Phoenix New Media Limited Q4 FY2025 earnings call

Over the past quarter, the company continued to increase inputs in in-depth reporting, professional commentary, and major thematic coverage planning to enhance core columns and flagship products' quality and influence. Optimized and upgraded key events and branded initiatives, promoting content and product form integration. In content reporting, maintained high-frequency professional coverage, had outstanding performance in certain events, focused on social issues, and had deeply reported human-centered stories. In content distribution, presence across major platforms expanded, with app AI applications improving distribution efficiency and user engagement. Strengthened presence in high-end events, like the Action League Charity Gala.

Total revenues were $222.3 million, representing a 1.9% increase year-on-year from $218.1 million. Specifically, net advertising revenues were 181.1 million, compared to 189 million in the same period of last year. Paid services revenue were 41.2 million, representing a 41.6% increase year-on-year from 29.1 million. Cost of revenues decreased by 18.6% to 98.6% from 121.1 million in the same period of last year. Growth margin for the fourth quarter improved to 55.6% from 44.5% in the same period of last year. Total operating expenses were 99.2 million, reflecting a 9.9% increase year-on-year from 90.3 million. Income from operations increased by 265.7% to 24.5 million from 6.7 million in the same period of last year. Net income attributable to iPhone was $45.3 million compared to net loss attributable to iPhone of $3.6 million in the same period of last year.

We forecast total revenue to be between 160 million and 175 million for the first quarter of 2026. For net advertising revenues, we project between 111.2 million and 121.2 million. While for paid service revenues, we projected between $48.8 million and $53.8 million.

In Q4, advertising budgets declined among major Internet platforms, automotive and liquor sectors were relatively weak. Near-term market challenges persist.

Q: What are the key challenges the company is currently facing, and how do you view the outlook for the advertising market in 2026?

A: In Q4, advertising budgets declined among major Internet platforms, automotive and liquor sectors were relatively weak. Achieved growth in consumer categories partially offsetting declines. Near term market challenges persist, focus on optimizing client mix, exploring new growth drivers, internationalization, enhancing content differentiation and conversion capabilities with AI, prioritizing sectors with stronger budget potential like home appliances, transportation, daily consumer goods while aligning with technological innovation and green consumption.