Yiren Digital Ltd.

Good day and welcome to the Yiren Digital fourth quarter and four-year 2025 earnings conference call. All participants will be in the listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the call over to Ms. Zoya Ji, Director of Investor Relations of Yiren Digital. Please go ahead, ma'am.

Thank you, operators. Good morning and good evening, everyone. Today's call features a presentation by our founder, chairman, and CEO, Mr. Ning Tang, and our CFO, Mr. William Hui. There will be a question and answer session after the prepared remarks. Before beginning, we'd like to remind you that discussions during this call contain forward-looking statements made under the Thick Harbor Provision of US Private Security Legitimacy Reform Act of 1995. Such statements are subject to risk, uncertainties, and factors that can cause actual results to differ materially from those contained in any such statements. Further information regarding such risk uncertainties or factors is included in our filings with the U.S. Securities and Exchange Commission. We do not undertake any obligation to update any forward-looking statements as required under relevant law. During the call, we will be referring to certain non-GAAP financial matters and supplemental matters 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 the U.S. GAAP for information about those non-GAAP financial measures and the reconciliation to GAAP measures. Please refer to our earnings press release. As a reminder, this conference is being recorded. In addition, an investor presentation and the webcast replay of this conference call will be available on our IR website. I will now pass it on to our CEO, Mr. Tang, for opening remarks.

Thank you, Zoya. Good day, everyone, and thank you all for joining us. In 2025, we celebrated 10-year anniversary of our listing on the New York Stock Exchange. Together, we've reached many milestones. We made a breakthrough in our AI innovation. We completed regulatory filing of our own large language model, Jiuyu. In the second half of the year, we released our first multi-agent platform, Magic Cube. With support of these AI tools, we incubated our internet insurance business. which has achieved strong growth quarter, strong growth quarter after quarter in 2025. 2025 was also a year that demanded the best of us and our team delivered. Heightened credit regulations and industry-wide deterioration in credit quality created significant pressure across our business. Yet, We navigated these headwinds with discipline and operational resilience. Equally important, we entered 2026 with growing confidence. Our next generation FinTech platform is gaining meaningful traction and invalidating the strategic investments we've made. I'm deeply grateful to our entire team for their dedication and resolve to one of the most challenging periods in our recent history. The rapid advancement of AI is fundamentally reshaping the industries we operate in, and we believe we are uniquely positioned to lead that transformation. Our years of deep vertical expertise in credit facilitation and insurance brokerage, combined with the AI infrastructure and agent technologies we've purposefully built, give us a differentiated foundation to reimagine our business ecosystem, accelerating growth and unlocking new avenues of innovation. Amid these challenges, we made meaningful progress on the two strategic priorities that will define EN Digital's next chapter, the continued scaling of internet insurance distribution as our second core growth engine, and the accelerating integration of AI capabilities across our business operations. Both are delivering results and both give us confidence in the trajectory ahead. For years, we have applied our proprietary AI capabilities to continuously analyze our platform data, systematically searching for where our next growth opportunity lies. That process of discipline discovery led us to a clear and compelling insight. Our users demonstrated strong, validated demand for online insurance products, demand that was underserved and ripe for a technology-driven solution. In the third quarter of 2025, gross return premiums generated through our internet insurance distribution business surged by 206% quarter over quarter. This strong momentum continued in the fourth quarter with another 95% quarter-over-quarter growth, and the revenue contribution to the segment had reached 22% in the fourth quarter. 2025 was also a landmark year in the comprehensive build-out of our AI infrastructure, where we closed the gaps and reached significant milestones. following the regulatory filing of jiyu our proprietary large language model in april we launched the magic cube in october our internally developed agent integration platform purpose built for enterprise scale ai deployment magic cube is the connective infrastructure that enables large-scale coordinated deployment of multi-agents across every critical function of our credit lending business from sales and risk management to capital planning compliance and customer service with magic cube in place we have laid the foundation to automate processes with ai driven agents throughout our operations a transformation that we believe will fundamentally redefine how EARN Digital operates and competes in the marketplace. The depth of our AI integration is best reflected in its financial impact. In 2025, AI-driven optimizations generated cost savings exceeding RMB 80 million. driven by the deployment of AIGC for marketing and AI-assisted outbound customer service, capabilities that have structurally reduced our dependence on both external vendors and internal headcount and better cost and capital efficiency. The operational impact of our AI deployment is best illustrated through concrete examples. Response times for our real-time AIGC-powered customer service script generation were cut by more than half, from 1.2 seconds to under 0.6 seconds, delivering measurably smoother customer interactions at scale. In a particularly compelling demonstration of our internal AI capabilities, our R&D team rebuilt our IVR system entirely in-house, decreasing our dependence on an external vendor and reducing the cost per call by 84%, from RMB 0.95 to RMB 0.15. Meanwhile, our AI-powered Intelligent Routing 2.0 system brought a step change in productivity to our fund management team, replacing legacy Excel-based workflows with an intelligent natural language interface driven by our two proprietary AI agents, EQ Agent and Zhuqiu Bot. fundamentally modernizing how our team operates day to day. These technological advancements are now just improving how we operate. They are redefining who we are. Our AI enabled capabilities across intelligent marketing, smart capital management, and advanced risk control have strengthened our ability to deliver technology solutions to the broader credit industry. Revenue from technology-driven services, including networking, marketing, and technical support, has grown significantly year over year, validating the commercial potential of our AI capabilities beyond our core business. We are now accelerating this growth to transform the company from a FinTech platform into an AI-native company for multiple industries. Finally, I'd like to review the performance of our credit solution business against the market backdrop in 2025. In the fourth quarter, we facilitated RMB 12.0 billion in loan originations, moderated by 22% year over year and 40% quarter over quarter. The moderation reflected our financial discipline when credit environment was difficult. We focused on higher quality credit during the quarter, which led to reduction in loan facilitation activities. For the full year, however, total loan facilitation reached RMB $67.8 billion. up by 26% from RMB 53.6 billion in 2024. As of December 31st, 2025, the accumulated number of borrowers we had served exceeded 14.3 million, representing a 16% increase from approximately 12.4 million at the end of 2024. During 2025, we strengthened our customer analytics and operational management with a particular focus on maximizing the lifetime value of high-quality repeat borrowers. At the same time, we maintained a prudent approach toward new customer acquisition. Through enhanced data analytics and a more refined customer segmentation, we prioritized the management and engagement of high-quality existing borrowers. As a result, our repeat borrowing volume remained high at 77% in the fourth quarter of 2025 compared to 65% in the same period of 2024. Meanwhile, the average loan ticket size on our lending platform increased from RMB 8,000 in the fourth quarter to RMB 11,500 in the fourth quarter of 2025. These operational strategies allowed us to effectively control customer acquisition costs while retaining higher quality borrowers with deeper credit insights and stronger brand trust. The quality from the legacy assets came under pressure in the fourth quarter, with the delinquency rate reaching a cyclical high in October. Our one to 30-day delinquency rate for fourth quarter reached 3.4%. The 31 to 60-day rate was 3.0%, and the 61 to 90-day rate stood at 2.8%. These levels are in line with industry trends and the macroeconomic environment. During 2025, assets under the risk-taking model nearly doubled, which contributed to an increase in our guaranteed service revenue as the result of changing credit requirements by our partners. Encouragingly, our lending, our leading risk indicators are beginning to turn. Our first payment default rate, FPD30, for loan delinquency over 30 days has been on a declining trend since October 2025. recently approaching the levels observed in the first half year of 2025. We believe these are early but meaningful signals that the credit cycle is gradually turning, and we expect a broader easing of the credit environment to support continuing improvement in both industry conditions and our own asset quality matrix. giving us well-funded confidence in our ability to deliver discipline and stable operations in 2026. On the institutional funding side, we secured a wide list of status with 29 institutional funding partners as of the end of 2025, and this number continues to grow in the new year. reflecting recognition of our risk management capability and the financial discipline by our partners, as well as less competition in the market and the new regulatory framework. As the industry digests the impact of the new regulations and the market consolidates, we are confident that leading, highly compliant players like us will benefit. In overseas markets, we expect to gradually expand our operations in the existing Philippines and the Indonesian markets while maintaining prudent financial discipline and a clear focus on profitability. We look forward to showing you more results in the coming quarters. As mentioned earlier, our traditional insurance brokerage business, which is predominantly anchored in a traditional sales network, has found new direction of growth. Amid the regulatory headwind on commission rate and the macroeconomic challenges in the fourth quarter, growth return premiums of our insurance brokerage business reached RMB 860.1 million, down 22% year-over-year. while full-year premiums reached the RMB 3.7 billion, a 17% decline from 2024. However, the composition of the revenue and the premium has changed significantly, as contributions from Internet insurance business increased rapidly in the past few quarters, largely filling up the gap from the traditional line. Our internet insurance business has delivered a meaningful expansion in both customer base and the policy volumes, reinforcing our conviction that internet insurance represents a sustainable and a scalable second-world engine for Eaton Digital. For the insurance brokerage business as a whole, at the end of 2025, we had served over 2 million insurance clients. up 33% from 1.53 million at the end of 2024. New policies issued reached 2.3 million, a 25% increase from 1.8 million in 2024. As internet insurance continues to contribute more to our total brokerage revenue in 2026 and serves as a low-cost customer acquisition channel for the entire platform, we are confident that our insurance business will successfully turn to both growth and profitability. To summarize, 2025 was a year that demanded resilience and revealed opportunity. We navigated one of the most challenging credit environments in recent history while simultaneously reshaping consumer credit, insurance, and industries far beyond. And we intend to be at the forefront of that transformation, not merely a participant in it. We are actively building toward that future. incubating AI-native business models, developing technology-driven revenue streams from our credit solutions, and reshaping our insurance brokerage business by fully integrating our online and offline capabilities as the cornerstone of long-term growth. Encouragingly, leading indicators increasingly signal that the worst of the credit stress cycle is behind us. And our core lending business is embracing recovery with renewed momentum. As we enter 2026, we are optimistic about the recovery of our core business. We are confident in our strategy and commitment from the team that delivered through one of the most demanding years. Our AI foundation has been laid, and we continue building it. With that, I'll now pass it over to William, who will provide more details on the financials for this quarter and the full year.