Financial Data and Key Metrics Changes - Total revenue for Q1 2024 reached RMB1.4 billion, representing a 40% year-over-year increase [19] - Total loan volume reached RMB11.9 billion, marking an 86% increase year-over-year [6] - Net profit for the quarter was RMB486 million, a 14% increase from the prior year [24] - Net cash from operations increased by 62% year-over-year [24] Business Line Data and Key Metrics Changes - Financial services segment revenue increased by 53% year-over-year to RMB738.1 million [19] - Insurance brokerage segment gross written premiums reached RMB912 million, a slight 1% decrease year-over-year [19] - Consumption and lifestyle services segment GMV reached RMB625 million, a remarkable 103% year-over-year increase [15] Market Data and Key Metrics Changes - The Philippine market achieved a milestone by surpassing RMB10 million in monthly loan volume [9] - International business loan volume increased by 60% compared to the previous quarter [8] Company Strategy and Development Direction - The company has rebranded its Chinese name to emphasize its focus on AI technology [5] - AI integration is a core strategy, with plans to enhance existing operations and explore new business opportunities [16][18] - The company aims to build advanced AI capabilities and explore strategic investments and partnerships [17][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of regulatory changes on the life insurance sector but remains optimistic about future growth in property insurance [12][14] - The company expects to maintain a revenue range of RMB1.4 billion to RMB1.6 billion for Q2 2024 [25] - Management is evaluating the possibility of instituting a dividend to return cash to shareholders [32] Other Important Information - The delinquency rate of the loan portfolio increased to 3.9% due to industry-wide credit quality fluctuations [10] - The company is focusing on improving asset quality through AI analysis and risk control [10][11] Q&A Session Summary Question: Comments on the quarter and dividend suggestion - Management acknowledged improvements in public relations and is evaluating the suggestion for a dividend [31][32] Question: International business expansion - Management confirmed solid progress in international markets, with expectations for overseas loan volume to increase significantly [38][39] Question: AI strategy and acquisitions - Management is focusing on utilizing AI in existing operations and exploring strategic investments and acquisitions in AI [41][43] Question: Cash flow and prepaid expenses - Management explained the increase in net cash from operations and the rise in prepaid expenses due to business development needs [46][65][68]

Core Viewpoint Yiren Digital Ltd. reported strong financial results for the first quarter of 2024, showcasing significant growth in revenue and operational metrics despite seasonal challenges. The company continues to enhance its AI capabilities and expand its service offerings in financial and lifestyle sectors. Financial Services Business - Total loans facilitated in Q1 2024 reached RMB 11.9 billion (US$ 1.6 billion), up 2.3% from RMB 11.6 billion in Q4 2023 and significantly higher than RMB 6.4 billion in Q1 2023 [2] - Cumulative number of borrowers served reached 9,978,280, a 7.3% increase from 9,295,666 as of December 31, 2023, and up from 7,582,435 as of March 31, 2023 [2] - Outstanding balance of performing loans was RMB 20.2 billion (US$ 2.8 billion), reflecting a 10.4% increase from RMB 18.3 billion as of December 31, 2023, and up from RMB 11.1 billion as of March 31, 2023 [2] Insurance Brokerage Business - Cumulative number of insurance clients served reached 1,343,660, a 4.7% increase from 1,283,102 as of December 31, 2023, and up from 1,007,238 as of March 31, 2023 [3] - Gross written premiums in Q1 2024 were RMB 912.4 million (US$ 126.4 million), down 24.5% from RMB 1,208.7 million in Q4 2023, primarily due to a decline in life insurance volume from regulatory changes [3] Consumption and Lifestyle Business - Total gross merchandise volume through the e-commerce platform reached RMB 625.1 million (US$ 86.6 million) in Q1 2024, a decrease of 9.8% from RMB 692.7 million in Q4 2023, attributed to seasonal factors [4] Financial Performance - Total net revenue for Q1 2024 was RMB 1,378.1 million (US$ 190.9 million), a 39.7% increase from RMB 986.3 million in Q1 2023 [7] - Revenue from financial services was RMB 738.1 million (US$ 102.2 million), up 52.5% from RMB 483.9 million in the same period of 2023 [7] - Net income for Q1 2024 was RMB 485.9 million (US$ 67.3 million), compared to RMB 427.2 million in Q1 2023, driven by growth in financial services and lifestyle segments [10] Operational Efficiency - The company generated approximately RMB 632 million in net cash from operations during Q1 2024, reflecting a 62% increase from the previous year [5] - Cash and equivalents stood at RMB 5.9 billion (US$ 817.7 million) as of March 31, 2024, with a total of USD 9.5 million allocated for share repurchase by the same date [6] Business Outlook - The company projects total revenue for Q2 2024 to be between RMB 1.4 billion to RMB 1.6 billion, maintaining a healthy net profit margin [13] Recent Developments - A new ESG (Environmental, Social, and Governance) committee was established to enhance governance and sustainability efforts [17][18] - The board of directors saw a change with the appointment of Mrs. Shuo Zheng, who brings extensive experience in financial control and regulatory compliance [14][15]

Company Overview - Yiren Digital Ltd. is an AI-powered platform that offers a comprehensive suite of financial and lifestyle services in China [2] - The company's mission is to enhance customers' financial well-being and quality of life through digital financial services, tailor-made insurance solutions, and premium lifestyle services [2] - Yiren Digital supports clients at various growth stages, addressing financing needs from consumption and production activities, while aiming to improve the overall well-being and security of individuals, families, and businesses [2] Financial Results Announcement - Yiren Digital plans to release its unaudited financial results for the first quarter ended March 31, 2024, before U.S. market opens on June 21, 2024 [1] - An earnings conference call will be hosted by the management at 7:30 a.m. U.S. Eastern Time on June 21, 2024 [1] - Participants interested in joining the call must register online in advance to receive dial-in details [1]

Company Overview - Yiren Digital (NYSE: YRD) is an AI-powered platform that provides a comprehensive suite of financial and lifestyle services in China, aiming to enhance customers' financial well-being and quality of life [3][7] - The company recently completed a branding upgrade, changing its Chinese name to "Yiren Zhike" ("宜人 智科"), which reflects its commitment to digital intelligent technologies and AI [6] AI and Investment Insights - Mr. Huang Jingsheng emphasized the importance of identifying companies with stable cash flow that can pivot to AI innovations and redefine market categories during his discussion at the GenAI Summit [1][2] - Key considerations for spotting potential unicorns in the AI sector include technological strength, extensive vertical data for training generative AI, logical deployment of AI capabilities, and the development of internally trained platforms [3][4] Technological Capabilities - Yiren Digital's proprietary intelligence platform, DiTing, has made over one billion decisions as of March 31, 2024, showcasing its robust capabilities in advanced AI and machine learning for financial decision-making [5] - The company's AI-driven Intelligent Customer Service received the "Outstanding Solution" Award at a recent competition, highlighting its innovative approach [5] Growth Potential - Mr. Huang drew parallels between Yiren Digital's growth trajectory and that of AWS, suggesting that Yiren Digital's AI systems and models are poised for significant market evolution and revaluation [4] - The company aims to transform its AI capabilities into innovative solutions applicable across various industries, indicating a strategic focus on broadening its market impact [6]

Core Insights - Yiren Digital Ltd. has won the "Outstanding Solution" Award for its AI-driven Intelligent Customer Service at a prestigious competition focused on financial integration technology [1][2] - The competition featured 124 national finalists and was judged by a panel of industry experts, highlighting the high standards of technical proficiency and innovation [2] - Yiren Digital's Intelligent Customer Service utilizes advanced technologies such as large language models, automatic speech recognition, and deep learning to provide personalized service experiences [3] Company Overview - Yiren Digital is an AI-powered platform that offers a comprehensive suite of financial and lifestyle services in China, aiming to enhance customers' financial well-being and quality of life [5] - The company is focused on advancing AI technology in financial services and has developed a proprietary "Model Factory" to improve the efficiency of its AI Smart Customer Service [4] - Yiren Digital aims to lead the practical application of AI in key sectors like Fintech, fostering competitive advantages and driving industry growth [4]

Core Insights - Yiren Digital's DiTing platform has surpassed one billion decisions as of March 31, 2024, showcasing its advanced AI and machine learning capabilities in financial decision-making [1][2][3] Company Overview - Yiren Digital Ltd. is an AI-powered platform providing a comprehensive suite of financial and lifestyle services in China, aiming to enhance customers' financial well-being and quality of life [5] DiTing Platform Features - DiTing is capable of supporting over 50 independent business lines simultaneously, with effective data separation and protection, and can make decisions within 100 milliseconds [2][3] - The platform integrates over 1,000 data sources and connects to more than 30,000 features with 130,000 rules, demonstrating its massive data accumulation and high-speed processing capabilities [2][3] Technological Advancements - DiTing employs advanced AI and machine learning algorithms for rapid data analysis and utilizes cloud computing for distributed storage and processing, enhancing efficiency and accuracy [3][4] - Real-time monitoring is implemented to detect and report anomalies, ensuring operational stability [3] Applications and Impact - The platform is utilized across various business segments, including risk pricing, marketing analysis, product testing, and data protection, contributing to improved operational efficiency and profitability [3][4] - DiTing's high scalability and versatile applicability allow business professionals to design tailored strategies for diverse scenarios, facilitating automated business strategy management [4] Industry Recognition - DiTing was recognized for its innovation at the third "Jinxintong" Fintech Innovation & Case Collection and Application Awards, highlighting Yiren Digital's contribution to the fintech industry [4]

BEIJING, May 15, 2024 /PRNewswire/ -- Yiren Digital Ltd. (NYSE: YRD) ("Yiren Digital" or the "Company"), an AI-powered platform providing a comprehensive suite of financial and lifestyle services in China, today announced that it has filed its annual report on Form 20-F for the fiscal year ended December 31, 2023 with the U.S. Securities and Exchange Commission on May 15, 2024. The annual report can be accessed on the Company's website at https://ir.yiren.com/ The Company will provide a hard copy of the ann ...

PART I [Key Information](index=6&type=section&id=Item%203.%20Key%20Information) Details the company's Cayman holding structure, its operational reliance on Chinese VIEs, associated risks, and key financial data - Yiren Digital Ltd is a Cayman Islands holding company, not an operating company, with operations conducted through subsidiaries and consolidated Variable Interest Entities (VIEs) in China[13](index=13&type=chunk) - Revenues from consolidated VIEs accounted for **33.2% of total revenues in 2023**, a decrease from 71.3% in 2021, showing a declining reliance on the VIE structure[13](index=13&type=chunk) - The company has obtained requisite operational licenses in China but acknowledges uncertainty regarding future regulatory requirements[20](index=20&type=chunk) - Cash transfers from PRC entities to entities outside mainland China are subject to governmental currency conversion controls, potentially limiting the ability to fund operations or make distributions[33](index=33&type=chunk)[36](index=36&type=chunk) Condensed Consolidating Schedule of Financial Position (as of Dec 31, 2023) | (RMB in millions) | Parent | Company Subsidiaries | Consolidated VIEs | Consolidated ABFE | Eliminations | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | 8,093 | 7,088 | 5,193 | 572 | (10,669) | 10,277 | | **Total Liabilities** | 7 | 1,338 | 3,916 | 749 | (3,819) | 2,191 | Condensed Consolidating Schedule of Income (For the Year Ended Dec 31, 2023) | (RMB in millions) | Parent | Company Subsidiaries | Consolidated VIEs | Consolidated ABFE | Eliminations | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Revenue** | — | 3,610 | 2,878 | — | (1,592) | 4,896 | | **Net (Loss)/Income** | (39) | 904 | 1,335 | (86) | (34) | 2,080 | [Risk Factors](index=18&type=section&id=D.%20Risk%20Factors) Enumerates significant risks related to business operations, the VIE structure, the Chinese regulatory environment, and its ADSs - The company operates in emerging and evolving industries, requiring continuous modification of its services and products[44](index=44&type=chunk) - The business is highly dependent on institutional funding partners, with **99.9% of the RMB 36.0 billion in loans facilitated in 2023 funded by third parties**[46](index=46&type=chunk) - There are significant risks related to the VIE structure; if PRC authorities deem the arrangements non-compliant, the company could face severe penalties, **potentially causing the value of ADSs to decline or become worthless**[29](index=29&type=chunk)[121](index=121&type=chunk) - The PRC government has significant oversight over operations and may exert more control, which could hinder the ability to offer securities and cause their value to decline[31](index=31&type=chunk)[132](index=132&type=chunk) - The company believes it was a **Passive Foreign Investment Company (PFIC) for the 2023 tax year**, which could result in adverse U.S. federal income tax consequences for U.S. holders[181](index=181&type=chunk) [Information on the Company](index=71&type=section&id=Item%204.%20Information%20on%20the%20Company) Provides an overview of the company's history, its three primary business segments, and its critical VIE organizational structure [History and Development of the Company](index=71&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Traces the company's evolution from a CreditEase unit to a public entity, highlighting key realignments and international expansion - The company began its online consumer finance business in March 2012 as a business unit of its parent company, CreditEase[185](index=185&type=chunk) - On September 30, 2019, the company changed its name from "Yirendai Ltd" to **"Yiren Digital Ltd"** to reflect its broader business scope[187](index=187&type=chunk) - In a 2020 business restructuring, the company disposed of its P2P lending platform to focus solely on institutional funding partners[189](index=189&type=chunk) - The company has been expanding internationally, acquiring lending corporations in the Philippines and Mexico in 2023[189](index=189&type=chunk) [Business Overview](index=73&type=section&id=B.%20Business%20Overview) Details the three core business segments, the AI-powered platform, and the technology-driven approach to risk management - The company operates through three main business segments: **Financial services, Insurance brokerage, and Consumption and lifestyle business**[189](index=189&type=chunk) - The company's loan facilitation process is a highly automated, five-stage process that typically takes less than five minutes to two hours[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[219](index=219&type=chunk) Loan Volume by Channel (RMB in thousands) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | **Loans from online channels** | 16,401,023 | 22,620,051 | 36,036,301 | | **Loans from offline channels** | 6,794,201 | 3,050 | — | | **Total Amount of loans facilitated** | 23,195,224 | 22,623,101 | 36,036,301 | Loan Volume by Funding Source (RMB in thousands) | Funding Source | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | **Third-party capital** | 21,506,322 | 22,622,453 | 35,992,302 | | Banks | 2,740,551 | 6,801,585 | 12,102,205 | | Consumer finance companies | 111,562 | 3,456,515 | 17,286,038 | | **Own capital** | 1,688,902 | 648 | 43,999 | | **Total** | **23,195,224** | **22,623,101** | **36,036,301** | [Organizational Structure](index=109&type=section&id=C.%20Organizational%20Structure) Explains the use of a VIE structure and contractual arrangements to control its primary operating entities in China - The company uses a **VIE structure** to operate in sectors with foreign investment restrictions in China; investors hold equity in the Cayman Islands holding company, not the PRC operating entities[311](index=311&type=chunk) - The contractual arrangements with VIEs are designed to give the company effective control and the right to receive substantially all economic benefits[317](index=317&type=chunk) - Key agreements underpinning the VIE structure include Equity Interest Pledge Agreements, Powers of Attorney, and Exclusive Business Cooperation Agreements[318](index=318&type=chunk)[323](index=323&type=chunk) [Operating and Financial Review and Prospects](index=116&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) Presents management's analysis of financial performance and condition for fiscal years 2021 through 2023 [Operating Results](index=116&type=section&id=A.%20Operating%20Results) Details financial performance from 2021-2023, highlighting significant revenue and net income growth driven by key business segments - Net revenue **increased by 42.5% in 2023** compared to 2022, primarily due to a 28.3% increase in revenue from the financial services business and a 90.6% increase from the consumption and lifestyle business[382](index=382&type=chunk) Results of Operations (RMB in thousands) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | **Net revenue** | 4,477,929 | 3,434,620 | 4,895,633 | | **Total operating costs and expenses** | (3,190,596) | (1,962,756) | (2,300,851) | | **Income before provision for income taxes** | 1,203,173 | 1,495,383 | 2,645,360 | | **Net income** | 1,032,984 | 1,194,871 | 2,080,197 | Net Revenue by Segment (RMB in thousands) | Segment | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | **Financial services business** | 3,184,302 | 1,959,732 | 2,515,119 | | **Insurance brokerage business** | 755,691 | 731,797 | 963,822 | | **Consumption & lifestyle business and others** | 537,936 | 743,091 | 1,416,692 | | **Total net revenue** | **4,477,929** | **3,434,620** | **4,895,633** | Loan Delinquency Rates (All Loans) | As of | 15-29 days | 30-59 days | 60-89 days | | :--- | :--- | :--- | :--- | | December 31, 2021 | 0.9% | 1.5% | 1.2% | | December 31, 2022 | 0.7% | 1.3% | 1.1% | | December 31, 2023 | 0.9% | 1.4% | 1.2% | [Liquidity and Capital Resources](index=136&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Outlines the company's primary liquidity sources, cash flow activities, and capital resource management - The company's principal sources of liquidity are cash from operations and share issuances; as of December 31, 2023, cash and cash equivalents stood at **RMB 5.8 billion (US$815.7 million)**[402](index=402&type=chunk) - The ability to pay dividends depends on distributions from PRC subsidiaries, which are subject to PRC regulations on profit distribution and statutory reserve requirements[410](index=410&type=chunk) Summary of Consolidated Cash Flows (RMB in thousands) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | 158,192 | 1,849,430 | 2,171,013 | | **Net cash (used in)/provided by investing activities** | (346,507) | 52,559 | 100,045 | | **Net cash provided by/(used in) financing activities** | 427,446 | (489,123) | (569,278) | | **Net (decrease)/increase in cash** | 238,195 | 1,415,352 | 1,697,909 | [Directors, Senior Management and Employees](index=141&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) Provides information on the company's leadership, compensation, board structure, employee data, and major share ownership - The company's board consists of seven directors; **Ning Tang serves as the Executive Chairman and Chief Executive Officer**[423](index=423&type=chunk)[425](index=425&type=chunk) - In 2023, the aggregate cash compensation paid to directors and officers was approximately **RMB 6.1 million (US$0.9 million)**[428](index=428&type=chunk) - The company has three share incentive plans; as of March 31, 2024, **2,241,114 restricted share units were outstanding** under the 2020 Plan[431](index=431&type=chunk) - As of March 31, 2024, CreditEase Holdings (Cayman) Limited is the principal shareholder, beneficially owning **82.5% of the total outstanding shares**[448](index=448&type=chunk) Employee Count by Year | As of December 31 | Total Employees | | :--- | :--- | | 2021 | 3,797 | | 2022 | 1,064 | | 2023 | 754 | [Major Shareholders and Related Party Transactions](index=150&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) Details the ownership structure and the extensive transactional and contractual relationship with its controlling shareholder, CreditEase - The company is a majority-owned subsidiary of CreditEase and has a series of agreements governing their relationship, including master transaction and non-competition agreements[453](index=453&type=chunk) - Under a non-competition agreement, Yiren Digital and CreditEase have agreed not to compete in each other's core business areas until at least 2035[466](index=466&type=chunk) Costs and Expenses for Services from CreditEase Affiliates (RMB in thousands) | Service Type | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Customers acquisition and referral services | 281,633 | 216,958 | 175,471 | | System support services | 135,118 | 100,635 | 72,035 | | Credit assessment services | 56,957 | 110,566 | 118,395 | | Collection services | 17,943 | 22,735 | 29,188 | | **Total costs and expenses** | **491,651** | **450,985** | **396,913** | Revenue from Services Provided to CreditEase Affiliates (RMB in thousands) | Service Type | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Customers acquisition and referral services | 442,570 | 409,688 | 140,782 | | Technical services | 85,832 | — | — | | Post-loan management services | 44,586 | — | — | | **Total revenue** | **573,158** | **411,010** | **141,595** | [Financial Information](index=155&type=section&id=Item%208.%20Financial%20Information) Confirms the inclusion of financial statements, discusses legal proceedings, and outlines the current dividend policy - The company's consolidated financial statements are appended to the annual report[473](index=473&type=chunk) - The board of directors decided in August 2018 to **temporarily suspend its semi-annual dividend policy**, and no dividends have been declared since[475](index=475&type=chunk) [Additional Information](index=156&type=section&id=Item%2010.%20Additional%20Information) Provides supplementary details on the corporate charter, exchange controls, and key taxation considerations in various jurisdictions - The company is a Cayman Islands exempted company, and its affairs are governed by its memorandum and articles of association and the Companies Act of the Cayman Islands[477](index=477&type=chunk) - Under PRC Enterprise Income Tax Law, dividends from the company's PRC subsidiaries are subject to a **10% withholding tax**, which may be reduced to 5% under the China-HK tax arrangement[298](index=298&type=chunk) - For U.S. federal income tax purposes, the company believes it was classified as a **Passive Foreign Investment Company (PFIC) for 2023**, which could have adverse tax consequences for U.S. holders[504](index=504&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=168&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Addresses the company's exposure to market risks, primarily foreign exchange, interest rate, and inflation risk - The company's primary market risk is **foreign exchange risk**, as all revenues are denominated in RMB, and the company does not currently use hedging instruments[516](index=516&type=chunk) - The company has not been exposed to material risks from changes in market interest rates but acknowledges that future changes could impact its business[517](index=517&type=chunk) - Inflation in China has not materially impacted the company's results of operations to date[518](index=518&type=chunk) PART II [Controls and Procedures](index=171&type=section&id=Item%2015.%20Controls%20and%20Procedures) Confirms management's conclusion that disclosure controls and internal control over financial reporting were effective - Management concluded that as of December 31, 2023, the company's disclosure controls and procedures were **effective**[529](index=529&type=chunk) - Based on an evaluation using the COSO framework, management concluded that the company's internal control over financial reporting was **effective as of December 31, 2023**[530](index=530&type=chunk) - No material changes were made to the internal control over financial reporting during the period covered by the annual report[532](index=532&type=chunk) [Corporate Governance and Other Matters](index=172&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Matters) Covers governance topics including the audit committee, accountant fees, share repurchases, and cybersecurity risk management - The board has an audit committee financial expert, Mr. Sam Hanhui Sun, and has adopted a code of business conduct and ethics[532](index=532&type=chunk) - Under its 2022 Share Repurchase Program, the company repurchased a total of **2,609,949 ADSs in 2023** at an average price of US$2.61 per ADS[536](index=536&type=chunk)[537](index=537&type=chunk) - The company has implemented a cybersecurity risk management strategy overseen by a dedicated board committee[542](index=542&type=chunk)[545](index=545&type=chunk) Principal Accountant Fees (RMB in thousands) | Fee Type | 2022 | 2023 | | :--- | :--- | :--- | | Audit fees | 10,161 | 11,613 | | Audit-related fees | 1,682 | — | | Tax fees | — | — | | All other fees | — | — | PART III [Financial Statements](index=181&type=section&id=Item%2018.%20Financial%20Statements) Presents the complete audited consolidated financial statements for the fiscal years 2021, 2022, and 2023 Consolidated Balance Sheet Highlights (RMB in thousands) | | Dec 31, 2022 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | 8,536,095 | 10,276,916 | | Cash and cash equivalents | 4,271,899 | 5,791,333 | | Contract assets, net | 626,739 | 978,051 | | **Total Liabilities** | 2,505,282 | 2,191,367 | | **Total Equity** | 6,030,813 | 8,085,549 | Consolidated Statements of Operations Highlights (RMB in thousands) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | **Net revenue** | 4,477,929 | 3,434,620 | 4,895,633 | | **Total operating costs and expenses** | (3,190,596) | (1,962,756) | (2,300,851) | | **Net income** | 1,032,984 | 1,194,871 | 2,080,197 | Consolidated Statements of Cash Flows Highlights (RMB in thousands) | | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | 158,192 | 1,849,430 | 2,171,013 | | **Net cash (used in)/provided by investing activities** | (346,507) | 52,559 | 100,045 | | **Net cash provided by/(used in) financing activities** | 427,446 | (489,123) | (569,278) |

[Executive Summary](index=2&type=section&id=Executive%20Summary) Yiren Digital concluded 2023 with strong financial and operational performance, exceeding guidance and strategically focusing on AI integration with a robust balance sheet [CEO and CFO Commentary](index=2&type=section&id=CEO%20and%20CFO%20Commentary) Yiren Digital concluded 2023 with strong financial and operational performance, exceeding previous guidance. The company is strategically focusing on AI integration across its operations, expanding AI expertise to B2B and B2C clients, and exploring strategic AI partnerships and investments. A robust balance sheet with RMB5.8 billion in cash and cash equivalents supports future growth initiatives - Yiren Digital achieved double-digit annual growth in both top and bottom lines for FY2023, surpassing previous guidance[5](index=5&type=chunk) - The company is establishing itself as an AI-driven financial and lifestyle services platform, integrating AI through its 'AI Lab' initiative to boost efficiency and customer experience[5](index=5&type=chunk) - Strategic plans include expanding AI expertise beyond fintech to other sectors, empowering B2B and B2C clients, and pursuing strategic partnerships and investments in high-quality AI companies[5](index=5&type=chunk) Key Financial Position as of December 31, 2023 | Metric | Amount (RMB) | | :--------------------- | :------------- | | Total cash and cash equivalents | 5.8 billion | [Operational Highlights](index=1&type=section&id=Operational%20Highlights) The company's 2023 operational performance was marked by significant growth in financial services and consumption & lifestyle, alongside mixed results in insurance brokerage due to regulatory changes [Financial Services Business](index=1&type=section&id=Financial%20Services%20Business) The financial services business demonstrated significant growth in Q4 2023 and fiscal year 2023, driven by strong demand for small revolving loan products and improved customer acquisition efficiency. Total loans facilitated and outstanding performing loans saw substantial increases Financial Services Business Key Metrics (Q4 2023 vs. Q3 2023 & Q4 2022) | Metric | Q4 2023 (RMB) | Q3 2023 (RMB) | YoY Change (Q4 2023 vs Q4 2022) | QoQ Change (Q4 2023 vs Q3 2023) | | :-------------------------------- | :------------ | :------------ | :------------------------------ | :------------------------------ | | Total loans facilitated | 11.6 billion | 9.8 billion | +70.6% (from 6.8 billion) | +18.7% | | Number of borrowers served | 1,371,501 | 1,204,012 | +59.1% (from 862,226) | +13.9% | | Outstanding balance of performing loans | 18.3 billion | 15.1 billion | +61.9% (from 11.3 billion) | +20.9% | Financial Services Business Key Metrics (FY 2023 vs. FY 2022) | Metric | FY 2023 (RMB) | FY 2022 (RMB) | YoY Change | | :-------------------------------- | :------------ | :------------ | :--------- | | Total loans facilitated | 36.0 billion | 22.6 billion | +59.3% | | Total number of borrowers served | 2,891,901 | 1,606,893 | +80.0% | [Insurance Brokerage Business](index=1&type=section&id=Insurance%20Brokerage%20Business) The insurance brokerage business experienced a decrease in client numbers and gross written premiums in Q4 2023, primarily due to product changes under new regulations affecting life insurance volume. However, cumulative client numbers and full-year gross written premiums still showed growth Insurance Brokerage Business Key Metrics (Q4 2023 vs. Q3 2023 & Q4 2022) | Metric | Q4 2023 | Q3 2023 | YoY Change (Q4 2023 vs Q4 2022) | QoQ Change (Q4 2023 vs Q3 2023) | | :-------------------------------- | :------ | :------ | :------------------------------ | :------------------------------ | | Number of insurance clients served | 102,556 | 123,693 | +20.2% (from 85,314) | -17.1% | | Gross written premiums (RMB) | 1,208.7 million | 1,428.5 million | -9.5% (from 1,335.5 million) | -15.4% | Insurance Brokerage Business Key Metrics (FY 2023 vs. FY 2022) | Metric | FY 2023 | FY 2022 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Cumulative number of insurance clients | 1,283,102 | 924,824 | +38.7% | | Total number of insurance clients served | 358,278 | 431,701 | -17.0% | | Total gross written premiums (RMB) | 4,893.0 million | 3,936.6 million | +24.3% | - The decrease in Q4 2023 insurance client numbers and gross written premiums was primarily due to a decline in life insurance volume following product changes under new regulations[3](index=3&type=chunk)[4](index=4&type=chunk) [Consumption and Lifestyle Business](index=2&type=section&id=Consumption%20and%20Lifestyle%20Business) The consumption and lifestyle business experienced substantial growth in Q4 2023 and fiscal year 2023, driven by a continuous increase in paying customers on its e-commerce platform Consumption and Lifestyle Business Key Metrics (Q4 2023 vs. Q3 2023 & Q4 2022) | Metric | Q4 2023 (RMB) | Q3 2023 (RMB) | YoY Change (Q4 2023 vs Q4 2022) | QoQ Change (Q4 2023 vs Q3 2023) | | :-------------------------------- | :------------ | :------------ | :------------------------------ | :------------------------------ | | Total gross merchandise volume | 692.7 million | 563.2 million | +137.1% (from 292.1 million) | +23.0% | Consumption and Lifestyle Business Key Metrics (FY 2023 vs. FY 2022) | Metric | FY 2023 (RMB) | FY 2022 (RMB) | YoY Change | | :-------------------------------- | :------------ | :------------ | :--------- | | Total gross merchandise volume | 1,960.3 million | 687.8 million | +185.0% | - The growth in GMV was mainly due to the continuous growth of paying customers on the e-commerce platform[4](index=4&type=chunk) [Fourth Quarter 2023 Financial Results](index=2&type=section&id=Fourth%20Quarter%202023%20Financial%20Results) Q4 2023 saw increased total net revenue and net income, driven by financial services and consumption, despite varied operating costs and a slight rise in delinquency rates [Revenue Analysis (Q4 2023)](index=2&type=section&id=Revenue%20Analysis%20(Q4%202023)) Total net revenue for Q4 2023 increased by 17.1% year-over-year, primarily driven by strong growth in financial services and consumption & lifestyle businesses. The insurance brokerage business, however, saw a significant decline due to regulatory changes Q4 2023 Net Revenue by Business Segment | Segment | Q4 2023 Revenue (RMB) | Q4 2022 Revenue (RMB) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Total Net Revenue | 1,274.3 million | 1,088.1 million | +17.1% | | Financial Services Business | 781.3 million | 639.2 million | +22.2% | | Insurance Brokerage Business | 98.2 million | 199.0 million | -50.7% | | Consumption and Lifestyle Business and others | 394.8 million | 249.9 million | +58.0% | - The increase in financial services revenue was attributed to persistent and growing demand for small revolving loan products[6](index=6&type=chunk) - The decrease in insurance brokerage revenue was due to declined sales of life insurance attributed to product changes under new regulations[6](index=6&type=chunk) - The increase in consumption and lifestyle revenue was primarily attributed to the continuous growth in gross merchandise volume driven by an expanding base of paying customers[6](index=6&type=chunk) [Operating Costs and Expenses (Q4 2023)](index=3&type=section&id=Operating%20Costs%20and%20Expenses%20(Q4%202023)) Operating costs and expenses in Q4 2023 showed varied trends. Sales and marketing expenses increased with business volume, while origination and servicing costs decreased due to lower life insurance sales. R&D expenses rose due to AI investments, and G&A remained stable Q4 2023 Operating Costs and Expenses | Expense Category | Q4 2023 (RMB) | Q4 2022 (RMB) | YoY Change | | :-------------------------------- | :------------ | :------------ | :--------- | | Sales and marketing expenses | 205.7 million | 103.4 million | +98.9% | | Origination, servicing and other operating costs | 184.7 million | 211.6 million | -12.7% | | Research and development expenses | 47.6 million | 32.9 million | +44.7% | | General and administrative expenses | 50.5 million | 52.3 million | -3.5% | | Allowance for contract assets, receivables and others | 98.7 million | 55.7 million | +77.2% | - Sales and marketing expenses increased primarily due to the growth of financial services business volume[7](index=7&type=chunk) - Origination, servicing and other operating costs decreased due to the decline in sales of life insurance products attributed to product changes under new regulations[7](index=7&type=chunk) - Research and development expenses increased mainly attributed to ongoing investment in AI upgrades and technological innovations[7](index=7&type=chunk) - Allowance for contract assets, receivables and others increased primarily attributed to the growing volume of loans facilitated on the platform[8](index=8&type=chunk) [Net Income and Profitability (Q4 2023)](index=3&type=section&id=Net%20Income%20and%20Profitability%20(Q4%202023)) Yiren Digital reported a significant increase in net income for Q4 2023, driven by business volume recovery and optimized business structure. Adjusted EBITDA also saw a healthy increase Q4 2023 Net Income and Profitability | Metric | Q4 2023 (RMB) | Q4 2022 (RMB) | YoY Change | | :-------------------- | :------------ | :------------ | :--------- | | Net income | 571.3 million | 485.2 million | +17.7% | | Adjusted EBITDA (non-GAAP) | 684.8 million | 645.1 million | +6.2% | | Basic income per ADS | 6.5 | 5.4 | +20.4% | | Diluted income per ADS | 6.5 | 5.4 | +20.4% | - The increase in net income was primarily due to the recovery of business volume and optimization of the business structure[8](index=8&type=chunk) [Cash Flow and Balance Sheet Highlights (Q4 2023)](index=4&type=section&id=Cash%20Flow%20and%20Balance%20Sheet%20Highlights%20(Q4%202023)) In Q4 2023, net cash generated from operating activities decreased slightly, while net cash provided by financing activities significantly increased. The company maintained a strong cash and cash equivalents position, along with growth in various investment balances Q4 2023 Cash Flow Summary | Cash Flow Activity | Q4 2023 (RMB) | Q4 2022 (RMB) | YoY Change | | :-------------------------------- | :------------ | :------------ | :--------- | | Net cash generated from operating activities | 417.2 million | 471.9 million | -11.5% | | Net cash used in investing activities | (260.3 million) | 283.1 million (provided) | N/A (shift from provided to used) | | Net cash provided by financing activities | 332.3 million | (54.6 million) (used) | N/A (shift from used to provided) | Key Balance Sheet Items as of December 31, 2023 | Item | Dec 31, 2023 (RMB) | Sep 30, 2023 (RMB) | QoQ Change | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Cash and cash equivalents | 5,791.3 million | 5,438.0 million | +6.5% | | Held-to-maturity investments | 10.4 million | 4.8 million | +116.7% | | Available-for-sale investments | 438.1 million | 338.1 million | +29.6% | | Trading securities | 76.1 million | 74.2 million | +2.6% | [Asset Quality (Q4 2023)](index=4&type=section&id=Asset%20Quality%20(Q4%202023)) Delinquency rates for loans past due for 15-89 days slightly increased in Q4 2023 compared to Q3 2023. Cumulative M3+ net charge-off rates for loans originated in 2020 and 2021 slightly decreased, while 2022 originations saw a slight increase Delinquency Rates as of December 31, 2023 | Delinquency Period | Dec 31, 2023 | Sep 30, 2023 | Change | | :----------------- | :----------- | :----------- | :----- | | 15-29 days | 0.9% | 0.8% | +0.1% | | 30-59 days | 1.4% | 1.2% | +0.2% | | 60-89 days | 1.2% | 1.0% | +0.2% | Cumulative M3+ Net Charge-Off Rates as of December 31, 2023 | Loan Origination Year | Dec 31, 2023 | Sep 30, 2023 | Change | | :-------------------- | :----------- | :----------- | :----- | | 2020 | 7.8% | 7.9% | -0.1% | | 2021 | 6.4% | 6.5% | -0.1% | | 2022 | 4.7% | 4.5% | +0.2% | [Fiscal Year 2023 Financial Results](index=4&type=section&id=Fiscal%20Year%202023%20Financial%20Results) Fiscal year 2023 demonstrated substantial growth in total net revenue and net income, reflecting increased business volume across all segments and healthy cash generation [Revenue Analysis (FY 2023)](index=4&type=section&id=Revenue%20Analysis%20(FY%202023)) Total net revenue for fiscal year 2023 increased significantly by 42.6% year-over-year, with all business segments contributing to growth. Financial services and consumption & lifestyle businesses were the primary drivers of this expansion FY 2023 Net Revenue by Business Segment | Segment | FY 2023 Revenue (RMB) | FY 2022 Revenue (RMB) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Total Net Revenue | 4,895.6 million | 3,434.6 million | +42.6% | | Financial Services Business | 2,515.1 million | 1,959.7 million | +28.3% | | Insurance Brokerage Business | 963.8 million | 731.8 million | +31.7% | | Consumption and Lifestyle Business and others | 1,416.7 million | 743.1 million | +90.6% | - The increase in financial services revenue was driven by the growing demand for small revolving loan products[13](index=13&type=chunk) - The increase in insurance brokerage revenue was driven by improved customer acquisition and serving capabilities[13](index=13&type=chunk) - The increase in consumption and lifestyle revenue was due to the continuous growth of paying customers on the e-commerce platform[13](index=13&type=chunk) [Operating Costs and Expenses (FY 2023)](index=5&type=section&id=Operating%20Costs%20and%20Expenses%20(FY%202023)) For fiscal year 2023, sales and marketing expenses and origination/servicing costs increased in line with overall business growth. R&D expenses remained stable, while G&A expenses saw a slight decrease FY 2023 Operating Costs and Expenses | Expense Category | FY 2023 (RMB) | FY 2022 (RMB) | YoY Change | | :-------------------------------- | :------------ | :------------ | :--------- | | Sales and marketing expenses | 656.6 million | 574.0 million | +14.4% | | Origination, servicing and other operating costs | 976.2 million | 776.8 million | +25.7% | | Research and development expenses | 148.8 million | 151.9 million | -2.0% | | General and administrative expenses | 231.1 million | 271.8 million | -14.9% | | Allowance for contract assets, receivables and others | 288.2 million | 188.2 million | +53.1% | - Sales and marketing expenses increased primarily due to the growth of financial services business volume[14](index=14&type=chunk) - Origination, servicing and other operating costs increased due to the rapid growth of the overall business scale[14](index=14&type=chunk) - Allowance for contract assets, receivables and others increased primarily attributed to the growing volume of loans facilitated on the platform[14](index=14&type=chunk) [Net Income and Profitability (FY 2023)](index=5&type=section&id=Net%20Income%20and%20Profitability%20(FY%202023)) Yiren Digital achieved substantial growth in net income and Adjusted EBITDA for fiscal year 2023, reflecting the overall increase in business volume and improved operational efficiency FY 2023 Net Income and Profitability | Metric | FY 2023 (RMB) | FY 2022 (RMB) | YoY Change | | :-------------------- | :------------ | :------------ | :--------- | | Net income | 2,080.2 million | 1,194.9 million | +74.1% | | Adjusted EBITDA (non-GAAP) | 2,578.5 million | 1,570.3 million | +64.8% | | Basic income per ADS | 23.5 | 13.7 | +71.5% | | Diluted income per ADS | 23.3 | 13.6 | +71.3% | - The increase in net income was driven by the growing business volume[15](index=15&type=chunk) [Cash Flow Highlights (FY 2023)](index=5&type=section&id=Cash%20Flow%20Highlights%20(FY%202023)) Net cash generated from operating activities for fiscal year 2023 increased, indicating healthy cash generation from core operations FY 2023 Cash Flow from Operating Activities | Metric | FY 2023 (RMB) | FY 2022 (RMB) | YoY Change | | :-------------------------------- | :------------ | :------------ | :--------- | | Net cash generated from operating activities | 2,171.0 million | 1,849.4 million | +17.4% | [Business Outlook](index=5&type=section&id=Business%20Outlook) Yiren Digital projects total revenue for 2024 to be between RMB5.8 billion and RMB6.8 billion, anticipating a healthy net profit margin [2024 Revenue Projection](index=5&type=section&id=2024%20Revenue%20Projection) Based on its preliminary assessment, Yiren Digital projects total revenue for the full year of 2024 to be between RMB5.8 billion and RMB6.8 billion, anticipating a healthy net profit margin Full Year 2024 Revenue Projection | Metric | Projection (RMB) | | :-------------------- | :--------------- | | Total Revenue | 5.8 billion to 6.8 billion | | Net Profit Margin | Healthy | - The projection is based on the Company's preliminary assessment of business and market conditions and is subject to changes and uncertainties[16](index=16&type=chunk) [Corporate Information](index=6&type=section&id=Corporate%20Information) The company has adopted a new cybersecurity policy, utilizes non-GAAP measures for performance assessment, and operates as an AI-powered financial and lifestyle services platform [Recent Development](index=6&type=section&id=Recent%20Development) In response to new SEC rules, Yiren Digital has adopted a Cybersecurity Incident Response Policy and established a cybersecurity risk management committee. This initiative highlights the company's commitment to exceeding regulatory standards and proactive risk management - Yiren Digital adopted a Cybersecurity Incident Response Policy in response to recent SEC rules on cybersecurity risk management[17](index=17&type=chunk) - A cybersecurity risk management committee has been established, chaired by Mr. Ning Tang, to enhance corporate governance efficiency and transparency[17](index=17&type=chunk) - The company emphasizes a proactive stance towards risk management related to information technology and data protection to maintain stakeholder trust[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) Yiren Digital uses non-GAAP financial measures like adjusted EBITDA to assess operating performance, believing they offer useful insights into core operating results and enhance understanding of past performance and prospects. The company provides reconciliations to U.S. GAAP measures - Adjusted EBITDA and adjusted EBITDA margin are used as supplemental non-GAAP measures to review and assess operating performance[18](index=18&type=chunk) - These non-GAAP measures provide useful information about core operating results and enhance the overall understanding of past performance and prospects[18](index=18&type=chunk) - The company compensates for limitations of non-GAAP measures by reconciling them to the nearest U.S. GAAP performance measure[18](index=18&type=chunk) [About Yiren Digital](index=7&type=section&id=About%20Yiren%20Digital) Yiren Digital Ltd. is an AI-powered platform in China offering comprehensive financial and lifestyle services. Its mission is to improve customers' financial well-being and quality of life through digital financial services, tailored insurance solutions, and premium lifestyle services, supporting clients' financing needs and overall well-being - Yiren Digital Ltd. is an advanced, AI-powered platform providing a comprehensive suite of financial and lifestyle services in China[22](index=22&type=chunk) - The company's mission is to elevate customers' financial well-being and enhance their quality of life by delivering digital financial services, tailor-made insurance solutions, and premium lifestyle services[22](index=22&type=chunk) - It supports clients at various growth stages, addressing financing needs from consumption and production activities, and aims to augment the overall well-being and security of individuals, families, and businesses[22](index=22&type=chunk) [Financial Statements and Supplementary Data](index=8&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) This section provides detailed unaudited consolidated financial statements, including statements of operations, balance sheets, operating highlights, non-GAAP reconciliations, and asset quality metrics [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The unaudited condensed consolidated statements of operations provide a detailed breakdown of Yiren Digital's revenues, operating costs, expenses, and net income for Q4 2023 and fiscal year 2023, showing significant growth in total net revenue and net income year-over-year Key Figures from Statements of Operations (Q4 2023 vs. Q4 2022) | Metric | Q4 2023 (RMB) | Q4 2022 (RMB) | | :-------------------------------- | :------------ | :------------ | | Total net revenue | 1,274,310 | 1,088,076 | | Total operating costs and expenses | 587,214 | 456,024 | | Net income | 571,268 | 485,235 | Key Figures from Statements of Operations (FY 2023 vs. FY 2022) | Metric | FY 2023 (RMB) | FY 2022 (RMB) | | :-------------------------------- | :------------ | :------------ | | Total net revenue | 4,895,633 | 3,434,620 | | Total operating costs and expenses | 2,300,851 | 1,962,756 | | Net income | 2,080,197 | 1,194,871 | [Unaudited Condensed Consolidated Balance Sheets](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The unaudited condensed consolidated balance sheets as of December 31, 2023, show an increase in total assets and total equity compared to the previous year, reflecting a strengthened financial position. Cash and cash equivalents, contract assets, and loans at fair value all increased Key Figures from Balance Sheets (as of Dec 31, 2023 vs. Dec 31, 2022) | Metric | Dec 31, 2023 (RMB) | Dec 31, 2022 (RMB) | | :-------------------------------- | :----------------- | :----------------- | | Total assets | 10,276,916 | 8,536,095 | | Total liabilities | 2,191,367 | 2,505,282 | | Total equity | 8,085,549 | 6,030,813 | | Cash and cash equivalents | 5,791,333 | 4,271,899 | | Contract assets, net | 978,051 | 626,739 | | Loans at fair value | 677,835 | 54,049 | [Operating Highlights (Detailed)](index=10&type=section&id=Operating%20Highlights%20(Detailed)) This section provides detailed operational metrics and segment-specific revenue and expense breakdowns for Q4 2023 and fiscal year 2023, reinforcing the trends observed in the operational highlights and financial results sections Detailed Operating Highlights (Q4 2023 vs. Q4 2022) | Metric | Q4 2023 (RMB) | Q4 2022 (RMB) | | :-------------------------------- | :------------ | :------------ | | Amount of loans facilitated | 11,645,528 | 6,783,523 | | Number of borrowers | 1,371,501 | 862,226 | | Gross written premiums | 1,208,717 | 1,335,488 | | Gross merchandise volume | 692,733 | 292,086 | | Financial services business revenue | 781,306 | 639,167 | | Insurance brokerage business revenue | 98,158 | 199,027 | | Consumption & lifestyle business revenue | 394,846 | 249,882 | Detailed Operating Highlights (FY 2023 vs. FY 2022) | Metric | FY 2023 (RMB) | FY 2022 (RMB) | | :-------------------------------- | :------------ | :------------ | | Amount of loans facilitated | 36,036,301 | 22,623,101 | | Number of borrowers | 2,891,901 | 1,606,893 | | Gross written premiums | 4,893,042 | 3,936,588 | | Gross merchandise volume | 1,960,344 | 687,848 | | Financial services business revenue | 2,515,119 | 1,959,732 | | Insurance brokerage business revenue | 963,822 | 731,797 | | Consumption & lifestyle business revenue | 1,416,692 | 743,091 | [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides the reconciliation of net income (GAAP) to Adjusted EBITDA (non-GAAP) for both Q4 2023 and fiscal year 2023, along with the Adjusted EBITDA margin, demonstrating the company's operational profitability excluding certain non-cash or non-recurring items Adjusted EBITDA Reconciliation (Q4 2023 vs. Q4 2022) | Metric | Q4 2023 (RMB) | Q4 2022 (RMB) | | :-------------------------------- | :------------ | :------------ | | Net income | 571,268 | 485,235 | | Interest (income)/expense, net | (29,880) | (3,439) | | Income tax expense | 140,818 | 159,285 | | Depreciation and amortization | 1,806 | 2,537 | | Share-based compensation | 828 | 1,494 | | Adjusted EBITDA | 684,840 | 645,112 | | Adjusted EBITDA margin | 53.7% | 59.3% | Adjusted EBITDA Reconciliation (FY 2023 vs. FY 2022) | Metric | FY 2023 (RMB) | FY 2022 (RMB) | | :-------------------------------- | :------------ | :------------ | | Net income | 2,080,197 | 1,194,871 | | Interest (income)/expense, net | (80,749) | 26,302 | | Income tax expense | 565,163 | 300,512 | | Depreciation and amortization | 7,116 | 26,430 | | Share-based compensation | 6,751 | 22,136 | | Adjusted EBITDA | 2,578,478 | 1,570,251 | | Adjusted EBITDA margin | 52.7% | 45.7% | [Delinquency and Charge-Off Rates](index=12&type=section&id=Delinquency%20and%20Charge-Off%20Rates) This section presents detailed delinquency rates for various past-due periods and cumulative M3+ net charge-off rates by loan origination period, providing insights into the credit quality and performance of the loan portfolio Delinquency Rates (as of December 31, 2023) | Delinquency Period | Rate | | :----------------- | :--- | | 15-29 days | 0.9% | | 30-59 days | 1.4% | | 60-89 days | 1.2% | Cumulative M3+ Net Charge-Off Rates by Loan Origination Period (as of December 31, 2023) | Loan Issued Period | Total Net Charge-Off Rate | | :----------------- | :------------------------ | | 2019 | 11.3% | | 2020 | 7.8% | | 2021 | 6.4% | | 2022 | 4.7% | | 2023Q1-Q3 | 2.8% | M3+ Net Charge-Off Rate by Loan Origination Quarter (Selected) | Loan Issued Period | 4 Month Book | 7 Month Book | 10 Month Book | 13 Month Book | | :----------------- | :----------- | :----------- | :------------ | :------------ | | 2022 Q1 | 0.6% | 2.5% | 3.8% | 4.5% | | 2022 Q2 | 0.4% | 2.2% | 3.6% | 4.1% | | 2022 Q3 | 0.5% | 2.7% | 4.1% | 4.7% | | 2022 Q4 | 0.6% | 3.0% | 4.6% | N/A | | 2023 Q1 | 0.5% | 3.1% | N/A | N/A |

Yiren Digital Limited (NYSE:YRD) Q4 2023 Earnings Conference Call March 21, 2024 8:00 AM ET Company Participants Ning Tang - Chief Executive Officer Mei Zhao - Senior Vice President Keyao He - Investor Relations Conference Call Participants Marco Zhang - Water Tower Research Bruce Oren - Black Lab Fund Matthew Larson - Fincadia Capital Peter Ruh - BlueBird Advisory Boyd Haynes - ACI David Tufts - private investor Andre Julian Hudu - Julian Operator Thank you for standing by, and welcome to the Yiren Digit ...