XYF — X Financial

Summary of XYF Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Total Net Revenue: RMB 1.18 billion (USD 170.5 million), down 39.3% year-over-year and 19.9% sequentially.
• Operating Income: RMB 140.7 million (USD 20.4 million), a decrease of 75.4% year-over-year but a recovery from Q4 2025.
• Net Income: RMB 37.9 million (USD 5.5 million), compared to RMB 458.1 million in Q1 2025 and RMB 57.2 million in Q4 2025.
• Operating Margin: 12%, improved from 1.4% in Q4 2025 but significantly lower than 29.6% in Q1 2025.
• Return on Equity: 1.9%, reflecting a reduced earnings base.
• Outstanding Loan Balance: RMB 35.3 billion, down 39.6% year-over-year.

2. Strategic Updates and Business Highlights:

• The company adopted a conservative approach, reducing loan origination activity by 58.4% year-over-year to prioritize credit quality and risk management.
• Shifted origination mix towards internally operated channels to strengthen borrower relationships and reduce costs.
• Tightened underwriting criteria and enhanced compliance infrastructure.
• Continued automation in servicing and collections to improve operational efficiency.

3. Forward Guidance and Outlook:

• For Q2 2026, total loan origination is expected to range between RMB 11.5 billion and RMB 12.5 billion, maintaining a focus on quality over volume.
• The company remains cautious due to the evolving regulatory environment, which may impact pricing, funding conditions, and origination activities.

4. Bad News, Challenges, or Points of Concern:

• Significant decline in borrower activity, with active borrowers down 60.6% year-over-year.
• Increased delinquency rates: 31-60 day delinquency at 2.61% (down from 2.9% in Q4 2025) and 91-180 day delinquency at 9.95% (up from 6.31% in Q4 2025).
• Higher credit provisions continue to weigh on profitability, with provisions at RMB 282.9 million, down from RMB 669.3 million in Q4 2025 but still above RMB 135.5 million in Q1 2025.
• Uncertainty regarding regulatory changes could materially affect future operating results and profitability.

5. Notable Q&A Insights:

• There were no questions during the Q&A session, indicating either a lack of immediate investor concerns or a need for further clarity on the regulatory landscape and its implications for the business.

Overall, XYF's Q1 2026 results reflect a company in transition, grappling with significant declines in revenue and borrower activity while focusing on long-term stability and credit quality amidst a challenging regulatory environment.