Yiren Digital Ltd. Q4 FY2025 earnings call

• AI Innovation: Celebrated 10-year NYSE listing anniversary. Completed regulatory filing of Jiuyu large language model, released Magic Cube multi-agent platform. AI-driven optimizations generated cost savings over RMB 80 million in 2025. - Credit Solution Business: Navigated challenging credit environment, focused on higher quality credit, repeat borrowing volume in Q4 2025 at 77% vs 65% in 2024, average loan ticket size increased. - Insurance Brokerage Business: Internet insurance distribution business showed strong growth, traditional insurance brokerage affected by regulatory headwinds and macro challenges but internet insurance filled gap. - Technology-Driven Services: Revenue from technology-driven services including networking, marketing, and technical support grew significantly, redefining the company from FinTech to AI-native for multiple industries.

Credit Solution Business: In Q4 2025, facilitated RMB 12.0 billion in loan originations, moderated by 22% y-o-y and 40% q-o-q; full-year loan facilitation reached RMB 67.8 billion, up 26% from 2024. Delinquency rates in Q4 2025: 1 - 30 days at 3.4%, 31 - 60 days at 3.0%, 61 - 90 days at 2.8%. Internet Insurance Business: Q3 2025 gross return premiums surged 206% q-o-q, Q4 2025 had another 95% q-o-q growth, revenue contribution to the segment reached 22% in Q4. Full-year insurance brokerage gross return premiums: RMB 3.7 billion, down 17% from 2024; Q4 2025 gross return premiums at RMB 860.1 million, down 22% y-o-y. Internet insurance revenue contribution to overall insurance segment: 22% in Q4 2025 and 14% for full-year 2025.

• Expect internet insurance revenue contribution to continue growing and take a bigger share in 2026. - Core business showing signs of recovery, optimistic about recovery of core business in 2026. - Non-land-based business to continue driving revenue growth, conservative forecast but may revise as delinquency figures improve more than expected.

• Heightened credit regulations and industry-wide deterioration in credit quality created pressure across business. - Delinquency rates in Q4 2025 were at cyclical highs. - Provisions for contingent liability increased due to growth in loan origination volume under risk-taking model, causing timing mismatch in revenue and cost recognition.

Q: About AI, looking to longer term, do you expect further cost savings or broader potential for AI application scenarios? And compare in-house developed AI agents to third-party ones, what are specific advantages? And view on security of popular AI tools like OpenAI?

A: AI strategy is to use AI more for credit and insurance businesses and look for more subsectors in financial services and beyond. In 2025, achieved direct cost savings of 80 million RMB, plus other indirect savings. In-house developed AI agents have advantages as capabilities proven in regulated industries, can be utilized for other financial services and new verticals.

Q: Since new rule passed in October 2025, impact on company and industry development trend?

A: Risk level peaked in Oct 2025 and showing signs of recovery. January FPD30 and DPD30 metrics dropped to May 2025 level. Cost of capital decreased by 93 basis points since new regulation, customer acquisition costs as percentage of loan volume at record low.

Q: About internet insurance distribution business development goals and strategic plans in 2026 and competitive advantages vs traditional?

A: Internet insurance business market potential big, online part showing great potential. Insurance brokerage business will have high-growing online part and more efficient offline part combined. In-house built technology platform capabilities for credit business can be applied, making online internet insurance grow faster than credit business transforming from offline to online.