LX — LexinFintech Holdings Ltd.

Summary of Lexin (LX) Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Loan Volume: RMB 57.9 billion, up 15.9% quarter-over-quarter and 12.2% year-over-year.
• Revenue: RMB 3.3 billion, representing an 8.7% sequential increase.
• Net Profit: RMB 201 million, a decrease of 5.9% quarter-over-quarter.
• Active Users: 5.17 million, a rise of 14.1% quarter-over-quarter and 8.6% year-over-year.
• New Active Users: 1.44 million, up 63.3% quarter-over-quarter and 101.6% year-over-year.
• Credit Business Revenue: RMB 1.5 billion, a 7.2% increase quarter-over-quarter.
• Operating Expenses: Increased by 13.8% to RMB 1.4 billion, primarily due to sales and marketing investments.

2. Strategic Updates and Business Highlights

• Diversified Ecosystem: Nearly 50% of loan volume now comes from installment e-commerce, offline inclusive finance, and fintech empowerment, marking a shift to new growth drivers.
• Fintech Empowerment: Significant growth in this segment, with partnerships enhancing operational capabilities and revenue potential.
• Installment E-commerce: Continued refinement of supply chain and product offerings, with a 24% increase in gross profit.
• Risk Management: Improved asset quality with a 7% decrease in day 1 delinquency ratio and enhanced risk identification strategies.
• Consumer Protection: Increased focus on compliance and consumer rights, with measures to combat fraud and improve customer experience.

3. Forward Guidance and Outlook

• Stable Loan Originations: Expected to remain steady in Q2 2026, with continued focus on optimizing asset mix and risk management.
• Revenue Growth: Anticipated gradual recovery in revenue, driven by fintech empowerment and installment e-commerce, though online consumer finance may face ongoing challenges.
• Prudent Approach: The company will maintain a conservative operational strategy amidst macroeconomic uncertainties, with expectations for lower credit costs as risk metrics improve.

4. Bad News, Challenges, or Points of Concern

• Online Consumer Finance Pressure: The segment continues to face headwinds due to macro uncertainties, impacting overall revenue growth.
• Operating Expenses: Increased expenses due to investments in user engagement and infrastructure may pressure margins.
• Regulatory Environment: Ongoing changes in regulations necessitate adaptive strategies, which could pose challenges to growth and compliance.

5. Notable Q&A Insights

• Regulatory Outlook: Management expressed confidence in navigating the evolving regulatory landscape, focusing on compliance and customer-centric strategies.
• Asset Quality Trends: Continued improvement in asset quality was highlighted, with expectations for further stabilization in risk metrics.
• Shareholder Returns: Plans to cancel 20 million ADS (12% of total shares) were announced, although new share repurchases are temporarily suspended due to macro uncertainties.

Overall, Lexin demonstrated resilience in its diversified business model, although it faces challenges in the online consumer finance sector and must navigate a complex regulatory environment.