Exhibit 99.1
Yiren Digital Reports Second Quarter 2026
Unaudited Financial Results
BEIJING,
September 30, 2026 /PRNewswire/ -- Yiren Digital Ltd. (NYSE: YRD) (“Yiren Digital” or the “Company”),
a leading company specializing in financial technology and artificial intelligence innovation across multiple industries in China and
global markets, today announced its unaudited financial results for the second quarter ended June 30, 2026.
Second Quarter 2026 Highlights
- Later-stage delinquency rates continued to improve with 31–60
day and 61–90 day delinquency rates declining to 2.0% and 2.4% as of June 30, 2026, respectively, from 2.7% and 3.2% as of March
31, 2026.
- Repeat borrowers accounted for 82% of total loans facilitated, compared
with 78% in the first quarter of 2026 and 77% in the same period of 2025, reflecting the Company’s continued focus on serving established
borrowers.
- Insurance client growth remained strong, with the number of clients
increasing 281% year over year and new policies increasing 177% year over year.
- Insurance brokerage revenue increased 16% year over year.
- AI deployment continued to generate measurable efficiency gains across
key operating functions, including lower human handling rates in asset recovery and higher autonomous resolution rates in customer operations.
- On July 2, 2026, the Company’s board of directors authorized a new
share repurchase program of up to US$20.0 million over the following 12 months.
Second Quarter 2026 Operational Results
Credit Solution Business
| ● | Total loans facilitated in the second quarter of 2026 were RMB6.3 billion (US$0.9 billion), representing a decrease of 29% compared
to RMB8.9 billion in the first quarter of 2026, and a decrease of 69% compared to RMB20.3 billion in the same period of 2025. |
| ● | Average loan size was RMB11,610 during the second quarter of 2026, a decrease of 3% from RMB11,991 in the first quarter of 2026, and
an increase of 57% from RMB7,398 in the same period of 2025. |
| ● | Number of borrowers served in the second quarter of 2026 was 424,489, representing a decrease of 20% compared to 531,500 in the first
quarter of 2026, and a decrease of 74% compared to 1,637,912 in the same period of 2025. |
| ● | Repeat borrowers’ loan amount1 accounted for 82% of total loans facilitated in
the second quarter of 2026, compared to 78% in the first quarter of 2026 and 77% in the same period of 2025. |
| ● | Cumulative number of borrowers served reached 14,667,379 as of June 30, 2026, representing an increase of 1% from 14,518,023 as of
March 31, 2026, and an increase of 8% from 13,536,838 as of June 30, 2025. |
| ● | Outstanding balance of performing loans facilitated was RMB15.1 billion (US$2.2 billion) as of June 30, 2026, representing a decrease
of 30% from RMB21.6 billion as of March 31, 2026, and a decrease of 52% from RMB31.2 billion as of June 30, 2025. |
| 1 | “Repeat borrowers’ loan amount” refers
to the proportion of total loan facilitation and origination volume through the Yixianghua platform in a given period that is generated
by borrowers who have previously completed at least one successful drawdown during that period. |
Insurance Brokerage Business
| ● | Number of insurance clients during the second quarter of 2026 was 452,962, representing an increase of 14% from 397,854 in the first
quarter of 2026, and a 281% year-over-year increase from 118,747 in the same period of 2025. |
| ● | Cumulative number of insurance clients was 2,712,793 as of June 30, 2026, representing an increase of 15% from 2,357,951 as of March
31, 2026, and a 61% year-over-year increase from 1,681,888 as of June 30, 2025. |
| ● | Number of new insurance policies in the second quarter of 2026 was 918,150, representing a decrease of 8% from 999,575 in the first
quarter of 2026, and a 177% year-over-year increase from 331,281 in the same period of 2025. |
| ● | Gross written premiums were RMB838.9 million (US$123.6 million), representing an increase of 2% from RMB823.0 million in the first
quarter of 2026 and a decrease of 1% from RMB850.1 million in the same period of 2025. First-year premiums were RMB532.9 million (US$78.5
million) in the second quarter of 2026, compared with RMB536.3 million in the first quarter of 2026 and RMB440.4 million in the same period
of 2025. Renewal premiums were RMB305.9 million (US$45.1 million) in the second quarter of 2026, compared with RMB286.7 million in the
first quarter of 2026 and RMB409.7 million in the same period of 2025. |
Recent Developments
All-in-AI Strategic Updates
| ● | Enterprise AI Deployment and Operating Efficiency: The Company continued to advance its enterprise AI operating model, supported
by its proprietary Zhiyu and Yizhi large language models, MagiCube 2.0 multi-agent platform, XuanJi workflow execution and ZhiNao orchestration
capabilities. AI deployment is increasingly translating into measurable efficiency gains and higher levels of automation across core operating
functions. As disclosed in the Company’s 2025 ESG Report, which was published in July 2026, the autonomous resolution rate of text-based
agents in customer operations increased from approximately 60% to nearly 80%, while automated quality inspection covered more than two
million service records daily. |
| ● | AI-Enabled Risk Management: The Company continued to expand the application of AI across risk management and borrower fraud
detection. As disclosed in the Company’s 2025 ESG Report, its Hawkeye fraud detection system and DiTing multimodal verification
engine helped avoid approximately RMB165 million (US$23 million) in potential fraud-related losses during 2025, demonstrating the potential
for AI capabilities to enhance risk identification and operational efficiency. |
| ● | AI Application-Layer Expansion: In July 2026, the Company entered into a warrant agreement with a private AI-native company
focused on immersive AI entertainment and emotional wellness, marking the fourth AI company with which Yiren Digital has entered into
a warrant agreement. The transaction reflects the Company’s disciplined approach to selectively expanding its AI application-layer portfolio
and developing new growth opportunities beyond its core financial services businesses. |
Share Repurchase Program
| ● | On July 2, 2026, the Company’s board of directors authorized a new share repurchase program, under which the Company may repurchase
up to 10% of its total issued and outstanding ordinary shares and/or American depositary shares (“ADSs”) for an aggregate
amount of up to US$20.0 million over the following 12 months. The timing and amount of any repurchases will be subject to market conditions
and other applicable factors. |
2025 ESG Report
| ● | In July 2026, the Company published its 2025 Environmental, Social and Governance Report, its third annual ESG report, prepared with
reference to the GRI Standards and benchmarked against the United Nations Sustainable Development Goals. During 2025, the Company facilitated
RMB19.5 billion of unsecured credit to more than 596,500 small business owners, established a three-tier ESG governance structure led
by the Board’s ESG Committee, and reduced total greenhouse gas emissions by 6% year over year. |
“During the second quarter of 2026, we maintained a disciplined
approach to our credit solution business, prioritizing portfolio quality and risk-adjusted returns while moderating near-term loan facilitation
volume. Under this approach, we saw an improvement in later-stage delinquency rates and a higher contribution from repeat borrowers. We
continue to refine our service model to leverage our AI innovation to deliver our services that are less capital intensive and more technology
focused,” said Mr. Ning Tang, Chairman and Chief Executive Officer of Yiren Digital. “At the same time, our insurance client
base continued to expand, and our All-in-AI strategy generated measurable efficiency gains across asset recovery, customer operations
and risk management. Looking ahead, we remain focused on strengthening our core operations, advancing our AI-native capabilities and building
a more diversified growth platform.”
“Our operating performance improved in the second quarter. However,
our results were also affected by the impairment and adjustments related to legacy receivables and contract assets,” said Mr. William
Hui, Chief Financial Officer of Yiren Digital. “Net loss nevertheless narrowed by 9% sequentially compared with the first quarter
of 2026, primarily reflecting an improved credit environment, greater efficiency in credit analysis and reduced reliance on the risk-taking
model.”
Second Quarter 2026 Financial Results
Total net revenue in the second quarter of 2026 was RMB890.0
million (US$131.2 million), representing a decrease of 3% from RMB915.1 million in the first quarter of 2026 and a decrease of 46% from
RMB1,652.1 million in the same period of 2025.
Within this, revenue from the credit solution business was RMB777.6
million (US$114.6 million), representing a decrease of 2% from RMB795.7 million in the first quarter of 2026 and a decrease of 48% from
RMB1,489.6 million in the same period of 2025.
Revenue from the credit solution business accounted for 87%
of total net revenue in the second quarter of 2026. The year-over-year decrease primarily reflected lower loan facilitation volume amid
the industry’s implementation of revised regulatory requirements for online loan facilitation. The revised framework introduced lower
borrower all-in financing cost limits and more stringent funding-partner requirements relating to pricing and risk-adjusted returns. Against
this backdrop, the Company moderated loan facilitation activity and increasingly concentrated originations among established repeat borrowers.
Revenue from the insurance brokerage business was RMB67.3 million
(US$9.9 million), representing a decrease of 23% from RMB87.2 million in the first quarter of 2026 and an increase of 16% from RMB58.1
million in the same period of 2025. The year-over-year increase was primarily driven by the continued expansion of the Company’s
internet distribution business, which maintained strong momentum, together with steady growth in its traditional insurance operations.
The sequential decrease mainly reflected lower estimated renewal rates for certain internet insurance products and the resulting adjustment
to revenue from the existing portfolio.
Revenue from other businesses was RMB45.0 million (US$6.6 million),
representing an increase of 40% from RMB32.2 million in the first quarter of 2026 and a decrease of 57% from RMB104.4 million in the same
period of 2025. The year-over-year decrease mainly reflected the continued scaling down of the e-commerce business.
Sales and marketing expenses in the second quarter of 2026 were
RMB126.9 million (US$18.7 million), representing an increase of 12% from RMB113.6 million in the first quarter of 2026 and a decrease
of 63% from RMB345.2 million in the same period of 2025. The year-over-year decrease was primarily attributable to lower customer acquisition
spending for the credit solution business as loan facilitation volume declined and the repeat-borrower mix increased. The sequential increase
mainly reflected higher internet-based promotion service fees for customer acquisition in the internet insurance business.
Origination, servicing and other operating costs in the second
quarter of 2026 were RMB189.6 million (US$27.9 million), representing a decrease of 4% from RMB197.6 million in the first quarter of 2026
and an increase of 18% from RMB160.9 million in the same period of 2025. The sequential decrease primarily reflected lower credit solution
operating costs as loan facilitation volume and the outstanding loan balance declined. The year-over-year increase was mainly attributable
to higher collection costs resulting from strengthened collection efforts, as well as higher operating costs associated with increased
new business volume in the traditional insurance business.
Research and development expenses in the second quarter of 2026
were RMB113.1 million (US$16.7 million), representing an increase of 4% from RMB108.9 million in the first quarter of 2026 and an increase
of 5% from RMB107.7 million in the same period of 2025. The modest increases reflected continued investment in AI-related research and
development, including personnel and engineering capabilities.
General and administrative expenses in the second quarter of
2026 were RMB75.8 million (US$11.2 million), representing an increase of 8% from RMB70.5 million in the first quarter of 2026 and a decrease
of 4% from RMB78.9 million in the same period of 2025.
Allowance for contract assets, receivables and others in the
second quarter of 2026 was RMB502.8 million (US$74.1 million), compared with RMB176.4 million in the first quarter of 2026 and RMB214.7
million in the same period of 2025. The increase primarily reflected a provision for credit loss recognized on certain related-party loan
receivables following a reassessment of their recoverability, as well as higher expected credit loss allowances on longer aging accounts
receivable. These increases were partially offset by lower credit losses on financing and guarantee receivables.
Provision for contingent liabilities in the second quarter of
2026 was RMB233.3 million (US$34.4 million), representing a decrease of 63% from RMB632.2 million in the first quarter of 2026 and a decrease
of 40% from RMB385.7 million in the same period of 2025. The decrease primarily reflected lower loan facilitation volume under the risk-taking
model, which reduced expected future guarantee payouts, as well as a net reversal of provisions associated with the existing loan portfolio
following updated credit assessments. The quarter-to-quarter decrease was further supported by lower expected net charge-off rates for
newly originated loans.
Fair value adjustments loss in the second quarter of 2026 was
RMB97.8 million (US$14.4 million), compared with a loss of RMB89.0 million in the first quarter of 2026 and a gain of RMB28.0 million
in the same period of 2025. The fair value loss was primarily attributable to declines in the market value of the Company’s digital assets
and related investments, partially offset by fair value gains on trust investments.
Income tax expense in the second quarter of 2026 was RMB25.1
million (US$3.7 million).
Net loss for the second quarter of 2026, due to the foregoing,
was RMB449.6 million (US$66.3 million), compared with a net loss of RMB494.7 million in the first quarter of 2026 and net income of RMB357.5
million in the same period of 2025.
Adjusted EBITDA2
(non-GAAP) in the second quarter of 2026 was a loss of RMB340.7 million (US$50.2 million), compared with a loss of RMB336.8 million
in the first quarter of 2026 and a gain of RMB351.4 million in the same period of 2025.
Basic and diluted loss per ADS in the second quarter of 2026
were both RMB5.1068 (US$0.7526), compared with basic and diluted loss per ADS of RMB5.6420 in the first quarter of 2026;
and basic and diluted income per ADS of RMB4.1356 and RMB4.1072, respectively, in the same period of 2025.
Net cash used in operating activities in the second quarter
of 2026 was RMB1,029.1 million (US$151.7 million), compared with RMB655.6 million used in the first quarter of 2026 and RMB411.2 million
generated in the same period of 2025. The higher net operating cash outflow primarily reflected lower service fee collections amid reduced
business volume, increased prepayments for collection, system support and marketing services, and continued indemnity payments under risk-taking
model.
Net cash provided by investing activities in the second quarter
of 2026 was RMB454.0 million (US$66.9 million), compared with RMB24.8 million used in the first quarter of 2026 and RMB752.2 million used
in the same period of 2025. The change was primarily attributable to repayments from trust lending arrangements and proceeds from redemptions
of funds and wealth management products, partially offset by new trust lending and other investment outflows.
Net cash used in financing activities in the second quarter
of 2026 was RMB469.9 million (US$69.3 million), compared with RMB345.6 million used in the first quarter of 2026 and RMB447.6 million
provided in the same period of 2025. The net financing cash outflow primarily reflected distributions of principal upon the liquidation
of certain trust plans.
| 2 | “Adjusted EBITDA” is a non-GAAP financial measure.
For more information, please see the final section and table captioned “Reconciliation of Adjusted EBITDA” at the end of
this press release. |
As of June 30, 2026, cash and cash equivalents were RMB1,696.7
million (US$250.1 million), compared with RMB2,453.1 million as of March 31, 2026. As of June 30, 2026, financial investments were RMB252.0
million (US$37.1 million), compared with RMB507.5 million as of March 31, 2026. The decrease in cash and cash equivalents primarily reflected
net cash used in operating and financing activities, partially offset by net cash provided by investing activities. The decline in financial
investments mainly reflected redemptions of funds and wealth management products and negative fair value movements.
As of June 30, 2026, delinquency rates3
for loans that were past due for 1-30 days, 31-60 days and 61-90 days were 2.5%, 2.0% and 2.4%, respectively, compared with 2.5%, 2.7%
and 3.2%, respectively, as of March 31, 2026.
Dividend Policy
The Board is evaluating a range of capital-allocation initiatives,
including cash dividend payments and/or the recently announced share repurchase program, with a view to enhancing long-term shareholder
value while maintaining a disciplined balance sheet and adequate financial flexibility.
Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses several
non-GAAP financial measures, such as adjusted EBITDA as a supplemental measure to review and assess operating performance. We believe
such non-GAAP measure provides useful information about our core operating results, enhances the overall understanding of our past performance
and prospects and allows for greater visibility with respect to key metrics used by our management in our financial and operational decision
making. The presentation of non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”). The non-GAAP financial measure has limitations as analytical tools. Other companies, including peer companies in the industry,
may calculate the non-GAAP measure differently, which may reduce their usefulness as a comparative measure. The Company compensates for
these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered
when evaluating our performance. See “Operating Highlights and Reconciliation of GAAP to Non-GAAP measures” at the end of this
press release. The Company’s non-GAAP financial measure excludes share-based compensation expenses, depreciation and amortization
expenses, interest income and investment income, net, fair value adjustments related to digital assets and financial investments, and
income tax benefit / (expense).
Currency Conversion
This announcement contains currency conversions of certain RMB amounts
into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made
at a rate of RMB6.7851 to US$1.00, the effective noon buying rate on June 30, 2026, as set forth in the H.10 statistical release of the
Federal Reserve Board.
Conference Call
Yiren Digital’s management will host an earnings conference call at
8:00 a.m. U.S. Eastern Time on September 30, 2026 (or 8:00 p.m. Beijing/Hong Kong Time on September 30, 2026).
Participants who wish to join the call should
register online in advance of the conference at: https://dpregister.com/sreg/10211298/104ad33bf36
Once registration is completed, participants will receive the dial-in
details for the conference call.
Additionally, a live and archived webcast of
the conference call will be available at: https://ir.yiren.com
| 3 | “Delinquency rates” refers to the outstanding
principal balance of loans that were 1-30 days, 31-60 days and 61-90 days past due as a percentage of the total performing outstanding
principal balance of loans as of a specific date. Loans originating outside mainland China are not included in the calculation. A performing
loan is one that is being repaid according to the agreed terms and has not become delinquent for more than 90 days. |
Safe Harbor Statement
This press release 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 “aim,” “anticipate,” “believe,” “estimate,”
“expect,” “hope,” “going forward,” “intend,” “ought to,” “plan,” “project,”
“potential,” “seek,” “may,” “might,” “can,” “could,” “will,” “would,”
“shall,” “should,” “is likely to” and the negative form of these words and other similar expressions. This
press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as
“will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,”
“estimates,” “target,” “confident,” and similar expressions. Forward-looking statements are based on management’s
current expectations, assumptions, and assessments of current market and operating conditions. These statements involve inherent risks,
uncertainties, and other factors, many of which are outside the control of the Company, and which could cause actual results to differ
materially from those expressed or implied in such statements. Actual results may differ materially from those expressed or implied in
forward-looking statements due to a variety of factors and other risks described in the Company’s filings with the U.S. Securities and
Exchange Commission. All forward-looking statements speak only as of the date of this press release. The Company undertakes no, and expressly
disclaims any, obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or
otherwise, except as required under applicable law.
About Yiren Digital
Yiren Digital Ltd. is a leading company specializing in financial technology
and artificial intelligence innovation across multiple industries in China and global markets. The Company leverages advanced artificial
intelligence and emerging technologies to enhance customer experience, optimize capital efficiency, and expand financial inclusion. Following
the regulatory filing of its in-house developed Large Language Model Zhiyu and the significant enhancement of its MagiCube Agent platform,
Yiren Digital is establishing a new growth engine to accelerate its evolution into an AI-native, multi-industry operating platform extending
beyond traditional financial services. For more information, please visit https://ir.yiren.com.
SOURCE Yiren Digital
For further information:
Investor Relations, Email: ir@yiren.com
Piacente Financial Communications, Email: yrd@thepiacentegroup.com
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
| | |
As of | |
| | |
December 31,
2025 | | |
March 31,
2026 | | |
June 30,
2026 | | |
June 30,
2026 | |
| | |
RMB | | |
RMB | | |
RMB | | |
USD | |
| | |
| | |
| | |
| | |
| |
| Cash and cash equivalents | |
| 3,348,126 | | |
| 2,453,140 | | |
| 1,696,719 | | |
| 250,065 | |
| Restricted cash | |
| 522,708 | | |
| 383,363 | | |
| 85,183 | | |
| 12,554 | |
| Accounts receivable | |
| 826,141 | | |
| 911,368 | | |
| 900,116 | | |
| 132,661 | |
| Guarantee receivable | |
| 832,905 | | |
| 868,827 | | |
| 769,228 | | |
| 113,370 | |
| Contract assets, net | |
| 619,291 | | |
| 305,106 | | |
| 137,000 | | |
| 20,191 | |
| Contract cost | |
| 4,287 | | |
| 2,149 | | |
| 1,429 | | |
| 211 | |
| Prepaid expenses and other assets | |
| 1,776,019 | | |
| 1,756,162 | | |
| 2,217,743 | | |
| 326,855 | |
| Loans at fair value | |
| 342,895 | | |
| 156,134 | | |
| 47,406 | | |
| 6,987 | |
| Financing receivables | |
| 909,182 | | |
| 938,958 | | |
| 773,807 | | |
| 114,045 | |
| Amounts due from related parties | |
| 2,974,080 | | |
| 3,429,417 | | |
| 2,005,406 | | |
| 295,560 | |
| Financial investments | |
| 483,700 | | |
| 507,528 | | |
| 251,962 | | |
| 37,135 | |
| Equity investments | |
| 11,528 | | |
| 23,455 | | |
| 23,005 | | |
| 3,390 | |
| Property, equipment and software, net | |
| 50,403 | | |
| 84,630 | | |
| 81,787 | | |
| 12,054 | |
| Digital Assets | |
| 391,267 | | |
| 287,228 | | |
| 225,413 | | |
| 33,222 | |
| Deferred tax assets | |
| 325,094 | | |
| 361,981 | | |
| 334,818 | | |
| 49,346 | |
| Right-of-use assets | |
| 37,329 | | |
| 33,891 | | |
| 29,989 | | |
| 4,420 | |
| Total assets | |
| 13,454,955 | | |
| 12,503,337 | | |
| 9,581,011 | | |
| 1,412,066 | |
| Accounts payable | |
| 79,630 | | |
| 93,759 | | |
| 61,289 | | |
| 9,033 | |
| Amounts due to related parties | |
| 44,179 | | |
| 14,982 | | |
| 36,491 | | |
| 5,378 | |
| Guarantee liabilities-stand ready | |
| 989,701 | | |
| 1,025,763 | | |
| 917,803 | | |
| 135,267 | |
| Guarantee liabilities-contingent | |
| 1,300,097 | | |
| 1,172,209 | | |
| 815,618 | | |
| 120,207 | |
| Deferred revenue | |
| 227 | | |
| 150 | | |
| 107 | | |
| 16 | |
| Payable to investors of consolidated ABFE | |
| 1,294,792 | | |
| 941,068 | | |
| 470,067 | | |
| 69,279 | |
| Accrued expenses and other liabilities | |
| 404,680 | | |
| 406,222 | | |
| 351,173 | | |
| 51,757 | |
| Deferred tax liabilities | |
| 29,854 | | |
| 34,197 | | |
| 32,595 | | |
| 4,804 | |
| Lease liabilities | |
| 39,758 | | |
| 35,289 | | |
| 33,252 | | |
| 4,901 | |
| Total liabilities | |
| 4,182,918 | | |
| 3,723,639 | | |
| 2,718,395 | | |
| 400,642 | |
| Ordinary shares | |
| 133 | | |
| 134 | | |
| 133 | | |
| 20 | |
| Additional paid-in capital | |
| 5,239,550 | | |
| 5,242,914 | | |
| 5,251,402 | | |
| 773,961 | |
| Treasury stock | |
| (170,686 | ) | |
| (170,686 | ) | |
| (170,686 | ) | |
| (25,156 | ) |
| Accumulated other comprehensive income | |
| (2,517 | ) | |
| (17,369 | ) | |
| (36,659 | ) | |
| (5,403 | ) |
| Retained earnings | |
| 4,205,557 | | |
| 3,710,721 | | |
| 3,257,264 | | |
| 480,061 | |
| Prepayment of acquisition costs to a related party under common control * | |
| - | | |
| - | | |
| (1,450,000 | ) | |
| (213,704 | ) |
| Total Yiren Digital Ltd shareholders’ equity | |
| 9,272,037 | | |
| 8,765,714 | | |
| 6,851,454 | | |
| 1,009,779 | |
| Non-controlling interests | |
| - | | |
| 13,984 | | |
| 11,162 | | |
| 1,645 | |
| Total equity | |
| 9,272,037 | | |
| 8,779,698 | | |
| 6,862,616 | | |
| 1,011,424 | |
| Total liabilities and equity | |
| 13,454,955 | | |
| 12,503,337 | | |
| 9,581,011 | | |
| 1,412,066 | |
| * | This balance represents the prepaid acquisition consideration
made to a related party under common control for the Company’s proposed acquisition and was reclassified from amounts due from
related parties to equity account because there is uncertainty on the completion of the acquisition as well as the net assets of the
acquisition target upon completion. The Company targets to close the acquisition during 2026, subject to regulatory approval. |
Unaudited Condensed Consolidated Statements
of Operations
(in thousands, except for share, per
share and per ADS data, and percentages)
| | |
For the Three Months Ended | | |
For the Six Months Ended | |
| | |
June 30,
2025 | | |
March 31,
2026 | | |
June 30,
2026 | | |
June 30,
2026 | | |
June 30,
2025 | | |
June 30,
2026 | | |
June 30,
2026 | |
| | |
RMB | | |
RMB | | |
RMB | | |
USD | | |
RMB | | |
RMB | | |
USD | |
| Net revenue: | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Loan facilitation services | |
| 874,584 | | |
| (3,909 | ) | |
| 31,120 | | |
| 4,587 | | |
| 1,616,978 | | |
| 27,211 | | |
| 4,010 | |
| Post-origination services | |
| 10,463 | | |
| (41 | ) | |
| 814 | | |
| 120 | | |
| 12,207 | | |
| 773 | | |
| 114 | |
| Guarantee services | |
| 316,942 | | |
| 519,155 | | |
| 493,806 | | |
| 72,778 | | |
| 635,339 | | |
| 1,012,961 | | |
| 149,292 | |
| Financing services | |
| 65,821 | | |
| 66,145 | | |
| 68,136 | | |
| 10,042 | | |
| 107,708 | | |
| 134,281 | | |
| 19,790 | |
| Insurance brokerage services | |
| 58,137 | | |
| 87,160 | | |
| 67,296 | | |
| 9,918 | | |
| 129,597 | | |
| 154,456 | | |
| 22,764 | |
| Electronic commerce services | |
| 93,962 | | |
| 921 | | |
| 1,908 | | |
| 281 | | |
| 278,036 | | |
| 2,829 | | |
| 417 | |
| Network and marketing services * | |
| 138,268 | | |
| 145,697 | | |
| 122,633 | | |
| 18,074 | | |
| 262,626 | | |
| 268,330 | | |
| 39,547 | |
| Technology services * | |
| 90,532 | | |
| 98,129 | | |
| 95,896 | | |
| 14,133 | | |
| 159,122 | | |
| 194,025 | | |
| 28,596 | |
| Others * | |
| 3,391 | | |
| 1,883 | | |
| 8,370 | | |
| 1,234 | | |
| 5,013 | | |
| 10,253 | | |
| 1,511 | |
| Total net revenue | |
| 1,652,100 | | |
| 915,140 | | |
| 889,979 | | |
| 131,167 | | |
| 3,206,626 | | |
| 1,805,119 | | |
| 266,041 | |
| Operating costs and expenses: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Sales and marketing | |
| 345,166 | | |
| 113,569 | | |
| 126,863 | | |
| 18,697 | | |
| 622,118 | | |
| 240,432 | | |
| 35,435 | |
| Origination,servicing and other operating costs | |
| 160,859 | | |
| 197,552 | | |
| 189,608 | | |
| 27,945 | | |
| 385,597 | | |
| 387,160 | | |
| 57,060 | |
| Research and development | |
| 107,693 | | |
| 108,933 | | |
| 113,109 | | |
| 16,670 | | |
| 193,647 | | |
| 222,042 | | |
| 32,725 | |
| General and administrative | |
| 78,862 | | |
| 70,504 | | |
| 75,816 | | |
| 11,174 | | |
| 174,699 | | |
| 146,320 | | |
| 21,565 | |
| Allowance for contract assets, receivables and others | |
| 214,698 | | |
| 176,424 | | |
| 502,821 | | |
| 74,107 | | |
| 367,503 | | |
| 679,245 | | |
| 100,109 | |
| Provision for contingent liabilities | |
| 385,674 | | |
| 632,219 | | |
| 233,289 | | |
| 34,382 | | |
| 796,437 | | |
| 865,508 | | |
| 127,560 | |
| Total operating costs and expenses | |
| 1,292,952 | | |
| 1,299,201 | | |
| 1,241,506 | | |
| 182,975 | | |
| 2,540,001 | | |
| 2,540,707 | | |
| 374,454 | |
| Other income/(loss): | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Investment income | |
| 2,245 | | |
| 1,318 | | |
| 12,417 | | |
| 1,830 | | |
| 4,217 | | |
| 13,735 | | |
| 2,024 | |
| Interest income | |
| 22,353 | | |
| 12,498 | | |
| 12,310 | | |
| 1,814 | | |
| 44,587 | | |
| 24,808 | | |
| 3,657 | |
| Fair value adjustments gain/(loss) | |
| 28,018 | | |
| (89,036 | ) | |
| (97,815 | ) | |
| (14,416 | ) | |
| (30,358 | ) | |
| (186,851 | ) | |
| (27,538 | ) |
| Others, net | |
| 14,084 | | |
| 1,591 | | |
| 429 | | |
| 63 | | |
| 14,758 | | |
| 2,020 | | |
| 298 | |
| Total other income/(loss) | |
| 66,700 | | |
| (73,629 | ) | |
| (72,659 | ) | |
| (10,709 | ) | |
| 33,204 | | |
| (146,288 | ) | |
| (21,559 | ) |
| Income/(loss) before provision for income taxes | |
| 425,848 | | |
| (457,690 | ) | |
| (424,186 | ) | |
| (62,517 | ) | |
| 699,829 | | |
| (881,876 | ) | |
| (129,972 | ) |
| Share of results of equity investees | |
| (4,431 | ) | |
| - | | |
| (371 | ) | |
| (55 | ) | |
| (4,560 | ) | |
| (371 | ) | |
| (55 | ) |
| Income tax expense/(benefit) | |
| 63,877 | | |
| 37,024 | | |
| 25,058 | | |
| 3,693 | | |
| 90,223 | | |
| 62,082 | | |
| 9,150 | |
| Net income/(loss) | |
| 357,540 | | |
| (494,714 | ) | |
| (449,615 | ) | |
| (66,265 | ) | |
| 605,046 | | |
| (944,329 | ) | |
| (139,177 | ) |
| Net loss/(income) attributable to non-controlling interests | |
| - | | |
| 1,173 | | |
| 2,823 | | |
| 416 | | |
| - | | |
| 3,996 | | |
| 589 | |
| Net income/(loss) attributable to ordinary shareholders of the Company | |
| 357,540 | | |
| (493,541 | ) | |
| (446,792 | ) | |
| (65,849 | ) | |
| 605,046 | | |
| (940,333 | ) | |
| (138,588 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Weighted-average number of ordinary shares used in computing basic net income/(loss) per share | |
| 172,907,793 | | |
| 174,951,573 | | |
| 174,976,922 | | |
| 174,976,922 | | |
| 172,854,331 | | |
| 174,964,318 | | |
| 174,964,318 | |
| Basic net income/(loss) per share attributable to ordinary shareholders of the Company | |
| 2.0678 | | |
| (2.8210 | ) | |
| (2.5534 | ) | |
| (0.3763 | ) | |
| 3.5003 | | |
| (5.3744 | ) | |
| (0.7921 | ) |
| Basic diluted net income/(loss) per ADS attributable to ordinary shareholders of the Company | |
| 4.1356 | | |
| (5.6420 | ) | |
| (5.1068 | ) | |
| (0.7526 | ) | |
| 7.0006 | | |
| (10.7488 | ) | |
| (1.5842 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Weighted-average number of ordinary shares used in computing diluted net income/(loss) per share | |
| 174,102,643 | | |
| 174,951,573 | | |
| 174,976,922 | | |
| 174,976,922 | | |
| 174,019,493 | | |
| 174,964,318 | | |
| 174,964,318 | |
| Diluted net income/(loss) per share attributable to ordinary shareholders of the Company | |
| 2.0536 | | |
| (2.8210 | ) | |
| (2.5534 | ) | |
| (0.3763 | ) | |
| 3.4769 | | |
| (5.3744 | ) | |
| (0.7921 | ) |
| Diluted net income/(loss) per ADS attributable to ordinary shareholders of the Company | |
| 4.1072 | | |
| (5.6420 | ) | |
| (5.1068 | ) | |
| (0.7526 | ) | |
| 6.9538 | | |
| (10.7488 | ) | |
| (1.5842 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Unaudited Condensed Consolidated Cash Flow Data | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net cash generated from/(used in) operating activities | |
| 411,224 | | |
| (655,588 | ) | |
| (1,029,107 | ) | |
| (151,672 | ) | |
| 889,874 | | |
| (1,684,695 | ) | |
| (248,293 | ) |
| Net cash used in/(provided by) investing activities | |
| (752,200 | ) | |
| (24,764 | ) | |
| 454,017 | | |
| 66,914 | | |
| (897,790 | ) | |
| 429,253 | | |
| 63,264 | |
| Net cash provided by/(used in) financing activities | |
| 447,588 | | |
| (345,590 | ) | |
| (469,907 | ) | |
| (69,256 | ) | |
| 367,012 | | |
| (815,497 | ) | |
| (120,190 | ) |
| Effect of foreign exchange rate changes | |
| (9,412 | ) | |
| (8,389 | ) | |
| (9,604 | ) | |
| (1,415 | ) | |
| (7,045 | ) | |
| (17,993 | ) | |
| (2,652 | ) |
| Net increase/(decrease) in cash, cash equivalents and restricted cash | |
| 97,200 | | |
| (1,034,331 | ) | |
| (1,054,601 | ) | |
| (155,429 | ) | |
| 352,051 | | |
| (2,088,932 | ) | |
| (307,871 | ) |
| Cash, cash equivalents and restricted cash, beginning of period | |
| 4,356,408 | | |
| 3,870,834 | | |
| 2,836,503 | | |
| 418,048 | | |
| 4,101,557 | | |
| 3,870,834 | | |
| 570,490 | |
| Cash, cash equivalents and restricted cash, end of period | |
| 4,453,608 | | |
| 2,836,503 | | |
| 1,781,902 | | |
| 262,619 | | |
| 4,453,608 | | |
| 1,781,902 | | |
| 262,619 | |
| * | Given the Company’s diversified revenue streams, Network
and marketing services and Technology services are now separately presented from Other revenue, with the remaining balance classified
as Others. Comparative figures for the prior period have been restated. |
Operating Highlights and Reconciliation of GAAP
to Non-GAAP Measures
(in thousands, except for number of borrowers,
number of insurance clients, cumulative number of insurance clients and percentages)
| | |
For the Three Months Ended | | |
For the Six Months Ended | |
| | |
June 30,
2025 | | |
March 31,
2026 | | |
June 30,
2026 | | |
June 30,
2026 | | |
June 30,
2025 | | |
June 30,
2026 | | |
June 30,
2026 | |
| | |
RMB | | |
RMB | | |
RMB | | |
USD | | |
RMB | | |
RMB | | |
USD | |
| Operating Highlights | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Amount of loans facilitated | |
| 20,347,799 | | |
| 8,910,760 | | |
| 6,302,596 | | |
| 928,888 | | |
| 35,585,722 | | |
| 15,213,356 | | |
| 2,242,171 | |
| Number of borrowers | |
| 1,637,912 | | |
| 531,500 | | |
| 424,489 | | |
| 424,489 | | |
| 2,466,710 | | |
| 832,248 | | |
| 832,248 | |
| Remaining principal of performing loans | |
| 31,220,078 | | |
| 21,603,502 | | |
| 15,107,343 | | |
| 2,226,547 | | |
| 31,220,078 | | |
| 15,107,343 | | |
| 2,226,547 | |
| Cumulative number of insurance clients | |
| 1,681,888 | | |
| 2,357,951 | | |
| 2,712,793 | | |
| 2,712,793 | | |
| 1,681,888 | | |
| 2,712,793 | | |
| 2,712,793 | |
| Number of insurance clients | |
| 118,747 | | |
| 397,854 | | |
| 452,962 | | |
| 452,962 | | |
| 187,833 | | |
| 789,960 | | |
| 789,960 | |
| Gross written premiums | |
| 850,080 | | |
| 822,991 | | |
| 838,859 | | |
| 123,633 | | |
| 1,651,878 | | |
| 1,661,850 | | |
| 244,926 | |
| First year premium | |
| 440,353 | | |
| 536,332 | | |
| 532,946 | | |
| 78,547 | | |
| 852,850 | | |
| 1,069,278 | | |
| 157,592 | |
| Renewal premium | |
| 409,727 | | |
| 286,659 | | |
| 305,913 | | |
| 45,086 | | |
| 799,028 | | |
| 592,572 | | |
| 87,334 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Segment Information | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Credit solution business: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenue | |
| 1,489,587 | | |
| 795,746 | | |
| 777,638 | | |
| 114,610 | | |
| 2,784,067 | | |
| 1,573,384 | | |
| 231,888 | |
| Sales and marketing expenses | |
| 332,405 | | |
| 80,760 | | |
| 82,462 | | |
| 12,154 | | |
| 593,308 | | |
| 163,222 | | |
| 24,056 | |
| Origination, servicing and other operating costs | |
| 105,617 | | |
| 140,143 | | |
| 116,554 | | |
| 17,178 | | |
| 246,240 | | |
| 256,697 | | |
| 37,832 | |
| Allowance for contract assets, receivables and others | |
| 216,260 | | |
| 174,866 | | |
| 502,956 | | |
| 74,127 | | |
| 368,372 | | |
| 677,822 | | |
| 99,899 | |
| Provision for contingent liabilities | |
| 385,674 | | |
| 632,219 | | |
| 233,289 | | |
| 34,382 | | |
| 796,437 | | |
| 865,508 | | |
| 127,560 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Insurance brokerage business: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenue | |
| 58,137 | | |
| 87,160 | | |
| 67,296 | | |
| 9,918 | | |
| 129,597 | | |
| 154,456 | | |
| 22,764 | |
| Sales and marketing expenses | |
| 2,731 | | |
| 2,388 | | |
| 20,922 | | |
| 3,083 | | |
| 5,526 | | |
| 23,310 | | |
| 3,435 | |
| Origination, servicing and other operating costs | |
| 52,683 | | |
| 54,475 | | |
| 69,044 | | |
| 10,176 | | |
| 134,123 | | |
| 123,519 | | |
| 18,205 | |
| Allowance for contract assets, receivables and others | |
| 564 | | |
| (117 | ) | |
| 107 | | |
| 16 | | |
| (14 | ) | |
| (10 | ) | |
| (1 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Others: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenue | |
| 104,376 | | |
| 32,234 | | |
| 45,045 | | |
| 6,639 | | |
| 292,962 | | |
| 77,279 | | |
| 11,389 | |
| Sales and marketing expenses | |
| 10,030 | | |
| 30,421 | | |
| 23,479 | | |
| 3,460 | | |
| 23,284 | | |
| 53,900 | | |
| 7,944 | |
| Origination, servicing and other operating costs | |
| 2,559 | | |
| 2,934 | | |
| 4,010 | | |
| 591 | | |
| 5,234 | | |
| 6,944 | | |
| 1,023 | |
| Allowance for contract assets, receivables and others | |
| 45 | | |
| 188 | | |
| 107 | | |
| 16 | | |
| (1,949 | ) | |
| 295 | | |
| 43 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Reconciliation of Adjusted EBITDA | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income/(loss) | |
| 357,540 | | |
| (494,714 | ) | |
| (449,615 | ) | |
| (66,265 | ) | |
| 605,046 | | |
| (944,329 | ) | |
| (139,177 | ) |
| Interest income and investment income, net | |
| (24,598 | ) | |
| (13,816 | ) | |
| (24,727 | ) | |
| (3,644 | ) | |
| (48,804 | ) | |
| (38,543 | ) | |
| (5,681 | ) |
| Income tax expense/(benefit) | |
| 63,877 | | |
| 37,024 | | |
| 25,058 | | |
| 3,693 | | |
| 90,223 | | |
| 62,082 | | |
| 9,150 | |
| Depreciation and amortization | |
| 2,643 | | |
| 3,561 | | |
| 3,711 | | |
| 547 | | |
| 4,940 | | |
| 7,272 | | |
| 1,072 | |
| Share-based compensation | |
| 6,932 | | |
| 2,071 | | |
| 1,821 | | |
| 269 | | |
| 9,119 | | |
| 3,892 | | |
| 574 | |
| Fair value adjustments related to digital assets and financial investments | |
| (54,979 | ) | |
| 129,059 | | |
| 103,064 | | |
| 15,190 | | |
| 15,845 | | |
| 232,123 | | |
| 34,210 | |
| Adjusted EBITDA | |
| 351,415 | | |
| (336,815 | ) | |
| (340,688 | ) | |
| (50,210 | ) | |
| 676,369 | | |
| (677,503 | ) | |
| (99,852 | ) |
| Adjusted EBITDA margin | |
| 21.3 | % | |
| -36.8 | % | |
| -38.3 | % | |
| -38.3 | % | |
| 21.1 | % | |
| -37.5 | % | |
| -37.5 | % |
Delinquency Rates
| | |
1-30 days | | |
31-60 days | | |
61-90 days | |
| | |
| | |
| | |
| |
| December 31, 2022 | |
| 1.7 | % | |
| 1.2 | % | |
| 1.1 | % |
| December 31, 2023 | |
| 2.0 | % | |
| 1.4 | % | |
| 1.2 | % |
| December 31, 2024 | |
| 1.6 | % | |
| 1.2 | % | |
| 1.1 | % |
| December 31, 2025 | |
| 3.4 | % | |
| 3.0 | % | |
| 2.8 | % |
| March 31, 2026 | |
| 2.5 | % | |
| 2.7 | % | |
| 3.2 | % |
| June 30, 2026 | |
| 2.5 | % | |
| 2.0 | % | |
| 2.4 | % |
90+ Days Delinquency Rates by Vintage
| Loan Issued | |
Month on Book | |
| Period | |
4 | | |
6 | | |
8 | | |
10 | | |
12 | | |
14 | | |
16 | | |
18 | | |
20 | | |
22 | | |
24 | |
| 2022Q1 | |
| 0.6 | % | |
| 2.0 | % | |
| 3.1 | % | |
| 3.9 | % | |
| 4.5 | % | |
| 4.7 | % | |
| 4.6 | % | |
| 4.6 | % | |
| 4.5 | % | |
| 4.5 | % | |
| 4.4 | % |
| 2022Q2 | |
| 0.5 | % | |
| 1.7 | % | |
| 2.9 | % | |
| 3.7 | % | |
| 4.2 | % | |
| 4.4 | % | |
| 4.3 | % | |
| 4.3 | % | |
| 4.2 | % | |
| 4.2 | % | |
| 4.1 | % |
| 2022Q3 | |
| 0.5 | % | |
| 2.1 | % | |
| 3.4 | % | |
| 4.2 | % | |
| 4.7 | % | |
| 5.0 | % | |
| 4.9 | % | |
| 4.9 | % | |
| 4.8 | % | |
| 4.7 | % | |
| 4.7 | % |
| 2022Q4 | |
| 0.7 | % | |
| 2.5 | % | |
| 3.8 | % | |
| 4.8 | % | |
| 5.5 | % | |
| 5.8 | % | |
| 5.8 | % | |
| 5.7 | % | |
| 5.6 | % | |
| 5.5 | % | |
| 5.4 | % |
| 2023Q1 | |
| 0.5 | % | |
| 2.3 | % | |
| 3.9 | % | |
| 5.0 | % | |
| 5.8 | % | |
| 6.1 | % | |
| 6.0 | % | |
| 5.9 | % | |
| 5.8 | % | |
| 5.7 | % | |
| 5.6 | % |
| 2023Q2 | |
| 0.6 | % | |
| 2.8 | % | |
| 4.7 | % | |
| 6.1 | % | |
| 6.8 | % | |
| 7.1 | % | |
| 7.0 | % | |
| 6.9 | % | |
| 6.8 | % | |
| 6.7 | % | |
| 6.6 | % |
| 2023Q3 | |
| 0.8 | % | |
| 3.5 | % | |
| 5.6 | % | |
| 7.0 | % | |
| 7.7 | % | |
| 7.9 | % | |
| 7.9 | % | |
| 7.7 | % | |
| 7.6 | % | |
| 7.5 | % | |
| 7.5 | % |
| 2023Q4 | |
| 0.7 | % | |
| 3.4 | % | |
| 5.6 | % | |
| 6.8 | % | |
| 7.4 | % | |
| 7.6 | % | |
| 7.6 | % | |
| 7.4 | % | |
| 7.3 | % | |
| 7.3 | % | |
| 7.2 | % |
| 2024Q1 | |
| 0.6 | % | |
| 3.0 | % | |
| 4.8 | % | |
| 5.9 | % | |
| 6.6 | % | |
| 6.8 | % | |
| 6.8 | % | |
| 6.7 | % | |
| 6.6 | % | |
| 6.6 | % | |
| 6.5 | % |
| 2024Q2 | |
| 0.6 | % | |
| 2.4 | % | |
| 4.0 | % | |
| 5.1 | % | |
| 5.8 | % | |
| 6.1 | % | |
| 6.1 | % | |
| 6.0 | % | |
| 5.9 | % | |
| 5.8 | % | |
| 5.8 | % |
| 2024Q3 | |
| 0.5 | % | |
| 2.2 | % | |
| 3.7 | % | |
| 4.7 | % | |
| 5.4 | % | |
| 5.8 | % | |
| 5.8 | % | |
| 5.7 | % | |
| 5.7 | % | |
| 5.5 | % | |
| | |
| 2024Q4 | |
| 0.6 | % | |
| 2.2 | % | |
| 3.8 | % | |
| 4.9 | % | |
| 5.9 | % | |
| 6.4 | % | |
| 6.4 | % | |
| 6.3 | % | |
| 6.0 | % | |
| | | |
| | |
| 2025Q1 | |
| 0.6 | % | |
| 2.3 | % | |
| 4.2 | % | |
| 6.0 | % | |
| 7.2 | % | |
| 7.8 | % | |
| 7.4 | % | |
| | | |
| | | |
| | | |
| | |
| 2025Q2 | |
| 0.8 | % | |
| 3.5 | % | |
| 6.6 | % | |
| 8.9 | % | |
| 10.0 | % | |
| 9.4 | % | |
| | | |
| | | |
| | | |
| | | |
| | |
| 2025Q3 | |
| 1.1 | % | |
| 4.8 | % | |
| 8.0 | % | |
| 10.0 | % | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| 2025Q4 | |
| 1.1 | % | |
| 4.3 | % | |
| 7.6 | % | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| 2026Q1 | |
| 0.7 | % | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| * | The 90+ days delinquency rate by vintage refers to the outstanding principal balance of loans
facilitated over a specified period that are more than 90 days past due, as a percentage of the total loans facilitated during that
same period. Loans originating outside mainland China are excluded from the calculation. |
