X Financial reported a 91.1% year-over-year decline in net income to $6.9 million for the second quarter of 2026, as revenue fell 56.3% to $146.4 million. The drop was driven by an 78.2% collapse in loan facilitation and servicing fees, reflecting a 70.2% year-over-year decline in loan origination volumes to RMB 11.63 billion.
Active borrowers decreased 74.8% to approximately 720,000, while earnings per share fell to RMB 1.26 ($0.19) from RMB 12.6 in the prior-year quarter. Sequentially, net income rose 23.8% to RMB 47 million, and operating margins expanded to 19.6% from 12% in Q1 2026.
The company suspended quantitative guidance for Q3 2026, citing uncertain visibility. Kent Li, president and chief risk officer, emphasized credit quality and liquidity priorities over near-term origination growth. Noah Kauffman, chief financial strategy officer, noted sequential improvements in delinquency rates, calling them the first in several quarters, while revenue remained near cyclical lows.
For the full year 2025, X Financial reported net income of $209 million and a return on equity of 19.8%, supported by $90 million in shareholder returns. Earnings per share reached $5.15, up from $2.36 in 2021, with operating and net margins of 21% and 19%, respectively. The company returned $209 million to shareholders over the past four years, with a payout ratio of 43% in FY2025.
Loan facilitation accounted for a significant portion of revenue, with total platform scale reaching $18.7 billion in loans to nearly 140 million registered users since inception. The average borrower was 36.6 years old, with an average loan of RMB 10,185 ($1,500) over 10.9 months, targeting China’s mass-market consumer segment.
Credit risk metrics showed elevated delinquencies, with a 91–180 day past-due rate of 9.09%, compared to U.S. subprime benchmarks of 2.50%. The 31–60 day delinquency rate stood at 1.73%, versus 1.55% for U.S. subprime issuers. The company’s balance sheet contracted, with total assets down 17.5% to RMB 9.39 billion ($1.38 billion) as of June 30, 2026, while cash and equivalents rose 14.6% to RMB 1.13 billion.
X Financial’s ADS traded near $5.40 in pre-market activity on August 24, 2026, within a 52-week range of $3.30 to $16.40. The company repurchased 2.63 million ADS for $12.49 million under a $100 million buyback program, with $35.5 million remaining. A semi-annual cash dividend of $0.28 per ADS for Q2 2026 is set for record on September 10, with payment expected around September 28.
