Jiayin Group Q2 2026 Earnings Call - Strategic Pivot to Tech and International Markets Amid Domestic Contraction

Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Jiayin Group second quarter 2026 earnings conference call. Currently, all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, we are recording today’s call. If you have any objections, you may disconnect at this time. I will now turn the call over to Mr. Sam Li from investor relations of Jiayin Group. Please proceed.

Sam Li, Investor Relations, Jiayin Group: Thank you, operator. Hello, everyone. Thank you all for joining us on today’s conference call to discuss Jiayin Group’s financial results for the second quarter of 2026. We released our earnings results earlier today. The press release is available on the company’s website as well as from Newswire Services. On the call with me today are Mr. Yan Dinggui, Chief Executive Officer, and Mr. Fan Chunlin, Chief Financial Officer. Before we continue, please note that today’s discussion will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company’s actual results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company’s public filings with the SEC.

The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP financial measures to GAAP financial measures. Please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese renminbi. With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with corresponding English translations. Please go ahead, Mr. Yan. Hello, everyone. Thank you for joining Jiayin Group’s second quarter 2026 earnings conference call.

According to the statistics from the People’s Bank of China, the outstanding balance of short-term household consumer loans in China decreased by approximately CNY 190 billion in the second quarter compared to the end of the first quarter. As industry regulatory compliance requirements continue to take effect, influenced by isolated industry events, institutional funding partners have adopted a more cautious approach. Against this backdrop, the company proactively adapted to changes in the industry and accelerated the strategic adjustments of our business structure. During the quarter, the company achieved transaction volume of CNY 9.5 billion, representing a year-over-year decrease of approximately 74.4%. Driven by both the industry-wide contraction and our strategic adjustment, we recorded a net loss of approximately CNY 180 million for the quarter.

In response to impacts brought by industry-wide liquidity tightening, we proactively reduced our risk exposure and steadily mitigated existing portfolio risk, concentrating our focus on our core base of high-quality borrowers. At the same time, we intensified our collection efforts and the 30-day collection rate improved consecutively quarter-on-quarter. As of the end of the second quarter, the 90-plus day delinquency rate stood at 2.21%, remaining stable on a sequential basis. Our international business serves as a key anchor in driving our strategic transformation and structural upgrades. In the second quarter, our Indonesian partner’s business volume increased by 58% year-over-year and 10% sequentially. By upgrading our risk strategy framework and advancing refined borrower segmentation, we significantly improved our customer acquisition cost efficiency and further expanded our partnership network with local financial institutions.

In Mexico, business volume increased by 36% sequentially in the second quarter, with continued improvements in borrower acquisition efficiency and asset quality. To achieve our long-term vision for our overseas business, we have comprehensively upgraded both our strategy and execution team. Moving forward, we plan to continue deepening our presence in Southeast Asia as our core anchor market while taking a prudent approach to market research and expansion in emerging regions such as East Africa and Central Asia, thereby advancing our global expansion in a structured and disciplined manner.

Yan Dinggui, Chief Executive Officer, Jiayin Group: 科技部门是我们战略转型的重要方向。公司正加速实现从贷款服务商向科技输出方的技术升级。本季度，公司自研的福羲平台已完成基建层、风控层和核心skill层沉淀，覆盖贷款周期内所有主要的业务环节。社群建模全链路skill已规模化落地，将传统三至五天的建模优化周期压短至小时级。模型AUC和KS的衡量指标风险识别准确率显著优于人工基准。未来将重点搭建面向金融机构的客户数据平台，支持沉量客群的甄选能力，并与自动化营销平台全面打通，形成标准化可复用的能力输出体系。

Sam Li, Investor Relations, Jiayin Group: Technology empowerment is a critical pillar of our strategic transformation, and we are accelerating our technology upgrades to transition from a loan facilitation service provider to a more comprehensive technology service provider. During the quarter, the company’s proprietary Fuxi platform has completed the key developments in the infrastructure layer, risk management layer, and core skills deployment, covering all key operational processes throughout the credit lifecycle. Specifically, the end-to-end skill for credit assessment modeling has been implemented at scale, compressing the traditional model optimization cycle from three to five days down to a matter of hours, with risk identification accuracy metrics, including model AUC and KS scores, significantly outperforming human benchmarks. Looking ahead, we will focus on building a customer data platform tailored for financial institutions, enabling existing borrower segmentation and targeting capabilities with full integration into our automated marketing platform, establishing a standardized and scalable framework for technology service delivery.

Yan Dinggui, Chief Executive Officer, Jiayin Group: 此外，AI应用已全面嵌入公司核心运营链条。目前客服、信件等业务场景已实现端到端AI全覆盖，部分场景已实现对人工座席的全面替代。风控层，我们利用大模型和机器学习相结合的技术，自研策略辅助agent，推动策略制定从专家建模人工计算向AI辅助专家建模机器自动计算的升级，策略迭代效率提升数倍。关键场景精细度提升20%以上。得益于AI带来的人效提升，我们积极推进组织价格优化，AI从单点工具演变为系统能力，支撑公司的业务调整，保持运营效率与成本竞争力。

Sam Li, Investor Relations, Jiayin Group: In addition, AI applications have been fully embedded into the company’s core operational value chain. End-to-end AI coverage has now been implemented in key operational scenarios such as customer service and loan application intake, completely replacing human agents in select functions. On the risk management front, we have developed our proprietary strategy assistance agent by combining large language models with traditional machine learning, driving the upgrade of risk strategy development from expert modeling with manual calculation to AI-assisted expert modeling with automated machine calculation. Consequently, our risk strategy iteration efficiency has improved by more than tenfold, and accuracy in key scenarios has increased by over 20%. Benefiting from the workforce efficiency gains brought by AI, we are actively optimizing our organizational structure. AI is evolving from a standalone tool into a systemic capability, supporting the company in maintaining operational efficiency and cost competitiveness during this period of business adjustment.

Yan Dinggui, Chief Executive Officer, Jiayin Group: 反欺诈方面，今年上半年行业内灰产迭代快，伪装性强，团伙化趋势明显，给机构造成的损失日益增加。为此，我们加快迭代了多模态策略体系，精准识别真实用户与代理黑产的行为差异。截至6月末，累计阻挡黑产恶意攻击信件17.6万件，累计识别并拦截高风险惯性欺诈申请超26.4万件，有效阻截黑产代理投诉行为，保障机构合作伙伴与借款人的权益。

Sam Li, Investor Relations, Jiayin Group: On the anti-fraud front, during the first half of this year, the industry experienced a rapid evolution of fraudulent and illicit activities in the industry, characterized by sophisticated disguising and masking tactics, and showed a clear trend towards organized operations, causing growing losses to institutions across the sector. To address this, we accelerated the iteration of our multimodal risk strategy system to precisely identify behavioral differences between genuine users and proxy-based fraud operations. As of the end of June, we had cumulatively blocked 176,000 malicious applications from fraudulent activities and identified and intercepted more than 264,000 high-risk repeat fraud applications, effectively intercepting fraudulent agent-initiated complaints and safeguarding the interests of institutional partners and borrowers. In light of the uncertain macroeconomic operating environment and the current strategic development priorities, the company has decided to refrain from issuing guidance for the third quarter and to suspend our dividend for this fiscal year.

By maintaining flexibility in our capital allocation and operational pace, we will focus internal resources on business transformation and risk mitigation. Notably, as of the end of the second quarter, the company’s cash and cash equivalents increased to RMB 504 million, providing a strong financial buffer to navigate through the industry cycle and ensure sound future development. With that, I will now turn the call over to our CFO, Mr. Chunlin Fan. Please go ahead.

Fan Chunlin, Chief Financial Officer, Jiayin Group: Thank you, Mr. Yan, and hello everyone. Thank you for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB and all percentage changes refer to year-over-year comparisons unless otherwise noted. As Mr. Yan noted earlier, we remained disciplined in our execution during the second quarter and delivered the transaction volume in line with our previous guidance. Transaction volume was RMB 9.5 billion, representing a decrease of 74.4% from the same period of 2025. Our net revenue was RMB 636.9 million, representing a decrease of 50.9% from the same period of 2025. Moving on to costs. Facilitation and servicing expense was RMB 549.3 million, representing an increase of 92.7% from the same period of 2025, primarily due to the increase in average outstanding loan balance for which the company provided guarantee services.

Allowance for uncollectible receivables, counter-assets, prepaid expenses, and other current assets and others was RMB 51.3 million, compared with RMB 32.5 million for the same period of 2025, primarily due to increased guarantee services the company provided. Sales and marketing expense was RMB 221.8 million, representing a decrease of 68.8% from the same period of 2025, primarily due to decreased borrower acquisition expenses and commission expenses. General and administrative expense was RMB 66.9 million, representing a decrease of 39.5% from the same period of 2025, primarily due to a decrease in share-based compensation. R&D expense was RMB 94.2 million, representing a decrease of 13.1% from the same period of 2025, primarily due to a decrease in share-based compensation. Non-GAAP loss from operations was RMB 225.7 million, compared with RMB 737.6 million non-GAAP income from operations in the same period of 2025.

Consequently, our net loss for the second quarter was CNY 183.6 million, compared with CNY 519.1 million net income in the same period of 2025. Our basic and diluted net loss per share was CNY 0.89, compared with CNY 2.46 basic and diluted net income per share in the second quarter of 2025. Basic and diluted net loss per ADS were CNY 3.56, compared with CNY 9.84 basic and diluted net income per ADS in the second quarter of 2025. Each ADS represents four Class A ordinary shares of the company. We ended this quarter with CNY 504 million in cash and cash equivalents, compared with CNY 43.4 million at the end of the previous quarter. With that, we can open the call for questions. Operator, please proceed.

Operator: Thank you. To ask a question, please press star one and one on your telephone. To cancel your request, please press star one and one again. There are no questions. I will return the call to Sam for closing remarks. Please go ahead.

Sam Li, Investor Relations, Jiayin Group: Thank you, Operator, and thank you all for participating on today’s call. We appreciate your interest and look forward to reporting to you again next quarter on our progress.

Operator: Thank you all again. This concludes the call. You may now disconnect.