Qifu Technology Q2 2025 Earnings Call Recap

Qifu Technology's Strong Performance in Q2 2025

During the second quarter of 2025, Qifu Technology, Inc. (NASDAQ: QFIN) delivered impressive financial results despite a challenging macroeconomic environment. The company’s earnings call highlighted key achievements and strategic initiatives that underscore its leadership in the fintech sector.

Key Financial Highlights

Qifu Technology reported total net revenue of CNY 5.22 billion for Q2 2025, reflecting a significant increase from the previous quarter and the same period last year. Revenue from credit-driven services, which is capital-heavy, reached CNY 3.57 billion, up from CNY 3.11 billion in Q1 and CNY 2.91 billion in the same quarter of 2024. This growth was primarily driven by an increase in on-balance sheet loans and higher capital-heavy loan volume.

Revenue from platform services, which are capital-light, amounted to CNY 1.65 billion in Q2, compared to CNY 1.58 billion in Q1 and CNY 1.25 billion in Q2 2024. The year-on-year growth was attributed to strong contributions from ICE and other value-added services, offsetting a decline in capital-light loan facilitation. Platform service accounted for roughly 51% of the quarter-ending loan balance.

Operational Efficiency and Risk Management

The company continued to refine its risk strategies and models to improve key performance metrics. In April, Qifu slightly tightened its risk standards in response to uncertainty related to potential tariff impacts. By June, further optimization of risk control and asset distribution strategies helped maintain a reasonable acceptance rate while improving risk metrics. As a result, the FPD over 7 days for new loans facilitated in June decreased by about 5% compared to May, while the C2M2 metric remained stable.

Qifu also made significant upgrades to its risk decisioning AI agent by leveraging large language models (LLMs). These enhancements allowed the company to establish an end-to-end risk management solution, moving toward more intelligent decision-making. The user profile enhancement AI agent used LLM capabilities to enrich user profiles for over 20% of the core user base, refining and cross-validating key labels such as industry, income, and occupation.

Expansion and Strategic Initiatives

On the user acquisition front, Qifu continued to implement a user-centric strategy, making its offerings available wherever users are. Through embedded finance, the company deepened its presence across various Internet scenarios, including short-form videos, e-commerce, mobility, food delivery, and financial services. In Q2, the number of new credit line users grew by 40% year-over-year to CNY 1.79 million, while average cost per credit line user decreased slightly sequentially.

Qifu also advanced its AI+ bank strategy, focusing on designing and developing AI-powered products tailored for financial institutions. The company upgraded its FocusPRO credit tech solution into a next-generation super AI credit agent to strengthen B2B services capabilities. Additionally, Qifu entered into a strategic partnership with an AI hardware provider to develop a customized all-in-one AI machine, enhancing the competitiveness of its AI products.

Regulatory Environment and Market Outlook

In April, China's National Financial Regulatory Administration issued a notice on strengthening the management of the Internet loan facilitation business of commercial banks. Qifu believes these new regulatory guidelines will help improve the overall health and sustainability of the loan facilitation sector, making consumer finance more accessible and delivering greater value to users. While the industry will go through an adjustment period to align with these new requirements, Qifu's prudent operations and strong execution capabilities have enabled it to navigate similar adjustments successfully.

Looking ahead, Qifu plans to continue prioritizing prudent, compliant operations and optimizing products and services to better address user needs. The company will advance its One Core, Two Wings strategy, executing on its AI+ credit strategy, and enhancing its AI agent platform to drive the digital transformation of financial institutions.

Financial Performance and Share Repurchase

Non-GAAP net profit for Q2 2025 was CNY 1.85 billion, compared to CNY 1.93 billion in Q1. The company booked a CNY 170 million loss associated with a currency derivative instrument related to its CB issuance, partially offset by approximately CNY 108 million foreign exchange gains. Non-GAAP net income per fully diluted ADS was CNY 13.63 in Q2, up from CNY 13.53 in Q1 and CNY 9.16 a year ago.

Qifu generated approximately CNY 2.62 billion in cash from operations in Q2, compared to CNY 2.81 billion in Q1. The company has been executing a CNY 450 million share repurchase plan, purchasing approximately 7.1 million ADS in the open market for a total amount of approximately CNY 277 million as of August 14, 2025.

Conclusion

Qifu Technology's Q2 2025 results reflect its strong financial performance, operational efficiency, and commitment to innovation. The company remains well-positioned to thrive in a healthier and more favorable market environment, continuing to consolidate its leadership in the fintech industry.