Jiayin Group First Quarter 2026 Earnings Conference Call

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Jiayin Group's first quarter 2026 earnings conference call. Currently, all participants are in listen-only mode. Later, we will conduct a question and answer session and instructions will follow up on today's call. If you have any objections, you may disconnect at this time. I will now turn the call over to Mr. Sam Lee from Investor Relations of Jiayin Group. Please proceed.

Thank you, Operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the first quarter of 2020. We released our earnings results earlier today. The press release is available on the company's website as well as from Newswire services. On the call with me today are Mr. Yan Dinggui, Chief Executive Officer, Mr. Fan Chunling, Chief Financial Officer, and Ms. Qi Dan, Chief Risk Officer. Before we continue, please note that today's discussion will contain forward-looking statements made under the State Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statement except as required under applicable law. Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Please note that, unless otherwise stated, all figures mentioned during the conference call are in Chinese, RMB. With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yuan will deliver his remarks in Chinese, and I will follow up with corresponding English translations. Please go ahead, Mr. Yan. Hello everyone. Thank you for joining our first quarter 2026 Earnings Conference call. During the first quarter of 2026, the consumer lending industry remained in an adjustment phase. The recovery in credit demand continued at a relatively gradual pace, and the industry as a whole remained under pressure. Against this backdrop, we focused on refining the operations of our high-quality existing borrower base and the structural enhancement of our business model. During the quarter, we achieved transaction volumes of RMB 19.3 billion, ending a year-over-year decrease of 45.8%. Revenue was impacted by industry cyclicality and volume contraction, while temporary cost pressures persisted during the period. As a result, we recorded a net loss of approximately RMB 61.7 million for the quarter. This quarter, we concentrated on the refined management and engagement of our high-quality existing borrower base. Through cross-analysis of user risk scores and platform behavioral insights, we segmented our existing borrowers into groups and implemented differentiated engagement strategies and operating strategies tailored on each group's credit profile and borrower intent. Repeat borrowing contribution accounted for 76.3% of transaction volume during the quarter, representing an increase of 4.4 percentage points from the same period last year. These highly engaged users not only contributed to stable repeat borrowing demand, but also validated the initial effectiveness of our strategy to deepen engagement with existing borrowers. The 90-plus day delinquency ratio was 2.25% as of the end of the first quarter, increasing sequentially. For higher risk borrowers segments, we continue to tighten underwriting criteria and credit limit controls to facilitate an orderly runoff of portfolio risk exposure. For high-quality borrowers, we further analyze borrowers' needs and work closely with our operations team to refine borrower management and engagement strategies, with a focus on improving retention. Meanwhile, we are embedding AI capabilities into our operations to drive the productization of risk management and continuously refining and developing reusable standardized solutions.

In the future, we will continue the entire strategy for the future. We will be surrounded by three main processes, and we will be able to promote the future. The first one is the global market market. In the future, we will be able to promote the financial companies' technology. In this process, the company as a技術 and運營 service provider, has a deep dive into the exchange rate of all-news, and provides from the power supply chain, and the technology service service and the full-on-one model of all-news. 利用先进的数据技术和成熟的运营经验,富能合作伙伴,一季度科技富能业务体量达到15.2亿元,环比增长67.6,这是多年激烈的技术服务能力向更深层次合作的自然延伸,也是我们在当前周期下的创新实践,我们看好该业务模式的长期价值,未来规模有望持续提升。

On the business development front, we continue to execute the overall strategy established in the previous quarter and advance our structural upgrade through three key initiatives. The first initiative is the enhancement of our joint operations and tech empowerment During the quarter, we actively expanded our technology empowerment services for financial institutions. Under this model, the company acts as a technology and operations service provider, deeply integrating into the entire lending process of partner banks. We provide comprehensive solutions covering borrow engagement and operations, technology services, and risk modeling capabilities. Leveraging our advanced data technologies and extensive operational experience, we empower our partners throughout the credit life cycle. In the first quarter, the transaction volume generated through our technology empowerment business reached RMB 1.52 billion, representing a sequential increase of approximately 67.6%. This business represents a natural extension of the technology service capabilities we have accumulated over many years, enabling us to deepen our collaboration with financial institutions. It also represents an important innovation initiative in the current operating environment. We remain optimistic about the long-term value of this model and expect its scale to continue expanding in the future. The second initiative is the development of a diversified product portfolio including auto-back loans and digital intelligence micro-loans which enables us to serve specific scenarios and borrower segments. For our auto-back loan business, the version 3.0 system launched earlier this year has achieved end-to-end fully digitalized operations. We remain focused on borrow engagement and operation with empowerment and matching while specialized partners handle post loan servicing and vehicle disposal. This This collaborative model allows us to concentrate resources on our core strengths while creating complementary advantages with upstream and downstream partners. Since the beginning of this year, the auto-back loan business has maintained strong growth momentum with overall user conversion rates ranking among the highest in the market under a full online operating model.

The continued expansion of our diversified product portfolio helps us reach differentiated borrow groups while providing funding partners with broader asset options. 第三条主线是海外业务 印尼地区一季度方款规模环比增长20% 同比翻番 通过深化与当地资金方的合作不断拓宽合作版图 墨西哥地区目前业务规模上小 但增长较快 我们在当地的合作伙伴一季度方款规模同比增长35% 将要去年同期以实现高速增长 报告期内 海外地区摄入规模逐步提升 The third initiative is our international business.

In Indonesia, loan volume increased by 20% quarter over quarter and more than doubled year over year in the first quarter. By deepening cooperation with local funding partners, we continue to expand our presence in the market. In Mexico, while currently small in scale, growth has been even faster. Our local partner loan volume increased by 35% sequentially during the first quarter and also delivered strong year-over-year growth. During the reporting period, revenue scale from overseas markets continued to increase.

We will continue to execute our globalization strategy, leveraging strategic investments as an entry point to export our advanced technology capabilities and operational expertise. and steadily build the segment into a growth engine for the company's future development. 核心技术能力 在研发加速方面 智能体生成代码占总AI代码量的30% 研发效率提升约20% 进一步夯实AI规模化投产的工程技术 作息辅助方面 自研模型全面上线客户环节 意图识别率从78%提升至93% 作息效率提升的同时 模型调用成本降低90%

In artificial intelligence, we continue to execute again a clear strategic roadmap by integrating AI technologies into our FinTech ecosystem and accelerating the evolution of our technology service capabilities. Intelligent engineering, the feature iteration cycle for our risk management models has been reduced from several days to less than one hour, enabling strategies to respond rapidly to changes in market conditions. This capability has also become a core technology offering provided to our institutional partners. For R&D acceleration, AI agents now generate approximately 30% of all AI-assisted code, improving development efficiency by around 20% and further strengthening the engineering foundation for large-scale AI deployment. In service assistance, our proprietary models have been fully deployed across customer service operations. Intent recognition accuracy improved from 78% to 93%, significantly enhancing service efficiency while reducing model inference costs by 90%. In addition, in workplace intelligence, we have completed enterprise-grade security enhancements for OpenClaw and deployed our proprietary AI agent, JainClaw, across a wide range of daily work scenarios. These initiatives are gradually reshaping the way our organization operates, enabling AI to serve as a collaborative partner for every employee and continuously unlocking productivity gains.

AI is steadily evolving from a supporting tool into an intrinsic driver of operational efficiency across the company. 累计识别并阻断7大借款人约29万人,拦截黑产恶意攻击11.3万件,我们持续推动风控战略从事后防御向事前主动拦截引进,尤其是在声纹识别、图像识别等多模态大模型领域已取得了私生性进展,通过引入声纹、图算法、距离分析等技术, We have always regarded security and responsibility as the lifeline of our business.

Leveraging the advantages of multimodal AI technology, we continue to strengthen the protection of user interest. During the first quarter, we identified and blocked approximately 290,000 fraudulent followers and intercepted 113,000 malicious applications associated with organized fraud activities. We continue to advance our risk management strategy from a reactive defense model toward proactive prevention and preemptive interception. In particular, we have achieved substantial progress in multimodal large language model applications, including voice print recognition, image recognition technologies. By integrating voice print analysis, graph algorithms, clustering technologies, and other advanced techniques, we are transforming our anti-fraud framework from traditional structured rule-based detection into a comprehensive prevention and control system built upon multimodal perception, graph analytics, and scalable engineering implementation. To date, our multimodal antifrost system has identified approximately 5 million suspicious audio and video samples associated with fraudulent and illicit activities, with an accuracy rate exceeding 90%. Turing to shareholder returns, we have extended our current share repurchase program through June 12, 2027, with approximately 49.6 million U.S. dollars remaining available under the program. We will continue to evaluate market conditions and our operational performance and comprehensively evaluate and implement various shareholder return initiatives. Given the continuing uncertainty in the macroeconomic environment, We remain prudent in our outlook. We currently expect transaction volume for the second quarter of 2026 to be between R&B 9.5 billion and R&B 10.5 billion. Looking ahead, we will continue to prioritize disciplined operations and sustainable development. Through deeper operational experience and enhanced organization resilience, we aim to build a durable competitive moat. With that, I will now turn the call over to our CFO, Mr. Fan Chun-Ling. Please go ahead.

Thank you, Mr. Yan, and hello, everyone. Thank you for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in R&B, and our percentage changes refer to year-over-year comparisons, unless otherwise noted. As Mr. Yan noted earlier, we remained disciplined in our execution during the first quarter and delivered the transaction volume in line with our previous guidance. Transaction volume was $19.3 billion, representing a decrease of 45.8% from the same period of Our net revenue was $756.7 million, representing a decrease of 57.4% from the same period of 2025. Moving on to costs, facilitation and servicing expense was $331.6 million, representing a decrease of 1.3% from the same period of 2025. Allowance for uncapable receivables, contract assets, prepaid expenses, and other current assets and others was R&B $1.1 million, compared with R&B $17.5 million for the same period of 2025, primarily due to the decrease in allowance for overseas contingent guarantees. Sales and marketing expense was $340.1 million, representing a decrease of 49.6% from the same period of 2025, primarily due to decreased borrow acquisition expenses. General and administrative expense was $44.1 million, representing a decrease of 16.5% from on the same period of 2025, primary due to decreased professional service fees. R&D expense was 109.8 million, representing an increase of 24.6% from the same period of 2025, primarily driven by an increase in technology infrastructure expenses and employee costs. Non-GAAP loss from operation was 70.1 million, compared with $606.6 million non-GAAP income from operation in the same period of 2025. Consequently, our net loss for the first quarter was $61.7 million compared with $559.5 million net income in the same period of 2025. Our basic and diluted net loss per share were both $0.29 compared with 2.53 basic and diluted net income per share in the first quarter of 2025. Basic and diluted net loss per ADS were both 1.16 compared with 10.12 basic and diluted net income per ADS in the first quarter of 2025. Each ADS represents four Class A ordinary shares of the company. We ended this quarter with $43.4 million in cash and cash equivalents, compared with $61.8 million at the end of the previous quarter. With that, we can open the call for questions. Ms. Chi, our Chief Risk Officer, and I will answer questions. Operator, please proceed.

Thank you. If you would like to ask a question, you will need to press star 1 and 1 on your telephone and waits for your name to be announced. To withdraw your question, please press star, one, and one again. Please stand by while we compile the Q&A roster. Thank you. We will now begin with our first question. This is from Zihao Li from CSC. Please go ahead.

一是我们看到公司第一季度 出现接近6200万的亏损 也是公司上次以来的首次单季度转亏 想请问一下背后的主要原因是什么 另外我们也很关心管理层 如何看待未来盈利能力的改善 那公司在日常经营层面 是否已经做出了一些调整 谢谢 下面我将翻译一下我的问题 Hello management I'm Jerry Lee from China Securities We have seen the companies reported a net loss of almost 62 million for the fourth quarter. It is fourth quarterly loss since listing. What are the primary drivers behind this performance? Any operational adjustments to improve for feasibilities moving forward? Thank you.

We have received the total cost of 6,170 million Since the Q2 was started Then the Q2 was started Then the Q2 was started Then the Q2 was started The entire business was A huge amount of The entire business was like The entire business was like The 9-year-old The total cost of the 这个最高内率从36%压降到24% 从这个去年的11号到今天的五叫今年的九六一份 整个市场的话已经总体压降了接近5000亿的贷款规模 所以的话呢这个我们从去年的11号开始根据监管的要求 我们的话呢将内率水平调整到24整体的业绩规模下降还是很明显 because the unemployment rate was very serious. In the last year, in the 11th of the year, due to the level of increasing increase, the supply chain caused by the supply chain. So in this year, I'm the CEO, Yen Dingquay.

I will answer your question. So on the loss of 61.7 million, so ever since the new regulation came out last year and implemented in October, where the lower from October to June, the overall market loan volume has reduced by 500 billion. And due to this significant lowering of the loan volume, there has been a liquidity crunch. And the liquidity crunch on the borrower side since the implementation on October 1st, We've tried many methods to be highly efficient to resolve the credit risk brought on by the after-effects of the implementation. 从3月份开始整个的这个信贷持续向好

然后我们已经度过了这个最艰难的这段时间 由于我们在这个11号开始压缩了我们的信贷规模 让我们能够更选择性的去接受优责资产 因为本身资金供给也不足 规模下降导致的收入的减少 叠加我们在当时没有去考虑等等费用押缩的计划 所以的话造成了我们一季度收入方面和我们的支出 所以造成了亏损 So ever since Chinese New Year, we've difficult adjustment combined with the cost reduction actions last year.

So the slower, there's a decrease in long volume than the decrease in cost reduction, so most of the difference in the loss.

We also have a good support. In the end of the year, we also have a good balance for our收入 and our支出. We also have a good balance for our customers'风险.

So, in today's time, I can be very responsible for you to say Q2, we've implemented a lot of cost control and reduction So the cash flow will be better next quarter And from the volume and revenue perspective We've balanced out our cash flow and revenue and expenses So to continue to have better cash flow and better liquidity for the upcoming quarter

This is my response to your question. provide some color on the risk trends through the first quarter and into April and May. Are we seeing an improvement in the risk metrics? Thank you.

I would like to welcome Ms. Qidan, our new Chief Risk Officer, to answer this question. She's from Tencent WeBank, and she used to be in risk management over there. So I'd like to welcome her to answer this question. 老克的新放款风险是在去年10月份在峰值,在这个之后呢,其实是一个逐步回落改善的趋势。 So the deterioration in asset quality caused by the rise in credit risk last year has been improving. Credit risk among the new borrowers peaked in September last year, while the risk associated with new loans facilitated to existing borrowers peak in November. Since then, both have trended downward and shown steady improvement. For new borrowers, Q4 of last year, we proactively really adjusted our borrower acquisition mix and the channel mix and optimized our risk models while really controlling the overall volume of new borrow acquisition. As a result, the new borrower credit performance has continued to improve. So by March and April of this year, the new borrower metrics has already declined to the lowest levels recorded during the entire last year. and more affordable customers.

The high-paying cost, high-paying cost, high-paying cost, low-paying cost, and low-paying cost, reduced the payment period and reduced the payment rate.

From the payment period, the payment period is a bit more Through the revenue of the revenue and the revenue of the revenue with respect to the new-need facility loans for existing borrowers, the risk levels continue to decline. throughout the first quarter. By April and May, the risk metrics have really fallen by approximately 25 to 30 percent from their peak levels returning to levels seen in May and June of last year. So from a risk management perspective, we've really tightened our borrower selection criteria, focusing on borrowers with repayment capabilities, as well as at more stable asset and credit profiles. At the same time, for the higher risk borrowers, such as those with elevated leverage, significant multi-borrowing exposure, greater liquidity stress or weaker asset profiles, for those borrowers we have proactively shortened the loan tenures and reduced credit limits. So, by making these adjustments to the borrowing emissions standards, credit limits, and loan terms, we have really actively optimized our – while this has resulted in a more measured pace of business growth, it has significantly improved the overall quality of our operations. Yeah, that's my answer to your question.

Thank you. seeing no more questions I will return the call to Sam for closing remarks please go ahead thank you operator and thank you all for participating on today's call we appreciate your interest and look forward to reporting to you again next quarter our progress thank you all again this concludes the call you may now disconnect