PPDAI Group Q2 Earnings Call Highlights

Key Points

• Q2 results improved sequentially: Loan volume rose 5% to RMB45 billion, revenue increased 6% to RMB3.4 billion and net income climbed 1% to RMB427 million. FinVolution maintained its full-year revenue outlook of RMB11.5 billion–RMB12.9 billion but expects results near the lower end.
• China operations face worsening conditions: Funding costs rose, regulatory actions disrupted collections and China loan volume fell about 50% in July after lenders tightened financing. Management is prioritizing liquidity, profitability and stricter underwriting over near-term growth.
• International growth is offsetting China and Philippines weakness: Overseas loan volume increased 19% year over year, driven by Indonesia and Australia, while the Philippines was affected by an interest-rate cap. FinVolution aims for overseas operations to generate more than 50% of group revenue by 2030.

PPDAI Group NYSE: FINV, which operates as FinVolution Group, reported sequential growth in loan volume, revenue and net income for the second quarter of 2026, while cautioning that a tightening funding environment and collection-industry regulatory actions in China could weigh on lending volumes and credit conditions in coming quarters.

Group loan volume rose 5% sequentially to RMB45 billion, Chief Executive Officer Tim Li said on the company’s earnings call. Revenue increased 6% to RMB3.4 billion, while net income rose 1% sequentially to RMB427 million. The company recorded RMB529 million in operating profit, including a RMB64 million one-time impairment of intangible assets. Excluding that charge, operating profit increased 8% sequentially, Chief Financial Officer Alexis Xu said.

FinVolution reiterated its full-year revenue outlook of RMB11.5 billion to RMB12.9 billion. However, Xu said the company now expects results to land in the lower end of that range unless the operating environment changes substantially, citing softer second-half conditions in China.

China lending growth faces funding pressures

In mainland China, loan volume reached RMB41 billion, up 6.5% from the prior quarter, as the company continued a recovery that began early in 2026. China revenue rose 8% sequentially to RMB2.4 billion, while the take rate remained about 3.2%.

The company said credit performance improved through the second quarter. C-M2 declined to 0.56% from 0.68%, and vintage credit costs remained near 2.7%. The 30-day collection rate improved to 89% from 87%, though day-one delinquency increased slightly to 5.3% from 5.2%.

Li said the company selectively expanded its lending book among higher-quality repeat borrowers, resulting in 6% sequential growth in unique borrowers while maintaining stable credit quality. China operating profit rose 4.3% sequentially to RMB625 million, according to Xu.

Conditions shifted in July following what management described as an isolated credit event involving the Jizi platform. Xu said the event prompted many financial institutions to conduct internal reviews of loan-facilitation partners, with some pausing business during those assessments. Smaller and midsize lending platforms either exited the market or sharply reduced originations, he said.

FinVolution said its China loan volume was down about 50% in July as industry funding tightened. Management said institutional confidence had begun to stabilize in August, but that the recovery in available funding remained gradual.

Funding costs increased 30 basis points sequentially to 3.7% in the second quarter, and Xu said they rose by an additional roughly 30 basis points in July. The company expects funding costs to continue trending upward over the next one to two quarters.

Collection-industry regulatory actions at the end of July also constrained collection resources and reduced recovery efficiency, Xu said. The company’s latest early-risk reading was about 20% above the second-quarter level. In response, FinVolution said it is tightening underwriting, refining customer segmentation, accelerating risk-model updates and reducing acquisition spending.

Management said it will prioritize funding stability and profitability over near-term origination growth. The company ended the quarter with RMB6.4 billion in cash and short-term investments, which Xu said had risen to RMB7.5 billion in July and August. Combined with about RMB5 billion in highly liquid assets, the company cited roughly RMB12.5 billion in available liquidity.

International business offsets Philippines pullback

FinVolution’s overseas segment continued to expand, with loan volume rising 19% year over year and revenue increasing 18% to RMB930 million. Unique overseas borrowers more than doubled from a year earlier to 5.3 million.

Overseas operating profit totaled RMB154 million, up 17% sequentially and more than double the prior-year period, according to Xu. The company said it remains confident in its previously stated full-year overseas EBITDA target of $13 million, double the prior year’s level.

Management said growth in Indonesia and Australia more than offset a deliberate reduction in originations in the Philippines following an interest-rate cap that took effect April 1. The company expects overseas loan volume to grow at a double-digit year-over-year rate for the full year.

• Indonesia: Offline buy now, pay later products accounted for about 25% of volume, compared with a single-digit share a year earlier. Indonesia represents more than 50% of overseas volume and revenue, Xu said.
• Philippines: FinVolution reduced originations and tightened underwriting to adapt to the rate cap. Management expects the business to return to sequential growth in the third quarter, with recovery typically taking two to three quarters after pricing adjustments.
• Australia: Unique borrowers rose 22% sequentially in the second quarter, helping drive loan volume growth of 70% sequentially. The company expanded into larger-ticket, lower-interest-rate products aimed at borrowers with stronger credit profiles.

Capital allocation and longer-term strategy

Li said internationalization remains central to FinVolution’s strategy, helping diversify the business beyond any single market. Overseas revenue represented roughly 27% of group revenue in the second quarter, and management expects that proportion to continue increasing during the rest of the year.

Xu said FinVolution is considering capital injections into licensed operations, including its micro-lending business, to diversify funding sources and improve funding stability in China. The company also said it intends to continue investing in overseas expansion and may replicate aspects of its Australia market-entry approach, including acquisitions.

The company repurchased $27.4 million of shares during the second quarter, bringing first-half repurchases to $66.8 million. Xu said FinVolution will continue to prioritize operating needs and maintain flexibility in repurchases based on share price and market liquidity.

Looking toward 2030, management said it aims for overseas operations to account for more than 50% of total group revenue.

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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