Phoenix New Media Limited Price & Performance (FENG)

Welcome to Phoenix New Media's earnings conference call for the fourth quarter of twenty twenty four. On today's call, we will begin with an overview of our fourth quarter results followed by a Q and A session.

You can find our quarterly financial results and the webcast of this conference call. On our website at ir.ifon.com. Before we continue, please note our Safe Harbor statement included in the earnings press release which also applies to any forward looking statements made on this call. Additionally, unless otherwise specified, all figures mentioned are in RMB. Joining me here today are our CEO, Mr. Yixiong Sun and our CFO, Mr. Edward Zhu. Now, I will pass the call to Mr. Sun, for his opening remarks I will provide the translation. [indiscernible] [indiscernible] Hello, everyone, and welcome Over the past year, we remain committed to the professionalism and quality of our content. Thanks to the hard work and close collaboration of our teams, we achieved the year on year revenue growth In the fourth quarter, we demonstrated both professionalism and speed in our news coverage. Earning widespread recognition. Our original content IP continued to innovate Our events showcase our social responsibility. And our efforts in commercialization also made progress. [indiscernible] These achievements have strengthened our influence and laid a solid foundation for our future Now, I will invite Edward to provide a more detailed summary of our fourth quarter performance on my behalf.

Thank you, Melissa. In the fourth quarter of twenty twenty four, we showcased our professional expertise and innovative spirit across multiple business areas. Delivering high quality content and services to users while staying competitive in the market. Our coverage of major news events showcased our rapid response and professional depth. Particularly during the U. S. Election and South Korea's martial law crisis. In November, we launched a real time world count product becoming the first domestic outlet to announce the U. S. Election results Our swing states only feature and on the ground video series taking you inside the U. S. Election garnered millions of views and trended across the Internet. In December, when South Korea declared martial law, we sprung into action immediately We quickly supplemented event details and continuously compiled edited and interpreted content to provide a fuller picture. While integrating live streaming which attracted over 27,000,000 views across platforms. [indiscernible] Our in-depth analysis about South Korea's first lady Kim Kun Hhee, earned praise from peers and gained strong traction online. We also distributed our exclusive interviews with the women who confronted the army across our channels. Highlighting things distinct edge in global news reporting. During the quarter, our original [indiscernible] and IPs delivered both excellent data and widespread [indiscernible] Tangbo Hu, our in-depth commentary series, broke down the Korean plane crash with technical precision.

Hitting RMB250 million on Weibo topics. Topping the trending list a new high for the column. In finance, cover story landed on exclusive chat with XPeng Motors CEO, at the Paris Motor Show. Racking up 19,000,000 views trending on Douyin. Total and Beyond. Our video IP journey shared the inspiring story of a girl who lost her hearing in infancy and made a remarkable journey to become a post doctoral fellow. Totaling 67,000,000 views. Meanwhile, the things reading WeChat account explored [indiscernible] [indiscernible] [indiscernible] [indiscernible] in-depth with the article widely responded and praised by industry peers. This quarter, we also put off several impactful events that reflected our cultural values and commitment to social good. The 2024 China Power person of the Year Gala. Seemed technology for good. Honored those using tech to better society and boost human well-being. The action [indiscernible] charity gala seemed cross border trust sustainability, focused on the needs of underserved communities and social inclusion. With philanthropists from various platforms sharing ideas and solutions amplifying our influence in public welfare Our strength in content distribution and brand value supported our advertising base. Driving our revenue uptick for the year despite tough market conditions. We also pushed into paid services launching a mini program driven novel business in Q4.

That tapped into Douyin Kaishou, and WeChat traffic [indiscernible] Fueling rapid growth. Overall, in Q4 twenty twenty four, earned recognition from users and industry through the professionalism speed and depth of our content. While laying the groundwork for future operations through commercial exploration. We understand that Amedia online's value lies not only in sharing news, but also in its commitment to social responsibility. We will continue striving to deliver higher quality content to users creating sustainable social and commercial value. This concludes our CEO, Mr. Shun, prepared remarks.

I will now walk you through our financial performance for the fourth quarter of twenty twenty four. All figures mentioned will be in RMB Our total revenues were RMB218.1 million an representing a 3% increase year on year. From RMB211.8 million Specifically, net advertising revenues were RMB115 million compared to RMB159 million 90,000,000 in the same period of last year. Paid services revenues were $29,100,000 representing a 96.6 increase year on year from 14,800,000.0 The primarily driven by revenue generated from our new digital reading services. Offered through mini programs on third party applications. Cost of revenues was RMB121.1 million slightly up from RMB120.5 million year on year. Gross margin for the fourth quarter improved to 44.5% up from 43.1% in the same period of last year. Total operating expenses were RMB90.3 million reflecting a 32% increase year on year from 68,400,000.0 This increase was primarily due to higher sales and marketing expenses, incurred for the new digital reading services mentioned earlier. Income from operations was RMB6.7 million dollars compared to $22,900,000 in the same period of last year. Net loss attributable to iPhone was RMB3.6 million, compared to net income attributable to iPhone of 8,100,000.0 in the same period of last year. [indiscernible] Moving on to our balance sheet.

As of 12/31/2024, The company's cash and cash equivalents term deposits, short term investments and the restricted cash totaled 1 point 05 billion or approximately US dollar hundred and 43,300,000.0 Finally, I'd like to provide our business outlook for the first quarter of twenty twenty five. We forecast total revenues to be between 147,000,000 and RMB162 million. For net advertising revenues, we project between 100 RMB122 million dollars While for paid service revenues, [indiscernible] we project between RMB35 million and RMB40 million This forecast reflects our current and preliminary view. Which is subject to change and substantial uncertainties. This concludes the prepared portion of our call. We are now ready for questions. Operator, please go ahead.

Thank you.

First question comes from Si Shuang Zhang from 86Research. Please go ahead.

Thank you. Good morning, management. Thank you for taking my question. Have one question regarding the paid service revenue. We have observed a substantial increase in this revenue stream during the fourth quarter. Could management please elaborate on the online factors contributing to this growth trajectory?

Thank you. Okay. Actually, the growth in paid services revenue stems from our paid short story novel business. Launched on third party platform Mini Programs tapping into traffic ecosystems like Douyin, Kuexiao and WeChat. This brought in notable revenue gains Related promotion fees have been recorded under sales and marketing expenses. Keeping the overall profit margin actually very quite modest. As a newly launched venture, although we expect a strong year over year revenue growth, in the near term. The business remains small in scale. We will focus on its profit contribution and keep evaluating its performance. Thank you.

Thank you. Just a moment for our next question please. Next, we have Troy Hsu from First Shanghai. Your line is now open.

Good morning to the management team. My name is Troy from First Shanghai Group, and I appreciate the opportunity to ask your question. Over the past year, the company saw an increasing advertising revenue despite a broader slowdown in online advertising market. Could you please share the strategies used to attract advertisers? Thank you.

Actually, overall, it's what down to two key approaches. First, our sales team has shifted to industry specific divisions. This allowed us to focus on specific sectors streamlined resource allocation and spend up innovation. For example, we achieved growth in the public sector securing promotional budgets from local tourism and cultural bureaus. In the FMCG sector, an experienced leader led a skilled team using useful trendy content to boost our revenue. Second, we have accelerated the innovation in content resources and upgraded our marketing products to respond more quickly.

To market shifts This includes tailoring international marketing strategies for companies expanding overseas. And boosting content distribution on short video platforms.

Yes, I hope I have answered your question. Thank you.

Thank you. This concludes the Q and A session. I will now hand back to Mo Te.

Thank you. This concludes our Q and A session and conference call. If you have any additional questions, please don't hesitate to reach out to us. Thank you for joining us and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.