LX — LexinFintech Holdings Ltd.

Summary of Lexin (LX) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Loan Volume: RMB 50 billion in Q4; total for 2025 was RMB 205.3 billion.
• Revenue: RMB 3 billion in Q4; net revenue from credit business was RMB 1.4 billion, down RMB 586 million quarter-over-quarter.
• Net Profit: RMB 214 million for Q4, a decrease of RMB 307 million from the previous quarter; full-year net profit was RMB 1.7 billion, up 52.4% year-over-year.
• Active Users: 4.53 million, with 884,000 new active users in Q4.
• Average Loan Rate: 21.7%, a decline of 140 basis points quarter-over-quarter.
• Operating Expenses: Decreased by 11% to RMB 1.2 billion, but did not keep pace with revenue decline.

2. Strategic Updates and Business Highlights

• Regulatory Compliance: Successfully aligned operations with new regulations, maintaining a high standard of compliance.
• Risk Management: Enhanced risk strategies led to improved risk indicators, with a focus on high-quality assets.
• E-commerce Integration: Continued optimization of the supply chain and marketing efforts during major shopping events, driving user engagement.
• AI Implementation: Advanced AI applications in customer service and risk management, improving efficiency and user satisfaction.
• Shareholder Returns: Increased dividend payout ratio to 30% of annual net profit; repurchased USD 39 million in ADS.

3. Forward Guidance and Outlook

• Loan Origination: Expected to remain stable in Q1 2026, with a gradual return to normalized growth anticipated.
• Risk Management: Continued focus on high-quality customer acquisition and asset quality improvement.
• Financial Performance: No full-year guidance provided due to macroeconomic uncertainties; however, a cautious optimism about stabilizing risk levels and improving asset quality was expressed.

4. Bad News, Challenges, or Points of Concern

• Revenue Compression: Decline in revenue due to pricing adjustments and reduced loan volume in the consumer finance segment.
• Increased Credit Costs: Heightened credit costs and conservative provisioning due to market volatility.
• Risk Levels: Elevated risk indicators, particularly in Q4, although signs of stabilization were noted.
• Market Volatility: Ongoing uncertainties in the macroeconomic environment could impact future performance.

5. Notable Q&A Insights

• Development Strategy: Management emphasized a user-centric approach and compliance with regulations as key to resilience in the new environment.
• Risk Outlook: Management noted that while risk levels remain elevated, there are signs of stabilization, and efforts will continue to manage high-risk segments.
• Financial Performance Outlook: Management highlighted that while loan volume may stabilize, revenue contributions from tech empowerment will be modest due to its lower pricing profile.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, challenges faced, and insights from the Q&A session, providing a comprehensive overview of Lexin's performance and outlook for Q4 2025.