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360 Finance Announces First Quarter 2019 Unaudited Financial Results
SHANGHAI, May 20, 2019 (GLOBE NEWSWIRE) -- 360 Finance, Inc. (QFIN) (“360 Finance” or the “Company”), a leading digital consumer finance platform, today announced its unaudited financial results for the first quarter ended March 31, 2019. First Quarter Operational Highlights
1 "Loan origination volume" refers to the total principal amount of loans originated through the Company’s platform during the given period. First Quarter 2019 Financial Highlights
7 Non-GAAP income from operations and Non-GAAP net income are non-GAAP financial measures. For more information on this non-GAAP financial measure, 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. Jun Xu, Chief Executive Officer and Director of 360 Finance, commented, “We are delighted to deliver solid performance for the first quarter of 2019 and maintain strong growth in our business. During the quarter, we attracted a record 3.5 million new users with approved credit lines, which helped to advance our vision of promoting financial inclusiveness for households with borrowing needs across China. Furthermore, we significantly expanded our cooperation with a variety of financial institutions, and we successfully received approval to list a total of RMB10 billion of asset backed securities (“ABS”) on the Shanghai Stock Exchange and Shenzhen Stock Exchange, which should help reduce our funding cost over time.” Mr. Jiang Wu, Chief Financial Officer of 360 Finance, stated, “Despite the long Chinese New Year holiday, we had a strong start to the year, achieving solid financial and operational results with impressive year-over-year and quarter-over-quarter growth. Given the attractive return-on-investment profiles of our borrowers, we decided to further invest in customer acquisition by increasing sales and marketing expenses in order to bolster our position in the market and ensure continued growth over the long-term. Meanwhile, we were still able to maintain healthy operating efficiency with non-GAAP operating margin of 46.2%.” Mr. Yan Zheng, Vice President of 360 Finance, added, “As we continued to substantially expand our loan book, we are happy to see that the annualized delinquency rates for loans originated on our platform continue to be within our expectations. We believe this speaks to the strength of our risk management capabilities, and the sustainability of our business. Leveraging the continued improvements to our risk management models, we proactively extended services to users with different risk-adjusted returns, while at the same time keeping our overall risk levels under control.” First Quarter 2019 Financial Results Total net revenues increased 235% to RMB2,009.0 million (US$299.3 million) from RMB599.4 million in the same period of 2018, primarily due to an increase in loan facilitation service fees, post origination service fees and other service fees associated with an increase in loan origination volume. Revenue from loan facilitation services increased 248% to RMB1,354.1 million (US$201.8 million) from RMB388.6 million in the same period of 2018, primarily due to an increase in loan origination volume on the Company’s platform. Revenue from post-origination services increased 459% to RMB420.8 million (US$62.7 million) from RMB75.3 million in the same period of 2018, primarily due to an increase in loan origination volume and the cumulative effect of loans originated during prior periods on the Company’s platform. Financing income*8 increased 8% to RMB80.2 million (US$11.9 million) from RMB74.5 million in the same period of 2018, primarily due to an increase in loan volume originated through the consolidated trusts. Financing income was recognized over the lifetime of the loans; therefore its growth rate lagged the growth rate of on-balance sheet loans. Other service fee revenues increased 152% to RMB154.0 million (US$22.9 million) from RMB61.0 million in the same period of 2018, primarily due to an increase in referral service fees. Total operating costs and expenses increased 198% to RMB1,149.6 million (US$171.3 million) from RMB386.0 million in the same period of 2018, primarily due to an increase in expenses associated with loan origination and online customer acquisition. Origination and servicing expenses increased 129% to RMB228.1 million (US$34.0 million) from RMB99.7 million in the same period of 2018, primarily due to an increase in loan origination volume and associated expenses for credit checks, collection and payments. Sales and marketing expenses increased 202% to RMB691.3 million (US$103.0 million) from RMB229.3 million in the same period of 2018, primarily due to an increase in advertising expenses to promote the Company’s brand and attract users to the platform. General and administrative expenses increased 278% to RMB101.5 million (US$15.1 million) from RMB26.8 million in the same period of 2018, primarily due to an increase in payroll and related expenses for employees engaged in general corporate functions and professional services. General and administrative expenses for the period included share-based compensation expenses of RMB53.0 million (US$7.9 million). Provision for loans receivable increased 37% to RMB17.5 million (US$2.6 million) from RMB12.8 million in the same period of 2018, primarily due to an increase in loan volume originated through the consolidated trusts. Provision for financial assets receivable increased 252% to RMB25.1 million (US$3.7 million) from RMB7.1 million in the same period of 2018, primarily due to an increase in loan origination volume. Provision for accounts receivable and contract assets increased 740% to RMB86.0 million (US$12.8 million) from RMB10.2 million in the same period of 2018, primarily due to an increase in loan origination volume. Income from operations increased 303% to RMB859.4 million (US$128.1 million) from RMB213.4 million in the same period of 2018. Non-GAAP income from operations increased 335% to RMB 928.2 million (US$138.3 million) from RMB213.4 million in the same period of 2018. Operating margin was 42.8%. Non-GAAP operating margin was 46.2%, compared with non-GAAP operating margin of 35.6% in the same period of 2018. Income before income tax expense was RMB917.1 million (US$136.7 million), compared with RMB216.0 million in the same period of 2018. Income tax expense was RMB197.2 million (US$29.4 million), compared with RMB52.5 million in the same period of 2018. Net income increased 340% to RMB719.9 million (US$107.3 million) from RMB163.6 million in the same period of 2018. Non-GAAP net income increased 382% to RMB788.8 million (US$117.5 million) from RMB163.6 million in the same period of 2018. Net income margin was 35.8%. Non-GAAP net income margin was 39.3%, compared with non-GAAP net income margin of 27.3% in the same period of 2018. 8 "Financing income" is generated from loans originated through the consolidated trusts and Fuzhou Microcredit, which charge fees and interests from borrowers. M6+ Delinquency Rate by Vintage The following chart displays the historical cumulative M6+ delinquency rates by loan origination vintage for all loans originated through the company’s platform: http://ml.globenewswire.com/Resource/Download/c9952338-579a-4f25-b6bd-0fe60df203f0 Business Outlook 360 Finance currently expects total net revenue for fiscal year 2019 to be in the range of RMB8,000 million to RMB8,500 million. This forecast reflects the Company’s current and preliminary views, which are subject to change. Conference Call 360 Finance's management team will host an earnings conference call at 8:00 AM U.S. Eastern Time on Tuesday, May 21, 2019 (8:00 PM Beijing Time on May 21, 2019). Dial-in details for the earnings conference call are as follows:
Please dial in 15 minutes before the call is scheduled to begin and provide the passcode to join the call. A replay of the conference call may be accessed by phone one hour after the end of the conference call until 7:59 AM ET on May 28, 2019 at the following numbers:
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.360jinrong.net/investor-relations. About 360 Finance 360 Finance, Inc. (NASDAQ: QFIN) (“360 Finance” or the “Company”) is a leading digital consumer finance platform and the finance partner of the 360 Group. The Company provides tailored online consumer finance products to prime, underserved borrowers funded primarily by its funding partners. The Company’s proprietary technology platform enables a unique user experience supported by resolute risk management. When coupled with its partnership with 360 Group, the Company’s technology translates to a meaningful borrower acquisition, borrower retention and funding advantage, supporting the rapid growth and scaling of its business. For more information, please visit: http://ir.360jinrong.net/investor-relations 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 and non-GAAP net income 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, and non-GAAP net income represents net income 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 RMB6.7112 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 March 29, 2019. 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. 360 Finance may also make written or oral forward-looking statements in its reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20-F and 6-K, 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 for 2019, 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. Further information regarding such risks and uncertainties is included in 360 Finance's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and 360 Finance does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For more information, please contact: 360 Finance Christensen In China In US
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