LexinFintech (LX) investor relations material

Executive summary

• The company faced significant industry headwinds in Q2 2026 due to sector-wide funding tightening, regulatory changes, and risk events at peers, leading to a material impact on loan facilitation operations.

• Net income dropped 49.7% quarter-over-quarter and 80.2% year-over-year, with both revenue and profitability declining sharply.

• Decisive measures included cost efficiency initiatives, organizational streamlining, accelerated AI adoption, and a prudent approach to new loan originations to maintain asset quality and operational resilience.

• The company maintained a focus on premium customer acquisition, risk management, and compliance, optimizing strategies to balance growth and credit quality.

• Dividend policy was shifted from semiannual to annual to preserve liquidity and support business transformation.

Financial highlights

• Q2 2026 loan origination volume was RMB 55.43 billion, revenue was RMB 3.19 billion, and net income was RMB 101 million, down 49.7% QoQ and 80.2% YoY.

• Gross profit for Q2 2026 was RMB 495.7 million, down 40.6% QoQ and 61.0% YoY.

• Installment e-commerce platform service income rose 60.8% YoY to RMB 784 million, partially offsetting declines in other segments.

• Operating expenses fell 17.6% QoQ to RMB 1.2 billion, driven by organizational optimization and AI adoption.

• Net margin dropped to 3.2% from 6.1% in the previous quarter.

Outlook and guidance

• The company expects continued industry uncertainty and sector-wide funding constraints, with Q3 likely to see further revenue decline, increased credit costs, and a net loss.

• No specific financial guidance for H2 2026 due to limited market visibility; further updates will be provided as conditions clarify.

• Ongoing investment in technology and digital infrastructure to support operational efficiency and compliance.

• Dividend policy shifted to annual evaluation to preserve liquidity and financial flexibility.