On August 31 Beijing time, Lexin, a leading new consumer digital technology services provider in China (NASDAQ: LX), released its unaudited financial results for the second quarter of 2026. Revenue reached RMB 3.19 billion, profit (Non-GAAP EBIT) was RMB 187 million, and transaction volume hit RMB 55.4 billion. During the quarter, the company's diversified ecosystem businesses, cultivated over many years, demonstrated operational resilience, with non-loan facilitation businesses such as installment retail and B2B digital intelligence technology now accounting for over 50% of transaction volume.

In the second quarter, the company's installment retail business transaction volume grew 6.3% quarter-over-quarter; B2B digital intelligence technology business transaction volume rose 8% quarter-over-quarter; cumulative registered users reached 253 million, up 1.4% quarter-over-quarter and 7.2% year-over-year. During the quarter, as AI applications deepened, the company's operating costs dropped 17.6% quarter-over-quarter.

Lexin CEO Shawn Wenjie Xiao stated: "The company has always prioritized compliant operations. Facing industry challenges, we have proactively tightened risk management, strengthened cost and capital controls, and accelerated AI applications across all business processes. Our ecosystem businesses, built over years, continue to make positive progress, and our operational resilience is further evident. Going forward, the company will follow regulatory guidance, steadily optimize its business layout, promote the expansion and application of our accumulated technology, business, and operational capabilities, and continue to strengthen fintech capabilities to support long-term value creation. Despite industry uncertainties ahead, we remain confident in the company's long-term development."

Where to Begin

Installment retail continues to deepen its focus on scenarios, supporting essential consumption demand. During the quarter, against the backdrop of macro policies promoting consumption taking effect and domestic consumer demand steadily recovering, Lexin's Fenqile Mall leveraged its scenario and supply chain value to tap into multi-level consumption potential, effectively meeting the public's demand for quality consumption and supporting the recovery of the physical consumer market. Relying on the company's long-accumulated user base, brand partnerships, and product supply capabilities, Lexin continued to refine its scenario and supply chain construction around well-known brand collaborations, brand flash sales, and private label development, enriching diversified consumption offerings. During the quarter, approximately 440 new top-tier brand partnerships were added, with several brands achieving sales exceeding RMB 10 million within a short period of cooperation; the brand flash sale channel, focusing on high-value-for-money branded products, added nearly 20 new well-known brand partners; and the first OEM private label product launched, achieving steady sales growth.

Coinciding with the mid-year consumption boom during the quarter, Fenqile Mall launched campaigns including the "Trendy Goods Festival," "May Day Travel Season," "520 Gift Season," and "618 Shopping Festival," boosting consumption vitality through shopping credits, new customer subsidies, and lucky draws. During the 618 period, platform transaction value grew 28.14% quarter-over-quarter, transaction volume grew 21.96%, and order numbers grew 32.8%, fully satisfying consumers' diversified and quality-oriented needs.

Why the Growth Story Matters

The B2B digital intelligence technology business grew rapidly in the second quarter, achieving economies of scale in profitability. Leading internet platforms with online, scenario-based operations have accumulated massive user bases and consumption scenarios, making them primary traffic pools for licensed financial institutions seeking quality customers. These top platforms are transitioning toward asset-light, operation-light models, and traditional licensed institutions face growing demand for quality assets and precise customer reach in their retail transformations, yet they have notable shortcomings in traffic integration and scenario adaptation. In this context, third-party institutions with leading fintech capabilities are becoming key hubs connecting the "traffic side" and "capital side."

Using "Yunxi Technology PRO" as a vehicle, the company systematically outputs its core digital intelligence capabilities, continuing to serve licensed institutions and traffic platforms in line with regulatory guidance. On one hand, leveraging Lexin's accumulated trillion-level credit experience and technology implementation practices, it helps financial institutions optimize operational systems, build more robust asset matrices, and improve long-term retail credit operational efficiency through decision models, business strategies, and various asset enhancement models deployed locally. On the other hand, it helps traffic platforms efficiently distribute and monetize, achieving a win-win-win outcome for all three parties. Under the current industry and regulatory environment, the B2B digital intelligence technology business holds long-term value, and the company will continue increasing investment to further support financial institutions' digital intelligence transformation.

Key Numbers and AI Impact

In the second quarter, the company accelerated deep AI applications across all business processes, with significant results in cost reduction and efficiency improvement throughout the AI value chain. In AI-assisted manual review, AI automatically integrates users' full qualification information and generates standardized risk assessment reports, reducing reliance on manual experience and improving risk identification efficiency and accuracy. In intelligent agent applications, strategy agents were further expanded during the quarter to assist in generating risk control strategies, identifying fraud and black-market operations, and formulating clearance strategies, automatically mining risk characteristics and generating strategy rules to improve risk identification accuracy while reducing false interception rates for normal users. To date, the company has deployed over 100 AI intelligent agent positions, comprehensively covering core business scenarios including intelligent strategy generation, compliance verification, post-loan management, and intelligent customer service, achieving multiple goals of cost reduction, quality improvement, and efficiency enhancement through technology empowerment.

Additionally, the company is exploring productizing and modularizing its mature AI capabilities, offering more standardized and replicable technical services to financial institutions through its B2B digital intelligence technology business, unlocking greater commercial value from its technological advantages and providing a stronger underlying capability foundation for the company's transformation. AI technology continues to be implemented, fully supporting the company's cost reduction goals. During the quarter, operating costs decreased 17.6% quarter-over-quarter. With continued deep AI application, the company expects further operating cost reductions in the third quarter.

Beyond the Headlines

Lexin continues to drive consumer protection throughout the entire credit lifecycle with digital intelligence technology, enhancing service and ecosystem governance. The company consistently adheres to compliance bottom lines and continuously improves its consumer rights protection system. In the second quarter, leveraging its industry-leading AI technology, the company upgraded its consumer protection mechanisms across institutional systems, technology empowerment, ecosystem governance, and intelligent services, promoting synergistic development of business and social value. During the quarter, in user service and care, the company continued improving service capabilities, with large model semantic understanding and long-text logical reasoning capabilities steadily advancing, enabling more precise identification and response to user needs and driving continuous service experience optimization. Multiple core service indicators maintained positive trends. Meanwhile, model capabilities strengthened user behavior analysis and tiered management, providing differentiated services and care for different user groups, further improving user experience and satisfaction.

Lexin extends consumer protection from internal risk control to ecosystem governance, deepening the "technology + police" collaboration model to precisely identify and actively combat various financial fraud and black-market activities. During the quarter, responding to regulatory calls, the company publicly solicited leads on financial fraud and black-market violations. To date, it has received nearly 22,000 tip-offs, with multiple leads assisting police in filing cases. Facing massive and complex lead information, the company leverages black-market identification intelligent agents, applying AI technology for information extraction, risk identification, and relationship mining, achieving intelligent upgrades from lead discovery and case assessment to risk disposal, moving black-market governance from manual experience to technology-driven identification. Over the past two-plus years, the company has deeply combated financial fraud and black-market activities through police-enterprise collaboration, coordinating with police in Shanghai, Zhejiang, Jiangsu, Jiangxi, Hubei, and other regions to solve nearly 100 such cases and dismantle 26 professional criminal gangs. Currently, the company will leverage the anti-crime campaign to deepen police-enterprise cooperation, strike hard at financial fraud and black-market operations, and jointly build a clean and orderly financial ecosystem.