Yiren Digital Ltd. (NYSE: YRD) reported Q1 EPS of $0.30. Revenue for the quarter came in at $167.9 million versus the consensus estimate of $87.95 million.

First Quarter 2021 Financial Results

• Total net revenue in the first quarter of 2021 was RMB1,100.0 million (US$167.9 million), compared to RMB1,023.7 million in the same period last year. Revenue from wealth management business reached RMB263.7 million (US$40.3 million), representing a decrease of 36.6% from RMB415.9 million in the first quarter of 2020, primarily driven by the spin-off of our legacy business. Revenue from credit business reached RMB836.2 million (US$127.6 million), representing an increase of 37.6% from RMB607.8 million in the first quarter of 2020, primarily driven by an increase in loan volume.
• Sales and marketing expenses in the first quarter of 2021 were RMB405.2 million (US$61.8 million), compared to RMB616.4 million in the same period last year. The decrease was primarily due to internal restructuring to optimize operating efficiencies.
• Origination, servicing and other operating costs in the first quarter of 2021 were RMB174.5 million (US$26.6 million), compared to RMB102.9 million in the same period last year. The increase was primarily due to increased sales commission expenses driven by expanded insurance volume.
• General and administrative expenses in the first quarter of 2021 were RMB119.9 million (US$18.3 million), compared to RMB149.0 million in the same period last year.
• Allowance for contract assets, receivables and others in the first quarter of 2021 was RMB141.2 million (US$21.6 million), compared to RMB143.4 million in the same period last year.
• Income tax expense in the first quarter of 2021 was RMB44.4 million (US$6.8 million).
• Net income in the first quarter of 2021 was RMB181.2 million (US$27.7 million), as compared to RMB19.2 million in the same period last year.
• Adjusted EBITDA[3] (non-GAAP) in the first quarter of 2021 was RMB251.5 million (US$38.4 million), compared to RMB29.8 million in the same period last year.
• Basic income per ADS in the first quarter of 2021 was RMB2.2 (US$0.3), compared to a basic income per ADS of RMB0.2 in the same period last year.
• Diluted income per ADS in the first quarter of 2021 was RMB2.1 (US$0.3), compared to a diluted income per ADS of RMB0.2 in the same period last year.
• Net cash used in operating activities in the first quarter of 2021 was RMB142.0 million (US$21.7 million), compared to net cash generated from operating activities of RMB562.7 million in the same period last year.
• Net cash used in investing activities in the first quarter of 2021 was RMB286.1 million (US$43.7 million), compared to RMB529.4 million in the same period last year.

"We have completed our transition to a leading user-centric digital personal financial management platform and we are pleased to start the year of 2021 with a strong quarter, resuming high quality growth and returning to our normal profitability margin level," said Mr. Ning Tang, Chairman and Chief Executive Officer of Yiren Digital. "As we continue to focus on our strategic direction and drive growth, we are aiming to fully address our customers' financial needs in every stage of their lives serving them through both online and offline channels, with products and services ranging from credit to investment and insurance, to help them better spend, better invest and be better protected. This is how we are differentiated and we believe we are on the right track to continue to expand our business map and become the leading digital personal financial management platform in China."

Our wealth management business continues to see stable growth. Client assets for investment products reached RMB10.7 billion as of March 31, 2021, representing an increase of 25% quarter over quarter. Total number of active investors stood at 307,107 as of March 31, 2021, representing an increase of 32% from last quarter."

"We continue to see solid growth for our credit business in the first quarter of 2021, which has helped us to kick off the year strong. At the end of the first quarter, Yiren Credit's registered users reached 95.8 million, representing an 8% year-on-year increase. Total number of borrowers served in the first quarter reached close to 346 thousands, representing an 83% quarter-over-quarter increase. In the first quarter, Yiren Credit's platform facilitated RMB4.9 billion in loans, representing a 17% quarter-over-quarter increase."

"In the first quarter, our total revenue increased by 7% year-on-year to RMB1.1 billion, of which 24% came from our wealth management business." said Ms. Na Mei, Chief Financial Officer of Yiren Digital. "On the balance sheet side, our cash position remains strong with RMB2.6 billion of cash and short-term investments as of March 31, 2021. Our strong balance sheet positions us well in the current operating environment and allows us to continue to explore new initiatives and tap into new opportunities."

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