Yirendai (NYSE:YRD) used its fourth-quarter and full-year 2025 earnings call to highlight a year of regulatory and credit-cycle pressure alongside rapid progress in artificial intelligence and a fast-growing internet insurance distribution business. Founder, Chairman, and CEO Ning Tang said 2025 “demanded the best of us,” but added that the company is entering 2026 with “growing confidence” as its next-generation platform gains traction and leading credit indicators begin to improve.
AI milestones and operational impact
Tang positioned AI as central to the company’s strategy, noting Yiren Digital completed the regulatory filing of its proprietary large language model, Zhiyu, in April 2025 and later released its first multi-agent platform, Magic Cube, in October. He described Magic Cube as an internal “connective infrastructure” designed to enable coordinated deployment of AI agents across functions including sales, risk management, capital planning, compliance, and customer service.
Chief Financial Officer William Hui reiterated the RMB 80 million figure as direct net cost savings and said it excludes other benefits such as fraud-loss avoidance, staff training savings, and other indirect efficiencies. In the Q&A, Hui added that fraud-loss avoidance was approximately RMB 180 million in 2025.
In response to an analyst question about the longer-term opportunity for AI, Tang said the company’s ambition is shifting from “AI as a tool” for cost savings to “AI as a colleague,” with business processes re-engineered around agents. He also argued that the company’s AI capabilities have been “well-tested” in heavily regulated environments and could be applied to additional financial services subsectors and select industries beyond financial services over the next few years.
Internet insurance distribution becomes a larger contributor
Management repeatedly pointed to internet insurance as an emerging “second core growth engine.” Tang said gross written premiums (GWP) from the internet insurance distribution business rose 206% quarter-over-quarter in the third quarter of 2025 and a further 95% quarter-over-quarter in the fourth quarter. He stated that internet insurance contributed 22% of segment revenue in the fourth quarter.
Hui provided additional quarterly detail, saying the company recorded RMB 50 million in fourth-quarter internet insurance GWP, up 95% sequentially, and that annualized premium reached RMB 267 million in the fourth quarter, representing 36% quarter-over-quarter growth and rising from a negligible level in the year-ago period. He said internet insurance accounted for 22% of insurance segment revenue in the quarter and 14% for the full year, and management expects that share to increase further in 2026.
While internet insurance grew quickly, the broader insurance brokerage business faced headwinds. Tang said fourth-quarter insurance brokerage GWP was RMB 860.1 million, down 22% year-over-year, and full-year GWP was RMB 3.7 billion, down 17% from 2024. Hui attributed the decline to a RMB 290 million drop in premiums from the traditional channel, partially offset by a RMB 50 million increase from internet insurance.
Despite lower premiums, Tang said total insurance clients served exceeded 2 million at the end of 2025, up 33% from 1.53 million a year earlier, and new policies issued reached 2.3 million, up 25% from 2024.
In the Q&A, Tang said the company’s strategic direction is an “offline and online combined model,” with offline teams increasingly using online tools such as live streaming and social platforms. He also argued that internet insurance is scaling faster than the company’s earlier transition of credit facilitation from offline to online because many of the analytics and AI agent capabilities have already been built and can be reused.
Credit facilitation volume, borrower trends, and asset quality
On the credit side, Tang said the company facilitated RMB 12.0 billion in loan originations in the fourth quarter, down 22% year-over-year and 40% quarter-over-quarter, reflecting a deliberate shift toward higher-quality credit as the credit environment deteriorated. For the full year, loan facilitation totaled RMB 67.8 billion, up 26% from RMB 53.6 billion in 2024, which management said was driven by strong performance earlier in the year.
Tang said cumulative borrowers served exceeded 14.3 million as of December 31, 2025, up 16% from approximately 12.4 million at the end of 2024. He also highlighted a greater emphasis on repeat borrowers and refined segmentation: repeat borrowing volume was 77% in the fourth quarter (up from 65% a year earlier), and average loan ticket size increased from RMB 8,000 in the first quarter to RMB 11,500 in the fourth quarter.
Asset quality weakened in the fourth quarter, which Tang said included a cyclical high in October. He reported fourth-quarter delinquency rates of 3.4% for 1–30 days, 3.0% for 31–60 days, and 2.8% for 61–90 days. However, both Tang and Hui said leading indicators improved after October. Tang said first payment default (FPD 30) trended downward since October and recently approached first-half 2025 levels.
Hui provided more color on the trajectory, stating that the FPD rate peaked in October, stabilized and trended down in November, and that December 2025 and January 2026 improved more than expected. He added that February delinquency was 38% below the peak, returning to the May 2025 level, while cautioning that there is typically a one- to two-quarter lag before improvements are fully reflected in financial results.
Financial results, provisions, and balance sheet
Hui said full-year 2025 total revenue was RMB 5.72 billion, down 1.5% from 2024, which he attributed to prioritizing credit quality over loan growth in the second half of the year. He also noted a sharp rise in guarantee services revenue, with fourth-quarter guarantee service revenue of RMB 612 million, up nearly 196% year-over-year, as more loan originations shifted to a risk-taking model.
On expenses, Hui said fourth-quarter sales and marketing expense declined 31% year-over-year to RMB 206 million, reflecting lower origination volume, reduced acquisition costs driven by AI, and a higher repeat borrower ratio. R&D expense fell 26% year-over-year to RMB 121 million due to a high base from a prior-year credit analysis system development project. Origination, servicing, and other operating costs rose 27% year-over-year to RMB 251 million, driven by higher commission rates for asset recovery services, while full-year origination and servicing costs declined 11% to RMB 786 million, which Hui said was helped by insurance brokerage cost reductions and increased AI automation. He also said over 81% of first payment default cases are being handled by AI agents.
Hui emphasized that the risk-taking model creates an accounting timing mismatch under GAAP: provisions for contingent liabilities are recognized at origination while related revenue is amortized over the loan period. He said fourth-quarter provisions for contingent liability increased 343% year-over-year to RMB 1.1 billion as risk-taking model loan volume grew 48% year-over-year, and that the higher proportion of risk-taking loans “has had, will continue to have” an accounting impact on earnings until the portfolio stabilizes.
For the fourth quarter, Hui reported a GAAP net loss of RMB 882 million, which he attributed largely to higher accounting provisions tied to the guarantee business, moderation in traditional insurance performance, and a RMB 109 million fair value loss on crypto assets. For the full year, he reported GAAP net income of RMB 144.5 million and said non-GAAP net income for 2025 was approximately RMB 834 million after adjustments related to the guarantee accounting mismatch.
Yiren Digital ended 2025 with RMB 3.3 billion in cash and cash equivalents. Hui said the company recorded a net cash outflow from operations of RMB 198 million in the fourth quarter but described the balance sheet as strong.
Looking ahead, management said it expects non-lending businesses to drive revenue growth in 2026 while credit performance improves sequentially. In Q&A, the company said the industry has largely adapted to the October 2025 loan facilitation regulation, citing improved delinquency metrics, a reported 93 basis point decline in cost of capital since the regulation took effect, and a further decline in customer acquisition cost as a percentage of loan volume amid eased competition.
About Yirendai (NYSE:YRD)
Yirendai Ltd is a leading fintech credit marketplace in China, offering consumer financing solutions through a digital platform. As a subsidiary of CreditEase, one of the country’s earliest peer-to-peer lending pioneers, Yirendai facilitates connections between individual borrowers and institutional or retail investors. The company’s integrated platform handles borrower screening, credit assessment, risk management and loan servicing to deliver a streamlined, transparent lending experience.
The company provides unsecured personal loans for purposes such as debt consolidation, home improvement and small business investment.
