BEIJING, Nov. 21, 2023 /PRNewswire/ — Yiren Digital Ltd. (NYSE: YRD) (“Yiren Digital” or the “Company”), an AI-driven one-stop select financial and lifestyle services platform in China, today announced its unaudited financial results for the quarter ended September 30, 2023.
Third Quarter 2023 Operational Highlights
Financial Services Business
Total loans facilitated in the third quarter of 2023 reached RMB9.8 billion (US$1.3 billion), representing an increase of 20.3% from RMB8.2 billion in the second quarter of 2023 and compared to RMB6.3 billion in the same period of 2022.Cumulative number of borrowers served reached 8,595,780 as of September 30, 2023, representing an increase of 7.4% from 8,002,372 as of June 30, 2023 and compared to 6,960,095 as of September 30, 2022.Number of borrowers served in the third quarter of 2023 was 1,204,012, representing an increase of 18.7% from 1,013,972 in the second quarter of 2023 and compared to 737,320 in the same period of 2022. The increase was driven by the strong demand for our small revolving loan products and the improvement of customer acquisition efficiency.Outstanding balance of performing loans facilitated reached RMB15.1 billion (US$2.1 billion) as of September 30, 2023, representing an increase of 18.2% from RMB12.8 billion as of June 30, 2023 and compared to RMB10.6 billion as of September 30, 2022.
Insurance Brokerage Business
Cumulative number of insurance clients served reached 1,256,762 as of September 30, 2023, representing an increase of 10.9% from 1,133,069 as of June 30, 2023 and compared to 866,874 as of September 30, 2022.Number of insurance clients served in the third quarter of 2023 was 123,693, representing a decrease of 8.7% from 135,449 in the second quarter of 2023 and compared to 156,294 in the same period of 2022. The decrease was primarily a result of our strategic shift towards prioritizing products with higher average premiums.Gross written premiums in the third quarter of 2023 were RMB1,428.5 million (US$195.8 million), representing an increase of 7.2% from RMB1,332.5 million in the second quarter of 2023 and compared to RMB996.9 million in the same period of 2022. The increase was mainly attributed to the contribution from the renewal premiums of long-term insurance policies.
Consumption and Lifestyle Business
Total gross merchandise volume generated through our e-commerce platform and “Yiren Select” channel reached RMB563.2 million (US$77.2 million) in the third quarter of 2023, representing an increase of 42.3% from RMB395.8 million in the second quarter of 2023 and compared to RMB249.6 million in the same period of 2022. The increase was mainly due to the continuous growth of paying customers on our e-commerce platform.
“Over the past quarter, we invested in AI across the enterprise, and we have noted tangible progress in improving operational efficiencies and enhanced profitability,” said Mr. Ning Tang, Chairman and Chief Executive Officer. “We are confident in maintaining our leading position as an AI and technology-driven financial and lifestyle services platform through continued investments in technological innovation.”
“Amidst a moderately recovering macro environment, we are pleased by the financial results we achieved this quarter with net revenue increasing 56% year-over-year to RMB1.3 billion and net income increasing 105% year-over-year to RMB554.4 million,” Ms. Na Mei, Chief Financial Officer commented. “In the third quarter, we generated approximately RMB645.4 million cash from operations and as of quarter-end, our cash position remains strong at RMB5.4 billion.”
Third Quarter 2023 Financial Results
Total net revenue in the third quarter of 2023 was RMB1,310.8 million (US$179.7 million), representing an increase of 55.9% from RMB840.7 million in the third quarter of 2022. Particularly, in the third quarter of 2023, revenue from financial services business was RMB668.0 million (US$91.6 million), representing an increase of 35.4% from RMB493.4 million in the same period of 2022. The increase was attributed to the persistent and growing demand for our small revolving loan products. Revenue from insurance brokerage business was RMB264.6 million (US$36.3 million), representing an increase of 40.0% from RMB189.0 million in the third quarter of 2022. The increase was due to the effectiveness of the cross-selling between property and life insurance, as well as an increase in high-premium policy sales. Revenue from consumption and lifestyle business and others was RMB378.2 million (US$51.8 million), representing an increase of 139.0% from RMB158.3 million in the third quarter of 2022. The increase was primarily attributed to the continuous growth in gross merchandise volume generated through our e-commerce platform, driven by an expanding base of paying customers on the platform.
Sales and marketing expenses in the third quarter of 2023 were RMB195.7 million (US$26.8 million), compared to RMB136.4 million in the same period of 2022. The increase was primarily due to the growth of financial services business volume.
Origination, servicing and other operating costs in the third quarter of 2023 were RMB245.4 million (US$33.6 million), compared to RMB223.6 million in the same period of 2022. The increase was due to the expanding insurance brokerage business.
Research and development expenses[1] in the third quarter of 2023 were RMB39.0 million (US$5.3 million), compared to RMB33.4 million in the same period of 2022. The increase was mainly attributed to our ongoing investment in technological innovation.
General and administrative expenses in the third quarter of 2023 were RMB53.5 million (US$7.3 million), compared to RMB76.5 million in the same period of 2022. The decrease resulted from the implementation of our strategy to refine operations, leading to improvements in overall cost efficiency.
Allowance for contract assets, receivables and others in the third quarter of 2023 was RMB83.8 million (US$11.5 million), compared to RMB35.1 million in the same period of 2022. The increase was primarily attributed to the growing volume of loans facilitated on our platform and additional provisions made for the maturing balances of auto-secured loans.
Income tax expense in the third quarter of 2023 was RMB161.9 million (US$22.2 million).
Net income in the third quarter of 2023 was RMB554.4 million (US$76.0 million), as compared to RMB270.3 million in the same period in 2022. The increase was primarily due to the recovery of business volume and optimization of our business structure.
Adjusted EBITDA[2] (non-GAAP) in the third quarter of 2023 was RMB692.7 million (US$94.9 million), compared to RMB365.0 million in the same period of 2022.
Basic and diluted income per ADS in the third quarter of 2023 was RMB6.3 (US$0.9) and RMB6.2 (US$0.9), compared to a basic per ADS of RMB3.0 and a diluted per ADS of RMB3.0 in the same period of 2022.
Net cash generated from operating activities in the third quarter of 2023 was RMB645.4 million (US$88.5 million), compared to RMB342.9 million in the same period of 2022.
Net cash used in investing activities in the third quarter of 2023 was RMB393.9 million (US$54.0 million), compared to RMB835.1 million in the same period of 2022.
Net cash used in financing activities in the third quarter of 2023 was RMB502.6 million (US$68.9 million), compared to RMB276.2 million in the same period of 2022.
As of September 30, 2023, cash and cash equivalents were RMB5,438.0 million (US$745.3 million), compared to RMB5,808.8 million as of June 30, 2023. As of September 30, 2023, the balance of held-to-maturity investments was RMB4.8 million (US$0.7 million), compared to RMB5.8 million as of June 30, 2023. As of September 30, 2023, the balance of available-for-sale investments was RMB338.1 million (US$46.3 million), compared to RMB102.6 million as of June 30, 2023. As of September 30, 2023, the balance of trading securities was RMB74.2 million (US$10.2 million), compared to nil as of June 30, 2023.
Delinquency rates. As of September 30, 2023, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.8%, 1.2% and 1.0%, respectively, compared to 0.7%, 1.1% and 1.1%, respectively, as of June 30, 2023.
Cumulative M3+ net charge-off rates. As of September 30, 2023, the cumulative M3+ net charge-off rates for loans originated in 2020, 2021 and 2022 were 7.9%, 6.5% and 4.5%, respectively, as compared to 8.0%, 6.6% and 3.9%, respectively, as of June 30, 2023.
Business Outlook
Based on the Company’s preliminary assessment of business and market conditions, the Company projects the total revenue in the fourth quarter of 2023 to be between RMB1.0 billion to RMB1.3 billion, with net profit margin expected to remain stable.
This is the Company’s current and preliminary view, which is subject to changes and uncertainties.
Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin as supplemental measures to review and assess operating performance. We believe these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See “Operating Highlights and Reconciliation of GAAP to Non-GAAP measures” at the end of this press release.
Currency Conversion
This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.2960 to US$1.00, the effective noon buying rate on September 29, 2023, as set forth in the H.10 statistical release of the Federal Reserve Board.
Conference Call
Yiren Digital’s management will host an earnings conference call at 8:00 a.m. U.S. Eastern Time on November 21, 2023 (or 9:00 p.m. Beijing/Hong Kong Time on November 21, 2023).
Participants who wish to join the call should register online in advance of the conference at:
https://s1.c-conf.com/diamondpass/10035120-gh876t.html
Once registration is completed, participants will receive the dial-in details for the conference call.
Additionally, a live and archived webcast of the conference call will be available at https://ir.yirendai.com/presentations-webcasts
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “confident” and similar statements. Such statements are based upon management’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yiren Digital’s control. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to Yiren Digital’s ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yiren Digital’s ability to meet the standards necessary to maintain the listing of its ADSs on the NYSE or other stock exchange, including its ability to cure any non-compliance with the NYSE’s continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in Yiren Digital’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Yiren Digital does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
About Yiren Digital
Yiren Digital Ltd. is an AI-driven one-stop select financial and lifestyle services platform in China. The Company provides personalized insurance solutions for individuals, families, and businesses, along with high-quality lifestyle services to enhance clients’ well-being and security, as well as offers financial consulting services for clients throughout their growth journey, addressing financing needs that arise from consumption and production.
[1] Research and development expenses have been segregated from general and administrative expenses and restated for historical periods to better reflect the Company’s cost and expense structure.
[2] “Adjusted EBITDA” is a non-GAAP financial measure. For more information on this non-GAAP financial measure, please see the section of “Operating Highlights and Reconciliations of GAAP to Non-GAAP Measures” and the table captioned “Reconciliations of Adjusted EBITDA” set forth at the end of this press release.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except for share, per share and per ADS data, and percentages)
For the Three Months Ended
For the Nine Months Ended
September
30,
2022
June
30,
2023
September
30,
2023
September
30,
2023
September
30,
2022
September
30,
2023
September
30,
2023
RMB
RMB
RMB
USD
RMB
RMB
USD
Net revenue:
Loan facilitation services
334,162
514,353
586,883
80,439
837,548
1,518,401
208,114
Post-origination services
74,433
5,273
984
135
166,720
12,573
1,723
Insurance brokerage services
189,019
404,695
264,611
36,268
532,770
865,664
118,649
Financing services
54,702
14,896
9,937
1,362
242,843
47,410
6,498
Electronic commerce services
52,954
287,725
350,635
48,058
173,742
881,218
120,781
Others
135,385
97,264
97,724
13,395
392,921
296,057
40,579
Total net revenue
840,655
1,324,206
1,310,774
179,657
2,346,544
3,621,323
496,344
Operating costs and expenses:
Sales and marketing
136,406
148,947
195,714
26,825
470,547
450,873
61,797
Origination,servicing and other
operating costs
223,622
346,367
245,360
33,629
565,250
791,472
108,480
Research and development expenses
33,422
33,018
38,981
5,343
118,987
101,168
13,866
General and administrative
76,525
63,723
53,519
7,335
219,472
180,623
24,756
Allowance for contract assets,
receivables and others
35,074
60,840
83,756
11,480
132,476
189,501
25,974
Total operating costs and expenses
505,049
652,895
617,330
84,612
1,506,732
1,713,637
234,873
Other (expenses)/income:
Interest (expense)/income, net
(378)
10,535
25,815
3,538
(29,741)
50,869
6,972
Fair value adjustments related to
Consolidated ABFE
2,077
(17,470)
(8,104)
(1,111)
21,862
(36,777)
(5,041)
Others, net
3,035
2,730
5,177
709
18,930
11,496
1,575
Total other income/(expenses)
4,734
(4,205)
22,888
3,136
11,051
25,588
3,506
Income before provision for income taxes
340,340
667,106
716,332
98,181
850,863
1,933,274
264,977
Income tax expense
70,020
139,758
161,917
22,192
141,227
424,345
58,161
Net income
270,320
527,348
554,415
75,989
709,636
1,508,929
206,816
Weighted average number of ordinary
shares outstanding, basic
179,409,525
176,929,176
176,866,653
176,866,653
173,174,370
177,189,206
177,189,206
Basic income per share
1.5067
2.9806
3.1346
0.4296
4.0978
8.5159
1.1672
Basic income per ADS
3.0134
5.9612
6.2692
0.8592
8.1956
17.0318
2.3344
Weighted average number of ordinary
shares outstanding, diluted
179,841,065
179,124,032
178,366,565
178,366,565
173,962,494
179,220,434
179,220,434
Diluted income per share
1.5031
2.9440
3.1083
0.4260
4.0792
8.4194
1.1540
Diluted income per ADS
3.0062
5.8880
6.2166
0.8520
8.1584
16.8388
2.3080
Unaudited Condensed Consolidated Cash
Flow Data
Net cash generated from operating
activities
342,888
718,058
645,416
88,462
1,377,540
1,753,781
240,375
Net cash (used in)/provided by investing
activities
(835,064)
(19,988)
(393,919)
(53,991)
(230,586)
360,376
49,394
Net cash used in financing activities
(276,198)
(6,120)
(502,636)
(68,892)
(434,572)
(901,587)
(123,573)
Effect of foreign exchange rate changes
2,284
329
2,395
328
3,592
2,543
349
Net increase in cash, cash equivalents
and restricted cash
(766,090)
692,279
(248,744)
(34,093)
715,974
1,215,113
166,545
Cash, cash equivalents and restricted
cash, beginning of period
4,427,408
5,132,273
5,824,552
798,321
2,945,344
4,360,695
597,683
Cash, cash equivalents and restricted
cash, end of period
3,661,318
5,824,552
5,575,808
764,228
3,661,318
5,575,808
764,228
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
As of
December
31,
2022
June
30,
2023
September
30,
2023
September
30,
2023
RMB
RMB
RMB
USD
Cash and cash equivalents
4,271,899
5,808,775
5,437,972
745,336
Restricted cash
88,796
15,777
137,836
18,892
Trading securities
–
–
74,185
10,168
Accounts receivable
221,004
490,680
432,824
59,323
Contract assets, net
626,739
694,507
826,088
113,225
Contract cost
787
356
271
37
Prepaid expenses and other assets
321,411
297,018
272,577
37,360
Loans at fair value
54,049
412,389
534,687
73,285
Financing receivables
514,388
252,878
162,411
22,260
Amounts due from related parties
1,266,232
1,098,164
940,472
128,902
Held-to-maturity investments
2,700
5,820
4,820
661
Available-for-sale investments
972,738
102,594
338,069
46,336
Property, equipment and software, net
77,256
73,991
73,446
10,067
Deferred tax assets
84,187
92,359
88,231
12,093
Right-of-use assets
33,909
25,424
27,352
3,749
Total assets
8,536,095
9,370,732
9,351,241
1,281,694
Accounts payable
14,144
66,738
38,025
5,211
Amounts due to related parties
227,724
338,779
27,664
3,792
Deferred revenue
65,539
32,450
27,150
3,721
Accrued expenses and other liabilities
1,315,006
1,427,016
1,483,190
203,288
Secured borrowings
767,900
392,100
–
–
Deferred tax liabilities
79,740
100,178
118,543
16,248
Lease liabilities
35,229
26,930
27,709
3,798
Total liabilities
2,505,282
2,384,191
1,822,235
249,758
Ordinary shares
129
130
130
18
Additional paid-in capital
5,160,783
5,168,632
5,169,821
708,583
Treasury stock
(46,734)
(66,914)
(81,501)
(11,171)
Accumulated other comprehensive
income
7,765
23,748
25,873
3,546
Retained earnings
908,870
1,860,945
2,414,683
330,960
Total equity
6,030,813
6,986,541
7,529,006
1,031,936
Total liabilities and equity
8,536,095
9,370,732
9,351,241
1,281,694
Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except for number of borrowers, number of insurance clients, cumulative number of insurance clients and percentages)
For the Three Months Ended
For the Nine Months Ended
September
30,
2022
June
30,
2023
September
30,
2023
September
30,
2023
September
30,
2022
September
30,
2023
September
30,
2023
RMB
RMB
RMB
USD
RMB
RMB
USD
Operating Highlights
Gross written premiums
996,864
1,332,458
1,428,484
195,790
2,601,100
3,684,325
504,979
First year premium
767,250
1,101,928
914,839
125,389
2,071,610
2,644,082
362,402
Renewal premium
229,614
230,530
513,645
70,401
529,490
1,040,243
142,577
Number of insurance clients
156,294
135,449
123,693
123,693
352,175
293,254
293,254
Cumulative number of insurance clients
866,874
1,133,069
1,256,762
1,256,762
866,874
1,256,762
1,256,762
Amount of loans facilitated
6,298,522
8,156,201
9,814,359
1,345,170
15,839,577
24,390,773
3,343,034
Number of borrowers
737,320
1,013,972
1,204,012
1,204,012
1,228,435
2,128,924
2,128,924
Remaining principal of performing loans
10,630,352
12,768,448
15,090,800
2,068,366
10,630,352
15,090,800
2,068,366
Gross merchandise volume
249,624
395,820
563,224
77,196
395,762
1,267,611
173,740
Segment Information
Insurance brokerage business:
Revenue
189,019
404,695
264,611
36,268
532,770
865,664
118,649
Sales and marketing expenses
2,565
3,845
3,175
435
14,783
9,309
1,276
Origination, servicing and other operating
costs
152,983
289,851
176,182
24,148
387,511
599,650
82,189
Financial services business:
Revenue
493,369
581,974
667,966
91,552
1,320,565
1,733,813
237,639
Sales and marketing expenses
88,714
103,164
146,369
20,062
325,934
311,751
42,729
Origination, servicing and other operating
costs
39,951
38,961
59,300
8,128
113,454
145,870
19,993
Consumption & lifestyle business and others:
Revenue
158,267
337,537
378,197
51,837
493,209
1,021,846
140,056
Sales and marketing expenses
45,127
41,938
46,170
6,328
129,830
129,813
17,792
Origination, servicing and other operating
costs
30,688
17,555
9,878
1,353
64,285
45,952
6,298
Reconciliation of Adjusted EBITDA
Net income
270,320
527,348
554,415
75,989
709,636
1,508,929
206,816
Interest expense/(income), net
378
(10,535)
(25,815)
(3,538)
29,741
(50,869)
(6,972)
Income tax expense
70,020
139,758
161,917
22,192
141,227
424,345
58,161
Depreciation and amortization
8,514
1,778
1,664
228
23,893
5,310
728
Share-based compensation
15,760
3,321
513
70
20,642
5,923
812
Adjusted EBITDA
364,992
661,670
692,694
94,941
925,139
1,893,638
259,545
Adjusted EBITDA margin
43.4 %
50.0 %
52.8 %
52.8 %
39.4 %
52.3 %
52.3 %
Delinquency Rates
15-29 days
30-59 days
60-89 days
December 31, 2019
0.8 %
1.3 %
1.0 %
December 31, 2020
0.5 %
0.7 %
0.6 %
December 31, 2021
0.9 %
1.5 %
1.2 %
December 31, 2022
0.7 %
1.3 %
1.1 %
March 31, 2023
0.6 %
1.2 %
1.2 %
June 30, 2023
0.7 %
1.1 %
1.1 %
September 30,2023
0.8 %
1.2 %
1.0 %
Net Charge-Off Rate
Loan
Issued
Period
Amount of Loans
Facilitated
During the Period
Accumulated M3+ Net
Charge-Off
as of September 30, 2023
Total Net Charge-Off
Rate
as of September 30,
2023
(in RMB thousands)
(in RMB thousands)
2019
3,431,443
390,347
11.4 %
2020
9,614,819
761,411
7.9 %
2021
23,195,224
1,502,598
6.5 %
2022
22,623,101
1,019,963
4.5 %
2023H1
14,576,413
249,378
1.7 %
M3+ Net Charge-Off Rate
Loan
Issued
Period
Month on Book
4
7
10
13
16
19
22
25
28
31
34
2019Q1
0.0 %
0.8 %
2.0 %
3.4 %
5.3 %
5.9 %
6.3 %
6.3 %
6.3 %
6.3 %
6.3 %
2019Q2
0.1 %
1.5 %
4.5 %
7.5 %
8.8 %
9.2 %
9.9 %
10.3 %
10.6 %
10.6 %
10.6 %
2019Q3
0.2 %
2.9 %
6.8 %
9.0 %
10.4 %
12.0 %
13.2 %
13.8 %
14.4 %
14.6 %
14.6 %
2019Q4
0.4 %
3.1 %
4.9 %
6.3 %
7.2 %
7.9 %
8.4 %
8.9 %
9.5 %
9.8 %
9.8 %
2020Q1
0.6 %
2.3 %
4.1 %
5.2 %
6.0 %
6.2 %
6.6 %
7.3 %
7.8 %
7.9 %
7.9 %
2020Q2
0.5 %
2.5 %
4.2 %
5.3 %
6.1 %
6.7 %
7.6 %
8.1 %
8.2 %
8.3 %
8.2 %
2020Q3
1.1 %
3.3 %
5.1 %
6.3 %
7.1 %
8.1 %
8.7 %
8.9 %
8.9 %
8.8 %
8.7 %
2020Q4
0.3 %
1.8 %
3.2 %
4.6 %
6.0 %
7.1 %
7.4 %
7.6 %
7.6 %
7.5 %
2021Q1
0.4 %
2.3 %
3.9 %
5.5 %
6.7 %
7.0 %
7.2 %
7.3 %
7.2 %
2021Q2
0.4 %
2.4 %
4.5 %
5.9 %
6.4 %
6.7 %
6.8 %
6.7 %
2021Q3
0.5 %
3.1 %
5.0 %
5.9 %
6.3 %
6.4 %
6.4 %
2021Q4
0.6 %
3.2 %
4.6 %
5.3 %
5.4 %
5.4 %
2022Q1
0.6 %
2.5 %
3.8 %
4.5 %
4.5 %
2022Q2
0.4 %
2.2 %
3.6 %
4.1 %
2022Q3
0.5 %
2.7 %
4.1 %
2022Q4
0.6 %
3.0 %
2023Q1
0.5 %
View original content:https://www.prnewswire.com/news-releases/yiren-digital-reports-third-quarter-2023-financial-results-301994534.html
SOURCE Yiren Digital