X Financial

First-quarter 2026 total net revenue was RMB 1.18 billion (USD 170.5 million), down 39.3% year over year and 19.9% sequentially. Total operating costs and expenses were RMB 1.04 billion, down 24.1% year over year and 28.5% sequentially. Total provisions were RMB 282.9 million, down from RMB 669.3 million in Q4 2025 but above RMB 135.5 million a year ago. Income from operations was RMB 140.7 million, with an operating margin of 12% versus 29.6% a year ago and 1.4% in Q4 2025. Net income was RMB 37.9 million, versus RMB 57.2 million in Q4 2025 and RMB 458.1 million in Q1 2025; non-GAAP adjusted net income was RMB 81 million. Basic earnings per ADS were RMB 0.96, and non-GAAP adjusted basic earnings per ADS were RMB 2.8. Balance sheet cash, including restricted cash, was about RMB 2.4 billion, total assets were about RMB 13.6 billion, and shareholders’ equity was about RMB 7.8 billion. For Q2 2026, the company expects total loan origination of RMB 11.5 billion to RMB 12.5 billion.

Kan Li said the company continued to operate with discipline in a difficult environment, deliberately slowing activity to align with supervisory expectations and prioritize credit quality over near-term volume. He emphasized tighter underwriting, stronger compliance, more automation in servicing and collections, and a shift toward internally operated channels to reduce reliance on higher-cost third-party traffic. His tone was cautious and defensive, with repeated focus on portfolio integrity, liquidity, and long-term balance sheet stability.

Noah Kauffman highlighted that revenue fell to RMB 1.18 billion, operating costs and expenses dropped to RMB 1.04 billion, and provisions improved sequentially to RMB 282.9 million from RMB 669.3 million in Q4. He noted marketing and borrower acquisition expense declined sharply to RMB 219.8 million from RMB 709 million in Q1 2025, supporting the margin recovery to 12% operating margin. Fuya Zheng added that cash, including restricted cash, was about RMB 2.4 billion, equity was about RMB 7.8 billion, and the company repurchased about 1.8 million ADS for roughly USD 8.2 million through May 15, with about USD 39.8 million remaining on the authorization through November 30, 2026.

There was no live analyst Q&A; the operator indicated no questions. The main points management preemptively addressed were the evolving regulatory environment for internet-based lending in China and the limited visibility into the timing and scope of future implementation. They said these regulatory changes could materially affect operations and that historical profitability should not be assumed to continue.