Breaking Down 360 DigiTech, Inc. (QFIN) Financial Health: Key Insights for Investors

You're looking at 360 DigiTech, Inc. (QFIN) and trying to map out a clear investment thesis, but the latest numbers are giving you whiplash. Honestly, that's fair. The company's unaudited third-quarter 2025 results show a real mix of strength and near-term risk, which is exactly what we need to unpack. They pulled in a solid total net revenue of US$731.2 million for Q3 2025, marking a 17.4% year-over-year increase, so the top line is definitely growing. But look closer: net income for the quarter was US$201.2 million, and the management's full-year 2025 net income guidance is cautious, projecting a range between RMB5.88 billion and RMB6.08 billion-a potential change from a -2% decrease to only a +1% increase year-over-year. That flat-to-slightly-down earnings picture, coupled with a forecast for a 39% to 49% decline in Q4 net income, tells you they are prioritizing risk management in a tough macroeconomic environment. We need to see if their shift to capital-light models, which now account for 48% of the loan balance, can keep the delinquency rate stable at 2.09% while they continue to grow their user base to 283.7 million consumers. This company is walking a tightrope between growth and caution. Let's dive into the details to see what that means for your portfolio.

Revenue Analysis

You need to know where the money is coming from, and for 360 DigiTech, Inc. (QFIN), the story is one of continued growth and a strategic pivot. The direct takeaway is that the company delivered a strong third quarter in 2025, beating analyst revenue expectations, and its full-year trajectory shows solid double-digit growth. This is defintely a resilient business model.

Looking at the latest data, 360 DigiTech, Inc. reported Q3 2025 revenue of $731.04 million, surpassing the consensus estimate of $693.21 million. Here's the quick math on the bigger picture: the Trailing Twelve Months (TTM) revenue for 2025 stands at approximately $2.19 Billion. Compared to the TTM revenue of $1.95 Billion in 2024, that translates to a year-over-year revenue growth rate of about 12.31%. That's a healthy clip for a mature fintech platform navigating a complex regulatory environment.

Breaking Down the Revenue Engine

The company's revenue streams primarily fall into two buckets, reflecting its core business of connecting borrowers with financial institutions in China:

• Credit-Driven Services: Revenue generated when 360 DigiTech, Inc. takes on a portion of the credit risk.
• Platform Services: Revenue from the 'capital-light model,' where the company acts purely as a technology facilitator, connecting borrowers and institutions without retaining credit risk.

The significant change here isn't a new product, but a fundamental shift in how the company earns its money. Management has been consistently pushing the capital-light model, which falls under Platform Services. This transition is crucial because it lowers the company's risk exposure and capital requirements, making the earnings stream more sustainable and less volatile. You can see this focus reflected in their core values: Mission Statement, Vision, & Core Values of 360 DigiTech, Inc. (QFIN).

Key Financial Snapshot (2025)

To keep things precise, here are the latest reported revenue figures you should focus on:

What this estimate hides is the internal segment mix for Q3 2025, but the trend is clear: the company is succeeding in its goal to shift toward Platform Services. This means a higher percentage of future revenue will likely come from technology fees rather than interest income and credit-risk-bearing activities. That's a good move for long-term stability.

Profitability Metrics

You need to know if 360 DigiTech, Inc. (QFIN) is truly an efficient profit machine or just a high-revenue growth story. The data for the first half of 2025, particularly the second quarter, shows the company is highly profitable and operates with margins that significantly outperform the general FinTech sector, largely due to its capital-light platform model.

The core takeaway is that 360 DigiTech, Inc. is running a high-margin business, with a Q2 2025 Gross Margin of over 80% and a Net Profit Margin exceeding 33%. This operational efficiency is a key differentiator, but you must watch for regulatory shifts that could pressure the take rate (the percentage of loan value the platform captures).

Gross, Operating, and Net Profit Margins

For the second quarter of 2025 (Q2 2025), 360 DigiTech, Inc. reported total net revenue of $728.1 million. Their business structure, which relies heavily on technology and platform services to facilitate loans, keeps the cost of revenue low, resulting in exceptionally high gross profitability.

Here's the quick math on Q2 2025, which gives us the clearest picture of their current financial health:

• Gross Profit Margin: The margin stood at approximately 82.30%. This means for every dollar of revenue, nearly 82 cents remain after the direct costs of providing the service.
• Operating Profit Margin: Income from operations was $298.2 million, resulting in a robust Operating Margin of 41.0%. This margin shows strong control over sales, general, and administrative expenses.
• Net Profit Margin: With Net Income at $241.6 million, the Net Profit Margin was approximately 33.18%. That's a powerful conversion of revenue to bottom-line profit.

This is a capital-light model working exactly as designed. One clean one-liner: High margins prove the platform model works better than traditional balance-sheet lending.

Profitability Trends and Operational Efficiency

The company continues to demonstrate strong operational efficiency. The Q2 2025 Operating Margin of 41.0% is a testament to effective cost management (e.g., marketing, technology). The platform's use of artificial intelligence (AI) in its credit decision engine has demonstrably improved risk management, which indirectly boosts profitability by lowering expected credit losses and improving the overall quality of facilitated loans.

Looking at the near-term trend, the company's Q3 2025 revenue came in at $731.042 million, slightly higher than Q2, suggesting continued revenue stability. However, management's Q3 2025 net income guidance was between RMB 1.52 billion and RMB 1.72 billion, which reflects a potential year-on-year decline of 2% to 13%, signaling a cautious approach due to regulatory uncertainty. This is a critical point: The market is pricing in regulatory risk, not just operational performance.

Comparison with Industry Averages

360 DigiTech, Inc.'s profitability ratios are significantly higher than general FinTech benchmarks and many of its direct competitors, placing it in the top tier for efficiency.

Here is how 360 DigiTech, Inc. stacks up against peers and broader industry targets as of late 2025:

The Net Profit Margin of 33.18% is almost double that of a key peer, FinVolution Group (18.37% Net Margin in Q3 2025). This dramatic difference underscores 360 DigiTech, Inc.'s superior operating leverage (the ability to convert revenue growth into profit growth) and its success in managing funding costs and credit risk. To be fair, a portion of this difference is likely due to the exact mix of 'platform services' versus 'credit-driven services' (on-balance sheet lending) in their respective business models. You can dig deeper into the company's business mix by Exploring 360 DigiTech, Inc. (QFIN) Investor Profile: Who's Buying and Why?

The high gross margin is defintely a signal that the core product is priced effectively and the technology stack is highly scalable, but the real test is maintaining the 40%+ Operating Margin as regulatory costs absorb a significant portion of operating expenses in this sector.

Debt vs. Equity Structure

You're looking at 360 DigiTech, Inc. (QFIN)'s balance sheet, and the first thing that jumps out is the company's remarkably low leverage. The direct takeaway is that 360 DigiTech is overwhelmingly financing its operations through equity and retained earnings, not debt, which is a strong sign of financial stability in the volatile Chinese FinTech sector.

As of the most recent data, 360 DigiTech, Inc. (QFIN) maintains a very conservative Debt-to-Equity (D/E) ratio of just 0.20. This means for every dollar of shareholder equity, the company only holds 20 cents in total debt. This is a defintely low ratio, especially when compared to the average for many financial services and capital markets firms in the US, which often sit closer to 0.50 to 0.55. A low D/E ratio signals lower financial risk, but it also means the company isn't aggressively using financial leverage to amplify returns.

Overview of Debt Levels (Q2 2025)

The total debt is a modest figure, particularly when viewed against the company's overall market capitalization of approximately $3.18 billion as of November 2025. The debt is split between short-term obligations and longer-term financing, which is typical for a platform that facilitates a mix of consumer and small business loans.

Here's the quick math on the Q2 2025 debt breakdown:

The majority of the debt is long-term, which gives the company more breathing room in its operational cash flow. Short-term debt at $204.25 million is a manageable figure given their current ratio of 3.48, which is quite high and shows strong liquidity.

Financing Strategy: Capital-Light Transition

The low leverage isn't an accident; it's a direct outcome of a strategic shift. 360 DigiTech, Inc. (QFIN) has been actively moving toward a 'capital-light' model, which means they use their technology platform to connect borrowers with third-party financial institutions, rather than funding the loans primarily from their own balance sheet.

This transition is how they balance debt and equity funding:

• Equity Dominance: The low 0.20 D/E ratio reflects a preference for equity and retained earnings to fund operations and growth, minimizing interest expense and financial risk.
• Reduced Leverage: The company's overall leverage ratio dropped substantially from 9.7x at the end of 2018 to 3.8x by the end of Q3 2022, demonstrating a clear commitment to de-risking the balance sheet.
• Debt for Platform Growth: The debt they do carry is primarily used to support the technology platform and the 'capital-heavy' portion of their business, which still accounts for some loan facilitation.

This strategic pivot is crucial for understanding the company's future, as it aligns with regulatory trends in the region. If you want to dive deeper into the strategic foundation, check out the Mission Statement, Vision, & Core Values of 360 DigiTech, Inc. (QFIN).

Regarding recent activity, specific 2025 debt issuances or credit ratings haven't made major headlines, but the broader context is that Asian corporate debt markets are heavily bank-based, and a significant portion of bonds issued in the region often lack a rating from the three main international agencies. The company's low leverage position suggests they have not needed to pursue major debt refinancing or new bond issuances in 2025, preferring to let retained earnings fund their growth.

Liquidity and Solvency

When you look at a balance sheet, liquidity-the ability to meet short-term obligations-is your first line of defense. For a fintech company like 360 DigiTech, Inc. (QFIN), which operates on an asset-light model, the traditional metrics tell a compelling story of financial strength.

The company's liquidity position for the 2025 fiscal year is defintely robust. Both the Current Ratio and the Quick Ratio (Acid-Test Ratio) stand at a strong 3.48. This ratio is essentially a measure of current assets (cash, receivables, etc.) relative to current liabilities. A value of 3.48 means 360 DigiTech, Inc. (QFIN) has $3.48 in readily available assets for every dollar of short-term debt, which is excellent. This isn't a capital-intensive business, so this level of coverage is exactly what you want to see.

Here's the quick math on their short-term health:

• Current Ratio: 3.48 (Indicates strong ability to cover near-term debts).
• Quick Ratio: 3.48 (Shows strong cash and near-cash asset coverage, typical for an asset-light model).
• Solvency Score: 72/100 (A high score confirming overall financial stability).

Working Capital and Cash Flow Trends

The health of a lending-focused platform is best seen in its working capital and cash flow generation. For 360 DigiTech, Inc. (QFIN), the working capital trend is stable and manageable. The projected Net Working Capital (NWC) for the end of fiscal year 2025 sits at 3,123 million CNY, with a modest projected change in NWC of 114 million CNY for the year. This low change in net working capital is a sign the business is maturing and efficiently managing its short-term assets and liabilities, avoiding large, unexpected cash demands.

The Cash Flow Statement provides the clearest picture of where the money is actually coming from and going. While the full 2025 breakdown is based on analyst projections and half-year data, the trends are clear: the core business is a cash machine. The company's Cash Flow per share is a healthy $5.38.

Here is a snapshot of the key cash flow components, using the 6-month 2025 projections in millions of Chinese Yuan (CNY) to map the near-term activity:

I calculate the Operating Cash Flow (OCF) by adding the low Capital Expenditure (CAPEX) of 39 million CNY back to the Free Cash Flow (FCF) of 3,016 million CNY for the first half of 2025. This figure-approximately 3,055 million CNY-shows the business is generating significant cash from its operations, which is the ultimate sign of a healthy, sustainable business model. If you want to dive deeper into the strategic drivers behind this model, you should review the Mission Statement, Vision, & Core Values of 360 DigiTech, Inc. (QFIN).

Liquidity Strengths and Actionable Takeaways

The most significant liquidity strength is the massive gap between current assets and current liabilities, reflected in the 3.48 Current Ratio. This gives management tremendous flexibility. On the financing side, the consistent quarterly dividend, which has a projected sustainable payout ratio of 23.47% for the coming year, is a clear sign that the company is comfortable with its ongoing cash outflows and has no immediate liquidity concerns.

This financial health translates to clear actions for you as an investor:

• Focus on Margin: The high liquidity suggests capital is not tied up; focus your analysis on Net Income margins and Return on Equity (ROE) to ensure this cash is being used efficiently for growth or shareholder returns.
• Monitor Regulatory Risk: Given the China-based operations, the primary risk isn't liquidity, but sudden regulatory shifts that could impact loan facilitation volume or cash-rich operations.
• Confirm CAPEX: The low CAPEX of 39 million CNY is a double-edged sword: great for cash flow, but you need to ensure they are still investing enough in their AI and machine learning technology stack to maintain their competitive edge.

Valuation Analysis

You're looking at 360 DigiTech, Inc. (QFIN) and wondering if the market has it right, especially with the stock trading near its 52-week low. The short answer is that based on core valuation multiples and analyst consensus in November 2025, the company looks significantly undervalued. This isn't a guarantee, but the numbers suggest a deep discount.

The company's valuation ratios are strikingly low, particularly when compared to the broader financial technology sector. As of November 2025, 360 DigiTech, Inc.'s trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio sits at just 3.24. This is a strong indicator of a value stock, suggesting the market is pricing the company for very little future growth or is overly concerned about near-term risks. Here's the quick math on the key multiples:

• Price-to-Earnings (P/E): 3.24 (TTM)
• Price-to-Book (P/B): 0.86 (Current)
• Enterprise Value-to-EBITDA (EV/EBITDA): 1.72 (Current)

A P/B ratio below 1.0, like the current 0.86, means the stock is trading for less than the book value of its assets, which is a classic signal of being potentially undervalued. Plus, an EV/EBITDA of 1.72 is incredibly low for any profitable tech-enabled financial company, indicating a very cheap valuation relative to its core operating cash flow (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is defintely a value play, but you need to understand the risks baked into that low price.

The stock price trend over the last 12 months tells a clear story of market pessimism. The 52-week price range for 360 DigiTech, Inc. was a high of $48.94 and a low of $20.45. With the stock trading around $22.42 in mid-November 2025, it's closer to the low end of that range, representing a significant decline from its yearly peak. The market is punishing the stock, likely due to macroeconomic headwinds in China and regulatory uncertainty, which is why the valuation is so compressed.

Despite the price drop, the company offers a compelling dividend profile. The trailing twelve-month dividend yield is a robust 6.55%, based on an annual payout of approximately $1.46 per share. The payout ratio is relatively conservative at 17.41% (TTM), meaning the company is returning a solid portion of its earnings to shareholders while retaining the majority for reinvestment or maintaining a strong balance sheet. A high yield with a low payout ratio suggests the dividend is sustainable.

What this estimate hides is the geopolitical and regulatory risk that keeps the stock price down. Still, the analyst community sees a clear path to recovery. The consensus rating from 19 analysts is a decisive 'BUY,' with an average 12-month price target set at $49.22. This target implies an upside of well over 100% from the current price, suggesting Wall Street believes the stock is deeply undervalued and the risks are already priced in. You can dive deeper into the operational side in Breaking Down 360 DigiTech, Inc. (QFIN) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at 360 DigiTech, Inc. (QFIN) and seeing strong growth in their capital-light model, but honestly, the near-term landscape is tricky. The biggest risks for the company fall into three buckets: the relentless Chinese regulatory environment, persistent macro-economic uncertainty, and a very serious, albeit unproven, allegation of financial misstatement.

The core challenge is that 360 DigiTech, Inc. (QFIN) operates in China's credit-tech space, which is subject to constant, sometimes sudden, regulatory shifts. The CEO noted in the Q3 2025 report that they are defintely adjusting operations to cope with the 'latest regulatory changes.' This means they have to remain prudent in business planning while the industry settles under the new structure, which can slow growth.

External and Regulatory Pressures

The external risks are primarily market conditions and regulatory policy. We saw further fluctuation in overall risk levels in Q3 2025 due to liquidity issues in high-risk segments of the consumer finance industry. Plus, the general economic conditions in China and globally always impact borrower quality, which is a key variable for a lending platform.

To be fair, the company is actively managing this. They're using their technology to mitigate risk, like their upgraded risk decisioning AI agent that now leverages Large Language Models (LLM) technology. This is a smart move, but still, a new rule from a Chinese regulator can change the business model overnight.

• Regulatory shifts can halt product lines.
• Macroeconomic weakness increases default risk.
• Industry competition pressures lending margins.

Operational and Financial Risks

The company's risk management is a double-edged sword right now. On one hand, they tightened risk standards mid-Q3 2025, which helped. For example, the leading risk indicator, First Payment Default (FPD) over seven days, for new loans facilitated in June 2025 decreased by about 5% compared to May, which is a clear operational win.

But here's the quick math on funding: In the first three quarters of 2025, 360 DigiTech, Inc. (QFIN) issued nearly RMB 18.9 billion in Asset-Backed Securities (ABS), a significant over 40% increase year-over-year. While this keeps their blended funding cost low, relying heavily on the ABS market for funding can expose them to capital market volatility and liquidity risk, especially in the second half of the year when liquidity is generally tighter.

What this estimate hides is the strategic risk in their business mix. They are shifting to a capital-light model, which accounted for approximately 48% of the quarter-end loan balance. This reduces credit risk exposure on their balance sheet but makes them more reliant on their financial institution partners, giving them less control over the entire loan lifecycle.

Strategic and Reputational Risks

The most critical, high-impact risk you need to be aware of is the allegations made in a September 2024 short-seller report. The report alleges that 360 DigiTech, Inc. (QFIN) has 'outright fake financials' and has astronomically overstated its profit compared to its net income disclosed in SEC filings. It also claims delinquency rates are skyrocketing while loan provisions are being reduced, and that the company is secretly overleveraged due to guarantees on off-balance sheet loans.

While the company continues to report strong unaudited financial results, including an increase in Q2 2025 non-GAAP net income by 30.8% year-over-year to RMB 1.85 billion, these allegations introduce a massive element of reputational and regulatory risk until they are definitively resolved. This kind of uncertainty is why the stock can trade at a lower multiple than its US peers. You should definitely read Exploring 360 DigiTech, Inc. (QFIN) Investor Profile: Who's Buying and Why? to see how institutional investors are viewing this risk/reward balance.

Growth Opportunities

You're looking for a clear path through the noise on 360 DigiTech, Inc. (QFIN), and honestly, the near-term growth story is anchored in their technology moat and expansion into underserved markets. The company is defintely not resting on its laurels; it's pushing its core competencies-AI and an asset-light model-to drive future earnings.

Wall Street analysts are projecting a solid top-line for the 2025 fiscal year. The consensus revenue forecast is approximately 20.10B, which marks a notable increase from the prior period. Here's the quick math: that 20.10B figure represents a projected growth of 17.10% over the previous year's revenue of 17.17B. That's a strong growth rate in a competitive Credit-Tech environment. For next year, the forecast is even higher, at 21.36B, an additional 6.28% growth.

Their earnings per share (EPS) projections are even more compelling. The forecasted EPS for the 2025 fiscal year is approximately 53.47, a massive jump of 129.57% from the prior year's 23.29. What this estimate hides, though, is the potential volatility in the China-based fintech sector, but still, the trajectory is clear. You can see the quarterly performance in the table below, which shows the actual results for Q3 2025, released on November 18, 2025.

The revenue beat in Q3 2025 shows their platform is resilient, even if EPS came in a little light. They are growing users and successfully facilitating loans, as evidenced by the high repeat borrower contribution and stable delinquency rate reported in the quarter.

Key Growth Drivers and Strategic Levers

The future growth isn't just a simple line extension; it's a calculated strategic push. 360 DigiTech, Inc.'s core competitive advantage is its AI-empowered Credit-Tech platform-it's what allows them to manage risk better than many peers. They use big data and machine learning to automate risk management, which reduces costs and improves access to credit for their target markets. This is a critical structural advantage.

The strategic initiatives are focused on two major areas:

• Product Innovations: Offering standardized risk management as SaaS modules (Software as a Service) to institutional clients, effectively monetizing their proprietary technology beyond their own lending platform.
• Market Expansions: A deliberate push into lower-tier cities and rural areas within China, which are currently underserved markets with significant credit needs. This is a huge, untapped user base.
• Strategic Partnerships: Forming alliances with e-commerce platforms and other consumer-facing businesses to expand their customer acquisition funnel.

Their asset-light model is a key differentiator, helping them navigate a complex regulatory environment by focusing on technology and connecting borrowers with financial institutions, rather than holding all the credit risk themselves. This model is what sets them up for sustainable growth. For a deeper dive into who's betting on this strategy, you should check out Exploring 360 DigiTech, Inc. (QFIN) Investor Profile: Who's Buying and Why?

The next concrete step for you is to monitor the Q4 2025 guidance when it's released to see if management affirms the strong full-year forecasts, especially around the expansion into new geographic markets.