BEIJING, Aug. 17, 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 June 30, 2023.
Second Quarter 2023 Operational Highlights
Insurance Brokerage Business
Cumulative number of insurance clients served reached 1,133,069 as of June 30, 2023, representing an increase of 12.5% from 1,007,238 as of March 31, 2023 and compared to 755,819 as of June 30, 2022.
Number of insurance clients served in the second quarter of 2023 was 135,449, representing an increase of 67.5% from 80,856 in the first quarter of 2023 and compared to 132,727 in the same period of 2022. The increase was attributed to the enhancement of digital operational efficiency, coupled with the optimization of products and service channels tailored to our customer base.
Gross written premiums in the second quarter of 2023 were RMB1,332.5 million (US$183.8 million), representing an increase of 44.3% from RMB923.4 million in the first quarter of 2023 and compared to RMB797.9 million in the same period of 2022. The quarter-over-quarter increase was mainly attributed to the effectiveness of the cross-selling between property and life insurance, as well as an increase in high-premium policy sales.
Financial Services Business
Total loans facilitated in the second quarter of 2023 reached RMB8.2 billion (US$1.1 billion), representing an increase of 27.0% from RMB6.4 billion in the first quarter of 2023 and compared to RMB4.9 billion in the same period of 2022.
Cumulative number of borrowers served reached 8,002,372 as of June 30, 2023, representing an increase of 5.5% compared to 7,582,435 as of March 31, 2023 and compared to 6,514,111 as of June 30, 2022.
Number of borrowers served in the second quarter of 2023 was 1,013,972 representing an increase of 16.2% from 872,235 in the first quarter of 2023 and compared to 556,094 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 RMB12.8 billion (US$1.8 billion) as of June 30, 2023, representing an increase of 14.7% from RMB11.1 billion as of March 31, 2023 and compared to RMB10.6 billion as of June 30, 2022.
Consumption & Lifestyle Business
Total gross merchandise volume generated through our e-commerce platform and “Yiren Select” channel reached RMB395.8 million (US$54.6 million) in the second quarter of 2023, representing an increase of 28.3% from RMB308.6 million in the first quarter of 2023 and compared to RMB87.1 million in the same period of 2022.
“I am very excited to reveal our new corporate positioning as an AI and technology-driven financial and lifestyle services platform, which better aligns with our business model that is anchored by three key pillars — financial services, insurance brokerage and consumption and lifestyle services.” said Mr. Ning Tang, Chairman and Chief Executive Officer. “In the long term, we will continue to focus on delivering shareholder value by expanding our business and investing in technology.”
“Despite a sequentially more challenging macro environment this quarter, we are pleased to report another quarter of solid financial results.,” Ms. Na Mei, Chief Financial Officer, commented. “For the second quarter of 2023, our total revenue increased by 65% year-over-year to RMB1.3 billion driven by rapid growth across all business segments. Net income reached RMB527.3 million for this quarter as we continued to strengthen operational efficiencies.”
Second Quarter 2023 Financial Results
Total net revenue in the second quarter of 2023 was RMB1,324.2 million (US$182.6 million), representing an increase of 65% from RMB801.1 million in the second quarter of 2022. Particularly, in the second quarter of 2023, revenue from financial services business was RMB582.0 million (US$80.3 million), representing an increase of 33.3% from RMB436.7 million in the same period of 2022. The increase was due to an increase of our small revolving loan products amid strong demand for consumption. Revenue from insurance brokerage business was RMB404.7 million (US$55.8 million), representing an increase of 114.6% from RMB188.6 million in the second 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.
Sales and marketing expenses in the second quarter of 2023 were RMB148.9 million (US$20.5 million), compared to RMB158.0 million in the same period of 2022. The decrease was primarily due to the optimization of the cost structure for our offline business and improvement of customer acquisition efficiency.
Origination, servicing and other operating costs in the second quarter of 2023 were RMB346.4 million (US$47.8 million), compared to RMB188.7 million in the same period of 2022. The increase was due to the expanding insurance brokerage business.
General and administrative expenses in the second quarter of 2023 were RMB96.7 million (US$13.3 million), compared to RMB112.0 million in the same period of 2022. The decrease was primarily a result of optimizing the company’s offline business operations and achieving overall cost-efficiency improvements.
Allowance for contract assets, receivables and others in the second quarter of 2023 was RMB60.8 million (US$8.4 million), compared to RMB65.6 million in the same period of 2022. The decrease was primarily due to the continued improvement in the risk performance.
Income tax expense in the second quarter of 2023 was RMB139.8 million (US$19.3 million).
Net income in the second quarter of 2023 was RMB527.3 million (US$72.7 million), as compared to RMB254.5 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[1] (non-GAAP) in the second quarter of 2023 was RMB661.7 million (US$91.2 million), compared to RMB312.9 million in the same period of 2022.
Basic and diluted income per ADS in the second quarter of 2023 was RMB6.0 (US$0.8) and RMB5.9 (US$0.8), 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 second quarter of 2023 was RMB718.1 million (US$99.0 million), compared to RMB666.9 million in the same period of 2022.
Net cash used in investing activities in the second quarter of 2023 was RMB20.0 million (US$2.8 million), compared to RMB255.7 million provided by investing activities in the same period of 2022.
As of June 30, 2023, cash and cash equivalents were RMB5,808.8 million (US$801.1 million), compared to RMB5,077.2 million as of March 31, 2023. As of June 30, 2023, the balance of held-to-maturity investments was RMB5.8 million (US$0.8 million), compared to RMB3.3 million as of March 31, 2023. As of June 30, 2023, the balance of available-for-sale investments was RMB102.6 million (US$14.1 million), compared to RMB250.8 million as of March 31, 2023.
Delinquency rates. As of June 30, 2023, the delinquency rates for loans that are past due for 15-29 days, 30-59 days and 60-89 days were 0.7%, 1.1% and 1.1% respectively, compared to 0.6%, 1.2% and 1.2% respectively as of March 31, 2023.
Cumulative M3+ net charge-off rates. As of June 30, 2023, the cumulative M3+ net charge-off rates for loans originated in 2020, 2021 and 2022 were 8.0%, 6.6% and 3.9% respectively, as compared to 8.1%, 6.6% and 2.6% respectively as of March 31, 2023.
Business Outlook
Based on the Company’s preliminary assessment of business and market conditions, the Company projects the total revenue in the third quarter of 2023 to be between RMB0.9 billion to RMB1.1 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 RMB7.2513 to US$1.00, the effective noon buying rate on June 30, 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 August 17, 2023 (or 8:00 p.m. Beijing/Hong Kong Time on August 17, 2023).
Participants who wish to join the call should register online in advance of the conference at:
https://s1.c-conf.com/diamondpass/10033013-5tdywj.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] “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 Six Months Ended
June 30,
2022
March 31,
2023
June 30,
2023
June 30,
2023
June 30,
2022
June 30,
2023
June 30,
2023
RMB
RMB
RMB
USD
RMB
RMB
USD
Net revenue:
Loan facilitation services
273,725
417,165
514,353
70,933
503,386
931,518
128,462
Post-origination services
55,311
6,316
5,273
727
92,287
11,589
1,598
Insurance brokerage services
188,570
196,358
404,695
55,810
343,751
601,053
82,889
Financing services
78,530
22,577
14,896
2,054
188,141
37,473
5,168
Electronic commerce services
70,977
242,858
287,725
39,679
120,788
530,583
73,171
Others
134,011
101,069
97,264
13,413
257,536
198,333
27,351
Total net revenue
801,124
986,343
1,324,206
182,616
1,505,889
2,310,549
318,639
Operating costs and expenses:
Sales and marketing
157,958
106,212
148,947
20,541
334,141
255,159
35,188
Origination,servicing and other
operating costs
188,687
199,745
346,367
47,766
341,628
546,112
75,312
General and administrative
111,964
92,550
96,741
13,341
228,512
189,291
26,104
Allowance for contract assets,
receivables and others
65,575
44,905
60,840
8,390
97,402
105,745
14,584
Total operating costs and expenses
524,184
443,412
652,895
90,038
1,001,683
1,096,307
151,188
Other (expenses)/income:
Interest (expense)/income, net
(3,790)
14,519
10,535
1,453
(29,363)
25,054
3,455
Fair value adjustments related to
Consolidated ABFE
15,020
(11,203)
(17,470)
(2,409)
19,785
(28,673)
(3,954)
Others, net
8,481
3,589
2,730
376
15,895
6,319
872
Total other income/(expenses)
19,711
6,905
(4,205)
(580)
6,317
2,700
373
Income before provision for income taxes
296,651
549,836
667,106
91,998
510,523
1,216,942
167,824
Income tax expense
42,163
122,670
139,758
19,273
71,207
262,428
36,190
Net income
254,488
427,166
527,348
72,725
439,316
954,514
131,634
Weighted average number of ordinary
shares outstanding, basic
170,008,652
177,782,059
176,929,176
176,929,176
170,005,103
177,353,262
177,353,262
Basic income per share
1.4969
2.4028
2.9806
0.4110
2.5841
5.3820
0.7422
Basic income per ADS
2.9938
4.8056
5.9612
0.8220
5.1682
10.7640
1.4844
Weighted average number of ordinary
shares outstanding, diluted
170,871,232
180,180,975
179,124,032
179,124,032
170,932,908
179,650,148
179,650,148
Diluted income per share
1.4894
2.3708
2.9440
0.4060
2.5701
5.3132
0.7327
Diluted income per ADS
2.9788
4.7416
5.8880
0.8120
5.1402
10.6264
1.4654
Unaudited Condensed Consolidated Cash
Flow Data
Net cash generated from operating
activities
666,901
390,307
718,058
99,026
1,034,652
1,108,365
152,852
Net cash provided by/(used in) investing
activities
255,693
774,283
(19,988)
(2,757)
604,478
754,295
104,022
Net cash used in financing activities
(50,166)
(392,831)
(6,120)
(844)
(158,374)
(398,951)
(55,018)
Effect of foreign exchange rate changes
1,580
(181)
329
45
1,308
148
20
Net increase in cash, cash equivalents
and restricted cash
874,008
771,578
692,279
95,470
1,482,064
1,463,857
201,876
Cash, cash equivalents and restricted
cash, beginning of period
3,553,400
4,360,695
5,132,273
707,773
2,945,344
4,360,695
601,367
Cash, cash equivalents and restricted
cash, end of period
4,427,408
5,132,273
5,824,552
803,243
4,427,408
5,824,552
803,243
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
As of
December 31,
2022
March 31,
2023
June 30,
2023
June 30,
2023
RMB
RMB
RMB
USD
Cash and cash equivalents
4,271,899
5,077,211
5,808,775
801,067
Restricted cash
88,796
55,062
15,777
2,176
Accounts receivable
221,004
320,440
490,680
67,666
Contract assets, net
626,739
609,969
694,507
95,777
Contract cost
787
480
356
49
Prepaid expenses and other assets
321,411
258,786
297,018
40,961
Loans at fair value
54,049
175,411
412,389
56,871
Financing receivables
514,388
371,196
252,878
34,874
Amounts due from related parties
1,266,232
1,281,348
1,098,164
151,444
Held-to-maturity investments
2,700
3,320
5,820
803
Available-for-sale investments
972,738
250,788
102,594
14,148
Property, equipment and software, net
77,256
75,726
73,991
10,204
Deferred tax assets
84,187
90,855
92,359
12,737
Right-of-use assets
33,909
29,606
25,424
3,506
Total assets
8,536,095
8,600,198
9,370,732
1,292,283
Accounts payable
14,144
19,887
66,738
9,203
Amounts due to related parties
227,724
247,717
338,779
46,720
Deferred revenue
65,539
36,555
32,450
4,475
Accrued expenses and other liabilities
1,315,006
1,342,251
1,427,016
196,795
Secured borrowings
767,900
392,100
392,100
54,073
Deferred tax liabilities
79,740
84,824
100,178
13,815
Lease liabilities
35,229
30,274
26,930
3,714
Total liabilities
2,505,282
2,153,608
2,384,191
328,795
Ordinary shares
129
129
130
18
Additional paid-in capital
5,160,783
5,164,104
5,168,632
712,787
Treasury stock
(46,734)
(61,046)
(66,914)
(9,228)
Accumulated other comprehensive
income
7,765
8,599
23,748
3,275
Retained earnings
908,870
1,334,804
1,860,945
256,636
Total equity
6,030,813
6,446,590
6,986,541
963,488
Total liabilities and equity
8,536,095
8,600,198
9,370,732
1,292,283
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 Six Months Ended
June 30,
2022
March 31,
2023
June 30,
2023
June 30,
2023
June 30,
2022
June 30,
2023
June 30,
2023
RMB
RMB
RMB
USD
RMB
RMB
USD
Operating Highlights
Gross written premiums
797,881
923,382
1,332,458
183,754
1,604,236
2,255,841
311,095
First year premium
764,318
627,314
1,101,928
151,962
1,304,360
1,729,243
238,474
Renewal premium
33,563
296,068
230,530
31,792
299,876
526,598
72,621
Number of insurance clients
132,727
80,856
135,449
135,449
266,199
212,414
212,414
Cumulative number of insurance clients
755,819
1,007,238
1,133,069
1,133,069
755,819
1,133,069
1,133,069
Amount of loans facilitated
4,934,167
6,420,213
8,156,201
1,124,792
9,541,056
14,576,413
2,010,179
Number of borrowers
556,094
872,235
1,013,972
1,013,972
827,767
1,457,736
1,457,736
Remaining principal of performing loans
10,613,125
11,129,221
12,768,448
1,760,850
10,613,125
12,768,448
1,760,850
Gross merchandise volume
87,117
308,567
395,820
54,586
146,138
704,387
97,139
Segment Information
Insurance Brokerage Business:
Revenue
188,570
196,358
404,695
55,810
343,751
601,053
82,889
Sales and marketing expenses
7,046
2,289
3,845
530
12,218
6,134
846
Origination, servicing and other operating
costs
141,338
133,617
289,851
39,972
234,528
423,468
58,399
Financial Services Business:
Revenue
436,723
483,873
581,974
80,258
827,196
1,065,847
146,987
Sales and marketing expenses
99,661
62,218
103,164
14,227
237,220
165,382
22,807
Origination, servicing and other operating
costs
33,833
47,609
38,961
5,373
73,503
86,570
11,940
Consumption & Lifestyle Business and others:
Revenue
175,831
306,112
337,537
46,548
334,942
643,649
88,763
Sales and marketing expenses
51,251
41,705
41,938
5,784
84,703
83,643
11,535
Origination, servicing and other operating
costs
13,516
18,519
17,555
2,421
33,597
36,074
4,973
Reconciliation of Adjusted EBITDA
Net income
254,488
427,166
527,348
72,725
439,316
954,514
131,634
Interest expense/(income), net
3,790
(14,519)
(10,535)
(1,453)
29,363
(25,054)
(3,455)
Income tax expense
42,163
122,670
139,758
19,273
71,207
262,428
36,190
Depreciation and amortization
9,119
1,868
1,778
245
15,379
3,646
503
Share-based compensation
3,382
2,089
3,321
458
4,882
5,410
746
Adjusted EBITDA
312,942
539,274
661,670
91,248
560,147
1,200,944
165,618
Adjusted EBITDA margin
39.1 %
54.7 %
50.0 %
50.0 %
37.2 %
52.0 %
52.0 %
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 %
Net Charge-Off Rate
Loan
Issued
Period
Amount of Loans
Facilitated
During the Period
Accumulated M3+ Net
Charge-Off
as of June 30, 2023
Total Net Charge-Off
Rate
as of June 30, 2023
(in RMB thousands)
(in RMB thousands)
2019
3,431,443
392,882
11.4 %
2020
9,614,819
767,540
8.0 %
2021
23,195,224
1,520,740
6.6 %
2022
22,623,101
871,590
3.9 %
2023Q1
6,420,213
38,654
0.6 %
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 %
7.2 %
7.7 %
7.9 %
7.8 %
2020Q2
0.5 %
2.5 %
4.2 %
5.3 %
6.1 %
6.7 %
7.5 %
8.1 %
8.2 %
8.2 %
8.2 %
2020Q3
1.1 %
3.3 %
5.1 %
6.3 %
7.1 %
8.1 %
8.7 %
8.8 %
8.8 %
8.7 %
2020Q4
0.3 %
1.8 %
3.2 %
4.6 %
6.0 %
7.0 %
7.4 %
7.5 %
7.5 %
2021Q1
0.4 %
2.3 %
3.9 %
5.5 %
6.6 %
6.9 %
7.1 %
7.1 %
2021Q2
0.4 %
2.4 %
4.5 %
5.9 %
6.4 %
6.5 %
6.6 %
2021Q3
0.5 %
3.1 %
5.0 %
5.9 %
6.1 %
6.2 %
2021Q4
0.6 %
3.2 %
4.6 %
5.1 %
5.2 %
2022Q1
0.6 %
2.6 %
3.4 %
4.1 %
2022Q2
0.4 %
1.6 %
3.0 %
2022Q3
0.5 %
2.7 %
2022Q4
0.6 %
View original content:https://www.prnewswire.com/news-releases/yiren-digital-reports-second-quarter-2023-financial-results-301903466.html
SOURCE Yiren Digital Ltd.