Yiren Digital Ltd. Q2 FY2025 earnings call

• AI-powered strategy driving strong quarter with personalized customer engagement, enhanced risk management, and improved service efficiency. - Financial services business saw loan volume facilitated reach RMB 20.3 billion in Q2, 34% q-o-q and 57% y-o-y growth, driven by repeat borrowing at 77%. - AI sales agent executes over 1,700 personalized marketing tasks daily; AI capital manager optimizes capital deployment in 10 minutes vs 1 week prior; AI risk manager detects over 30,000 high-risk identity documents daily. - Overseas business: Philippines loan volume nearly RMB 200 million, +54% q-o-q; Indonesia pilot operation begun. - Insurance brokerage business shows gradual recovery, with digital insurance line seeing strong growth in gross premiums. - Risk management: overhauled risk rating system to 8-level classification; AI collection robots handled 81% of D1 delinquency cases.

Financial services segment accounts for over 90% of revenue. Total loan facilitation volume in Q2 2025 was RMB 20.3 billion, up 57% year-over-year. Revenue from financial services segment increased 75% year-over-year to RMB 1.5 billion. Loan-guarantee services revenue reached RMB 317 million in Q2, up nearly 3.6x year-over-year. Insurance segment: gross written premium declined 20% year-over-year to RMB 850 million in Q2 2025, but was up 6% quarter-over-quarter. Gross premium from digital insurance line in Q2 was RMB 8 million, a 103% quarter-over-quarter growth. Consumption and lifestyle service is being wound down.

• Projected revenue for Q3 2025 in range of RMB 1.4 billion to RMB 1.6 billion. - International business and digital insurance segments expected to drive more revenues and margin growth in next few quarters.

• Regulatory impact on loan facilitation business, with credit risk and capital costs increasing slightly. - Sector-wide fluctuations in funding supply due to new regulations. - Industry consolidation potential as smaller platforms exit market.

Q: Congratulations on another strong quarter. Crypto assets have risen substantially this quarter. Does Yiren Digital intend to continue to increase crypto investments?

A: Yes, we will continue to work on the emerging crypto asset class. Initially, crypto position was for treasury management, now exploring ways to use crypto/blockchain to support core business. We have a long-term view and are in exploration stage.

Q: Do you hedge the risks of investing in crypto?

A: We have a long-term view, do not hedge directly on crypto assets we hold, as crypto price trending up aligns with our long-term view, and we are exploring strategic use of crypto.