Executives at Qfin (NASDAQ:QFIN) said the company delivered resilient full-year results in 2025 despite a rapidly tightening regulatory backdrop in China’s consumer finance market, while fourth-quarter performance reflected the impact of shrinking industry liquidity and elevated credit risks.
Regulatory shift pressured liquidity and loan growth in Q4
CEO Wu Haisheng said China’s consumer finance industry underwent “systemic restructuring” in 2025 under regulatory guidance, citing new loan facilitation rules, window guidance for consumer finance companies, and rules around comprehensive financing cost management for microlenders. Wu said these measures tightened market liquidity in the near term, suppressing credit demand and putting pressure on both loan growth and risk management across the sector.
For the full year, total loan facilitation and origination volume rose 1.6% year-over-year to about RMB 327.1 billion. Non-GAAP net income declined 1% to RMB 6.35 billion, while non-GAAP EPADS increased 10.4% to RMB 46.8, which management attributed to share count reduction.
Risk metrics elevated, but management pointed to improving new vintages
Management said sector-wide risk rose in the second half of 2025 and Qfin’s risk indicators showed “notable volatilities,” with legacy portfolios facing headwinds even as leading indicators for new vintages improved in the fourth quarter. Wu said the company’s C-M2 ratio—outstanding delinquency after 30 days of collection—rose to 0.97%, its highest level since 2020.
Wu described several actions taken across underwriting and collections, including a greater focus on high-quality borrowers and enhanced monitoring of multi-platform borrowing behavior. The company said these efforts improved model performance, with AUC rising 10% to 15%, and improved the asset mix as higher-risk segments were contracted. Wu said FPD30 for new loans declined about 18% sequentially in Q4, and that FPD30 for December vintages was close to historical lows over the past two years.
On collections, management said it optimized resource allocation toward high-performing partners and used more tailored strategies based on borrower profiling. Wu added that the 30-day collection rate improved marginally month-over-month in both November and December. The company also said it incorporated a People’s Bank of China one-time credit remediation policy introduced in late December—allowing eligible individuals to fix damaged credit records by March 31, 2026—into its collection strategy and expected some positive impact in the first quarter.
CRO Zheng Yan said early 2026 trends were encouraging. He said January data showed FPD7 improved by another 10% from December, reaching a two-year best. He also said C-M2 peaked in October, remained stable in November and December, and then fell 8.2% month-over-month in January. Management said it expected February’s C-M2 ratio to broadly return to the levels seen in July and August 2025, while emphasizing it needed more time to confirm sustainability amid ongoing industry adjustments.
Financial results reflected mix shift and pricing changes
CFO Alex Xu said Q4 total net revenue was RMB 4.09 billion, down from RMB 5.21 billion in Q3 and RMB 4.48 billion a year earlier. Revenue from credit-driven services (capital-heavy) was RMB 3.43 billion, compared with RMB 3.87 billion in Q3 and RMB 2.89 billion a year ago, with the year-over-year increase driven by more on-balance sheet loans offsetting lower off-balance sheet activity. Platform service revenue (capital-light) was RMB 660 million, down from RMB 1.34 billion in Q3 and RMB 1.59 billion a year earlier, which Xu attributed primarily to significantly lower ICE contribution tied to regulatory changes and a lower ICE take rate amid rising risks.
Xu said average IRR of loans originated and/or facilitated declined about 150 basis points quarter-over-quarter, and management anticipated a gradual decline in average pricing as it focuses more on high-quality, lower-priced users. Wu added in response to analyst questions that average pricing fell 140 basis points in Q4 and that there could be room for further downward adjustment in 2026 depending on market and regulatory conditions.
Operationally, sales and marketing expense fell 17% quarter-over-quarter as Qfin took a more cautious approach to customer acquisition. The company added about 1.45 million new credit line users in Q4 versus 1.95 million in Q3.
Funding and business mix: more capital-light tilt in 2026
On funding, Wu said the company achieved a modest reduction in ABS issuance costs in Q4 despite liquidity contraction, and that overall funding cost fell another 20 basis points from Q3 to a historical low as ABS became a larger share of its risk-bearing funding mix. For full-year 2025, total ABS issuance grew 40.8% to RMB 21.4 billion and average issuance cost declined 72 basis points year-over-year.
However, management warned the 2026 funding environment remained challenging and could create short-term volatility in funding costs. Addressing a question about microloan regulations and a 4x LPR cap on loan pricing, Wu said investors may become more cautious and ask for higher returns on microloan assets, introducing uncertainty for both ABS issuance volume and funding cost this year.
Regarding business model mix, Xu said Qfin typically leans more capital-heavy in “up cycles” for higher returns, while favoring capital-light in down cycles to offload risk. Given the current environment, he said the company expects to move “directionally” toward capital-light in 2026. In 2025, capital-light accounted for about 44% of total loan volume, and management said that proportion would likely increase, without setting a fixed target.
Capital returns, guidance, and overseas expansion plans
Management emphasized shareholder returns. Wu said the company returned about $200 million in dividends and $680 million through share repurchases in 2025, representing 98% of 2024 GAAP net income. Xu said Qfin repurchased about 8.7 million ADSs in Q4 for approximately $168.8 million at an average price of $19.4 per ADS, and about 21.1 million ADSs for the full year for approximately $677 million at an average price of $32.1 per ADS. Xu also said the company began buying back outstanding convertible bonds in Q4 and, as of March 17, 2026, had repurchased about $460 million principal amount for $399 million in cash, with about $230 million remaining outstanding.
The board approved a dividend of $0.39 per Class A ordinary share, or $0.78 per ADS, for the second half of 2025, payable to holders of record as of April 22, 2026. Management said it intends to maintain a progressive dividend-per-share policy and would consider resuming buybacks more actively when macro and regulatory conditions become more stable.
For Q1 2026, the company guided for non-GAAP net income of RMB 900 million to RMB 950 million, representing a year-over-year decline of 51% to 53%.
Executives also highlighted expansion initiatives. Wu said Qfin’s technology solutions business grew in 2025, with total loan volume up about 448% year-over-year and outstanding loan balance approaching RMB 11.7 billion by year-end. He discussed Focus PRO, a lending solution for financial institutions aimed at helping banks serve customer segments typically priced between 3% and 12% using digital tools across the credit life cycle.
On international expansion, Wu said 2025 marked the launch of overseas operations. He said the company had selected several markets for preparation and that one had started operations in 2026, with exploration planned across Europe, Latin America, and Southeast Asia. Management said it expected overseas teams to grow to about 200 people by year-end.
About Qfin (NASDAQ:QFIN)
360 DigiTech, Inc (NASDAQ: QFIN) is a China?based fintech company that specializes in providing digital lending solutions to underserved consumer and small business markets. Leveraging proprietary credit assessment technologies and big data analytics, the company connects borrowers with a network of financial institutions and investors through its online platform. Its services encompass unsecured consumer loans, installment credit products, and working capital financing for micro and small enterprises.
The company’s flagship platform offers an end?to?end digital lending experience, from application and credit evaluation to disbursement and repayment.
