Q2 2026 Qfin Holdings Inc Earnings Call Transcript
Key Points
- Risk metrics improved in Q2, with C-M2 ratio declining 17% sequentially to 0.66% and 30-day collection rate rising to 88.1%.
- Funding costs decreased by approximately 10 basis points sequentially, aided by a 90% increase in ABS issuance to RMB5.5 billion.
- Tech solutions business showed strong growth, with loan volume up 515% year-over-year and outstanding balance up 313%.
- Customer acquisition costs fell sharply due to reduced industry competition, allowing for more efficient spending.
- Provision coverage ratio strengthened to 472%, providing a robust buffer against potential credit losses.
- Net revenue declined significantly, falling to RMB3.57 billion in Q2 from RMB5.22 billion a year ago, with non-GAAP net profit down to RMB455 million from RMB1.85 billion.
- A one-off tax-related expense of approximately RMB500 million inflated the effective tax rate to 60.3% in Q2.
- Industry-wide liquidity squeeze and regulatory crackdown on collections have led to a sharp rise in C-M2 in August, with expectations of continued deterioration for two to three quarters.
- Funding costs are expected to increase in the second half of 2026, with external funding costs already up 25 basis points in July and August.
- Q3 guidance indicates a significant year-over-year decline in non-GAAP net income of 67% to 73%, reflecting ongoing market volatility and risk tightening.
Ladies and gentlemen, thank you for standing by, and welcome to the Qfin Holdings second-quarter 2026 earnings conference call. (Operator Instructions) Please also note today's event is being recorded.
At this time, I'd like to turn the conference call over to Ms. Karen Ji, Senior Director of Capital Markets. Please go ahead, Karen.
Thank you, Asia. Hello, everyone, and welcome to Qfin Holdings' second-quarter 2026 earnings conference call. Our earnings release was distributed earlier today and is available on our IR website.
Joining me today are Mr. Wu Haisheng, our CEO; Mr. Alex Xu, our CFO; and Mr. Zheng Yan, our CRO.
Now, I will quickly cover the Safe Harbor statement. Today's discussions may contain forward-looking statements, particularly statements about our business and the financial results that are subject to risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statement. Please refer to
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