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Qifu Technology Announces Third Quarter 2023 Unaudited Financial Results

/EIN News/ -- SHANGHAI, China, Nov. 16, 2023 (GLOBE NEWSWIRE) -- Qifu Technology, Inc. (NASDAQ: QFIN; HKEx: 3660) (“Qifu Technology” or the “Company”), a leading Credit-Tech platform in China, today announced its unaudited financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Business Highlights

  • As of September 30, 2023, our platform has connected 155 financial institutional partners and 227.9 million consumers*1 with potential credit needs, cumulatively, an increase of 12.0% from 203.5 million a year ago.
  • Cumulative users with approved credit lines*2 were 49.2 million as of September 30, 2023, an increase of 14.4% from 43.0 million as of September 30, 2022.
  • Cumulative borrowers with successful drawdown, including repeat borrowers was 29.4 million as of September 30, 2023, an increase of 11.9% from 26.3 million as of September 30, 2022.
  • In the third quarter of 2023, financial institutional partners originated 18,504,320 loans*3 through our platform. Total facilitation and origination loan volume reached RMB123,148 million*4, an increase of 11.3% from RMB110,675 million in the same period of 2022.
  • Out of those loans originated by financial institutions, RMB69,579 million was under capital-light model, Intelligence Credit Engine (“ICE”) and other technology solutions*5, representing 56.5% of the total, an increase of 7.7% from RMB64,583 million in the same period of 2022.
  • Total outstanding loan balance*6 was RMB189,100 million as of September 30, 2023, an increase of 18.2% from RMB160,020 million as of September 30, 2022.
  • RMB116,283 million of such loan balance was under capital-light model, “ICE” and other technology solutions*7, an increase of 27.5% from RMB91,196 million as of September 30, 2022.
  • The weighted average contractual tenor of loans originated by financial institutions across our platform in the third quarter of 2023 was approximately 11.23 months, compared with approximately 12.27 months in the same period of 2022.
  • 90 day+ delinquency rate*8 of loans originated by financial institutions across our platform was 1.82% as of September 30, 2023.
  • Repeat borrower contribution*9 of loans originated by financial institutions across our platform for the third quarter of 2023 was 91.5%.

1 Refers to cumulative registered users across our platform.
2 “Users with approved credit lines” refers to the total number of users who had submitted their credit applications and were approved with a credit line at the end of each period.
3 Including 5,935,834 loans across “V-pocket”, and 12,568,486 loans across other products.
4 Refers to the total principal amount of loans facilitated and originated during the given period, including loan volume facilitated through Intelligence Credit Engine (“ICE”) and other technology solutions.
5 “ICE” is an open platform on our “360 Jietiao” APP, we match borrowers and financial institutions through big data and cloud computing technology on “ICE”, and provide pre-loan investigation report of borrowers. For loans facilitated through “ICE”, the Company does not bear principal risk. Loan facilitation volume through “ICE” was RMB9,629 million in the third quarter of 2023.
Under other technology solutions, we offer financial institutions on-premise deployed, modular risk management SaaS, which helps financial institution partners improve credit assessment results. Loan facilitation volume through other technology solutions was RMB26,563 million in the third quarter of 2023.
6 “Total outstanding loan balance” refers to the total amount of principal outstanding for loans facilitated and originated at the end of each period, including loan balance for “ICE” and other technology solutions, excluding loans delinquent for more than 180 days.
7 Outstanding loan balance for “ICE” and other technology solutions were RMB12,720 million and RMB42,134 million, respectively, as of September 30, 2023.
8 “90 day+ delinquency rate” refers to the outstanding principal balance of on- and off-balance sheet loans that were 91 to 180 calendar days past due as a percentage of the total outstanding principal balance of on- and off-balance sheet loans across our platform as of a specific date. Loans that are charged-off and loans under “ICE” and other technology solutions are not included in the delinquency rate calculation.
9 “Repeat borrower contribution” for a given period refers to (i) the principal amount of loans borrowed during that period by borrowers who had historically made at least one successful drawdown, divided by (ii) the total loan facilitation and origination volume through our platform during that period.

Third Quarter 2023 Financial Highlights

  • Total net revenue was RMB4,281.0 million (US$586.8 million), compared to RMB4,144.1 million in the same period of 2022.
  • Income from operations was RMB1,388.9 million (US$190.4 million), compared to RMB1,158.3 million in the same period of 2022.
  • Non-GAAP*10 income from operations was RMB1,432.2 million (US$196.3 million), compared to RMB1,207.8 million in the same period of 2022.
  • Operating margin was 32.4%. Non-GAAP operating margin was 33.5%.
  • Net income was RMB1,137.7 million (US$155.9 million), compared to RMB988.4 million in the same period of 2022.
  • Non-GAAP net income was RMB1,181.0 million (US$161.9 million), compared to RMB1,037.9 million in the same period of 2022.
  • Net income attributed to the Company was RMB1,142.0 million (US$156.5 million), compared to RMB992.8 million in the same period of 2022.
  • Net income margin was 26.6%. Non-GAAP net income margin was 27.6%.

10 Non-GAAP income from operations (Adjusted Income from operations), Non-GAAP net income (Adjusted net income), Non-GAAP operating margin and Non-GAAP net income margin are non-GAAP financial measures. For more information on these non-GAAP financial measures, please see the section of “Use of Non-GAAP Financial Measures Statement” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.

Mr. Haisheng Wu, Chief Executive Officer and Director of Qifu Technology, commented, “As macro-economic recovery stalled and consumer sentiment softened, we made timely adjustment to our strategies and focused our effort on refined operations to drive better profitability and quality growth. For the third quarter, total loan facilitation and origination volume was RMB123.1 billion, up 11.3% year-on-year. Approximately 56% of the loan volume was facilitated under the capital-light model, ICE and other technology solutions.

Through optimizing customer acquisition channels and enriching product and service offerings, we added over 1.7 million new users with approved credit lines. In addition, we continued to strengthen our partnership with financial institutions and achieve overall better funding terms. During the quarter with the help of new ABS issuance, we further reduce our overall funding costs to record low levels.

As economic headwind persists, we experienced some fluctuation in asset quality during the quarter. However, many of the operational initiatives we launched in the quarter should continue to make positive contributions through the remainder of this year and the next year. In the long run, we will continue to drive for consistent executions and optimal balance between quality growth and manageable risks.”

“We are pleased to report another quarter of solid financial results in a rather challenging macro environment. Total revenue was RMB4.28 billion and non-GAAP net income was RMB1.18 billion for the third quarter,” Mr. Alex Xu, Chief Financial Officer, commented. “During the quarter, despite the macro uncertainty, we continued to improve our operational efficiency and drive for better economic returns. At the end of the third quarter, our total cash and cash equivalent*11 was approximately RMB8.2 billion, and we generated approximately RMB1.2 billion cash from operations. Our strong financial positions not only enable us to drive quality growth, but also allow us to deliver attractive shareholder returns through dividend payout and share repurchase.”

Mr. Yan Zheng, Chief Risk Officer, added, “We started to see fluctuation on key risk metrics in the third quarter as macro uncertainties impacted consumers’ sentiment and financial wellness. We took quick actions to tighten our credit assessment criteria to cope with the uncertainties. Among key leading indicators, Day-1 delinquency rate*12 was 4.6%, and 30-day collection rates*13 was approximately 87% for the third quarter. As the economic conditions change, we will continue to take a prudent approach in managing risks and navigating through this challenging macro headwinds.”

11 Including “Cash and cash equivalents”, “Restricted cash”, and “Security deposit prepaid to third-party guarantee companies”.
12 “Day-1 delinquency rate” is defined as (i) the total amount of principal that became overdue as of a specified date, divided by (ii) the total amount of principal that was due for repayment as of such specified date.
13 “30 day collection rate” is defined as (i) the amount of principal that was repaid in one month among the total amount of principal that became overdue as of a specified date, divided by (ii) the total amount of principal that became overdue as of such specified date.

Third Quarter 2023 Financial Results

Total net revenue was RMB4,281.0 million (US$586.8 million), compared to RMB4,144.1 million in the same period of 2022, and RMB3,914.3 million in the prior quarter.

Net revenue from Credit Driven Services was RMB3,071.0 million (US$420.9 million), compared to RMB2,941.1 million in the same period of 2022, and RMB2,788.7 million in the prior quarter.

Loan facilitation and servicing fees-capital heavy were RMB479.2 million (US$65.7 million), compared to RMB582.9 million in the same period of 2022 and RMB395.5 million in the prior quarter. The year-over-year decrease was primarily due to shorter tenor of the loans compared to that in the same period of 2022. The sequential increase was primarily due to higher capital-heavy loan volume and longer effective tenor of the loans compared to that in the prior quarter.

Financing income*14 was RMB1,369.9 million (US$187.8 million), compared to RMB877.1 million in the same period of 2022 and RMB1,188.7 million in the prior quarter. The year-over-year and sequential increases were primarily due to the growth in average outstanding balance of the on-balance-sheet loans.

Revenue from releasing of guarantee liabilities was RMB1,165.7 million (US$159.8 million), compared to RMB1,447.6 million in the same period of 2022, and RMB1,158.6 million in the prior quarter. The year-over-year and sequential changes reflected the changes in average outstanding balance of off-balance-sheet capital-heavy loans.

Other services fees were RMB56.1 million (US$7.7 million), compared to RMB33.6 million in the same period of 2022, and RMB45.9 million in the prior quarter. The year-over-year and sequential increases were mainly due to the increases in late payment fees under the capital-heavy model.

Net revenue from Platform Services was RMB1,210.1 million (US$165.9 million), compared to RMB1,203.0 million in the same period of 2022 and RMB1,125.6 million in the prior quarter.

Loan facilitation and servicing fees-capital light were RMB863.9 million (US$118.4 million), compared to RMB1,040.2 million in the same period of 2022 and RMB887.8 million in the prior quarter. The year-over-year decrease was mainly due to lower capital-light loan volume and shorter effective tenor of the loans. The sequential decrease was primarily due to lower capital-light loan volume.

Referral services fees were RMB234.2 million (US$32.1 million), compared to RMB85.4 million in the same period of 2022 and RMB160.9 million in the prior quarter. The year-over-year and sequential increases were mainly due to the increase in the loan facilitation volume through ICE.

Other services fees were RMB112.0 million (US$15.4 million), compared to RMB77.4 million in the same period of 2022 and RMB76.9 million in the prior quarter. The year-over-year and sequential increases were mainly due to increase in late payment fees and other service fees.

Total operating costs and expenses were RMB2,892.2 million (US$396.4 million), compared to RMB2,985.9 million in the same period of 2022 and RMB2,732.8 million in the prior quarter.

Facilitation, origination and servicing expenses were RMB639.8 million (US$87.7 million), compared to RMB617.3 million in the same period of 2022 and RMB648.0 million in the prior quarter. The year-over-year increase was primarily due to higher credit search fees and collection fees.

Funding costs were RMB160.2 million (US$22.0 million), compared to RMB138.5 million in the same period of 2022 and RMB165.2 million in the prior quarter. The year-over-year increase was primarily due to increases in funding from ABS, as a result of continued growth in on-balance-sheet loan balance, partially offset by the lower average cost of ABS.

Sales and marketing expenses were RMB529.6 million (US$72.6 million), compared to RMB624.1 million in the same period of 2022 and RMB436.5 million in the prior quarter. The year-over-year decrease was mainly due to decline in unit customer acquisition cost. The sequential increase was mainly due to larger number of new users and slightly higher unit cost in the third quarter.

General and administrative expenses were RMB95.4 million (US$13.1 million), compared to RMB102.7 million in the same period of 2022 and RMB112.8 million in the prior quarter. The year-over-year and sequential decreases were mainly due to decreases in professional service fees and our continued effort to improve operational efficiency.

Provision for loans receivable was RMB509.0 million (US$69.8 million), compared to RMB191.5 million in the same period of 2022 and RMB483.3 million in the prior quarter. The year-over-year and sequential increases were mainly due to the growth in loan origination volume of on-balance-sheet loans.

Provision for financial assets receivable was RMB86.9 million (US$11.9 million), compared to RMB115.1 million in the same period of 2022 and RMB82.3 million in the prior quarter. The year-over-year and sequential changes mainly reflected the Company’s consistent approach in assessing provisions commensurate with its underlying loan profile.

Provision for accounts receivable and contract assets was RMB39.7 million (US$5.4 million), compared to RMB53.8 million in the same period of 2022 and RMB47.2 million in the prior quarter. The year-over-year and sequential changes reflected the Company’s consistent approach in assessing provisions commensurate with its underlying loan profile.

Provision for contingent liability was RMB831.6 million (US$114.0 million), compared to RMB1,142.8 million in the same period of 2022 and RMB757.6 million in the prior quarter. The year-over-year and sequential changes reflected the Company’s consistent approach in assessing provisions commensurate with its underlying loan profile. In addition, the sequential increase was also partially due to the increase in loan facilitation volume of off-balance-sheet loans.

Income from operations was RMB1,388.9 million (US$190.4 million), compared to RMB1,158.3 million in the same period of 2022 and RMB1,181.5 million in the prior quarter.

Non-GAAP income from operations was RMB1,432.2 million (US$196.3 million), compared to RMB1,207.8 million in the same period of 2022 and RMB1,234.7 million in the prior quarter.

Operating margin was 32.4%. Non-GAAP operating margin was 33.5%.

Income before income tax expense was RMB1,478.1 million (US$202.6 million), compared to RMB1,171.5 million in the same period of 2022 and RMB1,366.3 million in the prior quarter.

Net income was RMB1,137.7 million (US$155.9 million), compared to RMB988.4 million in the same period of 2022 and RMB1,093.4 million in the prior quarter.

Non-GAAP net income was RMB1,181.0 million (US$161.9 million), compared to RMB1,037.9 million in the same period of 2022 and RMB1,146.6 million in the prior quarter.

Net income margin was 26.6%. Non-GAAP net income margin was 27.6%.

Net income attributed to the Company was RMB1,142.0 million (US$156.5 million), compared to RMB992.8 million in the same period of 2022 and RMB1,097.4 million in the prior quarter.

Non-GAAP net income attributed to the Company was RMB1,185.3 million (US$162.5 million), compared to RMB1,042.4 million in the same period of 2022 and RMB1,150.7 million in the prior quarter.

Net income per fully diluted ADS was RMB6.94 (US$0.96).

Non-GAAP net income per fully diluted ADS was RMB7.20 (US$0.99).

Weighted average basic ADS used in calculating GAAP and non-GAAP net income per ADS was 160.39 million.

Weighted average diluted ADS used in calculating GAAP and non-GAAP net income per ADS was 164.61 million.

14 “Financing income” is generated from loans facilitated through the Company’s platform funded by the consolidated trusts and Fuzhou Microcredit, which charge fees and interests from borrowers.

30 Day+ Delinquency Rate by Vintage and 180 Day+ Delinquency Rate by Vintage

The following charts and tables display the historical cumulative 30 day+ delinquency rates by loan facilitation and origination vintage and 180 day+ delinquency rates by loan facilitation and origination vintage for all loans facilitated and originated through the Company’s platform. Loans under “ICE” and other technology solutions are not included in the 30 day+ charts and the 180 day+ charts:

http://ml.globenewswire.com/Resource/Download/e56afd67-5dca-451d-9333-b92c4f4aa954

http://ml.globenewswire.com/Resource/Download/013031cc-cad2-4610-a707-e0526602e43d

Update on Share Repurchase

On June 20, 2023, the Company announced a share repurchase plan whereby the Company is authorized to repurchase its American depositary shares (“ADSs”) or Class A ordinary shares with an aggregate value of up to US$150 million during the 12-month period from June 20, 2023. From the launch of the share repurchase plan to November 16, 2023, the Company in aggregate purchased approximately 4.9 million ADSs in the open market for a total cost of approximately US$80 million (inclusive of commissions) at an average price around US$16.2 per ADS pursuant to the share repurchase plan.

Business Outlook

Given the slower than expected macro-economic recovery and persistent uncertainties, the Company will continue to take a prudent approach in business planning and risk management. As such, the Company now expects total loan volume for the fourth quarter to be between RMB116 billion and RMB126 billion, and for the full year total loan volume to be between RMB473 billion and RMB483 billion, representing a year-on-year growth of 15%-17%. This outlook reflects the Company’s current and preliminary views, which is subject to material changes.

Conference Call Preregistration

Qifu Technology’s management team will host an earnings conference call at 7:30 PM U.S. Eastern Time on Thursday, November 16, 2023 (8:30 AM Beijing Time on Friday, November 17, 2023).

All participants wishing to join the conference call must pre-register online using the link provided below.

Registration Link: https://register.vevent.com/register/BI21f98dce365242beac459791a07d81ab

Upon registration, each participant will receive details for the conference call, including dial-in numbers and a unique access PIN. Please dial in 10 minutes before the call is scheduled to begin.

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of the Company's website at http://ir.qifu.tech.

About Qifu Technology

Qifu Technology is a Credit-Tech platform in China that provides a comprehensive suite of technology services to assist financial institutions and consumers and SMEs in the loan lifecycle, ranging from borrower acquisition, preliminary credit assessment, fund matching and post-facilitation services. The Company is dedicated to making credit services more accessible and personalized to consumers and SMEs through Credit-Tech services to financial institutions.

For more information, please visit: https://ir.qifu.tech.

Use of Non-GAAP Financial Measures Statement

To supplement our financial results presented in accordance with U.S. GAAP, we use Non-GAAP financial measure, which is adjusted from results based on U.S. GAAP to exclude share-based compensation expenses. Reconciliations of our Non-GAAP financial measures to our U.S. GAAP financial measures are set forth in tables at the end of this earnings release, which provide more details on the Non-GAAP financial measures.

We use Non-GAAP income from operation, Non-GAAP operating margin, Non-GAAP net income, Non-GAAP net income margin, Non-GAAP net income attributed to the Company and Non-GAAP net income per fully diluted ADS in evaluating our operating results and for financial and operational decision-making purposes. Non-GAAP income from operation represents income from operation excluding share-based compensation expenses. Non-GAAP operating margin is equal to Non-GAAP income from operation divided by total net revenue. Non-GAAP net income represents net income excluding share-based compensation expenses. Non-GAAP net income margin is equal to Non-GAAP net income divided by total net revenue. Non-GAAP net income attributed to the Company represents net income attributed to the Company excluding share-based compensation expenses. Non-GAAP net income per fully diluted ADS represents net income per fully diluted ADS excluding share-based compensation expenses. Such adjustments have no impact on income tax. We believe that Non-GAAP income from operation and Non-GAAP net income help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in results based on U.S. GAAP. We believe that Non-GAAP income from operation and Non-GAAP net income provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Our Non-GAAP financial information should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to U.S. GAAP results. In addition, our calculation of Non-GAAP financial information may be different from the calculation used by other companies, and therefore comparability may be limited.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2960 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of September 29, 2023.

Safe Harbor Statement

Any forward-looking statements contained in this announcement are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. Qifu Technology may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including the Company’s business outlook, beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, which factors include but not limited to the following: the Company’s growth strategies, the Company’s cooperation with 360 Group, changes in laws, rules and regulatory environments, the recognition of the Company’s brand, market acceptance of the Company’s products and services, trends and developments in the credit-tech industry, governmental policies relating to the credit-tech industry, general economic conditions in China and around the globe, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks and uncertainties is included in Qifu Technology’s filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release, and Qifu Technology does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For more information, please contact:

Qifu Technology       
E-mail: ir@360shuke.com


  Qifu Technology, Inc.     
  Unaudited Condensed Consolidated Balance Sheets     
  (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
except for number of shares and per share data, or otherwise noted)
 
           
           
    December 31, September 30, September 30,  
    2022 2023 2023  
    RMB RMB USD  
  ASSETS        
  Current assets:        
  Cash and cash equivalents 7,165,584 4,938,298 676,850  
  Restricted cash 3,346,779 3,067,100 420,381  
  Short term investments 57,000 - -  
  Security deposit prepaid to third-party guarantee companies 396,699 192,037 26,321  
  Funds receivable from third party payment service providers 1,158,781 1,664,417 228,127  
  Accounts receivable and contract assets, net 2,868,625 2,842,438 389,589  
  Financial assets receivable, net 2,982,076 2,716,113 372,274  
  Amounts due from related parties 394,872 67,312 9,226  
  Loans receivable, net 15,347,662 23,469,654 3,216,784  
  Prepaid expenses and other assets 379,388 1,052,436 144,248  
  Total current assets 34,097,466 40,009,805 5,483,800  
  Non-current assets:        
  Accounts receivable and contract assets, net-non current 261,319 159,923 21,919  
  Financial assets receivable, net-non current 688,843 570,009 78,126  
  Amounts due from related parties 33,236 8,177 1,121  
  Loans receivable, net-non current 3,136,994 2,870,943 393,495  
  Property and equipment, net 47,602 148,285 20,324  
  Land use rights,net 998,185 982,642 134,682  
  Intangible assets 4,696 13,567 1,860  
  Goodwill - 41,210 5,648  
  Deferred tax assets 1,019,171 1,181,488 161,936  
  Other non-current assets 55,658 53,021 7,267  
  Total non-current assets 6,245,704 6,029,265 826,378  
  TOTAL ASSETS 40,343,170 46,039,070 6,310,178  
           
  LIABILITIES AND EQUITY        
  Current liabilities:        
  Payable to investors of the consolidated trusts-current 6,099,520 6,938,377 950,984  
  Accrued expenses and other current liabilities 2,004,551 2,674,368 366,553  
  Amounts due to related parties 113,697 152,740 20,935  
  Short term loans 150,000 756,278 103,657  
  Guarantee liabilities-stand ready 4,120,346 3,981,851 545,758  
  Guarantee liabilities-contingent 3,418,391 3,352,336 459,476  
  Income tax payable 661,015 1,010,478 138,498  
  Other tax payable 182,398 129,555 17,757  
  Total current liabilities 16,749,918 18,995,983 2,603,618  
  Non-current liabilities:        
  Deferred tax liabilities 100,835 117,173 16,060  
  Payable to investors of the consolidated trusts-noncurrent 4,521,600 5,697,700 780,935  
  Other long-term liabilities 39,520 98,574 13,511  
  Total non-current liabilities 4,661,955 5,913,447 810,506  
  TOTAL LIABILITIES 21,411,873 24,909,430 3,414,124  
  TOTAL QIFU TECHNOLOGY INC EQUITY 18,847,156 21,053,214 2,885,579  
  Noncontrolling interests 84,141 76,426 10,475  
  TOTAL EQUITY 18,931,297 21,129,640 2,896,054  
  TOTAL LIABILITIES AND EQUITY 40,343,170 46,039,070 6,310,178  
           



  Qifu Technology, Inc.  
  Unaudited Condensed Consolidated Statements of Operations  
  (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
except for number of shares and per share data, or otherwise noted)
 
                   
    Three months ended September 30,   Nine months ended September 30,  
    2022   2023   2023     2022   2023   2023    
    RMB RMB USD   RMB RMB USD  
  Credit driven services 2,941,106   3,070,969   420,911     8,809,503   8,490,297   1,163,692    
  Loan facilitation and servicing fees-capital heavy 582,857   479,248   65,686     1,724,628   1,185,924   162,544    
  Financing income 877,051   1,369,855   187,754     2,485,871   3,624,475   496,776    
  Revenue from releasing of guarantee liabilities 1,447,592   1,165,737   159,778     4,522,107   3,534,111   484,390    
  Other services fees 33,606   56,129   7,693     76,897   145,787   19,982    
  Platform services 1,203,023   1,210,057   165,852     3,837,872   3,304,227   452,881    
  Loan facilitation and servicing fees-capital light 1,040,210   863,860   118,402     3,169,165   2,516,970   344,979    
  Referral services fees 85,381   234,190   32,098     468,031   503,530   69,014    
  Other services fees 77,432   112,007   15,352     200,676   283,727   38,888    
  Total net revenue 4,144,129   4,281,026   586,763     12,647,375   11,794,524   1,616,573    
  Facilitation, origination and servicing 617,311   639,795   87,691     1,787,872   1,928,125   264,272    
  Funding costs 138,475   160,181   21,955     366,105   484,429   66,397    
  Sales and marketing 624,104   529,632   72,592     1,791,761   1,388,295   190,282    
  General and administrative 102,721   95,393   13,075     318,869   313,039   42,906    
  Provision for loans receivable 191,542   508,990   69,763     1,098,859   1,511,160   207,122    
  Provision for financial assets receivable 115,144   86,875   11,907     279,361   237,892   32,606    
  Provision for accounts receivable and contract assets 53,762   39,724   5,445     170,787   84,694   11,608    
  Provision for contingent liabilities 1,142,820   831,563   113,975     3,305,458   2,269,487   311,059    
  Total operating costs and expenses 2,985,879   2,892,153   396,403     9,119,072   8,217,121   1,126,252    
  Income from operations 1,158,250   1,388,873   190,360     3,528,303   3,577,403   490,321    
  Interest income, net 57,819   49,713   6,814     126,007   170,337   23,347    
  Foreign exchange (loss) gain (68,583 ) (659 ) (90 )   (155,241 ) 3,171   435    
  Other income, net 24,027   40,175   5,506     227,485   225,727   30,938    
  Investment loss -   -   -     (8,996 ) (30,112 ) (4,127 )  
  Income before income tax expense 1,171,513   1,478,102   202,590     3,717,558   3,946,526   540,914    
  Income taxes expense (183,159 ) (340,412 ) (46,657 )   (579,891 ) (785,637 ) (107,681 )  
  Net income 988,354   1,137,690   155,933     3,137,667   3,160,889   433,233    
  Net loss attributable to noncontrolling interests 4,481   4,357   597     14,505   12,707   1,742    
  Net income attributable to ordinary shareholders of the Company 992,835   1,142,047   156,530     3,152,172   3,173,596   434,975    
  Net income per ordinary share attributable to ordinary shareholders of Qifu Technology, Inc.          
  Basic 3.18   3.56   0.49     10.12   9.85   1.35    
  Diluted 3.09   3.47   0.48     9.81   9.61   1.32    
                   
  Net income per ADS attributable to ordinary shareholders of Qifu Technology, Inc.          
  Basic 6.36   7.12   0.98     20.24   19.70   2.70    
  Diluted 6.18   6.94   0.96     19.62   19.22   2.64    
                   
  Weighted average shares used in calculating net income per ordinary share            
  Basic 312,481,135   320,789,494   320,789,494     311,571,575   322,240,695   322,240,695    
  Diluted 321,521,765   329,220,827   329,220,827     321,224,803   330,391,888   330,391,888    
                   



Qifu Technology, Inc.         
Unaudited Condensed Consolidated Statements of Cash Flows        
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
except for number of shares and per share data, or otherwise noted)
 
                 
  Three months ended September 30,   Nine months ended September 30,  
  2022   2023   2023     2022   2023   2023    
  RMB RMB USD   RMB RMB USD  
Net cash provided by operating activities 1,592,127   1,243,893   170,490     4,130,038   4,766,559   653,311    
Net cash used in investing activities (2,981,196 ) (2,260,922 ) (309,885 )   (5,675,628 ) (9,262,095 ) (1,269,476 )  
Net cash provided by financing activities 881,092   702,952   96,348     3,010,269   1,978,079   271,118    
Effect of foreign exchange rate changes 7,081   4,934   675     4,704   10,492   1,439    
Net (decrease) increase in cash and cash equivalents (500,896 ) (309,143 ) (42,372 )   1,469,383   (2,506,965 ) (343,608 )  
Cash, cash equivalents, and restricted cash, beginning of period 10,730,226   8,314,541   1,139,603     8,759,947   10,512,363   1,440,839    
Cash, cash equivalents, and restricted cash, end of period 10,229,330   8,005,398   1,097,231     10,229,330   8,005,398   1,097,231    
                 



Qifu Technology, Inc.   
Unaudited Condensed Consolidated Statements of Comprehensive (Loss)/Income
 
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
except for number of shares and per share data, or otherwise noted)  
 
         
  Three months ended September 30,  
  2022 2023 2023  
  RMB RMB USD  
Net income 988,354 1,137,690 155,933  
Other comprehensive income, net of tax of nil:        
Foreign currency translation adjustment 36,950 4,051 555  
Other comprehensive income 36,950 4,051 555  
Total comprehensive income 1,025,304 1,141,741 156,488  
Comprehensive loss attributable to noncontrolling interests 4,481 4,357 597  
Comprehensive income attributable to ordinary shareholders 1,029,785 1,146,098 157,085  
         
         
  Nine months ended September 30,  
  2022 2023 2023  
  RMB RMB USD  
Net income 3,137,667 3,160,889 433,233  
Other comprehensive income, net of tax of nil:        
Foreign currency translation adjustment 80,270 20,724 2,840  
Other comprehensive income 80,270 20,724 2,840  
Total comprehensive income 3,217,937 3,181,613 436,073  
Comprehensive loss attributable to noncontrolling interests 14,505 12,707 1,742  
Comprehensive income attributable to ordinary shareholders 3,232,442 3,194,320 437,815  
 



Qifu Technology, Inc. 
 
Unaudited Reconciliations of GAAP and Non-GAAP Results
 
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("USD")
except for number of shares and per share data, or otherwise noted)
 
         
  Three months ended September 30,  
  2022   2023   2023  
  RMB RMB USD  
Reconciliation of Non-GAAP Net Income to Net Income        
Net income 988,354   1,137,690   155,933  
Add: Share-based compensation expenses 49,550   43,289   5,933  
Non-GAAP net income 1,037,904   1,180,979   161,866  
GAAP net income margin 23.8 % 26.6 %    
Non-GAAP net income margin 25.0 % 27.6 %    
         
Net income attributable to shareholders of Qifu Technology, Inc. 992,835   1,142,047   156,530  
Add: Share-based compensation expenses 49,550   43,289   5,933  
Non-GAAP net income attributable to shareholders of Qifu Technology, Inc. 1,042,385   1,185,336   162,463  
Weighted average ADS used in calculating net income per ordinary share for both GAAP and non-GAAP EPS -diluted 160,760,883   164,610,414   164,610,414  
Net income per ADS attributable to ordinary shareholders of Qifu Technology, Inc. -diluted 6.18   6.94   0.96  
Non-GAAP net income per ADS attributable to ordinary shareholders of Qifu Technology, Inc. -diluted 6.48   7.20   0.99  
         
Reconciliation of Non-GAAP Income from operations to Income from operations        
Income from operations 1,158,250   1,388,873   190,360  
Add: Share-based compensation expenses 49,550   43,289   5,933  
Non-GAAP Income from operations 1,207,800   1,432,162   196,293  
GAAP operating margin 27.9 % 32.4 %    
Non-GAAP operating margin 29.1 % 33.5 %    
         
         
  Nine months ended September 30,  
  2022   2023   2023  
  RMB RMB USD  
Reconciliation of Non-GAAP Net Income to Net Income        
Net income 3,137,667   3,160,889   433,233  
Add: Share-based compensation expenses 148,383   143,032   19,604  
Non-GAAP net income 3,286,050   3,303,921   452,837  
GAAP net income margin 24.8 % 26.8 %    
Non-GAAP net income margin 26.0 % 28.0 %    
         
Net income attributable to shareholders of Qifu Technology, Inc. 3,152,172   3,173,596   434,975  
Add: Share-based compensation expenses 148,383   143,032   19,604  
Non-GAAP net income attributable to shareholders of Qifu Technology, Inc. 3,300,555   3,316,628   454,579  
Weighted average ADS used in calculating net income per ordinary share for both GAAP and non-GAAP EPS -diluted 160,612,402   165,195,944   165,195,944  
Net income per ADS attributable to ordinary shareholders of Qifu Technology, Inc. -diluted 19.62   19.22   2.64  
Non-GAAP net income per ADS attributable to ordinary shareholders of Qifu Technology, Inc. -diluted 20.55   20.08   2.75  
         
Reconciliation of Non-GAAP Income from operations to Income from operations        
Income from operations 3,528,303   3,577,403   490,321  
Add: Share-based compensation expenses 148,383   143,032   19,604  
Non-GAAP Income from operations 3,676,686   3,720,435   509,925  
GAAP operating margin 27.9 % 30.3 %    
Non-GAAP operating margin 29.1 % 31.5 %    

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