Yiren Digital Reports Fourth Quarter and Fiscal Year 2022 Financial Results
Yiren Digital Ltd. (NYSE: YRD) reported its fourth quarter and fiscal year 2022 results, showing a total net revenue of RMB1,088.1 million (US$157.8 million), a 6.6% year-over-year increase. The net income surged 47% year-over-year to RMB485 million (US$70.4 million), with a net profit margin of 44.6%. Total revenue for 2022 was RMB3,434.6 million (US$498.0 million), down from RMB4,477.9 million in 2021. The company’s cumulative clients reached 3,138,191, showing a 1.9% increase. Adjusted EBITDA for the quarter was RMB654.1 million (US$93.5 million). For 2023, Yiren projects revenue between RMB3.6 billion and RMB4 billion, maintaining a stable profit margin.
- Net income increased by 47% year-over-year to RMB485 million.
- Adjusted EBITDA rose to RMB654.1 million, compared to RMB353.4 million in Q4 2021.
- Sales volume of investment products increased by 45.3% quarter-over-quarter.
- Net profit margin increased to 44.6% from 32.4% year-over-year.
- Total revenue for 2022 decreased to RMB3,434.6 million from RMB4,477.9 million in 2021.
- Active clients dropped 13.7% from Q3 2022 to Q4 2022.
Fourth Quarter 2022 and Fiscal Year 2022 Operational Highlights
Holistic Wealth Business
- Cumulative number of clients served reached 3,138,191 as of
December 31, 2022 , representing an increase of1.9% from 3,080,757 as ofSeptember 30, 2022 and compared to 2,702,122 as ofDecember 31, 2021 . - Number of active clients[1] was 535,928 as of
December 31, 2022 , representing a decrease of13.7% from 621,137 as ofSeptember 30, 2022 and compared to 424,366 as ofDecember 31, 2021 . The quarter-over-quarter decline was primarily due to the change of product mix. The decline was partially offset by the rapid growth of customer base on Yiren Select platform. - Total client assets[2] was
RMB23,372.1 million (US ) as of$3,388.6 million December 31, 2022 , representing an increase of2.5% fromRMB22,795.8 million as ofSeptember 30, 2022 and compared toRMB19,261.0 million as ofDecember 31, 2021 . - Sales volume of investment products amounted to
RMB6,502.1 million (US ) in the fourth quarter of 2022, representing an increase of$942.7 million 45.3% fromRMB4,476.4 million in the third quarter of 2022 and compared toRMB5,391.8 million in the same period of 2021. The growth was mainly driven by the rapid expansion of our insurance brokerage business. For the fiscal year of 2022, sales volume of investment products reachedRMB21,897.0 million (US ), compared to$3,174.8 million RMB21,588.6 million in 2021.
Credit-tech Business
- Total loans facilitated in the fourth quarter of 2022 reached
RMB6.8 billion (US ), representing an increase of$983.5 million 7.7% fromRMB6.3 billion in the third quarter of 2022 and compared toRMB6.2 billion in the fourth quarter of 2021. The growth was mainly due to the strong demand of our small revolving loan products. Total loans facilitated in 2022 reachedRMB22.6 billion (US ), compared to$3.3 billion RMB23.2 billion . The decline was due to the business transitions, which was largely offset by the strong growth of our consumer loan business post the restructuring. - Cumulative number of borrowers served reached 7,277,627 as of
December 31, 2022 , representing an increase of4.6% from 6,960,095 as ofSeptember 30, 2022 and compared to 6,127,068 as ofDecember 31, 2021 . - Number of borrowers served in the fourth quarter of 2022 was 862,226, representing an increase of
16.9% from 737,320 in the third quarter of 2022 and compared to 618,131 in the same period of 2021. The increase was driven by the strong demand of our small revolving loan products. Total number of borrowers served in 2022 was 1,606,893, compared to 1,297,046 in 2021. - Outstanding balance of performing loans facilitated reached
RMB11,259.8 million (US ) as of$1,632.5 million December 31, 2022 , representing an increase of5.9% fromRMB10,630.4 million as ofSeptember 30, 2022 and compared toRMB14,102.3 million as ofDecember 31, 2021 .
Consumption-Driven Services
- Total gross merchandise volume generated through our e-commerce platform and "Yiren Select" channel reached
RMB292.1 million (US ) in the fourth quarter of 2022. representing an increase of$42.3 million 17.0% fromRMB249.6 million in the third quarter of 2022 and compared toRMB61.6 million in the same period of 2021.
"We are pleased to deliver an impressive quarter with robust growth in both revenue and profitability, marking the full success of our business re-structuring and product optimization despite the volatilities of external environment amid the Covid resurgence." said Mr.
"As we previously projected, our insurance brokerage business continued its strong momentum in the fourth quarter of 2022. Total premium reached more than
"Regarding credit-tech business, our total loan volume reached
"We delivered a strong profit of
Fourth Quarter 2022 Financial Results
Total net revenue in the fourth quarter of 2022 was
Sales and marketing expenses in the fourth quarter of 2022 were
Origination, servicing and other operating costs in the fourth quarter of 2022 were
General and administrative expenses in the fourth quarter of 2022 were
Allowance for contract assets, receivables and others in the fourth quarter of 2022 was
Income tax expense in the fourth quarter of 2022 was
Net income in the fourth quarter of 2022 was
Adjusted EBITDA[3] (non-GAAP) in the fourth quarter of 2022 was
Basic and diluted income per ADS in the fourth quarter of 2022 were
Net cash generated from operating activities in the fourth quarter of 2022 was
Net cash provided by investing activities in the fourth quarter of 2022 was
As of
Delinquency rates. As of
Cumulative M3+ net charge-off rates. As
[1] Active clients refer to those who have made at least one investment through our holistic wealth ecosystem or have client assets above zero in the past twelve months. |
[2] Client assets refer to the outstanding balance of client assets generated through our platforms, where an asset is counted towards the outstanding balance for so long as it continues to be held by the clients on our platforms. |
[3] "Adjusted EBITDA" is a non-GAAP financial measure. For more information on this non-GAAP financial measure, please see the section of "Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures" and the table captioned "Reconciliation of Adjusted EBITDA" set forth at the end of this press release. |
Fiscal Year 2022 Financial Results
Total net revenue in 2022 was
Sales and marketing expenses in 2022 was
Origination, servicing and other operating costs in 2022 was
General and administrative expenses in 2022 was
Allowance for contract assets, receivables and others in 2022 was
Income tax expense in 2022 was
Net income in 2022 was
Adjusted EBITDA (non-GAAP) in 2022 was
Basic and diluted income per ADS in 2022 were
Net cash generated from operating activities in 2022 was
Business Outlook
Based on the Company's preliminary assessment of business and market conditions, the Company projects the total revenue in the full year of 2023 to be between
This is the Company's current and preliminary view, which is subject to changes and uncertainties.
Conference Call
The Company will host an earnings conference call at
Participants who wish to join the call should register online in advance of the conference at:
https://s1.c-conf.com/diamondpass/10029325-jd4z98.html
Once registration is completed, participants will receive the dial-in details for the conference call.
Additionally, a live and archived webcast of the conference call will be available at https://edge.media-server.com/mmc/p/2tasepf4
Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin as supplemental measures to review and assess operating performance. We believe these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in
Currency Conversion
This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the
About
Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||
(in thousands, except for share, per share and per ADS data, and percentages) | ||||||||||||||
For the Three Months Ended | For the Year Ended | |||||||||||||
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RMB | RMB | RMB | USD | RMB | RMB | USD | ||||||||
Net revenue: | ||||||||||||||
Loan facilitation services | 410,988 | 334,162 | 525,137 | 76,138 | 2,105,776 | 1,362,685 | 197,571 | |||||||
Post-origination services | 49,861 | 74,433 | 37,616 | 5,454 | 174,255 | 204,336 | 29,626 | |||||||
Insurance brokerage services | 244,780 | 189,019 | 199,027 | 28,856 | 755,691 | 731,797 | 106,101 | |||||||
Financing services | 140,027 | 54,702 | 35,940 | 5,211 | 524,840 | 278,783 | 40,420 | |||||||
Electronic commerce services | 33,114 | 52,954 | 129,154 | 18,725 | 33,114 | 302,896 | 43,916 | |||||||
Others | 142,170 | 135,385 | 161,202 | 23,372 | 884,253 | 554,123 | 80,339 | |||||||
Total net revenue | 1,020,940 | 840,655 | 1,088,076 | 157,756 | 4,477,929 | 3,434,620 | 497,973 | |||||||
Operating costs and expenses: | ||||||||||||||
Sales and marketing | 304,114 | 136,406 | 103,427 | 14,995 | 1,553,344 | 573,974 | 83,218 | |||||||
Origination,servicing and other | 216,751 | 223,622 | 211,591 | 30,678 | 760,858 | 776,841 | 112,631 | |||||||
General and administrative | 119,364 | 109,947 | 85,259 | 12,361 | 506,240 | 423,718 | 61,433 | |||||||
Allowance for contract assets, | 51,911 | 35,074 | 55,747 | 8,083 | 370,154 | 188,223 | 27,291 | |||||||
Total operating costs and expenses | 692,140 | 505,049 | 456,024 | 66,117 | 3,190,596 | 1,962,756 | 284,573 | |||||||
Other (expenses)/income: | ||||||||||||||
Interest (expense)/income, net | (18,056) | (378) | 3,439 | 499 | (73,383) | (26,302) | (3,813) | |||||||
Fair value adjustments related to | 11,720 | 2,077 | (2,962) | (429) | (37,442) | 18,900 | 2,740 | |||||||
Others, net | 2,935 | 3,035 | 11,991 | 1,738 | 26,665 | 30,921 | 4,483 | |||||||
Total other (expenses)/income | (3,401) | 4,734 | 12,468 | 1,808 | (84,160) | 23,519 | 3,410 | |||||||
Income before provision for income taxes | 325,399 | 340,340 | 644,520 | 93,447 | 1,203,173 | 1,495,383 | 216,810 | |||||||
Income tax (benefit)/expense | (5,366) | 70,020 | 159,285 | 23,095 | 170,189 | 300,512 | 43,570 | |||||||
Net income | 330,765 | 270,320 | 485,235 | 70,352 | 1,032,984 | 1,194,871 | 173,240 | |||||||
Weighted average number of ordinary | 169,967,125 | 179,409,525 | 179,211,437 | 179,211,437 | 169,029,826 | 174,695,959 | 174,695,959 | |||||||
Basic income per share | 1.9461 | 1.5067 | 2.7076 | 0.3926 | 6.1113 | 6.8397 | 0.9917 | |||||||
Basic income per ADS | 3.8922 | 3.0134 | 5.4152 | 0.7852 | 12.2226 | 13.6794 | 1.9834 | |||||||
Weighted average number of ordinary | 171,171,951 | 179,841,065 | 179,628,555 | 179,628,555 | 170,590,203 | 175,391,332 | 175,391,332 | |||||||
Diluted income per share | 1.9324 | 1.5031 | 2.7013 | 0.3917 | 6.0554 | 6.8126 | 0.9877 | |||||||
Diluted income per ADS | 3.8648 | 3.0062 | 5.4026 | 0.7834 | 12.1108 | 13.6252 | 1.9754 | |||||||
Unaudited Condensed Consolidated | ||||||||||||||
Net cash generated from operating | 189,377 | 342,888 | 471,890 | 68,418 | 158,192 | 1,849,430 | 268,142 | |||||||
Net cash provided by/(used in) investing | 381,870 | (835,064) | 283,145 | 41,052 | (346,507) | 52,559 | 7,620 | |||||||
Net cash (used in)/provided by financing | (45,831) | (276,198) | (54,551) | (7,909) | 427,446 | (489,123) | (70,916) | |||||||
Effect of foreign exchange rate changes | (283) | 2,284 | (1,107) | (160) | (936) | 2,485 | 360 | |||||||
Net increase/(decrease) in cash, cash | 525,133 | (766,090) | 699,377 | 101,401 | 238,195 | 1,415,351 | 205,206 | |||||||
Cash, cash equivalents and restricted cash, | 2,420,210 | 4,427,408 | 3,661,318 | 530,840 | 2,707,148 | 2,945,344 | 427,035 | |||||||
Cash, cash equivalents and restricted cash, | 2,945,343 | 3,661,318 | 4,360,695 | 632,241 | 2,945,343 | 4,360,695 | 632,241 |
Unaudited Condensed Consolidated Balance Sheets | |||||||
(in thousands) | |||||||
As of | |||||||
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RMB | RMB | RMB | USD | ||||
Cash and cash equivalents | 2,864,543 | 3,612,972 | 4,271,899 | 619,367 | |||
Restricted cash | 80,800 | 48,346 | 88,796 | 12,874 | |||
Accounts receivable | 305,018 | 274,623 | 221,004 | 32,044 | |||
Contract assets, net | 1,105,905 | 502,936 | 626,739 | 90,869 | |||
Contract cost | 9,959 | 1,610 | 787 | 114 | |||
Prepaid expenses and other assets | 352,015 | 361,258 | 321,411 | 46,600 | |||
Loans at fair value | 73,734 | 11,109 | 54,049 | 7,836 | |||
Financing receivables | 1,697,962 | 713,411 | 514,388 | 74,579 | |||
Amounts due from related parties | 879,256 | 1,124,738 | 1,266,232 | 183,586 | |||
Held-to-maturity investments | 2,200 | 1,800 | 2,700 | 391 | |||
Available-for-sale investments | 177,360 | 1,109,408 | 972,738 | 141,034 | |||
Property, equipment and software, net | 102,548 | 82,184 | 77,256 | 11,201 | |||
Deferred tax assets | 7,388 | 102,934 | 84,187 | 12,206 | |||
Right-of-use assets | 80,752 | 39,133 | 33,909 | 4,916 | |||
Total assets | 7,739,440 | 7,986,462 | 8,536,095 | 1,237,617 | |||
Accounts payable | 19,065 | 31,711 | 14,144 | 2,050 | |||
Amounts due to related parties | 434,127 | 244,185 | 227,724 | 33,017 | |||
Deferred revenue | 12,379 | 526 | 65,539 | 9,502 | |||
Payable to investors at fair value | 50,686 | 39,598 | - | - | |||
Accrued expenses and other liabilities | 1,182,783 | 1,234,738 | 1,315,006 | 190,658 | |||
Secured borrowings | 1,028,600 | 767,900 | 767,900 | 111,335 | |||
Refund liability | 5,732 | 351 | - | - | |||
Deferred tax liabilities | 112,535 | 78,819 | 79,740 | 11,561 | |||
Lease liabilities | 72,101 | 40,968 | 35,229 | 5,108 | |||
Total liabilities | 2,918,008 | 2,438,796 | 2,505,282 | 363,231 | |||
Ordinary shares | 123 | 129 | 129 | 19 | |||
Additional paid-in capital | 5,100,486 | 5,158,676 | 5,160,783 | 748,243 | |||
| (42,897) | (42,897) | (46,734) | (6,776) | |||
Accumulated other comprehensive | 11,553 | 7,509 | 7,765 | 1,126 | |||
Accumulated deficit | (247,833) | 424,249 | 908,870 | 131,774 | |||
Total equity | 4,821,432 | 5,547,666 | 6,030,813 | 874,386 | |||
Total liabilities and equity | 7,739,440 | 7,986,462 | 8,536,095 | 1,237,617 |
Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures | ||||||||||||||
(in thousands, except for number of borrowers, number of investors and percentages) | ||||||||||||||
For the Three Months Ended | For the Year Ended | |||||||||||||
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RMB | RMB | RMB | USD | RMB | RMB | USD | ||||||||
Operating Highlights | ||||||||||||||
Amount of investment in current investment | 5,391,760 | 4,476,390 | 6,502,061 | 942,710 | 21,588,645 | 21,897,031 | 3,174,771 | |||||||
Number of investors in current investment | 144,987 | 176,787 | 107,692 | 107,692 | 409,281 | 506,310 | 506,310 | |||||||
Amount of loans facilitated under loan | 6,170,158 | 6,298,522 | 6,783,523 | 983,518 | 23,195,224 | 22,623,101 | 3,280,041 | |||||||
Number of borrowers | 618,131 | 737,320 | 862,226 | 862,226 | 1,297,046 | 1,606,893 | 1,606,893 | |||||||
Remaining principal of performing loans | 14,102,279 | 10,630,352 | 11,259,763 | 1,632,512 | 14,102,279 | 11,259,763 | 1,632,512 | |||||||
Gross merchandise volume | 61,619 | 249,624 | 292,086 | 42,348 | 61,619 | 687,848 | 99,729 | |||||||
Segment Information | ||||||||||||||
Holistic Wealth: | ||||||||||||||
Revenue | 372,304 | 294,332 | 319,755 | 46,360 | 1,260,513 | 1,171,992 | 169,923 | |||||||
Sales and marketing expenses | 75,842 | 46,698 | 44,661 | 6,475 | 199,336 | 187,141 | 27,133 | |||||||
Origination,servicing and other operating costs | 156,243 | 165,605 | 157,342 | 22,812 | 598,606 | 561,080 | 81,349 | |||||||
Consumer credit: | ||||||||||||||
Revenue | 615,522 | 493,369 | 639,167 | 92,671 | 3,184,302 | 1,959,732 | 284,134 | |||||||
Sales and marketing expenses | 227,508 | 88,714 | 58,016 | 8,412 | 1,353,244 | 383,950 | 55,668 | |||||||
Origination,servicing and other operating costs | 53,396 | 39,951 | 38,085 | 5,522 | 155,140 | 151,539 | 21,971 | |||||||
Others: | ||||||||||||||
Revenue | 33,114 | 52,954 | 129,154 | 18,725 | 33,114 | 302,896 | 43,916 | |||||||
Sales and marketing expenses | 764 | 994 | 750 | 108 | 764 | 2,883 | 417 | |||||||
Origination,servicing and other operating costs | 7,112 | 18,066 | 16,164 | 2,344 | 7,112 | 64,222 | 9,311 | |||||||
Reconciliation of Adjusted EBITDA | ||||||||||||||
Net income | 330,765 | 270,320 | 485,235 | 70,352 | 1,032,984 | 1,194,871 | 173,240 | |||||||
Interest expense/(income), net | 18,056 | 378 | (3,439) | (499) | 73,383 | 26,302 | 3,813 | |||||||
Income (benefit)/tax expense | (5,366) | 70,020 | 159,285 | 23,095 | 170,189 | 300,512 | 43,570 | |||||||
Depreciation and amortization | 7,466 | 8,514 | 2,537 | 368 | 43,236 | 26,430 | 3,832 | |||||||
Share-based compensation | 2,497 | 15,760 | 1,494 | 217 | 19,089 | 22,136 | 3,209 | |||||||
Adjusted EBITDA | 353,418 | 364,992 | 645,112 | 93,533 | 1,338,881 | 1,570,251 | 227,664 | |||||||
Adjusted EBITDA margin | 34.6 % | 43.4 % | 59.3 % | 59.3 % | 29.9 % | 45.7 % | 45.7 % |
Delinquency Rates (Loan Facilitation Model) | ||||||
15-29 days | 30-59 days | 60-89 days | ||||
All Loans | ||||||
0.8 % | 1.3 % | 1.0 % | ||||
0.5 % | 0.7 % | 0.6 % | ||||
0.9 % | 1.5 % | 1.2 % | ||||
0.9 % | 2.0 % | 1.9 % | ||||
0.6 % | 1.4 % | 1.5 % | ||||
Septempber 30, 2022 | 0.7 % | 1.1 % | 1.0 % | |||
0.7 % | 1.3 % | 1.1 % | ||||
Online Channels | ||||||
1.0 % | 2.1 % | 1.6 % | ||||
0.6 % | 1.0 % | 1.1 % | ||||
0.8 % | 1.3 % | 1.1 % | ||||
0.7 % | 1.5 % | 1.3 % | ||||
0.6 % | 1.1 % | 1.2 % | ||||
Septempber 30, 2022 | 0.6 % | 0.9 % | 0.8 % | |||
0.7 % | 1.1 % | 0.9 % | ||||
Offline Channels | ||||||
0.7 % | 0.9 % | 0.7 % | ||||
0.4 % | 0.6 % | 0.4 % | ||||
1.0 % | 1.8 % | 1.4 % | ||||
1.1 % | 2.7 % | 2.9 % | ||||
0.8 % | 2.0 % | 2.3 % | ||||
Septempber 30, 2022 | 1.3 % | 1.9 % | 1.9 % | |||
1.2 % | 2.2 % | 2.3 % |
Net Charge-Off Rate (Loan Facilitation Model) | ||||||
Loan | Amount of Loans | Accumulated M3+ Net | Total Net Charge-Off | |||
(in RMB thousands) | (in RMB thousands) | |||||
2019 | 3,431,443 | 398,602 | 11.6 % | |||
2020 | 9,614,819 | 780,798 | 8.1 % | |||
2021 | 23,195,224 | 1,513,766 | 6.5 % | |||
2022Q1-Q3 | 15,839,577 | 316,444 | 2.0 % |
M3+ Net Charge-Off Rate (Loan Facilitation Model) | ||||||||||||
Loan | Month on Book | |||||||||||
4 | 7 | 10 | 13 | 16 | 19 | 22 | 25 | 28 | 31 | 34 | ||
2019Q1 | 0.0 % | 0.8 % | 2.0 % | 3.4 % | 5.3 % | 5.9 % | 6.3 % | 6.3 % | 6.3 % | 6.3 % | 6.3 % | |
2019Q2 | 0.1 % | 1.5 % | 4.5 % | 7.5 % | 8.8 % | 9.2 % | 9.9 % | 10.3 % | 10.6 % | 10.6 % | 10.6 % | |
2019Q3 | 0.2 % | 2.9 % | 6.8 % | 9.0 % | 10.4 % | 12.0 % | 13.2 % | 13.8 % | 14.4 % | 14.6 % | 14.6 % | |
2019Q4 | 0.4 % | 3.1 % | 4.9 % | 6.3 % | 7.2 % | 7.9 % | 8.4 % | 8.9 % | 9.5 % | 9.8 % | 9.8 % | |
2020Q1 | 0.6 % | 2.3 % | 4.1 % | 5.2 % | 6.0 % | 6.2 % | 6.6 % | 7.2 % | 7.7 % | 7.9 % | ||
2020Q2 | 0.5 % | 2.5 % | 4.2 % | 5.3 % | 6.1 % | 6.7 % | 7.5 % | 8.1 % | 8.2 % | |||
2020Q3 | 1.1 % | 3.3 % | 5.1 % | 6.3 % | 7.1 % | 8.1 % | 8.7 % | 8.8 % | ||||
2020Q4 | 0.3 % | 1.8 % | 3.2 % | 4.6 % | 6.0 % | 7.0 % | 7.4 % | |||||
2021Q1 | 0.4 % | 2.3 % | 3.9 % | 5.5 % | 6.6 % | 6.9 % | ||||||
2021Q2 | 0.4 % | 2.4 % | 4.5 % | 5.9 % | 6.4 % | |||||||
2021Q3 | 0.5 % | 3.1 % | 5.0 % | 5.9 % | ||||||||
2021Q4 | 0.6 % | 3.2 % | 4.6 % | |||||||||
2022Q1 | 0.6 % | 2.6 % | ||||||||||
2022Q2 | 0.4 % |
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