PPDAI Group Q1 Earnings Call Highlights

Key Points

• FinVolution posted a steady first quarter of 2026, with net revenue up 6% sequentially to RMB 3.2 billion and net profit up 1% to RMB 421 million, while management said improving credit trends in China helped offset seasonal softness and FX pressure.
• The newly disclosed overseas segment is becoming a major growth driver, contributing 30% of group revenue and delivering 35% year-over-year revenue growth, 88% operating profit growth, and profitability across Indonesia, the Philippines, and Australia.
• Management highlighted improving asset quality and capital returns, including better delinquency and collection metrics in China, continued AI-driven efficiency gains, and a new $150 million buyback program alongside full-year 2026 revenue guidance of RMB 11.5 billion to RMB 12.9 billion.

PPDAI Group NYSE: FINV, referred to on the call as FinVolution Group, reported a steady first quarter of 2026 as management highlighted improving credit trends in China, continued overseas growth and a new reporting structure designed to give investors more visibility into its international operations.

Chief Executive Officer Tiezheng “Tim” Li said the company entered the year with “clarity, not certainty,” and that early results showed the impact of disciplined decisions made in 2025. Despite normal first-quarter seasonal softness, total transaction volume was RMB 42.6 billion, roughly in line with the prior quarter. Group net revenue reached RMB 3.2 billion, up 6% sequentially, while net profit was RMB 421 million, up 1% sequentially. Li said foreign exchange fluctuations affected bottom-line growth.

Management said overseas markets accounted for 30% of group revenue during the quarter and have become “a second profitable engine” for the business. For the first time, the company disclosed overseas operations as a separate reportable segment.

China Business Shows Early Risk Improvement

Li described the first quarter in mainland China as a period of “patience,” with early signs of recovery but continued regulatory uncertainty. China transaction volume was RMB 38.5 billion, roughly flat sequentially, despite the Chinese New Year holiday period.

Chief Financial Officer Jiayuan “Alexis” Xu said China net revenue was RMB 2.2 billion, up 7% sequentially. The take rate rose from 3.0% to 3.2%, supported by better risk performance.

Management pointed to several indicators showing improved credit conditions in China:

• Vintage delinquency eased from 3.0% to 2.7%.
• Day-one delinquency improved from 5.5% to 5.2%.
• The 30-day collection rate rose from 85.9% to 86.8%.
• The M2 default rate declined from 0.77% to 0.68%.

Li said actions taken in the second half of 2025 were helping credit risk return to a healthier baseline. Xu added that the company selectively broadened credit appetite as asset quality improved, while maintaining stable funding partnerships with financial institutions.

FinVolution added about 0.6 million new borrowers in China during the quarter, up 7% sequentially. Management said this occurred even as sales and marketing spending in China was reduced, helped by improved targeting, higher conversion and lower customer acquisition costs.

Overseas Segment Gains Scale and Profitability

The newly disclosed overseas segment includes Indonesia, the Philippines and Australia. Xu said the segment had reached a point where separate reporting better reflects its scale, profitability and growth trajectory.

Overseas revenue was RMB 949 million in the first quarter, up 35% year over year. Operating profit reached RMB 46 million, up 88% year over year, while adjusted EBITDA was RMB 47.5 million, up 87% year over year. Management said all three overseas markets contributed to profitability.

Overseas transaction volume was RMB 4.1 billion, broadly flat sequentially, with management noting that the first quarter is also seasonally slow in international markets. On a year-over-year basis, overseas loan volume rose 35%, loan balance increased 38% and unique borrowers more than doubled to 4.5 million.

In Indonesia, Xu said offline buy now, pay later remained the primary growth engine despite Ramadan, with both transaction volume and loan balance up 5% sequentially. Unique borrowers in Indonesia reached 3.2 million, nearly five times the level from a year earlier.

In the Philippines, management said it deliberately moderated origination ahead of a new interest rate regime taking effect in the second quarter. Xu said the company had previously navigated pricing transitions in Indonesia and China and was applying a similar approach in the Philippines.

In Australia, Li said the company is expanding customer acquisition channels, migrating the platform to proprietary risk infrastructure and deploying credit models tailored to Australian consumers. Xu said credit trends in Australia moved lower from the prior quarter’s seasonal peak, and transaction volume still grew sequentially despite first-quarter softness.

AI and Technology Remain Central to Operations

Li said artificial intelligence is now “how we run the business,” rather than merely a supporting capability. The company has nearly 120 active AI-related initiatives across the business, with more than half embedded directly in frontline operations.

Management cited AI collection agents as one example. Li said they are the default touchpoint for pre-due reminders in some overseas businesses and are handling 50% of early-stage collections at recovery efficiency levels in line with historical benchmarks.

Xu also said large language models are being used in China to refine risk analysis, fraud detection and intelligent post-loan collections. In response to an analyst question, Xu said asset quality continued to improve into the second quarter, with day-one delinquency falling below 5% by the end of April, returning to levels seen in July and August of the prior year.

Buybacks, Dividend and Regulatory Outlook

During the question-and-answer session, UBS analyst Xiaoxiong Ye asked about the company’s buyback plans and regulatory developments. Xu said the company repurchased about $14 million of shares in the fourth quarter of 2025, another $39 million in the first quarter of 2026 and an additional $15 million by the end of April, for about $54 million deployed this year. He said about $20 million remained under the current program, and the board had approved a new $150 million buyback program lasting two years.

Xu said capital allocation will balance business expansion, particularly overseas, with share repurchases when the stock trades at what management views as a dislocated price.

On regulation, Li addressed new rules related to online marketing of financial products. He said the regulation continues a trend toward consumer protection, licensed participation in financial products and clearer boundaries between technology and finance. Li said marketing rules are tightening, user traffic flows from third-party platforms may require workflow changes, and core financial decisions such as credit approval and risk assessment must remain with licensed financial institutions.

“This has always been our model,” Li said, adding that FinVolution provides technology and data tools while partners make final decisions. He said the company views the higher regulatory bar as a medium- to long-term positive, though near-term adjustments will be required.

The company reiterated full-year 2026 revenue guidance of RMB 11.5 billion to RMB 12.9 billion. Xu said China remains a resilient foundation while overseas operations are scaling profitability alongside it.

About PPDAI Group NYSE: FINV

PPDAI Group Inc operates an online consumer finance marketplace that connects individual and institutional investors with personal and small-business borrowers. Through its digital platform, the company facilitates unsecured consumer loans, auto refinancing loans and small-business financing by leveraging proprietary credit assessment tools and big data analytics. Investors gain exposure to a diversified portfolio of retail credit assets, while borrowers benefit from streamlined application processes and competitive financing rates.

At the core of PPDAI's offering is a multi-layered risk management framework that combines automated credit scoring, manual underwriting oversight and third-party data verification.

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