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Phoenix New Media (FENG) Q2 Earnings call transcript Aug 14, 2024

AInvestThursday, Aug 15, 2024 3:36 pm ET
2min read

Phoenix New Media recently held its second quarter 2024 earnings call, providing investors and analysts with an update on the company's performance and strategic initiatives. The call, led by CEO Yusheng Sun and CFO Xiaojing Lu, highlighted the company's achievements, challenges, and future outlook.

Financial Performance and Strategic Direction

Phoenix New Media reported a total revenue of CNY 168.3 million for the second quarter of 2024, a slight decrease from the same period in the previous year. The company attributed this decrease to the declining market for Internet advertising, which saw a year-over-year decline in overall spending. However, Phoenix New Media managed to maintain stable advertising revenue, with a slight increase, demonstrating the company's resilience in the face of market challenges.

The company also reported a significant improvement in its operational efficiency, with a decrease in cost of revenues and a rise in gross margin. This is a testament to the company's focus on cost control measures and its efforts to optimize its operations.

Content and Distribution

Phoenix New Media's strength lies in its ability to produce high-quality content and distribute it effectively across various platforms. The company's coverage of major international news stories, such as the death of the Iranian president in a plane crash, showcased its thorough analysis and commitment to objective journalism. The success of its original video service, Phoenix Lab, further underscores its ability to cater to a younger demographic and create practical consumer guides. With over 170 million active user followers across all platforms and a rapidly growing follower base on Douyin, Phoenix New Media's reach and influence continue to expand.

Future Outlook and Challenges

Looking ahead, Phoenix New Media plans to focus on strengthening its team's professional capabilities and optimizing user experience. The company is also working on improving its operational efficiency and monetization capabilities to maintain its competitiveness in the Internet media industry. Despite the challenges posed by the declining Internet advertising market, Phoenix New Media remains optimistic about its growth prospects, particularly in the international market and in the alcoholic beverage and FMCG sectors.

Investor and Analyst Perspectives

During the Q&A session, Alice Tang of First Shanghai raised concerns about the slowing growth rate of the Internet advertising market and its impact on Phoenix New Media's revenue. In response, the company expressed its plans to diversify into new industry sectors and expand its international marketing efforts to counteract the decline in traditional ad spending. The company's strategic focus on premium IP content, high-end interviews, and specialized team has already yielded positive results in the alcoholic beverage and FMCG sectors, indicating a promising outlook for these areas.

Conclusion

Phoenix New Media's second quarter 2024 earnings call underscored the company's resilience in the face of market challenges and its commitment to producing high-quality content and effective distribution. With a focus on operational efficiency, user experience, and strategic expansion, Phoenix New Media is well-positioned to navigate the evolving media landscape and capitalize on growth opportunities in the second half of the year and beyond.

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