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SEC filingRevenue declined 7.4% to $13.2B amid reduced transaction volumes, yet net income surged 52.4% to $1.7B through disciplined risk management and operational efficiencies, powering $3.6B operating cash flow.
LexinFintech delivered mixed financial results for FY2025, with revenue falling 7.4% to $13.2 billion from $14.2 billion in FY2024. This decline was primarily driven by the decrease in transaction volume of online direct sales, which are recorded on a gross basis, partially offset by increases in transaction volume with third-party sellers. Investors should note this reflects a strategic shift in business mix, with e-commerce dynamics influencing top-line pressure while maintaining platform scale.
Gross profit contracted 11.1% to $4.5 billion from $5.0 billion, yielding a gross margin of 34.0%. The margin compression stems from the same revenue composition changes, as lower-margin third-party transactions gained share relative to direct sales. Management's focus on risk management expenses, which increased, underscores tighter controls amid evolving credit and sales environments, balancing growth with prudence.
Despite top-line challenges, net income more than doubled 52.4% to $1.7 billion from $1.1 billion, with diluted EPS rising 45.7% to $4.72 from $3.24. This profitability rebound highlights effective cost discipline and risk mitigation, as evidenced by commentary on risk management expense increases that likely curbed potential losses. Personnel-related costs also rose, supporting operational scaling without eroding margins excessively.
Cash generation proved robust, with net cash provided by operating activities tripling to $3.6 billion from $1.1 billion. After $353 million in capital expenditures (up from $247 million), free cash flow reached $3.3 billion. These investments align with management's stated intent to incur capex for expected business growth, positioning LexinFintech to capture user acquisition opportunities across online and offline channels while managing customer cohorts.
Overall, FY2025 demonstrates resilience through risk-focused execution. The revenue dip signals near-term headwinds from direct sales softening, but surging profitability and cash flows affirm a sustainable model. Investors can expect continued emphasis on transaction volume diversification and operational metrics monitoring, as outlined in management discussion, to drive long-term value.