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X Financial ( NYSE: XYF ) 2025 Q1 Earnings Results Presentation
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Disclaimer This presentation has been prepared by X Financial (the “Company”) solely for information purpose and has not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Company or any of its affiliates, advisers, or representatives or the underwriters as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctness of the information or opinions presented or contained in this presentation. None of the Company or any of its affiliates, advisers, or representatives or the underwriters accept any responsibility whatsoever (in negligence or otherwise) for any loss howsoever arising from any information presented or contained in this presentation or otherwise arising in connection with the presentation. The information presented or contained in this presentation is subject to change without notice and its accuracy is not guaranteed. This presentation does not constitute an offer to sell or issue or an invitation to purchase or subscribe for any securities of the Company for sale in the United States or anywhere else. No securities of the Company may be sold in the United States without registration with the United States Securities and Exchange Commission (the “SEC”) or an exemption from such registration pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations thereunder. No part of this presentation shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Specifically, these materials do not constitute a “pro- spectus” within the meaning of the Securities Act. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company and is qualified in its entirety by reference to the detailed information in the prospectus relating to the proposed offering. The Company has filed a registration statement on Form F-1 with the SEC relating to its securities to be offered in the United States, but the registration statement has not yet become effective. Any public offering of the Company’s securities to be made in the United States will be made solely on the basis of the information contained in the statutory prospectus included in such registration statement. The prospectus contains detailed information about the Company, its subsidiaries and affiliated entities, management, the consolidated financial statements and risks and uncertainties associated with its business and industry. Any decision to purchase the Company’s securities in the proposed offering should be made solely on the basis of the information contained in the prospectus relating to the proposed offering. Certain statements in this presentation, and other statements that the Company may make, are forward- looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect the Company’s intent, beliefs or current expectations about the future. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” “anticipates,” “believes,” “confident” or words of similar meaning. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company’s operations and other factors, many of which are beyond the Company’s control, and accordingly, actual results may differ materially from these forward-looking statements. The Company or any of its affiliates, advisers, or representatives or the underwriters has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances. In evaluating its business, the Company uses certain non-GAAP measures as supplemental measures to review and assess its operating performance. These non-GAAP financial measures have limitations as analytical tools, and when assessing the Company’s operating performances, investors should not consider them in isolation, or as a substitute for net income attributable to the Company or other consolidated statement of operations data prepared in accordance with U.S. GAAP. THE INFORMATION CONTAINED IN THIS DOCUMENT IS HIGHLY CONFIDENTIAL AND IS BEING GIVEN SOLELY FOR YOUR INFORMATION AND ONLY FORYOUR USE IN CONNECTION WITH THIS PRESENTATION. THE INFORMATION CONTAINED HEREIN MAY NOT BE COPIED, REPRODUCED, REDISTRIBUTED, OR OTHERWISE DISCLOSED, IN WHOLE OR IN PART, TO ANY OTHER PERSON IN ANY MANNER. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS PRESENTATION IN WHOLE OR IN PART IS UNAUTHORIZED. By viewing and accessing this presentation, viewers hereby acknowledge and agree to keep the contents of this presentation and these materials confidential. Viewers agree not to photograph, copy or otherwise reproduce this presentation in any form or pass on this presentation to any other person for any purpose, during the presentation or while in the conference room. Viewers must return this presentation and all other materials provided in connection herewith to the Company upon completion of the presentation. By viewing, accessing or participating in this presentation, viewers agree to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. 02
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Company Overview
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X Financial at a Glance In the first quarter of 2025 35,149 mn (RMB) Total Loan Facilitation and Origination Amount 2.43 mn Active Borrowers As of March 31, 2025 58,403 mn (RMB) Loan Balance A leading Chinese fintech platform
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Our Business Loan Application Risk Management & Pairing Investment Demand Institutional Funding Partners Insurance Company Financial Guarantee Companies Risk Control X Financial Loan Facilitation Based on 100% Institutional Funding 05 Prime Borrowers
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Institutional Funding Partners Prime Borrowers Insured loan products Insurance PartnerBlacklist + Other Database Third-party Risk Control Principal + Interest Funding Partners Confidence Enhanced risk management system to accurately identify prime borrowers and pricing risk Strengthen funding partners confidence resulting in deepened cooperation Jointly analyze risk and develop advanced risk assessment models Both principal and interest are insured against default Credit Data Credit Insurance Model WinSAFE 06 InsuranceBenefits Insurance Premium
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Financial Guarantee Model We have established cooperation with high-quality financing guarantee companies who provide guarantee services to protect institutional funding partners against default for both the principal and interest. （1）Substantially all credit ratings were evaluated at least AA+ level by renowned rating companies. Strong Capabilities of the Financial Guarantee Companies AA+ Credit Rating（1) ~RMB1 Billion of Registered Capital Joint Risk Control Balanced Geographic Coverage Of Services 07
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Technology-driven Approach to Servicing Borrowers and Funding Partners Proprietary Risk Management Model 3rd Party Guarantee Partners Data Analysis & Fraud Detection Customer Profiles Lines of Credit Borrowing Costs Tenure Risk Assessment Credit Limit Regulation Requirement Funding Borrowers Assets Funding Partners 08
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Our Growth Strategies Strengthen brand awarenessExpand user base and enhance user acquisition Strengthen risk management and technology capabilities Diversify and scale up funding sources Optimize product offerings 09
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Investment Highlights 03 Diversified funding sources and 100% institutional funding 04 Founded by seasoned entrepreneurs with proven track record 02 Rigorous data-driven credit assessment modeling system 01 Leading industry position with differentiated products benefiting from China’s booming personal finance market 10
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Wide Range of Age Groups Early career stage 25 to 40 in average Flexible Loan Amount / Credit Line RMB500 – 50,000 Flexible Tenor Meeting Borrowers’ Liquidity Needs 3, 6, 9, 12 months Various Sources of Credit Proof Reducing Collateral Needs Xiaoying Card Loan Flagship Product 01 Leading Industry Position with Differentiated Products that Benefit from China’s Booming Personal Finance Market 11
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02 Continuous optimization of credit assessment systems that strengthen risk controls Technology & Data-driven Credit Assessment Credit policy adjustments Model optimization + synchronization Deep learning Licensed third-party data ◼ Social behavior ◼ Online payment history ◼ Credit data Credit Scoring Data Data analysis ◼ 1 million fraud data ◼ 2,500 variables ◼ 300 anti-fraud rules Loan application selection ◼ Intelligent ◼ Dynamic ◼ Quantifiable Fraud detection ◼ Data algorithms ◼ Social network graphs ◼ Facial Recognition Proprietary risk model WinSAFE ◼ Over 20 models ◼ Black List Proprietary Technology 12
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High-quality loans and strong reputation help us attract more institutional investors. Achieved 100% institutional funding for new loans facilitated through our platform by Q2 2020. Key cooperating financial institutions include Bank of Hangzhou Consumer Finance Company, National Trust, etc. Total number of partnerships with institutional funding partners keeps growing. 03 Diversified Funding Sources and 100% Institutional Funding 13
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04 Seasoned Management Team Founded by a seasoned entrepreneur with proven track record and backed by a strong team of financial and technology talents Yue Tang (Justin) Founder, Chairman and CEO Co-founder of Blue Ridge China, an investment and consulting company Co-founder of eLong, one of the first online travel service companies in China Kan Li (Kent) President 15+ years of work experience in the financial sector Expe rt in risk management system establishment Former manager at Capital One Fuya Zheng (Frank) Chief Financial Officer 15+ years of work experience with corporate finance and investment management Former CFO of a Nasdaq-listed company Yufan Jiang (Jason) Chief Risk Officer 10+ years of work experience in the field of personal credit risk management Previously worked at Bank of Communications 14
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Operational and Financial Data
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Performance of Loan Balance and Loan Facilitation __Total Outstanding Loan Balance (1) (RMBmn) 48,847 52,327 FY2023 FY2024 43,812 52,327 58,403 1Q 2024 4Q 2024 1Q 2025 _ Total Loan Facilitation and Origination Amount (RMBmn) 105,557 104,889 FY2023 FY2024 21,505 32,297 35,149 1Q 2024 4Q 2024 1Q 2025 16 (1)Represents the total amount of loans outstanding for loans X Financial facilitated and originated at the end of the relevant period. Loans that are delinquent for more than 60 days are excluded in the outstanding loan balance, except for Xiaoying Housing Loan. As Xiaoying Housing Loan is a secured loan product and the Company is entitled to payment by exercising its rights to the collateral, the Company does not exclude Xiaoying Housing loan delinquent for more than 60 days in the outstanding loan balance
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Revenue and Non-GAAP Adj. Net Income Growth 4,815 5,872 FY2023 FY2024 1,208 1,709 1,938 1Q 2024 4Q 2024 1Q 2025 __Total Net Revenue (RMBmn) _ Non-GAAP Adj. Net Income(1) (RMBmn) 1,277 1,539 FY2023 FY2024 322 408 467 1Q 2024 4Q 2024 1Q 2025 (1)Represents net income before share-based compensation expenses, impairment losses on financial investments, impairment losses on long-term investments and income (loss) from financial investments 17
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Operational Efficiency __Operating Margin (1) __Non-GAAP Adj. Net Income Margin(2) 30.4% 31.9% FY2023 FY2024 31.2% 30.7% 29.6% 1Q 2024 4Q 2024 1Q 2025 18 26.5% 26.2% FY2023 FY2024 26.7% 23.9% 24.1% 1Q 2024 4Q 2024 1Q 2025 (1) Represents Income from operations divided by total net revenue (2) Represents Non-GAAP adjusted net income divided by total net revenue
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Net Revenue Per Employee and Operating Costs and Expenses 9,242 10,429 FY2023 FY2024 (RMB1,000) 2.9% 3.3% FY2023 FY2024 3.3% 3.1% 3.5% 1Q 2024 4Q 2024 1Q 2025 2,350 3,035 3,224 1Q 2024 4Q 2024 1Q 2025 __Net Revenue Per Employee __Operating Costs and Expenses (1) (1) Represents operating costs and expenses divided by total amount of loans that the Company facilitated and originated during the relevant period. Operating costs and expenses include origination and servicing expense, borrower acquisitions and marketing expense, as well as general and administrative expense. 19
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Outstanding Return on Equity Performance __Total Assets (RMBmn) (RMBmn) (1) Represents total X Financial shareholders’ equity, excluding non-controlling interest in subsidiaries 3,264 (37.0%) 3,847 (33.0%) 3,976 (33.6%) 4.081 (33.8%) 3,810 (43.1%) 4,948 (42.5%) 4,828 (40.9%) 4,212 (34.8%) 1,162 (13.1%) 1,660 (14.2%) 2,030 (17.2%) 2,410 (19.9%) 602 (6.8%) 1,195 (10.3%) 985 (8.3%) 1,390 (11.5%) FY2022 FY2023 FY2024 1Q2025 Cash & Cash Equivalents Accounts Receivable & Contract Assets Loans receivable from Xiaoying Credit Loans and other loans Others 20 8,838 11,650 11,819 4,753 5,847 6,953 7,435 FY2022 FY2023 FY2024 1Q2025 __Total Equity (1) 12,093
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Summary Consolidated Balance Sheet 21 As of 12/31/2024 As of 03/31/2025 (in RMB1,000) (in RMB1,000) (in USD1,000) Cash and cash equivalents 984,611 1,389,456 191,472 Accounts receivable and contract assets, net 2,029,550 2,409,743 332,071 Loans receivable from Xiaoying Credit Loans and other loans, net 4,828,317 4,212,291 580,469 Total assets 11,819,288 12,093,005 1,666,460 Payable to investors and institutional funding partners at amortized cost 2,184,086 1,718,948 236,877 Short-term borrowings 328,500 603,500 83,165 Income tax payable 591,491 618,616 85,248 Total liabilities 4,866,134 4,657,578 641,830 Total equity 6,953,154 7,435,427 1,024,630 Source: Company financial statements
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Consolidated Income Statement 22 1Q 2024 1Q 2025 (in RMB1,000) (in RMB1,000) (in USD1,000) Net revenues Loan facilitation service 614,150 1,078,379 148,605 Post-origination service 152,742 266,041 36,661 Financing income 334,628 310,140 42,739 Guarantee income 32,926 82,929 11,428 Other revenue 73,528 200,016 27,563 Total net revenue 1,207,974 1,937,505 266,996 Operating costs and expenses Origination and servicing 426,547 473,725 65,281 Borrower acquisitions and marketing 248,374 709,007 97,704 General and administrative 38,474 51,744 7,131 Provision for accounts receivable and contract assets 8,655 9,048 1,247 Provision for loans receivable 61,540 62,196 8,571 Provision for contingent guarantee liabilities 47,893 63,748 8,785 Change in fair value of financial guarantee derivative - (5,417) (746) (Reversal of) provision for credit losses for deposits and other financial assets (50) 549 76 Total operating costs and expenses 831,433 1,364,600 188,049 Income from operations 376,541 572,905 78,947 Interest expenses, net (4,291) (2,719) (375) Foreign exchange loss (424) (12,482) (1,720) Income (loss) from financial investments 8,327 (3,678) (507) Other income, net 4,046 1,935 267 Income before income taxes 384,199 555,961 76,612 Income tax expense (65,025) (116,528) (16,058) Gain (loss) from equity in affiliates, net of tax 2,046 (2,182) (301) Gain from financial investments at equity method, net of tax 41,919 20,876 2,877 Net income 363,139 458,127 63,130 Net income attributable to X Financial shareholders 363,139 458,127 63,130
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Consolidated Income Statement 23 FY2023 FY2024 (in RMB1,000) (in RMB1,000) (in USD1,000) Net revenues Loan facilitation service 2,740,974 3,102,345 425,020 Post-origination service 596,582 759,539 104,056 Financing income 1,137,336 1,372,004 187,964 Guarantee income 24,498 201,716 27,635 Other revenue 315,494 436,178 59,756 Total net revenue 4,814,884 5,871,782 804,431 Operating costs and expenses Origination and servicing 1,544,014 1,738,139 238,124 Borrower acquisitions and marketing 1,370,942 1,582,472 216,798 General and administrative 153,943 175,934 24,103 Provision for accounts receivable and contract assets 12,234 35,732 4,895 Provision for loans receivable 229,137 221,658 30,367 Provision for contingent guarantee liabilities 67,520 241,738 33,118 Change in fair value of financial guarantee derivative (24,966) (1,038) (142) Fair value adjustments related to Consolidated Trusts 531 - - (Reversal of) provision for credit losses for deposits and other financial assets (588) 3,378 463 Total operating costs and expenses 3,352,767 3,998,013 547,726 Income from operations 1,462,117 1,873,769 256,705 Interest expenses, net (20,365) (560) (77) Foreign exchange loss (4,023) (9,533) (1,306) Income from financial investments 6,498 17,134 2,347 Other income, net 24,351 13,521 1,852 Income before income taxes 1,468,578 1,894,331 259,521 Income tax expense (261,130) (405,702) (55,581) (Loss) gain from equity in affiliates, net of tax (1,931) 10,159 1,392 (Loss) gain from financial investments at equity method, net of tax (18,723) 41,118 5,633 Net income 1,186,794 1,539,906 210,965 Net income attributable to X Financial shareholders 1,186,794 1,539,906 210,965
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Reconciliations of GAAP and Non-GAAP Results 24 1Q 2024 1Q 2025 (in RMB1,000) (in RMB1,000) (in USD1,000) Reconciliation of Adjusted Net Income from Net Income GAAP net income 363,139 458,127 63,130 Less: Income (loss) from financial investments (net of tax of nil) 8,327 (3,678) (507) Less: Impairment losses on financial investments (net of tax of nil) - - - Less: Impairment losses on long-term investments (net of tax) - - - Less: Gain (loss) from financial investments at equity method (net of tax of nil) 41,919 20,876 2,877 Add: Share-based compensation expenses (net of tax of nil) 9,312 25,837 3,560 Non-GAAP adjusted net income 322,205 466,766 64,320 FY2023 FY2024 (in RMB1,000) (in RMB1,000) (in USD1,000) Reconciliation of Adjusted Net Income from Net Income GAAP net income 1,186,794 1,539,906 210,965 Less: Income (loss) from financial investments (net of tax of nil) 6,498 17,134 2,347 Less: Impairment losses on financial investments (net of tax of nil) - - - Less: Impairment losses on long-term investments (net of tax) (35,079) (16,680) (2,285) Less: Gain (loss) from financial investments at equity method (net of tax of nil) (18,723) 41,118 5,633 Add: Share-based compensation expenses (net of tax of nil) 42,598 40,178 5,504 Non-GAAP adjusted net income 1,276,696 1,538,512 210,774
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