Risk elimination, AI integration, and cross-scene empowerment: The ultimate transformation of Yirendai Technology Inc. (YRD.US) in industry technology.

In 2025, it was a year of rule reshaping for the Chinese lending industry. From the April establishment of the "lending new regulations" setting a 24% interest rate red line, to the joint release of the "Financial Product Online Marketing Management Measures" by eight departments at the beginning of 2026, the regulatory combination completely ended the extensive growth model based on covering risks with interest differentials and acquiring customers through traffic resale. Against the backdrop of industry-wide risk control and scale reduction, Yiren Digital (YRD.US) delivered a seemingly contradictory but transformative performance report: with a full-year net revenue of 5.719 billion yuan in 2025, the basic foundation remained stable; however, the net profit attributable to shareholders decreased to 40.5 million yuan, with a net loss of 0.882 billion yuan in the fourth quarter. However, the sharp fluctuation in the profit side is not a collapse of operational capabilities, but a proactive financial "mine clearing" operation. By centrally provisioning allowances to lock in the risk limit and actively reducing the credit scale, Yiren Digital is shifting its focus from scale expansion to asset quality restoration, allowing AI to transform from a background technological reserve to a core profit engine in the foreground. Behind the large provision "mine clearing": risk clearance and repair logic Throughout 2025, the company made provisions for contingent liabilities totaling 2.366 billion yuan, with 1.11 billion yuan provisioned in the fourth quarter alone. This move directly consumed current profits, but also preemptively covered potential losses resulting from macroeconomic fluctuations and rising industry credit risks. In fact, from the perspective of pre-provisioning profits, the company's operating results in 2025 still remained positive. In non-GAAP terms, the adjusted net profit after adjusting for mismatched guarantee income and provisions was 834 million yuan, more accurately reflecting the core business's ability to generate profits. In other words, this operation of "exchanging profits for a safety cushion," while reducing GAAP reported profits, did not change the fundamental ability of the core business to generate cash flow and profits but rather locked in future uncertainties in the 2025 financial statements, clearing obstacles for core business repair and profit rebound. At the same time, Yiren Digital actively tightened its credit strategy, with a 40% decrease in matched loans and a 17% decrease in loan balances in the fourth quarter, and a steep drop of 44% in the number of serviced borrowers. With the industry's first-day delinquency rate rising to 6.1% and the 30-day recovery rate dropping to 84.1%, the company chose safety over scale, keeping the 1-30 day delinquency rate at 3.4%, better than the industry comparable level. Meanwhile, the company's traditional business foundation remained stable. With over 14 million customers serviced cumulatively and a repeat borrowing rate maintained at a high level of 77%, it proves the stickiness of the core customer base. The internet insurance distribution channel showed strong growth momentum in 2025, with a quarterly compound growth rate of GWP reaching 87%, demonstrating the resilience of the "online + offline" integrated mode in structural optimization. The first quarter of 2026 has already passed, with the release of the first-quarter report imminent. It should be noted in advance that the first quarter is traditionally a slow season for the lending industry, with fewer working days due to the long Chinese New Year holiday leading to a seasonal decrease in credit demand, as clearly reflected in previous financial reports. Coupled with the financial inertia brought by the large provisions in 2025, the first quarter of 2026 will likely exhibit the characteristic of "revenue pressure and high provisions," with net profits under GAAP likely to continue in the repair range. However, investors should look beyond the numbers to see the underlying "warmth." Since the beginning of 2026, some leading indicators have shown positive changes. Loan volume recovery on a month-to-month basis in the first quarter, healthy repeat borrowing rates for existing customers, and improving core delinquency rate indicators on a monthly basis. In addition, the company has made phased progress in internationalization and new business layout. If there is further disclosure of information on related projects during Q1, it will form a positive narrative of multiple achievements. From "technology investment" to "profit engine" AI deeply embedded in the entire business chain In the past few years, AI in Yiren Digital has mainly manifested as isolated achievements in different aspects such as marketing, risk control, etc., without forming a closed-loop. Since 2025, this situation has fundamentally changed. AI has evolved from a "single-point tool" to a "full-chain operating system," deeply embedded in every core business process such as lending matchmaking, marketing acquisition, fund allocation, risk control, quality inspection, legal affairs, etc., achieving a substantial transformation from "technology investment" to "business results." On one hand, they excel in targeting high-frequency core scenarios, such as research and risk control in the financial industry, using AI systems to process massive financial data and identify transaction risks. On the other hand, AI can drive end-to-end process reengineering, such as in the marketing process, using AI to generate compliant personalized product information documents and complete multi-channel distribution, digitalizing the manual compliance review and content production processes, and establishing a clear effect validation system - measuring AI value through conversion rates, cost reduction rates, and other metrics to ensure controllable input-output ratio. This is not just a concept upgrade, but a tangible implementation. In marketing, the AIGC intelligent system executes over 1,700 tasks daily, reducing content generation time to 0.5 seconds, significantly lowering marketing costs. The customer service large model achieves an accuracy rate of 92%, providing 24/7 automated service; the quality inspection system processes over 2 million sales records daily, intercepting compliance risks proactively. The AI fund allocation system has increased matching rates from 60% to 66%, reducing asset costs by 24 basis points alone, accumulating cash flow savings of 54 million yuan. Faced with industry-wide delinquency rate fluctuations, AI is not only an efficiency tool but also a risk control "immune system." Yiren Digital utilizes a multimodal large model risk control system to intercept over 30,000 abnormal accounts daily, preventing potential losses exceeding 180 million yuan annually. Considering all business lines, the cost reduction and efficiency improvement effects driven by AI in 2025 are significant. This means that AI within the company is no longer a separate R&D expense but an internally generated core capability that continuously produces positive cash flow. More than just financial technology - "Implicit reshaping" under the empowerment of AI across scenarios Although from the current financial statements, credit-related businesses are still the main source of revenue for Yiren Digital, the income structure has undergone changes beneath the surface. On one hand, based on the "large model for intelligent language" and the AI intelligent system platform, the company has polished a general AI capability system covering risk control, marketing, and fund matching. This suite of capabilities has been fully validated in the financial core business, possessing high universality and replicability, serving as the technological basis for external institutions. These types of technology services do not require capital, have higher profit margins, follow a typical asset-light model, and are expected to become an important source of incremental income in the company's income structure. On the other hand, the cross-track deployment of the "AI Everything" strategy has entered the importation phase. The company is gradually reusing AI interactive capabilities mature in the financial scenario in emerging tracks such as AI learning and AI entertainment. While these new businesses are still in the strategic investment phase and have not yet formed a substantial revenue, they have outlined a clear growth curve for the future. From the company's perspective, the underlying AI capabilities possess a naturally cross-industry universal attribute and will eventually penetrate multiple scenarios such as finance, growth, and life services. This layout is not just a simple diversification of businesses but has formed a virtuous cycle of "core business iteration - capability reuse - ecological feedback." Yiren Digital no longer defines itself as a simple financial technology company but is transforming into an industrial technology company empowered across scenarios by AI at the core. The transformation logic of Yiren Digital is essentially the systematic evolution of the company's genes. The company has moved beyond the adaptation stage of "patching up the existing process" and has entered the "native era" of redefining business around AI. This upgrade allows Tang Ning's advocacy of "AI with love" to no longer be a grand narrative but a warm companion for intelligent systems and precise outreach for inclusive finance. Starting from a single financial scenario and moving towards a multi-scenario intelligent system platform, Yiren Digital is ushering in a new era as an industrial technology company driven by AI, achieving industry-wide transfer of technological dividends. The company is no longer a financial intermediary living off interest differentials but a technology platform with large models, millions of users, and cross-industry output capabilities. Looking ahead, despite facing short-term pressures from macroeconomic seasonal and recovery phases, as regulatory environments stabilize gradually, AI-driven cost reductions, and efficiency enhancements continue to be released, and the deepening of cross-scenario layouts, Yiren Digital has entered a more sustainable growth trajectory.