LexinFintech Holdings Ltd. Reports First Quarter 2022 Unaudited Financial Results

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SHENZHEN, China, May 30, 2022 (GLOBE NEWSWIRE) — LexinFintech Holdings Ltd. (“Lexin” or the “Company”) (NASDAQ: LX), a leading online and offline consumption platform and a technology-driven service provider in China, today announced its unaudited financial results for the quarter ended March 31, 2022.

First Quarter 2022 Operational Highlights:

Total number of registered users reached 171 million as of March 31, 2022, representing an increase of 29.4% from 132 million as of March 31, 2021; and users with credit line reached 37.8 million as of March 31, 2022, up by 24.8% from 30.3 million as of March 31, 2021.
As of March 31, 2021, we cumulatively originated RMB702 billion in loans, an increase of 40.7% from RMB499 billion a year ago.
User base
Number of active users1 who used our loan products in the first quarter of 2022 was 5.7 million, representing a decrease of 30.7% from 8.2 million in the first quarter of 2021.
Number of new active users who used our loan products in the first quarter of 2022 was 0.7 million, representing a decrease of 63.1% from 1.8 million in the first quarter of 2021.
Loan facilitation business

Total loan originations2 in the first quarter of 2022 was RMB43.2 billion, a decrease of 19.8% from RMB53.8 billion in the first quarter of 2021.
Total outstanding principal balance of loans2 reached RMB83.8 billion as of March 31, 2022, representing an increase of 1.7% from RMB82.4 billion as of March 31, 2021.
Lexin has continued to expand financing services for small and micro business owners. In the first quarter, loan originations for small and micro business owners reached RMB4.2 billion.
Number of orders placed on our platform in the first quarter of 2022 was 27.9 million, representing a decrease of 64.6% from 78.6 million in the first quarter of 2021.
Credit performance
90 day+ delinquency ratio was 2.40% as of March 31, 2022.
First payment default rate (30 day+) for new loan originations was below 1% as of March 31, 2022.
Technology-Driven Platform Services
In the first quarter of 2022, we had served over 100 customers with our technology-driven platform services.
In the first quarter of 2022, our customer retention rate3 of technology-driven platform services was over 80%.
New Consumption-Driven, Location-Based Services
The GMV4 in the first quarter of 2022 amounted to RMB 669 million, representing a decrease of 10.7% from RMB749 million in the first quarter of 2021.
In the first quarter of 2022, we served over 271,000 users and 2,300 merchants under new consumption-driven, location-based services.
Other operational highlights
The weighted average tenor of loans originated on our platform in the first quarter of 2022 was approximately 12.3 months, representing an increase from 11.7 months in the first quarter of 2021. The nominal APR5 was 14.4% for the first quarter of 2022, representing a decrease from 15.5% in the first quarter of 2021.
1. Active users refer to, for a specified period, users who made at least one transaction during that period through our platform or through our third-party partners’ platforms using credit line granted by us.

2. Originations of loans and outstanding principal balance represent the origination and outstanding principal balance of both on- and off-balance sheet loans.

3. Customer retention rate refers to the number of financial institution customers and partners who repurchase our service in the current quarter as a percentage of total number of financial institution customers and partners in the preceding quarter.

4. GMV refers to the total value of transactions completed for products purchased on our e-commerce and Maiya channel, net of returns.

5. Nominal APR refers to all-in interest costs and fees to the borrower over the net proceeds received by the borrower as a percentage of the total loan originations of both on- and off-balance sheet loans.

First Quarter 2022 Financial Highlights:

Total operating revenue was RMB1,712 million, representing a decrease of 41.8% from the first quarter of 2021. Revenue from new consumption-driven, location-based services was RMB319 million, representing a decrease of 26.2% from the first quarter of 2021. Revenue from technology-driven platform services was RMB497 million, representing a decrease of 26.3% from the first quarter of 2021. Revenue from credit-driven platform services was RMB896 million, representing a decrease of 51.2% from the first quarter of 2021.
Gross profit was RMB461 million, representing a decrease of 66.3% from the first quarter of 2021.
Net income attributable to ordinary shareholders of the Company was RMB78.1 million, representing a decrease of 89.0% from the first quarter of 2021. Net income per ADS attributable to ordinary shareholders of the Company was RMB0.42 on a fully diluted basis.
Non-GAAP EBIT6 was RMB156 million, representing a decrease of 82.8% from the first quarter of 2021.
Adjusted net income attributable to ordinary shareholders of the Company6 was RMB129 million, representing a decrease of 83.2% from the first quarter of 2021. Adjusted net income per ADS attributable to ordinary shareholders of the Company6 was RMB0.62 on a fully diluted basis.
6. Non-GAAP EBIT, adjusted net income attributable to ordinary shareholders of the Company, adjusted net income per ordinary share and per ADS attributable to ordinary shareholders of the Company are non-GAAP financial measures. For more information on non-GAAP financial measures, please see the section of “Use of Non-GAAP Financial Measures Statement” and the tables captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.

First Quarter 2022 Financial Results:

Operating revenue decreased from RMB2,944 million in the first quarter of 2021 to RMB1,712 million in the first quarter of 2022. This decrease in operating revenue was due to the decrease in revenues from new consumption-driven, location-based services, technology-driven platform services and credit-driven platform services for the quarter.

Revenue from new consumption-driven, location-based services decreased by 26.2% from RMB432 million in the first quarter of 2021 to RMB319 million in the first quarter of 2022. The decrease was primarily due to the lower consumption desired under the impact of the COVID-19.

Revenue from technology-driven platform services decreased by 26.3% from RMB675 million in the first quarter of 2021 to RMB497 million in the first quarter of 2022. This decrease was primarily due to a decrease from profit sharing model service within technology-driven platform services with the decrease of transaction volume in the first quarter of 2022.

Revenue from credit-driven platform services decreased by 51.2% from RMB1,837 million in the first quarter of 2021 to RMB896 million in the first quarter of 2022. The decrease was primarily due to the decrease of loan facilitation and servicing fees-credit oriented and interest and financial services income and other revenues.

Loan facilitation and servicing fees-credit oriented decreased by 75.9% from RMB1,060 million in the first quarter of 2021 to RMB256 million in the first quarter of 2022. This decrease was primarily due to a decrease in the nominal APR and an increase of guarantee obligation with the increasing credit risk in the first quarter of 2022, which resulted in the decrease in considerations for revenue from loan facilitation and servicing fees-credit oriented.

Interest and financial services income and other revenues decreased by 28.6% from RMB542 million in the first quarter of 2021 to RMB387 million in the first quarter of 2022, which was consistent with the decrease in the origination of on-balance sheet loans in the first quarter of 2022.

Guarantee income increased by 8.0% from RMB235 million in the first quarter of 2021 to RMB254 million in the first quarter of 2022. The increase was primarily due to the increase of loan origination in the first quarter of 2022 and the increase of outstanding balances of the off-balance sheet loans funded by certain institutional funding partners, which are accounted for under ASC 460, Guarantees.

Cost of sales decreased by 24.3% from RMB434 million in the first quarter of 2021 to RMB328 million in the first quarter of 2022, which was consistent with the decrease of new consumption-driven revenue.

Funding cost decreased by 27.4% from RMB130 million in the first quarter of 2021 to RMB94.3 million in the first quarter of 2022, which was consistent with the decrease of the interest and financial services income and other revenues.

Processing and servicing cost increased by 16.6% from RMB397 million in the first quarter of 2021 to RMB462 million in the first quarter of 2022. This increase was primarily due to an increase in risk management and collection expenses.

Provision for credit losses of financing and interest receivables was RMB45.5 million in the first quarter of 2022, compared to RMB172 million in the first quarter of 2021. The credit losses have reflected the most recent performance in relation to the Company’s on-balance sheet loans and that the Company has continued to implement prudent credit assessment and risk management policies and procedures.

Provision for credit losses of contract assets and receivables decreased by 67.5% from RMB219 million in the first quarter of 2021 to RMB71.2 million in the first quarter of 2022. The decrease was primarily due to a decrease in the balance of contract assets as of March 31, 2022.

Provision for credit losses of contingent liabilities of guarantee increased by 11.7% from RMB224 million in the first quarter of 2021 to RMB250 million in the first quarter of 2022. The increase was primarily due to the increase of outstanding balances of the off-balance sheet loans funded by certain institutional funding partners, which are accounted for under ASC 460, Guarantees.

Gross profit decreased by 66.3% from RMB1,369 million in the first quarter of 2021 to RMB461 million in the first quarter of 2022. The decrease in gross profit was primarily due to the decrease in revenues from new consumption-driven, location-based services, technology-driven platform services and credit-driven platform services, and the increase in processing and servicing cost and provision for credit losses of contingent liabilities of guarantee, and partially offset by the decrease in funding cost, cost of sales, provision for credit losses of financing and interest receivables and provision for credit losses of contract assets and receivables.

Sales and marketing expenses remained stable from RMB346 million in the first quarter of 2021 to RMB360 million in the first quarter of 2022.

Research and development expenses increased by 22.8% from RMB124 million in the first quarter of 2021 to RMB153 million in the first quarter of 2022. This increase was primarily due to…