LX

This article first appeared on GuruFocus. Loan Volume: RMB55.43 billion in Q2 2026, a 4.3% decrease quarter-over-quarter. Revenue: RMB3.19 billion in Q2 2026. Net Income: RMB101 million in Q2 2026, a 49.7% decrease quarter-over-quarter. Credit Business Net Revenue: RMB981 million, a 32.5% decrease quarter-over-quarter. Credit Facilitation Service Income: RMB508 million, a 43.6% decrease quarter-over-quarter. Tech Empowerment Service Income: RMB473 million, a 14.4% decrease quarter-over-quarter. Installment E-commerce Net Revenue: RMB329 million, a 58.7% increase quarter-over-quarter. E-commerce Gross Profit Margin: Expanded from 9.4% to 14.1% quarter-over-quarter. Operating Expenses: Decreased by 17.6% quarter-over-quarter to RMB1.2 billion. Credit Cost: Increased 9.6% sequentially to RMB1.4 billion. Gross Provision Ratio (New Capital-Heavy Loans): 7.8%, higher than the last quarter. Provision Coverage Ratio: 230%. Cash Position: Approximately RMB2.5 billion as of June 30. Shareholders' Equity: Approximately RMB12 billion. Day One Delinquency Ratio: Rose roughly 9.5% quarter-over-quarter. 90-Day Plus Delinquency Ratio: Rose from 3.5% to 3.6%. FPD 30 (New Loans): Limited to a minor level of around 4.6% quarter-over-quarter. Warning! GuruFocus has detected 4 Warning Sign with LX. Is LX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. LexinFintech Holdings Ltd (NASDAQ:LX) demonstrated strong operational resilience by swiftly implementing cost-cutting measures, including organizational streamlining and AI adoption, which reduced operating expenses by 17.6% quarter-over-quarter. The company's FinTech empowerment business, serving corporate clients, achieved solid growth of 8% in loan volume and reached profitability, aligning with regulatory trends and providing a diversified revenue stream. The installment e-commerce business showed robust profitability, with gross profit increasing 58.7% and gross margin expanding from 9.4% to 14.1%, serving as a stable revenue driver. LexinFintech Holdings Ltd (NASDAQ:LX) maintains a solid financial position with RMB2.5 billion in cash and RMB12 billion in shareholders' equity, providing a buffer to navigate industry volatility. The company's AI-driven risk control initiatives have enhanced efficiency, with the credit assessment agent demonstrating risk detection capability 3x that of manual review, and AI deployment across operations contributing to cost savings. LexinFintech Holdings Ltd (NASDAQ:LX) has a strong compliance record, having never engaged in non-compliant practices, which positions it well to withstand regulatory scrutiny and rebuild trust with funding partners. LexinFintech Holdings Ltd (NASDAQ:LX) experienced a material impact on loan facilitation operations due to industry-wide funding tightening and suspension, leading to a 4.3% sequential decline in loan origination volume to RMB55.43 billion. The company's net income decreased significantly by 49.7% quarter-over-quarter to RMB101 million, driven by revenue decline, increased provisioning, and cost pressures. Risk indicators are expected to worsen, with day one delinquency ratio rising 9.5% quarter-over-quarter and 90-day plus delinquency ratio increasing to 3.6%, with further deterioration anticipated in Q3. The company expects to record a net loss in the third quarter of 2026 due to continued revenue contraction, higher credit costs, and one-time severance expenses from organizational optimization. LexinFintech Holdings Ltd (NASDAQ:LX) has adjusted its dividend policy from semi-annual to annual distribution, delaying potential shareholder returns and signaling reduced near-term capital returns. The company faces limited visibility on when funding supply will normalize, with revenue expected to further decrease and credit risks and costs trending upward in the near term. Q: What is your take on the recent risk events in the industry, how have they affected your business, and what steps are you taking in response? A: (Jay Wenjie Xiao, Chairman and CEO) The events involving certain peers triggered a crisis of confidence among funding providers, causing a broad-based tightening and even suspension of funding across the industry. While these are isolated cases, we expect the adjustment period to last longer than initially expected. We have always operated in strict compliance and don't have the issues seen at those institutions, but we are not immune to the broader trend. Our loan facilitation business took a significant hit in July, with new originations contracting notably. We are responding by accelerating our diversification strategy, driving cost efficiency (expecting management costs to come down by 30% to 40%), and deepening AI integration across operations to stay lean and agile. Q: How do you expect the risk trend to evolve in the third quarter? A: (Arvin Zhanwen Qiao, Chief Risk Officer) Following the industry events in late June, we saw volatility in risk indicators driven by a sector-wide liquidity shock. Looking ahead to Q3, with funding supply tightening further and new loan originations declining materially, we expect the existing portfolio risk to remain under upward pressure sequentially. Compounded by a further contracting loan balance, the 90-day plus delinquency ratio is expected to rise further. On the collection side, due to higher compliance requirements for loan collection practices, our collection rate will also see a decline. However, with our prudent risk approach and adequate provisioning, we have the capability to manage an orderly wind down of existing risk assets. Q: Given the impact of recent industry risk events, how should we think about the financial performance for the second half of the year? A: (James Zheng, CFO) Market visibility remains limited, so we are not providing specific financial guidance. We expect Q3 performance to be under pressure due to a material impact on new loan originations, which will weigh on the top line. Additionally, credit costs will rise due to increased default risks in the existing portfolio, and we will incur one-off severance-related costs from organizational streamlining. Factoring all this in, we expect the company to record a net loss in the third quarter. For Q4, we will update guidance as we get more clarity on the regulatory front. Q: Following the change to your dividend policy, how should we view your long-term plans to return value to shareholders? A: (Company Representative) The Board decided to change our dividend distribution from a semi-annual to annual schedule to maintain ample liquidity and financial flexibility during the industry adjustment. Our commitment to creating and returning value to shareholders has not wavered. As the industry gradually recovers and business performance improves, the Board will actively evaluate a range of shareholder return options, including share buybacks, based on our specific circumstances at that time. Q: Can you provide more details on the performance of your FinTech empowerment business and installment e-commerce business during the quarter? A: (James Zheng, CFO) Our FinTech empowerment service bucked the overall trend with continued growth of 8% quarter-over-quarter, and the combined loan volume contribution from FinTech empowerment and e-commerce has now reached 45%. The installment e-commerce business maintained stable loan volume at RMB2.3 billion, but more importantly, gross profit for this segment reached RMB329 million, a 58.7% increase, with gross profit margin expanding from 9.4% to 14.1%. These diversified businesses are serving as reliable stabilizers and valuable revenue drivers for our broader portfolio. Q: What is the current state of your cash position and how are you managing liquidity during this period of funding supply tightening? A: (James Zheng, CFO) We currently have a cash position of RMB2.5 billion, which provides a financial buffer to help us navigate industry volatility. We are prioritizing cash flow management while optimizing operational efficiency, including staff reductions to safeguard our core business fundamentals. We are also maintaining dialogue with our funding partners to reinforce mutual trust, ensuring we are well positioned to resume normal funding supply as soon as market conditions permit. Q: How is AI being utilized in your risk management operations, and what results have you seen? A: (Arvin Zhanwen Qiao, Chief Risk Officer) Our continued investment in AI-driven risk control is yielding meaningful results. In credit approval, our credit assessment agent has evolved from assisting human reviewers to making autonomous decisions. Its risk detection capability is 3x that of manual review for autonomous rejection and 1.2x for review recommendations. We are also building an internal risk control agent expert platform that has boosted the outward efficiency of general risk models and routine strategies by over 5x, positioning us well for future tech empowerment and risk solution offerings to the industry. Q: What is your outlook on the regulatory environment and when do you expect funding supply to normalize? A: (Jay Wenjie Xiao, Chairman and CEO) We don't expect the regulatory and funding environment to ease anytime soon, and recovery will take time. The risk events involving certain peers have triggered heightened regulatory scrutiny, and we wouldn't be surprised to see more regulatory measures follow. In the near term, we will stay disciplined and ensure an orderly wind down of risk assets. Over the medium to long term, we will accelerate the transition to a tech-empowered model by empowering financial institutions with our technology solutions, positioning ourselves for long-term sustainable growth under the new regulatory landscape. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

SHENZHEN, China, Aug. 31, 2026 (GLOBE NEWSWIRE) -- LexinFintech Holdings Ltd. (“Lexin” or the “Company”) (NASDAQ: LX), a leading technology-empowered personal financial service enabler in China, today announced its unaudited financial results for the quarter ended June 30, 2026. Mr. Jay Wenjie Xiao, Chairman and Chief Executive Officer of Lexin, commented, "During the second quarter, the industry environment remained complex. Nevertheless, by prioritizing regulatory compliance and leveraging our diversified business ecosystem, we maintained our operational resilience. For the quarter, our GMV reached 55.4 billion, with total revenue of 3.2 billion and net income of 101 million. In late June, risk events involving certain industry peers led to a sector-wide tightening of funding supply, impacting broader market sentiment and loan volume. In response, we have taken a disciplined approach to fortify our position: carefully managing our cost structure to enhance operational resilience, refining our risk parameters to safeguard asset quality, optimizing liquidity management for capital efficiency, and advancing our business diversification. While near-term market uncertainty may persist for some time, our diversified business ecosystem provides a foundation for long-term sustainable operations and tech-empowerment transformation. We remain confident in the long-term fundamentals of our business. Looking ahead, given the ongoing industry uncertainties, the Board has made a prudent decision to adjust our dividend policy to an annual evaluation cycle to preserve liquidity and maintain a financial buffer to support our business transformation. When market conditions stabilize and our operational performance recovers, the Board will actively evaluate options, including potential share repurchases, to enhance shareholder returns," Mr. Xiao concluded. Mr. James Zheng, Chief Financial Officer of Lexin, commented, "During the second quarter, we continued to advance our business transformation under the new regulatory framework that took effect in the fourth quarter of last year, achieving progress that largely met our expectations. The recent risk events involving certain industry players have sector-wide effects, and we have been correspondingly impacted by these headwinds. While we are taking proactive measures to mitigate these uncertainties, our near-term performance will foreseeably remain under considerable pressure. As we manage through this industry transition, we remain highly disciplined, scaling back volume to prioritize asset quality. Our immediate focus is to safeguard our liquidity, fortify our balance sheet, and position the Company to resume sustainable growth once market conditions normalize." Second Quarter Operational Highlights: User Base Total number of registered users across our platform reached 253 million as of June 30, 2026, representing an increase of 7.2% from 236 million as of June 30, 2025. Number of active users1 in the second quarter of 2026 was 5.0 million, representing an increase of 6.1% from 4.7 million in the second quarter of 2025. Number of cumulative borrowers with successful drawdown was 39.2 million as of June 30, 2026, an increase of 11.4% from 35.2 million as of June 30, 2025. Loan Facilitation Business As of June 30, 2026, we cumulatively originated RMB1,644 billion in loans, an increase of 15.0% from RMB1,430 billion as of June 30, 2025. Total loan originations2 in the second quarter of 2026 was RMB55.4 billion, an increase of 4.8% from RMB52.9 billion in the second quarter of 2025. Total outstanding principal balance of loans3 was RMB93.7 billion as of June 30, 2026, representing a decrease of 11.4% from RMB106 billion as of June 30, 2025. Credit Performance4 90 day+ delinquency ratio5 was 3.6% as of June 30, 2026, as compared with 3.5% as of March 31, 2026. First payment default rate (30 day+) for new loan originations was below 1% as of June 30, 2026. Installment E-commerce Platform Service GMV6 in the second quarter of 2026 for our installment e-commerce platform service was RMB2,342 million, representing an increase of 15.5% from RMB2,029 million in the second quarter of 2025. In the second quarter of 2026, our installment e-commerce platform service served over 700,000 users. Other Operational Highlights The weighted average tenor of loans originated in the second quarter of 2026 was approximately 10.7 months, as compared with 13.2 months in the second quarter of 2025. Repeated borrowers’ contribution7 of loans across our platform for the second quarter of 2026 was 85.7%. Second Quarter 2026 Financial Highlights: Total operating revenue was RMB3,187 million, representing a decrease of 11.2% from the second quarter of 2025. Credit facilitation service income was RMB1,930 million, representing a decrease of 15.0% from the second quarter of 2025. Tech-empowerment service income was RMB473 million, representing a decrease of 43.0% from the second quarter of 2025. Installment e-commerce platform service income was RMB784 million, representing an increase of 60.8% from the second quarter of 2025. Net income attributable to ordinary shareholders of the Company was RMB101 million, representing a decrease of 80.2% from the second quarter of 2025. Net income per ADS attributable to ordinary shareholders of the Company was RMB0.61 on a fully diluted basis. Adjusted net income attributable to ordinary shareholders of the Company8 was RMB127 million, representing a decrease of 76.4% from the second quarter of 2025. Adjusted net income per ADS attributable to ordinary shareholders of the Company8 was RMB0.76 on a fully diluted basis. __________________________ Active users refer to, for a specified period, users who made at least one transaction during that period through our platform or through our third-party partners’ platforms using the credit line granted by us. Total loan originations refer to the total principal amount of loans originated during the given period through our platform or through our third-party partners' platforms. Total outstanding principal balance of loans refers to the total amount of principal outstanding for loans facilitated and originated at the end of each period, including loans guaranteed by our financial guarantee companies and the loans facilitated across third party platforms that we bear principal risk and excluding loans delinquent for more than 180 days that are charged-off. Loans under Intelligent Credit Platform are excluded from the calculation of credit performance. Intelligent Credit Platform (ICP) is an intelligent platform on our “Fenqile” app, under which we match borrowers and financial institutions through big data and cloud computing technology. For loans facilitated through ICP, the Company does not bear principal risk. “90 day+ delinquency rate” refers to the outstanding principal balance of on- and off-balance sheet loans that were 91 to 180 calendar days past due as a percentage of the total outstanding principal balance of on- and off-balance sheet loans across our platform and those loans across third party platforms that we bear principle risk as of a specific date. Loans that are charged-off and loans under “ICP”, E-commerce business and overseas are not included in the delinquency rate calculation. GMV refers to the total value of transactions completed for products purchased on our e-commerce and Maiya channel, net of returns. Repeated borrowers’ contribution for a given period refers to the principal amount of loans borrowed during that period by borrowers who had previously made at least one successful drawdown as a percentage of the total loan facilitation and origination volume through our platform during that period. Adjusted net income attributable to ordinary shareholders of the Company, adjusted net income per ordinary share and per ADS attributable to ordinary shareholders of the Company are non-GAAP financial measures. For more information on non-GAAP financial measures, please see the section of “Use of Non-GAAP Financial Measures Statement” and the tables captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release. Second Quarter 2026 Financial Results: Operating revenue was RMB3,187 million in the second quarter of 2026, as compared to RMB3,587 million in the second quarter of 2025. Credit facilitation service income was RMB1,930 million in the second quarter of 2026, as compared to RMB2,270 million in the second quarter of 2025. The decrease was due to the decrease in loan facilitation and servicing fees-credit oriented revenue, as well as financing income. Loan facilitation and servicing fees-credit oriented was RMB738 million in the second quarter of 2026, as compared to RMB1,131 million in the second quarter of 2025. The decrease was primarily due to the decrease in the APR of off-balance sheet loans and the decrease in origination of off-balance sheet loans. Guarantee income was RMB759 million in the second quarter of 2026, as compared to RMB571 million in the second quarter of 2025. The increase was primarily due to the increase of outstanding balances in the off-balance sheet loans funded by certain institutional funding partners, which are accounted for under ASC 460, Guarantees. Financing income was RMB433 million in the second quarter of 2026, as compared to RMB568 million in the second quarter of 2025.The decrease was primarily driven by the decrease in the outstanding balances of on-balance sheet loans. Tech-empowerment service income was RMB473 million in the second quarter of 2026, as compared to RMB830 million in the second quarter of 2025. The decrease was primarily due to the decrease of loan facilitation volume through ICP. Installment e-commerce platform service income was RMB784 million in the second quarter of 2026, as compared to RMB487 million in the second quarter of 2025. The increase was primarily driven by the increase in transaction volume. Cost of sales consisted of cost of inventory sold and other costs. Cost of sales was RMB484 million in the second quarter of 2026, as compared to RMB426 million in the second quarter of 2025. The increase was primarily driven by the increase in transaction volume of online direct sales which is recorded on a gross basis. Funding cost was RMB24.5 million in the second quarter of 2026, as compared to RMB59.9 million in the second quarter of 2025. The decrease was primarily driven by the decrease in funding rates and balance of funding debts to fund the on-balance sheet loans. Processing and servicing costs was RMB546 million in the second quarter of 2026, as compared to RMB606 million in the second quarter of 2025. Provision for financing receivables was RMB410 million in the second quarter of 2026, as compared to RMB257 million in the second quarter of 2025. The increase was primarily due to the decrease in performance of the on-balance sheet loans. Provision for contract assets and receivables was RMB174 million in the second quarter of 2026, as compared to RMB164 million in the second quarter of 2025. Provision for contingent guarantee liabilities was RMB1,052 million in the second quarter of 2026, as compared to RMB802 million in the second quarter of 2025. The increase was primarily due to the increase of outstanding balances in the off-balance sheet loans funded by certain institutional funding partners, which are accounted for under ASC 460, Guarantees. Gross profit was RMB496 million in the second quarter of 2026, as compared to RMB1,273 million in the second quarter of 2025. Sales and marketing expenses was RMB347 million in the second quarter of 2026, as compared to RMB567 million in the second quarter of 2025. The decrease was primarily driven by the decrease in advertising fees. Research and development expenses was RMB147 million in the second quarter of 2026, as compared to RMB158 million in the second quarter of 2025. General and administrative expenses was RMB107 million in the second quarter of 2026, as compared to RMB96.0 million in the second quarter of 2025. Change in fair value of financial guarantee derivatives and loans at fair value was a gain of RMB238 million in the second quarter of 2026, as compared to a gain of RMB184 million in the second quarter of 2025. The change was primarily driven by the fair value gains realized as a result of the release of guarantee obligation as loans are repaid, partially offset by the fair value loss from the re-measurement of the expected loss rates. Income tax expense was RMB53.5 million in the second quarter of 2026, as compared to RMB120 million in the second quarter of 2025. The decrease was primarily due to the decrease in income before income tax expense. Net income was RMB101 million in the second quarter of 2026, as compared to RMB511 million in the second quarter of 2025. Recent Development Update of Share Repurchase Program Pursuant to the Company’s share repurchase program of up to US$50 million adopted in July 2025, the Company repurchased a total of approximately 9.6 million ADSs (equivalent to 19.2 million Class A ordinary shares) for approximately US$39 million. The total number of shares repurchased by the Company since the adoption of the share repurchase program amounted to approximately 5.8% of its total ordinary shares outstanding as of June 30, 2026. Updated Dividend Policy On August 31, 2026, the Board approved an updated dividend policy, under which the Company will distribute 30% of total net income as cash dividends on an annual basis, effective from fiscal year 2026. This represents a change from the previous semi-annual distribution. Any potential dividend for fiscal year 2026 will be determined in conjunction with the announcement of the Company's full-year results in early 2027. Business Outlook Looking ahead, given the ongoing industry and regulatory uncertainties, we anticipate total loan origination for the third quarter of 2026 to decrease significantly on a quarter-over-quarter basis and we may incur a net loss for the quarter. This forecast reflects our current preliminary views, which are subject to the impact of macroeconomic factors. The Company may adjust its performance outlook as appropriate based on evolving circumstances. Conference Call The Company’s management will host an earnings conference call at 7:00 AM U.S. Eastern time on August 31, 2026 (7:00 PM Beijing/Hong Kong time on August 31, 2026). Participants who wish to join the conference call should register online at: https://register-conf.media-server.com/register/BI1de4908791bd49b8b7d1448ef38c027a Once registration is completed, each participant will receive the dial-in number and a unique access PIN for the conference call. Participants joining the conference call should dial in at least 10 minutes before the scheduled start time. A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.lexin.com. About LexinFintech Holdings Ltd. We are a leading credit technology-empowered personal financial service enabler. Our mission is to use technology and risk management expertise to make financing more accessible for young generation consumers. We strive to achieve this mission by connecting consumers with financial institutions, where we facilitate through a unique model that includes online and offline channels, installment consumption platform, big data and AI driven credit risk management capabilities, as well as smart user and loan management systems. We also empower financial institutions by providing cutting-edge proprietary technology solutions to meet their needs of financial digital transformation. For more information, please visit http://ir.lexin.com. To follow us on Twitter, please go to: https://twitter.com/LexinFintech. Use of Non-GAAP Financial Measures Statement In evaluating our business, we consider and use adjusted net income attributable to ordinary shareholders of the Company, non-GAAP EBIT, adjusted net income per ordinary share and per ADS attributable to ordinary shareholders of the Company, four non-GAAP measures, as supplemental measures to review and assess our operating performance. The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define adjusted net income attributable to ordinary shareholders of the Company as net income attributable to ordinary shareholders of the Company excluding share-based compensation expenses, interest expense associated with convertible notes, and investment income/(loss) and we define non-GAAP EBIT as net income excluding income tax expense, share-based compensation expenses, interest expense, net, and investment income/(loss). We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. Adjusted net income attributable to ordinary shareholders of the Company enables our management to assess our operating results without considering the impact of share-based compensation expenses, interest expense associated with convertible notes, and investment income/(loss). Non-GAAP EBIT, on the other hand, enables our management to assess our operating results without considering the impact of income tax expense, share-based compensation expenses, interest expense, net, and investment income/(loss). We also believe that the use of these non-GAAP financial measures facilitates investors’ assessment of our operating performance. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as an analytical tool. One of the key limitations of using adjusted net income attributable to ordinary shareholders of the Company and non-GAAP EBIT is that they do not reflect all items of income and expense that affect our operations. Share-based compensation expenses, interest expense associated with convertible notes, income tax expense, interest expense, net, and investment income/(loss) have been and may continue to be incurred in our business and are not reflected in the presentation of adjusted net income attributable to ordinary shareholders of the Company and non-GAAP EBIT. Further, these non-GAAP financial measures may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability may be limited. We compensate for these limitations by reconciling each of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure. Exchange Rate Information Statement This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.7851 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on June 30, 2026. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Lexin’s beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the expectation of the collection efficiency and delinquency, business outlook and quotations from management in this announcement, contain forward-looking statements. Lexin may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Lexin’s goal and strategies; Lexin’s expansion plans; Lexin’s future business development, financial condition and results of operations; Lexin’s expectation regarding demand for, and market acceptance of, its credit and investment management products; Lexin’s expectations regarding keeping and strengthening its relationship with borrowers, institutional funding partners, merchandise suppliers and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Lexin’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Lexin does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: LexinFintech Holdings Ltd. IR inquiries: Will Tan Tel: +86 (755) 3637-8888 ext. 6258 E-mail: [email protected] Media inquiries: Ruifeng Xu Tel: +86 (755) 3637-8888 ext. 6993 E-mail: [email protected] SOURCE LexinFintech Holdings Ltd. __________________________(1)  Short-term financing receivables, net of allowance for credit losses of RMB198,694 and RMB264,769 as of December 31, 2025 and June 30, 2026, respectively. Short-term contract assets and receivables, net of allowance for credit losses of RMB259,054 and RMB294,664 as of December 31, 2025 and June 30, 2026, respectively. Long-term financing receivables, net of allowance for credit losses of RMB3,723 and RMB3,691 as of December 31, 2025 and June 30, 2026, respectively. Long-term contract assets and receivables, net of allowance for credit losses of RMB14,569 and RMB4,598 as of December 31, 2025 and June 30, 2026, respectively. Additional Credit Information Vintage Charge Off Curve1 Dpd30+/GMV by Performance Windows1 First Payment Default 30+1 1.     Loans facilitated under ICP and E-commerce business are excluded from the charts.

Interested in LexinFintech Holdings Ltd. Sponsored ADR? Here are five stocks we like better. Funding constraints sharply pressured operations: LexinFintech’s Q2 loan volume fell 4.3% sequentially, revenue declined 21.1% to CNY1.3 billion, and net income dropped 49.7% to CNY101 million as industry risk events led funding providers to tighten supply. Credit risks are worsening: Credit costs rose 9.6% to CNY1.4 billion, while delinquency metrics increased. Management expects risk indicators and costs to rise further in Q3 and anticipates a net loss, partly due to restructuring expenses. Lexin is shifting toward technology and preserving liquidity: Fintech empowerment and e-commerce accounted for 45% of loan volume, with installment e-commerce gross profit rising 58.7% sequentially. The company is cutting costs, expanding AI use and moving to annual rather than semiannual dividend assessments to maintain financial flexibility. Pharma Frenzy: Volatility Ignites Biotech Sector LexinFintech (NASDAQ:LX) reported second-quarter net income of CNY101 million as tighter funding conditions and broader industry risk concerns pressured its loan facilitation operations. Management said recent risk events involving certain industry peers prompted funding providers to tighten or suspend supply across the sector, affecting new loan originations and increasing uncertainty around asset quality. Chairman and CEO Jay Wenjie Xiao said Lexin generated CNY55.43 billion in loan volume and CNY3.19 billion in revenue during the quarter. The company’s loan origination volume was down 4.3% sequentially, while net income declined 49.7%, or about CNY100 million, from the prior quarter, according to CFO James Zheng. → Amazon’s Zoox Push Tests Tesla’s Robotaxi Premium as Waymo Widens Its Lead Xiao said the industry environment deteriorated in late June after risk events at certain peers undermined market confidence. He said the developments led to broad-based funding tightening, affecting both online consumer finance and offline inclusive-finance loan facilitation. “We have always operated strictly in compliance with regulations, and we do not have any of the issues seen at these institutions,” Xiao said in response to an analyst question. Still, he said Lexin was not immune to the broader sector trend, with its loan facilitation business taking a meaningful hit in July as new originations contracted. → Apple’s Foldable iPhone Could Be a Catalyst, But Not a Cure-All Zheng said the company had CNY2.5 billion in cash, including cash equivalents and restricted cash, as of June 30, and approximately CNY12 billion in shareholders’ equity. He said the cash balance provides a financial buffer as the company navigates market volatility. Management said it is maintaining discussions with funding partners and remains on the white list of major funding providers. Xiao said this position should allow the company to resume loan origination when market conditions permit, though executives said they had limited visibility into the timing of a broader funding recovery. → From SaaS-pocalypse to Perfect Storm: Workday’s AI Growth Story Strengthens Zheng said total net revenue, combining credit business and installment e-commerce operations, was CNY1.3 billion, down 21.1% sequentially. Net revenue from the credit business was CNY981 million, down 32.5%, reflecting declines in both credit facilitation service income and technology empowerment service income. Credit facilitation service income, representing Lexin’s capital-heavy business, fell 43.6% to CNY508 million. Technology empowerment service income, representing its capital-light business, declined 14.4% to CNY473 million. Overall credit costs rose 9.6% sequentially to CNY1.4 billion as the company adopted a more conservative provisioning approach. The provision coverage ratio stood at 230%, while the gross provision ratio for new capital-heavy loans was 7.8%, Zheng said. The company said operating expenses fell 17.6% sequentially, supported by lower sales and marketing costs and organizational optimization. Xiao said Lexin has streamlined its organizational structure, optimized headcount and expanded artificial intelligence deployment. He said the company expects management costs to decline by 30% to 40% as a result of its efficiency efforts. Lexin has deployed more than 100 AI agent roles across operational areas including strategy generation, compliance checks, post-loan management and customer service, according to Xiao. Chief Risk Officer Arvin Zhanwen Qiao said AI tools are also being applied to credit approval and risk management, with the company seeking to standardize more of its internal risk-management tasks. Management highlighted growth in the company’s fintech empowerment and installment e-commerce operations as it shifts away from guarantee-backed loan facilitation toward a more technology-enabled model. Zheng said fintech empowerment service loan volume grew 8% during the second quarter. The contribution from fintech empowerment and e-commerce businesses reached 45% of loan volume, he said. Installment e-commerce loan volume was stable at CNY2.3 billion. The segment’s gross profit reached CNY329 million, up 58.7% sequentially, while gross margin expanded to 14.1% from 9.4% in the previous quarter, according to Zheng. Xiao said the company intends to continue investing in technology empowerment services for institutional clients, supported by its traffic acquisition, risk management, AI and operating capabilities. He also said management expects the e-commerce business to continue growing steadily and contributing profit. Qiao said funding constraints across the industry contributed to a roughly 9.5% sequential increase in Lexin’s day-one delinquency ratio across total assets. The 90-day-plus delinquency ratio rose to 3.6% from 3.5%, he said. The company expects risk indicators for its outstanding portfolio to continue increasing sequentially in the third quarter as funding supply tightens and new loan originations decline sharply. Qiao said the contraction in loan balances is also expected to push the 90-day-plus delinquency ratio higher. Lexin said it is tightening underwriting standards, increasing scrutiny of borrowers with cross-platform debt, strengthening early-stage collections and using differentiated repayment reminders. The company is also increasing provisioning and preparing for an orderly runoff of existing assets. “Our goal is to keep any risk fluctuation within our risk appetite,” Qiao said. Zheng said Lexin expects revenue to decline further and credit risks and costs to increase in the third quarter. The company also expects one-time expenses from organizational restructuring, including severance-related costs, to be recognized primarily in the period. “If I factor in all of this, we expect the company to record a net loss in the third quarter,” Zheng said. The company did not provide specific financial guidance for the second half, citing uncertainty over regulation and funding availability. Lexin’s board also changed its dividend policy from semiannual distributions to an annual schedule. Any potential dividend declaration for 2026 will be assessed when the company reports fourth-quarter results in early 2027. Xiao said the decision is intended to preserve liquidity, capital resources and financial flexibility during the industry adjustment. He added that the board may evaluate shareholder-return measures, including share repurchases, if industry conditions and business performance improve. LexinFintech Holdings Ltd. (NASDAQ: LX) is a China-based consumer finance and digital banking platform primarily serving young, underbanked consumers. The company's core offering is point-of-sale installment financing, enabling eligible customers to split purchases into fixed monthly payments with transparent fees. Leveraging proprietary data analytics and credit scoring models, LexinFintech underwrites consumer loans for online purchases and provides credit lines that support a variety of retail and e-commerce transactions. In addition to its flagship installment loan service, LexinFintech has developed wealth management and fintech-as-a-service products. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "LexinFintech Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Image source: The Motley Fool. Thursday, March 19, 2026 at 7 a.m. ET Chief Executive Officer — Jay Xiao Chief Risk Officer — Zhanwen Qiao Chief Financial Officer — Xigui Zheng Head of Investor Relations — Will Tan Jay Xiao: [Interpreted] Hi, everyone. Thanks for joining us today for our fourth quarter 2025 earnings call. In the fourth quarter, we optimized our business operations within the new regulatory framework, successfully achieving our objectives of stabilizing scale and mitigating risk. During this period of industry adjustment, our unique business ecosystem demonstrated its differentiated advantages, leading to a significant rebound in active users. Guided by our long-term oriented philosophy, we are seeing the resilience of our multi-business synergy become increasingly evident, further strengthening our ability to navigate business cycles. In the fourth quarter, our loan volume reached RMB 50 billion and revenue reached RMB 3 billion. Number of active users stood at 4.53 million with 884,000 new active users. For the full year of 2025, total loan volume was RMB 205.3 billion. Net profit was RMB 1.7 billion, representing a year-over-year increase of 52.4%. Next, I will walk you through the key initiatives we have undertaken since the fourth quarter. First, we proactively aligned our operations with the new regulatory requirements, adhering to a high standard of compliance. Following the official implementation of the new regulations in Q4 and building on the earlier completion of business adjustments and system deployment, we remain focused on our customer-centric strategy to further optimize our product matrix and personalized service experience. By operating prudently within the regulatory framework, we have not only enhanced our long-term sustainability and risk resilience, but also effectively connected financial services with market demand. Through our diversified business lines, including online consumer finance, installment e-commerce and off-line inclusive finance, we continue to support the real economy and foster healthy growth in consumer spending. Second, we have comprehensively strengthened our risk management to ensure steady business development. Since the fourth quarter, the industry has faced an upward trend in credit risk. In response, we optimized our risk strategies and maintained stringent standards for new loan quality. By incorporating more real-time data dimensions, we have enhanced the proactiveness and precision of our risk identification, leading to a month-over-month improvement in risk indicators for new loans. Regarding our existing portfolio, we focused on refined operations for high-quality assets. By optimizing credit line allocations and implementing a differentiated pricing framework, we enhanced both product competitiveness and the customer experience, ensuring the continued stability of our existing assets. Overall, we successfully stabilized our risk profile during the quarter with asset quality remaining steady and key risk indicators improving monthly. Since the beginning of 2026, several key risk indicators have shown a positive trajectory in January and February. Specifically, day 1 delinquency ratio of our total assets decreased by over 10% from its peak in October last year. Third, our unique business ecosystem has demonstrated greater strength during this period of industry transition. Our installment e-commerce business remained deeply integrated with daily consumption scenarios. In the fourth quarter, we continued to optimize our supply chain, expanding our offerings across essential categories such as food, apparel and household goods. During major e-commerce events like Double 11 and Double 12, we ramped up our marketing efforts. Through initiatives such as interest-free promotions, we drove steady growth in both user engagement and transaction volume, further reinforcing our differentiated advantages in installment e-commerce. During the quarter, we continued to invest in our customer acquisition capabilities, which effectively fueled growth in new users with credit line. At the same time, we focused on deepening engagement with high-quality existing customers, utilizing differentiated pricing and credit line strategies to drive a sustained rise in user activity. Furthermore, our off-line inclusive finance, tech empowerment and overseas businesses all achieved steady growth, further underscoring the overall resilience of our diversified ecosystem. Fourth, we deeply integrated AI technology to elevate the user service experience. During the fourth quarter, we continued to advance our applications of large models. Our customer service AI agents are now successfully deployed in core scenarios, including credit approvals, transactions and repayments. These agents maintain a response accuracy of over 90% with an average response time of under 3 seconds. Notably, in the credit approval stage, the human intervention rate was only 3.4%, significantly boosting both efficiency and user satisfaction. Looking ahead, we will expand these automated services to nighttime hours to achieve seamless 24/7 coverage. During the quarter, we further implemented large models in key risk management processes. For example, in compliance quality assurance, our AI-assisted system is gradually replacing traditional rule-based monitoring, raising our QA accuracy to 89%. In risk strategy, our strategy generation AI agents perform deep modeling of customer data to automate the creation and full process evaluation of differentiated risk strategies, consistently improving decision-making precision and response efficiency. In user operations, our credit line adjustment AI agents accurately identify user needs during their dialogues with customers and provide self-service guidance. This not only reduces manual service costs, but also enhances the user experience. The company has always adhered to a user-centric service philosophy, positioning consumer rights protection as a core competitive advantage. In the fourth quarter, we continued to standardize our service processes and optimize intelligent routing, leading to a measurable improvement in overall efficiency and response times. We also refined our tiered customer service model, enhancing our self-service platform to drive higher user satisfaction. During the quarter, a series of macro policies supporting consumption and the county-level economy were rolled out, anchoring the direction for industry development. We have always closely aligned with national policy requirements, fully leveraged our own advantages and increased investment in consumption scenarios and products tailored for micro and small business owners. Through measures such as interest-free and low-interest promotions, complemented by an enriched product supply and comprehensive services, we are delivering tangible support for the consumption rebound and injecting financial vitality into the growth of micro and small businesses. As we enter 2026, we are optimistic about the market's development potential. We are well positioned to seize growth opportunities while upholding a high standard of compliance and a customer-centric philosophy. By deepening our diversified business ecosystem, we will continue to strengthen our operational resilience and our ability to navigate market cycles. Next, I'll hand over the floor to our CRO, Arvin. Thanks. Zhanwen Qiao: [Interpreted] Thanks, Jay. Next, I will provide a review of our key initiatives and achievements in risk management for the fourth quarter. The fourth quarter of 2025 marked the full implementation of the new loan facilitation regulations. The resulting liquidity tightening across the sector created significant headwinds for both industry scale and risk performance. In response to the cyclical volatility, we maintained a disciplined approach to risk management throughout the quarter, increasing our mix of prime assets and optimizing our portfolio structure to ensure overall stability. Specifically, in the fourth quarter day 1 delinquency ratio of total assets increased by 7% and 90 days plus delinquency ratio edged up by 3% quarter-over-quarter. On a month-over-month basis, our risk indicators saw a marginal decline in November and December after peaking in October, signaling that asset risk performance has begun to stabilize. In December day 1 delinquency ratio declined by 8% compared to October. We will sustain our rigorous risk controls through the first half of 2026 to reinforce this downward trajectory and gradually bring our asset risks back within our target risk appetite. Next, I would like to walk you through the key risk management initiatives we have implemented during the fourth quarter. First, we continue to intensify the identification and management of high-risk customers. From a modeling perspective, we accelerated the iteration of our risk models by implementing automated weekly updates. By incorporating the most recent default samples into our training sets every week, we were able to more rapidly capture and learn the shifting characteristics of delinquent borrowers in the current market environment. On the strategy front, we integrated a broader range of real-time data dimensions, including cross-platform borrowing, delinquency history, leverage ratios, personal income and employment stability. This allowed us to apply more stringent transaction interception and credit exposure controls to customers exhibiting frequent borrowing, excessive cross-platform debt or high debt-to-income ratios. Furthermore, we reinforced our day 1 delinquency management across the entire portfolio. We placed a particular emphasis on improving the identification of high-risk cohorts at the earliest stage of delinquency while optimizing the frequency of repayment reminders and strengthening our auto deduction efficiency and payment clearing infrastructure. Second, we continue to refine our operational capabilities for high-quality assets, consistently increasing the mix of prime assets and optimizing our portfolio structure. At the data and modeling level, we continuously optimized our prime customer identification capabilities. We developed dedicated strategies, including credit line allocation, pricing and repayments tailored to prime segments, comprehensively enhancing our offer competitiveness. In addition, we deepened our one-on-one exclusive services for prime customers through account management services via instant messaging, interactive supplementary document submission and dedicated manual reviews for large ticket loans, we provided customized reoffer based on customer needs, thereby boosting customer satisfaction and retention. Third, regarding our installment e-commerce business, we significantly intensified consumer support during the fourth quarter through initiatives tailored for the Double 11 and Double 12 shopping festivals. During these events, we provided dedicated temporary credit lines to support large ticket purchases, particularly in the 3C and consumer electronics categories. Additionally, for our top-tier prime customers, we launched 12- and 24-month interest-free installment campaigns to further accelerate high-quality volume growth. Looking ahead to the first quarter of 2026, we will continue to strengthen risk controls over existing and new loans while intensifying our efforts in managing and phasing out high-risk segments to ensure a sustained downward trend in risk levels. Next, I will hand over to our CFO, James, to provide a review of the company's financial performance for the fourth quarter. Xigui Zheng: Hi, everyone. Thanks, Arvin. I will now provide a detailed overview of our fourth quarter financial results. Please note that all figures are presented in renminbi terms and all comparisons are made on a quarter-over-quarter basis, unless otherwise stated. The fourth quarter marked a pivotal transition for the industry as the new regulatory framework officially came into force. We have strictly followed the regulatory requirements, ensuring that the comprehensive interest rate for all new loans is capped at or below 24%. Following the implementation of these new regulations, we observed elevated volatility in industry-wide credit risk. This complex market environment created challenges for our performance. In the fourth quarter, our net income recorded RMB 214 million. This sequential decrease was primarily driven by the pricing adjustment to strictly complying with the 24% cap, coupled with the contraction in loan volume resulting from our prudent strategy to proactively manage risk exposure. Furthermore, heightened market volatility led to increased credit costs and more conservative provisioning. Lastly, operating expense did not decline proportionately with the revenue due to the fixed cost and expense recognition seasonality. Now let's take a holistic review of our fourth quarter financial results. First, net revenue of the credit business, which is derived by adding up credit facilitation service income and the tech empowerment service income, net of credit costs, including provisions and fair value changes and the funding cost was RMB 1.4 billion, representing a RMB 586 million decrease quarter-over-quarter. The overall decline was primarily driven by a RMB 132 million drop in credit facilitation service income stemming from contracted loan volume in our online consumer finance business that decreased overall pricing. During the fourth quarter, weighted average APR of new loans originated was 21.7%, a 140 basis point decline quarter-over-quarter. This was compounded by approximately RMB 185 million increase in credit costs, reflecting elevated risk volatility and our prudent provisioning. Additionally, our tech empowerment service income decreased by RMB 286 million, mainly due to the wind down of the ICP business, although this was partially offset by revenue growth in our value-added services. Second, net revenue of the e-commerce business, defined by e-commerce revenue net of cost of inventory sold increased by RMB 56 million to RMB 167 million. So the total net revenue summing the credit and e-commerce business added up to RMB 1.5 billion, a 26% or RMB 530 million decrease quarter-over-quarter. On the expense side, operating expenses, including the sales and marketing, research and development, general and administrative expenses, processing and servicing costs decreased by 11% or RMB 147 million to RMB 1.2 billion. As I mentioned earlier, because the 11% reduction in operating expenses was outpaced by the 26% decline in net revenue, the difference weighed on our net profit for the quarter. Tax and others decreased by RMB 76 million to RMB 86 million. Consequently, total expenses added up to RMB 1.3 billion, a decrease of RMB 223 million. By deducting total expenses of RMB 1.3 billion from the total revenue of RMB 1.5 billion, we arrived at a net income of RMB 214 million, a decrease of RMB 307 million quarter-over-quarter. Although the complex environment posed challenges to our performance, we demonstrated our operational resilience. Next, I will elaborate on 3 key business highlights that underscore our strength during this transitional period, the resilience of our business ecosystem, our prudent provision coverage and further reductions in funding costs, the resilience of our business ecosystem. Amid the cycle of adjustment, while our online consumer finance business was significantly impacted, other business lines actually provide critical stability, specifically regarding our e-commerce business, although the GMV declined slightly as a result of our prudent operational strategy, gross profit continued to achieve steady growth, recording RMB 167 million during the fourth quarter. Notably, the e-commerce gross margin calculated as the gross profit divided by GMV reached 7.8%, representing a quarter-over-quarter increase of 295 basis points. In parallel, our tech empowerment business continued to expand, acting as a vital counterbalance to the volume decline in the online consumer finance business. And this model, where we work together with the Internet super platforms like ByteDance and the banking partners, we assist our banking partners with customer risk assessment while assuming the corresponding credit risk. Given the better quality of this consumer base, these loans carry lower pricing. It is worth highlighting that since this model recognized revenue over the loan tenure rather than upfront and it carries lower take rate consistent with its lower risk nature, it creates a temporary time lag between the revenue recognition and the loan volume. However, this mix shift is accretive to our long-term asset quality and steady financial performance. Furthermore, our off-line inclusive finance business progressed steadily, maintaining stable risk performance and acting as a stabilizer for our overall portfolio. The resilience of our business ecosystem demonstrates that we have built a comprehensive product matrix that serves a broad spectrum of the market. Our business lines now cover a wide range of interest tiers from competitive rates for prime users to standard rates for the mass market. This allows us to effectively match users with the right products, maximizing our reach and retention amidst the evolving regulatory environment. Second, prudent provision coverage. In the fourth quarter, impacted by heightened volatility in industry risk, our total credit costs, including the 3 provision line items and the fair value changes of financial guarantee derivatives in the income statement rose by RMB 185 million to RMB 1.3 billion. While we observed early signs of improvement in December following our credit tightening measures, overall risk indicators remain at elevated level, and we expect that the industry will need time to fully digest risks. Consequently, we adopted a more prudent approach to provisioning for new loans facilitated during this period. To better illustrate our provisioning strength, I'd encourage you to focus on the gross provision, which excludes the impact of the net accounting policies in item change in fair value of financial guarantee derivatives and loan values in the income statement. Specifically, the gross provision ratio of new loans calculated as the gross provisions divided by the capital-heavy new loan volume increased by 27 basis points from the third quarter to 7.24%. Please note that for an apple-to-apple comparison, this volume metric excludes loans from tech empowerment services. This level stands well above our historical peak vintage charge-off rate of around 6.1%. We view this elevated provisioning ratio, not just as a reflection of the current volatility, but also as a buffer to future-proof our performance against potential macro uncertainties. Third, the optimization of funding costs. With the implementation of the new policy, institutional funding that was previously allocated to segments priced above 24% was released in the fourth quarter, resulting in ample funding supply. Consequently, our funding cost declined substantially from 4.4% in third quarter to 3.8%. Looking ahead to 2026, as the industry landscape shifts to a new normal stage and the new regulatory framework, we anticipate a structural flight to quality. Funding will increasingly congregate towards platforms that are fully compliant and possess strong risk management capabilities. Currently, we have successfully secured our place on a wide list of our key funding partners, laying a solid foundation for our steady development in the future. To summarize, the above 3 highlights mainly impacted the net revenue side of the income statement. On the cost and expense side, total operating expenses reduced by 11% or RMB 147 million to RMB 1.2 billion, mainly due to the decrease of sales and marketing expenses, reflecting our disciplined approach to user acquisitions during this industry transition. However, our total operating expense reduction was slower than the decline in the net revenue. This was primarily due to fixed costs and seasonal impacts. For balance sheet items, as of December 31, our cash position, which includes cash, cash equivalents and restricted cash was approximately RMB 4.0 billion. Shareholders' equity remained solid at about RMB 12 billion. To conclude, I'd like to reaffirm our commitment to enhancing shareholder value. As of March 2026, we have repurchased $39 million worth of ADS alongside the CEO's personal purchase of over USD 10 million worth of ADS. On the dividend front, our Board of Directors has approved a dividend of USD 0.188 per ADS, bringing our total dividend for 2025 to USD 0.2382 per ADS. This represents a more than 100% increase compared to USD 0.182 in 2024. On the foundations of our current shareholder return policy, we continue to evaluate opportunities and explore different ways to ensure we deliver optimal value to our shareholders. Looking ahead, while our asset quality continues to show positive momentum, we maintain a prudent approach given the ongoing macroeconomic uncertainties. We expect total loan origination to remain relatively stable in the first quarter of 2026. That's all our prepared remarks for today. Operator, we're now ready to take questions. Operator: [Operator Instructions] First question is from Alex Ye from UBS. Xiaoxiong Ye: [Interpreted] So I have 2 questions. The first one is given the new regulatory environment, so how is Lexin's development strategy going to change going forward? And then second question is, could management share with us some of the key operating performance outlook for this year? Jay Xiao: [Interpreted] So this is the translation for Jay's answer. With the full implementation of the new regulation, the industry has entered a new phase centering on quality and compliance. Industry resources will increasingly concentrate on platforms that demonstrate both quality and compliance. Under such new regulatory environment, the key to Lexin's business resilience lies in our user-centric approach and our ability to serve customers across different segments. Our unique business ecosystem enable us to engage and serve users with varying risk profiles and achieve stable growth amid market fluctuations. Specifically, we actively respond to regulatory guidance by adhering to a high standard of compliance. Building on the current regulatory requirements, we further lowered the overall loan rates. In the fourth quarter, the average loan rate on our new loans was 21.7%, which will be further lowered in 2026. Furthermore, we remain deeply committed to the off-line inclusive finance market and serve the micro and small business owner segment. Leveraging our installment e-commerce platform, we enriched the supply of products on our platform across diverse and essential life service categories to tap into the consumption potential of our users. Meanwhile, with the steady expansion of our technology solution empowerment and overseas business, the revenue structure is becoming more diversified, strengthening our long-term operational resilience under the new regulatory framework. Last but not least, we adhere to a user-centric service philosophy, being consumer protection as a key part of enhancing our operational resilience. Moving forward, we will continue to improve efficiency and experience of our customer service through process standardization, intelligent task routing and refined operation, further strengthening consumer rights protection. Regarding the second question about the outlook of our business operation in the year of 2026. With risk level stabilizing, we will adopt a more proactive user acquisition strategy. By enhancing the customer experience and product competitiveness, we will focus on high-quality segments to bring our business back on to a path of steady normalized growth, more specifically on our key operational initiatives. In terms of products and customer segments, we will focus on the refined management of high-quality assets. By optimizing credit line allocation and building a differentiated pricing system, we aim to strengthen both product competitiveness and customer experience. This will reinforce our user-centric operational capabilities to serve different segments of customers and enable us to expand and better serve prime segments. In terms of asset quality, we will improve our customer mix and enhance asset quality by ramping up on acquisition of more high-quality customers. By far, we have already observed early signs of risk stabilization and improvement in asset quality. Barring any new macroeconomic shocks, we expect the industry to gradually digest the existing risk, bringing overall risk metrics back within our risk appetite. This will lay a solid foundation for proactive customer acquisition and business recovery. And in terms of loan origination, we'll continue to invest in and strengthen our customer acquisition capabilities. Driven by our improved product competitiveness and proactive customer acquisition strategy, we expect our loan volume to gradually return to a normalized growth range following a period of bottoming out and stabilization. Operator: Next question is from Judy Zhang from Citi. Judy Zhang: [Interpreted] Now let me translate the 2 questions. The first question is regarding on the risk outlook. Can management share with us the company's latest risk performance and the future outlook? And the second question is what is the outlook for the company's full year financial performance for this year? Zhanwen Qiao: [Interpreted] This is the translation for Arvin's answer. The fourth quarter was the first quarter after the implementation of the new regulation and was a critical period for the entire industry to digest the impact of the new regulation. While industry-wide risk has begun to show signs of stabilizing, it will take some time for this risk to be fully clear and return to the level before the first half of 2025. In response to this round of risk cycle, we continue to strengthen our risk management in Q4 by increasing the proportion of high-quality assets and optimizing our asset structure, ensuring risk remain under control. Regarding the specific performance, although the overall risk indicator in Q4 was higher than that in Q3, on a month-over-month basis, starting from the month of November, we have started to see rates trend down for multiple months consecutively, signaling a downward trend, and we expect this downward trend to continue. Despite this improvement, it's important to note that risk levels remain elevated in the fourth quarter. Looking ahead to the first quarter of 2026, we will continue to strengthen risk control over loans while intensifying our efforts in managing and phasing out high-risk segments to ensure a sustained downward trend in risk levels and gradually bringing the loan risk back within our target risk appetite in the second half of 2026. Xigui Zheng: Okay. I will take on the second question regarding the financial guidance. The fourth quarter of 2025 was indeed one of the most challenging periods absorbing the concentrated impact of several factors. This include revenue compression from pricing adjustments, the deliberate scale down of loan volume in our consumer finance business, a shift in the pace of revenue recognition driven by changes in our business mix due to the tech empowerment business volume growth, short-term uptick in our credit risk and the seasonal impact on our operational expenses. For the first quarter of this year, as I stated earlier, we expect the loan volume of originations to be at a similar level as our fourth quarter. Given the ongoing macroeconomic uncertainties and lower visibility, we are not providing a full year financial guidance for 2026 at this point. However, I would like to share a few variables that may impact our financial performance. Looking ahead, our full year financial performance will be primarily influenced by the following dynamics. On the revenue side, number one, volume. While our overall loan volume will remain stable or even grow a little bit, the short-term revenue contribution from a tech empowerment business, Shuke Ye will be relatively modest. This is due to its lower credit cost, lower pricing profile and relatively slower revenue recognition accounting schedule. Second is the pricing. The proactive downward adjustment to our overall pricing will also continue to weigh on all of our top line. On the cost and expense side, number one, funding costs. In the near term, frequent regulatory window guidance directed at funding partners has led to a somewhat tightened funding supply in the first quarter. Moving forward, our funding costs will be influenced by a combination of the broader regulatory environment, the quality of our customer cohorts and the overall funding liquidity. Second, the credit cost. As risk progressively stabilize and we pivot towards higher-quality customer cohorts, we anticipate a gradual optimization of our credit cost while maintaining an ample provision. Third point is the operating expenses. We'll persistently drive cost reduction and efficiency initiatives to optimize our operational leverage and steadily lower our operating expenses. So in summary, in view of the macro uncertainties, we will maintain prudent in our overall business strategy and execution at the same time, optimize the profit and the shareholder value and strive to build a long-term healthy and sustainable business. Operator: Next question is from [ Claire Wang ] from Goldman Sachs. Unknown Analyst: [Interpreted] I'll quick translate my question. What's the company's future plan for enhancing shareholder returns in terms of both share buyback and cash dividend. Jay Xiao: [Interpreted] So first, starting from the second half of 2025, our dividend payout ratio was raised to 30% of outstanding annual net profit. This actually puts us at the forefront of the industry. On top of cash dividends as of today, we have repurchased USD 39 million worth of ADS, completing 80% of our current repurchase program. I have also fully executed my personal USD 10 million share repurchase plan. This action reflects the management's firm confidence in the company's outlook and its long-term intrinsic value. Following this earnings release, we will continue to execute the remaining portion of our share repurchase program, delivering our commitment to enhance shareholder returns. Looking ahead, we will closely monitor market dynamics and based on our actual operational needs, actively explore diverse initiatives, including further repurchases to create sustainable value for our shareholders. Operator: Thank you. I will now hand the conference back to Will Tan for closing comments. Will Tan: Thank you. This conference is now concluded. Thank you for joining us today's call. If you have any more questions, please do not hesitate to contact us. Thanks again. Operator: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.] Before you buy stock in LexinFintech, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and LexinFintech wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. LexinFintech (LX) Q4 2025 Earnings Transcript was originally published by The Motley Fool

Image source: The Motley Fool. Monday, May 25, 2026 at 7 a.m. ET Chief Executive Officer — Jay Xiao Chief Risk Officer — Zhanwen Qiao Chief Financial Officer — Xigui Zheng Head of Investor Relations — Will Tan Jay Xiao: [Interpreted] Hi, everyone. Thanks for joining us today for our first quarter 2026 earnings call. In the first quarter, against the backdrop of macroeconomic and industry challenges, our unique and diversified business ecosystem, which we have been building for many years, demonstrated strong operational resilience. During the quarter, the loan volume of our installment e-commerce, off-line inclusive finance and fintech empowerment businesses accounted for nearly 50% of the total. Ecosystem businesses grew faster than the online loan facilitation business, becoming the company's new growth drivers. This indicates the transition from old to new growth drivers, the initial success of our long-term oriented strategy of diversified development and the company's steady progress toward healthy and sustainable development. During the quarter, the company achieved a loan volume of RMB 57.9 billion, representing a quarter-over-quarter increase of 15.9% and a year-over-year increase of 12.2%. Revenue reached RMB 3.3 billion. Number of active users stood at 5.17 million, a quarter-over-quarter rise of 14.1% and 8.6% year-over-year. Number of new active users was 1.44 million, up 63.3% quarter-over-quarter and 101.6% year-over-year. Net profit reached RMB 201 million, besides a number of key risk indicators continue to show improvement, maintaining a stable trend. Next, I will walk you through the key initiatives we have undertaken since the first quarter. First, our diversified ecosystem businesses accounted for nearly 50% of our total loan volume, becoming the new growth drivers. In the first quarter, despite the seasonal impact of Chinese Spring Festival holiday, our installment e-commerce, offline inclusive finance and fintech empowerment businesses continued to grow steadily, with loan volume increasing significantly [Audio Gap] growth momentum to the company's overall performance. We have unlocked the new growth space for our B2B business by efficiently connecting with Internet traffic platforms and financial institutions. In the first quarter, our fintech empowerment business, which we have been building for many years began to grow rapidly. Our Yunxi Technology Pro solution builds a bridge of resource collaboration between Lexin and Internet traffic platforms and various financial institutions by incorporating our technological capabilities and operational experience. It enables our partnered-platforms to distribute traffic precisely and efficiently empowers financial institution partners to obtain assets with stable profitability and thereby benefits for all 3 parties. Our installment e-commerce, refined its supply chain and fully penetrated essential consumption scenarios. Installment e-commerce business continued to deepen its presence in different consumption scenarios, refine the supply chain system and enrich product offerings across categories such as food, apparel, transportation, travel, shopping, entertainment and pets. During the quarter, leveraging our advantage in partnerships with industry leaders, we added nearly 150 well-known brands and launched an outlet channel for select merchants, signing more than 20 domestic and international fashion and sports brands. Since its launch, total transaction volume of participating brand channels increased by 43% quarter-over-quarter, fully meeting users' demand for quality consumption, targeting essential daily needs and festive gifting scenarios and several major promotional campaigns during key consumption periods such as New Year's Day, Chinese Spring Festival Gift Fair and the Lunar New Year holiday, consistently driving consumption growth. In the 3C Digital Products segment, ongoing interest-free and discount offers effectively boosted user activity. During the quarter, the number of orders from high-quality users on our platform increased by 35.7%. Inclusive Finance business expanded its county-level presence, unlocking new growth in lower-tier markets. Our offline Inclusive Finance business has always focused on localized operations for specialized industries such as agriculture, forestry, animal husbandry and fishery. We have launched unique risk models and credit approval strategies tailored to industry-specific customer segments. This helps match the funding needs of county-level small and micro businesses and individual merchants with local financial institutions, ensuring that inclusive financing resources continue to flow into county economies and supports their development. During the quarter, our overseas business developed steadily with continued stable growth in loan volume, profitability and asset. Second, we refined our risk strategies and optimized our product matrix, leading to improvements in asset quality. In the first quarter, we continued to adjust and optimize our risk strategies. Our deeply iterated algorithms and models significantly improved the efficiency of channel connection and target user screening. We newly launched a credit report interpretation AI agent and an interactive credit enhancement function, making user identification more accurate and effectively supporting personalized pricing and credit line allocation for high-quality users. We have made flexible repayment features such as on-demand borrowing and repaying and bullet repayment available across all products. Focusing on white collar workers and small and micro business owners, we developed differentiated credit granting and outreach strategies. Through scenario-based operations, we allocated pricing and credit line resources preferentially to high-quality customers, consistently boosting their activity levels. During the quarter, our asset quality continued its steady recovery, with risk indicators improving for both existing and new assets. For total assets, day 1 delinquency ratio decreased by about 7% quarter-over-quarter. 30-day collection rate improved month-over-month. New customer quality also improved and loan volume to high-quality segments rose notably. FPD 30 of new loans initiated in the first quarter is expected to decrease by about 6%. In the first quarter, we continued to increase resource investment in consumer protection and customer experience improvement. We strengthened the coordination between our frontline service and consumer protection teams and various business lines, enabling smoother information flow, more timely issue response and a more efficient closed-loop resolution mechanism. In terms of service experience, by optimizing intelligent routing and queuing strategies and introducing peak time early warning mechanisms, we significantly improved service efficiency with key customer metrics showing further improvement. On the customer care front, we enhanced our user behavior analysis through more sophisticated models and refined customer tiering, implementing more targeted care measures for different segments, which improved overall user experience and satisfaction. In combating illegal financial activities and fraudulent syndicates, we actively responded to relevant regulatory deployments, leveraging our technological advantages in AI and big data to strengthen the end-to-end defense and governance system, including risk identification and case detection, thereby safeguarding consumers' legitimate rights and interests. Looking ahead, building upon the initial success of our diversified system strategy and the solid growth momentum of our businesses, we will continue to drive our installment e-commerce, off-line inclusive finance and fintech empowerment businesses, steadily advancing along the path of diversified and resilient development. We believe that our unique ecosystem advantages will continue to strengthen the company's operational resilience, enabling us to navigate future uncertainties and create long-term sustainable returns for our shareholders. Next, I'll hand over the floor to our CRO, Arvin. Thanks. Zhanwen Qiao: [Interpreted] Thanks, Jay. Next, I will provide a review of our key initiatives and achievements in risk management for the first quarter of this year. In the first quarter of 2026, as the impact of the new regulations on industry risk gradually subsided, industry-wide risk began to decline. We also maintained the steady risk reduction trend we have seen since last year. Regarding specific risk performance compared to the fourth quarter of 2025, day 1 delinquency ratio of total assets decreased by approximately 7%. The 30-day collection rates continued to recover month-over-month, and we estimate that FPD 30 for new loans, initiated in the first quarter to, decline by about 6%. Overall, this performance continued to improve. Now let me walk you through the specific risk initiatives implemented during the quarter. First, we continue to scale up the application of large models in risk management scenarios during the first quarter, consistently improving the efficiency and effectiveness of risk management. On the high-risk asset management side, we leveraged large model capabilities to optimize and upgrade our high-risk asset management robots and automated risk inspection robots, effectively enhancing our risk identification capabilities and the efficiency of high-risk customer management. This helped sustain the downward trend in risk during the quarter. At the same time, we used large models to enable real-time interactive credit line increases, growing the prime asset base and driving continued improvement in new loan risk. Through large models, we achieved real-time online interaction for credit line increases, efficiently capturing customers' credit needs and credit enhancement documentation. This not only significantly improved the accuracy and efficiency of risk identification, but also enabled us based on a comprehensive understanding of customer risk profiles and needs, to offer customers personalized credit offers that meet their specific requirements. Second, in our consumer credit business, we promoted steady growth in prime asset volume through a dedicated prime customer segment management, focusing on prime white collar customers and small and micro business owners. We leveraged a dedicated risk identification model, differentiated credit line increase and pricing reduction strategies and account management services to substantially increase both the addressable customer base and drawdown rate of prime target segments, driving significant growth in [Audio Gap] volume. Compared with the fourth quarter of 2025, loan volume from prime white collar customers increased by 56% and volume from prime small and micro business customers increased by 30% in the first quarter, demonstrating the early success of our prime segment management approach. In the second quarter, we will continue to refine our prime segment management capabilities to further drive Prime asset growth. Third, regarding our inclusive finance business, we continue to deeply cultivate broad county-level market and fully implemented a localized operation strategy. Tailored to the characteristics of country-level customers, we developed a country level business risk model, and optimize risk strategies with optimized customer onboarding, credit granting and pricing to match the risk profile and credit needs of small and micro customers in offline wholesale and retail, agricultural supply and farming segment. At the same time, we strengthened risk management and post loan collection for small and micro customers through online and offline coordination. To date, we have covered nearly 100 countries, served over 4 million small and micro merchants and individual operators, maintained stable risk performance and continued to grow loan volume. Additionally, in the first quarter, we strengthened our identification and [Technical Difficulty] on illegal and fraudulent activities. We built an end-to-end prevention and control system encompassing early warning, in-process interception, post-event enforcement and ecosystem coordination to combat illicit activities such as agent assisted complaints. We provided actionable leads to public security authorities, assisted in the successful crackdown of a fraudulent syndicate in Shandong province and facilitated the arrest of over 40 suspects. Looking ahead to the second quarter of 2026, we will continue to optimize our asset mix and strengthen risk management over new loans. At the same time, we will better serve prime customers and enhance their experience driving further growth in high-quality assets, while keeping risk stable and controllable. Our goal is to gradually bring risk levels back within our target risk appetite. Next, I will hand over to our CFO, James, to provide a review of the company's financial performance for the first quarter. Xigui Zheng: Thanks, Arvin. I will now provide a detailed overview of our first quarter finance results. Please note that all figures are presented in renmibi terms and all comparisons are made on a quarter-over-quarter basis unless otherwise stated. During the first quarter, the industry continued to navigate a period of adjustment, against this complex backdrop for our diversified business ecosystem demonstrated continued operational resilience. Driven by the structural optimization of our business portfolio, we successfully grew our total loan volume. While our online consumer finance business faced pressure due to the macro uncertainties, our ecosystem segment, particularly the fintech empowerment service achieved solid growth. Consequently, total revenue for the first quarter was RMB 3.3 billion, representing an 8.7% sequential increase with net income remaining relatively stable at RMB 201 million. Now let's take a review of our first quarter financial results. First, net revenue of the credit business, which is derived by adding up credit facilitation service income and tech empowerment service income, net of credit costs, including provisions and fair value changes and the funding cost, was RMB 1.5 billion, representing a 7.2% or RMB 98 million increase quarter-over-quarter. The overall growth was largely driven by RMB 382 million in tech empowerment service income. This was underpinned by revenue growth from lower provisions top-ups for our capital-light portfolio amonst improving asset quality. Since our capital-light income is recorded net of credit cost, the material sequential decline in provisions directly boosted this revenue line. On the other hand, credit facilitation service income, our capital-heavy business declined by about 10% or RMB 253 million. This reflects the ongoing volume and pricing headwinds in our online consumer finance business, partially offsetting the increase in our tech empowerment service income. Second, net income of the installment e-commerce business, defined by installment e-commerce revenue, net of cost inventory sold, increased by RMB 41 million to RMB 208 million. So the total net revenue, summing the credit and installment e-commerce business added up to RMB 1.7 billion, a 9.1% or RMB 138 million increase quarter-over-quarter. On the expense side, operating expenses, including sales and marketing, research and development general administrative expenses and processing the servicing costs increased by 13.8% or RMB 169 million to RMB 1.4 billion. Tax and others decreased by 20.9% or RMB 18 million to RMB 68 million. Consequently, total expenses added up to 1.5 billion, an increase of 151 million. By deducting the total expenses of RMB 1.5 billion from total net revenue of RMB 1.7 billion, we arrived at a net income of RMB 201 million, a decrease of 5.9% or [indiscernible] quarter-over-quarter. [Audio Gap] macro headwinds, our diversified ecosystem has successfully sustained our financial performance. Now let me walk you through 3 key business highlights behind these results. First, the resilience of our diversified business ecosystem. Amid continued industry consolidations in the first quarter of 2026, we proactively optimized our business mix to strengthen risk management and compliance. Anchored by our diversified ecosystem, we continue to demonstrate strong operational resilience. Consequently, non-online consumer finance GMV, which encompasses off-line inclusive finance, fintech empowerment services and our e-commerce business grew to nearly 50% of our total GMV, up 42% sequentially, effectively offsetting the contraction in our online consumer finance business. This shift was largely fueled by our fintech empowerment or ShuKe model, where we partner with leading Internet platforms and banks on risk assessment and assume the corresponding credit risk. With loan volume surging to around RMB 21 million -- rather [indiscernible] financial contribution is not yet fully reflected due to its lower pricing and advertised revenue recognition. However, the buildup of the ShuKe model creates a robust revenue pipeline, and it will improve our long-term asset quality and ensure steady profitability across market cycles. The installment e-commerce business maintained its positive momentum, supported by stable transaction volumes and improving gross margins, which I will elaborate later. At the same time, our offline inclusive finance and overseas business advanced steadily, serving as additional stabilizers and diversifiers for our broader business portfolio. Second, the steady development of our installment e-commerce business. Our installment e-commerce business continue to be deeply integrated into our ecosystem, providing seamless and convenient consumption scenarios and acting as a unique competitive advantage. Given the current macroeconomic environment, this segment continued to prioritize asset quality over rapid expansion. While demand remains strong in the first quarter of 2026, we deliberately moderated the growth to contain credit risk within our risk appetite. As a result, installment e-commerce GMV remained steady at RMB 2.2 billion. Gross profit from the e-commerce business reached RMB 208 million, representing a 24% increase, with gross margin expanded by 169 basis points, sequentially to 9.4%. This solid performance was largely driven by the continued refinement of our e-commerce operations. Ultimately, the steady development of this segment not only generates reliable gross profit but also allows us to capture and serve the diverse consumption needs of our users, further diversifying our revenue streams and reinforcing our operating resilience. Third, prudent provision coverage. In the first quarter, our total credit cost, which encompasses 3 provision line items and fair value changes of financial guarantee derivatives in our income statement, stood at RMB 1.3 billion, up 0.8% sequentially. This increase was primarily volume-driven, aligning with the growth in our new loan origination. As Arvin noted, our risk indicators are stabilizing with risks for both existing and new loans trending downward from January through March, the supplementary provisions required for our existing portfolio were lower than in Q4. To highlight our provisioning strength, let's look at the gross provision metric. By stripping out the net impact of the fair value changes, gross provision offers a true picture of the capital we have reserved against our loan portfolio. Specifically, our gross provision ratio for new capital heavy loans stood at about 7.2%, comfortably exceeding our historical peak vintage charge-off rate. [Audio Gap] coverage ratio was 258% in the first quarter. To summarize, our diversified ecosystem has proven its value as a structural stabilizing. The solid progress in our fintech empowerment and e-commerce segments effectively offset the near-term pressure of consumer finance business, building a sustainable revenue pipeline for future quarters. Coupled with our conservative provisioning strategy, where we have established a resilient foundation to navigate current and potential market uncertainties, ensuring steady operations across all cycles. Now let's move on to our operating expense line items. On the cost and expense side, total operating expenses increased by 14% or RMB 169 million to RMB 1.4 billion, mainly due to the increase of sales and marketing expenses of RMB 124 million, primarily reflecting our investment in ecosystem user engagement, alongside the upgrading of our service infrastructure to further improve consumer protection and overall user experience. For balance sheet items, as of March 31, our cash position, which includes cash, cash equivalents and restricted cash, was approximately RMB 3.3 billion. Shareholders equity remain solid at [Audio Gap]. We expect a gradual recovery trend we saw in the first quarter to carry into the second quarter, modest in pace, but trending in the right direction. That said, as the lingering impact of macroeconomic uncertainties have not yet fully dissipated, we will strictly maintain our prudent operational approach. As such, we expect the total loan originations for the second quarter to remain relatively stable. That's all our prepared remarks for today. Operator, we are now ready to take questions. Operator: [Operator Instructions] We will now take our first question from the line of Alex Ye from UBS. Unknown Analyst: So my first question is regarding the recent rollout of various new regulations. What's the company's outlook on this front? And what are the variety of measures that you are taking to adapt to those changes? Second question is regarding the asset quality. Could you provide some update on the latest asset quality trend for your loan portfolio? And how should we think about the -- the risk outlook for the coming quarters? Jay Xiao: [Interpreted] Overall, the industry is more mature and with a greater focus on compliance and user experience challenge. [indiscernible] market space and opportunities remain. This gives us more room to grow in healthy and high-quality way. environment, we will continue to deepen our customer-centric approach to serve different customer segments. More specifically, we will keep improving customer experience, grow our high-quality assets, further optimizing our asset mix and strengthen the overall risk resilience. At the same time, we will steadily promote the healthy development of our diversified ecosystem businesses. We are also accelerating our efforts to explore new customer segments, new products and new business models. For example, going deeper into serving small and micro businesses owners and improving services for our prime customers. On consumer rights protection, we will put more focus on compliance process, covering the whole process from product design to disclosures to post-loan services. Over the long run, we will stick to compliant operations and leverage our diverse business ecosystem to further enhance our operational resilience. We believe this strategic positioning will help us navigate external changes and achieved stable operations and long-term sustainable growth. So overall, in the first quarter of 2026, the quality of both our new loans and existing loans maintained an improving trend. Regarding the specific metrics, compared to Q4 of 2025, day 1 delinquency ratio of total assets decreased about 7% in Q1, 30-day collection [indiscernible] for new loans originated in Q1 is expected to decline around 6%. So you can see the overall risk continued to improve. Looking ahead to the second quarter of 2026, we will continue to optimize our asset mix and strengthen risk management over new loans by enhancing risk identification, total and maintaining the quality of new loans. Great identification will help us to further reinforce the current downward trend that we have already seen in the risk metrics. Our overall goal is to risk steadily in the second quarter and which will set us up for recovery and high-quality growth for the rest of year. Operator: We will now take our next question from the line of Judy Zhang from Citi. Judy Zhang: [Interpreted] This is Judy Zhang from Citi. So in light of the changing regulatory environment, what's your outlook for the company's full year financial performance? Unknown Executive: Okay. I will take the question. As a summary, if you look ahead to 2026, there are still a lot of uncertainty in the macro environment. So we'll continue to take a prudent approach and keep strengthening our operational resilience. I really, at this time, can't really provide specific numbers. Maybe I can quickly walk you through a few key metrics and its trend. First on the loan volume side, the online consumer finance may remain [indiscernible]. Thanks to the solid growth of our ecosystem business like our fintech empowerment and installment e-commerce platform, we would expect the total loan volume to stay relatively stable quarter-over-quarter. Second, on the revenue side. Because the fintech empowerment business recognized the revenue more gradually due to the accounting policy, so it won't fully offset the near-term revenue impact from the contractions of the online consumer finance business. . However, in the longer, having a larger contribution from these businesses will give us more stable revenue base. Our asset quality continued to improve, resulting in the lower provision top-ups on the existing capital light business, which led to the increase in our tech empowerment service revenue. So I would expect this trend to contribute positively to our revenue indicator. Third, on the credit cost side, they should come down as risk continue to decline, assuming no major macro or regulatory changes. With that said, we'll remain prudent with our provisions. Fourth, on the expense side, due to the expansion of our ecosystem business, our continued investment in customer experience, operating expenses increased slightly on a sequential basis in Q1. So going forward, we'll keep on driving operational efficiency, reduce costs where we can and aim to steadily optimize our expense ratio. So put all these together, as a summary, overall for 2026, we continue to focus on making steady progress while navigating the uncertainties. So we'll keep building a strong foundation for the long-term high-quality business. Operator: We will now take our next question from [indiscernible] Wang from Goldman Sachs. Unknown Analyst: [Foreign Language] This is [indiscernible] Wang from Goldman Sachs. Could you please elaborate on the corporate plans to enhance shareholder returns? Unknown Executive: [Interpreted] We have always focus on shareholder returns. The company plans to cancel 20 million ADS, which represents about 12% of our total outstanding shares. That said, the ongoing macro uncertainties, we have temporarily suspended new share repurchases for now. We always try to balance shareholder returns with capital efficiency. Going forward, we will stay flexible. When market conditions right and [indiscernible] make sure our buyback do have the best [indiscernible]. After we complete this repurchase program, we will actively consider launching a new one based on how our business. Our goal is to steadily improve long-term returns for our shareholders. Through consistent and practical steps and initiatives, we want our shareholders to share in the value we create. Operator: We have now reached the end of the question-and-answer session. I would now like to turn the conference back to Will for closing comments. Will Tan: Thank you. This conference is now concluded. Thank you for joining us today. If you have any more questions, please do not hesitate to contact us. Thanks again. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.] Before you buy stock in LexinFintech, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and LexinFintech wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $472,852!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,317,207!* Now, it’s worth noting Stock Advisor’s total average return is 984% — a market-crushing outperformance compared to 210% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 27, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. LexinFintech (LX) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Interested in LexinFintech Holdings Ltd. Sponsored ADR? Here are five stocks we like better. LexinFintech posted higher Q1 loan volume and revenue, with total loan volume up 15.9% sequentially to RMB 57.9 billion and revenue reaching RMB 3.3 billion. Active users and new active users also grew sharply, showing continued platform expansion. Diversified ecosystem businesses helped offset weakness in online consumer finance, as installment e-commerce, offline inclusive finance and fintech empowerment made up nearly half of total loan volume. Management said these segments are becoming key growth drivers and supporting long-term asset quality. Asset quality and risk metrics improved during the quarter, with delinquency trends and collection rates getting better as industry regulation pressures eased. However, net income still fell 5.9% sequentially to RMB 201 million because operating expenses increased and online consumer finance remained under pressure. Pharma Frenzy: Volatility Ignites Biotech Sector LexinFintech (NASDAQ:LX) reported higher first-quarter loan volume and revenue as management said growth in its diversified ecosystem businesses helped offset pressure in online consumer finance amid macroeconomic and industry challenges. On the company’s first-quarter 2026 earnings call, Chairman and Chief Executive Officer Jay Wenjie Xiao said Lexin’s installment e-commerce, offline inclusive finance and fintech empowerment businesses accounted for nearly 50% of total loan volume during the quarter. He described those businesses as new growth drivers and said they showed “strong operational resilience” in a challenging environment. → Voya Financial Grows Earnings Across All 3 Business Segments Lexin reported total loan volume of RMB 57.9 billion, up 15.9% quarter over quarter and 12.2% year over year. Revenue reached RMB 3.3 billion, while net profit was RMB 201 million. Active users totaled 5.17 million, up 14.1% sequentially and 8.6% from a year earlier. New active users reached 1.44 million, rising 63.3% quarter over quarter and 101.6% year over year. Xiao said the company’s diversified ecosystem strategy is beginning to show results, with ecosystem businesses growing faster than the online loan facilitation business. He highlighted fintech empowerment, installment e-commerce and offline inclusive finance as areas that added momentum in the quarter. → SpaceX Gets the Attention, But These 4 Stocks Could Get the Returns Chief Financial Officer James Zheng said the industry continued to operate through a period of adjustment, and Lexin’s online consumer finance business remained under pressure from macroeconomic uncertainty. However, he said growth in ecosystem segments, particularly fintech empowerment services, supported total loan volume. Zheng said non-online consumer finance gross merchandise volume, including offline inclusive finance, fintech empowerment services and e-commerce, grew to nearly 50% of total GMV and was up 42% sequentially. He said the fintech empowerment, or ShuKe, model involved partnerships with internet platforms and banks on risk assessment and credit risk assumption, with loan volume rising to around RMB 31 billion. → Ross Stores Earnings Beat Sends Stock To New Highs “The build-up of the ShuKe model creates a robust revenue pipeline, and it will improve our long-term asset quality and ensure steady profitability across market cycles,” Zheng said. Lexin’s installment e-commerce business also contributed to the quarter’s performance. Xiao said the business expanded its supply chain and product offerings across categories including food, apparel, transportation, travel, shopping, entertainment and pets. During the quarter, the company added nearly 150 brands and launched an outlet channel for select merchants, signing more than 20 domestic and international fashion and sports brands. Zheng said installment e-commerce GMV remained steady at RMB 2.2 billion, while gross profit from the business reached RMB 208 million, up 24% sequentially. Gross margin expanded by 169 basis points to 9.4%. Management said the company deliberately moderated growth in the segment to keep credit risk within its risk appetite, even as demand remained strong. Chief Risk Officer Arvin Zhanwen Qiao said Lexin’s asset quality improved in the first quarter as the impact of new industry regulations gradually subsided and industry-wide risk began to decline. Compared with the fourth quarter of 2025, Lexin’s day-one delinquency ratio for total assets declined by about 7%, while the 30-day collection rate continued to recover month over month. Qiao said FPD30 for new loans originated in the first quarter is expected to decline by about 6%. Qiao said the company expanded the use of large models in risk management, including upgrades to high-risk asset management tools and automated risk inspection systems. He also said Lexin used large models to support real-time interactive credit line increases, helping the company better identify risk and tailor credit offers. The company also focused on prime white-collar customers and small and microbusiness owners. Qiao said loan volume from prime white-collar customers rose 56% quarter over quarter, while volume from prime small and microbusiness customers increased 30%. In offline inclusive finance, Qiao said Lexin continued to develop county-level markets through localized risk models and credit strategies. He said the company has covered nearly 100 counties and served more than 4 million small and micro merchants and individual operators, while maintaining stable risk performance. Zheng said net revenue from the credit business, after credit costs and funding costs, was RMB 1.5 billion, up 7.2% sequentially. He said the increase was largely driven by a RMB 382 million rise in tech empowerment service income, supported by lower provision top-ups as asset quality improved. Credit facilitation service income declined by about 10%, or RMB 253 million, reflecting volume and pricing headwinds in online consumer finance. Total net revenue from the credit and installment e-commerce businesses was RMB 1.7 billion, up 9.1% quarter over quarter. Operating expenses rose 13.8% to RMB 1.4 billion, mainly due to higher sales and marketing expenses and investments in user engagement, service infrastructure, consumer protection and user experience. Net income fell 5.9% sequentially to RMB 201 million. Lexin’s total credit cost was RMB 1.3 billion, up 0.8% sequentially. Zheng said the increase was primarily volume-driven and aligned with new loan origination growth. He said the company’s gross provision ratio for new capital-heavy loans was about 7.2%, and its coverage ratio was 258% in the first quarter. As of March 31, Lexin’s cash position, including cash equivalents and restricted cash, was approximately RMB 3.3 billion. In response to analyst questions, Xiao said the industry is becoming more mature and organized, with greater emphasis on compliance and user experience. He said Lexin will continue to focus on customer experience, high-quality assets, asset mix optimization and risk resilience while developing its diversified ecosystem businesses. Zheng declined to provide specific full-year financial targets, citing macroeconomic uncertainty. He said total loan volume is expected to remain relatively stable quarter over quarter, supported by ecosystem businesses, though online consumer finance may remain under pressure. He said credit costs should come down if risk continues to decline, assuming no major macroeconomic or regulatory changes. On shareholder returns, Xiao said Lexin plans to cancel 20 million American depositary shares, representing about 12% of total outstanding shares. He said the company has temporarily suspended new share repurchases because of macro uncertainty but may restart the program when market conditions are appropriate. LexinFintech Holdings Ltd. (NASDAQ: LX) is a China-based consumer finance and digital banking platform primarily serving young, underbanked consumers. The company's core offering is point-of-sale installment financing, enabling eligible customers to split purchases into fixed monthly payments with transparent fees. Leveraging proprietary data analytics and credit scoring models, LexinFintech underwrites consumer loans for online purchases and provides credit lines that support a variety of retail and e-commerce transactions. In addition to its flagship installment loan service, LexinFintech has developed wealth management and fintech-as-a-service products. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "LexinFintech Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

SHENZHEN, China, May 25, 2026 (GLOBE NEWSWIRE) -- LexinFintech Holdings Ltd. (“Lexin” or the “Company”) (NASDAQ: LX), a leading technology-empowered personal financial service enabler in China, today announced its unaudited financial results for the quarter ended March 31, 2026. Mr. Jay Wenjie Xiao, Chairman and Chief Executive Officer of Lexin, commented, “In the first quarter, despite the complex macroeconomic and industry environment, the diversified business ecosystem we have established demonstrated solid operational resilience. Total loan originations reached RMB57.9 billion, representing an increase of 15.9% quarter-over-quarter. This momentum was primarily driven by our non-Consumer Finance business—including Installment E-commerce, Offline Inclusive Financing, and Fintech-empowerment services—which accounted for nearly 50% of our total loan origination. During the period, net income remained relatively steady quarter-over-quarter at RMB201 million. This bottom-line performance underscores the fundamental strength and diversity of our core business model. Underpinning these results, we achieved consistent improvements in asset quality by refining our risk management strategies and optimizing our product matrix. We also continued to step up our investments in consumer rights protection and customer experience enhancements. Looking ahead, we remain fully committed to compliant operations. Leveraging our business ecosystem, we will continuously enhance our operational resilience to navigate evolving market dynamics, achieve sustainable growth, and deliver long-term returns for our shareholders.” Mr. James Zheng, Chief Financial Officer of Lexin, commented, “Building on the resilience of our business ecosystem, we have proactively optimized our business mix this quarter to focus on high-quality growth. While the strategic shift in our consumer finance business and the broader macro environment moderated our current growth, our expanding business ecosystem provided a structural buffer. In the first quarter, our total revenue was RMB3.3 billion, representing an 8.7% increase quarter-over-quarter. With a focus on long-term sustainability, we increased our investments in ecosystem user engagement and upgraded our customer service infrastructure. We also further bolstered our financial foundation with ample provisioning. As a result, our net income stood at RMB201 million, remaining relatively stable quarter-over-quarter. Looking ahead, while staying vigilant regarding persistent macro uncertainties, we will advance our diversified business ecosystem to ensure steady progress across market cycles and continue to deliver value to our shareholders.” First Quarter Operational Highlights: User Base Total number of registered users across our platform reached 250 million as of March 31, 2026, representing an increase of 7.6% from 232 million as of March 31, 2025. Number of active users1 in the first quarter of 2026 was 5.2 million, representing an increase of 8.6% from 4.8 million in the first quarter of 2025. Number of cumulative borrowers with successful drawdown was 38.2 million as of March 31, 2026, an increase of 10.8% from 34.5 million as of March 31, 2025. Loan Facilitation Business As of March 31, 2026, we cumulatively originated RMB1,588 billion in loans, an increase of 15.4% from RMB1,377 billion as of March 31, 2025. Total loan originations2 in the first quarter of 2026 was RMB57.9 billion, an increase of 12.2% from RMB51.6 billion in the first quarter of 2025. Total outstanding principal balance of loans3 was RMB96.5 billion as of March 31, 2026, representing a decrease of 10.1% from RMB107 billion as of March 31, 2025. Credit Performance4 90 day+ delinquency ratio5 was 3.5% as of March 31, 2026, as compared with 3.1% as of December 31, 2025. First payment default rate (30 day+) for new loan originations was below 1% as of March 31, 2026. Installment E-commerce Platform Service GMV6 in the first quarter of 2026 for our installment e-commerce platform service was RMB2,198 million, representing an increase of 95% from RMB1,126 million in the first quarter of 2025. In the first quarter of 2026, our installment e-commerce platform service served over 600,000 users. Other Operational Highlights The weighted average tenor of loans originated in the first quarter of 2026 was approximately 11.4 months, as compared with 13.4 months in the first quarter of 2025. Repeated borrowers’ contribution7 of loans across our platform for the first quarter of 2026 was 89.9%. First Quarter 2026 Financial Highlights: Total operating revenue was RMB3,309 million, representing an increase of 6.6% from the first quarter of 2025. Credit facilitation service income was RMB2,232 million, representing an increase of 1.9% from the first quarter of 2025. Tech-empowerment service income was RMB553 million, representing a decrease of 11.5% from the first quarter of 2025. Installment e-commerce platform service income was RMB525 million, representing an increase of 81.9% from the first quarter of 2025. Net income attributable to ordinary shareholders of the Company was RMB201 million, representing a decrease of 53.2% from the first quarter of 2025. Net income per ADS attributable to ordinary shareholders of the Company was RMB1.20 on a fully diluted basis. Adjusted net income attributable to ordinary shareholders of the Company8 was RMB228 million, representing a decrease of 51.6% from the first quarter of 2025. Adjusted net income per ADS attributable to ordinary shareholders of the Company8 was RMB1.35 on a fully diluted basis. __________________________ Active users refer to, for a specified period, users who made at least one transaction during that period through our platform or through our third-party partners’ platforms using the credit line granted by us. Total loan originations refer to the total principal amount of loans originated during the given period through our platform or through our third-party partners' platforms. Total outstanding principal balance of loans refers to the total amount of principal outstanding for loans facilitated and originated at the end of each period, including loans guaranteed by our financial guarantee companies and the loans facilitated across third party platforms that we bear principal risk and excluding loans delinquent for more than 180 days that are charged-off. Loans under Intelligent Credit Platform are excluded from the calculation of credit performance. Intelligent Credit Platform (ICP) is an intelligent platform on our “Fenqile” app, under which we match borrowers and financial institutions through big data and cloud computing technology. For loans facilitated through ICP, the Company does not bear principal risk. “90 day+ delinquency rate” refers to the outstanding principal balance of on- and off-balance sheet loans that were 91 to 180 calendar days past due as a percentage of the total outstanding principal balance of on- and off-balance sheet loans across our platform and those loans across third party platforms that we bear principle risk as of a specific date. Loans that are charged-off and loans under “ICP”, E-commerce business and overseas are not included in the delinquency rate calculation. GMV refers to the total value of transactions completed for products purchased on our e-commerce and Maiya channel, net of returns. Repeated borrowers’ contribution for a given period refers to the principal amount of loans borrowed during that period by borrowers who had previously made at least one successful drawdown as a percentage of the total loan facilitation and origination volume through our platform during that period. Adjusted net income attributable to ordinary shareholders of the Company, adjusted net income per ordinary share and per ADS attributable to ordinary shareholders of the Company are non-GAAP financial measures. For more information on non-GAAP financial measures, please see the section of “Use of Non-GAAP Financial Measures Statement” and the tables captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release. First Quarter 2026 Financial Results: Operating revenue was RMB3,309 million in the first quarter of 2026, as compared to RMB3,104 million in the first quarter of 2025. Credit facilitation service income was RMB2,232 million in the first quarter of 2026, as compared to RMB2,191 million in the first quarter of 2025. The increase was due to the increase in guarantee income. Loan facilitation and servicing fees-credit oriented was RMB1,038 million in the first quarter of 2026, as compared to RMB1,136 million in the first quarter of 2025. The decrease was primarily due to the decrease in the APR of off-balance sheet loans and the decrease in origination of off-balance sheet loans. Guarantee income was RMB727 million in the first quarter of 2026, as compared to RMB548 million in the first quarter of 2025. The increase was primarily due to the increase of outstanding balances in the off-balance sheet loans funded by certain institutional funding partners, which are accounted for under ASC 460, Guarantees. Financing income was RMB467 million in the first quarter of 2026, as compared to RMB507 million in the first quarter of 2025. Tech-empowerment service income was RMB553 million in the first quarter of 2026, as compared to RMB625 million in the first quarter of 2025. The decrease was primarily due to the decrease of loan facilitation volume through ICP. Installment e-commerce platform service income was RMB525 million in the first quarter of 2026, as compared to RMB288 million in the first quarter of 2025. The increase was primarily driven by the increase in transaction volume with third-party sellers. Cost of sales consisted of cost of inventory sold and other costs. Cost of sales was RMB349 million in the first quarter of 2026, as compared to RMB262 million in the first quarter of 2025. The increase was primarily driven by the increase in transaction volume of online direct sales which is recorded on a gross basis. Funding cost was RMB55.6 million in the first quarter of 2026, as compared to RMB83.0 million in the first quarter of 2025. The decrease was primarily driven by the decrease in funding rates and balance of funding debts to fund the on-balance sheet loans. Processing and servicing costs was RMB634 million in the first quarter of 2026, as compared to RMB551 million in the first quarter of 2025.The increase was primarily due to the increase in risk management expenses. Provision for financing receivables was RMB341 million in the first quarter of 2026, as compared to RMB182 million in the first quarter of 2025. The increase was primarily due to the changes in loan portfolio of on balance sheet loans. Provision for contract assets and receivables was RMB137 million in the first quarter of 2026, as compared to RMB130 million in the first quarter of 2025. Provision for contingent guarantee liabilities was RMB959 million in the first quarter of 2026, as compared to RMB677 million in the first quarter of 2025. The increase was primarily due to the increase of outstanding balances in the off-balance sheet loans funded by certain institutional funding partners, which are accounted for under ASC 460, Guarantees. Gross profit was RMB835 million in the first quarter of 2026, as compared to RMB1,219 million in the first quarter of 2025. Sales and marketing expenses was RMB512 million in the first quarter of 2026, as compared to RMB493 million in the first quarter of 2025. The increase was primarily driven by the increase in personnel-related costs. Research and development expenses was RMB148 million in the first quarter of 2026, as compared to RMB156 million in the first quarter of 2025. General and administrative expenses was RMB97.5 million in the first quarter of 2026, as compared to RMB101 million in the first quarter of 2025. Change in fair value of financial guarantee derivatives and loans at fair value was a gain of RMB161 million in the first quarter of 2026, as compared to a gain of RMB74.6 million in the first quarter of 2025. The change was primarily driven by the fair value gains realized as a result of the release of guarantee obligation as loans are repaid, partially offset by the fair value loss from the re-measurement of the expected loss rates. Income tax expense was RMB68.0 million in the first quarter of 2026, as compared to RMB101 million in the first quarter of 2025. The decrease was primarily due to the decrease in income before income tax expense. Net income was RMB201 million in the first quarter of 2026, as compared to RMB430 million in the first quarter of 2025. Recent Development Update of Share Repurchase Program Pursuant to the share repurchase program of up to US$50 million adopted in July 2025, the Company repurchased a total of approximately 9.6 million ADSs (equivalent to 19.2 million Class A ordinary shares) for approximately US$39 million. The remaining amount under the share repurchase program was US$11 million as of the date of this announcement. The total number of shares repurchased by the Company since the adoption of the share repurchase program amounted to approximately 5.9% of its total ordinary shares outstanding as of March 31, 2026. Business Outlook Looking ahead, while our risk metrics continue to improve, we remain prudent in light of ongoing macroeconomic uncertainties and expect total loan origination for the second quarter of 2026 to remain relatively flat. This forecast reflects our current preliminary views, which are subject to the impact of macroeconomic factors. The Company may adjust its performance outlook as appropriate based on evolving circumstances. Conference Call The Company’s management will host an earnings conference call at 7:00 AM U.S. Eastern time on May 25, 2026 (7:00 PM Beijing/Hong Kong time on May 25, 2026). Participants who wish to join the conference call should register online at: https://register-conf.media-server.com/register/BIdbf6538c90c542929a234504dca02fbc Once registration is completed, each participant will receive the dial-in number and a unique access PIN for the conference call. Participants joining the conference call should dial in at least 10 minutes before the scheduled start time. A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.lexin.com. About LexinFintech Holdings Ltd. We are a leading credit technology-empowered personal financial service enabler. Our mission is to use technology and risk management expertise to make financing more accessible for young generation consumers. We strive to achieve this mission by connecting consumers with financial institutions, where we facilitate through a unique model that includes online and offline channels, installment consumption platform, big data and AI driven credit risk management capabilities, as well as smart user and loan management systems. We also empower financial institutions by providing cutting-edge proprietary technology solutions to meet their needs of financial digital transformation. For more information, please visit http://ir.lexin.com. To follow us on Twitter, please go to: https://twitter.com/LexinFintech. Use of Non-GAAP Financial Measures Statement In evaluating our business, we consider and use adjusted net income attributable to ordinary shareholders of the Company, non-GAAP EBIT, adjusted net income per ordinary share and per ADS attributable to ordinary shareholders of the Company, four non-GAAP measures, as supplemental measures to review and assess our operating performance. The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define adjusted net income attributable to ordinary shareholders of the Company as net income attributable to ordinary shareholders of the Company excluding share-based compensation expenses, interest expense associated with convertible notes, and investment income/(loss) and we define non-GAAP EBIT as net income excluding income tax expense, share-based compensation expenses, interest expense, net, and investment income/(loss). We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. Adjusted net income attributable to ordinary shareholders of the Company enables our management to assess our operating results without considering the impact of share-based compensation expenses, interest expense associated with convertible notes, and investment income/(loss). Non-GAAP EBIT, on the other hand, enables our management to assess our operating results without considering the impact of income tax expense, share-based compensation expenses, interest expense, net, and investment income/(loss). We also believe that the use of these non-GAAP financial measures facilitates investors’ assessment of our operating performance. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as an analytical tool. One of the key limitations of using adjusted net income attributable to ordinary shareholders of the Company and non-GAAP EBIT is that they do not reflect all items of income and expense that affect our operations. Share-based compensation expenses, interest expense associated with convertible notes, income tax expense, interest expense, net, and investment income/(loss) have been and may continue to be incurred in our business and are not reflected in the presentation of adjusted net income attributable to ordinary shareholders of the Company and non-GAAP EBIT. Further, these non-GAAP financial measures may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability may be limited. We compensate for these limitations by reconciling each of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure. Exchange Rate Information Statement This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.8980 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on March 31, 2026. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Lexin’s beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the expectation of the collection efficiency and delinquency, business outlook and quotations from management in this announcement, contain forward-looking statements. Lexin may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Lexin’s goal and strategies; Lexin’s expansion plans; Lexin’s future business development, financial condition and results of operations; Lexin’s expectation regarding demand for, and market acceptance of, its credit and investment management products; Lexin’s expectations regarding keeping and strengthening its relationship with borrowers, institutional funding partners, merchandise suppliers and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Lexin’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Lexin does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: LexinFintech Holdings Ltd.IR inquiries:Will TanTel: +86 (755) 3637-8888 ext. 6258E-mail: [email protected] Media inquiries:Ruifeng XuTel: +86 (755) 3637-8888 ext. 6993E-mail: [email protected] LexinFintech Holdings Ltd. __________________________(1)  Short-term financing receivables, net of allowance for credit losses of RMB198,694 and RMB208,703 as of December 31, 2025 and March 31, 2026, respectively. Short-term contract assets and receivables, net of allowance for credit losses of RMB259,054 and RMB303,608 as of December 31, 2025 and March 31, 2026, respectively. Long-term financing receivables, net of allowance for credit losses of RMB3,723 and RMB3,336 as of December 31, 2025 and March 31, 2026, respectively. Long-term contract assets and receivables, net of allowance for credit losses of RMB14,569 and RMB11,356 as of December 31, 2025 and March 31, 2026, respectively. Additional Credit Information Vintage Charge Off Curve1 Dpd30+/GMV by Performance Windows1 First Payment Default 30+1 1.        Loans facilitated under ICP and E-commerce business are excluded from the charts.

This article first appeared on GuruFocus. Loan Volume: RMB57.9 billion, a 15.9% increase quarter-over-quarter and a 12.2% increase year-over-year. Revenue: RMB3.3 billion, an 8.7% sequential increase. Net Profit: RMB201 million, relatively stable with a slight decrease of 5.9% quarter-over-quarter. Active Users: 5.17 million, a 14.1% increase quarter-over-quarter and 8.6% year-over-year. New Active Users: 1.44 million, up 63.3% quarter-over-quarter and 101.6% year-over-year. Installment E-commerce GMV: RMB2.2 billion, with gross profit reaching RMB208 million, a 24% increase. Gross Margin (Installment E-commerce): Expanded by 169 basis points to 9.4% sequentially. Operating Expenses: Increased by 13.8% to RMB1.4 billion. Cash Position: Approximately RMB3.3 billion as of March 31. Provision Coverage Ratio: 258% in the first quarter. Warning! GuruFocus has detected 4 Warning Sign with LX. Is LX fairly valued? Test your thesis with our free DCF calculator. Release Date: May 25, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. LexinFintech Holdings Ltd (NASDAQ:LX) demonstrated strong operational resilience despite macroeconomic and industry challenges. The company's diversified business ecosystem, including installment e-commerce, offline inclusive finance, and Fintech empowerment businesses, accounted for nearly 50% of the total loan volume, becoming new growth drivers. Loan volume increased by 15.9% quarter-over-quarter and 12.2% year-over-year, reaching RMB57.9 billion. The number of active users rose by 14.1% quarter-over-quarter and 8.6% year-over-year, with new active users increasing by 63.3% quarter-over-quarter and 101.6% year-over-year. LexinFintech Holdings Ltd (NASDAQ:LX) achieved a net profit of RMB201 million, with key risk indicators showing improvement and maintaining a stable trend. The online consumer finance business faced pressure due to macro uncertainties, impacting overall revenue growth. Operating expenses increased by 13.8% or RMB169 million, driven by higher sales and marketing expenses. Net income decreased by 5.9% or RMB13 million quarter-over-quarter, despite revenue growth. The company temporarily suspended new share repurchases due to ongoing macro uncertainties. The credit facilitation service income, a capital-heavy business, declined by about 10% or RMB253 million, reflecting volume and pricing headwinds. Q: What is LexinFintech's outlook on the recent regulatory changes and how is the company adapting? A: Jay Wenjie Xiao, Chairman and CEO: The regulatory changes present both challenges and opportunities, allowing us to grow in a healthy and high-quality manner. We are focusing on compliance and user experience, optimizing our asset mix, and strengthening risk resilience. We are also exploring new customer segments and business models, such as serving small and micro business owners. Our strategic positioning aims to navigate external changes and achieve stable, long-term growth. Q: Can you provide an update on the asset quality trend and risk outlook for the loan portfolio? A: Jay Wenjie Xiao, Chairman and CEO: Asset quality is improving, with the day one delinquency ratio of total assets decreasing by about 7% in Q1 2026 compared to Q4 2025. The 30-day collection rate for new loans is expected to decline by around 6%. We will continue to optimize our asset mix and strengthen risk management to maintain this positive trend. Q: What is the company's financial performance outlook in light of the changing regulatory environment? A: James Zheng, CFO: Despite macro uncertainties, we expect total loan volume to remain stable due to growth in our ecosystem businesses like Fintech empowerment and installment e-commerce. Revenue from these segments will offset the impact of the online consumer finance business. We anticipate continued improvement in asset quality and aim to optimize our expense ratio while maintaining a strong foundation for long-term growth. Q: How does LexinFintech plan to enhance shareholder returns? A: Jay Wenjie Xiao, Chairman and CEO: We plan to cancel 20 million ADS, representing about 12% of our total outstanding shares. Although new share repurchases are temporarily suspended due to macro uncertainties, we remain flexible and will consider launching a new buyback program when market conditions are favorable to improve long-term shareholder returns. Q: What are the key financial highlights from the first quarter of 2026? A: James Zheng, CFO: Total revenue for Q1 2026 was RMB3.3 billion, with net income at RMB201 million. The diversified business ecosystem demonstrated resilience, with non-online consumer finance GMV growing to nearly 50% of total GMV. The installment e-commerce business maintained steady growth, and prudent provision coverage was upheld to navigate market uncertainties. For the complete transcript of the earnings call, please refer to the full earnings call transcript.