Yiren Digital Ltd. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Services Adjustments: Challenging operating environment due to regulatory uncertainty and credit backdrop, but adjusted risk posture. AI-driven marketing enhanced customer profiling accuracy and reactivated dormant users. LLM-powered service robot improved response accuracy. Fraud detection coverage and accuracy improved with agentic AI.
• Capital Allocation: Total outstanding loan balance RMB 34.2 billion, 10% quarter-to-quarter growth. Funding cost rose 55 basis points. Included in YBASE of compliant funding partners.
• Asset Quality: Risk indicators edged up in Q3, but risk indicators for new borrowers' loan portfolio began to trend down in November. AI-driven collection capabilities mitigated early-stage delinquency, reducing labor costs.
• Overseas Business: Indonesian operations launched in September 2025, expected to contribute significant growth in 2026.
• Insurance Business Transformation: Shifted to digital, low customer acquisition cost model. Gross written premium and segment revenue increased, with Internet insurance showing strong momentum.

Segment Performance

• Financial Services Segment: Facilitated RMB 20.2 billion in loan origination during the quarter, up 51% year over year. Repeat borrowing rate was a record high of 77%. Total borrowers decreased by 11% to 1.3 million, but cumulative borrower base increased by 21% year on year to 14 million. Average size for new loans from lending platform rose to RMB 10,100. Revenue from this segment increased by 70% year over year to RMB 1.4 billion in the third quarter.
• Insurance Brokerage Business: Gross written premium reached RMB 1.15 billion, an increase of 35% quarter over quarter. Revenue from the segment was RMB 84.2 million, up 45% from the prior quarter. Internet insurance business delivered RMB 196 million in annualized premium, representing 204% quarter over quarter growth. Total customer numbers rose 93% quarter over quarter to 229,353.

Guidance

• Projecting revenue to be in the range of RMB 1.4 billion to RMB 1.6 billion for 2025.
• International business and Internet insurance segments expected to drive higher revenue and margin growth in the coming quarters.

Risks

• Heightened regulatory uncertainty.
• Cautious credit backdrop impacting asset quality.
• Industry-wide pressure on asset quality continuing in Q4, with recovery likely early next year.

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