Loss Increase
The net loss attributable to ifeng increased to CNY 29.7 million from CNY 26 million in the same period of last year, reflecting the financial pressures on the company.
Forward-Looking Guidance
For the second quarter of 2025, Phoenix New Media forecasts total revenues between CNY 182.1 million and CNY 197.1 million. Net advertising revenues are expected to be between CNY 148.7 million and CNY 158.7 million, while paid service revenues are projected to range from CNY 33.4 million to CNY 38.4 million. Despite the challenges, the company remains committed to content innovation, expanding commercial opportunities, and enhancing operational efficiency to deliver long-term value for investors.
In conclusion, the earnings call for Phoenix New Media highlighted a mixed sentiment, with significant achievements in content innovation and paid services revenue growth. However, the decline in net advertising revenue and increased operating expenses present substantial challenges. The company is focused on strategic expansions and operational improvements to overcome these hurdles and deliver value to its investors.