On August 25, Qfin Holdings (NASDAQ:QFIN) reported second-quarter results that tell two very different stories at once. Total loan volume fell 25.1% year over year to RMB63,377 million, and non-GAAP net income dropped to RMB454.9 million from RMB946 million just one quarter earlier. Non-GAAP earnings per diluted ADS sank to RMB3.72 from RMB7.70. But buried in the same release, revenue from the company's technology solutions business jumped more than sixfold, and management laid out plans to turn Qfin into what it calls an AI-native lender. Investors have to weigh both halves of that picture.
The clearest growth story sits inside Qfin's tech solutions arm. Loan volume tied to that unit hit RMB10.5 billion for the quarter, up 515% from a year earlier, while the outstanding balance climbed to roughly RMB16.1 billion, up 313%. Through its FocusPRO platform, Qfin now helps banks serve borrowers priced between 3% and 12%, a segment its own consumer lending rarely touches. During the quarter, the company signed two new AI agent projects with banking partners, one built to support loan officers from lead identification through conversion, the other aimed at SME credit review and approval. CEO Wu Haisheng framed the effort as an organizational shift, saying it is "about turning individual and team experience into shared reusable organizational capabilities."
Risk metrics also moved in the right direction during the quarter itself. The 30-day collection rate rose to 88.1%, up 2.3 percentage points sequentially, while the C-M2 delinquency ratio fell 17% sequentially to 0.66%, nearing year-ago levels. The 90-day delinquency rate dropped to 2.83% from 3.5%. On the funding side, ABS issuance jumped 90% sequentially to RMB5.5 billion while issuance costs fell roughly 20 basis points, and overall funding costs eased about 10 basis points as the company leaned on a track record of stable ******* et performance. Qfin also paid a semiannual dividend of $0.46 per ADS, a payout ratio near 30%, and had repurchased $7 million of stock before pausing the buyback program.
Every one of those quarterly improvements sits next to a much rougher backdrop. Sales and marketing spending fell 13% sequentially as Qfin pulled back on growth, and new credit line users fell to 830,000, down from 1.19 million a quarter earlier. New loan provisions hit RMB1.72 billion, a booking ratio of 5.36%, the highest on record. A one-off RMB500 million tax expense tied to a change in tax treatment pushed the effective tax rate to 60.3%, though management expects it to settle near 20% going forward.
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The clearest growth story sits inside Qfin's tech solutions arm. Loan volume tied to that unit hit RMB10.5 billion for the quarter, up 515% from a year earlier, while the outstanding balance climbed to roughly RMB16.1 billion, up 313%. Through its FocusPRO platform, Qfin now helps banks serve borrowers priced between 3% and 12%, a segment its own consumer lending rarely touches. During the quarter, the company signed two new AI agent projects with banking partners, one built to support loan officers from lead identification through conversion, the other aimed at SME credit review and approval. CEO Wu Haisheng framed the effort as an organizational shift, saying it is "about turning individual and team experience into shared reusable organizational capabilities."
Risk metrics also moved in the right direction during the quarter itself. The 30-day collection rate rose to 88.1%, up 2.3 percentage points sequentially, while the C-M2 delinquency ratio fell 17% sequentially to 0.66%, nearing year-ago levels. The 90-day delinquency rate dropped to 2.83% from 3.5%. On the funding side, ABS issuance jumped 90% sequentially to RMB5.5 billion while issuance costs fell roughly 20 basis points, and overall funding costs eased about 10 basis points as the company leaned on a track record of stable ******* et performance. Qfin also paid a semiannual dividend of $0.46 per ADS, a payout ratio near 30%, and had repurchased $7 million of stock before pausing the buyback program.
Every one of those quarterly improvements sits next to a much rougher backdrop. Sales and marketing spending fell 13% sequentially as Qfin pulled back on growth, and new credit line users fell to 830,000, down from 1.19 million a quarter earlier. New loan provisions hit RMB1.72 billion, a booking ratio of 5.36%, the highest on record. A one-off RMB500 million tax expense tied to a change in tax treatment pushed the effective tax rate to 60.3%, though management expects it to settle near 20% going forward.
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