First Quarter 2026 Financial and Operational Highlights
Total net revenue in Q1 2026 was RMB1.18 billion (US$170.5 million), a decrease of 39.3% year-over-year and 19.9% quarter-over-quarter. The year-over-year decline was primarily driven by significantly lower loan facilitation volumes amid the Company's continued tightening of credit standards and focus on higher-quality origination.
Total loan amount facilitated and originated[1] in Q1 2026 was RMB14.63 billion, down 35.8% quarter-over-quarter and down 58.4% year-over-year.
Net income in Q1 2026 was RMB37.9 million (US$5.5 million), a decrease of 91.7% year-over-year, primarily reflecting substantially higher credit-related provisions and significantly lower loan facilitation revenue amid reduced origination volumes.
Delinquency rates for loans 31–60 days past due improved to 2.61% (from 2.90% at Q4 2025 year-end and 1.25% a year ago); loans 91–180 days past due increased to 9.95% (from 6.31% at Q4 2025 year-end and 2.73% a year ago). The increase in the 91–180 day delinquency rate primarily reflects the migration of previously delinquent balances further into that bucket and the effect of a significantly reduced total outstanding loan balance, both of which contribute to a higher reported rate, rather than a deterioration in the quality of more recent originations.
Mr. Kent Li, President of X Financial, commented: "In the first quarter of 2026, we facilitated and originated RMB14.6 billion in loans, reflecting a substantial decline of 35.8% from the prior quarter and 58.4% year-over-year. Borrower activity continued to moderate, with active borrowers declining to approximately 956,520, down 60.6% from a year ago, reflecting the Company's deliberate focus on higher-quality origination and tighter credit standards. The 31–60 day delinquency rate eased to 2.61% from 2.90% in the prior quarter, reflecting improvement in more recent origination quality. The 91–180 day rate rose to 9.95%, driven by the migration of existing delinquent balances further into that bucket rather than fresh deterioration in new originations. In response, we have further strengthened our risk management framework, enhanced collection strategies, and adjusted capital deployment to preserve balance sheet resilience. While profitability was significantly impacted by higher provisions and narrower margins, we believe these actions appropriately position the Company for the challenging environment ahead."
Mr. Frank Fuya Zheng, Chief Financial Officer of X Financial, added: "In the first quarter of 2026, total net revenue was RMB1.18 billion, a decrease of 39.3% from the same period last year and 19.9% sequentially. Net income was RMB37.9 million and non-GAAP adjusted net income was RMB81.2 million, both significantly lower than the prior year period, primarily due to substantially higher credit-related provisions and significantly lower loan facilitation revenue amid reduced origination volumes. Basic earnings per ADS were RMB0.96, and non-GAAP adjusted earnings per ADS were RMB2.10. Operating margin improved to 12.0% from 1.4% in the prior quarter, though remained significantly below the 29.6% recorded in the same period of 2025, reflecting the ongoing impact of elevated credit costs and reduced contribution from higher-margin facilitation services. We will continue to manage capital conservatively, strengthen our balance sheet, and maintain cost discipline to support business resilience amid an evolving regulatory and operating landscape."
[1] Represents the total amount of loans that the Company facilitated and originated during the relevant period.
First Quarter 2026 GAAP and Non-GAAP Financial Summary
(In thousands, except for share and per share data)
Three Months Ended March 31, 2025
Three Months Ended December 31, 2025
Three Months Ended March 31, 2026
QoQ
YoY
RMB
RMB
RMB
Total net revenue
1,937,505
1,467,843
1,176,139
(19.9 %)
(39.3 %)
Total operating costs and expenses
(1,364,600)
(1,447,660)
(1,035,481)
(28.5 %)
(24.1 %)
Income from operations
572,905
20,183
140,658
596.9 %
(75.4 %)
Net income
458,127
57,167
37,947
(33.6 %)
(91.7 %)
Non-GAAP adjusted net income
466,766
61,320
81,180
32.4 %
(82.6 %)
Net income per ADS—basic
10.92
1.44
0.96
(33.3 %)
(91.2 %)
Net income per ADS—diluted
10.56
1.44
0.96
(33.3 %)
(90.9 %)
Non-GAAP adjusted net income per ADS—basic
11.10
1.56
2.10
34.6 %
(81.1 %)
Non-GAAP adjusted net income per ADS—diluted
10.74
1.56
2.04
30.8 %
(81.0 %)
Business Outlook & Capital Return
Business Outlook: Based on current trends, X Financial expects the total loan amount facilitated and originated in the second quarter of 2026 to be in the range of RMB 11.5 billion to RMB 12.5 billion. This guidance reflects a measured pace of origination following a sequential decline in the first quarter and management's continued focus on asset quality, credit discipline, and profitability optimization rather than aggressive volume expansion. The Company remains attentive to recent regulatory developments and evolving credit conditions, and acknowledges that potential regulatory changes, once implemented, could adversely affect margins and profitability. The Company will continue to exercise prudent risk control and disciplined execution to navigate the evolving environment and support long-term business resilience.
Capital Return to Shareholders: From January 1, 2026 through May 15, 2026, X Financial repurchased an aggregate of approximately 1.8 million ADSs, for a total consideration of approximately US$8.2 million under its share repurchase programs. The Company now has approximately US$39.8 million remaining under its existing US$100 million share repurchase program, which is effective through November 30, 2026. This program reflects the Company's commitment to returning capital to shareholders and enhancing long-term shareholder value, subject to ongoing assessment of market and regulatory conditions. Repurchases under the program remain subject to market conditions and other factors and may be modified or suspended at management's discretion.
Regulatory Update
The regulatory environment governing internet-based lending in the People's Republic of China continued to evolve during the first quarter of 2026, with authorities further strengthening oversight across the consumer credit business chain. The Company continues to monitor these developments closely; however, management has limited visibility into the ultimate scope and direction of implementation. If current and emerging regulatory requirements are implemented as currently understood, the Company's operating results may be materially and adversely affected, and historical levels of profitability should not be assumed to be indicative of future performance.
Conference Call
X Financial's management team will host an earnings conference call at 7:30 AM U.S. Eastern Time on May 28, 2026 (7:30 PM Beijing / Hong Kong Time on May 28, 2026).
Dial-in details for the earnings conference call are as follows:
United States:
1-888-346-8982
Hong Kong:
800-905945
Mainland China:
4001-201203
International:
1-412-902-4272
Passcode:
X Financial
Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following numbers until June 04, 2026:
United States:
1-855-669-9658
International:
1-412-317-0088
Passcode:
1485675
Additional Information
This press release contains highlights only. For the Company's complete financial results and management's discussion and analysis for the first quarter ended March 31, 2026, please refer to the Form 6-K filed with the U.S. Securities and Exchange Commission on May 27, 2026.
About X Financial
X Financial (NYSE:XYF) (the "Company") is a leading Chinese fintech platform. The Company is committed to connecting borrowers on its platform with its institutional funding partners. With its proprietary big data-driven technology, the Company has established strategic partnerships with financial institutions across multiple areas of its business operations, enabling it to facilitate and originate loans to prime borrowers under a risk assessment and control system.
For more information, please visit http://ir.xiaoyinggroup.com.
Use of Non-GAAP Financial Measures
In evaluating our business, we consider and use non-GAAP measures as supplemental measures to review and assess our operating performance. We present the non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We believe that the use of the non-GAAP financial measures facilitates investors' assessment of our operating performance and help investors to identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income (loss) from operations and net income (loss). We also believe that the non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.
We use in this press release the following non-GAAP financial measures: (i) adjusted net income (loss), (ii) adjusted net income (loss) per basic ADS, (iii) adjusted net income (loss) per diluted ADS, (iv) adjusted net income (loss) per basic share, and (v) adjusted net income (loss) per diluted share, each of which excludes share-based compensation expense, impairment losses on financial investments, income (loss) from financial investments, gain (loss) from financial investments at equity method and impairment losses on long-term investments. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, investors should not consider them in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.
We mitigate these limitations by reconciling the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.
For more information on these non-GAAP financial measures, please see the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release.
Exchange Rate Information
This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.8980 to US$1.00, the exchange rate in effect as of March 31, 2026, as published in the Federal Reserve Board's H.10 statistical release. Percentages stated in this release are calculated based on the RMB amounts.
Disclaimer
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements ...
