FENG - Earnings call transcript Q1 2021 | Phoenix New Media Limited

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Operator

Good day and thank you for standing by. Welcome to the Phoenix New Media First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. to Qing conference Liu. like first to now today, speaker would hand over the your I Thank you. ahead. go Please

Qing Liu

Thank you, will and our Q&A operator. XXXX Welcome On quarterly Chief to Phoenix New results Edward Mr. a call. Mr. Liu; Lu. joined session. review Financial Officer, the Officer, earnings call, Media’s a I’m here provide Executive then by management conduct Chief today’s Shuang and first conference first quarter of

are webcast first will our available XXXX website call results hours. this The replay be call few the on and at the of A quarter on ir.ifeng.com. in website a conference financial of available

we Before will statements. earnings would our press you refer release, which make to forward-looking this to we our continue, apply harbor as in I safe statement to like call

figures Shuang that this CEO. I would note unless during are RMB. call all the Liu, Mr. turn stated, otherwise over With mentioned in please to our like that, call conference Finally, to

Shuang Liu

on for content our business new and Thank you, industry-wide brand growth and advantages on creating to pressure Qing. focus us XXXX, exert create of baseline first quality to our competition exclusive Hello, today. you delivering striving by continued the process. high everyone. joining the quarter original, and In fortifying our securing core our on Thank advertising We call while curves.

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generated two live coverage, Phoenix especially exclusive record the our billion breaking Our a and internet. from broadcast, across original news featured content views TV

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in viewers top and of at our China, hot Forbes We’re rank the lists bar top searches.

coverage our of TV’s Two Our through to eight videos. beyond Sessions reach live forecasted important short coverage, across included sessions, platform and event the was globe. millions articles extended which users Phoenix news

Our year-over-year. for of results brand Sessions from advertising Two highs to event event The prior for speak years. number reached the the advertising brand the themselves. by revenues compared XX% our increased And from clients new

to and China-U.S. in with outlets the interacting major capturing media were in rooms line. Another between event from perspectives a highest outside the we This the on feeds across outlet which major social of massive of and in-person was there only raising profile all media questions most one front We published video this representative the March, commercial as of peers general dialogue sole official dialogue and conference user was of the Chinese public the were covered by interviews, generate Biden government Alaska dialogue concerns. commercial event various the outlets Chinese the to Chinese held event. media so We the four administration. first by that as access far, events got year’s republished live on our media platforms. exclusive We the covered traffic

to our teams’ as the by social create needs and of core tailored programs such to in-depth image program facilitates speakers’ industry interview and buzz, gain as on across further third-party of our our popularity Jinping gain IP between programs, and entertainment branding our specifically brand making views those topics the as we sales IP Jinping million to audience post-event financial continue in in-depth our promote integrated We such coverage content, media broader access as and exposure effectively vertical Weibo social in Xi The Cover original Other than experts the on Moreover, Talks Our brand various Talk for same dialogues in advertising premium time, Jinping Consider brand’s order and XXX products. to speakers. cultural available Xi in news the and our a among capturing aligned trending viewers our Jinping more customer. vertical to our dialogue platforms, social broad expertise main Talks, IP enhancing well understanding with vertical, this Ifeng market accumulated programs, other than interviews Talks, on delivered On internet. platforms team’s and media advertisers recognition base, we influence. and needs. the celebrities

XX we distributed characteristics searches in the exceeded unique searches quarter. distribution of earned exposure us increased exceeded quarter. media executed hours million followers total bring to first of opportunities. our other the monetization XX strategies, million – tailored hot on third-party course, account other content of to official in our social actively our first Weibo the platforms first social of the platforms While our platforms time hot More eight brand, new platform, mark media XXX The number for and the specifically, each and

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our Now iPhone app. turning to

series user significant other of differentiated Implementing substantial experience highly apps, in enhancing content from During expand – efficacy operations, library. algorithm, upgrades retention. boost the presence algorithm-based first iPhone’s quarter, severe to put we content a its of its and and streamline to its in competition the effort

only us to these of classifications, algorithm interest-based topics. to users content to our on our user generic also vertical profile From of we not social profiles flow easy the refined content trending across our providing platform, access interests. of distribution content. but exposure refined Furthermore, our topics we personalized and segmentation the tailored content First, based and our content maximize with differentiate based also user allowing interest-based individual provide a on by aggregated strategies

We continue experience to of improve our the user product.

our of the content pool. premium to operation continue Second, strengthen we

platform’s closely our In hot further topics. exposure trending we we resources premium and that enhanced quality During app. By on the maximizing was on consistent to meantime, that directed users providing information in, we quarter, and topics and of the the focus articles overall news content complimentary production related interested have high quality of also are the videos enhance of the pool our enrich content user the experience. premium diversify content to our and to the

provide our our influence iPhone’s to user TV’s Third, feeds enhance classic Phoenix live channel, and a further feature programs, access we app, brand retention. users with introduced which to television news and

basis. a of rate a result user XX-day basis and a retention XX% increased our efforts increased click-through the As by above, X% on on sequential sequential user mentioned rate by

to Now new initiatives. turning

committed advancing new to further various diversify we to argument quarter, the and initiatives revenue our During streams remain growth.

estate, influence. our For on we focus BXB real establishing

solution, One their fluctuations, was updates changes, [indiscernible]. system of and with companies, stock the key smart industry property strategic content to This our rollout analysis BXB generation provides user development. price estate on including areas and products we real related

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premium On library online the library we accumulated IP, reading front, literature online have extensive of IP. an

more monetization goal diverse been for opportunities IP. to has this foster primary Our

literature of has reproducing, million IP other all transform of instant XXX in of an Our audio on end one and video series had channel, the in-house plays. literature our a initial By content March, views million Kuaishou excess X.XX work was into [indiscernible] million We largest an production audio since the February. in collected already XX of our video short followers, form launching content, platform, IP our success. Ximalaya, China’s over

competitiveness, In our content audience into customers. on spot production and content we On convert traffic our five generated the a e-commerce content front, the from e-commerce efficiently enhance algorithm to top platforms were exception fact, continue e-commerce strengthen to we recommendation capabilities to platform’s to user the original must personalize earning watchlist. series overall

the the Mini quarter, We optimization to a PC also program our In the better products Phoenix WeChat on of platform. version provide experience. e-commerce accelerated developer user premium we independent upgraded of

of on result rates As achieved these increase conversion platforms. user we a in both upgrades, an

we’re e-commerce user traffic content costs. of from offerings also acquisition our generating explored third-party our through customer premium to ways lower More platforms importantly, different actively

to feature. During efforts, by aware the business and the have combined increase GMV areas order initiatives. and to the first pressure that the summary, our quarter, our certain progress in streams. is our streaming have are on sequentially quarter. XX% proactively In we launch premium downward products same And these we our and of we quite traffic business continue are realigned offerings. new profit made strategies grew advertising initiatives our At XX%, segments our for diversify facing by of through so far live of the example, time, we sequentially revenue e-commerce we gross to business content by Nevertheless, new officially we exclusive Driven existing Phoenix competition user first encouraging. in invest in it’s in premium business,

for stay Going prepared financials. build provide closer hand fortifying solid CFO, Mr. remarks. our into quarterly a concludes leadership Lu structure I and our growth. sustainable call focus our news our expanding forward, to reporting, now Edward cost foundation new influence on we will a our the my optimizing to in media business will This to look

Edward Lu

conference our today. Thank you thank call for on joining you, Shuang and all

million increased Our in RMBXX.X mainly million by in to period last Loss of XXXX on loss of others the last period now by was revenues year. from services. period the in from X.X% from negative from RMBXX.X of attributable of real period RMBXX.X of in from the represents in related the period negative first same million of XX.X% of trend net the were decrease operating I revenues advertising from last XX.X% RMBXX.X of quarter from million quarter year. RMBXXX.X in million same quarter Paid XXXX period Non-GAAP Non-GAAP Operating during loss operations due reflecting attributable of e-commerce first the of negative from XXXX increased was first ifeng quarter the million million, in last our the million first budgets first revenues to additional in first towards e-commerce RMBXX.X XXXX, period representing the RMBXXX.X improving of Non-GAAP was by from and the XXXX year. in the industries year, XXXX XXXX, operations in from services in compared line million, million advertising quarter will in to a same policy revenue improving improving XXXX online year, first due in the period period certain same period the operations quarter improving million, mainly market margin of same was the from revenues the of previous the RMBXXX.X a the in quarter to estate same RMBXX.X first of negative the RMBXX.X was total year. of X.X% of XXXX of the RMBXX.X the year. from to quarter advertisers of last same in broader XXXX online color period the the by Net increase in year. million, were conditions was in in caused last continuing XX%, paid from XXXX of RMBXX.X in million same last period. in first the same RMBXX.X XX.X%, Revenues in quarter to XX.X% XXXX. operations margin from X.X% guidance. in of same of mainly RMBXXX.X to to quarter in in of reading. loss RMBXX.X from of the from improving Net first from of year. same the last last quarter free XXXX some million, This reductions contents the in of million, the ifeng last RMBXX.X in million Revenues decrease from provide and first first quarter RMBXX.X with million continuing XX.X% sensitive year. decreased the RMBXX.X in

XX, billion were restricted XXXX, approximately cash Moving deposits on to and and RMBX.XX March company’s our cash equivalents, short investments as balance of and the US$XXX.X or cash term million. term sheet,

outlook our of quarter I’d provide the to XXXX. business Finally, second like for

We be are to RMBXXX.X million total million. RMBXXX.X forecasting between revenue and

forecasting are we million. revenues, advertising RMBXXX.X net For and RMBXXX.X million between

and For between continue RMBXX are retain paid original million and our RMBXX services users. of our we producing to forecasting attract revenues, In to million. content we will exclusive build and efforts summary,

experience user enhance product streamline brand upgrades investing also We’re strengthen and equity. content to operations to

recovery our we combined streams and advertising monetization our the with our the growth recovery improve prepared continue diversify stage operating of is This In new revenue of the setting our portion the to will concludes gradual addition, This profitability. to efficiency. explore for initiatives strategies, of call. industry and

now for Operator, please ready go questions. We’re ahead.

Operator

Thank the question. Binbin first from question of Please Ding you. comes Your [Operator Instructions] ask JPMorgan.

Binbin Ding

morning, have questions. Good three [Audio management. Dip] I

First one growth the traffic? what [indiscernible] is organic cost in the your And is traffic between traffic future. two external versus cause these

plan Second is, talk major very third-party what management can do traffic? in traffic? third-party you your Thank about are your generate traffic future. of of Third the is, the And those much. sources monetization how also the one you

Shuang Liu

to we focus Yes, talk last have I organic in more traffic. Shuang. growth is our year, this like on Binbin, from about Starting strategy. our

about are acquisition the more strategy. we especially I think, user cautious

or approach. the growth brand-driven are user focused We content-driven on more

marketing So portion organic tell brand, quantify of under premium And This influence, traffic. going monetization means will control. experience about our demonstrated content. that’s major growth, can platforms. over we like to our other by this to of like outlets it’s on I see the share traffic by users is content third-party our most forward, the accumulated But to traffic. I portion which value from organic And you that content, talking media have why at going cannot social traffic higher have million and brand our come you of I driven XXX and potential. our by our stage, we

counting progress our platforms. ecosystem. dynamic on already video we two making good in content, style. on short of tens from videos social well have leaders like Kuaishou viewers We solid engaging WeChat user demographic. these Bilibili. on opinion Douyin, expanding TV, will service believe as of in as other also appeal our and exclusive millions the that and Everyday to achieved consume users base while also to interactions progress short contents platforms content are promote trademark user in these partners, the younger fits create and of personalized We We Phoenix plan who better hosts our form And

Our massive In program And these fully have yet filming quarter, media. user base media enormous monetization launch speaking, this first greater base, frankly, better utilize to use we the not brings resources. potential. we of social social monetize our

planning their with with to provide brand We’re more options. capabilities also the provide in brand marketing placing allow clients includes process These to professional of advertisement services services our our accounts. goods and allows We to Massive marketing potential customers. us party social top more are media clients traffic social integrated utilizing brand can third industries, not allocations advertisers in only advertisers existing it also a budget growing winning more industries. advertisers us attract from help reach new fast customer especially believe target to more media in

optimize of increase interactions. content forward, platforms customize our original going to to the to user will So we exposure capabilities accelerate continue content, for and to third-party our

expansion want form early our and a we self that platforms. the media As our user style. our stickiness also enhance capabilities, continue to capabilities on we on at are monetization emphasize I monetizing platforms, improve enforcing to stage social of third-party for our monetization outlets user will

on and With and we portals the these monetize TV and – between the more their premium interaction these you. recognition part, our hosts brand we’re the also Thank Phoenix traffics can our leverage confident integration, improve the more our content TV of strengths more further further effectively, part sites.

Operator

Thank you.

Macquarie. Your next Please Frank Chen ask from question of comes a question.

Frank Chen

have quick morning, two Good I questions.

[Technical those potential you question is XXX the one some or sharing of media. example, will tell your platform Thank The the social and native can is acquisition have from more should you. unit operating follow? your have revenue get business if more metrics? be How health Can that? on a that you million, is that monetization you unit what potential on initiative. to we of second over ads, for costs media question million business economic monetization user on think media social followers you the your about followers? you share first amount Well, now willing share the of inside how content? And you unit protein are us The follow-up For you of can additional social Difficulty] more model

Edward Lu

Frank. speaking. is Hi, Edward This good morning,

quickly of first question is e-commerce quite in and GMV encouraging. business our grew who creating to allows improve grew iPhone by generating this first by list time, On We basis algorithms. on and low monetization and and low, our of user business, short us articles have users allowed video e-commerce existing original our have build explore our the the gross actually such our quarter a our to services target sequential as consumer apps, the tailor consumers XX%. e-commerce ecommerce At capabilities our Regarding recommendation system, point cost. majority it this platform e-commerce actually iPhone to and potential traffic. XX% content, has content let progress the like a the we our by of very of service still our utilizing very from brand our revenues to trust e-commerce profit a us Also, provide acquisition

achieve e-commerce user the beyond existing to more business to significant go a we growth our course, Of in need traffic. long-term,

up collaborated the a prices. collection our third quarter, platforms. such explore at team video is encouraging users potential party higher quite online started well of In throw and will has high as generate accurate, with competitive result the influencers live Douyin. on of video WeChat. different a to established sessions, training platforms we quite continue premium quality is the and sessions traffic different these such This result product short from we for to throughout Kuaishou our ways very e-commerce to short platforms, e-commerce Our ways series using premium to on user of we content successfully already as e-commerce organized first And

selection Moreover, e-commerce to acquiring to has our future reasonable converting and we definitely cost This has need cost. media consumers a improvements, price, at business platform although our party efficiency social to, It followers continued XXX traffic for operation potential terms lot We goals. of especially into boost further a our we’re third enhance optimize the structure, will to fundamentals enormous to challenge. also refine product e-commerce daily continue in headroom our of of business. million remains reasonable a strategy,

much sure cost a don’t video a we acquisition to Regarding content premium on and lot I’m if clearly. Actually, because user the heard exclusive Kuaishou. of not question, second channels spend Douyin, and social as and the I your platforms, of you provide have we WeChat Weibo on platforms such like

users they social subscribe of – will our accounts our they just, So media they on kind content like channels. this and will

As business Kuaishou WeChat of know, And at these million there’s future. user believe, Douyin, the Weibo, a than we have like is simple. we you quite kind big model massive And like have actually XXX like for and bases already more on followers central. potential a

like opportunities clients, provide consumers First, advertising, social existing on our exposure more can for platform. advertising, more is so potential we brand our advertising they brand reach

So, platforms social well. network as

But more from will more their solving. base, user Because e-commerce kind on and kind Douyin, this consumers Jingdong, ago, to do our only as and of and are years social five Kuaishou I users a platform. for the or this to like Taobao buy come nowadays, faster of platform know massive WeChat people So platform, developing above, advertising this business. forward three business. Also help definitely already like e-commerce platform mentioned,

media on base And I platform so have will e-commerce I our your help answered for future, massive social sure. we this business believe the question. in hope, the user

Edward Lu

Yes.

few Let a more me add words.

questions. social to the our due want double same want have that. million network of on that being I actually, might I manifestation At at with question, the second stage. emphasize you to the is early beginning, check over platforms Your XXX users of sort answered But

native now, option right monetization the sharing party early and with it’s platforms. third too said, I stage. apps, the As revenue includes But

keep portion it’s apps premature we’ll sharing So updated on. to of and options. and the native you definitely share the data revenue But the

Frank Chen

and Shuang you. Thank Thank very clear. Edwards, you,

Edward Lu

Thank you.

Operator

Securities. [Operator Shanghai Instructions] from ask from Your question First Zhang question. next comes Carmen a Please

Carmen Zhang

challenges business advertising advertising Hi, that more and question. Thanks my the revenue? about currently your tell taking your you first us in pressuring for quarter, management. are the Can main

Edward Lu

good advertising Hi, macro achieved our advertising is morning, for the a brand as sequentially. economy speaking. Actually, This recover the in first business Edward quarter, rate our continue Carmen. healthy growth business, to

as However, future from revenue broader perspective, whole in challenges business growth. still a advertising a our faces

its of We is on growth expectation year-over-year expect quarter, should business our to this that trend second our brand the most in the advertising a experience to fact based continue brand continue advertisers rebound.

pandemic continues real positive aware brand food the offline advertising as which a will will costs conducted to impact the control the impact under a advertising national such advertising to be more brand estate, in lead our is addition, to advertising better to brand come challenge. from China, In normal, notably brought certain The refined events have be management on this more experience gala of macroeconomic expect our as process growth. to we’re Therefore, many need execution can policies, project And in Nonetheless, industries, increasing as pressure. in control will for a uncertainties spending. we also project costs. with tackling we up

for adjusting our offering, also our our in capabilities influence to besides different the terms us our team energy content. brand influence that especially our of into new consumption, eventually new our advertising content drivers is expand We healthcare to will across and as we allowing sales translate This original We’re new education, in regions, sales believe enhancing such growth are vehicles. all balance areas business. in areas our these

in For advertising platforms leading product for API our to more continues already market put advertisers. the a technology by of we and sharing video competitive to more and ad upgrade docking Actually, absorbed are features effort the ad business, platform to Sony, between data efficient placement, ad of programmatic from this to budget kind we have those overall our survive be must platforms, accordingly. the coordination the environment, the enhanced enable actually our as underlying we our show

infotainment helped throughout vertical. for plans to conversion in rates have we support for our our finance strengthened viewer, industry. This improve the platforms’ clients Sony the advertising data For our system

multiple additional quarter. [ph] we and make Fanyue Thank mentioned leading to the programmatic and our business you. our delivery have our and improve smartphone converted competitive development extended the efforts I traffic Fanyue’s aligned the partners, more challenges efficiency effectiveness drove programmatic Fanyue, systems were into used This manufacturers which market. above For in in of ad this

Operator

would the now conference to Instructions] to like closing have management I back the continue. remarks. for [Operator Please team

Qing Liu

Thank you, operator.

We on our a have come Q&A call. the end contact session Please free for us on day. Thank have to if our any you questions. joining to us conference further of you feel Have good this call.

Phoenix New Media Limited (FENG) 11 May 212021 Q1 Earnings call transcript