LexinFintech (LX) Q3 2024 earnings summary

Executive summary

• Net profit reached RMB 310 million in Q3 2024, up 36.7% quarter-over-quarter, with stable revenue and prudent risk management despite flat loan originations and a lower loan balance.

• Loan originations totaled RMB 51 billion, with an outstanding loan balance of RMB 111.2 billion, reflecting a 3.4% decline from the previous quarter due to tightened credit standards.

• Registered users reached 223 million, with cumulative active users at 31.5 million and users with credit lines at 44.1 million, all showing sequential or year-over-year growth.

• Board approved an increase in dividend payout ratio to 25% of net profit starting in 2025.

• Net profit margin improved to 8.5%, up from 6.2% in Q2.

Financial highlights

• Operating revenue was RMB 3.7 billion, up 4.4% year-over-year and stable quarter-over-quarter.

• Net profit increased by 36.7% quarter-over-quarter to RMB 310 million, though down 16.5% year-over-year.

• Take rate reached a record high of 3.25%, up from 2.91% in Q2 and 2.44% a year ago.

• Funding cost hit a record low of 4.28%, down nearly 100 basis points from Q2 and decreased 33.4% year-over-year.

• Gross profit declined 11.0% year-over-year to RMB 1,207 million.

Outlook and guidance

• Management expects continued improvement in asset quality and profitability into 2025, with further guidance after Q4.

• Q4 loan origination GMV expected to grow at a flat to low single-digit rate quarter-over-quarter.

• Cautious short-term outlook, with government stimulus expected to gradually support recovery.