Financial Data and Key Metrics Changes - Total net revenue for Q2 was RMB 5.22 billion, up from RMB 4.69 billion in Q1 and RMB 4.16 billion a year ago [16] - Non-GAAP net income increased by 30.8% year over year to RMB 1.85 billion, while non-GAAP EPADS rose by 48.8% to RMB 13.63 [5][22] - The effective tax rate for Q2 was 19.3%, higher than the typical rate of approximately 15% due to withholding tax provisions [23] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.57 billion in Q2, compared to RMB 3.11 billion in Q1 and RMB 2.91 billion a year ago [17] - Revenue from platform services was RMB 1.65 billion in Q2, up from RMB 1.58 billion in Q1 and RMB 1.25 billion a year ago [17] - Loan volume supported by total technology solutions business increased approximately 150% year over year [11] Market Data and Key Metrics Changes - Total loan facilitation and origination volume increased by approximately 16% year over year to RMB 84.6 billion [4] - New credit line users grew 40% year over year to 1.79 million, while the number of new borrowers increased by approximately 60% year over year to 1.23 million [10] - Total ABS issuance in the first half of the year nearly matched the full year total in 2024, with issuance costs declining to a record low [9] Company Strategy and Development Direction - The company is focused on advancing its AI plus bank strategy and enhancing its AI agent platform to drive digital transformation in financial institutions [11][13] - The company aims to optimize products and services to better address user needs while improving operational efficiency [13] - The company is exploring overseas expansion opportunities, with initial operations launched in the UK [14] Management's Comments on Operating Environment and Future Outlook - The management noted that consumer confidence and credit demand remain soft, with no clear signs of recovery [31] - The company plans to prioritize risk management and take a cautious approach to loan origination in the second half of the year [33] - The company expects to generate non-GAAP net income between RMB 1.6 billion and RMB 1.8 billion for 2025, reflecting a prudent approach amid economic uncertainties [26] Other Important Information - The company has executed a share repurchase plan, purchasing approximately 7.1 million ADS for a total of approximately RMB 277 million [25] - The company reported a provision coverage ratio of 662% in Q2, indicating a robust financial position [21][58] Q&A Session Summary Question: What is the management's latest outlook on loan volume growth? - Management indicated that consumer confidence remains soft, with a decrease in short-term household loans and no clear signs of recovery [31][32] Question: What are the latest views on take rates? - Management stated that the Q2 take rate was 5.4% and expected it to remain around 5% in Q3, with potential volatility due to new regulations [34][35] Question: What is the estimated impact of the new regulation on the ICE business? - Management views the new rules positively for the industry, expecting improved health and sustainability, while preparing alternative plans for the ICE business [40][44] Question: What are the main considerations for selecting target markets for overseas expansion? - Management considers regulatory environment, openness to fintech innovation, and financial infrastructure when selecting target markets [47][48]

Financial Data and Key Metrics Changes - Total net revenue for Q2 was RMB 5.22 billion, up from RMB 4.69 billion in Q1 and RMB 4.16 billion a year ago [18] - Non-GAAP net income increased by 30.8% year over year to RMB 1.85 billion, while non-GAAP EPADS rose by 48.8% to RMB 13.63 [6][24] - Total cash and cash equivalents and short-term investments were RMB 13.34 billion in Q2, down from RMB 14.03 billion in Q1 [25] Business Line Data and Key Metrics Changes - Revenue from credit-driven services was RMB 3.57 billion in Q2, compared to RMB 3.11 billion in Q1 and RMB 2.91 billion a year ago, driven by higher capital-heavy loan volume [19] - Revenue from platform services was RMB 1.65 billion in Q2, up from RMB 1.58 billion in Q1 and RMB 1.25 billion a year ago [19] - Loan volume supported by total technology solutions business increased approximately 150% year over year [12] Market Data and Key Metrics Changes - Total loan facilitation and origination volume increased by approximately 16% year over year to RMB 84.6 billion [5] - New credit line users grew 40% year over year to 1.79 million, while the number of new borrowers increased by approximately 60% year over year to 1.23 million [11] - Ninety-day delinquency rate was 1.97% in Q2, down from 2.02% in Q1 [21] Company Strategy and Development Direction - The company is focused on advancing its AI plus bank strategy and enhancing its AI agent platform to drive digital transformation in financial institutions [12][14] - The company aims to optimize products and services to better address user needs while improving operational efficiency [14] - The company is exploring international opportunities, with a recent launch of small-scale operations in the UK [15] Management's Comments on Operating Environment and Future Outlook - The management noted that consumer confidence and credit demand remain soft, with no clear signs of recovery [34] - The company expects to maintain a cautious approach to loan origination and facilitation due to regulatory uncertainty [35] - For 2025, the company expects to generate non-GAAP net income between RMB 1.6 billion and RMB 1.8 billion [28] Other Important Information - The company issued approximately RMB 7.8 billion in ABS during the quarter, representing a year-over-year increase of about 70% [9] - The effective tax rate for Q2 was 19.3%, higher than the typical rate of approximately 15% due to withholding tax provisions [25] Q&A Session Summary Question: What is the management's latest outlook on loan volume growth? - Management indicated that consumer confidence and credit demand remain soft, with no clear signs of recovery, and a cautious approach to loan origination will be maintained [34][35] Question: What are the latest views on take rates? - The Q2 take rate was 5.4%, with expectations of around 5% for Q3, but regulatory changes may introduce volatility [37][38] Question: What is the estimated impact of the new regulation on the ICE business? - Management views the new rules positively for the industry, expecting improved health and sustainability, with a focus on technology capabilities [42][43] Question: What are the main considerations for overseas expansion? - The company considers regulatory environment, openness to fintech innovation, and financial infrastructure when selecting target markets [49][50]

Core Insights - The company reported its Q2 2025 financial results, showing significant growth in user base and loan facilitation [2] - The company has deepened its embedded finance strategy, enhancing user experience across various sectors [2] User Metrics - The platform serves a total of 165 financial institutions, with registered users reaching 276 million, representing a year-on-year growth of 11.4% [2] - The cumulative number of credit users increased to 60.2 million, up 12.3% year-on-year, while borrowing users reached 36.8 million, reflecting a 14.9% increase [2] - In Q2, the company added 1.79 million new credit users, a 40% year-on-year increase, and 1.23 million new borrowing users, approximately 60% higher than the previous year [2] Loan Facilitation - The platform facilitated loans totaling 84.6 billion yuan in Q2, marking a 16% year-on-year increase, with outstanding loans at 140.1 billion yuan [2] - Over half of the new credit users came from embedded finance channels, which saw a year-on-year growth of 103% in new credit users and approximately 155% growth in loan volume [2] Financial Performance - The company's revenue for Q2 reached 5.2 billion yuan, reflecting an 11.2% quarter-on-quarter increase and a 25.4% year-on-year increase [2] - The non-GAAP net profit for the quarter was reported at 1.85 billion yuan [2]

Company Overview - Qfin Holdings is a leading AI-empowered credit-tech platform in China[14] - The company facilitated RMB 846 billion in loan volume in 2Q25, a 161% year-over-year increase[14] - Non-GAAP net income in 2Q25 was RMB 1849 million, a 315% year-over-year increase[14] - The platform has 602 million cumulative users with approved credit lines and 165 cumulative financial institution partners[14] Shareholder Value - Over US$1 billion worth of ADSs have been repurchased cumulatively[16] - Share count reduction through share repurchase plans is 227%[16] - The dividend per ADS for 1H25 is US$076[18] Business Model and Technology - The company primarily enables financial institutions with innovative technology solutions, focusing on convenient processes and personalized products[21] - The platform utilizes an AI-driven credit assessment engine (Argus) with over 680k data dimensions and 300+ model iterations[41] - AI is applied ubiquitously in business operations, including intelligent marketing, loan monitoring/collection, loan application/drawdown, and research and development[43, 44, 45] Financial Performance - Loan facilitation volume grew by 161% year-over-year, reaching RMB 846 billion in 2Q25[56] - Platform services contributed 414% to the loan facilitation volume[57] - Non-GAAP net income was RMB 1849 million in 2Q25[63]

Company Performance - Qfin Holdings Inc. reported quarterly earnings of $1.78 per share, slightly missing the Zacks Consensus Estimate of $1.79 per share, but showing an increase from $1.22 per share a year ago, resulting in an earnings surprise of -0.56% [1] - The company posted revenues of $728.11 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 13.46%, and up from $572.44 million year-over-year [2] - Over the last four quarters, Qfin Holdings has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - Qfin Holdings shares have declined approximately 9.2% since the beginning of the year, contrasting with the S&P 500's gain of 10% [3] - The current Zacks Rank for Qfin Holdings is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.83 on revenues of $654.88 million, and for the current fiscal year, it is $7.11 on revenues of $2.58 billion [7] - The outlook for the industry, specifically the Financial - Miscellaneous Services sector, is favorable, ranking in the top 20% of over 250 Zacks industries, which historically outperforms the bottom 50% by more than 2 to 1 [8]

Core Viewpoint - Qifu Technology demonstrates strong resilience and risk management capabilities in a complex macroeconomic environment, achieving significant growth in user base and financial performance [1][2][3] Financial Performance - In Q2 2025, Qifu Technology reported revenue of RMB 52 billion, a quarter-on-quarter increase of 11.2% and a year-on-year increase of 25.4% [2][3] - The non-GAAP net profit for the same quarter was RMB 18.5 billion, with operating cash flow reaching approximately RMB 26.2 billion [2][3] - The company achieved a record high in ABS issuance, with a further decrease in comprehensive funding costs quarter-on-quarter [2] User Growth and Engagement - As of June 30, 2025, Qifu Technology served 165 financial institutions, with a registered user base of 276 million, reflecting a year-on-year growth of 11.4% [1] - The number of cumulative credit users increased to 60.2 million, up 12.3% year-on-year, while borrowing users reached 36.8 million, a 14.9% increase [1] - In Q2, the platform facilitated loans totaling RMB 84.6 billion, a year-on-year growth of 16%, with a loan balance of RMB 140.1 billion at the end of the quarter [1] Strategic Initiatives - The company has expanded its customer acquisition channels through embedded finance, linking with various internet scenarios such as short videos, e-commerce, travel, and food delivery [1] - Over half of the new credit users in the quarter came from embedded finance partners, with new credit user numbers increasing by 40% year-on-year [1] - The company plans to continue investing in AI applications within its credit service chain to enhance service quality and efficiency [2]

Core Viewpoint - Qifu Technology, a Chinese AI credit technology platform, reported its unaudited financial results for the second quarter and six months ending June 30, 2025, and announced an increase in semi-annual dividends [1][20]. Financial Performance - Total net revenue for Q2 2025 was RMB 52.159 billion (USD 7.281 billion), up from RMB 41.601 billion in Q2 2024 and RMB 46.907 billion in Q1 2025 [6][10]. - Net profit for Q2 2025 was RMB 17.305 billion (USD 2.416 billion), compared to RMB 13.765 billion in Q2 2024 and RMB 17.966 billion in Q1 2025 [7][14]. - Non-GAAP net profit for Q2 2025 was RMB 18.49 billion (USD 2.581 billion), an increase from RMB 14.134 billion in Q2 2024 and a decrease from RMB 19.262 billion in Q1 2025 [8][14]. Business Summary - As of June 30, 2025, the platform connected with 165 financial institution partners and 275.8 million consumers with potential credit needs, an 11.4% increase from 247.6 million a year ago [2]. - The cumulative number of approved credit limit users reached 60.2 million, a 12.3% increase from 53.6 million as of June 30, 2024 [2]. - The total number of successful borrowers (including repeat borrowers) was 36.8 million, a 14.9% increase from 32 million as of June 30, 2024 [2]. Loan and Credit Metrics - The total loan amount facilitated and issued by financial institutions through the platform reached RMB 846.09 billion, a 16.1% increase from RMB 728.64 billion in the same period of 2024, but a 4.8% decrease from RMB 888.83 billion in the previous quarter [2]. - The outstanding loan balance as of June 30, 2025, was RMB 1,400.8 billion, a 13.4% increase from RMB 1,235.51 billion as of June 30, 2024, but a slight decrease of 0.1% from RMB 1,402.73 billion as of March 31, 2025 [3]. - The 90+ days delinquency rate for loans on the platform was 1.97% as of June 30, 2025 [4]. Operational Insights - The weighted average contract term for loans initiated by financial institutions on the platform was approximately 10.33 months in Q2 2025, compared to 9.97 months in the same period of 2024 [3]. - Repeat borrowers contributed 93.8% of the loans initiated in Q2 2025 [5]. Dividend and Share Buyback - The board approved a semi-annual dividend of USD 0.38 per Class A ordinary share and USD 0.76 per American Depositary Share, with payment dates expected around September 25 and September 30, 2025, respectively [20]. - As of August 14, 2025, the company repurchased approximately 7.1 million ADS for a total of about USD 277 million under its stock repurchase plan [22]. Future Outlook - Due to ongoing macroeconomic uncertainties, the company plans to maintain cautious business planning for the remainder of 2025, expecting Q3 2025 net profit to be between RMB 15.2 billion and RMB 17.2 billion, reflecting a year-over-year decline of 2% to 13% [23].

EF001 | 發行人所發行上市權證/可轉換債券的相關信息 | | | --- | --- | | 發行人所發行上市權證/可轉換債券 | 不適用 | | 其他信息 | | | 納斯達克美國存託股票代碼: QFIN | | | 發行人董事 | | | 於本公告日期，本公司董事會包括董事吳海生先生、徐祚立先生及趙丹先生；及獨立董事肖鋼先生、閻焱先生、趙帆先生、陳曉歡 | | | 先生、劉祥革先生及焦嬌女士。 | | 第 2 頁 共 2 頁 v 1.1.1 EF001 免責聲明 | 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 | | | --- | --- | | 股票發行人現金股息公告 | | | 發行人名稱 | 奇富科技股份有限公司 | | 股份代號 | 03660 | | 多櫃檯股份代號及貨幣 | 不適用 | | 相關股份代號及名稱 | 不適用 | | 公告標題 | 2025財年上半年度股息公告 | | 公告日期 | 2025年8月15日 | | 公 ...

[Performance Overview & Management Commentary](index=2&type=section&id=Performance%20Overview%20%26%20Management%20Commentary) [Q2 2025 Business Highlights](index=2&type=section&id=Q2%202025%20Business%20Highlights) In Q2 2025, the company achieved year-over-year growth in user base and outstanding loan balance, with 41.4% of total facilitated loans under light-capital models and a 90-day+ delinquency rate of 1.97% Q2 2025 Key Operating Metrics | Metric | Q2 2025 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Total Facilitated and Originated Loan Volume | RMB 84.61 billion | +16.1% | -4.8% | | - Light-Capital/ICE/Tech Solution Share | 41.4% | - | - | | Total Outstanding Loan Balance at Period End | RMB 140.08 billion | +13.4% | -0.1% | | - Light-Capital/ICE/Tech Solution Share | Approx. 51% | - | - | | Cumulative Approved Credit Line Users | 60.2 million | +12.3% | - | | Cumulative Successful Borrower Withdrawals | 36.8 million | +14.9% | - | | 90-Day+ Delinquency Rate | 1.97% | - | - | [Q2 2025 Financial Highlights](index=3&type=section&id=Q2%202025%20Financial%20Highlights) The company achieved robust financial performance in Q2 2025, with total net revenue reaching **RMB 5.22 billion** and Non-GAAP net profit at **RMB 1.85 billion**, demonstrating sustained profitability Q2 2025 Key Financial Data | Metric | Amount (RMB) | Amount (USD) | | :--- | :--- | :--- | | Total Net Revenue | 5.216 billion | 0.728 billion | | Net Profit | 1.731 billion | 0.242 billion | | Non-GAAP Net Profit | 1.849 billion | 0.258 billion | | Diluted Net Earnings Per ADS | 12.76 | 1.78 | | Diluted Non-GAAP Net Earnings Per ADS | 13.63 | 1.90 | [Management Commentary](index=3&type=section&id=Management%20Commentary) Management highlighted the company's resilient operations amidst macroeconomic uncertainties and regulatory changes, achieved by tightening risk controls, optimizing business structure with **51%** light-asset model share, and diversifying customer acquisition channels, while prudently increasing provisions to near historical highs - CEO Wu Haisheng noted that in response to economic uncertainties and regulatory changes, the company proactively tightened risk control standards and adjusted its business structure, with the outstanding loan balance from light-asset models, ICE, and comprehensive technology solutions reaching approximately **51%**[7](index=7&type=chunk) - CFO Xu Zuoli emphasized that despite the volatile macroeconomic environment, the company achieved robust financial performance and prudently assessed risks, with new provisions in Q2 approaching historical highs[7](index=7&type=chunk) - CRO Zheng Yan added that influenced by macroeconomic challenges, overall market risk levels fluctuated, with the first-day delinquency rate reaching **5.1%**, prompting the company to tighten risk controls and potentially implement further measures to mitigate potential risks[7](index=7&type=chunk) [Financial Performance Analysis](index=4&type=section&id=Financial%20Performance%20Analysis) [Operating Results](index=4&type=section&id=Operating%20Results) In Q2 2025, total net revenue grew **25.4%** to **RMB 5.22 billion**, driven by credit-driven and platform services, while operating costs and expenses significantly increased **41.6%** to **RMB 3.08 billion**, resulting in operating income of **RMB 2.14 billion**, up **7.6%** year-over-year [Net Revenue](index=4&type=section&id=Net%20Revenue) Total net revenue reached **RMB 5.22 billion**, a **25.4%** year-over-year increase, with credit-driven service net revenue at **RMB 3.57 billion** (up **22.4%**) and platform service net revenue at **RMB 1.65 billion** (up **32.3%**), driven by increased financing income and referral service fees respectively Q2 2025 Net Revenue Composition (RMB million) | Revenue Item | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Net Revenue** | **5,215.9** | **4,160.1** | **+25.4%** | | **Credit-Driven Service Net Revenue** | **3,565.5** | **2,912.2** | **+22.4%** | | - Financing Income | 2,205.0 | 1,690.1 | +30.5% | | - Release of Guarantee Liabilities Income | 805.3 | 972.6 | -17.2% | | **Platform Service Net Revenue** | **1,650.3** | **1,247.9** | **+32.3%** | | - Loan Facilitation and Service Fees - Light-Capital | 326.8 | 524.4 | -37.7% | | - Referral Service Fees | 986.4 | 623.5 | +58.2% | [Operating Costs and Expenses](index=5&type=section&id=Operating%20Costs%20and%20Expenses) Total operating costs and expenses increased **41.6%** to **RMB 3.08 billion**, primarily driven by a rise in sales and marketing expenses to **RMB 663 million** due to increased investment in embedded finance channels and information flow advertising, and a significant increase in contingent liability provisions to **RMB 398 million** due to higher heavy-capital loan volumes and risk assessment adjustments Q2 2025 Operating Costs and Expenses Composition (RMB million) | Cost Item | Q2 2025 | Q2 2024 | YoY Change Reason | | :--- | :--- | :--- | :--- | | **Total** | **3,079.7** | **2,175.1** | **-** | | Facilitation, Origination and Servicing Expenses | 781.0 | 722.2 | Increase in total loan volume | | Sales and Marketing Expenses | 662.7 | 366.4 | Increased investment in embedded finance channels and information flow advertising | | Provision for Loans Receivable | 773.8 | 849.5 | Reversal of prior provisions, partially offset by increase in on-balance sheet loans | | Provision for Contingent Liabilities | 397.6 | (213.3) | Increase in heavy-capital loan facilitation volume and risk assessment adjustments | [Profitability and EPS](index=6&type=section&id=Profitability%20and%20EPS) In Q2 2025, the company achieved operating income of **RMB 2.14 billion**, net profit of **RMB 1.73 billion** (up **25.7%** YoY), and Non-GAAP net profit of **RMB 1.85 billion** (up **30.8%** YoY), with diluted net earnings per ADS at **RMB 12.76** Q2 2025 Profitability Metrics (RMB million) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Income | 2,136.2 | 1,985.0 | +7.6% | | Non-GAAP Operating Income | 2,254.7 | 2,021.9 | +11.5% | | Net Profit | 1,730.5 | 1,376.5 | +25.7% | | Non-GAAP Net Profit | 1,849.0 | 1,413.4 | +30.8% | | Diluted Net Earnings Per ADS (RMB) | 12.76 | 8.92 | +43.0% | [Asset Quality](index=7&type=section&id=Asset%20Quality) The report presents asset quality performance of facilitated loans across different periods through 30-day+ and 180-day+ delinquency rate charts (Vintage Curves), which are key tools for assessing credit business risk trends - The report provides quarterly historical loan 30-day+ and 180-day+ delinquency rate charts to track the asset quality performance of loans originated in different periods[22](index=22&type=chunk)[23](index=23&type=chunk)[26](index=26&type=chunk) [Shareholder Returns & Business Outlook](index=7&type=section&id=Shareholder%20Returns%20%26%20Business%20Outlook) [Dividends and Share Repurchase](index=7&type=section&id=Dividends%20and%20Share%20Repurchase) The company declared a H1 2025 dividend of **USD 0.76** per ADS and actively executed its share repurchase program, having repurchased approximately **USD 277 million** in ADS under the 2025 plan as of August 14, 2025 - The Board approved a H1 2025 dividend of **USD 0.38** per Class A ordinary share or **USD 0.76** per ADS, with the record date set for September 8, 2025[25](index=25&type=chunk) - As of August 14, 2025, the company repurchased approximately **7.1 million** ADS at an average price of **USD 38.9/ADS**, totaling approximately **USD 277 million**, under its **USD 450 million** 2025 share repurchase program[27](index=27&type=chunk) [Business Outlook](index=8&type=section&id=Business%20Outlook) Given ongoing macroeconomic uncertainties, the company maintains a cautious outlook for Q3 2025, projecting net profit between **RMB 1.52 billion** and **RMB 1.72 billion**, and Non-GAAP net profit between **RMB 1.60 billion** and **RMB 1.80 billion**, representing a **2% to 13%** year-over-year decrease Q3 2025 Performance Guidance | Metric | Forecast Range (RMB billion) | YoY Change | | :--- | :--- | :--- | | Net Profit | 1.52 - 1.72 billion | -13% to -2% | | Non-GAAP Net Profit | 1.60 - 1.80 billion | - | [Financial Statements](index=11&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached **RMB 59.75 billion**, up **24.1%** from year-end 2024, primarily driven by increased net loans receivable, with total liabilities at **RMB 35.65 billion** and total equity at **RMB 24.11 billion**, indicating a stable balance sheet structure Key Balance Sheet Items (As of June 30, 2025) | Item | Amount (RMB billion) | | :--- | :--- | | **Total Assets** | **59.75** | | Cash, Cash Equivalents and Restricted Cash | 8.21 | | Net Loans Receivable (Current + Non-current) | 37.43 | | **Total Liabilities** | **35.65** | | Amounts Due to Consolidated Trust Investors | 20.00 | | **Total Equity** | **24.11** | [Unaudited Condensed Consolidated Statements of Operations](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenue, costs, and profit composition for Q2 and H1 2025, showing Q2 net revenue of **RMB 5.22 billion**, operating income of **RMB 2.14 billion**, and net profit of **RMB 1.73 billion** Q2 2025 Income Statement Overview (RMB million) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Net Revenue | 5,215.9 | 4,160.1 | | Total Operating Costs and Expenses | 3,079.7 | 2,175.1 | | Operating Income | 2,136.2 | 1,985.0 | | Net Profit | 1,730.5 | 1,376.5 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, the company generated **RMB 2.62 billion** in net cash from operating activities, indicating strong core business cash generation, while net cash used in investing activities was **RMB 8.19 billion**, and net cash from financing activities was **RMB 2.00 billion** Q2 2025 Cash Flow Statement Overview (RMB million) | Item | Q2 2025 | | :--- | :--- | | Net Cash from Operating Activities | 2,622.0 | | Net Cash Used in Investing Activities | (8,191.1) | | Net Cash from Financing Activities | 1,995.6 | | Cash, Cash Equivalents and Restricted Cash at Period End | 8,212.4 | [GAAP to IFRS Reconciliation](index=17&type=section&id=GAAP%20to%20IFRS%20Reconciliation) [Reconciliation Explanation and Results](index=17&type=section&id=Reconciliation%20Explanation%20and%20Results) This section provides a quantitative reconciliation of financial statements prepared under US GAAP to IFRS, as required by HKEX, showing H1 2025 net profit of **RMB 3.52 billion** under IFRS, slightly lower than **RMB 3.53 billion** under US GAAP - The company's directors prepared interim financial statements under US GAAP and disclosed a reconciliation of differences with International Financial Reporting Standards (IFRS)[51](index=51&type=chunk) - Deloitte Touche Tohmatsu has performed a limited assurance engagement on this reconciliation statement and found no material issues[54](index=54&type=chunk)[55](index=55&type=chunk) [Notes on Key Accounting Differences](index=24&type=section&id=Notes%20on%20Key%20Accounting%20Differences) The report details five key accounting differences between US GAAP and IFRS: expected credit loss recognition (CECL vs. IFRS 9 three-stage model), effective interest rate calculation, share-based payment attribution, financial guarantee accounting, and convertible preferred note measurement - Expected Credit Losses: US GAAP uses the CECL model to recognize lifetime expected losses at inception, while IFRS 9 employs a three-stage model, recognizing lifetime losses only when credit risk significantly increases[62](index=62&type=chunk) - Effective Interest Rate: US GAAP calculates based on contractual cash flows, whereas IFRS uses estimated cash flows[63](index=63&type=chunk) - Financial Guarantees: US GAAP recognizes standby and contingent guarantee liabilities using the gross method, while IFRS recognizes revenue based on premiums received and measures liabilities at the higher of loss allowance or initial recognition amount[63](index=63&type=chunk) - Convertible Preferred Notes: Under US GAAP, they are measured as liabilities, while under IFRS, they are designated as fair value through profit or loss[63](index=63&type=chunk)

Core Viewpoint - Qfin Holdings, Inc. reported strong financial results for the second quarter of 2025, with total net revenue reaching RMB5,215.9 million (US$728.1 million), reflecting a year-over-year increase of 25.4% from RMB4,160.1 million in the same period of 2024. The company also announced a semi-annual dividend of US$0.38 per Class A ordinary share [10][17][41]. Financial Highlights - Total net revenue for Q2 2025 was RMB5,215.9 million (US$728.1 million), compared to RMB4,690.7 million in the prior quarter and RMB4,160.1 million in the same period of 2024 [10][17]. - Net income for Q2 2025 was RMB1,730.5 million (US$241.6 million), a decrease from RMB1,796.6 million in the prior quarter but an increase from RMB1,376.5 million in the same period of 2024 [18][35]. - Non-GAAP net income for Q2 2025 was RMB1,849.0 million (US$258.1 million), compared to RMB1,926.2 million in the prior quarter and RMB1,413.4 million in the same period of 2024 [18][36]. - Total outstanding loan balance was RMB140,080 million as of June 30, 2025, an increase of 13.4% from RMB123,551 million a year ago [11][10]. Business Performance - The platform connected 165 financial institutional partners and 275.8 million consumers with potential credit needs, marking an 11.4% increase from 247.6 million a year ago [11]. - Cumulative users with approved credit lines reached 60.2 million, up 12.3% from 53.6 million a year ago [11]. - The company facilitated 23,638,189 loans in Q2 2025, with total facilitation and origination loan volume reaching RMB84,609 million, a 16.1% increase from RMB72,864 million in the same period of 2024 [11][10]. Operational Insights - The weighted average contractual tenor of loans originated was approximately 10.33 months, compared to 9.97 months in the same period of 2024 [11]. - The 90-day+ delinquency rate was 1.97% as of June 30, 2025 [11]. - Repeat borrower contribution for loans originated was 93.8% in Q2 2025 [11]. Strategic Developments - The company issued a record amount of Asset-Backed Securities (ABS) during the quarter, and the blended funding cost declined despite liquidity shortages in certain industry segments [14]. - More than half of new credit line users were acquired through embedded finance partners, indicating a diversification in user acquisition channels [14]. - The company plans to allocate more resources to AI applications across its credit service offerings to enhance efficiency and service quality [15]. Future Outlook - For Q3 2025, the company expects net income between RMB1.52 billion and RMB1.72 billion, and non-GAAP net income between RMB1.60 billion and RMB1.80 billion, reflecting a year-on-year decline of 2% to 13% [44].