X Financial's Risk-First Pivot: Q3 Revenue Falls 13.7% as Growth Strategy Shifts

X Financial (NYSE: XYF) reported mixed results for Q3 2025, with year-over-year revenue growth offset by a sequential decline amid moderating borrower activity and rising credit costs. The fintech platform posted total net revenue of RMB1.96 billion for the quarter, representing a 23.9% increase from the same period in 2024 but a 13.7% drop compared to Q2 2025. Net income rose 12.1% annually to RMB421.24 million but fell 20.2% sequentially, driven by higher credit-related provisions and operating expenses. Non-GAAP adjusted net income declined 26.1% quarter-over-quarter to RMB438.18 million, reflecting a 1.0% year-over-year gain.

The company attributed the sequential revenue contraction to a cautious lending environment and deliberate moderation of loan growth to prioritize asset quality and risk control. X Financial expects Q4 2025 loan originations to range between RMB21.0–23.0 billion, with full-year 2025 originations projected at RMB128.8–130.8 billion. This measured growth strategy follows a 13.7% sequential revenue decline in Q3 and underscores the firm's focus on disciplined risk management.

Shareholder returns remained a priority, with X Financial repurchasing 4.26 million ADSs for US$67.9 million under its US$100 million share buyback program since January 2025. The program, which expires in November 2026, now has US$48.0 million remaining according to Marketscreener. Management cited confidence in long-term growth and shareholder value enhancement, though repurchase activity remains subject to market conditions.

Meanwhile, Bank of America updated its commitments in November 2025, including replacing a direct-pay letter of credit for Illinois Finance Authority bonds with JPMorgan Chase Bank. The bank also facilitated a $1.45 billion financing deal for BX Commercial Mortgage Trust 2025-JDI, with Fitch Ratings assigning its initial ratings. These moves highlight ongoing activity in commercial real estate and credit markets, though X Financial's results suggest broader fintech sector caution amid elevated credit risks.

X Financial's earnings per ADS declined sequentially but outperformed in a year-over-year comparison, with basic EPS at RMB10.56 for Q3 2025, a 34.4% increase from Q3 2024. The stock traded at a forward P/E of 25, down from 38 three months ago, reflecting investor skepticism amid the company's strategic pivot toward risk mitigation.