Phoenix New Media ((FENG)) has held its Q4 earnings call. Read on for the main highlights of the call.
Phoenix New Media’s recent earnings call presented a mixed sentiment, with the company showcasing growth in total revenues and a significant expansion in paid services. However, the positive outlook was tempered by challenges such as decreased advertising revenues and increased operating expenses, leading to a net loss for the quarter. Despite these setbacks, the company’s innovative content strategies and improved gross margin offer a glimmer of optimism.
Year-on-Year Revenue Growth
Phoenix New Media demonstrated resilience in a challenging market, achieving a 3% increase in total revenues year-on-year, reaching RMB 218.1 million. This growth underscores the company’s ability to navigate difficult economic conditions.
Significant Growth in Paid Services
The company reported a remarkable 96.6% increase in paid services revenues, rising to RMB 29.1 million. This surge was primarily driven by the introduction of new digital reading services through mini programs, highlighting a successful expansion into new revenue streams.
Improvement in Gross Margin
Phoenix New Media’s gross margin improved to 44.5%, up from 43.1% in the same period last year. This improvement indicates better cost management and operational efficiency, contributing positively to the company’s financial health.
Successful Content Innovation and Distribution
The company’s innovative content strategies and rapid response to major news events, such as the US election and South Korea’s martial law crisis, significantly boosted viewership. This success underscores Phoenix New Media’s strength in news coverage and content distribution.
Decrease in Net Advertising Revenues
Despite successes in other areas, net advertising revenues declined to RMB 189 million from RMB 197 million in the same period last year. This decrease reflects ongoing challenges within the advertising sector that the company needs to address.
Increase in Operating Expenses
Operating expenses rose by 32% year-on-year to RMB 90.3 million, primarily due to higher sales and marketing expenses associated with new digital services. This increase in expenses has contributed to the financial challenges faced by the company.
Net Loss Reported
Phoenix New Media reported a net loss attributable to IFENG of RMB 3.6 million, compared to a net income of RMB 8.1 million in the same period last year. This shift to a net loss highlights the financial difficulties the company is currently navigating.
Forward-Looking Guidance
Looking ahead, Phoenix New Media forecasts Q1 2025 total revenues to be between RMB 147 million and RMB 162 million. The company projects net advertising revenues to range between RMB 112 million and RMB 122 million, while paid service revenues are expected to be between RMB 35 million and RMB 40 million. These projections indicate a cautious yet optimistic outlook for the upcoming quarter.
In conclusion, Phoenix New Media’s earnings call revealed a balanced sentiment, with growth in revenues and paid services being offset by challenges in advertising revenues and increased expenses. The company’s innovative strategies and improved gross margin provide a foundation for potential recovery and growth in the future.