Phoenix New Media Reports Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

BEIJING,March 19,2019 -- Phoenix New Media Limited (NYSE: FENG) ("Phoenix New Media","ifeng" or the "Company"),aleading new media company in China,today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31,2018.

"As online content regulation in China became increasingly stringent during 2018,we continued to adapt and evolve with the changing media landscape. As an industry leader,we remain steadfast in our commitment to providing our users with leading professional journalism and world-class news content," Mr. Shuang Liu,CEO of Phoenix New Media,commented. "In the fourth quarter,we actively expanded our user base and service offerings by diversifying into lifestyle verticals like entertainment and fashion,refining our We-Media operations,increasing investments in our digital reading business,enhancing our video operations,and accelerating our in-house original content production capabilities. Looking forward to 2019,we will maintain our focus on optimizing both our users' experience and the ROI for our advertisers. We are also looking for opportunities to expand our products and content offerings through mergers and acquisitions."

Ms. BettyHo,CFOof Phoenix New Media,further stated,"In the fourth quarter of 2018,our total revenues decreased by 13.5% year over year to RMB399.2million under the newaccounting standard of ASC606 and decreased by 6.0% year over year to RMB434.1 million under the prioraccounting standard of ASC605,primarily as a result of 14-day temporary service suspension and the macroeconomic slowdown. However,as the fourth quarter normally is our strongest quarter,our total revenues increased by 21.2% sequentially,driven by a 26.5% growth of our advertising revenues compared to the third quarter of 2018 under the newaccounting standard of ASC606. The advertising revenue generated from our FENG app has increased by 24.5% year-over-year in the fourth quarter of 2018 under the prior accounting standard. While we are expecting the economic headwind to continue into 2019,we are confident that our continuous efforts in diversifying our revenue streams and improving the synergies between our business lines will help us weather through the near-term uncertainties and deliver long-term value to our shareholders."

Acquisition of Yitian Xindong

On December 19,2018,the Company announced that it entered into an agreement to acquire 25.5% equity interests in Beijing Yitian Xindong Network Technology Co.,Ltd. ("Yitian Xindong"),for an aggregate purchase price of RMB144 million (the "Acquisition"). Yitian Xindong owns the mobile application Tadu,a leading online digital reading application in China that currently has more than one million daily active users.

On December 28,the Company completed the Acquisition and gained a 51.0% voting rights of Yitian Xindong by entering an agreement with Shenzhen Bingruixin Technology Co.,Ltd. ("Bingruixin"),a 25.5% shareholder of Yitian Xindong,who agreed to entrust voting rights with respect to the 25.5% equity interests in Yitian Xindong to the Company. Accordingly,the Company was able to consolidate Yitian Xindong and had consolidated the unaudited financial statements of Yitian Xindong for the 3-day period from December 29,2018 to December 31,2018. The revenue of Yitian Xindong for the 3-day period was RMB1.1 million (US$0.2 million),which was included in the consolidated paid service revenues.

On March 1,2019,the Company acquired another 25.5% equity interests in Yitian Xindong from Bingruixin. As a result,the Company currently holds 51.0% equity interests in and a 51.0% voting rights of Yitian Xindong and expects to continue to consolidate Yitian Xindong's financial statements.

Adoption of ASC606

Beginning fromJanuary 1,the Company adopted a new accounting standard of ASC606,Revenue from Contracts with Customers(the "new accounting standard") by applying the modified retrospective method. The financial data presented in the Company's financial statements for the quarters of 2018 and the fiscal year 2018 are in accordance with the new accounting standard while all financial data presented for the quarters of 2017 and the fiscal year 2017 are in accordance with ASC605,Revenue Recognition (the "prior accounting standard").

The impact of applying the new accounting standard on the Company's unaudited financial results as compared to the prior accounting standard for the quarter ended December 31,2018 was as follows:

Three Months EndedDecember 31,2018

Prior Accounting

Standard(1)

Adjustments

New Accounting

Standard(2)

Sales Taxes And

Surcharges

Barter

Transactions

Contract

Fulfillment

Costs

(RMB in thousands)

Revenues

434,068

(35,821)

987

-

399,234

Net advertising revenues

388,667

(33,675)

987

-

355,979

Paid services revenues

45,401

(2,146)

-

-

43,255

Cost of revenues

(217,198)

35,821

(52)

157

(181,272)

Gross profit

216,870

-

935

157

217,962

Operating expenses

(254,447)

-

(2,564)

-

(257,011)

Sales and marketing expenses

(152,958)

-

(2,564)

-

(155,522)

Lossfrom operations

(37,577)

-

(1,629)

157

(39,049)

Note:

(1) This financial information for the three months ended December 31,2018 waspresented under the prior accounting standard (ASC605).

(2) This financial information for the three months ended December 31,2018 waspresented under the new accounting standard (ASC606).

Fourth Quarter 2018 Financial Results

REVENUES

Total revenues for the fourth quarter of 2018 were RMB399.2 million (US$58.1 million) under the new accounting standard,which represented a decrease of 13.5% from RMB461.8 million in the fourth quarter of 2017.

Net advertising revenues for the fourth quarter of 2018were RMB355.9 million(US$51.8million) (net of advertising agency service feesand sales taxes and surcharges)under the new accounting standard,which represented a decrease of 13.3% from RMB410.5 million in the fourth quarter of 2017.

Paid services revenues[1]for the fourth quarter of 2018 were RMB43.3 million (US$6.3million) under the new accounting standard,which represented a decrease of 15.6% from RMB51.2million in the fourth quarter of 2017. Revenues from digital entertainment[2]for the fourth quarter of 2018 decreased by 23.3% to RMB30.3million (US$4.4million) from RMB39.5 million in the fourth quarter of 2017. Revenues from games and others[3]for the fourth quarter of 2018 increased by 10.5% to RMB13.0 million (US$1.9 million) from RMB11.7 million in the fourth quarter of 2017.

Under the prior accounting standard ASC605,total revenues for the fourthquarter of 2018 would have been RMB434.1 million (US$63.1 million),which would have represented a decrease of 6.0% fromRMB461.8million in the fourthquarter of 2017.

Under the prior accounting standard ASC605,net advertising revenues for the fourthquarterof 2018 would have been RMB388.7 million (US$56.5 million),which would have represented a decrease of 5.3% from RMB410.5 million in the fourthquarter of 2017,primarily attributable toa 29.2% year-over-year decrease in PC advertising revenues,partially offset by a 24.5% year-over-year increase in mobile application advertising revenues. The decrease in net advertising revenueswas mainly due to the challenging market condition and the negative impact from the 14-day temporary service suspensionof ifeng News mobile application,WAP,and certain channels on ifeng.com between September 26,2018 and October 9,2018.

Under the prior accounting standard ASC605,paid services revenues for the fourth quarter of 2018 would have been RMB45.4 million (US$6.6 million),which would have represented a decrease of 11.4% from RMB51.2millionin the fourthquarter of 2017. Under the prior accounting standard ASC605,revenues from digital entertainment for the fourth quarter of 2018 would have been RMB31.6 million (US$4.6 million),which would have represented a decrease of 19.9% from RMB39.5million in the fourthquarter of 2017,due to a 23.2% decrease in the MVAS revenues mainly resulting from the decline in users' demand for services provided through telecom operators in China. Under the prior accounting standard ASC605,revenues from online digital reading for the fourthquarter of 2018 would have been RMB14.4 million (US$2.1 million),which would have represented a decrease of 15.5% from RMB17.0 million in the fourthquarter of 2017,mainly due to the tightening regulations in China regarding online digital reading content and the impact of the 14-day temporary service suspension. Under the prior accounting standard ASC605,revenues from games and others for the fourthquarter of 2018 would have been RMB13.8 million (US$2.0 million),which would have represented an increase of 17.2% from RMB11.7 million in the fourthquarter of 2017.

COST OF REVENUES

Cost of revenues for the fourth quarter of 2018 was RMB181.3 million (US$26.4 million) under the new accounting standard,which represented a decrease of 13.1% from RMB208.7 million in the fourth quarter of 2017. Under the prior accounting standard ASC605,cost of revenues for the fourth quarter of 2018 would have been RMB217.2 million (US$31.6 million),which would have represented an increase of 4.1% from RMB208.7 million in the fourthquarter of 2017. The decrease in cost of revenues under the new accounting standard was mainly due to:

The sales taxes and surcharges were RMB35.8 million (US$5.2 million) in the fourth quarter of 2018,which was excluded from cost of revenues and recorded as a reduction item of revenues under the new accounting standard,as compared to sales taxes and surcharges of RMB39.9 million in the fourth quarter of 2017,which was recorded as a component of cost of revenues under the prior accounting standard ASC605.

Content and operational costs for the fourth quarter of 2018 increased to RMB153.9 million (US$22.4 million) from RMB143.6 million in the fourth quarter of 2017,primarily attributable to an increase in advertisement-related content production cost.

Revenue sharing fees to telecom operators and channel partners for the fourth quarter of 2018 increased to RMB13.2 million (US$1.9 million) from RMB12.4 million in the fourth quarter of 2017,primarily attributable to the increase in fees paid to some channel partners,and partially offset by the decrease in the revenue sharing fees of MVAS products to telecom operators.

Bandwidth costs for the fourth quarter of 2018 increased to RMB14.2 million (US$2.1 million) from RMB12.8 million in the fourth quarter of 2017.

Share-based compensation included in cost of revenues was RMB2.5 million (US$0.4 million) in the fourth quarter of 2018,as compared to RMB1.2 million in the fourth quarter of 2017. The change was mainly due to the adjustment of the estimated forfeiture rate of share-based awards as a result of the demission rate of headcounts recorded in the fourth quarter of 2018.

GROSS PROFIT

Gross profit for thefourth quarter of 2018 wasRMB218.0 million (US$31.7 million),as compared toRMB253.1 million in the fourth quarter of 2017. Gross margin for the fourth quarter of 2018 decreased slightly to 54.6% from 54.8% in the fourth quarter of 2017.

To supplement the financial measures presented in accordance with the United States Generally Accepted Accounting Principles ("GAAP"),the Company has presented certain non-GAAP financial measures in this press release,which excluded the impact of certain reconciling items as stated in the "Use of Non-GAAP Financial Measures" section below. The related reconciliations to GAAP financial measures are presented in the accompanying "Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures."

Non-GAAP gross margin for the fourth quarter of 2018,which excluded share-based compensation,increased slightly to 55.2% from 55.1% in the fourth quarter of 2017.

OPERATING EXPENSESAND LOSS FROM OPERATIONS

Total operating expensesfor the fourth quarter of 2018slightly decreased by 0.6% to RMB257.0 million(US$37.4 million)from RMB258.5million in the fourth quarter of 2017. Share-based compensation included in operating expenseswas RMB2.1 million (US$0.3 million)in the fourth quarter of 2018,as compared to RMB3.5 million in the fourth quarter of 2017. As the Company recognized share-based compensation,net of estimated forfeitures,on a graded-vesting basis over the vesting term of the awards,there wasless share-based compensation recognized in the fourth quarter of 2018for share options granted prior to 2018.

Loss from operations for the fourth quarter of 2018 was RMB39.0 million (US$5.7 million),as compared to RMB5.4 million in the fourth quarter of 2017. Operating margin for the fourth quarter of 2018 decreased to negative 9.8% from negative 1.2% in the fourth quarter of 2017,which was primarily due to the decrease in revenues resulting from the impact of the 14-day temporary service suspension and the slowdown of the macroeconomics.

Non-GAAPloss from operationsfor the fourth quarter of 2018,was RMB34.4 million (US$5.0 million),as compared to non-GAAP loss from operations of RMB0.8 million in the fourth quarter of 2017. Non-GAAP operating margin for the fourth quarter of 2018,decreased tonegative 8.6%from negative 0.2%inthe fourth quarter of 2017.

OTHERINCOME OR LOSS

Other income or loss reflects interest income,interest expense,foreign currency exchange gain or loss,income or loss from equity method investments,net of impairments,and others,net[4]. Total net other income for the fourth quarter of 2018 was RMB19.7 million (US$2.9 million),as compared to RMB19.9 million in the fourth quarter of 2017.

Interest income for the fourth quarter of 2018 decreased to RMB8.6 million (US$1.3 million) from RMB13.2 million in the fourth quarter of 2017.

Interest expense for the fourth quarter of 2018 decreased to RMB2.4 million (US$0.4 million),from RMB3.7 million in the fourth quarter of 2017,which was primarily due to the decrease in outstanding short-term bank loans in the fourth quarter of 2018,as compared to that of 2017.

Foreign currency exchange loss for the fourth quarter of 2018 was RMB0.3 million (US$0.05 million),as compared to foreign currency exchange loss of RMB4.5 million in the fourth quarter of 2017,which was mainly caused by the less significant appreciation of Renminbi against US dollars in the fourth quarter of 2018 as compared to that of 2017 that generated less exchange loss in Renminbi denominated borrowings recorded in the Company's subsidiaries whose functional currency is not Renminbi.

Income from equity method investments for the fourth quarter of 2018,was RMB4.0 million (US$0.6 million),as compared to income from equity method investments of RMB4.9 million in the fourth quarter of 2017.

Others,net,for the fourth quarter of 2018 decreased slightly to RMB9.9 million (US$1.4 million),from RMB10.0 million in the fourth quarter of 2017.

NET INCOME/ (LOSS) ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Net loss attributable to Phoenix New Media Limited for the fourth quarter of 2018 was RMB38.3 million (US$5.6 million),as compared to net income attributable to Phoenix New Media Limited of RMB11.8 million in the fourth quarter of 2017. Net margin for the fourth quarter of 2018 decreased to negative 9.6% from positive 2.6% in the fourth quarter of 2017. Net loss per diluted ADS[5]in the fourth quarter of 2018 was RMB0.53 (US$0.08),as compared tonet income per diluted ADS of RMB0.16 in the fourthquarter of 2017.

Non-GAAPnet loss attributable to Phoenix New Media Limited for the fourth quarter of 2018,which excluded share-based compensation and income or loss from equity method investments,was RMB37.7 million (US$5.5 million),as compared to non-GAAP net income attributable to Phoenix New Media Limited of RMB11.6million in the fourth quarter of 2017. Non-GAAP net margin for the fourth quarter of 2018 decreased to negative 9.4% from positive 2.5% in the fourth quarter of 2017. Non-GAAP net lossper diluted ADS in the fourth quarter of 2018was RMB0.52 (US$0.08),as compared tonon-GAAPnet income per diluted ADS ofRMB0.16 in thefourthquarter of 2017.

For the fourth quarter of 2018,the Company's weighted average number of ADSs used in the computation of diluted net loss per ADS was 72,767,164. As of December 31,the Company had a total of 582,149,952 ordinary shares outstanding,or the equivalent of 72,768,744 ADSs.

CERTAIN BALANCE SHEET ITEMS

As of December 31,the Company's cash and cash equivalents,term deposits and short term investments and restricted cash were RMB1.36 billion (US$197.3 million). Restricted cash represents deposits placed as security for banking facilities granted to the Company,which are restricted in their withdrawal or usage.

Fiscal Year 2018 Financial Results

The impact of applying the new accounting standard on the Company's unaudited financial results as compared to the prior accounting standard for the year ended December 31,2018 was as follows:

YearEndedDecember 31,2018

Prior Accounting

Standard(1)

Adjustments

New Accounting

Standard(2)

Sales Taxes And

Surcharges

Barter

Transactions

Contract

Fulfillment

Costs

(RMB in thousands)

Revenues

1,495,691

(122,962)

4,650

-

1,377,379

Net advertising revenues

1,306,930

(113,309)

4,650

-

1,198,271

Paid services revenues

188,761

(9,653)

-

-

179,108

Cost of revenues

(719,213)

122,962

(454)

157

(596,548)

Gross profit

776,478

-

4,196

157

780,831

Operating expenses

(900,536)

-

(4,317)

-

(904,853)

Sales and marketing expenses

(533,245)

-

(4,317)

-

(537,562)

Lossfrom operations

(124,058)

-

(121)

157

(124,022)

Note:

(1) This financial information for the yearended December 31,2018 waspresented under the prior accounting standard (ASC605).

(2) This financial information for the yearended December 31,2018 waspresented under the new accounting standard (ASC606).

REVENUES

Total revenues forfiscal year2018were RMB1.38billion (US$200.3 million) under the new accounting standard,which represents a decrease of 12.6%fromRMB1.58billion in fiscal year 2017.

Net advertising revenues for fiscal year2018were RMB1.20 billion (US$174.3 million) (net of advertising agency service feesand sales taxes and surcharges)under the new accounting standard,which represented a decrease of 11.5% from RMB1.35 billion in fiscal year 2017.

Paid service revenues for fiscal year2018were RMB179.1 million (US$26.1million) under the new accounting standard,which represented a decrease of 19.2% fromRMB221.6million in fiscal year 2017.

Under the prior accounting standard ASC605,total revenues forfiscal year2018would have decreased by 5.0% to RMB1.50 billion (US$217.5 million) fromRMB1.58billion in fiscal year 2017.

Under the prior accounting standard ASC605,net advertising revenues (net of advertising agency service feesand sales taxes and surcharges)for fiscal year2018would have decreased by 3.4% to RMB1.31 billion(US$190.1 million)fromRMB1.35 billionin fiscal year 2017,primarily due tothe decrease in PC advertising revenues,which was partially offset by the 28.9%year-over-yeargrowthin mobile application advertising revenues.

Under the prior accounting standard ASC605,paid service revenues for fiscal year2018would have decreased by 14.8% toRMB188.8 million (US$27.5million)fromRMB221.6million in fiscal year 2017,which was primarily due tothe 39.5% year-over-year decrease of revenues from MVAS products.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues for fiscal year 2018 was RMB596.5 million (US$86.8 million) under the new accounting standard,which represented a decrease of 18.0% from RMB727.2 million in fiscal year 2017. Under the prior accounting standard ASC605,cost of revenues for fiscal year 2018 would have been RMB719.2 million (US$104.6 million),which would have represented a decrease of 1.1% from RMB727.2 million in fiscal year 2017. Share-based compensation included in cost of revenues was RMB3.7 million (US$0.5 million) in fiscal year 2018,as compared to RMB5.0 million in fiscal year 2017. As the Company recognized share-based compensation,there was less share-based compensation recognized in fiscal year 2018 for share options granted prior to 2018.

Gross profit for fiscal year 2018decreased to RMB780.8million (US$113.6 million)from RMB847.9million in fiscal year 2017.Gross margin for fiscal year 2018 increased to 56.7%from 53.8% in fiscal year 2017. Non-GAAP gross margin,which excludes share-based compensation,for fiscal year 2018 increased to 57.0% from 54.2% in fiscal year 2017.

OPERATING EXPENSESAND INCOME/(LOSS) FROM OPERATIONS

Total operating expenses for fiscal year 2018increased toRMB904.8 million (US$131.6 million) fromRMB832.9million in fiscal year 2017. The increase in operating expenses was primarily attributableto the increase in mobile traffic acquisition expenses. Share-based compensation included in operating expenses decreased to RMB10.2 million (US$1.5 million) in fiscal year 2018 from RMB15.8 million in fiscal year 2017. As the Company recognized share-based compensation,there was less share-based compensation recognized in fiscal year 2018 for share options granted prior to 2018.

Loss from operations for fiscal year 2018 was RMB124.0 million (US$18.0 million),as compared to income from operations of RMB15.0 million in fiscal year 2017. Operating margin for fiscal year 2018 was negative 9.0%,as compared to positive 1.0% in fiscal year 2017.

Non-GAAP loss from operations,for fiscal year 2018 was RMB110.0 million (US$16.0million),as compared to non-GAAP income from operations of RMB35.8 million in fiscal year 2017. Non-GAAP operating margin for fiscal year 2018 was negative 8.0%,as compared to positive 2.3% in fiscal year 2017.

NET INCOME/(LOSS) ATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Net loss attributable to Phoenix New Media Limited for fiscal year 2018was RMB63.2 million (US$9.2million),as compared to net income attributable to Phoenix New Media of RMB37.5million in fiscal year 2017. Net margin for fiscal year 2018 was negative 4.6%,as compared to positive 2.4% in fiscal year 2017. Net lossper diluted ADS for fiscal year 2018 was RMB0.87 (US$0.13),as compared to net incomeper diluted ADSof RMB0.51 infiscal year 2017.

Non-GAAP net loss attributable to Phoenix New Media Limited for fiscal year 2018,which excludedshare-based compensation and income/(loss) from equity method investments,was RMB54.6 million (US$7.9 million),as compared to non-GAAP net income attributable to Phoenix New Media Limited of RMB52.0 million in fiscal year 2017. Non-GAAP net margin for fiscal year 2018 was negative 4.0%,as compared to positive 3.3% in fiscal year 2017. Non-GAAP net loss per diluted ADS for fiscal year 2018 was RMB0.75 (US$0.11),as compared to non-GAAP net income per diluted ADS of RMB0.70 in fiscal year 2017.

Business Outlook

For thefirst quarter of 2019,the Company expects its total revenues to be between RMB254.8 million and RMB274.8 million; net advertising revenues are expected to be between RMB193.8 million and RMB208.8 million; and paid servicesrevenues are expected to be between RMB61.0 million and RMB66.0 million.

All of the above forecasts reflect the Company's current and preliminary view on the market and operational conditions,which are subject to change.

Conference Call Information

The Companywill hold a conference call at9:00 p.m. U.S.Eastern Time on March 18,2019 (March 19,2019 at 9:00 a.m. Beijing/Hong Kong time) to discuss its fourth quarterand fiscal year 2018 unaudited financial resultsand operating performance.

To participate in the call,please use the dial-in numbers and conference ID below:

International:

+65 67135440

Mainland China:

4001200654

Hong Kong:

+852 30186776

United States:

+1 8456750438

United Kingdom:

08000159724

Australia:

1300713759

Conference ID:

7279276

A replay of the call will be available through March 26,2019 by using the dial-in numbers and conference ID below:

International:

+61 290034211

Mainland China:

4006322162

Hong Kong:

+852 30512780

United States:

+1 6462543697

Conference ID:

7279276

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.ifeng.com.

Use of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with the United StatesGenerally Accepted Accounting Principles ("GAAP"),Phoenix New Media Limited usesnon-GAAP gross profit,non-GAAP grossmargin,non-GAAP income or loss from operations,non-GAAP operating margin,non-GAAP net incomeor loss attributable to Phoenix New Media Limited,non-GAAP net marginandnon-GAAP net income or loss per diluted ADS,each of which is a non-GAAP financial measure.Non-GAAP gross profit is gross profit excluding share-based compensation. Non-GAAP grossmargin is non-GAAP gross profit divided by total revenues. Non-GAAP income or loss from operations is income or loss from operations excluding share-based compensation. Non-GAAP operating margin is non-GAAP income or loss from operations divided by total revenues. Non-GAAP net income or loss attributable to Phoenix New Media Limited is net income or lossattributable to Phoenix New MediaLimited excluding share-based compensationand income or loss from equity method investments,net of impairments. Non-GAAPnet margin is non-GAAP net incomeor lossattributable to Phoenix New Media Limited divided by total revenues.Non-GAAP net income or loss per diluted ADS is non-GAAP net income or loss attributable to Phoenix New Media Limited divided by weighted average number of diluted ADSs. The Company believes that separate analysis and exclusion of the aforementioned non-GAAP to GAAP reconciling items add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measurestogether with the related GAAP financial measuresto obtain a better understanding of its operating performance. It uses these non-GAAP financial measuresfor planning,forecasting and measuring results against the forecast. The Company believes that using these non-GAAP financial measures to evaluate its business allows both managementand investors to assess the Company'sperformance against its competitors and ultimately monitor its capacity to generate returns for investors.The Companyalso believesthat these non-GAAP financial measuresareuseful supplemental information for investors and analysts to assess its operating performance without the effect of items like share-based compensationand income or loss from equity method investments,which havebeen and will continue to be significant and recurring in its business. However,the use of these non-GAAP financial measureshasmaterial limitations as an analytical tool. One of the limitations of using these non-GAAP financial measuresis that theydo not include all items that impact the Company's gross profit,income or loss from operations and net income or lossattributable to Phoenix New Media Limitedfor the period. In addition,because these non-GAAPfinancial measures arenot calculatedin the same manner by all companies,theymay not be comparable to other similarlytitled measures used by other companies. In light of the foregoing limitations,you should not consider these non-GAAP financial measures in isolation from,or as an alternative to,the financial measuresprepared in accordance with GAAP.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("USD")at specified rates solely for the convenience of the reader. Unless otherwise stated,all translations from RMB to USD were made at the rate of RMB6.8755to US$1.00,the noon buying rate in effect on December 31,2018in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB,as the case may be,at any particular rate or at all. For analytical presentation,all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

About Phoenix New MediaLimited

Phoenix New Media Limited (NYSE: FENG) is a leading new media company providing premium content on an integrated Internet platform,including PC and mobile,in China. Having originated from a leading global Chinese language TV network based in Hong Kong,Phoenix TV,the Company enables consumers to access professional news and other quality information and share user-generated content on the Internet through their PCs and mobile devices. Phoenix New Media's platform includes its PC channel,consisting of ifeng.com website,which comprises interest-based verticalssuch as news,finance,fashion,military and digital reading,and interactive services; its mobile channel,consisting of mobile news applications,mobile video application,HTML5-based mobile Internet websites,and mobile digital reading application; and its operations with the telecom operators that provides content and mobile value-added services.

Safe Harbor Statement

This announcement contains forward−looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward−looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things,the business outlook and quotations from management in this announcement,as well as Phoenix New Media's strategic and operational plans,contain forward−looking statements. Phoenix New Media may also make written or oral forward−looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20−F and 6−K,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to thirdparties. Statements that are not historical facts,including statements about Phoenix New Media's beliefs and expectations,are forward−looking statements. Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward−looking statement,including but not limited to the following: the Company's goals and strategies; the Company's future business development,financial condition and results of operations; the expected growth of online and mobile advertising,online video and mobile paid services markets in China; the Company's reliance on online and mobile advertising and MVAS for a majority of its total revenues; the Company's expectations regarding demand for and market acceptance of its services; the Company's expectations regarding maintaining and strengthening its relationships with advertisers,partners and customers; the Company's investment plans and strategies,fluctuations in the Company's quarterly operating results; the Company's plans to enhance its user experience,infrastructure and services offerings; the Company's reliance on mobile operators in China to provide most of its MVAS; changes by mobile operators in China to their policies for MVAS; competition in itsindustry in China; and relevant government policies and regulations relating to the Company. Further information regarding these and other risks is included in the Company's filings with the SEC,including itsregistration statement on Form F−1,as amended,and its annual reports on Form 20−F. All information provided in this press release and in the attachments is as of the date of this press release,and Phoenix New Media does not undertake any obligation to update any forward−looking statement,except as required under applicable law.

[1]Paid services revenues comprise of (i)revenues from digital entertainment,which includes MVAS and digital reading,and (ii)revenues from games and others,which includes web-based games,mobile games,content sales,and other online and mobile paid services through the Company's own platforms.

[2]Digital entertainment includes mobile value-added services delivered through telecom operators' platforms,or MVAS,and digital reading.

[3]Games and othersincludeweb-based and mobile games,and other online and mobile paid services through the Company's own platforms.

[4]"Others,net" primarily consists of government subsidies and litigation loss provisions.

[5] "ADS" means American Depositary Share of the Company. Each ADS represents eight Class A ordinary shares of the Company.

For investor and media inquiries please contact:

Phoenix New Media Limited

Qing Liu

Email: investorrelations@ifeng.com

ICR,Inc.

Jack Wang

Tel: +1 (646) 405-4883

Email: investorrelations@ifeng.com

Phoenix New Media Limited

Condensed Consolidated Balance Sheets

(Amounts in thousands)

December 31,

December 31,

2017

2018

2018

RMB

RMB

US$

Audited*

Unaudited

Unaudited

ASSETS

Current assets:

Cash and cash equivalents

362,862

174,024

25,311

Term deposits and short term investments

737,657

912,594

132,731

Restricted cash

336,700

269,648

39,219

Accounts receivable,net

458,744

484,113

70,411

Amounts due from related parties

187,214

91,228

13,269

Prepayment and other current assets

57,458

88,963

12,938

Convertible loans due from a related party

102,631

-

-

Total current assets

2,243,266

2,020,570

293,879

Non-current assets:

Property and equipment,net

64,454

95,631

13,909

Intangible assets,net

6,712

97,448

14,173

Goodwill

-

338,288

49,202

Available-for-sale debt investments

1,196,330

1,961,474

285,285

Equity investments,net

15,342

33,694

4,901

Deferred tax assets

60,460

60,160

8,750

Other non-current assets

12,544

23,454

3,411

Total non-current assets

1,355,842

2,610,149

379,631

Total assets

3,599,108

4,630,719

673,510

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term loans

330,000

267,665

38,930

Accounts payable

262,657

264,753

38,507

Amounts due to related parties

14,140

25,218

3,668

Advances from customers

65,196

54,601

7,941

Taxes payable

92,214

101,386

14,746

Salary and welfare payable

134,471

132,316

19,245

Accrued expenses and other current liabilities

173,253

227,328

33,063

Total current liabilities

1,071,931

1,073,267

156,100

Non-current liabilities:

Deferred tax liabilities

1,312

140,960

20,502

Long-term liabilities

24,714

26,131

3,801

Total non-current liabilities

26,026

167,091

24,303

Total liabilities

1,097,957

1,240,358

180,403

Shareholders' equity:

Phoenix New Media Limited shareholders' equity:

Class A ordinary shares

17,180

17,487

2,543

Class B ordinary shares

22,053

22,053

3,207

Additional paid-in capital

1,587,575

1,604,588

233,378

Statutory reserves

81,237

87,620

12,744

Retained earnings

229,250

159,621

23,215

Accumulated other comprehensive income

570,244

1,188,358

172,840

Total Phoenix New Media Limited shareholders' equity

2,507,539

3,079,727

447,927

Noncontrolling interests

(6,388)

310,634

45,180

Total shareholders' equity

2,501,151

3,390,361

493,107

Total liabilities and shareholders' equity

3,510

*Derived from audited financial statements included in the Company's Form 20-F dated April 26,2018.

Phoenix New Media Limited

Condensed Consolidated Statements of Comprehensive Income/(Loss)

(Amounts in thousands,except for number of shares and per share (or ADS) data)

Three Months Ended

Twelve Months Ended

December 31,

September 30,

2017

2018

2018

2018

2017

2018

2018

RMB

RMB

RMB

US$

RMB

RMB

US$

Unaudited

Unaudited

Unaudited

Unaudited

Audited*

Unaudited

Unaudited

Revenues:

Net advertising revenues

410,547

281,500

355,979

51,775

1,353,480

1,271

174,281

Paid service revenues

51,240

47,840

43,255

6,291

221,612

179,108

26,050

Total revenues

461,787

329,340

399,234

58,066

1,575,092

1,379

200,331

Cost of revenues

(208,679)

(152,236)

(181,272)

(26,365)

(727,197)

(596,548)

(86,764)

Gross profit

253,108

177,104

217,962

31,701

847,895

780,831

113,567

Operating expenses:

Sales and marketing expenses

(156,590)

(140,998)

(155,522)

(22,620)

(493,664)

(537,562)

(78,185)

General and administrative expenses

(50,457)

(41,692)

(44,670)

(6,497)

(146,923)

(162,568)

(23,645)

Technology and product development

expenses

(51,494)

(50,969)

(56,819)

(8,264)

(192,325)

(204,723)

(29,776)

Total operating expenses

(258,541)

(233,659)

(257,011)

(37,381)

(832,912)

(904,853)

(131,606)

(Loss)/income from operations

(5,433)

(56,555)

(39,049)

(5,680)

14,983

(124,022)

(18,039)

Other income/(loss):

Interest income

13,213

12,349

8,608

1,252

54,286

47,445

6,901

Interest expense

(3,746)

(3,080)

(2,442)

(355)

(22,221)

(13,544)

(1,970)

Foreign currency exchange (loss)/gain

(4,481)

6,066

(317)

(46)

(23,560)

6,849

996

Income from equity method investments,net

of impairments

4,865

4,240

3,977

578

6,296

5,352

778

Gain on disposal of convertible loans due

from a related party

-

10,565

-

-

-

10,565

1,537

Others,net

10,037

5,773

9,854

1,433

19,423

21,848

3,178

Income/(loss) before tax

14,455

(20,642)

(19,369)

(2,818)

49,207

(45,507)

(6,619)

Income tax (expense)/benefit

(3,294)

3,889

(20,220)

(2,941)

(14,783)

(20,105)

(2,924)

Net income/(loss)

11,161

(16,753)

(39,589)

(5,759)

34,424

(65,612)

(9,543)

Net loss attributable to noncontrolling

interests

660

127

1,292

188

3,048

2,390

348

Net income/(loss) attributable to Phoenix

New Media Limited

11,821

(16,626)

(38,297)

(5,571)

37,472

(63,222)

(9,195)

Net income/(loss)

11,543)

Other comprehensive income,net of tax: fair

value remeasurement for available-for-

sale investments**

22,227

52,111

462,558

67,276

321,538

566,320

82,368

Other comprehensive (loss)/income,net of

tax: foreign currency translation

adjustment

(14,609)

39,966

(2,534)

(369)

(49,640)

51,794

7,533

Comprehensive income

18,779

75,324

420,435

61,148

306,322

552,502

80,358

Comprehensive loss attributable to

noncontrolling interests

660

127

1,390

348

Comprehensive income attributable to

PhoenixNew Media Limited

19,439

75,451

421,727

61,336

309,370

554,892

80,706

Net income/(loss) attributable to Phoenix

New Media Limited

11,195)

Net income/(loss)per Class A and Class B

ordinary share:

Basic

0.02

(0.03)

(0.07)

(0.01)

0.07

(0.11)

(0.02)

Diluted

0.02

(0.03)

(0.07)

(0.01)

0.06

(0.11)

(0.02)

Net income/(loss)per ADS (1 ADS represents

8 Class A ordinary shares):

Basic

0.16

(0.23)

(0.53)

(0.08)

0.52

(0.87)

(0.13)

Diluted

0.16

(0.23)

(0.53)

(0.08)

0.51

(0.87)

(0.13)

Weighted average number of Class A and

Class B ordinary shares used in computing

net income/(loss)per share:

Basic

576,851,243

581,962,548

582,137,314

582,314

574,786,887

581,084,453

581,453

Diluted

591,174,724

581,314

590,433,907

581,453

* Derived from audited financial statements included in the Company's Form 20-F dated April 26,2018.

** The Company adopted ASU 2016-1,Recognition and Measurement of Financial Assets and Financial Liabilities,beginning from January 1,2018. After the adoption of this new accounting standard,the Company measures long-

term equity investments,other than those accounted for under the equity method,at fair value through earnings. As investments in Particle meet the definition of debt securities,which are recorded as available-for-sale investments,

there is no impact of the adoption of ASU 2016-1 on the available-for-sale investments in Particle and the changes in their fair value continue to be recorded in other comprehensive income.

There were minor revisions to revenues and cost of revenues for the previous quarters of 2018,which were determined as immaterial adjustment under SEC Staff Accounting Bulletin: No. 99 – Materiality.

Phoenix New Media Limited

Condensed Segment Information

(Amounts in thousands)

Three Months Ended

TwelveMonths Ended

December 31,

2017

2018

2018

2018

2017

2018

2018

RMB

RMB

RMB

US$

RMB

RMB

US$

Unaudited

Unaudited

Unaudited

Unaudited

Audited*

Unaudited

Unaudited

Revenues:

Net advertising service

410,281

Paid service

51,331

Cost of revenues

Net advertising service

181,361

132,519

166,652

24,239

602,945

517,533

75,272

Paid service

27,318

19,717

14,620

2,126

124,252

79,015

11,492

Total cost of revenues

208,679

152,236

181,272

26,365

727,197

596,548

86,764

Gross profit

Net advertising service

229,186

148,981

189,327

27,536

750,535

680,738

99,009

Paid service

23,922

28,123

28,635

4,165

97,360

100,093

14,558

Total gross profit

253,567

* Derived from audited financial statements included in the Company's Form 20-F dated April 26,2018.

Phoenix New Media Limited

Condensed Information of Cost of Revenues

(Amounts in thousands)

Three Months Ended

Twelve Months Ended

December 31,

2017

2018

2018

2018

2017

2018

2018

RMB

RMB

RMB

US$

RMB

RMB

US$

Unaudited

Unaudited

Unaudited

Unaudited

Audited*

Unaudited

Unaudited

Revenue sharing fees

12,350

14,261

13,201

1,920

72,613

47,539

6,914

Content and operational costs

143,588

123,281

153,866

22,379

466,379

491,868

71,539

Bandwidth costs

12,830

14,694

14,205

2,066

55,050

57,141

8,311

Sales taxes and surcharges**

39,911

-

-

-

133,155

-

-

Total cost of revenues

208,764

* Derived from audited financial statements included in the Company's Form 20-F dated April 26,2018.

** The sales taxes and surcharges in the quarters of 2018 and the fiscal year 2018 were excluded from cost of revenues and recorded as a reduction of revenues under the new revenue recognition accounting standard (ASC606),while sales taxes and surcharges in the quarters of 2017 and fiscal year 2017 were recorded as a component of cost of revenues under the prior accounting standard (ASC605).

Reconciliations of Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures

(Amounts in thousands,except for number of ADSs and per ADS data)

Three Months Ended December 31,2017

Three Months Ended September 30,2018

Three Months Ended December 31,2018

Non-GAAP

Non-GAAP

Non-GAAP

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Gross profit

253,108

1,221

(1)

254,329

177,104

442

(1)

177,546

217,962

2,469

(1)

220,431

Gross margin

54.8%

55.1%

53.8%

53.9%

54.6%

55.2%

(Loss)/income from

operations

(5,433)

4,677

(1)

(756)

(56,555)

2,535

(1)

(54,020)

(39,049)

4,614

(1)

(34,435)

Operating margin

(1.2%)

(0.2%)

(17.2%)

(16.4%)

(9.8%)

(8.6%)

4,677

(1)

2,535

(1)

4,614

(1)

(4,865)

(2)

(4,240)

(2)

(3,977)

(2)

Net income/(loss)

attributable to

Phoenix New

Media Limited

11,821

(188)

11,633

(16,626)

(1,705)

(18,331)

(38,297)

637

(37,660)

Net margin

2.6%

2.5%

(5.0%)

(5.6%)

(9.6%)

(9.4%)

Net income/(loss) per

ADS—diluted

0.16

0.16

(0.23)

(0.25)

(0.53)

(0.52)

Weighted average

number of ADSs

used in computing

diluted net

income/(loss) per

ADS

73,896,840

73,840

72,745,318

72,164

72,164

(1) Share-based compensation

(2) Income from equity method investments,net of impairments

Non-GAAP to GAAP reconciling items have no income tax effect.

Reconciliations of Non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures

(Amounts in thousands,except for number of ADSs and per ADS data)

Twelve Months Ended December 31,2017

Twelve Months Ended December 31,2018

Non-GAAP

Non-GAAP

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

RMB

RMB

RMB

RMB

RMB

RMB

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Gross profit

847,895

5,017

(1)

852,912

780,831

3,750

(1)

784,581

Gross margin

53.8%

54.2%

56.7%

57.0%

Income/(loss) from operations

14,983

20,852

(1)

35,835

(124,022)

13,989

(1)

(110,033)

Operating margin

1.0%

2.3%

(9.0%)

(8.0%)

20,852

(1)

13,989

(1)

(6,296)

(2)

(5,352)

(2)

Net income/(loss) attributable to Phoenix

New Media Limited

37,472

14,556

52,028

(63,222)

8,637

(54,585)

Net margin

2.4%

3.3%

(4.6%)

(4.0%)

Net income/(loss) per ADS—diluted

0.51

0.70

(0.87)

(0.75)

Weighted average number of ADSs used in

computing diluted net income/(loss) per

ADS

73,804,238

73,238

72,635,557

72,557

(1) Share-based compensation

(2) Income from equity method investments,net of impairments

Non-GAAP to GAAP reconciling items have no income tax effect.

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