Good day and thank you for standing by. Welcome to Phoenix New Media second quarter 2026 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Muzi Guo from Investor Relations. Please go ahead.

Thank you, Operator. Welcome to Phoenix New Media's earnings conference call for the second quarter of 2026. 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.ifrm.com. Before we continue, please note the safe harbor statement included 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 today are our CEO, Li Qi, and our CFO, Edward Liu. I will now pass the call to Mr. Li for his opening remarks. I will provide translation as needed.

Hello, investors, analysts, and friends. Welcome to the second quarter of the Fenghuang Network's business call. I am the new CEO, Li Qi, of Fenghuang Network. I am very happy to be the first to communicate with you as CEO. I also look forward to continuing to communicate with investors in the future. I will continue to focus on the core advantages of Phoenix Net with the management team, professional content, brand influence, and commercialization capabilities, and continue to improve operating efficiency, and continue to improve the long-term value of the company based on business. Next, please let CFO Lu Jing introduce the business progress and management situation of this quarter to everyone. Thank you.

Hello everyone and welcome. I am Li Qi, the new CEO of Phoenix New Media. It is my pleasure to join you for the first time in this role. I look forward to maintaining ongoing communication with our investors. Together with the management team, I will continue to focus on Phoenix's core strengths, including our professional content capabilities, brand influence, and commercial capabilities. We will continue to improve operational efficiency, strengthen our business foundation and enhance long-term value for our shareholders. Next, I would like to invite our CFO, Edward, to walk you through our business performance and key developments during the quarter.

Okay, thank you, Muzi. In Q2, 2026, we saw continued strong demand from brand advertisers for high-quality content. As information becomes more fragmented and the user attention becomes and others. High-quality content that effectively connects brands with audiences has become increasingly valuable. Leveraging our long-standing content expertise, we are deepening our strategy of driving business value through quality content. This quarter, several major international events demonstrated our ability to produce high-quality content and respond quickly. During President Trump's visit to China, things provided full live coverage of the key activities and captured the critical moments in real time. Our video, who were the Chinese company representatives at Trump's welcome dinner, achieved over 40 million views on Douyin and WeChat channels while also leading to additional business opportunities with major brand clients. This is a good example of how premium journalism can translate into commercial value. Our systematic approach to major event coverage, from preparation and live reporting to follow-up analysis continue to differentiate us. During the Iran conflict, we delivered fast, high-quality coverage through breaking live broadcasts and special programs. For the 2026 World Cup hosted by Canada, Mexico, and the United States, we built comprehensive content and marketing products around the tournament. Our original sports content IP generated more than 75 million impressions across the wide, attracted over 10 leading brands, and achieved significant commercial growth. In addition, Our reporting on the Shanxi Qingyuan mine accident demonstrated our investigative capabilities and journalistic expertise in major public events, with multiple exclusive stories being republished by mainstream media. Our original content IPs continue to demonstrate long-term value. Programs such as Journey and Endless Conversations have built strong audience engagement and brand influence through authentic storytelling and in-depth conversations. We believe premium branded content creates value beyond product promotion by connecting brands with meaningful social issues and compiling stories. Our flagship interview IP should do a wisdom talk has operated for eight seasons and maintained eight consecutive years of brand partnerships. The advertiser base of this premium IP has expanded from traditional liquor brands into industries such as automobiles and technology. demonstrating that strong content IPs are not only effective audience acquisition tools but also long-term commercial assets with repeat monetization potential. As our content capabilities continue to build commercial value is being unlocked across key verticals. Following the shift toward more in-depth original vertical videos on WeChat channels, Our tech channel achieved quarterly revenue growth of over 100% year-over-year Our iPhone car research lab established differentiated expertise with potential content such as Xiaomi EV side airbag testing and delivered strong revenue growth through event marketing around the Beijing Auto Show Meanwhile, our large-scale event IPs also performed well The HerPower Weibo topic approached 200 million readers and the Greater Bay Area Finance Forum achieved over 100 million impressions and was republished by industry organizations. AI is now integrated into our content workflow. We use AI to support content preparation, production, and post-production. This allows us to maintain high quality while improving efficiency and optimizing costs. We are also enhancing content distribution, user reach, and operational precision to maximize content value and commercial conversions. Looking ahead, our priorities remain clear. Continue investing in trusted content, deepen the use of AI across our workflow, expand monetization opportunities in key verticals and strengthen the connection between our content capabilities and commercial value. We believe this effort will further reinforce Fink's position as a trusted media company and support sustainable long-term growth. This concludes our CEO, Mr. Li's prepared remarks. I will now walk you through our financial performance for the second quarter of 2026. All figures mentioned will be in RMB. Our total revenues were 216.7 million, representing a 15.8% increase year on year from 187.1 million. Specifically, net advertising revenues were 146.9 million compared to 153.3 million in the same period of last year. Paid services revenues were 69.8 million, representing a 106.5% increase year-on-year from 33.8 million, primarily driven by revenue generated from our digital reading services offered through many programs on third-party applications. Cost of revenues decreased by 2.6% to 92.6 million from 95.1 million in the same period of last year. Growth margin for the second quarter improved to 37.3% from 49.2% in the same period of last year. Total operating expenses were 129.4 million, reflecting a 30.4% increase year-on-year from 99.2 million. This increase was primarily due to higher sales and marketing expenses incurred for the digital reading services mentioned earlier. Loss from operations were 5.3 million compared to 7.2 million in the same period of last year. Net income attributable to iPhone was 6.5 million. compared to net loss attributable to iPhone of 10.4 million in the same period of last year. Moving on to our balance sheet, as of June 30, 2026, the communist cash and cash equivalents, term deposits, short-term investments, and restricted cash totaled 990 million, or approximately US dollar 145.9 million. Finally, I'd like to provide our business outlook for the third quarter of 2026. We forecast total revenues to be between 220.9 million and 235.9 million. For net advertising revenues, we project between 151.9 million and 161.9 million. While for paid service revenues, we project between 69 million and 74 million. This forecast reflects our current and preliminary view, which is subject to change and substantial uncertainty. This concludes the prepared portion of our call. We are now ready for questions. Operator, please go ahead.

Thank you very much. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star, one, one again. Please stand by as we compile the Q&A roster. First question comes from Alexander Lu from First Shanghai.

Thanks management for taking my question and congratulations for this quarter's achievement. So my question is related with advertising. So the company achieved year on year revenue growth this quarter. So we are looking at the advertising business more broadly. The picture seems more nuanced. Can you walk us through the dynamics, what's creating pressure and what's giving you all confidence and how you see the near to medium term trajectory?

Thank you, Alexander. The advertising environment was mixed this quarter. In some categories, such as Chinese liquor, the timing of certain contract renewal fall outside Q2, which had an impact on the quarter. But we don't see any fundamental change in the underlying demand. At the same time, we saw growth in several other areas. is coming from deeper vertical content, event-based campaigns that help brands reach a larger audience, and branded content IPs that support long-term client relationships. We are seeing these models work across a range of categories, including technology, automotive, finance, and consumer brands. So we believe this is more of a structural shift rather than just a short-term thing. Going forward, we think that content-driven monetization will be an important area of growth. Our focus is to extend the models that have worked well for us, build relationships with clients who see things as a content partner rather than just a media channel. We are also expanding into new advertiser segments where our lightweight, fast-turn campaigns have proven effective. I hope I have answered your questions, Alexander. Thank you again.

Thank you. I see no further questions at this time. I will now turn the conference back to Muzi.

Thank you. This concludes our Q&A session and conference call. If you have any further questions, please feel free to contact us. Thank you for joining us and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.