Phoenix New Media Limited (NYSE:FENG) reported an 8.3% increase in third-quarter 2026 revenue to RMB217.6 million ($32.5 million), compared with RMB200.9 million in the corresponding period of 2025, supported by growth in paid digital services.
The Chinese digital media company’s shares were unchanged in after-hours trading following the announcement of its financial results.
Phoenix New Media recorded an adjusted loss of RMB0.13 ($0.02) per American Depositary Share (ADS), compared with an adjusted loss of RMB1.17 per ADS in the third quarter of the previous year.
The company also reported an improvement in gross margin, reflecting changes in its revenue mix and lower operating costs associated with generating revenue.
Paid Services Revenue Rises 64.4% as Digital Reading Demand Increases
Paid services revenue increased 64.4% to RMB68.4 million ($10.2 million) during the third quarter, compared with RMB41.6 million a year earlier.
The increase was primarily attributable to digital reading services distributed through mini-programs integrated into third-party applications.
These services contributed to the company’s overall revenue growth, offsetting a decline in advertising revenue during the period.
Net advertising revenue fell 6.3% to RMB149.2 million ($22.3 million), compared with RMB159.3 million in the third quarter of 2025.
The contrasting performances of the two business segments reflected a shift in the company’s revenue composition, with paid services accounting for a larger proportion of total revenue.
Paid services represented approximately 31.4% of third-quarter revenue, compared with approximately 20.7% in the corresponding period of the previous year.
Gross Margin Improves to 57.6% Following Cost Reductions
Phoenix New Media reported a third-quarter gross margin of 57.6%, compared with 47.6% in the same period of 2025.
The 10-percentage-point improvement was primarily attributed to higher margins from digital reading services and measures to control costs.
Cost of revenue declined 12.4% year over year to RMB92.2 million ($13.8 million).
The reduction occurred alongside an increase in total revenue, contributing to the improvement in gross profitability.
The company’s adjusted loss per ADS narrowed to RMB0.13 from RMB1.17 a year earlier, although it remained negative on this measure.
The results indicate that growth in paid services and lower revenue-related costs contributed to the changes in the company’s third-quarter financial performance.
Management Highlights Content Development and Commercial Activities
Phoenix New Media Chief Executive Officer Qi Li said the company continued to develop its editorial content and pursue additional commercial opportunities during the quarter.
“During the third quarter, we provided timely coverage of major news events, continued to invest in original content, and pursued new commercial opportunities in key verticals, further leveraging Phoenix’s brand and content expertise,” Li said.
The company’s activities included coverage of major news developments, investment in original reporting and the development of commercial opportunities in selected content categories.
The growth in digital reading services was a significant contributor to the company’s revenue performance during the period.
Fourth-Quarter Revenue Forecast Reaches RMB251.7 Million
Phoenix New Media provided revenue guidance for the fourth quarter of 2026, forecasting total revenue between RMB236.7 million and RMB251.7 million.
The midpoint of the projected range is RMB244.2 million, representing an increase of approximately 12.2% compared with third-quarter revenue of RMB217.6 million.
The company expects net advertising revenue of between RMB148.4 million and RMB158.4 million during the fourth quarter.
Paid services revenue is projected to range from RMB88.3 million to RMB93.3 million.
At the midpoint, the paid services forecast represents approximately 32.7% sequential growth compared with the third quarter.
The guidance indicates that management expects paid services to remain an important contributor to revenue during the final three months of the year.
Actual results will depend on the performance of the company’s advertising operations, digital reading services and other paid offerings.
Cash and Investments Total RMB935.4 Million
As of September 30, 2026, Phoenix New Media reported combined cash, cash equivalents, term deposits, short-term investments and restricted cash of RMB935.4 million ($139.5 million).
The reported balance includes both liquid financial resources and restricted cash, which may be subject to limitations on its use.
The company’s financial position and fourth-quarter revenue guidance were disclosed alongside its third-quarter operating results.
Phoenix New Media enters the final quarter of 2026 following revenue growth driven by paid services, an improvement in gross margin and a narrower adjusted loss per ADS.
Its fourth-quarter outlook anticipates further sequential revenue growth, with paid services expected to contribute a larger amount of revenue than in the third quarter.