Lexin's Remarkable Q2 Growth: Profits Surge Amid Consumer Trends

Lexin's Impressive Financial Performance in Q2 2025

On August 7, 2025, Lexin (NASDAQ: LX), a prominent digital technology service provider in the new consumption sector, unveiled its impressive financial results for the second quarter. The company reported a remarkable revenue of RMB 3.59 billion, reflecting a significant 15.6% quarter-over-quarter growth. Profits also saw a notable increase, reaching RMB 670 million, which represents a 15.2% increase quarter-over-quarter and a staggering 116.4% year-over-year. This latest Q2 performance marks the fifth consecutive quarter of profit growth, with multiple core business metrics demonstrating continuous improvement.

Transaction Volume and User Growth

In Q2, Lexin's transaction volume soared to RMB 52.86 billion, while its total loans under management reached RMB 105.78 billion. The user base expanded remarkably, now numbering 236 million. Overall, Lexin's asset quality has improved consistently over the last four quarters, indicated by a declining First Payment Default (FPD7) rate of 5% and a reduction in the delinquency rate of all assets by approximately 2% quarter-over-quarter. This consistent enhancement of asset quality underscores the company’s ability to manage risks effectively.

Financial Indicators and Shareholder Returns

Financially, Lexin's profit margin, calculated as the annualized net profit against the loan balance, increased by 34 basis points in Q2 compared to the previous quarter. The company is committed to enhancing shareholder returns, announcing a cash dividend of US$0.194 per ADS, which will be distributed on September 15. This represents an increase of 76% compared to the previous year’s dividend and indicates a higher payout ratio—set to be raised from 25% to 30% starting the second half of the year. In addition, Lexin launched a US$60 million share repurchase program aimed at further boosting shareholder value.

Adapting to Macro Changes with Strategic Growth

Xiao Wenjie, Lexin's CEO, emphasized the company's focus on risk and data-driven strategies to refine operations and maintain stable growth amid fluctuating macroeconomic conditions. As Lexin looks ahead to the third quarter, it plans to leverage its ecological business advantages, enhance operational resilience, and ensure continued profitability, holding onto its optimistic full-year guidance.

Enhancements in Ecological Business and Customer Engagement

In line with national policies aimed at boosting consumption, Lexin has enriched its service offerings and improved user experience to facilitate stronger consumer engagement. The recent upgrade of Fenqile Mall’s supply chain has brought on board numerous reputable brand merchants. Innovative promotions during major sales events, including significant increases in Gross Merchandise Volume (GMV), demonstrate Lexin’s agility in meeting diverse customer needs and driving consumption growth.

Inclusive Financing Initiatives

Lexin’s subsidiary, Fenqile Inclusive, plays a crucial role in supporting small and micro enterprises facing funding challenges. By utilizing advanced data analytics and artificial intelligence, Fenqile Inclusive has optimized its credit products to better match financing needs, resulting in over RMB 4.69 billion in loan disbursements to various enterprises. This aligns with government initiatives aimed at promoting inclusive finance to strengthen economic resilience.

Risk Management Innovations with AI

Lexin has also prioritized upgrading its risk control systems through the integration of artificial intelligence, significantly enhancing its operational capabilities. The implementation of localized AI models improves customer management and debt collection processes. Recently, Lexin introduced over 50 AI agent positions, which are set to expand further, continuing to boost operational efficiency. This focus on technology has earned Lexin accolades for its innovation in the fintech sector.

Commitment to Consumer Protection

In its pursuit of robust consumer rights protection, Lexin integrates consumer welfare throughout its business model. By investing in technology to enhance consumer services, Lexin has significantly improved user satisfaction and service responsiveness, thereby reinforcing its commitment to high-quality consumer protection.

Conclusion

Overall, Lexin's sustained growth in Q2 2025 showcases its strategic adaptability in a changing landscape. The company's innovative approach towards customer engagement, risk management, and technological advancement positions it favorably for continued success in the evolving market.

Frequently Asked Questions

What are Lexin's recent financial results?

Lexin reported a revenue of RMB 3.59 billion in Q2 2025, with a profit of RMB 670 million, demonstrating significant year-over-year growth.

How many users does Lexin currently have?

Lexin’s user base reached 236 million as of Q2 2025.

What initiatives has Lexin taken to support small businesses?

Lexin's Fenqile Inclusive subsidiary has provided low-interest financial products that facilitated RMB 4.69 billion in loans to small and micro enterprises.

How is Lexin integrating AI in its operations?

Lexin has implemented AI-powered risk control systems and introduced over 50 AI agent positions to enhance operational efficiency.

What is Lexin's strategy for shareholder returns?

Lexin recently announced a cash dividend increase and a share repurchase program to maximize shareholder value and returns.

About The Author

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