Phoenix New Media (FENG) Q3 2026 Earnings Call Transcript

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DATE

Nov. 10, 2026

CALL PARTICIPANTS

• Chief Executive Officer - Li Qi
• Chief Financial Officer - Edward Lu
• Investor Relations - Muzi Guo

TAKEAWAYS

• Total Revenues -- RMB 217.6 million, representing an 8.3% increase year over year driven by growth in paid services.
• Net Advertising Revenues -- RMB 149.2 million, a 6.3% decrease due to cautious advertiser spending in the home appliance, e-commerce, and automotive sectors.
• Paid Services Revenues -- RMB 68.4 million, reflecting a 64.4% increase year over year primarily from digital reading services.
• Digital Reading Revenue -- RMB 65.8 million, growing 71.8% year over year due to expansion within third-party mini programs.
• Gross Profit -- RMB 125.4 million, a 31% increase from RMB 95.7 million in the same period of 2025.
• Gross Margin -- 57.6%, up from 47.6% in the prior year due to a higher revenue mix from the high-margin digital reading business.
• Operating Expenses -- RMB 128.6 million, an 18% rise driven by increased marketing spending to acquire users for digital reading applications.
• Loss from Operations -- RMB 3.2 million, narrowing from a RMB 13.3 million loss in the third quarter of 2025.
• Net Loss per ADS -- RMB 2.02, widening from RMB 0.41 in the prior year due to non-operating investment fluctuations.
• Total Cash Balance -- RMB 935.4 million as of Sept. 30, 2026, including term deposits and short-term investments.
• Q4 2026 Revenue Guidance -- RMB 236.7 million to RMB 251.7 million, representing management's preliminary outlook for the final quarter.
• Q4 2026 Advertising Guidance -- RMB 148.4 million to RMB 158.4 million.
• Q4 2026 Paid Services Guidance -- RMB 88.3 million to RMB 93.3 million.
• AI and Robotics Revenue Growth -- more than threefold increase in the first nine months of 2026 compared to the full year of 2025.
• Event Impressions -- 800 million total impressions for the Phoenix Greater Bay Area Finance Forum across multiple live streaming platforms.
• International News Engagement -- 50 million total views for short video coverage of high-level diplomatic visits during the third quarter.
• Fair Value Changes in Investments -- a loss of RMB 16.5 million, compared to a gain of RMB 9.4 million in the same period of 2025.
• E-commerce and Other Revenues -- RMB 2.6 million, a decrease of 21.2% compared to RMB 3.3 million in the prior year.
• Cost of Revenues -- RMB 92.2 million, a 12.4% reduction reflecting the implementation of strict cost control measures.
• Loss from Equity Method Investments -- RMB 6.3 million, widening from RMB 0.2 million in the prior year's third quarter.

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RISKS

• Lu stated, "advertisers are still careful with their budgets. They want to know what each campaign can achieve and why it is worth investment," noting specific revenue declines in home appliance and e-commerce categories.

SUMMARY

Phoenix New Media Limited (NYSE:FENG) reported an 8.3% increase in total revenues for the third quarter, supported by a significant expansion in its paid services division. Management reported that the company is adapting its content distribution strategy to meet the requirements of evolving AI models and large language platforms. The company reported a significant narrowing of its operating loss, although its net loss widened due to non-operating fluctuations in investment fair values. Management stated that while advertising budgets remain constrained in certain industrial sectors, there is growth in categories such as food, beverage, and technology. The company continues to leverage its professional journalism brand to secure high-profile partnerships and host major industry forums.

• The company is making its content more accessible to large language models to reach audiences that use AI tools for information discovery.
• Management reported that AI and robotics have become a key growth vertical, with revenue from these clients in the first nine months of 2026 already tripling the 2025 full-year totals.
• Lu noted that the project-based work around industry events, such as the World Artificial Intelligence Conference, provides a model for developing long-term relationships with tech clients.
• The Phoenix Greater Bay Area Finance Forum generated more than 800 million impressions, strengthening the company's connections with government and business leaders.
• The company reported that brand-sponsored documentaries, including the series "The Journey," are successfully integrating brand partnerships into original storytelling while maintaining content quality.
• CEO Li stated that the company is focused on preparing for changes in how people find and consume information as AI models "evolve to become the traffic window."

INDUSTRY GLOSSARY

• ADS: American Depositary Share, representing 48 Class A ordinary shares of the company.
• Mini programs: Lightweight applications that run within host platforms like WeChat, used by the company for digital reading services.
• GAAP: Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting.
• non-GAAP: Financial measures that exclude certain non-recurring or non-cash items to provide an alternative view of core operating performance.
• ASC 820: An accounting standard that defines fair value and provides a framework for measuring it in financial statements.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to Phoenix New Media Third Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I will now turn the conference over to your first speaker today, Muzi Guo, from Investor Relations. Please go ahead.

Muzi Guo: Thank you, operator. Welcome to Phoenix New Media's Earnings Conference Call for the third quarter of 2026. Today's call will begin with an overview of our quarterly results, followed by a Q&A session. Our quarterly financial results and the webcast of this conference call are available on our website at ir.ifeng.com. Before we continue, please note the safe harbor statement included in our earnings press release, which applies to any forward-looking statements made during this call. Unless otherwise stated, all figures mentioned are in RMB. Joining me today are our CEO, Li Qi; and our CFO, Edward Lu. I will now pass the call to Mr. Li for his opening remarks. I will provide translation as needed.

Li Qi: [Foreign Language] [Interpreted] Hello, everyone, and thank you for joining our call. During the third quarter, we continued to focus on strengthening our content and commercial capabilities through timely coverage of major news events, continued investment in our original content and new business opportunities in key industry sectors. We made further use of Phoenix's strong brand and content expertise. We will build on these strengths, deepen our client relationships and work to create more consistent business opportunities. We're also exploring how to make our content more accessible to AI models and platforms as we prepare for changes in how people find and consume information, and as AI models evolve to become the traffic window.

Now I would like to invite our CFO, Edward Lu, to share more details on our business progress and financial performance during the quarter.

Xiaojing Lu: During the third quarter, we continued to build on our strength in international news, reporting and in-depth analysis. Our coverage of President Xi Jinping's visit to the United States included timely news updates and expert interviews across multiple platforms, helping our audience better understand China U.S. relationships and other international developments. Related short videos received more than 50 million views in total. Our reporting also gained attention beyond our own channels. For example, our interview on China-U.S. cooperation in AI was reported by the official social media accounts of China's permanent mission to the United States. We also continue to cover major social issues, including natural disasters and public safety incidents.

Through on-the-ground reporting, data analysis and in-depth research, we provided timely and reliable news coverage that went beyond the headlines. These efforts reflect the value of professional journalism in today's fast-changing media environment. Turning to our business in key industry sectors, our technology channel made strong progress, particularly in AI and robotics. We continue to strengthen our industry knowledge and produce specialized content, helping us win new business from clients in this field. In the first 9 months of 2026, revenue from AI and robotics clients was more than 3x the amount generated in the full year of 2025, with most of the revenue coming from original content services.

We also expanded our work around major industry events, including the World Artificial Intelligence Conference and the World Robot Conference. By combining specialized content, event coverage and marketing services, we are finding new ways to serve clients and build long-term relationships. We believe this model could also work in other industry sectors. In our original content business, we continue to bring quality story telling and the brand partnerships together. Our documentary service, including The Journey, attracted audiences with real-life stories and topics that matter to society. During the quarter, our brand-sponsored documentaries reached wide audiences across multiple platforms. They featured our clients' brands in a natural way without taking away from the stories themselves.

This helps us maintain the quality of our content while delivering value to our brand partners. We also hosted the Phoenix Greater Bay Area Finance Forum during the third quarter in partnership with Phoenix TV. The forum brought together government representatives, business leaders and investors to discuss AI, international business expansion and cross-border finance. Through live streaming coverage across multiple platforms, the event generated more than 800 million impressions. Events like this allow us to strengthen our industry connections, reach wider audiences and develop new opportunities with brand partners. On the technology and the product side, we continue to improve how we organize and distribute content while exploring new uses for AI.

We are using AI to improve our content production and operating efficiency. At the same time, we are working to make our content more accessible to AI models and platforms so that it can continue to reach audiences as the way people search for information changes. Looking ahead, we will continue to focus on our strength in professional journalism and our trusted brand. Our priorities are to expand our original content business, deepen our work in key industry sectors and improve operating efficiency. We will also continue to explore AI applications at a measured pace. Together, these efforts will help us strengthen our business and support the company's long-term development. This concludes our CEO, Mr. Li's prepared remarks.

I will now walk you through our financial performance for the third quarter of 2026. All figures mentioned will be in RMB. Our total revenues were RMB 217.6 million, representing an 8.3% increase year-on-year from RMB 200.9 million. Specifically, net advertising revenues were RMB 149.2 million compared to RMB 159.3 million in the same period of last year. Paid services revenues were RMB 68.4 million, representing a 64.4% increase year-on-year from RMB 41.6 million, primarily driven by the revenue generated from our digital reading services offered through mini programs on third-party applications. Cost of revenues decreased by 12.4% to RMB 92.2 million from RMB 105.2 million in the same period of last year.

Gross margin for the third quarter improved to 57.6% from 47.6% in the same period of last year. Total operating expenses were RMB 128.6 million, reflecting an 18% increase year-on-year from RMB 109 million. This increase was primarily due to higher sales and marketing expenses incurred for the digital reading services mentioned earlier. Loss from operations was RMB 3.2 million compared to RMB 13.3 million in the same period of last year. Net loss attributable to ifeng was RMB 24.3 million compared to RMB 4.9 million in the same period of last year. Moving on to our balance sheet.

As of September 30, 2026, the company's cash and cash equivalents, term deposits, short-term investments and restricted cash totaled RMB 935.4 million or approximately USD 139.5 million. Finally, I'd like to provide our business outlook for the fourth quarter of 2026. We forecast total revenues to be between RMB 236.7 million and RMB 251.7 million. For net advertising revenues, we projected between RMB 148.4 million and RMB 158.4 million, while for paid service revenues, we project between RMB 88.3 million and RMB 93.3 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.

Operator: [Operator Instructions] First question comes from the line of [ Alexandra Liu ] from First Shanghai.

Unknown Analyst: So I have a question related to advertising. So how do you see the advertising market at the moment? And what were the main challenges and opportunities for Phoenix this quarter? And what will you focus on over the next few quarters?

Xiaojing Lu: Actually, first, thank you very much for the question. In my opinion, like advertisers are still careful with their budgets. They want to know what each campaign can achieve and why it is worth investment. We also see differences across industries and individual clients. This quarter, revenue from home appliances, e-commerce and automotive clients was lower. Revenue from liquor and food and beverage clients grew. We also made progress with tech clients, especially in AI and robotics. In these newer fields, our in-depth content and strong coverage of major industry events have helped us build our reputation and influence. Brands work with us because we understand their industries and the audience they want to reach.

Our focus is to turn these opportunities into long-term client relationships. For example, a project around an industry event could lead to a follow-up content or campaign for the client's next product launch. We are also working to bring our content to more channels as more people use AI tools to find information. We are exploring ways to make our content more visible through large language models. This work is still at an early stage, but it is part of how we are adapting to change in how people get information and how brands reach them. Thank you. I hope I have answered your question.

Operator: Thank you, management. I see no further questions at this time. I will now turn the conference back to Muzi Guo for closing remarks.

Muzi Guo: Thank you. This concludes our conference call for the third quarter. If you have any additional questions, please don't hesitate to reach out to us. Thank you for your time, and have a great day.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

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