Phoenix New Media Reports First Quarter 2019 Unaudited Financial Results

BEIJING,May 14,2019 -- 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 first quarterended March 31,2019.

Mr. Shuang Liu,CEO of Phoenix New Media,commented,"I am so pleased that our topline exceeded our expectations. In the first quarter of 2019,we continued to focus on enhancing our AI framework by further improving its synergies with our editorial system. The successful integration of human expertise and AI algorithms not only strengthened our ability to generate and distribute high-quality content,but also allowed us to maintain our professional journalism standards and provide unbiased,premium content to our users. In addition,our new growth initiatives in ourcontent offering strategy,digital reading and our expansion in lifestyle related verticals have all out-performed our expectations.

Despite headwinds from macroeconomic uncertainties and industry challenges,we are confident that our ability to generate accurate and highly relevant sales leads in a variety of niche verticals can help our clients achieve a high ROI with a limited marketing budget."

Ms. BettyHo,CFOof Phoenix New Media,further stated,"Forthe first quarter of 2019,our total revenues reached RMB284.9 million,exceeding the high end of our previous guidance as a result of the better than expected performance ofthe digital reading business of Tadu. The total consolidated paid services revenues for the first quarter of 2019 increased by 66.1% year over year to RMB68.9 million. However,our net advertising revenues for the first quarter of 2019 decreased to RMB216.0 million primarily as a result of macroeconomic uncertainties and increased competition. Looking ahead,we will continue to invest in the expansion of original content and to further diversify our product offerings. We are actively exploring potential investment in premium content and expect the synergies between our different businesses to enable us to enter into a fresh growth cycle."

First Quarter 2019 Financial Results

REVENUES

Total revenues for the first quarter of 2019wereRMB284.9 million (US$42.4 million),which were flat as compared with the same quarter last year,though the Company consolidated the revenues from Beijing Yitian Xindong Network Technology Co.,Ltd. ("Yitian Xindong" or "Tadu")of RMB43.5 million (US$6.5 million),the advertising revenues were decreased due to macroeconomic headwind and intense competition.

Net advertising revenues for the firstquarterof 2019 were RMB216.0 million (US$32.2 million),which represented a decrease of 11.3% from RMB243.4 million in the firstquarter of 2018,primarily attributable toa 9.0% year-over-year decrease in PC advertising revenues and a 12.4% year-over-year decrease in mobile advertising revenues.

Paid services revenues[1]for the first quarter of 2019 were RMB68.9 million (US$10.3 million),which represented an increase of 66.1% from RMB41.5millionin the firstquarter of 2018. Revenues from paid contents for the first quarter of 2019 increased 147.8% to RMB52.9 million (US$7.9 million) from RMB21.4million in the firstquarter of 2018 primarily due to the inclusion of digital reading revenues from Tadu. Revenues from games for the first quarter of 2019 were RMB3.1million (US$0.5 million),which represented a decrease of 35.0% from RMB4.8 million in the firstquarter of 2018. Revenues from MVAS for the firstquarter of 2019 were RMB7.9 million (US$1.2 million),which represented a decrease of 42.0% from RMB13.7 million in the firstquarter of 2018. Revenues from others for the first quarter of 2019 were RMB5.0 million (US$0.7 million),which represented an increase of 200.8% from RMB1.6 million in the first quarter of 2018,mainly caused by the increase in revenues from commissions generated from online transactions.

[1] Prior to 2019,paid services revenues comprisedof (i)revenues from digital entertainment,which included MVAS and digital reading,and (ii)revenues from games and others,which included web-based games,mobile games,content sales,and other online and mobile paid services through the Company's own platforms.

Beginning from January 1,2019,paid services revenues have been re-classified and now comprisedof (i)revenues from paid contents,which includes digital reading,audio books,paid videos,and other content-related sales activities,(ii)revenues from games,which includes web-based gamesandmobile games,(iii)revenues from MVAS,and (iv) revenues from others.For comparison purposes,the revenues from paid servicesfor the quartersof 2018have been retrospectively re-classified.

COST OF REVENUES

Cost of revenues for the first quarter of 2019 was RMB178.2 million (US$26.5 million),representing an increase of 38.4% from RMB128.7 million in the first quarter of 2018. The increase in cost of revenues was mainly due to:

Content and operational costs for the first quarter of 2019 increased from RMB105.8 million in the first quarter of 2018 to RMB147.0 million (US$21.9 million),primarily attributable to an increase in IP production costs.

Revenue sharing fees to telecom operators and channel partners for the first quarter of 2019 increased from RMB8.6 million in the first quarter of 2018 to RMB17.3 million (US$2.6 million),primarily attributable to the increase in revenue sharing fees paid to content providers by Tadu.

Share-based compensation included in cost of revenues was RMB1.4 million (US$0.2 million) in the first quarter of 2019,as compared to RMB0.2 million in the first quarter of 2018,primarily attributable to the newly granted restricted share units to some employees under a restricted share unit scheme adopted in 2018 by Fread Limited,a subsidiary of the Company.

The increase in cost of revenues was partially offset by decrease in bandwidth costs from RMB14.3 million in the first quarter of 2018 to RMB13.9 million (US$2.1 million) for the firstquarter of 2019.

GROSS PROFIT

Gross profit for thefirst quarter of 2019 wasRMB106.7 million (US$15.9 million),as compared toRMB156.2 million in the first quarter of 2018. Gross margin for the first quarter of 2019 decreasedto 37.5% from 54.9% in the first quarter of 2018,mainly caused by the 38.4% year-over-year increase in cost of revenues for the first quarter of 2019 as explained above.

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 first quarter of 2019,which excluded share-based compensation,decreased to 38.0% from 55.0% in the first quarter of 2018.

OPERATING EXPENSESAND LOSS FROM OPERATIONS

Total operating expensesfor the first quarter of 2019increased by 6.9% from RMB214.0million in the first quarter of 2018 to RMB228.8 million(US$34.1 million),primarily attributable to the inclusion of operating expensesfrom Tadu. Share-based compensation included in operating expenseswas RMB2.5 million (US$0.4 million)in the first quarter of 2019,as compared to RMB3.2 million in the first quarter of 2018. 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 first quarter of 2019for share options granted prior to 2019.

Loss from operations for the first quarter of 2019 was RMB122.1 million (US$18.2 million),as compared to loss from operations of RMB57.9 million in the first quarter of 2018. Operating margin for the first quarter of 2019 decreased to negative 42.9% from negative 20.3% in the first quarter of 2018.

Non-GAAPloss from operationsfor the first quarter of 2019,was RMB118.1 million (US$17.6 million),as compared to non-GAAP loss from operations of RMB54.4 million in the first quarter of 2018. Non-GAAP operating margin for the first quarter of 2019,decreased tonegative 41.5%from negative 19.1%inthe first quarter of 2018.

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[2]. Total net other income for the first quarter of 2019 was RMB1.9 million (US$0.3 million),as compared to net other loss of RMB5.2 million in the first quarter of 2018.

Interest income for the first quarter of 2019 decreased to RMB8.7 million (US$1.3 million) from RMB12.9 million in the first quarter of 2018.

Interest expense for the first quarter of 2019 decreased to RMB2.9 million (US$0.4 million),from RMB4.6 million in the first quarter of 2018,which was primarily due to the decrease in outstanding short-term bank loans in the first quarter of 2019,as compared to that of 2018.

Foreign currency exchange loss for the first quarter of 2019 was RMB2.2 million (US$0.3 million),as compared to foreign currency exchange loss of RMB15.1 million in the first quarter of 2018,which was mainly caused by the less significant appreciation of Renminbi against US dollars in the first quarter of 2019 as compared to that of 2018 that generated less exchange loss in Renminbi denominated liabilities recorded in the Company's subsidiaries whose functional currency is not Renminbi.

Loss from equity method investments,for the first quarter of 2019 was RMB4.0 million (US$0.6 million),as compared to loss from equity method investments,net of impairment,of RMB2.4 million in the first quarter of 2018.

Others,net,for the first quarter of 2019 decreased to RMB2.2 million (US$0.3 million),from RMB4.1 million in the first quarter of 2018.

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

NET LOSSATTRIBUTABLE TO PHOENIX NEW MEDIA LIMITED

Net loss attributable to Phoenix New Media Limited for the first quarter of 2019 was RMB119.7 million (US$17.8 million),as compared to net loss attributable to Phoenix New Media Limited of RMB57.5 million in the first quarter of 2018. Net margin for the first quarter of 2019 decreased to negative 42.0% from negative 20.2% in the first quarter of 2018. Net loss per diluted ADS[3]in the first quarter of 2019 was RMB1.65 (US$0.25),as compared tonet loss per diluted ADS of RMB0.79 in the firstquarter of 2018.

Non-GAAPnet loss attributable to Phoenix New Media Limited for the first quarter of 2019,which excluded share-based compensation and income or loss from equity method investments,was RMB111.8 million (US$16.7 million),as compared to non-GAAPnet loss attributable to Phoenix New Media Limited of RMB51.7million in the first quarter of 2018. Non-GAAP net margin for the first quarter of 2019 decreased to negative 39.2% from negative 18.2% in the first quarter of 2018. Non-GAAP net lossper diluted ADS in the first quarter of 2019was RMB1.54 (US$0.23),as compared tonon-GAAPnet loss per diluted ADS ofRMB0.71 in thefirstquarter of 2018.

For the first quarter of 2019,the Company's weighted average number of ADSs used in the computation of diluted net loss per ADS was 72,773,389. As of March 31,the Company had a total of 582,249,952 ordinary shares outstanding,or the equivalent of 72,781,244 ADSs.

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

CERTAIN BALANCE SHEET ITEMS

As of March 31,the Company's cash and cash equivalents,term deposits and short term investments and restricted cash were RMB1.75billion (US$260.3 million). Restricted cash represents deposits placed as security for banking facilities granted to the Company,which are restricted in their withdrawal or usage. The increase of cash balance was due to the receipt of the US$100.0 million deposit from proposed buyers of investments in Particle Inc. ("Particle").

On February 23,the Company entered into a binding letter of intent (the "LOI") with an independent third party to sell 32% of the total outstanding shares of Particle on an as-if converted basis to such party or its designated entities (collectively referred to as the "Proposed Buyers") for a total consideration of US$448.0 million in cash. The proposed buyers have paid cash deposit of US$100.0 million to the Company,and the Company and the proposed buyers entered into the formal purchase agreement (the "SPA") on March 22,2019 (the "Proposed Transactions"). Completion of the Proposed Transactions is still subject to certain closing conditions,though some of them have been met and some of them are progressing. There is no assurance that the Proposed Transactions will ever be closed. The fair value of available-for-sale debt investments in Particle increased from RMB1,959.5 million as of December 31,2018 to RMB2,728.4 million (US$406.6 million) as of March 31,mainly due to the increased possibility of completing the Proposed Transactions based on the status of various closing conditions used in the valuation of available-for-sale debt investments in Particle for the first quarter of 2019.

Business Outlook

For thesecond quarter of 2019,the Company expects its total revenues to be between RMB374.1 million and RMB394.1 million; net advertising revenues are expected to be between RMB308.8 million and RMB323.8 million; and paid servicesrevenues are expected to be between RMB65.3 million and RMB70.3 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 May 13,2019 (May 14,2019 at 9:00 a.m. Beijing/Hong Kong time) to discuss its first quarter2019 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:

5560416

A replay of the call will be available through May 21,2019 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:

5560416

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 RMB6.7112 to US$1.00,the noon buying rate in effect on March 31,2019in 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 verticals and interactive services; its mobile channel,consisting of mobile news applications,mobile video application,digital reading applicationsand mobile Internet website; and its operations with the telecom operators that provides 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.

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,

March 31,

2018

2019

2019

RMB

RMB

US$

Audited*

Unaudited

Unaudited

ASSETS

Current assets:

Cash and cash equivalents

174,024

295,729

44,065

Term deposits and short term investments

912,594

1,194,317

177,959

Restricted cash

269,648

256,850

38,272

Accounts receivable,net

484,113

486,466

72,486

Amounts due from related parties

91,228

89,374

13,317

Prepayment and other current assets

88,963

94,066

14,016

Total current assets

2,020,570

2,416,802

360,115

Non-current assets:

Property and equipment,net

95,631

88,217

13,145

Intangible assets,net

97,448

96,834

14,429

Goodwill

338,288

338,288

50,406

Available-for-sale debt investments

1,961,474

2,730,448

406,849

Equity investments,net

33,694

29,726

4,429

Deferred tax assets

60,160

55,978

8,341

Operating lease right-of- use assets,net

-

93,551

13,940

Other non-current assets

23,454

18,070

2,693

Total non-current assets

2,610,149

3,451,112

514,232

Total assets

4,630,719

5,867,914

874,347

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term loans

267,665

242,406

36,120

Accounts payable

264,753

253,078

37,710

Amounts due to related parties

25,218

18,693

Advances from customers

54,601

53,051

7,905

Taxes payable

101,386

95,159

14,179

Salary and welfare payable

132,316

92,259

13,747

Deposits from proposed buyers of investments in

Particle

-

673,350

100,332

Accrued expenses and other current liabilities

227,328

264,347

39,388

Operating leaseliabilities

-

27,195

4,052

Total current liabilities

1,073,267

1,718,915

256,126

Non-current liabilities:

Deferred tax liabilities

140,960

216,084

32,198

Long-term liabilities

26,131

26,131

3,894

Operating leaseliabilities

-

67,554

10,066

Total non-current liabilities

167,091

309,769

46,158

Total liabilities

1,240,358

2,028,684

302,284

Shareholders' equity:

Phoenix New Media Limited shareholders' equity:

Class A ordinary shares

17,487

17,494

2,607

Class B ordinary shares

22,053

22,053

3,286

Additional paid-in capital

1,604,588

1,501

239,078

Statutory reserves

87,620

87,620

13,056

Retained earnings

159,621

39,884

5,943

Accumulated other comprehensive income

1,188,358

1,886,567

281,107

Total Phoenix New Media Limited shareholders' equity

3,079,727

3,658,119

545,077

Noncontrolling interests

310,634

181,111

26,986

Total shareholders' equity

3,390,361

3,839,230

572,063

Total liabilities and shareholders' equity

4,347

* Derived from audited financial statements included in the Company's Form 20-F dated April 26,2019.

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

March 31,

December 31,

2018

2018

2019

2019

RMB

RMB

RMB

US$

Unaudited

Unaudited

Unaudited

Unaudited

Revenues:

Net advertising revenues

243,448

355,979

215,984

32,183

Paid service revenues

41,475

43,255

68,890

10,265

Total revenues

284,923

399,234

284,874

42,448

Cost of revenues

(128,744)

(181,272)

(178,145)

(26,544)

Gross profit

156,179

217,962

106,729

15,904

Operating expenses:

Sales and marketing expenses

(131,219)

(155,522)

(120,572)

(17,966)

General and administrative expenses

(34,398)

(44,670)

(48,852)

(7,279)

Technology and product development expenses

(48,412)

(56,819)

(59,441)

(8,857)

Total operating expenses

(214,029)

(257,011)

(228,865)

(34,102)

Loss from operations

(57,850)

(39,049)

(122,136)

(18,198)

Other income/(loss):

Interest income

12,938

8,608

8,658

1,290

Interest expenses

(4,633)

(2,442)

(2,903)

(433)

Foreign currency exchange loss

(15,131)

(317)

(2,167)

(323)

(Loss)/income from equity method investments,net

of impairments

(2,430)

3,977

(3,968)

(591)

Others,net

4,093

9,854

2,241

334

Loss before tax

(63,013)

(19,369)

(120,275)

(17,921)

Income tax benefit/(expense)

4,724

(20,220)

(7,461)

(1,112)

Net loss

(58,289)

(39,589)

(127,736)

(19,033)

Net loss attributable to noncontrolling interests

749

1,292

7,999

1,192

Net loss attributable to Phoenix New Media Limited

(57,540)

(38,297)

(119,737)

(17,841)

Net loss

(58,033)

Other comprehensive income,net of tax: fair value

remeasurement for available-for-sale investments

46,364

462,558

725,403

108,088

Other comprehensive loss,net of tax: foreign

currency translation adjustment

(35,014)

(2,534)

(27,193)

(4,052)

Comprehensive (loss)/income

(46,939)

420,435

570,474

85,003

Comprehensive loss attributable to noncontrolling interests

749

1,192

Comprehensive (loss)/income attributable to

Phoenix New Media Limited

(46,190)

421,727

578,473

86,195

Net lossattributable to Phoenix New Media Limited

(57,841)

Net loss per Class A and Class B ordinary share:

Basic

(0.10)

(0.07)

(0.21)

(0.03)

Diluted

(0.10)

(0.07)

(0.21)

(0.03)

Net loss per ADS (1 ADS represents 8 Class A ordinary shares):

Basic

(0.79)

(0.53)

(1.65)

(0.25)

Diluted

(0.79)

(0.53)

(1.65)

(0.25)

Weighted average number of Class A and Class B

ordinary shares used in computing net loss per share:

Basic

579,228,111

582,137,314

582,187,109

582,109

Diluted

579,109

Phoenix New Media Limited

Condensed Segments Information

(Amounts in thousands)

Three Months Ended

March 31,

2018

2018

2019

2019

RMB

RMB

RMB

US$

Unaudited

Unaudited

Unaudited

Unaudited

Revenues:

Net advertising service

243,183

Paid service

41,265

Total revenues

284,448

Cost of revenues

Net advertising service

107,453

166,652

140,060

20,869

Paid service

21,291

14,620

38,085

5,675

Total cost of revenues

128,744

181,272

178,145

26,544

Gross profit

Net advertising service

135,995

189,327

75,924

11,314

Paid service

20,184

28,635

30,805

4,590

Total gross profit

156,904

Phoenix New Media Limited

Condensed Information of Cost of Revenues

(Amounts in thousands)

Three Months Ended

March 31,

2018

2018

2019

2019

RMB

RMB

RMB

US$

Unaudited

Unaudited

Unaudited

Unaudited

Revenue sharing fees

8,617

13,201

17,329

2,582

Content and operational costs

105,784

153,866

146,961

21,898

Bandwidth costs

14,343

14,205

13,855

2,064

Total cost of revenues

128,544

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 March 31,2018

Three Months Ended December 31,2018

Three Months Ended March 31,2019

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

156,179

205

(1)

156,384

217,962

2,469

(1)

220,431

106,729

1,441

(1)

108,170

Gross margin

54.9%

55.0%

54.6%

55.2%

37.5%

38.0%

Loss from

operations

(57,850)

3,450

(1)

(54,400)

(39,049)

4,614

(1)

(34,435)

(122,136)

3,987

(1)

(118,149)

Operating margin

(20.3)%

(19.1)%

(9.8)%

(8.6)%

(42.9)%

(41.5)%

3,450

(1)

4,614

(1)

3,987

(1)

2,430

(2)

(3,977)

(2)

3,968

(2)

Net loss

attributable to

Phoenix New

MediaLimited

(57,540)

5,880

(51,660)

(38,297)

637

(37,660)

(119,737)

7,955

(111,782)

Net margin

(20.2)%

(18.2)%

(9.6)%

(9.4)%

(42.0)%

(39.2)%

Net loss per ADS-

diluted

(0.79)

(0.71)

(0.53)

(0.52)

(1.65)

(1.54)

Weighted average

number of ADSs

used in computing

diluted net loss per

ADS

72,403,514

72,767,164

72,389

72,389

(1) Share-based compensation

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

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

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