Yiren Digital's Q3 2025 Earnings Call: Contradictions Emerge on Loan Rules, Crypto Strategy, and Global Expansion Plans

Date of Call: November 25, 2025

Financials Results

• Revenue: RMB 1.55 billion, up 5.1% YOY
• EPS: RMB 3.65 per ADR (USD 0.51), down 12% sequentially
• Operating Margin: Net margin 20%, down from 22% in prior quarter (declined 2 percentage points sequentially)

Guidance:

• Revenue for Q4 2025 expected to be RMB 1.4 billion to RMB 1.6 billion.
• Company expects continued volatility in credit and regulatory environment; asset-quality recovery likely to begin early 2026.
• International expansion (Indonesia) and Internet Insurance are expected to drive higher revenue and margin over the next few quarters.
• Maintain disciplined credit policy and emphasize AI-driven risk management and efficiency to protect asset quality and margins.

Business Commentary:

* Loan Origination and Borrower Base: - Yiren Digital facilitated RMB 20.2 billion in loan origination during Q3 2025, up 51% year-over-year. - The number of total borrowers decreased by 11% to 1.3 million compared to the same period last year, while the total cumulative borrower base increased by 21% year-on-year to 14 million. -

- The shift towards higher credit quality customer segments and better credit predictability from repeat borrowers contributed to the trend.

• Internet Insurance Segment Growth:
• The Internet Insurance segment delivered RMB 196 million in annualized premium, representing 204% quarter-over-quarter growth.

• This growth was attributed to more precise marketing and low penetration within the target segment, leading to an increase in customer numbers by 93% quarter-over-quarter to 229,353.

• AI and Risk Management Impact:

• The company's AI-driven marketing agent expanded the pool of identified high-intent users by 38% quarter-over-quarter.
• AI-driven solutions improved response accuracy for customer service to over 92%, reducing the rate of inquiries requiring escalation by nearly 15% quarter-over-quarter.

• These advancements in AI capabilities enhanced process efficiency and strengthened unit economics, offsetting margin pressure due to rising credit risk.

• Regulatory Impact and Asset Quality:

• The 1- to 30-day delinquency rate stood at 2.7%, while the 31- to 60-day and 61- to 90-day delinquency rates were 1.7% and 1.4%, respectively, due to proactively tightened credit policies.
• The increased risk indicators were expected to continue impacting asset quality in the fourth quarter, with recovery anticipated in early 2026 as the market stabilizes.
  

  Sentiment Analysis:

  Overall Tone: Neutral

  • Management acknowledged a challenging quarter driven by regulatory uncertainty and credit pressure but highlighted 5.1% YOY revenue growth to RMB1.55bn, record 77% repeat-borrower rate, strong Internet Insurance momentum, effective AI-driven risk controls, and cautious optimism with Q4 revenue guidance of RMB1.4–1.6bn.

Contradiction Point 1

Impact of New Loan Facilitation Rules

It involves the anticipated impact of new loan facilitation rules on the company, which is crucial for understanding regulatory compliance and business strategy.

What is the context for crypto assets on the balance sheet and the fair value adjustment? - Unknown Shareholder

2025Q3: The recent loan facilitation regulation in China is beneficial for Yiren Digital, promoting transparency and regulatory clarity. - Yuning Feng(CFO)

What impact do you expect from the new loan facilitation rules? - Christopher Wu (Luke Capital)

2025Q1: This will likely accelerate industry consolidation, and as Yiren Digital is already on the white list of funding partners, it is seen as good news for the company. - Yuning Feng(CFO)

Contradiction Point 2

Regulatory Environment and Business Strategy

It reflects differing perspectives on the regulatory environment and the company's strategic response, which could impact investor expectations and business outcomes.

Not specified in the provided transcript. - Unspecified

2025Q3: This past quarter presented a more challenging operating environment than we've 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. - Ning Tang(CEO)

How will the company adapt as Chinese regulations ease, considering potential competitive responses? What are the long-term goals for the overseas business? - Haonan (Indiscernible Capital)

2024Q4: As the macro environment improves, the company will focus on increasing the repeat borrowing rate, enhancing customer acquisition through partnerships with platforms like Douyin, and exploring non-finance channels for loan volume. AI-driven analytics will be utilized for smarter customer acquisition. - Ning Tang(CEO)

Contradiction Point 3

Crypto Investments Strategy

It reflects a change in the company's approach to crypto investments, potentially impacting their financial strategy and future growth.

Not specified - Not specified

2025Q3: We increased our crypto position for treasury management initially, but now we are exploring different ways of using crypto and blockchain to support our core business. - Ka Hui(CFO)

Does Yiren Digital plan to continue increasing crypto investments? - Unidentified Analyst (Black Lab Fund)

2025Q2: We have made investments in crypto. We consider crypto to be an important part of the future financial system and a part of Fintech. We increased our crypto position in the past year. It's part of the strategic discussion. It's not only for treasure management. We are exploring different ways of using crypto and blockchain to support our core business. - Ning Tang(CEO)

Contradiction Point 4

International Business Strategy and Growth Expectations

It involves differing expectations for the growth and scale of the international business, which is crucial for the company's global expansion strategy.

What factors drove the significant increase in quarterly revenue? - Unspecified

2025Q3: Our international business and Internet insurance segments are expected to drive a higher revenue growth and margin growth in the next few quarters. - Ka Hui(CFO)

What are your long-term goals for the overseas business? What scale do you expect the business to reach? How much will you invest in the overseas business? Could the overseas business surpass the domestic business in size someday? - Haonan (Indiscernible Capital)

2024Q4: The company is optimistic about global growth and aims to make the international business a meaningful revenue contributor within the next 3-year time frame. The success in the Philippines can be replicated in other markets, and the company has made progress in America, Southern America, and the Middle East. - Ning Tang(CEO)

Contradiction Point 5

Crypto Investments Hedging

It shows a difference in the company's stance on hedging its crypto investments, which could influence its risk management strategy.

How will management adjust the product mix in North America to maintain competitiveness amid current economic uncertainties? - Not specified

2025Q3: We do not hedge our crypto assets directly, as we believe in their long-term potential and strategic significance. Our approach is based on a long-term view and strategic exploration. - Ka Hui(CFO)

Do you hedge crypto investment risks? - Unidentified Analyst (Black Lab Fund)

2025Q2: We do not hedge our crypto assets directly, as we believe in their long-term potential and strategic significance. Our approach is based on a long-term view and strategic exploration. - Ka Hui(CFO)