Yiren Digital Q2 2025 Earnings Call: Strong Loan Growth, AI-Driven Efficiency, and Challenges Ahead

Yiren Digital Ltd reported Q2 2025 total revenue of RMB1.65 billion, a 10.4% YoY increase, and net income of RMB358 million, a 44.5% QoQ increase and a 12.7% decrease YoY. Loan volume facilitated reached RMB20.3 billion, a 34% QoQ increase and a 57% YoY growth. The company's AI-powered strategy improved operational efficiency, and digital insurance business achieved 103% QoQ growth in gross premiums. However, the insurance brokerage business experienced a 20% YoY decline in gross written premiums due to regulatory-driven commission rate compression.

Yiren Digital Ltd. (NYSE: YRD) has reported its financial results for the second quarter (Q2) and six months ended June 30, 2025, showcasing robust growth and operational resilience. The company's total revenue for Q2 2025 reached RMB1.65 billion, marking a 10.4% year-over-year (YoY) increase [1]. Net income for the quarter stood at RMB358 million, representing a 44.5% quarter-over-quarter (QoQ) increase and a 12.7% YoY decrease [1].

The company's loan volume facilitated in Q2 2025 reached RMB20.3 billion, a 34% QoQ increase and a 57% YoY growth, driven by strong demand for small revolving loan products [2]. The cumulative number of borrowers served reached 13.5 million as of June 30, 2025, an increase of 25% YoY [2].

Yiren Digital's AI-powered strategy significantly improved operational efficiency and customer engagement. The digital insurance business achieved a 103% QoQ growth in gross premiums, reaching RMB850.1 million [2]. However, the insurance brokerage business experienced a 20% YoY decline in gross written premiums, primarily due to regulatory-driven commission rate compression [2].

The company's financial services business generated RMB1.489 billion in revenue, accounting for 90% of the total net revenue, up by 75% YoY [2]. In contrast, the insurance brokerage business revenue decreased by 36% YoY to RMB58.1 million [2]. The consumption and lifestyle business revenue decreased significantly, mainly due to strategic refocus on core financial services [2].

Sales and marketing expenses increased by 20.7% QoQ to RMB345.2 million, while origination, servicing, and other operating costs decreased by 34.2% QoQ to RMB160.9 million [2]. Research and development expenses increased by 96.4% QoQ to RMB107.7 million, primarily driven by AI spending and R&D headcount [2]. General and administrative expenses increased by 15.1% QoQ to RMB78.9 million [2].

Allowance for contract assets, receivables, and others increased by 72.3% QoQ to RMB214.7 million, reflecting higher loan volume facilitated [2]. Provision for contingent liabilities increased by 38.8% QoQ to RMB385.7 million, attributable to the risk-taking model [2]. Net cash generated from operating activities increased by 11.5% QoQ to RMB411.2 million [2].

As of June 30, 2025, cash and cash equivalents stood at RMB4.099 billion, and the balance of financial investment was RMB418.9 million [2]. Delinquency rates for loans that are past due for 1-30 days, 31-60 days, and 61-90 days were 1.7%, 1.1%, and 1.0%, respectively, compared to 1.6%, 1.2%, and 1.2% as of March 31, 2025 [2].

Yiren Digital's Chairman and Chief Executive Officer, Mr. Ning Tang, commented, "We are pleased to report another strong quarter, driven by the continued success of our AI-powered strategy. Our advanced AI capabilities have delivered quantifiable results—more personalized customer engagement, enhanced risk management with predictive analytics and fraud detection, and improving service efficiency with compliant, tailored solutions." Mr. William Hui, Chief Financial Officer, added, "Our second quarter results demonstrate the Company's operational resilience and mark a return to profitability growth following five consecutive quarters of decline."

References:
[1] https://www.marketscreener.com/news/yiren-digital-ltd-reports-earnings-results-for-the-second-quarter-and-six-months-ended-june-30-2025-2025-08-21
[2] https://www.nasdaq.com/press-release/yiren-digital-reports-second-quarter-2025-financial-results-2025-08-21