Waterdrop Inc. Announces First Quarter 2025 Unaudited Financial Results

, /PRNewswire/ -- Waterdrop Inc. ("Waterdrop", the "Company" or "we") (NYSE: WDH), a leading technology platform dedicated to insurance and healthcare service with a positive social impact, today announced its unaudited financial results for the three months ended March 31, 2025. Financial and Operational Highlights for the First Quarter of 2025 Profit growth with stable liquidity: In the first quarter of 2025, net profit attributable to our ordinary shareholders reached RMB108.2 million (US$14.9 million), marking a solid increase of 34.2% year-over-year. We continued to generate positive operating cash flow during the first quarter of 2025. Accelerated business growth: The first-year premiums ("FYP") generated through our insurance business reached RMB2,092.4 million (US$288.3 million) during the first quarter of 2025, representing an increase of 19.3% year over year. Net operating revenue was RMB753.7 million (US$103.9 million), representing an increase of 7.0% year over year. Expanded crowdfunding coverage: As of March 31, 2025, around 475 million people cumulatively had donated an aggregate of RMB68.8 billion to 3.47 million patients through Waterdrop Medical Crowdfunding. Steadfast performance in patient recruitment: As of March 31, 2025, the Company had cumulatively enrolled 11,217 patients into 1,281 clinical trial programs through the E-Find Platform. Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We achieved remarkable growth in the first quarter of 2025, kicking off the year with robust operational and financial outcomes. Both revenue and profit grew on a year-on-year and quarter-on-quarter basis. In line with our annual growth objectives, our insurance business maintained a strong upward trajectory. We refined our public domain user acquisition strategies and improved services for private domain users, leading to a notable 30.1% year-over-year increase in short-term insurance premium. Product innovation remains a top priority, as highlighted by the upgrade of 'Jiehaoyun', our industry-first product, to version 5.0. Furthermore, we recently introduced a revolutionary Million Medical Insurance product that uniquely offers both a health declaration waiver and guaranteed renewal for five consecutive years. Despite headwinds from product iteration, our long-term insurance premiums grew by 27.6% quarter-on-quarter, demonstrating operational resilience. Waterdrop Medical Crowdfunding further enhanced its risk control framework through ongoing upgrades, improving the rigor of campaign validation processes. This quarter, we expanded our verification platform to cover 92% of domestic cities. The system now enables smoother user-led verification of critical credibility factors like housing, vehicle ownership, and income data. These improvements deliver more reliable and efficient risk management. Our digital clinical trial solution revenue sustained its growth momentum this quarter, reflecting an 11.5% increase compared to the same period last year. We collaborated with a total of 185 pharmaceutical companies and contract research organizations ("CROs"). Meanwhile, we enrolled 822 patients and initiated services for 77 new programs during the first quarter of 2025. We are pleased to report that Waterdrop Guardian AI applications are playing increasingly critical roles in both internal and external use cases. For instance, the penetration of our 'AI Insurance Expert - Medical Insurance' has further expanded and facilitated over 2 million yuan in monthly premiums this quarter. Additionally, our 'AI Service Quality Copilot' has boosted unit operational efficiency by 83% since its launch. Beyond internal initiatives, we have partnered with four Property and Casualty insurers to pilot AI-driven applications in the auto insurance sector, collaborating to set industry benchmarks. Every strategic action we take is anchored in our objective of maximizing shareholder value. The Company distributed approximately US$7.3 million in cash dividends this quarter and repurchased a cumulative total of approximately 54.2 million ADSs from the open market as of May 31, 2025. Our long-standing commitment to user-centric philosophy and AI investment laid the foundation for our achievements. Looking ahead to the upcoming quarters of 2025, we will leverage our proven business know-how to accelerate operational growth, creating greater value to both users and shareholders." Financial Results for the First Quarter of 2025 Operating revenue, net Net operating revenue for the first quarter of 2025 increased by 7.0% year-over-year to RMB753.7 million (US$103.9 million) from RMB704.7 million for the same period of 2024. On a quarter-over-quarter basis, net operating revenue increased by 9.7%. Insurance-related income includes insurance brokerage income and technical service income. Insurance brokerage income represents brokerage commissions earned from insurance companies. Technical service income is derived from providing technical services including customer relationship maintenance, customer complaint management, claim review, and user referral services, among other things, to insurance companies, insurance brokers, and agency companies. Our insurance-related income amounted to RMB658.0 million (US$90.7 million) in the first quarter of 2025, representing an increase of 8.4% year-over-year from RMB606.8 million for the first quarter of 2024, which was mainly due to an increase in insurance brokerage income. On a quarter-over-quarter basis, insurance-related income increased by 13.0%. Crowdfunding service fees represent the service income earned when patients successfully withdraw the proceeds from their crowdfunding campaigns. Our role is to operate the Waterdrop Medical Crowdfunding platform to provide crowdfunding related services through the internet, enabling patients with significant medical bills to seek help from caring hearts through technology (the "medical crowdfunding services"). Our medical crowdfunding services generally consist of providing technical and internet support, managing, reviewing and supervising the crowdfunding campaigns, providing comprehensive risk management and anti-fraud measures, and facilitating the collection and transfer of the funds. For the first quarter of 2025, we generated RMB67.1 million (US$9.3 million) in service fees, remaining stable compared with the service fees of RMB67.4 million for the first quarter of 2024. On a quarter-over-quarter basis, crowdfunding service fees increased by 3.1%. Digital clinical trial solution income represents the service income earned from our customers mainly including biopharmaceutical companies and leading biotechnology companies. We match qualified and suitable patients for enrollment in clinical trials for our customers and generate digital clinical trial solution revenue for successful matches and we typically charge our customers a fixed unit price per successful match. For the first quarter of 2025, our digital clinical trial solution income amounted to RMB23.0 million (US$3.2 million), representing an increase of 11.5% from RMB20.6 million in the same period of 2024. On a quarter-over-quarter basis, digital clinical trial solution income decreased by 9.9%. Operating costs and expenses Operating costs and expenses increased by 3.0% year over year to RMB677.8 million (US$93.4 million) for the first quarter of 2025. On a quarter-over-quarter basis, operating costs and expenses increased by 6.9%. Operating costs increased by 13.0% year over year to RMB374.2 million (US$51.6 million) for the first quarter of 2025, as compared with RMB331.2 million for the first quarter of 2024, which was primarily driven by (i) an increase of RMB37.7 million in costs of referral and service fees, (ii) an increase of RMB2.8 million in the costs for the digital clinical trial solution consultants team, and (iii) an increase of RMB1.7 million in personnel costs. On a quarter-over-quarter basis, operating costs increased by 15.6% from RMB323.8 million, primarily due to (i) an increase of RMB28.3 million in costs of referral and service fees, and (ii) an increase of RMB8.4 million in the costs for the crowdfunding consultants team. Sales and marketing expenses decreased by 5.4% year over year to RMB172.4 million (US$23.8 million) for the first quarter of 2025, as compared with RMB182.1 million for the same quarter of 2024. The decrease was primarily due to (i) a decrease of RMB5.9 million in outsourced sales and marketing service fees to third parties, (ii) a decrease of RMB5.6 million in personnel costs and share-based compensation expenses, partially offset by (iii) an increase of RMB4.5 million in marketing expenses for third-party traffic channels. On a quarter-over-quarter basis, sales and marketing expenses decreased by 5.3% from RMB182.0 million, primarily due to (i) a decrease of RMB7.5 million in marketing expenses for third-party traffic channels, and (ii) a decrease of RMB1.9 million in outsourced sales and marketing service fees to third parties. General and administrative expenses decreased by 15.8% year over year to RMB74.9 million (US$10.3 million) for the first quarter of 2025, compared with RMB89.0 million for the same quarter of 2024. The year-over-year variance was due to (i) a decrease of RMB9.8 million in professional service fees, and (ii) a decrease of RMB4.0 million in allowance for credit losses. On a quarter-over-quarter basis, general and administrative expenses increased by 1.7% from RMB73.7 million, due to (i) an increase of RMB4.7 million in allowance for credit losses, partially offset by (ii) a decrease of RMB2.6 million in professional service fees. Research and development expenses remained stable at RMB56.2 million (US$7.8 million) for the first quarter of 2025, maintaining nearly the same level as RMB56.0 million for the same period of 2024. On a quarter-over-quarter basis, research and development expenses increased by 3.6% from RMB54.3 million. The increase was primarily due to an increase of RMB1.7 million in personnel costs and share-based compensation expenses. Operating profit for the first quarter of 2025 was RMB75.9 million (US$10.5 million), as compared with RMB46.4 million for the first quarter of 2024 and RMB53.0 million for the fourth quarter of 2024. Interest income for the first quarter of 2025 was RMB33.8 million (US$4.7 million), as compared with RMB39.8 million for the first quarter of 2024 and RMB35.8 million for the fourth quarter of 2024. Income tax expense for the first quarter of 2025 was RMB13.3 million (US$1.8 million), as compared with RMB8.6 million for the first quarter of 2024 and RMB1.9 million for the fourth quarter of 2024. Net profit attributable to the Company's ordinary shareholders for the first quarter of 2025 was RMB108.2 million (US$14.9 million), as compared with RMB80.6 million for the same period of 2024, and RMB99.6 million for the fourth quarter of 2024. Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP(1)) for the first quarter of 2025 was RMB130.0 million (US$17.9 million), as compared with RMB98.4 million for the same period of 2024, and RMB107.1 million for the fourth quarter of 2024. Cash position(2) As of March 31, 2025, cash position of the Company was RMB3,543.3 million (US$488.3 million), as compared with RMB3,670.3 million as of December 31, 2024. (1) See the sections entitled "Non-GAAP Financial Measure" and "Reconciliations of GAAP and Non-GAAP Results" for more information about the non-GAAP measures referred to in this announcement. (2) Cash position includes cash and cash equivalents, short-term investments, and long-term debt investments included in long-term investments. Share Repurchase Programs Pursuant to the share repurchase programs launched in September 2021, September 2022, September 2023 and September 2024, respectively, we had cumulatively repurchased approximately 54.2 million ADSs from the open market with cash for a total consideration of approximately US$106.6 million as of May 31, 2025. Supplemental Information We organize and report our business in the following operating segments: Insurance, which mainly includes insurance brokerage service and technical service; Crowdfunding, which mainly includes crowdfunding service; and Others, which do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and are aggregated. The table below sets forth the segment operating results, with the three-month comparative figures retrospectively adjusted to conform to this presentation. For the Three Months Ended March 31, 2024 December 31, 2024 March 31, 2025 RMB RMB RMB USD (All amounts in thousands) Operating revenue, net Insurance 606,777 582,442 657,988 90,673 Crowdfunding 67,350 65,138 67,131 9,251 Others 30,573 39,244 28,575 3,938 Total consolidated operating revenue, net 704,700 686,824 753,694 103,862 Operating costs and expenses Insurance (477,614) (479,856) (506,575) (69,808) Crowdfunding (99,587) (87,147) (97,299) (13,408) Others (62,005) (45,177) (54,000) (7,442) Operating profit/(loss) Insurance 129,163 102,586 151,413 20,865 Crowdfunding (32,237) (22,009) (30,168) (4,157) Others (31,432) (5,933) (25,425) (3,504) Total segment operating profit 65,494 74,644 95,820 13,204 Unallocated items* (19,130) (21,684) (19,927) (2,746) Total consolidated operating profit 46,364 52,960 75,893 10,458 Total other income 42,781 40,443 41,690 5,745 Consolidated profit before income tax 89,145 93,403 117,583 16,203 * The share-based compensation represents unallocated items in the segment information because our management does not consider this as part of the segment operating performance measure. Exchange Rate This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB7.2567 to US$1.00, the noon buying rate in effect on March 31, 2025 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release. Non-GAAP Financial Measure The Company uses non-GAAP financial measure, adjusted net profit attributable to our ordinary shareholders, in evaluating the Company's operating results and for financial and operational decision-making purposes. Adjusted net profit attributable to our ordinary shareholders represents net profit attributable to our ordinary shareholders excluding share-based compensation expense attributable to our ordinary shareholders, foreign currency exchange gain or losses, and impact of terminating the mutual aid plan on non-GAAP adjustments. Such adjustments have no impact on income tax. The non-GAAP financial measure is not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measure has limitations as analytical tools and when assessing the Company's operating performance, investors should not consider it in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Investors are encouraged to review the Company's historical non-GAAP financial measure to the most directly comparable GAAP measure. Adjusted net profit attributable to our ordinary shareholders presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measure differently, limiting its usefulness as a comparative measure to our data. The Company mitigates 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 the Company's performance. For more information on the non-GAAP financial measure, please see the table captioned "Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release. Safe Harbor Statement This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. Among other things, quotations in this announcement, contain forward-looking statements. Waterdrop 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 Waterdrop's beliefs, plans 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: Waterdrop's mission, goals and strategies; Waterdrop's future business development, financial condition and results of operations; the expected growth of the insurance, medical crowdfunding and healthcare industry in China; Waterdrop's expectations regarding demand for and market acceptance of our products and services; Waterdrop's expectations regarding its relationships with consumers, insurance carriers and other partners; competition in the industry and relevant government policies and regulations relating to insurance, medical crowdfunding and healthcare industry. Further information regarding these and other risks is included in Waterdrop's filings with the SEC. All information provided in this press release is as of the date of this press release, and Waterdrop does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Conference Call Information Waterdrop's management team will hold a conference call on June 5, 2025 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time on the same day) to discuss the financial results. Dial-in details for the earnings conference call are as follows: International: 1-412-317-6061 United States Toll Free: 1-888-317-6003 Hong Kong Toll Free: 800-963976 Hong Kong: 852-58081995 Mainland China: 4001-206115 Chinese Line (Mandarin) Entry Number: 0072517 English Interpretation Line (Listen-only Mode) Entry Number: 8162178 Participants can choose between the Chinese and the English interpretation lines. Please note that the English interpretation option will be in listen-only mode. Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call. Telephone replays will be accessible two hours after the conclusion of the conference call until June 12, 2025 by dialing the following numbers: United States Toll Free: 1-877-344-7529 International: 1-412-317-0088 Chinese Line Access Code: 9960990 English Interpretation Line Access Code: 6469856 A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.waterdrop-inc.com/. About Waterdrop Inc. Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com. For investor inquiries, please contactWaterdrop Inc.[email protected] WATERDROP INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, unless otherwise noted) As of December 31, 2024 March 31, 2025 RMB RMB USD Assets Current assets Cash and cash equivalents 986,323 1,158,059 159,585 Restricted cash 520,588 603,924 83,223 Short-term investments 1,612,619 778,068 107,221 Accounts receivable, net 716,206 768,855 105,951 Current contract assets 619,436 632,525 87,164 Amount due from related parties 257 270 37 Prepaid expense and other assets 182,641 192,849 26,575 Total current assets 4,638,070 4,134,550 569,756 Non-current assets Non-current contract assets 153,749 171,226 23,596 Property, equipment and software, net 240,024 240,846 33,189 Intangible assets, net 153,011 152,979 21,081 Long-term investments 1,114,160 1,649,792 227,347 Right of use assets, net 46,872 36,970 5,095 Deferred tax assets 27,028 21,278 2,932 Goodwill 80,751 80,751 11,128 Total non-current assets 1,815,595 2,353,842 324,368 Total assets 6,453,665 6,488,392 894,124 Liabilities, Mezzanine Equity and Shareholders' Equity Current liabilities Amount due to related parties 10,616 10,851 1,495 Insurance premium payables 537,344 624,202 86,017 Accrued expenses and other current liabilities 704,035 791,425 109,061 Short-term loans 198,373 - - Current lease liabilities 34,573 30,973 4,268 Total current liabilities 1,484,941 1,457,451 200,841 Non-current liabilities Non-current lease liabilities 10,971 5,707 786 Deferred tax liabilities 84,185 91,680 12,634 Total non-current liabilities 95,156 97,387 13,420 Total liabilities 1,580,097 1,554,838 214,261 Mezzanine Equity Redeemable non-controlling interests 76,133 72,193 9,948 Shareholders' equity Class A ordinary shares 112 113 16 Class B ordinary shares 27 27 4 Treasury stock (15) (16) (2) Additional paid-in capital 6,832,214 6,784,389 934,914 Accumulated other comprehensive income 159,550 163,106 22,477 Accumulated deficit (2,194,453) (2,086,258) (287,494) Total shareholders' equity 4,797,435 4,861,361 669,915 Total liabilities, mezzanine equity and shareholders' equity 6,453,665 6,488,392 894,124 WATERDROP INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (All amounts in thousands, except for share and per share data, or otherwise noted) For the Three Months Ended March 31, 2024 December 31, 2024 March 31, 2025 RMB RMB RMB USD Operating revenue, net 704,700 686,824 753,694 103,862 Operating costs and expenses(i) Operating costs (331,243) (323,836) (374,218) (51,569) Sales and marketing expenses (182,146) (182,038) (172,396) (23,757) General and administrative expenses (88,961) (73,725) (74,943) (10,327) Research and development expenses (55,986) (54,265) (56,244) (7,751) Total operating costs and expenses (658,336) (633,864) (677,801) (93,404) Operating profit 46,364 52,960 75,893 10,458 Other income Interest income 39,804 35,802 33,814 4,660 Foreign currency exchange gain/(loss) 1,514 (963) (2,103) (290) Others, net 1,463 5,604 9,979 1,375 Profit before income tax 89,145 93,403 117,583 16,203 Income tax expense (8,588) (1,936) (13,328) (1,837) Net profit 80,557 91,467 104,255 14,366 Net loss attributable to mezzanine equity classified as non- controlling interests shareholders (75) (8,148) (3,940) (543) Net profit attributable to ordinary shareholders 80,632 99,615 108,195 14,909 Other comprehensive income: Foreign currency translation adjustment, net of tax 25,143 89,187 (14,056) (1,937) Unrealized (loss)/gain on available for sale investments, net of tax - (29,330) 17,612 2,427 Total comprehensive income 105,700 151,324 107,811 14,856 Total comprehensive loss attributable to mezzanine equity classified as non-controlling interests shareholders (75) (8,148) (3,940) (543) Total comprehensive income attributable to ordinary shareholders 105,775 159,472 111,751 15,399 Weighted average number of ordinary shares used in computing net profit per share Basic 3,696,619,172 3,620,987,566 3,620,380,862 3,620,380,862 Diluted 3,756,462,107 3,699,552,300 3,711,999,000 3,711,999,000 Net profit per share attributable to ordinary shareholders Basic 0.02 0.03 0.03 0.00 Diluted 0.02 0.03 0.03 0.00 (i) Share-based compensation expenses are included in the operating costs and expenses as follows. For the Three Months Ended March 31, 2024 December 31, 2024 March 31, 2025 RMB RMB RMB USD Sales and marketing expenses (1,820) (1,692) (1,899) (262) General and administrative expenses (14,327) (17,336) (15,527) (2,140) Research and development expenses (2,983) (2,656) (2,501) (344) Total (19,130) (21,684) (19,927) (2,746) WATERDROP INC. RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, unless otherwise noted) For the Three Months Ended March 31, 2024 December 31, 2024 March 31, 2025 RMB RMB RMB USD Net profit attributable to the Company's ordinary shareholders 80,632 99,615 108,195 14,909 Add: Share-based compensation expense attributable to the Company's ordinary shareholders 19,260 21,502 19,750 2,722 Foreign currency exchange (gain)/ loss (1,514) 963 2,103 290 Impact of terminating the mutual aid plan(ii) - (14,985) - - Adjusted net profit attributable to the Company's ordinary shareholders 98,378 107,095 130,048 17,921 (ii) This represents the reversal of the difference between estimated cost of medical expense coverage and actual payment. SOURCE Waterdrop Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Waterdrop Inc. Announces First Quarter 2025 Unaudited Financial Results

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