Financial Performance - Lexin reported Q2 2025 revenue of RMB 3.59 billion, a 15.6% increase quarter-over-quarter (QoQ) [1] - Non-GAAP EBIT profit reached RMB 670 million, up 15.2% QoQ and 116.4% year-over-year (YoY), marking the highest profit in 14 quarters [1] - The company's transaction volume in Q2 was RMB 52.86 billion, with total loans under management at RMB 105.78 billion and user count reaching 236 million [3] Asset Quality - Risk indicators improved for four consecutive quarters, with the First-payment default (FPD7) of newly added assets decreasing by approximately 5% QoQ [4] - The delinquency rate of all assets dropped by about 2% QoQ, and the 90+ day non-performing loan ratio fell by around 6% QoQ [4] - The profit margin in Q2 increased by 34 basis points compared to Q1, with consistent quarterly growth of over 20 basis points [6] Shareholder Returns - A cash dividend of US$0.194 per ADS will be distributed on September 15, representing approximately 25% of the first-half net profit, a 76% increase from the previous dividend [7] - The dividend payout ratio will increase from 25% to 30% of net profit starting in the second half of the year [7][8] - Lexin launched a US$60 million share-repurchase program to enhance shareholder returns [8] Strategic Initiatives - The company is focusing on a strategic transformation driven by risk and data, achieving refined operations and high-quality growth [9] - Lexin is aligning with government policies to boost consumption by enriching its product suite and optimizing user experience [10] - The Fenqile Mall upgraded its supply chain and saw a 139% YoY increase in GMV during the "6·18" promotion period [12] Inclusive Finance - Fenqile Inclusive upgraded its products using big data and AI, facilitating RMB 4.69 billion in loan disbursements to small and micro enterprises [14] - The company supports small enterprises with low-interest, high-limit financial products, enhancing their resilience [13] Digital Technology and Risk Management - Lexin invested RMB 160 million in R&D in Q2, up 10% YoY, focusing on risk control and operational resilience [18] - The company upgraded its risk control system using AI large models, improving decision-making efficiency and risk management accuracy [20] - Lexin's self-developed AI Agent positions increased to 50, with plans to expand to over 100, enhancing operational efficiency [21][22] Consumer Protection - Lexin is integrating consumer protection into its business chain, improving over 50 digital tools to enhance service response and user satisfaction [23]

Core Insights - LexinFintech Holdings Ltd. reported strong financial results for Q1 2025, with revenue of RMB 3.1 billion and a profit (Non-GAAP EBIT) of RMB 580 million, reflecting a year-over-year increase of 104.7% and a quarter-over-quarter increase of 25.3% [1] - The company has demonstrated resilience amid macroeconomic uncertainties, achieving its highest quarterly profit in 13 quarters, supported by a dual-driven strategy focusing on risk control and data management [1][8] Financial Performance - Lexin's early-stage risk metrics, FPD7, improved by 5% quarter-over-quarter, while the overall delinquency rate decreased by 11% QoQ, and the 90+ day delinquency rate fell by 9% QoQ, indicating enhanced asset quality [3] - The profit margin rose by 21% QoQ, marking the fourth consecutive quarter of improvement [3] - Funding costs decreased by 2.3% QoQ, continuing a seven-quarter trend of declines [4] Business Scale and User Growth - The transaction volume in Q1 reached RMB 51.62 billion, with a managed outstanding loan balance of RMB 107.33 billion [6] - The total number of users grew to 232 million, representing an 8.1% year-over-year increase [6] Dividend Policy - Lexin announced an increase in its cash dividend payout ratio from 25% to 30% of total net profit, effective from the second half of 2025, marking the second dividend hike in six months [7] Strategic Transformation - The company emphasized its strategic transformation over the past two years, focusing on risk-driven, data-driven, and refined operations, which has led to high-quality development [8] - Lexin invested RMB 156 million in R&D in Q1, a 15.3% year-over-year increase, enhancing its industry leadership [10] Risk Management and Technology Integration - Lexin upgraded its risk control system, achieving synergy between risk management and business operations, and improved customer segmentation accuracy by 10% [11] - The company developed intelligent risk control tools, reducing overall fraud incidence by 30% year-over-year [11] Ecosystem Business Development - Lexin's installment retail, personal consumption credit, and inclusive finance businesses showed solid progress, with the installment retail business transaction volume increasing by 16.2% QoQ [14] - The launch of "FlexiLoan" in the personal consumption credit sector catered to young users' needs, enhancing user retention and engagement [17] Inclusive Finance Initiatives - Lexin's Fenqile Inclusive Finance initiative connected 150,000 micro and small businesses with approximately RMB 4.3 billion in funding, with over 70% of transactions originating from fourth-tier cities and below [19] International Expansion - In Q1, Lexin upgraded its financial products in Mexico and Indonesia, reducing overseas customer acquisition costs by 19% QoQ while improving profitability [20][21] Consumer Protection Efforts - The company deployed AI-powered tools to enhance consumer service experiences, aiming to strengthen consumer trust and deliver secure financial experiences [22]