LexinFintech's Q1 2025: Navigating Contradictions in Geopolitical Risks, Regulatory Changes, and Shareholder Returns
Earnings DecryptThursday, May 22, 2025 8:08 pm ET
2min read
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Record Profitability and Asset Quality Improvement:
- First Quarter 2025 Earnings reported a record high GAAP net profit of CNY 430 million, with a 18.6% quarter-over-quarter growth and 113% year-over-year growth.
- The increase was driven by enhanced risk management capabilities, refined operations, and a risk-first approach to business transformation.
Capital-Light Model Expansion:
- The volume under the model increased by 43% quarter-over-quarter, accounting for 28% of the total GMV, up from 20% last quarter.
- This expansion was due to the migration of more subprime customers to the intelligent credit platform (ICP), offering risk-based pricing to reduce overall risk exposure.
Revenue and Cost Efficiency:
- The revenue take rate increased to 6.69%, up from 6.22%, while the net profit take rate rose to 1.58% from 1.31%, marking a 27 basis point sequential improvement.
- The improvement was attributed to better asset quality, reduced credit and funding costs, and refined business operations.
Improved Risk Management Indicators:
- Key risk indicators showed improvement, with day 1 delinquency rate declining by 11%, and the first payment default rate over 7 days decreasing by 5%.
- This was due to enhanced risk identification capabilities, proactive approaches to risk management, and the application of AI-driven tools in decision-making processes.
Record Profitability and Asset Quality Improvement:
- First Quarter 2025 Earnings reported a record high GAAP net profit of CNY 430 million, with a 18.6% quarter-over-quarter growth and 113% year-over-year growth.
- The increase was driven by enhanced risk management capabilities, refined operations, and a risk-first approach to business transformation.
Capital-Light Model Expansion:
- The volume under the model increased by 43% quarter-over-quarter, accounting for 28% of the total GMV, up from 20% last quarter.
- This expansion was due to the migration of more subprime customers to the intelligent credit platform (ICP), offering risk-based pricing to reduce overall risk exposure.
Revenue and Cost Efficiency:
- The revenue take rate increased to 6.69%, up from 6.22%, while the net profit take rate rose to 1.58% from 1.31%, marking a 27 basis point sequential improvement.
- The improvement was attributed to better asset quality, reduced credit and funding costs, and refined business operations.
Improved Risk Management Indicators:
- Key risk indicators showed improvement, with day 1 delinquency rate declining by 11%, and the first payment default rate over 7 days decreasing by 5%.
- This was due to enhanced risk identification capabilities, proactive approaches to risk management, and the application of AI-driven tools in decision-making processes.
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