#China #Shenzhen #X Financial #financial results #Fintech Platform

X Financial Reports Fourth Quarter and Fiscal Year 2025 Results

On March 25, 2026, X Financial, a prominent fintech platform based in China, unveiled its unaudited financial results for the fourth quarter and the entire fiscal year that concluded on December 31, 2025. Despite facing considerable market headwinds, the company recorded mixed results and initiated steps to address ongoing challenges.

Financial Performance Highlights

In Q4 2025, X Financial generated a total net revenue of RMB 1.47 billion (approximately USD 209.9 million), marking a significant decline of 14.1% compared to the same period in 2024 and a staggering 25.1% drop from the prior quarter. For the full fiscal year, net revenue stood at RMB 7.64 billion (around USD 1.09 billion), reflecting a year-over-year increase of 30.1% from 2024.

The fall in quarterly revenue and loan facilitation revenue contributed to a drastic reduction in net income. The firm's net income for Q4 plummeted to RMB 57.2 million (USD 8.2 million), which represents a shocking decrease of 85.2% from last year. This downturn was prompted largely by increased provisions related to credit risk and lower activity in loan facilitation. In contrast, the complete fiscal year net income totaled RMB 1.46 billion (USD 209.4 million), showing a slight decline from RMB 1.54 billion in 2024.

In terms of loan origination, the company facilitated loans amounting to RMB 22.77 billion in Q4 2025, a significant dip of 29.5% compared to the previous year, and 32.3% lower than the preceding quarter. For the total fiscal year, the loan amounts originated reached RMB 130.55 billion, an increase of 24.5% compared to RMB 104.89 billion recorded in 2024.

Increasing Delinquency Rates and Credit Quality Concerns

A troubling indicator of asset quality was the rising delinquency rates among loans. For loans that were 31 to 60 days past due, the delinquency rate surged to 2.90%, up from 1.17% in the previous year, and the rate for loans 91-180 days past due escalated to 6.31%, significantly higher than 2.48% a year earlier. Mr. Kent Li, President of X Financial, acknowledged that these rates reflect intensified pressure on asset quality due to a conservative risk posture adopted by the company and the industry overall.

Active borrower engagement has also diminished, with approximately 1.69 million active borrowers recorded in Q4 2025, a decline of 20.2% year-over-year. The reduction in borrower activity correlates with the company's strategic shift towards prioritizing high-quality loan origination and tighter lending standards.

Strengthening Risk Management and Financial Resilience

In light of these financial setbacks, Mr. Li noted that the company is actively enhancing its risk management frameworks, adjusting capital allocation, and refining collection strategies. These measures aim to bolster the company’s balance sheet resilience in a volatile market setting. Despite the significant pressures impacting profitability due to heightened provisions and contracting margins, the management is confident that these strategic actions will pave the way for stable performance in the near future.

Moreover, Mr. Frank Fuya Zheng, the Chief Financial Officer, highlighted that managing capital conservatively and adhering to disciplined growth strategies will remain paramount as X Financial navigates the uncertainties in the financial landscape.

Future Outlook and Regulatory Challenges

Looking forward, the company anticipates that the loan amounts facilitated and originated in the first quarter of 2026 will range between RMB 14.5 billion to RMB 15.5 billion. This cautious forecast takes into account the ongoing macroeconomic and regulatory uncertainty.

The regulatory environment in China's fintech sector presents additional challenges, underscored by Notice 9 issued by the National Financial Regulatory Administration, which imposes strict caps on borrowing costs. The company is currently adapting to these evolving regulations, which significantly affect operations and profitability prospects. X Financial's management is vigilant in monitoring these developments as they evolve throughout 2026, as their impact on business operations remains uncertain.

In summary, while the financial results of Q4 2025 indicate substantial challenges for X Financial, the company is implementing strategic measures aimed at fostering stability and growth. The adaptability of its risk management framework and commitment to quality over quantity in loan origination will be critical as they navigate an unpredictable market landscape.