Phoenix New Media ((FENG)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Phoenix New Media’s recent earnings call painted a mixed picture, with the company showcasing both positive developments and challenges. While there was notable revenue growth and a significant rise in paid services revenues, these gains were tempered by increased operating expenses, a higher net loss, and stagnant advertising revenues. The sentiment during the call was balanced, reflecting both optimism and caution in a challenging market environment.
Revenue Growth
Phoenix New Media reported a commendable 11.2% increase in total revenues, reaching RMB 187.1 million compared to RMB 168.3 million in the previous year. This growth highlights the company’s ability to expand its market presence despite facing a challenging economic landscape.
Significant Growth in Paid Services
The company experienced a remarkable 148.5% year-on-year increase in paid services revenues, which rose to RMB 33.8 million from RMB 13.6 million. This surge was primarily driven by the success of digital reading services, underscoring the potential of this segment in the company’s revenue portfolio.
Strong Content Engagement
Phoenix News has seen impressive content engagement, with its video accounts surpassing 5 million followers and annual views exceeding 2 billion. The company projects revenue growth in this area to approach 50%, indicating a strong future potential for content-driven revenue streams.
Global Expansion and Industry Influence
Phoenix New Media is expanding its global footprint, having hosted the 2025 China Enterprise Global Expansion Summit and signing a strategic agreement at the 2025 AIM Global Summit. These moves are aimed at enhancing international partnerships and increasing the company’s influence in the global market.
Reduction in Cost of Revenues
The company achieved a 7.6% reduction in the cost of revenues, decreasing to RMB 95.1 million from RMB 102.9 million. This reduction reflects effective cost management strategies, contributing positively to the company’s financial health.
Increase in Operating Expenses
Despite the positive revenue trends, Phoenix New Media faced a 33.5% increase in total operating expenses, which rose to RMB 99.2 million from RMB 74.3 million. This increase was mainly due to higher sales and marketing expenses, which the company attributes to its efforts to boost market presence.
Net Loss Increase
The net loss attributable to iFeng increased to RMB 10.4 million, up from RMB 5.5 million in the same period last year. This reflects the ongoing challenges the company faces in balancing revenue growth with cost management.
Flat Advertising Revenue
Advertising revenues remained flat, slightly decreasing to RMB 153.3 million from RMB 154.7 million. This stagnation is indicative of the challenging advertising market environment that the company is navigating.
Forward-Looking Guidance
Looking ahead, Phoenix New Media forecasts third-quarter revenues to be between RMB 203.4 million and RMB 218.4 million. The company anticipates net advertising revenues to range from RMB 168.4 million to RMB 178.4 million, while paid service revenues are projected between RMB 35 million and RMB 40 million. Despite a flat advertising market, the company remains optimistic, emphasizing its strong brand credibility and international marketing efforts as key competitive advantages.
In summary, Phoenix New Media’s earnings call highlighted both achievements and challenges, with a balanced sentiment reflecting the company’s cautious optimism. The significant growth in paid services and strong content engagement are promising, yet the company must navigate increased expenses and a challenging advertising market to sustain its momentum.