Jiayin Group Q2 2025 Earnings Call Transcript

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August 20, 2025

Key Takeaways

  • Positive Sentiment: Jiayin Group delivered record Q2 results with loan facilitation volume up 54.6% YoY to RMB 37.1 billion and net income rising 117.8% to RMB 519 million.
  • Neutral Sentiment: The company guided Q3 loan facilitation volume of RMB 32–34 billion and non-GAAP income from operations of RMB 490–560 million, reflecting a prudent outlook amid regulatory changes.
  • Positive Sentiment: Shareholder returns were boosted by a 60% increase in the cash dividend to USD 0.80 per ADS and an expanded share repurchase plan now totaling USD 80 million.
  • Positive Sentiment: Investments in AI and R&D drove operational efficiency gains, including an 80% cost reduction in AI-generated summaries and deployment of over 200 self-service AI agents.
  • Positive Sentiment: Risk management remained robust with a stable 90-day delinquency ratio of 1.12% and interception of over 320,000 malicious fraud applications through a new multimodal anti-fraud system.
AI Generated. May Contain Errors.
Earnings Conference Call
Jiayin Group Q2 2025
00:00 / 00:00

There are 4 speakers on the call.

Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Geon Group's Second Quarter twenty twenty five Earnings Conference Call. Currently, participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, we are recording today's call.

Operator

If you have any objections, you may disconnect at this time. I will now turn the call over to Mr. Sam Li from Investor Relations of Jiang Group. Please proceed.

Speaker 1

Thank you, operator. Hello, everyone. Thank you all for joining us today on today's conference call to discuss Jiayin Group's financial results for the 2025. We released our earnings results earlier today. The press release is available on the company's website as well as from Newswire services.

Speaker 1

On the call with me today are Mr. Yan Ding Gui, Chief Executive Officer Mr. Frank Cunning, Chief Financial Officer and Ms. Xu Yifang, Chief Risk Officer. Before we continue, please note that today's discussion will contain forward looking statements made under the Safe Harbor provisions of The U.

Speaker 1

S. Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.

Speaker 1

The company does not assume any obligation to update any forward looking statement, except as required under applicable law. Also, this call includes discussion of certain non GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non GAAP financial measures to GAAP financial measures. Please note, unless otherwise stated, all figures mentioned during the conference call are in Chinese or renminbi. With that, let me turn the call over to our CEO, Mr.

Speaker 1

Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow-up with corresponding English translation. Please go ahead, Mr. Good afternoon, everyone.

Speaker 1

Thank you for joining Jiayin Group's second quarter twenty twenty five earnings conference call. In the first half of this year, China has vigorously advanced its special initiatives to boost consumption with total retail sales of consumer goods rising by 5% year on year. Additionally, six government departments jointly issued the guiding opinions on financial support for boosting and expanding consumption, aiming to further expand financial supply in the consumption sector. Against this backdrop, the company has seized market opportunities, leveraged its core strength, accelerated the matching of consumer credit supply and demand and supported the release of household consumption potential. In the second quarter, the company achieved loan facilitation volume of 37,100,000,000.0, representing a year on year increase of approximately 54.6%, setting a new record.

Speaker 1

Non GAAP income from operations reached $738,000,000, up approximately 182% year on year, while net income reached $519,000,000, a year on year increase of approximately 117.8%, while ensuring compliant operations. The company has successfully achieved its established operational target and maintained a positive development momentum. During the reporting period, the company maintained in-depth cooperation with seventy financial institutions with another 58 under active negotiation. We have also been included in the white list of loan facilitation partners by multiple institutions, which not only recognizes our compliance capabilities, technological strength and brand influence, but also helps enhance the sustainability and diversity of funding supply, providing long term support for stable operations. Meanwhile, the company is also jointly exploring new business development path under the new regulatory framework with funding partners.

Speaker 1

Examples include launching joint operation projects to assist financial institutions in connecting with targeted traffic channels, achieving resource integration and complementary advantages through refined scenario engagement and risk control modeling. To date, we have collaborated with over 10 banks and consumer finance companies with a number and scale projects continuing to grow, effectively empowering institutional partners and significantly strengthening ecosystem synergies. In the second quarter, we have further enhanced our asset generation and risk pricing capability, leveraging precise borrower segmentation strategies and more competitive credit limits. The average borrowing amount per repeat borrower increased by 4.8% quarter on quarter and their share of loan facilitation volume rose from 71.9% in the previous quarter to 75.6% in the current quarter, effectively boosting borrowers' stickiness. We have also achieved multipoint borrower outreach through continuously expanding acquisition channels and a diversified partnership ecosystem.

Speaker 1

The number of borrowers in the current quarter reached 908,000, representing a year on year increase of approximately 33.5, achieving balanced growth between new and repeat borrowers, which together form the growth resilience of the company. In terms of risk management, we have continued to increase investment in technology and adhere to a data driven risk control framework. Key efforts have been focused on building a multimodal anti fraud system by extracting voiceprints from tens of millions of calls. We have established our own voiceprint database, which has been applied in multiple business processes such as identifying black and gray market activities and preventing fraud. Through multidimensional data cross verification and real time dynamic intelligent recognition, we've blocked approximately 320,000 malicious fraud applications in the 2025 and cumulatively identified and intercepted over 460,000 high risk habitual fraud applications.

Speaker 1

To address market fluctuations, we customized risk models to assess high volatility, high risk users, enhancing risk prediction capabilities. As of the end of second quarter, the ninety day plus delinquency ratio remained stable at 1.12%. To continuously strengthen the value of AI technology in empowering our business, the company has focused on building foundational capabilities and aerial based applications, expanding breadth and depth of business intelligence. In the second quarter, we launched a data intelligence assistant with three key agents, effectively reducing the threshold for business R and D and improving data R and D efficiency. In the agent intelligence domain, we have gradually replaced some commercial large language models with post training self optimized models, resulting in significant cost reductions and efficiency improvements.

Speaker 1

For example, in agent assistance scenarios, the cost of AI generated conversation summaries decreased by approximately 80% year on year. In terms of infrastructure development, our models optimized through reinforcement learning ranked fifth on the internationally authoritative BERT Evaluation Leaderboard, securing the top position among models with the same amount of parameters with a generation share accuracy rate reaching 71%. This lays a solid foundation for the subsequent implementation in loan facilitation scenarios and the construction of our core competitiveness in data engineering. Meanwhile, the company has built a one stop self-service R and D platform that supports various business departments in developing and deploying exclusive AI agents as needed. Within just one month, over 200 such agents have been deployed, strengthening internal empowerment and systematically advancing the in-depth implementation of AI across the business ecosystem.

Speaker 1

Overseas markets remain a critical component of the company's long term strategic layout. In the second quarter, our Indonesian partners saw robust business growth with loan disbursements increasing by over 200% year on year and registered users growing by approximately 170%. While maintaining compliance, we continue to enhance user accumulation and operational efficiency. In Mexico, loan disbursement and registered users both increased by nearly 40% quarter on quarter with a focus on product innovation and optimizing risk control systems. Guided by an open and win win philosophy, we will continue to collaborate with local partners to unlock the potential of overseas markets.

Speaker 1

Recently, we released our 2024 ESG report, which highlights substantial progress and sustainable development. At the corporate governance level, we adhere to leveraging technological innovation to advance inclusive finance. In terms of social responsibility, we have carried out multiple public welfare initiatives focusing on educational support, mental health care. For environmental protection, we have reduced energy intensity and carbon emission intensity through optimized energy and emission management. We have deeply integrated ESG practices into our business operations, fostering a positive cycle among economic returns, social value and low carbon operation.

Speaker 1

Regarding shareholder returns, in July, the company distributed its annual cash dividend. The Board of Directors approved a cash dividend of US0.8 dollars per ADS with a total dividend amount of approximately US41.1 million dollars representing an increase of over 50% compared to last year. In terms of share repurchases, in June, the Board approved extending the current repurchase program's validity period to 06/12/2026. In August, we increased the existing share repurchase plan by an additional US50 million dollars We will flexibly adjust cash dividend and share repurchase policies to share development achievement with shareholders and achieve mutual value creation. Looking ahead to the second half of the year, as new loan facilitation regulations are gradually implemented, the policy environment in the Internet finance sector is becoming clear.

Speaker 1

We will adhere to the principle of compliance as the foundation and prudent operations, dynamically adjusting our operational pace. The company expects its third quarter twenty twenty five loan facilitation volume guidance to be 32,000,000,000 to RMB 34,000,000,000, with non GAAP income from operation guidance set at 490,000,000.00 to RMB 560,000,000.00. Moving forward, we will take compliance as our cornerstone and innovation as our wing, accelerate the building of differentiated competitive barriers and ensuring sustainable and steady growth for the company. With that, I will now turn the call over to our CFO, Mr. Fan Zheng Lin.

Speaker 1

Please go ahead.

Speaker 2

Thank you, Mr. Yan, and hello, everyone, for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB and all percentage changes refer to year over year comparisons unless otherwise noted. As Mr.

Speaker 2

Yan noted earlier, we maintained a robust growth momentum throughout the second quarter, setting a new record high in business scale. Loan facilitation volume was EUR 37,100,000,000.0, representing an increase of 54.6% from the same period of 2024. Our net revenue was thousand €886,200,000 representing an increase of 27.8% from the same period of 2024. Moving on to costs. Facilitation and servicing expense was CHF285.1 million, representing a decrease of 53.1% from the same period of twenty twenty four.

Speaker 2

This was primarily due to decreased expenses related to financial guarantee services. Allowance for our cash flow assets, loans receivable and others were 32,500,000.0 compared with EUR 3,300,000.0 reversal in the 2024, primarily due to the additional cap of overseas guarantees, which the company provided for loan facilitation business conducted by the company's investee in the 2025. Sales and marketing expense was EUR 7 and 10,500,000.0, representing an increase of 46% from the same period of 2024, primarily due to an increase in borrower acquisition expenses and the commission expenses. G and A expense was EUR 110,500,000.0, representing an increase of 70% from the same period of 2024, primarily driven by an increase in payroll expenses and share based compensation. R and D expense was million, representing an increase of 16.8% from the same period of 2024, primarily due to higher share based compensation as well as increased professional service fees.

Speaker 2

Non GAAP income from operation was 7 and 37,600,000.0 compared with EUR261.6 million in the same period of 2024. Consequently, our net income for the second quarter was EUR519.1 million, representing an increase of 117.8% from $238,300,000 in the same period of 2024. Our basic and diluted net income per share was $2.46 compared with $1.12 in the 2024. Basic and diluted net income per ADS was $9,840,000 compared with 4,480,000.00 in the 2024. We ended this quarter with $316,200,000 in cash and cash equivalents compared with $190,300,000 at the end of the previous quarter.

Speaker 2

With that, we can open the call for questions. Ms. Xu, our Chief Risk Officer, and I will answer your questions. Operator, please proceed.

Operator

Thank you. And our first question comes from Ron Hwa with Genu Asset. Your line is open.

Speaker 3

Management, I have two questions. The first one is company's loan facilitation business has sustained high growth. How does management will the impact of the new regulations business going forward? And my second question is what are management's plans around shareholders' return? Thank you.

Speaker 1

Hi, Ms. Farrell, thank you for your question. So we sustained high growth this quarter and this proves our consistent investing and focus in the digitalization and credit technology of our company. And in the future, we'll continue to focus on enhancing operational capabilities through data and AI empowerment to enable financial institutions with our expertise to pursue long term and quality growth. Speaking of the new regulation, the specific implementation will probably become more clear in the fourth quarter.

Speaker 1

At the present, not only for us, but for the entire industry, licensed financial institutions seem to be adopting a more cautious approach to funding supply. And of course, the decisions of which platforms to cooperate with, they're also being made with a greater consideration. In terms of the wireless of institutional partners, earlier Mr. Yan referenced it, but we're proactively ensuring that these requirements don't impact our existing loan facilitation business. On the business model side, we're actively preparing multiple contingency and product plans, so that in the next couple of months, we can quickly respond to product model requirements of our institutional partners related to the new regulation.

Speaker 1

So the company's operational and management focus will continue to be on strengthening our capabilities in credit technology, data, risk management and operations. Really, regardless of how the product and corporations models evolve under the new regulations, these capabilities are our core competitive advantages in the loan facilitation and credit tech industry. And that's what really makes us appealing to our partners. As the new regulation become clear and fully implemented, we expect this to drive a long term healthy industry development growth and ensuring that there healthy competition. So for long standing established players like us in the industry, this is a positive signal.

Speaker 1

For the second question, Mr. Fan will answer your question. For dividends, Mr. Yan touched upon it earlier, the company will maintain an annual dividend policy with the total amount being approximately 30% of the previous year's net income after tax. In July, the company distributed a cash dividend of USD 0.8 per ADS, representing a 60% increase compared to last year's USD 0.5 per ADS.

Speaker 1

For our share repurchase, at the recent Board meeting in August, an additional US50 million dollars was approved for the share repurchase plan, bringing the total authorized repurchase amount to US80 million dollars As of August 2025, the total repurchase amount is approximately US30.4 million dollars To summarize, as always, we will continue to share the results of the company's development with our shareholders and seek to provide excellent returns to our investors. Thank you, Ms. Haram.

Operator

Thank you. Our next question comes from Yuxuan Chen with HTSC. Your line is open.

Speaker 1

Okay. Let me do the translation. Hello, management. Thanks for giving me this opportunity. I'm Chengyuan from Huatai Securities.

Speaker 1

I have two questions. The first one, we noticed the company's profitability has improved over the past two quarters. In light of new regulations, what is your outlook for profit margin going forward? And the second is, we have observed continued improvement in risk performance this quarter. What are the key drivers behind this and how has the risk performance trended so far on the third quarter?

Speaker 1

Also some funding partners have becomes more cautious in lending resulting in tighter market liquidity. Could this create volatility in asset quality? And what measures has measurement taken in response? That's all. Thanks.

Speaker 1

Thank you, Yisheng, for your question. I will answer the first question and Mr. Xu will answer the second question. In Q2 twenty twenty five, the company's non GAAP income from operations reached $738,000,000, really exceeding our guidance range of RMB660 million to RMB730 million previously given. And the net income reached million, a year on year increase of 117.8%.

Speaker 1

The net income margin stood at 27.5%, significantly up from 16.1% in the same period last year. The strong profit margin performance over the past two quarters can be attributed to the following key factors. First, there's a significant increase in the company's loan facilitation volume. In 2025, the loan facilitation volume reached RMB 37,100,000,000.0, a year on year increase of almost 55%, marking a new record since the company's listing. So the economies of scale has really helped improve the profit margin.

Speaker 1

The second factor is the continued optimization of the company's revenue mix. This is the key point we have consistently emphasized to our investors. The high quality growth in the loan facilitation service revenue and the significant reduction in the proportion of guarantee service revenue really have effectively optimized our profit margin. With the rapid year over year growth in facilitation transaction volume in Q2, the company's facilitation service revenue reached 1,609,000,000.000, about a 70% increase compared to the previous year. In terms of revenue contribution, facilitation service revenue's share of the total revenue increased from 64% in Q2 last year to 85 percent in Q2 this year.

Speaker 1

Correspondingly, the proportion of lower margin guarantee related service revenue decreased from about 29% in Q2 twenty twenty four to less than 7% in Q2 twenty twenty five. The continued optimization of the revenue mix has significantly improved the company's profit margin. Third, the company's continued strategic investments in AI technology and R and D have led to significant improvement in operational efficiency. Our ongoing investment, combined with the implementation of AI applications across various operational processes, has really laid a solid foundation for sustained improvements in operational efficiency for Q2 and over the long term. The implementation of the new regulation, as Mr.

Speaker 1

Hu mentioned earlier, in the short term will require institutions to adjust their strategies, pricing strategies and cooperation models. However, in the long term, these regulations will benefit the entire industry by fostering healthier, more compliant and more sustainable development. As the new regulation become implemented, Jiayin will further strengthen our long term advantages given the new regulations become, given the details of the new facilitation regulations are yet to be clarified, we're taking a prudent approach prudent approach in providing the Q3 loan facilitation volume guidance of RMB 32,000,000,000 to RMB 34,000,000,000. For Q3, the non GAAP income from operation guidance is $490,000,000 to RMB $516,000,000. For the full year, we're keeping our guidance the same, RMB137 billion to RMB142 billion for the loan facilitation volume.

Speaker 1

That's my answer for the first question. And the second question, I'll turn it over to Ms. Xu. Yes. The second question are all the questions are related to risk performance.

Speaker 1

So this quarter, the risk performance has continued to improve mainly due to several factors. First, the ongoing investment in risk data and models, focusing on the changes in characteristics during risk cycle, automating the monitoring of leading risk indicators and trends and quickly responding with corresponding risk strategy and frameworks and solutions. The second reason is that the denominator, our loan volume has continued to increase fast speed. So that's another contributing factor. The third reason is technological.

Speaker 1

We've increased our investment in forward looking research on risk cycles. So beginning at the end of Q1 and first, the earlier part of Q2 of this year, we've already began the research and quantification on sensitive borrower segment. We anticipate that in the context of cautious funding supply, there will be short term adjustments and fluctuations are inevitable, especially among the cyclical sensitive borrowers and those with tail end pricing. So as liquidity decreases, the performance for these borrowers is expected to decline. For the repeat borrowers, we're proactively managing the exposure and transaction criteria.

Speaker 1

For new borrowers, what we're doing is we're focusing on the concentration of sensitive borrower segments within the acquisition channels and adjusting the scale proportion and volume and structure of these channels. So throughout this credit cycle, we will continue to monitor and research the customer segment characteristics and enhancing the differentiated credit and operational strategies for our top tier high quality borrowers to ensure the healthy development of our overall risk profile in the broader context of the industry environment. That's my answer for the risk indicators and risk performance. Thank you.

Operator

Thank you. Seeing no more questions, I'll return the call to Sam for closing remarks. Please go ahead.

Speaker 1

Thank you, operator, and thank you all for participating on today's call. We appreciate your interest and look forward to reporting to you again next quarter on our progress.

Operator

Thank you all again. This concludes the call. You may now disconnect.

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