Qudian Inc. Reports Fourth Quarter and Full Year 2022 Unaudited Financial Results

XIAMEN,China,Feb. 21,2023 -- Qudian Inc. ("Qudian" or "the Company" or "We") (NYSE: QD),a consumer-oriented technology company in China,today announced its unaudited financial results for the quarter and full year ended December 31,2022.

Fourth Quarter 2022 Operational Highlights:

As a result of the Company's previously announced decision to cease new credit offerings after September 6,2022,there was no outstanding loan balance[1] from the loan book business as of December 31,2022. In addition,the Company did not facilitate any credit transactions in the fourth quarter of 2022.

[1] Includes (i) off and on balance sheet loans directly or indirectly funded by our institutional funding partners or our own capital,net of cumulative write-offs and (ii) does not include auto loans from Dabai Auto business.

Fourth Quarter 2022 Financial Highlights:

Total revenues were RMB160.1 million (US$23.2 million),compared to RMB378.9 million for the same period of last year

Net income attributable to Qudian's shareholders was RMB490.1 million (US$71.1 million),compared to net loss of RMB65.1 million for the same period of last year; net income per diluted ADS was RMB2.07 (US$0.30) for the fourth quarter of 2022

Non-GAAP net income attributable to Qudian's shareholders was RMB493.3 million (US$71.5 million),compared to net loss of RMB59.3 million for the same period of last year. We exclude share-based compensation expenses and convertible bonds buyback income from our non-GAAP measures. Non-GAAP net income per diluted ADS was RMB2.08 (US$0.30) for the fourth quarter of 2022

Full Year 2022 Financial Highlights:

Total revenues were RMB577.5 million (US$83.7 million) for 2022,representing a decrease of 65.1% from 2021,primarily due to the decrease in the amount of credit transactions

Net loss attributable to Qudian's shareholders was RMB362.0 million (US$52.5 million),compared to an income of RMB589.1 million in 2021; net loss per diluted ADS was RMB1.47 (US$0.21) for 2022

Non-GAAP net loss attributable to Qudian's shareholders was RMB347.9 million (US$50.4 million),compared to an income of RMB612.4 million in 2021; non-GAAP net loss per diluted ADS was RMB1.41 (US$0.21) for 2022

"Macro headwinds and COVID disruptions created challenging business conditions in 2022. In this volatile environment,we prudently implemented our operating strategy while maintaining a healthy balance sheet by pursuing efficient cash management. We continued in the fourth quarter to execute our business transition,with the winding down of our loan book business to its final stage," said Mr. Min Luo,Founder,Chairman and Chief Executive Officer of Qudian. "As we enter 2023,we remain agile,navigating market dynamics and capitalizing on new business opportunities,including those overseas,committed,as always,to building long-term value for our shareholders."

Fourth Quarter Financial Results

Total revenues were RMB160.1 million (US$23.2 million),representing a decrease of 57.8% from RMB378.9 million for the fourth quarter of 2021.

Financing income totaled RMB29.3 million (US$4.2 million),representing a decrease of 90.1% from RMB296.4 million for the fourth quarter of 2021,as a result of the decrease in the average on-balance sheet loan balance.

Loan facilitation income and other related income decreased by 50.2% to RMB4.9 million (US$0.7 million) from RMB9.9 million for the fourth quarter of 2021,as a result of the wind down of off-balance sheet loans during this quarter.

Transaction services fee and other related incomeincreased to RMB102.6 million (US$14.9 million) from RMB41.6 million for the fourth quarter of 2021,primarily due to the change in estimate for variable consideration for the transactions facilitated in the past years.

Sales income and others increased to RMB19.3 million (US$2.8 million),which was mostly attributable to sales income generated by QD Food,compared with RMB7.2 million for the fourth quarter of 2021,which was mainly attributable to sales income generated by the Wanlimu Kids. We have wound down the QD Food business.

Total operating costs and expensesdecreased to RMB108.8 million (US$15.8 million) from RMB387.8 million for the fourth quarter of 2021.

Cost of revenues increased by 92.4% to RMB73.7 million (US$10.7 million) from RMB38.3 million for the fourth quarter of 2021,primarily due to the inventory clearance relating to QD Food.

Sales and marketing expensesdecreased by 33.4% to RMB18.5 million (US$2.7 million) from RMB27.8 million for the fourth quarter of 2021,primarily due to the winding down of the WLM Kids business.

General and administrative expensesdecreased by 38.3% to RMB67.8 million (US$9.8 million) from RMB109.8 million for the fourth quarter of 2021,primarily due to the winding down of the WLM Kids business.

Research and development expensesdecreased by 88.9% to RMB2.5 million (US$0.4 million) from RMB22.8 million for the fourth quarter of 2021,as a result of the decrease in staff head count,which led to a corresponding decrease in staff salaries and a decrease in third-party service fees.

Provision for receivables and other assetswas a reversal of RMB140.7 million (US$20.4 million) for the fourth quarter of 2022,mainly due to the decrease in past-due on-balance sheet outstanding principal receivables.

Impairment loss from long-lived assetswas RMB104.0 million (US$15.1 million) for the fourth quarter of 2022,as a result of the winding down of the WLM Kids business and QD Food business.

Income from operations was RMB66.1 million (US$9.6 million),compared to RMB47.8 million for the fourth quarter of 2021.

Net income attributable to Qudian's shareholderswas RMB490.1 million (US$71.1 million). Net income per diluted ADS was RMB2.07 (US$0.30).

Non-GAAP net income attributable to Qudian's shareholders was RMB493.3 million (US$71.5 million). Non-GAAP net income per diluted ADS was RMB2.08 (US$0.30).

Full Year 2022 Financial Results

Total revenues were RMB577.5 million (US$83.7 million),a decrease of 65.1% from RMB1,654.0 million for 2021.

Financing income totaled RMB308.7 million (US$44.8 million),a decrease of 75.4% from RMB1,255.5 million for 2021,as a result of the decrease in the average on-balance sheet loan balance to zero as of the end of 2022.

Loan facilitation income and other related incomedecreased by 56.7% to RMB18.8 million (US$2.7 million) from RMB43.5 million for 2021,as a result of the wind down of off-balance sheet transactions.

Transaction services fee and other related incomewas RMB113.8 million (US$16.5 million),compared to RMB151.7 million for 2021,primarily due to the change in estimate for variable consideration for the transactions facilitated in the past years.

Sales income and others decreased by 17.9% to RMB82.6 million (US$12.0 million) from RMB100.7 million for 2021,mainly due to the winding down of the Wanlimu e-commerce platform,partially offset by sales relating to QD Food.

Total operating costs and expenses increased by 16.1% to RMB944.2 million (US$136.9 million) from RMB813.6 million for 2021.

Cost of revenues increased by 28.2% to RMB383.1 million (US$55.5 million) from RMB298.7 million for 2021,primarily due to the increase in the cost of goods sold relating to QD Food.

Sales and marketing expensesincreased by 113.2% to RMB271.6 million (US$39.4 million) from RMB127.4 million for 2021. The increase was primarily due to marketing expenses incurred by QD Food.

General and administrative expenses decreased by 35.2% to RMB287.5 million (US$41.7 million) from RMB443.3 million for 2021,primarily due to the winding down of the WLM Kids business.

Research and development expensesdecreased by 58.7% to RMB58.3 million (US$8.4 million) from RMB141.3 million for 2021. The decrease was primarily due to the decrease in staff head count,which led to a corresponding decrease in staff salaries and a decrease in third-party service fees.

Provision for receivables and other assetswas a reversal of RMB221.1 million (US$32.1 million) for 2022,mainly due to the decrease in past-due on-balance sheet outstanding principal receivables.

Impairment loss from long-lived assetswas RMB268.9 million (US$39.0 million) for 2022,as a result of the winding down of the WLM Kids business and QD Food.

Loss from operations was RMB329.5 million (US$47.8 million) compared to an income of RMB922.7 million for 2021.

Net loss attributable to Qudian's shareholders was RMB362.0 million (US$52.5 million),compared to an income of RMB589.1 million. Net loss per diluted ADS was RMB1.47 (US$0.21) for 2022.

Non-GAAP net loss attributable to Qudian's shareholderswas RMB347.9 million (US$50.4 million),compared to an income of RMB612.4 million. Non-GAAP net loss per diluted ADS was RMB1.41 (US$0.21) for 2022.

Cash Flow

As of December 31,the Company had cash and cash equivalents of RMB3,502.0 million (US$507.7 million) and restricted cash of RMB70.7 million (US$10.3 million). Restricted cash mainly represents security deposits held in designated bank accounts for the guarantee of on-and-off balance sheet transactions. Such restricted cash is not available to fund the general liquidity needs of the Company.

For the fourth quarter of 2022,net cash provided by operating activities was RMB83.3 million (US$12.1 million),mainly due to proceeds from interest and investment income. Net cash provided by investing activities was RMB332.3 million (US$48.2 million),mainly due to the net proceeds from the collection of loan principal. Net cash used in financing activities was RMB51.5 million (US$7.5 million),mainly due to the repurchase of ordinary shares.

For the full year of 2022,net cash used in operating activities was RMB184.5 million (US$26.7 million),mainly due to payments made to suppliers and employees and partially offset by cash received from investment income. Net cash provided by investing activities was RMB2,330.2 million (US$337.8 million),mainly due to the net proceeds from the collection of loan principal. Net cash used in financing activities was RMB835.0 million (US$121.1 million),mainly due to the repurchases of ordinary shares and convertible senior notes.

Update on Share Repurchase

As of the date of this release,the Company has cumulatively completed total share repurchases of approximately US$602.1 million.

About Qudian Inc.

Qudian Inc. ("Qudian") is a consumer-oriented technology company in China. The Company historically focused on providing credit solutions to consumers. Qudian is exploring innovative consumer products and services to satisfy Chinese consumers' fundamental and daily needs by leveraging its technology capabilities.

For more information,please visit http://ir.qudian.com.

Use of Non-GAAP Financial Measures

We use Non-GAAP net income/loss attributable to Qudian's shareholders,a Non-GAAP financial measure,in evaluating our operating results and for financial and operational decision-making purposes. We believe that Non-GAAP net income/loss attributable to Qudian's shareholders helps identify underlying trends in our business by excluding the impact of share-based compensation expenses,which are non-cash charges,and convertible bonds buyback income,which is non-cash and non-recurring. We believe that Non-GAAP net income/loss attributable to Qudian's shareholders provides useful information about our operating results,enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Non-GAAP net income/loss attributable to Qudian's shareholders is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This Non-GAAP financial measure has limitations as an analytical tool,and when assessing our operating performance,cash flows or our liquidity,investors should not consider them in isolation,or as a substitute for net loss /income,cash flows provided by operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP.

We mitigate these limitations by reconciling the Non-GAAP financial measure to the most comparable U.S. GAAP performance measure,all of which should be considered when evaluating our performance.

For more information on this Non-GAAP financial measure,please see the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated,all translations from RMB to US$ were made at the rate of RMB6.8972 to US$1.00,the noon buying rate in effect on December 30,in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB,as the case may be,at any particular rate or at all.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit,which could result in significant differences from this preliminary unaudited financial information.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things,the expectation of its collection efficiency and delinquency,contain forward-looking statements. Qudian may also make written or oral forward-looking statements in its periodic reports to the SEC,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 statements about Qudian's beliefs and expectations,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,including but not limited to the following: Qudian's goal and strategies; Qudian's expansion plans; Qudian's future business development,financial condition and results of operations; Qudian's expectations regarding demand for,and market acceptance of,its products; Qudian's expectations regarding keeping and strengthening its relationships with customers,business partners and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Qudian'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 Qudian does not undertake any obligation to update any forward-looking statement,except as required under applicable law.

For investor and media inquiries,please contact:

In China:

Qudian Inc.

Tel: +86-592-596-8208

E-mail: ir@qudian.com

The Piacente Group,Inc.

Jenny Cai

Tel: +86 (10) 6508-0677

E-mail: qudian@tpg-ir.com

In the United States:

The Piacente Group,Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: qudian@tpg-ir.com 

QUDIAN INC.

Unaudited Condensed Consolidated Statements of Operations

Three months ended December 31,

(In thousands except for number

2021

2022

of shares and per-share data)

(Unaudited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

Revenues:

Financing income

296,443

29,276

4,245

Sales commission fee

7,545

-

-

Sales income and others

7,158

19,305

2,799

Penalty fee

16,178

3,966

575

Loan facilitation income and other related income

9,925

4,942

717

Transaction services fee and other related income

41,638

102,580

14,873

Total revenues

378,887

160,069

23,209

Operating cost and expenses:

Cost of revenues

(38,272)

(73,653)

(10,679)

Sales and marketing

(27,799)

(18,520)

(2,685)

General and administrative

(109,793)

(67,764)

(9,825)

Research and development

(22,798)

(2,538)

(368)

Changes in guarantee liabilities and risk assurance liabilities(1)

38,826

16,857

2,444

Provision for receivables and other assets

(71,544)

140,726

20,403

Impairment loss from long-lived assets

(156,394)

(103,950)

(15,071)

Total operating cost and expenses

(387,774)

(108,842)

(15,781)

Other operating income

56,728

14,858

2,154

Income from operations

47,841

66,085

9,582

Interest and investment income,net

149,352

224,055

32,485

(Loss)/Gain from equity method investments

(221,798)

12,839

1,861

Gain on derivative instruments

17,375

262,049

37,994

Foreign exchange gain/(loss),net

78

(1,639)

(238)

Other income

20

254

37

Other expenses

(3,355)

-

-

Net (loss)/income before income taxes

(10,487)

563,643

81,721

Income tax expenses

(55,503)

(73,540)

(10,662)

Net (loss)/Income

(65,990)

490,103

71,059

Less: net loss attributable to non-controlling

interest shareholders

(927)

-

-

Net (loss)/income attributable to Qudian

Inc.'s shareholders

(65,063)

490,059

Loss/(Earning) per share for Class A and

Class B ordinary shares:

Basic

(0.26)

2.07

0.30

Diluted

(0.26)

2.07

0.30

Loss/(Earning) per ADS (1 Class A ordinary

share equals 1 ADSs):

Basic

(0.26)

2.07

0.30

Diluted

(0.26)

2.07

0.30

Weighted average number of Class A and

Class B ordinary shares outstanding:

Basic

253,682,383

236,955,750

236,750

Diluted

265,107,010

236,750

Other comprehensive loss:

Foreign currency translation adjustment

(2,517)

(23,059)

(3,343)

Total comprehensive (loss)/income

(68,507)

467,044

67,716

Less: total comprehensive loss attributable

to non-controlling interest shareholders

(927)

-

-

Total comprehensive (loss)/income

attributable to Qudian Inc.'s

shareholders

(67,580)

467,716

Note:

(1): The amount includes the change in fair value of the guarantee liabilities accounted in accordance with ASC 815,"Derivative",

and the change in risk assurance liabilities accounted in accordance with ASC 450,"Contingencies" and ASC 460,"Guarantees".

QUDIAN INC.

Unaudited Condensed Consolidated Statements of Operations

Year ended December 31,

(In thousands except for number

2021

2022

of shares and per-share data)

(Audited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

Revenues:

Financing income

1,255,488

308,717

44,760

Sales commission fee

35,411

115

17

Sales income and others

100,668

82,616

11,978

Penalty fee

67,316

53,445

7,749

Loan facilitation income and other related income

43,466

18,809

2,727

Transaction services fee and other related income

151,694

113,790

16,498

Total revenues

1,654,043

577,492

83,729

Operating cost and expenses:

Cost of revenues

(298,726)

(383,091)

(55,543)

Sales and marketing

(127,376)

(271,611)

(39,380)

General and administrative

(443,276)

(287,457)

(41,677)

Research and development

(141,264)

(58,275)

(8,449)

Changes in guarantee liabilities and risk assurance liabilities(1)

201,602

103,991

15,077

Provision for receivables and other assets

151,817

221,121

32,060

Impairment loss from long-lived assets

(156,394)

(268,927)

(38,991)

Total operating cost and expenses

(813,617)

(944,249)

(136,903)

Other operating income

82,273

37,255

5,401

Income/(Loss) from operations

922,699

(329,502)

(47,773)

Interest and investment income,net

129,456

112,816

16,357

(Loss)/Gain from equity method investments

(221,798)

13,998

2,030

Gain/(Loss) on derivative instruments

17,375

(70,420)

(10,210)

Foreign exchange (loss)/gain,net

(51)

250

36

Other income

5,213

19,833

2,876

Other expenses

(6,485)

(16,599)

(2,407)

Net income/(loss) before income taxes

846,409

(269,624)

(39,091)

Income tax expenses

(260,482)

(92,428)

(13,401)

Net income/(loss)

585,927

(362,052)

(52,492)

Less: net loss attributable to non-controlling

interest shareholders

(3,147)

(88)

(13)

Net income/(loss) attributable to Qudian Inc.'s

shareholders

589,074

(361,964)

(52,479)

Earning/(loss) per share for Class A and Class B

ordinary shares:

Basic

2.32

(1.47)

(0.21)

Diluted

2.27

(1.47)

(0.21)

Earning/(loss) per ADS (1 Class A ordinary share

equals 1 ADSs):

Basic

2.32

(1.47)

(0.21)

Diluted

2.27

(1.47)

(0.21)

Weighted average number of Class A and Class B

ordinary shares outstanding:

Basic

253,438,807

246,043,086

246,086

Diluted

266,292,869

246,086

Other comprehensive (loss)/income:

Foreign currency translation adjustment

(7,577)

13,037

1,890

Total comprehensive income/(loss)

578,350

(349,015)

(50,602)

Less: total comprehensive loss attributable to

non-controlling interest shareholders

(3,147)

(88)

(13)

Total comprehensive income/(loss)

attributable to Qudian Inc.'s shareholders

581,497

(348,927)

(50,589)

Note:

(1): The amount includes the change in fair value of the guarantee liabilities accounted in accordance with ASC

815,and the change in risk assurance liabilities accounted in accordance with ASC 450,

"Contingencies" and ASC 460,"Guarantees".

QUDIAN INC.

Unaudited Condensed Consolidated Balance Sheets

As of December 31,

As of December 31,

(In thousands except for number

2021

2022

of shares and per-share data)

(Audited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

ASSETS:

Current assets:

Cash and cash equivalents

2,065,495

3,502,041

507,748

Restricted cash

177,925

70,707

10,252

Derivative instruments-assets

17,376

-

-

Short-term investments

5,926,601

5,378,305

779,781

Short-term loan principal and financing service fee

receivables

2,371,966

-

-

Short-term finance lease receivables

31,462

1,381

200

Short-term contract assets

27,965

-

-

Other current assets

1,599,300

2,106,092

305,355

Total current assets

12,218,090

11,058,526

1,603,336

Non-current assets:

Long-term finance lease receivables

399

-

-

Operating lease right-of-use assets

300,607

103,142

14,954

Investment in equity method investee

85,582

133,058

19,292

Long-term investments

286,065

217,046

31,469

Property and equipment,net

659,101

773,886

112,203

Intangible assets

11,012

9,701

1,406

Long-term contract assets

31

-

-

Deferred tax assets,net

87,286

-

-

Other non-current assets

442,952

451,076

65,400

Total non-current assets

1,873,035

1,687,909

244,724

TOTAL ASSETS

14,091,125

12,746,435

1,848,060

QUDIAN INC.

Unaudited Condensed Consolidated Balance Sheets (Continued)

As of December 31,

(In thousands except for number

2021

2022

of shares and per-share data)

(Audited)

(Unaudited)

(Unaudited)

RMB

RMB

US$

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term borrowings and interest payables

-

29,062

4,214

Short-term lease liabilities

37,470

6,311

915

Derivative instruments-liability

-

163,128

23,651

Accrued expenses and other current liabilities

376,868

295,675

42,869

Guarantee liabilities and risk assurance liabilities(2)

886

-

-

Income tax payable

78,294

90,753

13,158

Total current liabilities

493,518

584,929

84,807

Non-current liabilities:

Deferred tax liabilities,net

68,543

2,118

307

Convertible senior notes

681,401

-

-

Long-term lease liabilities

168,800

426

62

Long-term borrowings and interest payables

145,312

116,249

16,855

Other non-current liabilities

10,012

-

-

Total non-current liabilities

1,074,068

118,793

17,224

Total liabilities

1,567,586

703,722

102,031

Shareholders' equity:

Class A Ordinary shares

132

132

19

Class B Ordinary shares

44

44

6

Treasury shares

(346,321)

(481,582)

(69,823)

Additional paid-in capital

4,017,375

4,030,825

584,415

Accumulated other comprehensive loss

(58,997)

(45,960)

(6,664)

Non-controlling interests

6,853

-

-

Retained earnings

8,904,453

8,539,254

1,238,076

Total shareholders' equity

12,523,539

12,042,713

1,029

TOTAL LIABILITIES AND SHAREHOLDERS'

EQUITY

14,060

Note:

(2) The amount includes the balance of the guarantee liabilities accounted in accordance with ASC 815,and the balance of risk

assurance liabilities accounted in accordance with ASC 450,"Guarantees".

QUDIAN INC.

Unaudited Reconciliation of GAAP And Non-GAAP Results

Three months ended December 31,

2021

2022

(In thousands except for number

(Unaudited)

(Unaudited)

(Unaudited)

of shares and per-share data)

RMB

RMB

US$

Total net (loss)/income attributable to Qudian Inc.'s shareholders

(65,059

Add: Share-based compensation expenses

5,747

3,376

489

Less: Convertible bonds buyback income

(36)

184

27

Non-GAAP net income/(loss) attributable to Qudian Inc.'s shareholders

(59,280)

493,295

71,521

Non-GAAP net (loss)/earning per share—basic

(0.23)

2.08

0.30

Non-GAAP net (loss)/earning per share—diluted

(0.23)

2.08

0.30

Weighted average shares outstanding—basic

253,750

Weighted average shares outstanding—diluted

265,750

Year ended December 31,

2021

2022

(In thousands except for number

(Audited)

(Unaudited)

(Unaudited)

of shares and per-share data)

RMB

RMB

US$

Total net income/(loss) attributable to Qudian Inc.'s shareholders

589,479)

Add: Share-based compensation expenses

35,349

24,054

3,488

Less: Convertible bonds buyback income

12,046

10,028

1,454

Non-GAAP net income/(loss) attributable to Qudian Inc.'s shareholders

612,377

(347,938)

(50,446)

Non-GAAP net earning/(loss) per share—basic

2.42

(1.41)

(0.21)

Non-GAAP net earning/(loss) per share—diluted

2.36

(1.41)

(0.21)

Weighted average shares outstanding—basic

253,086

Weighted average shares outstanding—diluted

266,086

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