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Operator: Good day, and thank you for standing by. Welcome to Phoenix New Media First Quarter 2025 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your speaker today, Muzi Guo from Investor Relations. Please go ahead.

Muzi Guo: Thank you, operator. Welcome to Phoenix New Media’s earnings conference call for the first quarter of 2025. Today’s call will begin with an overview of our quarterly results, followed by a Q&A session. Our quarterly financial results and the webcast of this conference call are available on our website at ir.ifeng.com. Before we continue, please note the safe harbor statement in our earnings press release, which applies to any forward-looking statements made during this call. Unless otherwise stated, all figures mentioned are in RMB. Joining me here today are our CEO, Mr. Yusheng Sun; and our CFO, Mr. Edward Lu. I will now pass the call to Mr. Sun for his opening remarks. I will provide translation as needed.

Yusheng Sun: [Foreign Language]

Muzi Guo: Hello, everyone, and welcome. In Q1 2025, Phoenix New Media navigated complex global and regional events, consistently delivering authorative reporting with unmatched speed and depth, showcasing professional insight and reinforcing our industry leadership. Through sustained content innovation, we leverage our quality content creation and distribution capabilities to deliver value to users and advertising clients, unlocking new commercial partnerships. Looking to Q2, we will further deepen content innovation, expand commercial opportunities and enhance operational efficiency, remaining committed to delivering long-term value for investors. Now I will invite Edward to provide a more detailed summary of our first quarter performance on my behalf.

Edward Lu: Okay. Thank you, Muzi. In the first quarter of 2025, we showcased strong momentum by leading breaking news, driving content innovation and unlocking new commercial opportunities. Our content team excelled amid global trade volatility, regional political turbulence, natural disasters and the rapid rise of artificial intelligence, consistently delivering authoritative reporting with unparalleled speed and depth. Across major Q1 events from South Korea’s political upheaval to Trump’s tariff escalation and the new energy vehicle safety concerns, we were frequently first to break the story, setting the pace for industry coverage. Our approach goes beyond guidelines, diving into the courses, personal stories and critical details that resonate with audiences while fostering active user engagement through interactive formats.

For instance, our investigative series on Trump’s tariffs and their impact on Asian markets alongside exposed on NEV fire risks and DeepSeek’s AI breakthroughs sparkled vibrant discussions ranking high on major social media platforms. Meanwhile, we advanced content innovation by developing unique IPs that deliver exceptional value to users and brands. A key highlight was the launch of KCA Link, a creation model blending professional and user-generated content. Partnering with leading KOLs and KOCs in finance and tech, we crafted immersive experiences from trade show tours and factory deep dives to industrial park visits that highlight corporate innovation, operational strength and strategic vision, significantly boosting brand trust and visibility.

Equally compelling is our new column, Why It Is, which targeted with an in-depth look at PopMart’s artistic industrialization model and global ambitions, resonating strongly with brands seeking innovative frameworks. The launch garnered over 100,000 WeChat reads and widespread shares on social media, reflecting robust engagement and social impact. We are confident this series will continue to gain momentum, establishing a benchmark in its category. These content innovations translated directly into commercial success, showcasing our ability to convert creative excellence into business value. A prime example is our tech channels, Tesla’s FSD China rollout. Within 3 hours, we connected with car owners and broadcast our first-to-market live test.

With exclusive footage driving viral attention and endorsements from industrial leaders on X. Building on this, our live plus short video plus trending topic strategy fueled a comparative test of automakers’ intelligent driving systems, sparking cross-platform bus, including retweets from the CEO of top-tier NEV makers. This approach allowed us to swiftly secure branding partnerships with top industry players. Beyond high-profile tech events, we also unlocked value through authentic storytelling in routine coverage. During the 2 sessions, we captured the authentic story of a prominent industry leader, the Chairman of a leading global corporation in a short video that went viral, reaching over 60 million views. This search elevated their personal brand, boosting their company’s visibility and sales.

It highlights a growing opportunity using our content expertise to craft compelling entrepreneur IPs. As businesses prioritize authentic leader-driven narratives, clients are turning to us to amplify these stories, creating new branding resources. Looking to Q2 2025, we will deepen our commitment to content innovation, creating more viral IPs to bolster user loyalty and brand influence. We will keep delivering tailored high-impact solutions for advertisers, expanding commercial avenues while sharpening operational efficiency. This concludes our CEO, Mr. Sun’s, prepared remarks. I will now walk you through our financial performance for the first quarter of 2025. All figures mentioned will be in RMB. Our total revenue were CNY 155.2 million, representing a 1.4% increase year-on-year from CNY 153 million.

Specifically, net advertising revenues were CNY 120.5 million compared to CNY 138.6 million in the same period of last year. Paid services revenues were CNY 34.7 million, representing a 141% increase year-on-year from CNY 14.4 million, primarily driven by revenue generated from our digital reading services offered through mini programs on third-party applications. Cost of revenues decreased by 15.1% to CNY 92.5 million from CNY 109 million in the same period of last year. Total operating expenses were CNY 101.1 million, reflecting a 25.6% increase year-on-year from CNY 80.5 million. This increase was primarily due to higher sales and marketing expenses incurred for the digital reading services mentioned earlier. Loss from operations was CNY 38.4 million compared to CNY 36.5 million in the same period of last year.

Net loss attributable to ifeng was CNY 29.7 million compared to CNY 26 million in the same period of last year. Moving on to our balance sheet. As of March 31, 2025, the company’s cash and cash equivalents, term deposits, short-term investments and restricted cash totaled CNY 984.5 million or approximately USD 135.7 million. Finally, I’d like to provide our business outlook for the second quarter of 2025. We forecast total revenues to be between CNY 182.1 million and CNY 197.1 million. For net advertising revenues, we project between CNY 148.7 million and CNY 158.7 million, while for paid service revenues, we project between CNY 33.4 million and CNY 38.4 million. This forecast reflects our current and preliminary view, which is subject to change and substantial uncertainties.

This concludes the prepared portion of our call. We are now ready for questions. Operator, please go ahead.

Operator: [Operator Instructions] Our first question comes from Alice Tang of First Shanghai.

Alice Tang: I was wondering, could you please share some insights on the trends and outlook for the company’s advertising business in Q1 2025, please?

Edward Lu: Thank you very much for the question. Actually, in Q1 2025, our advertising business faced severe challenges, but our team responded actively, showing strong resilience. First, while the number of existing clients remained steady, they spending – their spending became more cautious, reducing average revenue per client. To address this, we focused on attracting new clients and their revenue grew significantly, balancing the decline from existing clients. Second, some industries had seasonal fluctuations. For example, alcohol advertising dropped sharply, but we expanded quickly in finance, e-commerce, consumer goods and electronics, achieving good progress. Also, certain clients had strong demand, but their projects required high investment and cost.

So we focused on refining our creative content resources and events to increase our pricing premium. Looking to Q2, advertisers are still cautious with marketing spending, but are improving compared to Q1. Based on market research, advertisers are focusing more on brand value and media influence. We will continue to use our strength as a leading Internet media platform, offering high-quality content and campaigns to create value for clients. Besides growing new industries and domestic clients, we are also exploring marketing partnerships with overseas companies in China. Our team is dedicated to staying competitive in this market. Thank you, Alice.

Operator: Thank you for the questions. This concludes the Q&A session. I will now pass the conference back to Muzi.

Muzi Guo: Thank you. We have now come to the end of our Q&A session and conference call. If you have any additional questions, please don’t hesitate to reach out to us. Thank you for joining us, and have a great day.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.