YRD

This article first appeared on GuruFocus. Release Date: June 25, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Yiren Digital Ltd (NYSE:YRD) reported a meaningful improvement in credit quality during the first quarter, supporting margin expansion and healthier operating environment. The company's AI-powered precision marketing improved acquisition efficiency, reducing customer acquisition costs by more than 50% year-over-year. Revenue from the Internet Insurance business grew by 38% quarter-over-quarter, marking growth in the insurance segment for the first time since regulatory reforms. Yiren Digital Ltd (NYSE:YRD) has integrated AI into every major business function, enhancing operational efficiency and profitability. The company is building an AI ecosystem through strategic investments and internal incubation, positioning itself for future growth across multiple industries. Total net revenue for the first quarter decreased by 41% year-over-year, reflecting the impact of the industry's credit normalization. The company reported a net loss of RMB494.7 million, although this was an improvement from the previous quarter. Provisions for contingent liabilities remained high at RMB632.2 million, despite a reduction from the previous quarter. The allowance for credit assets receivables was RMB176.4 million, indicating ongoing challenges in credit asset management. Despite improvements, the company's earnings profile is still in transition, with fintech remaining the core business amidst diversification efforts. Warning! GuruFocus has detected 4 Warning Sign with YRD. Is YRD fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide an overview of Yiren Digital's performance in the first quarter of 2026? A: Ning Tang, CEO, highlighted that the first quarter marked an important step in the company's transformation, with improvements in credit quality and operational efficiency. The company is focusing on integrating AI into its operations and expanding its AI ecosystem, which includes fintech infrastructure and strategic investments in AI-native startups. Q: How has the credit solution segment performed, and what are the key metrics? A: Ning Tang, CEO, reported a meaningful improvement in credit quality, with a record 78% repeat borrowing ratio and a decline in the FPD30+ rate to 0.76%. The company has seen improved asset recovery rates and reduced customer acquisition costs due to AI-powered precision marketing. Q: What progress has been made in the Internet Insurance business? A: Ning Tang, CEO, stated that the Internet Insurance business grew by 38% quarter-over-quarter, with nearly 1 million new insurance policies issued. The number of insurance clients increased significantly, demonstrating the stability and growth potential of the Internet Insurance model. Q: Can you elaborate on the AI strategy and ecosystem development? A: Ning Tang, CEO, explained that the company is building an AI ecosystem centered around fintech, AI infrastructure, and AI applications. This includes the launch of MagicCube 2.0, which enhances AI governance and enables autonomous AI execution, and strategic investments in AI-native startups in education and entertainment sectors. Q: What are the financial highlights for the first quarter of 2026? A: Ka Chun William Hui, CFO, reported total net revenue of RMB915.1 million, a 41% decrease year-over-year but only a 4% decrease sequentially. The company saw a significant reduction in credit-related provisions and improved operating efficiency, leading to a narrowed adjusted EBITDA loss of RMB337 million. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, March 19, 2026 at 8 a.m. ET Founder, Chairman, and Chief Executive Officer — Ning Tang Chief Financial Officer — Ka Hui Ning Tang: Thank you, Keyao. Good day, everyone, and thank you all for joining us. In 2025, we celebrated 10-year anniversary of our listing on the New York Stock Exchange. Together, we have reached many milestones. We made a breakthrough in our AI innovation where we completed regulatory filing of our own large language model, Zhiyu. In the second half of the year, we released our first multi-agent platform, Magicube. With support of these AI tools, we incubated our Internet insurance business, which has achieved strong growth quarter -- strong growth quarter-after-quarter in 2025. 2025 was also a year that demanded the best of us and our team delivered. Heightened credit regulations and industry-wide deterioration in credit quality created significant pressure across our business. Yet we navigated these headwinds with discipline and operational resilience. Equally important, we enter 2026 with growing confidence. Our next-generation fintech platform is gaining meaningful traction and validating the strategic investments we've made. I'm deeply grateful to our entire team for their dedication and resolve through one of the most challenging periods in our recent history. The rapid advancement of AI is fundamentally reshaping the industries we operate in, and we believe we are uniquely positioned to lead that transformation. Our years of deep vertical expertise in credit facilitation and insurance brokerage, combined with the AI infrastructure and agent technologies we've purposefully built give us a differentiated foundation to reimagine our business ecosystem, accelerating growth and unlocking new avenues of innovation. Amid these challenges, we made meaningful progress on the 2 strategic priorities that will define Yiren Digital's next chapter, the continued scaling of Internet insurance distribution as our second core growth engine and the accelerating integration of AI capabilities across our business operations. Both are delivering results and both give us confidence in the trajectory ahead. For years, we have applied our proprietary AI capabilities to continuously analyze our platform data, systematically searching for where our next growth opportunity lies. That process of disciplined discovery led us to a clear and compelling insight. Our users demonstrated strong validated demand for online insurance products, demand that was underserved and ripe for a technology-driven solution. In the third quarter of 2025, gross written premiums generated through our Internet insurance distribution business surged by 206% quarter-over-quarter. This strong momentum continued in the fourth quarter with another 95% quarter-over-quarter growth and the revenue contribution to the segment had reached 22% in the fourth quarter. 2025 was also a landmark year in the comprehensive build-out of our AI infrastructure, where we closed the gaps and reached significant milestones. Following the regulatory filing of Zhiyu, our proprietary large language model in April, we launched Magicube in October, our internally developed agent integration platform purpose-built for enterprise scale AI deployment. Magicube is the connective infrastructure that enables large-scale coordinated deployment of multi-agents across every critical function of our credit lending business from sales and risk management to capital planning, compliance and customer service. With Magicube in place, we have laid the foundation to automate processes with AI-driven agents throughout our operations. A transformation that we believe will fundamentally redefine how Yiren Digital operates and competes in the marketplace. The depth of our AI integration is best reflected in its financial impact. In 2025, AI-driven optimizations generated cost savings exceeding RMB 80 million, driven by the deployment of AIGC for marketing and AI-assisted outbound customer service, capabilities that have structurally reduced our dependence on both external vendors and internal headcount and better cost and capital efficiency. The operational impact of our AI deployment is best illustrated through concrete examples. Response times for our real-time AIGC-powered customer service [indiscernible] generation were cut by more than half from 1.2 seconds to under 0.6 seconds, delivering measurably smoother customer interactions at scale. In a particularly compelling demonstration of our internal AI capabilities, our R&D team rebuilt our IVR system entirely in-house, decreasing our dependence on an external vendor and reducing the cost per call by 84% from RMB 0.95 to RMB 0.15. Meanwhile, our AI-powered intelligent routing 2.0 system brought a step change in productivity to our fund management team, replacing legacy Excel-based workflows with an intelligent natural language interface driven by our 2 proprietary AI agents, YiQ agent and ZhuQue bot, fundamentally modernizing how our team operates day-to-day. These technological advancements are not just improving how we operate, they are redefining who we are. Our AI-enabled capabilities across intelligent marketing, smart capital management and advanced risk control have strengthened our ability to deliver technology solutions to the broader credit industry. Revenue from technology-driven services, including networking, marketing and technical support has grown significantly year-over-year, validating the commercial potential of our AI capabilities beyond our core business. We are now accelerating this growth to transform the company from a fintech platform into an AI-native company for multiple industries. Finally, I'd like to review the performance of our credit solutions business against the market backdrop in 2025. In the fourth quarter, we facilitated RMB 12.0 billion in loan originations, moderated by 22% year-over-year and 40% quarter-over-quarter. The moderation reflected our financial discipline when credit environment was difficult. We focused on higher quality credit during the quarter, which led to reduction in loan facilitation activities. For the full year, however, total loan facilitation reached RMB 67.8 billion, up by 26% from RMB 53.6 billion in 2024. As of December 31, 2025, the cumulative number of borrowers we have served exceeded RMB 14.3 million, representing a 16% increase from approximately RMB 12.4 million at the end of 2024. During 2025, we strengthened our customer analytics and operational management with a particular focus on maximizing the lifetime value of high-quality repeat borrowers. At the same time, we maintained a prudent approach toward new customer acquisition. Through enhanced data analytics and more refined customer segmentation, we prioritized the management and engagement of high-quality existing borrowers. As a result, our repeat borrowing volume remained high at 77% in the fourth quarter of 2025 compared to 65% in the same period of 2024. Meanwhile, the average loan ticket size on our lending platform increased from RMB 8,000 in the fourth quarter to RMB 11,500 in the fourth quarter of 2025. These operational strategies allowed us to effectively control customer acquisition costs while retaining higher-quality borrowers with deeper credit insights and stronger brand trust. The quality from the legacy assets came under pressure in the fourth quarter with the delinquency rate reaching a cyclical high in October. Our 1- to 30-day delinquency rate for fourth quarter reached 3.4%. The 31- to 60-day rate was 3.0% and the 61- to 90-day rate stood at 2.8%. These levels are in line with industry trends and the macroeconomic environment. During 2025, assets under the risk-taking model nearly doubled, which contributed to an increase in our guaranteed service revenue as a result of changing credit requirements by our partners. Encouragingly, our lending -- our leading risk indicators are beginning to turn. Our first payment default rate FPD30 for loan delinquency over 30 days has been on a declining trend since October 2025, recently approaching the levels observed in the first half year of 2025. We believe these are early but meaningful signals that the credit cycle is gradually turning, and we expect a broader easing of the credit environment to support continued improvement in both industry conditions and our own asset quality metrics, giving us well-funded confidence in our ability to deliver disciplined and stable operations in 2026. On the institutional funding side, we secured wide list status with 29 institutional funding partners as of the end of 2025, and this number continues to grow in the new year, reflecting recognition of our risk management capability and financial discipline by our partners as well as less competition in the market and the new regulatory framework. As the industry digests the impact of the new regulations and the market consolidates, we are confident that leading highly compliant players like us will benefit. In overseas markets, we expect to gradually expand our operations in the existing Philippines and Indonesian markets while maintaining prudent financial discipline and a clear focus on profitability. We look forward to showing more results in the coming quarters. As mentioned earlier, our traditional insurance brokerage business, which is predominantly anchored in a traditional sales network has found new direction of growth. Amid the regulatory headwind on commission rate and the macroeconomic challenges in the fourth quarter, gross written premiums of our insurance brokerage business reached RMB 860.1 million, down 22% year-over-year, while full year premiums reached RMB 3.7 billion, a 17% decline from 2024. However, the composition of the revenue and the premium has changed significantly as contribution from Internet insurance business increased rapidly in the past few quarters, largely filling up the gap from the traditional line. Our Internet insurance business has delivered a meaningful expansion in both customer base and policy volumes, reinforcing our conviction that Internet insurance represents a sustainable and scalable second growth engine for Yiren Digital. For the insurance brokerage business as a whole, at the end of 2025, we had served over 2 million insurance clients, up 33% from 1.53 million at the end of 2024. New policies issued reached 2.3 million, a 25% increase from 1.8 million in 2024. As Internet insurance continues to contribute more to our total brokerage revenue in 2026 and serves as a low-cost customer acquisition channel for the entire platform, we are confident that our insurance business will successfully turn to both growth and profitability. To summarize, 2025 was a year that demanded resilience and revealed opportunity. We navigated one of the most challenging credit environments in recent history while simultaneously advancing our transformation into a next-generation fintech driven by AI. The explosive global growth of AI is reshaping customer -- consumer credit, insurance and industries far beyond, and we intend to be at the forefront of that transformation, not merely a participant in it. We are actively building towards that future, incubating AI native business models, developing technology-driven revenue streams from our credit solutions and reshaping our insurance brokerage business by fully integrating our online and offline capabilities as the cornerstone of long-term growth. Encouragingly, leading indicators increasingly signal that the worst of the credit stress cycle is behind us and our core lending business is embracing recovery with renewed momentum. As we enter 2026, we are optimistic about the recovery of our core business. We are confident in our strategy and commitment from the team that delivered through one of the most demanding years. Our AI foundation has been laid, and we continue building it. With that, I will now pass it over to William, who will provide more details on the financials for this quarter and the full year. Ka Hui: Thank you, Ning. Hello, everyone. I will be walking you through our financial performance for the fourth quarter and full year 2025. Please refer to our earnings release and IR deck for further details, both available on our website. This quarter reflects continued progress across several of our key strategic priorities. First, our investment in AI are beginning to translate into tangible outcomes. We achieved direct net cost savings of approximately RMB 80 million, driven by improvements in areas such as high sales conversion, customer service automation and risk management efficiency. This figure excludes other business benefits from AI such as avoidance of fraud losses, savings from staff training and other indirect cost savings because of AI. In addition, our proprietary AI technology is beginning to generate revenue in new business within the credit solutions and Internet insurance segment. Second, our Internet insurance business continues to gain momentum. During the quarter, we recorded gross written premiums of RMB 50 million, representing 95% quarter-over-quarter growth. The annualized premium reached RMB 267 million in the fourth quarter, representing 36% growth quarter-over-quarter, up from a negligible amount in the fourth quarter of 2024. The revenue accounted for 22% of the revenue from our entire insurance segment in the fourth quarter of 2025. We expect this revenue contribution to continue to grow and take a bigger revenue share in 2026. For the credit solutions business, 2025 was a unique year. We began with a very good growth momentum, seeing a 43% growth in loan facilitation volume in the first half of 2025. However, we subsequently faced a downward trend in the credit cycle alongside with regulatory changes. In the second half of 2025, we shift our strategic priority to credit quality over loan growth, resulting in a 22% year-over-year contraction in our loan volume. Having said that, we are seeing early signs of turnaround in our credit cycle. Key credit metrics have improved. The 30 days first payment delinquency or FPD rate peaked in October 2025 and began to stabilize and trend down in November 2025. Figures for December 2025 and January 2026 have improved more than expected. The delinquency rate in February was 38% below the peak, which is already back to the May 2025 level when credit quality began to deteriorate. However, as a reminder, there is typically a lag of 1 or 2 quarters before these improvements are fully reflected in our financial results. Overall, we remain focused on maintaining strong balance sheet with cash positions of RMB 3.3 billion, while continuing to invest in AI capabilities and high-growth opportunities. We believe this balanced approach positions us well for sustainable long-term growth. Turning to the key financial figures for the fourth quarter and full year of 2025. Total revenue for the full year 2025 was RMB 5.72 billion, representing 1.5% decrease from 2024. The decrease was a result of prioritizing credit quality over loan growth in the second half of the year as we tightened our credit policy in response to a challenging credit environment. Full year loan facilitation volume was RMB 67.8 billion, representing 26% growth comparing to the full year of 2024. This growth was driven by strong performance in the first 3 quarters partially offset by a contraction in loan volume during the fourth quarter of 2025. Our guarantee services also saw significant growth with revenue reaching RMB 612 million in the fourth quarter of 2025, up nearly 196% year-over-year as we shift more loan origination to a risk-taking model during the year. Regarding credit quality, our 31 to 60 days and 61 to 90 days delinquency rates reached 3% and 2.8%, respectively, in the fourth quarter, while the 1 to 30 days delinquency rate reached 3.4% in the fourth quarter of 2025. This reflects the higher risk environment and in response, we have tightened our credit policies. Our upgraded AI-driven risk management system is enabling us to more frequently and effectively assess and mitigate risk across our portfolio. Looking at the same metrics on a monthly basis, the delinquency rate peaked in October and gradually decreased in December 2025. For instance, the 1 to 30 days FPD rate decreased by 38% from October 2025 to January 2026. For the customer acquisitions, our AI models have enhanced our ability to understand customer behavior and execute more effective precision marketing strategies to drive higher sales conversion. As a result, customer acquisition cost as a percentage of total loan facilitation volume declined by 80 basis points to a record low in the fourth quarter compared to the same period in 2024. In the insurance brokerage segment, our gross written premium decreased by 22% year-over-year to RMB 860 million in the fourth quarter of 2025, and the full year gross premium was down by 17% year-over-year. The decrease was due to premium from the traditional channel which decreased by RMB 290 million. That decrease was partially offset by RMB 50 million increase from the insurance -- from the Internet insurance. For the fourth quarter of 2025, revenue from the overall insurance brokerage segment was RMB 84 million compared to RMB 106 million in the same period of 2024. The Internet insurance revenue contributions accounts for 22% of the total segment revenue in the fourth quarter and 14% for the full year of 2025. It has become a significant part of the business. The integration of our online and offline channel, combined with our AI-driven sales and servicing capabilities, enhance the overall customer experience while supporting more competitive customer acquisition cost structure for our traditional business. This integrated approach also creates opportunities for increased synergies across channels. We also recorded technology-driven marketing service revenue in the fourth quarter as we are transforming our organization into an AI solution platform company. We look forward to presenting you more details in the coming quarters as these services scale. On the expense side, sales and marketing expenses in the fourth quarter of 2025 decreased by 31% year-over-year to RMB 206 million. This is attributable to lower origination volume, lower acquisition cost for new customer driven by AI and an increase in our repeat borrower ratio to 76% through the year. The overall customer acquisition cost as a percentage of loan volume decreased by 80 basis points in the fourth quarter of 2025 compared to the same period of 2024. It was a record low, reflecting less competition in the market as some players exited the market following the new regulation and also our AI marketing strategy, which was driving a better customer acquisition efficiency. Research and development expenses decreased by 26% year-over-year to RMB 121 million in the fourth quarter of 2025. This was due to a high base effect from the expense of our credit analysis system development project in the second half of 2024. The full year R&D expenses were RMB 407 million, representing 1.3% decrease from 2024. With the innovative AI tools we are building more for less, we will continue to invest in talent and AI infrastructure to enhance the overall productivity of the R&D team. Origination, servicing and other operating costs increased by 27% year-over-year to RMB 251 million in the fourth quarter of 2025. This was driven by increased commission rates for asset recovery services to boost collection incentive during a challenging credit environment. Full year origination and servicing costs decreased by 11% to RMB 786 million, driven by decrease in insurance brokerage business costs, along with the increased AI automation as over 81% of our first payment delinquent cases are being handled by our AI agents. General and administrative expenses for the quarter increased by 4.8% year-over-year to RMB 44 million. We have imposed tighter cost control to lower the expenses further. The allowance for contract assets and receivable for the fourth quarter decreased by 46% year-over-year to RMB 296 million, driven by higher receivables from guaranteed services and financing services amid industry level higher risk profile of assets. Provisions for contingent liability this quarter increased by 343% year-over-year to RMB 1.1 billion, reflecting the growth in loan origination volume under the risk-taking model, which grew by 48% year-over-year. Under the current accounting standard, we are required to recognize provisions for contingent liability immediately upon loan origination under the risk-taking model, while the corresponding revenue is amortized over the loan period. The increasing proportion of the risk-taking model loan volume has -- will continue to have an accounting impact on our earnings in the coming quarters. As previously noted, accounting standards give rise to a timing mismatch that results in a near-term earning pressure when we taking model loan volume growth because standby guarantee liability is recorded on the balance sheet at loan inception. This liability will be amortized to become guaranteed service revenue over the guaranteed period in the future, where the provisions for the associated guarantee-related contingent liability and standby guarantee liabilities are recognized upfront in accordance with GAAP, resulting in timing mismatch for revenue and cost, this timing mismatch is expected to normalize when the loan balance under the risk-taking model stabilize when the amortized revenues from the legacy assets balance out the provisions from new loans. For the fourth quarter of 2025, GAAP net loss amounts to RMB 882 million, largely due to higher accounting provisions driven from the guarantee business, as mentioned. The moderation in performance of the traditional insurance business and RMB 109 million fair value loss on the crypto assets. For the full year of 2025, the GAAP net income was RMB 14.5 million. To match the revenue and contingent liability accrual after adjusting for revenue from the stand ready guarantee liabilities, our non-GAAP net income for the full year 2025 was about RMB 834 million. So regarding our cash flow, we recorded a net cash outflow from our operation of RMB 198 million in the fourth quarter of 2025, but our balance sheet remains strong with cash and cash equivalents of RMB 3.3 billion as of December 31, 2025. Looking ahead to 2026, our non-lending business will continue to drive our revenue growth, while our credit performance continued to improve on a sequential basis. As this is a conservative forecast as our delinquency figures are improving more than expected, we may revise our forecast during the year. Overall, we are optimistic about the business as the core business has shown signs of recovery. Our Internet business has become a significant growth contributor, and our AI platform engine is starting to deliver results. So that's the end of our presentation. Operator, back to you. Operator: [Operator Instructions] And our first question will come from [ Connie Gu ] with [indiscernible]. Unknown Analyst: And my question is about AI. You mentioned that internal AI transformation has brought significant cost savings to the company in 2025. So looking to the longer term, do you expect further cost savings or a broader potential for AI application scenarios? And when we compare in-house developed AI agents to the third-party ones, what are the specific advantages? And how do you view the security of the popular AI tools lately like open? Ning Tang: Thank you for your question regarding AI. And actually, let me, explain more, talk more about our AI strategy. And I think it's extremely important because we are, as I reported earlier on, redefining the company. Yes, previously, it's a fintech company utilizing technology to do better finance credit work to begin with. Then we included insurance. But in the future, it's going to be an AI agent, AI native company, not only for credit and insurance subsectors, but also for more financial services subsectors and a few select industries in the coming couple of years. So basically, it's going to be a different value proposition evolving from our past. Let me explain more. Yes. So when we first started to utilize AI. It was more like a tool for cost savings to do our existing processes better, cheaper. Yes, AI as a tool. That's like in like 2023, 2024, but from last year and even more so this year, you just mentioned the [ OpenClaw ], AI is now a colleague is now a person, yes, a worker. So that means we are going to do businesses differently. We're going to reengineer our business processes for credit and insurance existing businesses. And at the same time, because our technologies, our AI capabilities have been well tested, proven in this heavily regulated demanding super tight security standard industries, sectors, our AI capabilities, our agents can be utilized for other financial services needs, subsectors and going beyond financial services subsectors to more industries. So this is the strategy. This is the development process, yes. So going forward, we're going to do AI more and more for our credit, for our insurance businesses. But at the same time, we'll look for more subsectors in financial services and new verticals beyond financial services to leverage our AI capabilities, proven capabilities, yes. So this is the strategy we have. And my vision is after 1 year, 2 years, 3 years, Yiren Digital will be a different company. It's not totally away from our traditional businesses. They will do -- we will do like credit, we'll do insurance. These are great applications for AI. But at the same time, we're going to do more. Yes, there are better also subsectors for AI applications, agents and growth for us going forward. So this is the strategy we have in mind, and we are executing. Thank you. Ka Hui: Yes. Just to add to Ning's comment with the numbers, in 2025, we already achieved a cost saving of RMB 80 million, and that is on top -- and those are the direct -- just the direct costs, and that's on top of other indirect cost savings such as the avoidance of fraud losses, which was approximately RMB 180 million last year and also other costs like the staff training and office space and all that. So I think just to add on to Ning's comments, we are transforming the company from just being using the AI to save cost to using the AI to generate revenue. So the -- what AI will help us is it will reduce our time to market with the technologies and also the analytics that will help us to identify new business opportunities. Operator: The next question will come from [ Wang Yang ] with [indiscernible] Securities. Unknown Analyst: [Interpreted] Since the new loan facilitation regulation issued in October 2025, the industry has generally experienced a significant impact. Has the company seen any improvement in this effect so far? How do you expect the industry risk environment to evolve over the course of the year? Ka Hui: Okay. Thank you. Thank you for your questions. Based on our credit performance metrics, our risk level peak in the last October and now showing signs of recovery. The new industry regulation had a short-term impact on us, our funding partners and our peers. We believe the industry has already adapted to this short-term impact, position itself for better long-term development. Our January FPD30 and DPD30 metrics, which track 30 days delinquency rate have dropped by 38% to the level seen in May 2025 when this cycle began. When the new regulation took effect in October, our cost of capital -- sorry, since the new regulation took effect in October, our cost of capital has decreased by 93 basis points. Meanwhile, our customer acquisition cost as a percentage of loan volume continued to drop by another 0.8% to a record low now. So indicating after the new regulation, the competition is -- has been eased, and we view this as a positive signal. And our balance sheet remains solid, providing the financial strength to manage potential risk as these improvements continue to flow through the business. But overall, we remain confident in the long-term fundamentals of our business. We think the new business will make the industry healthier. Thank you. Operator: The next question will come from [ Yulong Yu ]. Unknown Analyst: [Interpreted] I have noticed that the company's Internet insurance distribution business has demonstrated strong breakout growth. Could you elaborate on the development targets and strategic priorities for this segment in the new year? Additionally, compared with traditional insurance distribution models, where do you see our key competitive advantages are? Ning Tang: Okay. Let me take the first crack and yes, William can add to it. The insurance -- internet insurance business market potential is very big. Yes. And you may well remember that our credit facilitation business actually was quite offline several years ago. And then we successfully moved it to online to, yes, digitally transform the business. That was absolutely necessary, the right thing to do, bring us growth opportunities. And the same is happening for our insurance brokerage business, but not exactly the same, let me explain. Well, more and more businesses are moving online, yes. So the online part will be bigger and bigger contribution to our insurance business, top line, bottom line. And the same is happening as the credit business going from offline to online. The difference is we will still have offline part, but that offline part is also going to be more and more kind of like the so-called offline and online, meaning our offline colleagues will do more and more online activities like live streaming, like WeChat, Douyin kind of applications. We'll do that more and more. So the offline part will be also more and more effective. And as you have seen, the online part, the purely online part is showing great potential, super fast growth. And that's also very promising. So going forward, the insurance brokerage business will have this, yes, high growing like online part and also a more efficient like offline part kind of being offline, online combined model. Yes. So this is the vision we have for our insurance business. And William, do you have anything to add? And by the way, I'd like to add something why like our online Internet insurance business is growing, yes, so fast, much faster than our credit business transforming from offline to online because pretty much all the tools have been built for the credit business, the analytics, the AI agents, capabilities, so on, have been built. So it's a much faster acceleration process. And the same logic goes for what I just mentioned, us moving to other like verticals, other industries, the same kind of AI infrastructure, the agent capabilities have been built. Of course, we need to add new kind of like vertical domain expertise. That's also essential. But to begin with, the technology platform capabilities have been built. So it's a much faster, much accelerated process. Thank you. Operator: And that will conclude our question-and-answer session. If you have any further questions, please connect to the IR team of the Yiren Digital or Piacente Financial Communications. 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See the 10 stocks » *Stock Advisor returns as of June 2, 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. Yiren Digital (YRD) Q4 2025 Earnings Transcript was originally published by The Motley Fool

Yiren Digital Ltd. reported past fourth-quarter 2025 revenue of CNY 957.63 million versus CNY 1,452.19 million a year earlier, swinging to a net loss of CNY 882.16 million, and also posted a full-year 2025 profit of CNY 40.53 million compared with CNY 1.58 billion previously. Alongside these sharply weaker results, the board decided to temporarily suspend the second-half 2025 cash dividend to preserve capital for potential credit volatility and technology investment. With earnings weakening and the dividend on hold, we will now examine how this shift in capital priorities affects Yiren Digital’s investment narrative. Rare earth metals are the new gold rush. Find out which 28 stocks are leading the charge. For anyone considering Yiren Digital today, the core belief has to be that its fintech and AI capabilities can translate into sustainable, higher‑quality earnings over time, despite a bruising reset in 2025. The latest quarter’s sharp swing to a CNY 882.16 million loss, together with the suspension of the second‑half dividend, directly challenges the earlier income‑and‑growth narrative and brings balance sheet resilience and credit risk management to the forefront. Short‑term catalysts now hinge less on headline growth and more on evidence that credit costs are under control, that the lending book remains sound, and that technology spending is disciplined and accretive. With the share price having fallen very sharply in recent months, the market already appears to be pricing in a meaningful step‑up in risk. However, the scale and timing of potential credit volatility is something investors should be aware of. Despite retreating, Yiren Digital's shares might still be trading above their fair value and there could be some more downside. Discover how much. The Simply Wall St Community’s single fair value estimate clusters at US$41.63 per share, while recent results highlight shrinking margins and a suspended dividend, prompting you to weigh very different expectations for Yiren Digital’s trajectory. Explore another fair value estimate on Yiren Digital - why the stock might be a potential multi-bagger! Disagree with this assessment? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Yiren Digital research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision. Our free Yiren Digital research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Yiren Digital's overall financial health at a glance. Opportunities like this don't last. These are today's most promising picks. Check them out now: Invest in the nuclear renaissance through our list of 89 elite nuclear energy infrastructure plays powering the global AI revolution. Capitalize on the AI infrastructure supercycle with our selection of the 35 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. Outshine the giants: these 21 early-stage AI stocks could fund your retirement. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include YRD. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Total Revenue (2025): RMB5.72 billion, a 1.5% decrease from 2024. Loan Facilitation Volume (2025): RMB67.8 billion, a 26% increase from 2024. Gross Written Premiums (Q4 2025): RMB860 million, a 22% decrease year over year. Internet Insurance Revenue Contribution (Q4 2025): 22% of the total Insurance segment revenue. AI-Driven Cost Savings (2025): Exceeded RMB80 million. Delinquency Rates (Q4 2025): 1-30 days at 3.4%, 31-60 days at 3.0%, 61-90 days at 2.8%. GAAP Net Loss (Q4 2025): RMB882 million. Non-GAAP Net Income (2025): RMB834 million. Cash and Cash Equivalents (End of 2025): RMB3.3 billion. Customer Acquisition Cost: Declined by 80 basis points in Q4 2025 compared to Q4 2024. R&D Expenses (Q4 2025): RMB121 million, a 26% decrease year over year. Sales and Marketing Expenses (Q4 2025): RMB206 million, a 31% decrease year over year. Warning! GuruFocus has detected 3 Warning Signs with YRD. Is YRD fairly valued? Test your thesis with our free DCF calculator. Release Date: March 19, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Yiren Digital Ltd (NYSE:YRD) achieved significant AI-driven cost savings of over RMB80 million in 2025, enhancing operational efficiency. The Internet Insurance business experienced robust growth, with gross written premiums increasing by 95% quarter-over-quarter in Q4 2025. The company successfully launched its proprietary AI platform, MagiCube, which is expected to transform business operations and improve efficiency. Yiren Digital Ltd (NYSE:YRD) maintained a strong cash position with RMB3.3 billion in cash and cash equivalents as of December 31, 2025. The company reported a 26% year-over-year increase in total loan facilitation volume for 2025, reaching RMB67.8 billion. Yiren Digital Ltd (NYSE:YRD) faced a challenging credit environment, resulting in a 22% year-over-year contraction in loan volume in Q4 2025. The traditional Insurance Brokerage business saw a decline, with gross written premiums down 22% year-over-year in Q4 2025. The company reported a GAAP net loss of RMB882 million for Q4 2025, largely due to higher accounting provisions from the guarantee business. Delinquency rates increased, with the 1- to 30-day delinquency rate reaching 3.4% in Q4 2025, reflecting a higher risk environment. Provisions for contingent liability increased significantly by 343% year-over-year to RMB1.1 billion in Q4 2025, impacting earnings. Q: My question is about AI. You mentioned that internal AI transformation has brought significant cost savings to the company in 2025. Do you expect further cost savings or broader potential for AI application scenarios? What are the specific advantages of in-house developed AI agents compared to third-party ones? A: Ning Tang, CEO: Our AI strategy is crucial as we redefine Yiren Digital from a fintech company to an AI-native company. Initially, AI was a tool for cost savings, but now it's a colleague, transforming business processes. Our AI capabilities, proven in regulated industries, will expand beyond financial services. We aim to leverage AI for credit, insurance, and new sectors. William Hui, CFO: In 2025, AI saved RMB80 million in direct costs, plus indirect savings like fraud loss avoidance. AI will help us identify new business opportunities and generate revenue. Q: Since the new loan facilitation regulation issued in October 2025, has the company seen any improvement in their effects? How do you expect the industry risk environment to evolve over the year? A: Ka Chun William Hui, CFO: Our risk level peaked in October and is now recovering. The new regulation had a short-term impact, but the industry is adapting. Our delinquency metrics have improved, and our cost of capital has decreased. Customer acquisition costs have also dropped, indicating eased competition. We remain confident in the long-term fundamentals of our business. Q: The company's Internet insurance distribution business has shown strong growth. Could you elaborate on the development targets and strategic priorities for this segment in the new year? What are our key competitive advantages compared to traditional insurance distribution models? A: Ning Tang, CEO: The Internet Insurance market potential is significant. Our credit facilitation business successfully moved online, and the same is happening for our Insurance Brokerage business. The online part is growing rapidly, and the offline part will become more effective with online activities. Our AI tools, built for the Credit business, accelerate this transformation. The Insurance business will have a high-growth online part and a more efficient offline-online combined model. Q: How has the company's AI-driven risk management system impacted credit quality and delinquency rates? A: Ka Chun William Hui, CFO: Our AI-driven risk management system has enabled us to assess and mitigate risks more effectively. Delinquency rates peaked in October 2025 and have since decreased. The 1 to 30 days FPD rate dropped by 38% from October 2025 to January 2026. These improvements are expected to reflect in our financial results over the next few quarters. Q: What are the financial highlights for Yiren Digital in the fourth quarter and full year of 2025? A: Ka Chun William Hui, CFO: Total revenue for 2025 was RMB5.72 billion, a 1.5% decrease from 2024. Loan facilitation volume grew by 26% to RMB67.8 billion. Guarantee services revenue increased significantly. Delinquency rates reflected a higher risk environment, but our AI-driven risk management system is improving credit quality. We achieved cost savings through AI, and our balance sheet remains strong with RMB3.3 billion in cash. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

AI adoption drove tangible efficiencies: Yiren Digital filed its LLM Zhiyu and launched multi-agent platform Magic Cube, reporting more than RMB 80 million in direct net cost savings in 2025 and roughly RMB 180 million in fraud‑loss avoidance. Internet insurance is a fast‑growing second engine: Gross written premiums jumped 206% QoQ in Q3 and 95% QoQ in Q4, accounting for 22% of segment revenue in Q4 with annualized premium at RMB 267 million and further growth expected in 2026. Credit mix, provisions and earnings impact: Q4 loan facilitation fell to RMB 12.0 billion (‑22% YoY, ‑40% QoQ) as the firm shifted to higher‑quality loans; provisions for contingent liabilities surged 343% to RMB 1.1 billion, driving a Q4 GAAP net loss of RMB 882 million despite full‑year GAAP net income of RMB 144.5 million (non‑GAAP ~RMB 834 million) and ending the year with RMB 3.3 billion in cash. Interested in Yirendai Ltd.? Here are five stocks we like better. Yirendai (NYSE:YRD) used its fourth-quarter and full-year 2025 earnings call to highlight a year of regulatory and credit-cycle pressure alongside rapid progress in artificial intelligence and a fast-growing internet insurance distribution business. Founder, Chairman, and CEO Ning Tang said 2025 “demanded the best of us,” but added that the company is entering 2026 with “growing confidence” as its next-generation platform gains traction and leading credit indicators begin to improve. Tang positioned AI as central to the company’s strategy, noting Yiren Digital completed the regulatory filing of its proprietary large language model, Zhiyu, in April 2025 and later released its first multi-agent platform, Magic Cube, in October. He described Magic Cube as an internal “connective infrastructure” designed to enable coordinated deployment of AI agents across functions including sales, risk management, capital planning, compliance, and customer service. → Forget Chipmakers: Walmart and Target Are the Real AI Plays Management tied AI adoption to measurable efficiency gains. Tang said AI-driven optimizations generated more than RMB 80 million in cost savings in 2025, driven by AI-generated content in marketing and AI-assisted outbound customer service. He also cited specific operational examples, including cutting real-time AI customer service script generation response time from 1.2 seconds to under 0.6 seconds and rebuilding an in-house IVR system that reduced cost per call by 84% (from RMB 0.95 to RMB 0.15). Chief Financial Officer William Hui reiterated the RMB 80 million figure as direct net cost savings and said it excludes other benefits such as fraud-loss avoidance, staff training savings, and other indirect efficiencies. In the Q&A, Hui added that fraud-loss avoidance was approximately RMB 180 million in 2025. → Expedia Stock Turns Volatile After Rally. Where Does It Go Next? In response to an analyst question about the longer-term opportunity for AI, Tang said the company’s ambition is shifting from “AI as a tool” for cost savings to “AI as a colleague,” with business processes re-engineered around agents. He also argued that the company’s AI capabilities have been “well-tested” in heavily regulated environments and could be applied to additional financial services subsectors and select industries beyond financial services over the next few years. Management repeatedly pointed to internet insurance as an emerging “second core growth engine.” Tang said gross written premiums (GWP) from the internet insurance distribution business rose 206% quarter-over-quarter in the third quarter of 2025 and a further 95% quarter-over-quarter in the fourth quarter. He stated that internet insurance contributed 22% of segment revenue in the fourth quarter. → The SkyWater Deal: IonQ's Bid for Quantum Supremacy Hui provided additional quarterly detail, saying the company recorded RMB 50 million in fourth-quarter internet insurance GWP, up 95% sequentially, and that annualized premium reached RMB 267 million in the fourth quarter, representing 36% quarter-over-quarter growth and rising from a negligible level in the year-ago period. He said internet insurance accounted for 22% of insurance segment revenue in the quarter and 14% for the full year, and management expects that share to increase further in 2026. While internet insurance grew quickly, the broader insurance brokerage business faced headwinds. Tang said fourth-quarter insurance brokerage GWP was RMB 860.1 million, down 22% year-over-year, and full-year GWP was RMB 3.7 billion, down 17% from 2024. Hui attributed the decline to a RMB 290 million drop in premiums from the traditional channel, partially offset by a RMB 50 million increase from internet insurance. Despite lower premiums, Tang said total insurance clients served exceeded 2 million at the end of 2025, up 33% from 1.53 million a year earlier, and new policies issued reached 2.3 million, up 25% from 2024. In the Q&A, Tang said the company’s strategic direction is an “offline and online combined model,” with offline teams increasingly using online tools such as live streaming and social platforms. He also argued that internet insurance is scaling faster than the company’s earlier transition of credit facilitation from offline to online because many of the analytics and AI agent capabilities have already been built and can be reused. On the credit side, Tang said the company facilitated RMB 12.0 billion in loan originations in the fourth quarter, down 22% year-over-year and 40% quarter-over-quarter, reflecting a deliberate shift toward higher-quality credit as the credit environment deteriorated. For the full year, loan facilitation totaled RMB 67.8 billion, up 26% from RMB 53.6 billion in 2024, which management said was driven by strong performance earlier in the year. Tang said cumulative borrowers served exceeded 14.3 million as of December 31, 2025, up 16% from approximately 12.4 million at the end of 2024. He also highlighted a greater emphasis on repeat borrowers and refined segmentation: repeat borrowing volume was 77% in the fourth quarter (up from 65% a year earlier), and average loan ticket size increased from RMB 8,000 in the first quarter to RMB 11,500 in the fourth quarter. Asset quality weakened in the fourth quarter, which Tang said included a cyclical high in October. He reported fourth-quarter delinquency rates of 3.4% for 1–30 days, 3.0% for 31–60 days, and 2.8% for 61–90 days. However, both Tang and Hui said leading indicators improved after October. Tang said first payment default (FPD 30) trended downward since October and recently approached first-half 2025 levels. Hui provided more color on the trajectory, stating that the FPD rate peaked in October, stabilized and trended down in November, and that December 2025 and January 2026 improved more than expected. He added that February delinquency was 38% below the peak, returning to the May 2025 level, while cautioning that there is typically a one- to two-quarter lag before improvements are fully reflected in financial results. Hui said full-year 2025 total revenue was RMB 5.72 billion, down 1.5% from 2024, which he attributed to prioritizing credit quality over loan growth in the second half of the year. He also noted a sharp rise in guarantee services revenue, with fourth-quarter guarantee service revenue of RMB 612 million, up nearly 196% year-over-year, as more loan originations shifted to a risk-taking model. On expenses, Hui said fourth-quarter sales and marketing expense declined 31% year-over-year to RMB 206 million, reflecting lower origination volume, reduced acquisition costs driven by AI, and a higher repeat borrower ratio. R&D expense fell 26% year-over-year to RMB 121 million due to a high base from a prior-year credit analysis system development project. Origination, servicing, and other operating costs rose 27% year-over-year to RMB 251 million, driven by higher commission rates for asset recovery services, while full-year origination and servicing costs declined 11% to RMB 786 million, which Hui said was helped by insurance brokerage cost reductions and increased AI automation. He also said over 81% of first payment default cases are being handled by AI agents. Hui emphasized that the risk-taking model creates an accounting timing mismatch under GAAP: provisions for contingent liabilities are recognized at origination while related revenue is amortized over the loan period. He said fourth-quarter provisions for contingent liability increased 343% year-over-year to RMB 1.1 billion as risk-taking model loan volume grew 48% year-over-year, and that the higher proportion of risk-taking loans “has had, will continue to have” an accounting impact on earnings until the portfolio stabilizes. For the fourth quarter, Hui reported a GAAP net loss of RMB 882 million, which he attributed largely to higher accounting provisions tied to the guarantee business, moderation in traditional insurance performance, and a RMB 109 million fair value loss on crypto assets. For the full year, he reported GAAP net income of RMB 144.5 million and said non-GAAP net income for 2025 was approximately RMB 834 million after adjustments related to the guarantee accounting mismatch. Yiren Digital ended 2025 with RMB 3.3 billion in cash and cash equivalents. Hui said the company recorded a net cash outflow from operations of RMB 198 million in the fourth quarter but described the balance sheet as strong. Looking ahead, management said it expects non-lending businesses to drive revenue growth in 2026 while credit performance improves sequentially. In Q&A, the company said the industry has largely adapted to the October 2025 loan facilitation regulation, citing improved delinquency metrics, a reported 93 basis point decline in cost of capital since the regulation took effect, and a further decline in customer acquisition cost as a percentage of loan volume amid eased competition. Yirendai Ltd is a leading fintech credit marketplace in China, offering consumer financing solutions through a digital platform. As a subsidiary of CreditEase, one of the country’s earliest peer-to-peer lending pioneers, Yirendai facilitates connections between individual borrowers and institutional or retail investors. The company’s integrated platform handles borrower screening, credit assessment, risk management and loan servicing to deliver a streamlined, transparent lending experience. The company provides unsecured personal loans for purposes such as debt consolidation, home improvement and small business investment. The article "Yirendai Q4 Earnings Call Highlights" was originally published by MarketBeat.

BEIJING, March 19, 2026 /PRNewswire/ -- Yiren Digital Ltd. (NYSE: YRD) ("Yiren Digital" or the "Company"), a leading fintech company specializing in digital consumer lending, insurance and financial technology innovation across China and global markets, today announced its unaudited financial results for the fourth quarter and 2025 fiscal year ended December 31, 2025. Fourth Quarter and Fiscal Year 2025 Operational Highlights Credit Solution Business (formerly known as Financial Services Business) Total loans facilitated in the fourth quarter of 2025 was RMB12.0 billion (US$1.7 billion), representing a decrease of 40% compared to RMB20.2 billion in the third quarter of 2025 and a decrease of 22% compared to RMB15.4 billion in the same period of 2024. Total loans facilitated for the 2025 full year reached RMB67.8 billion (US$9.7 billion), representing an increase of 26% from RMB53.6 billion in 2024. Number of borrowers served in the fourth quarter of 2025 was 742,444, representing a decrease of 44% compared to 1,335,978 in the third quarter of 2025 and a decrease of 52% compared to 1,560,789 in the same period of 2024. The decrease was due to the strategic tightening of the credit policy amid ongoing industry-wide fluctuations in credit risk. Repeat borrowers' loan amount [1] accounted for 77% of the total volume of loans facilitated in the fourth quarter of 2025, in line with the third quarter of 2025. Repeat borrowers' loan amount percentage was 76% for the 2025 full year, compared to 59% in 2024. Cumulative number of borrowers served reached 14,295,499 as of December 31, 2025, representing an increase of 2% from 14,006,873 as of September 30, 2025, and an increase of 16% compared to 12,350,400 as of December 31, 2024. Outstanding balance of performing loans facilitated was RMB28.6 billion (US$4.1 billion) as of December 31, 2025, representing a decrease of 17% from RMB34.2 billion as of September 30, 2025, and an increase of 15% compared to RMB24.8 billion as of December 31, 2024. Insurance Brokerage Business Gross written premiums in the fourth quarter of 2025 were RMB860.1 million (US$123.0 million), representing a decrease of 25% from RMB1,148.0 million in the third quarter of 2025 and a decrease of 22% compared to RMB1,100.3 million in the same period of 2024. The decline was primarily due to reduced gross written premiums from broker channels, partially offset by the continued strong growth of the internet insurance distribution business. Cumulative number of insurance clients was 2,035,550 as of December 31, 2025, representing an increase of 10% from 1,853,435 as of September 30, 2025, and an increase of 33% from 1,532,119 as of December 31, 2024. Number of new insurance policies in the fourth quarter of 2025 was 824,225, representing a 16% increase from 710,079 in the third quarter of 2025, and a 68% increase from 490,409 in the same period of 2024. This was primarily driven by the rapid expansion of internet distribution channels throughout 2025. "Our early efforts to strengthen credit standards and proactively build financial buffers ahead of the industry downturn have allowed us to navigate a challenging market environment while maintaining stable operations," said Mr. Ning Tang, Chairman and Chief Executive Officer of Yiren Digital. "The AI-driven risk management system we built over the past two years is delivering measurable results, sharpening our credit decision-making capabilities and reinforcing our operational resilience in China's evolving credit market. These same AI capabilities are enabling us to scale our internet insurance distribution business, which sustained strong growth momentum in 2025 and meaningfully expanded our addressable market. Our strategic focus in 2026 is to deepen our AI-driven operating model and accelerate the transformation of our two core business segments into purpose-built frameworks that serve institutional and individual clients and generate more commercial opportunities from the AI technologies we have developed over the past few years." "Fiscal 2025 was a period of elevated credit risk across the consumer lending industry, and we met this environment with disciplined risk management and proactive balance sheet stewardship. We tightened our credit policy early and accumulated cash reserves to ensure we navigated the cycle with excess financial strength. Our internet insurance distribution business delivered strong momentum throughout the year, emerging as a meaningful contributor to revenue diversification and a proof point of our ability to scale new business lines," Mr. William Hui, Chief Financial Officer of Yiren Digital, commented. Fourth Quarter 2025 Financial Results Total net revenue in the fourth quarter of 2025 was RMB957.6 million (US$136.9 million), representing a decrease of 34% from RMB1,452.2 million in the fourth quarter of 2024. Within this, revenue from credit solution business was RMB832.7 million (US$119.1 million), representing a decrease of 21% from RMB1,047.8 million in the same period of 2024. The decrease was mainly attributed to a decline in service fee rate under the new regulatory framework and a proactive, strategic scale-back on the loan facilitation volume of credit solution business amid heightened market risks. Revenue from credit solution business accounted for 87% of total net revenue in the fourth quarter. Revenue from insurance brokerage business was RMB83.8 million (US$12.0 million) in the fourth quarter of 2025, representing a decrease of 21% from RMB106.4 million in the fourth quarter of 2024 due to structural compression in service fee rate in recent years. The internet distribution sub-segment has demonstrated strong growth momentum since mid-2025 and its contribution to total brokerage revenue is increasing significantly in the fourth quarter of 2025 to 22%. Revenue from other business was RMB41.1 million (US$5.9 million), compared with RMB298.0 million in the same period of 2024. The decrease was mainly attributable to the continued decline in sales through the e-commerce business. Sales and marketing expenses in the fourth quarter of 2025 were RMB206.1 million (US$29.5 million), a decrease of 31% compared to RMB298.5 million in the same period of 2024. This change was mainly attributable to a scale-down in facilitated loan volume in the fourth quarter of 2025, and a higher contribution from repeat borrowers through Yixianghua platform, which increased to 77%, compared with 65% in the same period last year, and a decrease in new customer acquisition costs as the result of AI-assisted precision marketing. Origination, servicing and other operating costs in the fourth quarter of 2025 were RMB250.9 million (US$35.9 million), representing a 27% increase from RMB197.2 million in the same period of 2024. The increase reflects a strategic decision to raise asset recovery commissions to incentivize stronger recovery performance amid a challenging credit environment. These incremental recovery costs were partially offset by meaningful savings from the accelerated deployment of AI agents and automation across the collection and customer service workflows, as well as disciplined cost management across broader operations. Research and development expenses in the fourth quarter of 2025 were RMB121.4 million (US$17.4 million), a decrease of 26% compared to RMB164.7 million in the same period of 2024, and an increase of 33% from RMB91.5 million in the third quarter of 2025. The year-over-year decrease in R&D expenses was mainly due to a high base resulting from a one-off development expense in the AI credit system in the second half of 2024. With that build largely complete, the deeper integration of AI automation tools across the credit analytic workflows in 2025 delivered measurable efficiency gains and a more optimized cost structure. R&D expenses increased in the fourth quarter compared to the third quarter due to increased investment in senior AI R&D talent to support the execution of the 2026 AI roadmap. General and administrative expenses in the fourth quarter of 2025 were RMB44.3 million (US$6.3 million), representing a modest increase of 5%, compared to RMB42.2 million in the same period of 2024 and a decrease of 58% from RMB104.4 million in the third quarter of 2025. As Yiren Digital continues to invest in talent and implement organizational restructuring to strengthen its operational capabilities, these expenses may have some seasonal fluctuation. Allowance for contract assets, receivables and others in the fourth quarter of 2025 was RMB295.8 million (US$42.3 million), compared to RMB203.1 million in the same period of 2024. The increase was driven by higher receivables from guarantee services and financing services, fueled by rising expected loss rates amid an industry-level higher risk profile of assets. Provision for contingent liabilities in the fourth quarter of 2025 was RMB1,110.1 million (US$158.7 million), compared to RMB250.7 million in the same period of 2024. The increase was primarily driven by the overall growth in loan volume originated under the risk-taking model[2], coupled with a higher-risk asset profile. Fair value adjustments gain/(loss) in the fourth quarter of 2025 was a loss of RMB84.9 million (US$12.1 million), compared to a gain of RMB16.9 million in the same period of 2024, and a gain of RMB161.3 million in the third quarter of 2025. The decrease primarily resulted from fair value changes in crypto assets, reflecting the overall decline in digital asset prices during the fourth quarter of 2025. Income tax benefit in the fourth quarter of 2025 was RMB245.3 million (US$35.1 million). Net loss for the fourth quarter of 2025 was RMB882.2 million (US$126.1 million), compared to a net income of RMB331.4 million in the same period in 2024. The loss primarily resulted from substantial upfront provisions recognized in the quarter for risk-taking model assets in the credit solution business — required by accounting standards for the expanding loan volume under the risk-taking model — along with a higher-risk asset profile and lower fee rates in the loan facilitation business under the new regulations. The short-term impact of accounting standards on earnings should normalize as the risk-taking loan balance stabilizes. Adjusted EBITDA[3] (non-GAAP) in the fourth quarter of 2025 was a loss of RMB1,022.8 million (US$146.3 million), compared to a gain of RMB319.5 million in the same period of 2024 and a gain of RMB236.8 million in the third quarter of 2025. Basic and diluted loss per ADS in the fourth quarter of 2025 were RMB10.1230 (US$1.4476) and RMB10.0650 (US$1.4392), respectively, compared to basic and diluted income per ADS of RMB3.8378 and RMB3.8156, respectively, in the same period of 2024. Net cash used in operating activities in the fourth quarter of 2025 was RMB197.6 million (US$28.3 million), compared to RMB373.0 million generated from operating activities in the same period of 2024. Net cash provided by investing activities in the fourth quarter of 2025 was RMB50.8 million (US$7.3 million), compared to RMB32.9 million used in investing activities in the same period of 2024. Net cash used in financing activities in the fourth quarter of 2025 was RMB234.1 million (US$33.5 million), compared to RMB114.3 million in the same period of 2024. As of December 31, 2025, cash and cash equivalents were RMB3,348.1 million (US$478.8 million), compared to RMB3,841.3 million as of December 31, 2024. As of December 31, 2025, the balance of financial investments was RMB483.7 million (US$69.2 million), compared to RMB437.2 million as of December 31, 2024. Delinquency rates[4]. As of December 31, 2025, the delinquency rates for loans that are past due for 1-30 days, 31-60 days and 61-90 days were 3.4%, 3.0% and 2.8%, respectively, compared to 2.7%, 1.7% and 1.4%, respectively, as of September 30, 2025. Fiscal Year 2025 Financial Results Total net revenue in 2025 was RMB5,719.2 million (US$817.8 million), representing a decrease of 1% from RMB5,805.9 million in 2024. By segment, revenue from credit solution business was RMB5,040.0 million (US$720.7 million), representing an increase of 45% from RMB3,473.1 million in 2024. The increase was primarily attributable to increased guarantee services revenue from overall growth in loan volume originated under the risk-taking model in 2025, as well as to increased revenue from marketing services and technical support services. Revenue from insurance brokerage business was RMB297.6 million (US$42.6 million) in 2025, representing a decrease of 27% from RMB408.4 million in 2024. The decline reflects structural compression in brokerage commission rates and tightened market conditions under enhanced regulatory oversight in recent years. However, the internet distribution channel has demonstrated strong growth momentum in 2025 and accounted for 14% of revenue in this segment for the whole year result. Revenue from other business was RMB381.6 million (US$54.6 million), compared with the revenue of RMB1,924.4 million in 2024. The decrease was mainly attributable to a continued decline in sales from the e-commerce business. Sales and marketing expenses in 2025 were RMB1,159.9 million (US$165.9 million), a 3% decrease compared to RMB1,196.4 million in 2024, while total loan facilitation increased by 26% in 2025, reflecting improved customer acquisition efficiency. The decline in sales and marketing expenses was mainly attributable to a higher contribution from repeat borrowers through the Yixianghua platform, which increased to 76% in 2025, compared with 59% in 2024. The increasing application of Artificial Intelligence Generated Content ("AIGC") and AI agents in tele-sales also contributed to the decrease in this expense. Origination, servicing and other operating costs in 2025 were RMB786.4 million (US$112.5 million), representing an 11% decrease from RMB883.0 million in 2024. This decrease was primarily driven by cost savings from decreased insurance brokerage business along with the broader use of AI agents to automate customer service, and enhanced cost discipline in overall operations. Research and development expenses in 2025 were RMB406.6 million (US$58.1 million), representing a decrease of 1% compared to RMB411.9 million in 2024. R&D expenses were well-balanced in 2025 as the AI credit system completed a major upgrade at the end of 2024, which created cost savings, offset by an increase in AI talent for future AI initiatives. General and administrative expenses in 2025 were RMB323.4 million (US$46.2 million), representing an increase of 18% compared to RMB274.7 million in 2024, primarily driven by the continuous investment in professionals and specialized talent to support business diversification and strengthen risk management, alongside organizational restructuring initiatives. Allowance for contract assets, receivables and others in 2025 was RMB892.7 million (US$127.6 million), compared to RMB523.6 million in 2024. The increase was driven by increased loan facilitation volume in 2025 compared to the prior year, which resulted in higher receivables and a corresponding increase in the allowance. Provision for contingent liabilities in 2025 was RMB2,366.3 million (US$338.4 million), compared to RMB869.3 million in 2024. The increase was primarily driven by the overall growth in loan volume originated under the risk-taking model in 2025, coupled with a higher-risk asset profile. Fair value adjustments gain in 2025 was RMB46.1 million (US$6.6 million) compared to RMB107.5 million in 2024. The decrease was mainly attributable to fair value changes in crypto assets, reflecting weaker digital asset prices in the fourth quarter of 2025. Income tax benefit in 2025 was RMB99.0 million (US$14.2 million), compared to an income tax expense of RMB279.2 million in 2024. Net income in 2025 was RMB40.5 million (US$5.8 million), compared to RMB1,582.3 million in 2024. The decrease primarily resulted from increasing allowance of contract assets and receivables due to more loan facilitation volume during the period, plus substantial upfront provisions recognized for the risk-taking model assets in the fourth quarter of 2025 required by accounting standards, along with a higher-risk asset profile and lower fee rates in the loan facilitation business under new regulations. The short-term impact of accounting standards on earnings should normalize as the risk-taking loan balance stabilizes. Adjusted EBITDA (non-GAAP) in 2025 was a loss of RMB109.6 million (US$15.7 million), compared to a gain of RMB1,776.2 million in 2024. Basic and diluted income per ADS in 2025 were RMB0.4670 (US$0.0668) and RMB0.4640 (US$0.0664), respectively, compared to RMB18.2654 and RMB18.1132, respectively, in 2024. Net cash generated from operating activities in 2025 was RMB686.7 million (US$98.2 million), compared to RMB1,424.1 million in 2024. Net cash used in investing activities in 2025 was RMB1,554.6 million (US$222.3 million), compared to RMB3,113.1 million in 2024. Net cash provided by financing activities in 2025 was RMB662.6 million (US$94.8 million), compared to RMB277.2 million used in financing activities in 2024. Dividend Policy Under the Company's semi-annual dividend policy, the Board has determined to temporarily suspend the Company's cash dividend for the second half of 2025. This decision reflects the Company's current capital priorities, including maintaining appropriate reserves to support potential credit fluctuations in its lending business and funding investments in technology development. The Board periodically reviews the Company's capital requirements, financial condition and results of operations when considering future dividend declarations. Non-GAAP Financial Measures In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin as supplemental measures to review and assess operating performance. We believe these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these 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 accounting principles generally accepted in the United States of America ("U.S. GAAP"). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See "Operating Highlights and Reconciliation of GAAP to Non-GAAP measures" at the end of this press release. Currency Conversion This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.9931 to US$1.00, the effective noon buying rate on December 31, 2025, as set forth in the H.10 statistical release of the Federal Reserve Board. Conference Call Yiren Digital's management will host an earnings conference call at 8:00 a.m. U.S. Eastern Time on March 19, 2026 (or 8:00 p.m. Beijing/Hong Kong Time on March 19, 2026). Participants who wish to join the call should register online in advance of the conference at: https://dpregister.com/sreg/10207200/1036f9b7260. Once registration is completed, participants will receive the dial-in details for the conference call. Additionally, a live and archived webcast of the conference call will be available at: https://ir.yiren.com. Safe Harbor Statement This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yiren Digital's control. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to Yiren Digital's ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yiren Digital's ability to meet the standards necessary to maintain the listing of its ADSs on the NYSE or other stock exchange, including its ability to cure any non-compliance with the NYSE's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in Yiren Digital's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Yiren Digital does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. About Yiren Digital Yiren Digital Ltd. is a leading fintech company specializing in digital consumer lending, insurance, and financial technology innovation across China and global markets. The Company leverages advanced artificial intelligence and emerging technologies to enhance customer experience, optimize capital efficiency, and expand financial inclusion. With the successful filing of the in-house developed Large Language Model Zhiyu, the substantial upgrade of its Magicube Agent platform, Yiren Digital is establishing a new growth engine to position itself as an AI-powered next-generation fintech leader. For more information, please visit https://ir.yiren.com. View original content:https://www.prnewswire.com/news-releases/yiren-digital-reports-fourth-quarter-and-fiscal-year-2025-financial-results-302718638.html

This article first appeared on GuruFocus. Total Revenue: RMB1.55 billion, up 5.1% year over year. Loan Origination: RMB20.2 billion, up 51% year over year. Repeat Borrowing Rate: 77%, up 16 percentage points from last year. Average Loan Size: Increased from RMB7,000 to RMB10,100. Outstanding Loan Balance: RMB34.2 billion, 10% quarter over quarter growth. Funding Costs: Increased by 55 basis points during the quarter. Delinquency Rates: 1-to-30-day at 2.7%, 31-to-60-day at 1.7%, 61-to-90-day at 1.4%. Insurance Gross Return Premium: RMB1.15 billion, up 35% quarter over quarter. Insurance Revenue: RMB84.2 million, up 45% quarter over quarter. Internet Insurance Premium: RMB196 million, 204% quarter over quarter growth. Net Income: RMB318 million, translating to RMB3.65 per ATR share or USD0.51 per ADR share. Net Margin: Declined from 22% to 20% quarter over quarter. Cash Position: Total cash equivalent and restricted cash of RMB4.3 billion. Projected Q4 Revenue: RMB1.4 billion to RMB1.6 billion. Warning! GuruFocus has detected 4 Warning Signs with YRD. Is YRD fairly valued? Test your thesis with our free DCF calculator. Release Date: November 25, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Yiren Digital Ltd (NYSE:YRD) reported a 51% year-over-year increase in loan origination, reaching RMB20.2 billion. The company's internet insurance segment demonstrated strong growth, with annualized premium increasing by 204% quarter over quarter. The repeat borrowing rate remained high at 77%, indicating strong customer retention and loyalty. AI-driven initiatives, such as the Magicube platform, have improved sales conversion and risk controls, enhancing overall productivity. The company successfully launched its Indonesian operations, expected to contribute significant growth in 2026. The number of total borrowers decreased by 11% year over year due to tightened credit policies. Funding costs rose by 55 basis points during the quarter, reflecting sector-wide trends. The company's net income declined by 12% from the previous quarter, attributed to upfront provisions and industry-wide asset quality volatility. Yiren Digital Ltd (NYSE:YRD) faced heightened regulatory uncertainty and a cautious credit backdrop, impacting parts of its business. The allowance for contract assets and receivables increased by 142% year over year, driven by higher receivables from loan facilitation services. Q: Can you elaborate on the impact of regulatory changes on your business operations this quarter? A: Ning Tang, CEO: The heightened regulatory uncertainty has indeed posed challenges, particularly affecting parts of our business. However, we have swiftly adjusted our risk posture to protect asset quality. Our internet insurance segment has shown resilience and continues to grow, which helps offset some of the pressures from regulatory changes. Q: How has the AI-driven platform, Magicube, contributed to your operations? A: Ning Tang, CEO: Magicube has significantly improved our operations by enhancing sales conversion, elevating risk controls, and boosting overall productivity. It has also improved customer profiling accuracy and expanded our user base, leading to a 15% increase in app engagement. Q: What are the key drivers behind the 51% increase in loan origination? A: Ning Tang, CEO: The increase is primarily driven by a higher average loan ticket size and a strong repeat borrowing rate of 77%. Our focus on higher credit quality customer segments and better credit predictability from repeat borrowers have also contributed to this growth. Q: Could you provide more details on the performance of your insurance brokerage business? A: Ka Chun William Hui, CFO: Our insurance brokerage business has transformed into a digital, low-cost, high-margin model. Gross return premium increased by 35% quarter over quarter, and our internet insurance business saw a 204% growth in annualized premium. This shift has allowed us to focus on a more profitable customer base. Q: What are your expectations for the overseas business, particularly in Indonesia? A: Ning Tang, CEO: Our Indonesian operations launched in September 2025, and we expect this segment to contribute significantly to our growth in 2026. We are optimistic about the potential of our international expansion. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Tuesday, Nov. 25, 2025 at 7 a.m. ET Chief Executive Officer — Ning Tang Chief Financial Officer — Ka Chun Hui Need a quote from a Motley Fool analyst? Email [email protected] Ning Tang: This past quarter presented a more challenging operating environment than we have seen in recent periods, driven primarily by heightened regulatory uncertainty and a more cautious credit backdrop. While these factors weighed on parts of our business, we moved quickly to adjust our risk posture and protect asset quality. I am pleased to share that these actions have been effective. At the same time, our Internet insurance segment continued to deliver solid growth, reinforcing the resilience and diversification of our platform. As we look ahead, we remain focused on disciplined execution and positioning the company for the next generation of fintech with AI and blockchain. As part of our ongoing transformation, we continue to advance our agentic AI capabilities to enhance process efficiency and strengthen unit economics. These innovations are helping us offset the margin pressure associated with rising credit risk. Our agentic platform, MagicQ, is already demonstrating meaningful impact, improving sales conversion, elevating risk controls, and driving greater overall productivity. With that, let me walk you through the key business highlights for the quarter. First, turning to our financial services segment. We facilitated RMB 20.2 billion in loan origination during this quarter, up 51% year over year. Our repeat borrowing rate remained at a record high of 77%, in line with last quarter and 16 percentage points higher than a year ago. While the number of our total borrowers decreased by 11% to 1.3 million compared to the same period last year due to the tightening of credit policies, our total cumulative borrower base increased by 21% year on year to 14 million. We also continued to see healthy structural improvements across our borrower base. The average size for new loans from our lending platform rose from RMB 7,000 to RMB 10,100, driven by our ongoing shift towards higher credit quality customer segments and better credit predictability from repeat borrowers. We expect this favorable mix trend to continue as we continue to trade up for better quality borrowers. Our agentic AI has delivered a remarkable boost in our operations. For marketing, our AI-driven marketing agent continues to deliver strong results. It enhanced customer profiling accuracy and expanded the pool of identified high-intent users by 38% quarter over quarter. In addition, our proprietary AI agent now generates tailored responses across a wide range of customer inquiries, effectively reactivating dormant users and driving a 15% increase in their ATP engagement. For customer service, our LLM-powered service robot continues to strengthen its performance, with response accuracy rising from roughly 80% to over 92%. Meanwhile, the rate of inquiries requiring escalation to human agents declined by nearly 15% quarter over quarter. For quality control and risk management, we continue to optimize our multi-model models. Fraud detection coverage increased from a weekly manual sampling of 450 cases to 5,800 by agentic AI, while accuracy improved to 91%. Now let's turn to capital allocation. As of September 30, 2025, our total outstanding loan balance is RMB 34.2 billion, representing 10% quarter-to-quarter growth. Our funding cost rose by 55 basis points during the quarter, in line with the sector trend. We are now included in the YBASE of nearly 30 compliant funding partners under the new regulatory framework, positioning us as one of the leading players in the market. Asset quality and credit risk, we continue to see industry-wide pressure this quarter. Although we proactively tightened our credit policies, our risk indicators edged up in Q3. As of September 30, our one to thirty-day delinquency rate stood at 2.7%, while the thirty-one to sixty-day and the sixty-one to ninety-day delinquency rates were 1.7% and 1.4%, respectively. The good news is that we see that risk indicators for the loan portfolio from new borrowers begin to trend down in November, which is proof of the effectiveness of our upgraded credit strategy. However, from a conservative point of view, we expect the industry-wide impact on the overall asset quality to continue in the fourth quarter and that the recovery is likely to begin early next year as the market stabilizes. Our AI-driven collection capabilities play an important role in mitigating early-stage synthesis. This automation drove productivity growth, reducing labor costs by an average of RMB 5 million per month, up from RMB 2.7 million in the second quarter, while improving service quality. Turning to our overseas business, our Indonesian operations launched on schedule in September 2025, and we expect this segment to contribute significant growth in 2026. Now turning to our insurance brokerage business. After navigating significant regulatory headwinds and commission pressure in 2024, we entered 2025 with a transformed operating model. Our insurance business has shifted from a high-touch, high-cost brokerage approach to a digital, low customer acquisition cost, high-margin model by tapping into new insurance demand within our existing customer acquisition channels on the platform. This has allowed us to focus on a healthier, more profitable customer base that is contributing meaningfully to segment margins. In 2025, gross written premium reached RMB 1.15 billion, an increase of 35% quarter over quarter. Revenue from the segment was RMB 84.2 million, up 45% from the prior quarter. Our Internet insurance business continued its rapid expansion, delivering RMB 196 million in annualized premium, representing 204% quarter over quarter growth. Total customer numbers rose 93% quarter over quarter to 229,353, driven by more precise marketing and still low penetration within the target segment. We expect the Internet insurance business to sustain strong momentum over the coming quarters. Finally, while we continue to strengthen and scale our core business, we are also investing strategically into the future. Building on our technology capabilities and our position within the broader fintech ecosystem, we are exploring new ways to better serve customers and manage assets through AI and blockchain-enabled solutions. We see AI and blockchain as core strategic pillars for the future of our business, especially as we expand our footprint globally. We are investing in the systems and capabilities needed to build our next-generation fintech infrastructure while deepening partnerships with key industry players. In October, we signed an MOU with TrainUp, a leading crypto solutions provider in Singapore, and we also announced our plan to launch an Ethereum staking service, which is currently undergoing testing. This initiative marks an important milestone in our journey toward delivering seamless 24/7 global financial services. Over the next few quarters, we look forward to introducing additional products designed to enhance financing efficiency and asset monetization for our customers. To conclude on the quarter, while the third quarter brought its share of challenges, the progress we have made demonstrates that our diversification and forward-looking strategy are working. We have built a stronger, more resilient foundation that positions us well for sustainable growth and value creation in the quarters ahead. I am confident that by staying disciplined and continuing to execute on our priorities, we will emerge even stronger. With that, I will now pass it over to Ka Chun Hui, who will provide more details on the financials for the quarter. Ka Chun Hui: Thank you, Ning. Hello, everyone. I will now walk you through our financial performance for the third quarter this year. Please refer to our earnings release and IR deck for further details, both available on our website. For the third quarter, total revenue grew by 5.1% year over year to RMB 1.55 billion, mainly attributable to 70% growth from the Financial Services segment. It was partially offset by the decline in revenue from the consumers and lifestyle segment, as we announced the mid-decommission of the business in 2024. In the Financial Services segment, total loan facilitation volume increased by 51% year over year. The increase was driven by growth in average loan ticket size, the growth of repeated borrowers, and an increase in loan referral revenue. The loans from repeat borrowers account for 77% of the total loan volume facilitated in the third quarter this year, up 16 percentage points compared to the same period last year. As the credit from repeated borrowers is more predictable, it allows us to extend the credit without substantially affecting our portfolio risk. The average size for new loans from our lending platform increased by 44% to RMB 10,100. Overall, the revenue from this segment increased by 70% year over year to RMB 1.4 billion in the third quarter. The revenue growth is driven by our loan guarantee services revenue, which reached RMB 1.4 billion in the third quarter, up nearly 2.4 times year over year, driven by higher loan facilitation under the risk-taking model. As our service revenue and loan facilitation from the risk-taking model increases, our provisions for contingency liability also increased by 68.8% year over year to RMB 460 million. But as the economic benefits of the guarantee services are recognized over the next few quarters, the total of guarantee liabilities of RMB 930 million will be recognized as revenue over the next few quarters. The contribution margin for the entire Financial Services segment improved from 5.2% in 2024 to 23% in the third quarter, driven by a 27.1% decrease in the origination expense while the revenue grew by 70%. In the insurance segment, our gross written premium in the third quarter was RMB 1.15 billion, up 35% from the second quarter this year. It is showing a sign of recovery for this business. Compared to the third quarter of 2024, the premium is still down by 15%. The total premium is slightly down by 1.5% year on year. We have successfully turned around the business. The main growth contributor is the Internet insurance line that we launched in the first quarter. In the third quarter, the gross premium from the Internet insurance line was RMB 196 million, representing 204% growth quarter over quarter. We expect this growth momentum will continue in the next few quarters and have significant revenue contribution to the overall insurance line. One thing to highlight is that the margin and the take rate for the Internet insurance business is much higher than the traditional brokerage line because the clients for this segment come from our customer traffic from insurance and other business segments. These customer segments are of better risk quality than traditional insurance carriers are not able to reach. As such, the Internet insurance business has lower customer acquisition costs, better revenue sharing with the carriers, and no commission cost. The margin is expected to increase as the premium scales, which will benefit the bottom line. On the expense side, sales and marketing expenses in the third quarter decreased by 1.2% year over year to RMB 332 million. The marketing expenses decreased while our total loan facilitation increased by 51%. This is the result of better AI-assisted precision marketing that drives a higher sales conversion, effectively lowering the borrower acquisition cost. Research and development expenses decreased by 39% year over year to RMB 92 million. This is because, during the same period last year, there was a one-off large system development project. The origination, servicing, and other operating costs decreased by 27% year over year to RMB 150 million because of the 27.1% decrease in the origination expense from the financial services business due to the improved collection efficiency driven by AI and lower commission costs from the traditional insurance brokerage line. General and administrative expenses for the quarter increased by 30% year over year to RMB 104 million, primarily due to increased personnel-related costs to strengthen our risk management and to fund the plan for new business initiatives such as the development of the next-generation fintech that we mentioned in the announcement in October. The allowance for contract assets and receivables and others for the quarter increased by 142% year over year to RMB 229 million. This is driven by higher receivables from loan facilitation services and guarantee services as the loan volume has grown with particular strength from the risk-taking model that generates higher service revenues. Along with the increase in the self-funded loan balance in 2025, provisions for contingent liability this year increased by 69% year over year to RMB 460 million because of the increase in loan volume facilitated under the risk-taking model. Net income for the third quarter was RMB 318 million, translating to RMB 3.65 per ADR share or USD 0.51 per ADR share. This represents a 12% decline from the second quarter of this year. The pressure on profitability is attributed to multiple reasons, including the substantial upfront provisions under our risk-taking loan facilitation model, industry-wide volatility in asset quality, a declining fee rate for the loan facilitation business following the new regulation, as well as the decreasing commission rate in our traditional insurance brokerage line. Our net margin declined slightly from 22% in the prior quarter this year to 20%. However, we maintain a very good cash position. The net cash outflow from operations in the third quarter was RMB 1 million, and our balance sheet remained robust with a total cash equivalent and restricted cash of RMB 4 billion. This will position us well to address any future challenges and to capture new opportunities. Looking ahead, we remain cautiously optimistic about our business. While we anticipate volatility in the credit and regulatory risk environment, our disciplined credit policy, enhanced risk management capability, and effective risk revenue model will position us well in this market environment. Our international business and Internet insurance segments are expected to drive higher revenue growth and margin growth in the next few quarters. For 2025, we are projecting revenue to be in the range of RMB 1.4 billion to RMB 1.6 billion, reflecting our disciplined approach to growth and risk management. That's the end of my part of the presentation. Thank you very much. Operator: Thank you. And operator, we are open for Q&A. We will now begin the question and answer session. The conference has now concluded. If you have any questions, you are welcome to contact the company's IR team. Thank you for attending today's presentation. You may now disconnect. Ka Chun Hui: Thank you. Ever feel like you missed the boat in buying the most successful stocks? 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