FinVolution Group

Hello, ladies and gentlemen. Thank you for participating in the second quarter 2025 earnings conference call to Finvolution Group. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Yam Cheng, head of capital markets for the company. Yam, please go ahead.

Thank you, Wilco. Hi, everyone. Welcome to our second quarter 2025 earnings conference call. The company's results were issued via Newswire Services earlier today and are posted online. You can download the earnings release and sign up for the company's email alerts by visiting the IR section of our website at ir.finvgroup.com. Mr. Tietzen Li, our Chief Executive Officer, and Mr. Jiayuan Xu, Our Chief Financial Officer will start the call with their prepared remarks and conclude with a Q&A section. During this call, we will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For information about these non-GAAP measures and the cancellation of GAAP measures, please refer to our earnings press release. Before we continue, please note that today's discussion contains forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties are included in the company's filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statement except as required under applicable laws. Finally, we posted a presentation on our IR website, providing further details of our results for the quarter. I will now turn the call over to our CEO, Mr. Taiten. Taiten, please go ahead.

Thanks, Yan. Hello, everyone. Welcome to our earnings call. Following a solid first quarter of 2025, I'm pleased to share that Revolution sustained its healthy momentum in the second quarter. Supported by our robust growth in our international business and steady performance in China, net revenue reached 3.6 billion RMB, up 13% year-over-year, driven by a 10% increase in transaction volume in China and a 39% surge in international transaction volume. Net income also showed solid growth, reaching 751 million RMB, representing an increase of 36% year-over-year and 2% quarter-over-quarter. Since our transition to institutional funding model in 2021, we have now delivered 18 consecutive quarters of year-over-year growth in both transaction volume and revenue, a strong testament to our resilient business fundamentals in today's fast-changing macro landscape. As discussed in last quarter's earnings call, regulation in China's consumer finance sector has been evolving. With the implementation of the new regulation of the internet loan facilitation business in October. We believe it may have implications to the loan mix and the risk profile of the assets in the industry. And we are closely monitoring the latest developments and the dynamics of the sector. We maintain active dialogue with our funding partners, which expanded from 114 to 119 in the second quarter. to maintain relatively stable funding supply and prepare in advance for the potential impacts on our transaction volumes and risk metrics. Our risk infrastructure tested across multiple economic and regulatory cycles positions us well to adapt swiftly and effectively to these changes. In the long run, we view that these measures will ultimately foster more sustainable growth across the sector and benefits the lending platform like ours. Part of our resilient business hinged on the international operations, which offer valuable diversification benefit and growth. In the second quarter, international transaction volume increased 39% year-over-year to 3.2 billion RMB, and loan balance rose 50% to 2.1 billion RMB. Notably, our international operations contribute 22% of net revenue, up from 18% in the same period last year. Understanding the growth is our expanding customer base. We onboarded 1.6 million new borrowers during the second quarter, a 96% year-over-year increase. This marked our first consecutive quarter surpassing 1 million new borrowers. Thanks to our effective AI-powered marketing strategy and the diverse user acquisition channels in China, the transaction volume from new borrowers reached 7.1 billion RMB of 20% year-over-year in our international markets. We attached 1.1 million new borrowers up 126% year-over-year. New Borough growth from our international markets also outpaced that in China for the fifth consecutive quarter. Shared by our diversified service we provide in the ecosystem through partnership with the leading e-commerce and technology platforms, we expect this trend to continue. On the technology front, we continue to leverage AI in our risk management. We have built effective defenses against sophisticated AI fraud like DeepFix, achieving 98.8% detection accuracy. Our proprietary visual AI analyzes by ground patterns, document and synthetic and the text-level anomalies, resulting in 95% detection of digital artifacts in forged images. We combine this with multi-layered verification, including dynamic facial recognition, randomized voice checks, and real-time video authentication. Looking ahead, we are evolving from single-mode to multi-mode detection that simultaneously analyze video and audio, keeping us ahead against the evolving financial fraud. ESG remains core to our long-term strategy. We published our seventh annual ESG report in July, and it's going our unwavering commitment to sustainable inclusive financial throughout 2024. We made substantial progress by combining technology innovation, process improvements, and ecosystem partnerships, particularly in enhancing our anti-fraud capabilities and optimizing service quality. These efforts have meaningful advanced consumer protection with our intelligent fraud prevention system, now detecting over seven thousand suspicious activities daily. In 2024, we blocked more than 26,000 fraud attempts, protecting financial institutions from potential losses over 300 million RMB while maintaining 98% user satisfaction rate. Also worth noting, Dreamolution Group secured two prestigious honors at the FinTech Financial Asia 2025 Award in June, the Best Strategic Initiatives Award for the Philippines, as well as the Most Innovative Use of Technology Award for Mainland China. This recognition affirms the positive value our fintech solutions has brought to financial institutions across multiple markets. Finally, an update on our capital market activity. We completed 150 million US dollars convertible bonds offering in June, the first capital market transaction since our IPO in 2017. The funding will support our strategic priorities, accelerating international expansion and lowering capital costs. The transaction also helped us diversify our investor base and deepen engagement with a broader group of investors. We are encouraged by the positive reception from the convertible bonds investors, as well as the improvements in our stock's liquidity following the transaction. In summary, our second quarter performance reflects outstanding execution of our local excellence. global outlook strategy. We are encouraged by the resilience of our China business and the strength of our international business. Both served by ongoing investment in technology, customer acquisition, and international expansion, we are well positioned to continue driving sustainable growth and delivering long-term value. Now, I will handle the call over to our CFO, Jia Yuanxu, for a closer look at our financials.