Waterdrop Inc. Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results and a Cash Dividend

BEIJING, March 12, 2025 /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 and twelve months ended December 31, 2024 and a cash dividend. Financial and Operational Highlights for the Fourth Quarter of 2024 Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We are pleased to report a set of outstanding financial results for the fourth quarter and the full year of 2024. We have sustained remarkable profitability and doubled our annual net profit attributable to ordinary shareholders, attaining a 119.8% year-on-year increase. Our insurance business capped off the year with an annual FYP of RMB7,472.8 million (US$1,023.8 million), marking a 5.1% year-over-year growth. Throughout the fourth quarter, we honed our focus on optimizing customer acquisition channels and diversifying product offerings, which yielded robust outcomes. Our targeted acquisition strategies spurred a 14.9% year-over-year surge in new user acquired. Leveraging user insights, we introduced more inclusive short-term insurance products in this quarter, including medical plans tailored for individuals with pre-existing conditions. Furthermore, we sustained our efforts to enhance and diversify our long-term insurance offerings, with disability income insurance alone achieving an FYP exceeding RMB90 million. As a milestone, Waterdrop Medical Crowdfunding has been officially recognized as a pioneer in China's standardized medical crowdfunding sector. Following new legislation changes, the platform secured designation from the Ministry of Civil Affairs on December 25, 2024, becoming one of the first batch state-endorsed 'Online Service Platforms for Individuals Seeking Financial Help'. During this quarter, our digital clinical trial solution income continued its growth, realizing a year-over-year increase of 22.9%. We collaborated with a total of 177 pharmaceutical companies and contract research organizations ("CROs"). Moreover, we enrolled 880 patients and initiated services for 79 new programs during the fourth quarter of 2024. Alternatively, we recently announced the strategic integration and local deployment of DeepSeek models, which marks a significant step forward in our AI-driven insurance ecosystem. Utilizing advanced AI models, Waterdrop's AI Insurance Expert now supports multi-modal interactions, including voice and text. The system excels in managing complex dialogues and assisting with sales strategies, autonomously handling voice communications and consultations for medical insurance products. Our every decision is guided by the principles of maximizing and prioritizing shareholders' returns. By the end of February 2025, the Company had cumulatively repurchased approximately 52.1 million ADSs from the open market. We are also pleased to announce that, with the board approval, the Company will soon start another cash dividend of approximately US$7.3 million. Looking ahead to 2025, we aim for faster growth and to scale up our business operations, all the while continuing to contribute to profitability, by using technology to enhance our core competitiveness." Financial Results for the Fourth Quarter of 2024 Operating revenue, net Net operating revenue for the fourth quarter of 2024 increased by 4.2% year over year to RMB686.8 million (US$94.1 million) from RMB659.4 million for the same period of 2023. On a quarter-over-quarter basis, net operating revenue decreased by 2.5%. Operating costs and expenses Operating costs and expenses increased by 0.2% year over year to RMB633.9 million (US$86.8 million) for the fourth quarter of 2024. On a quarter-over-quarter basis, operating costs and expenses decreased by 6.5%. Operating profit for the fourth quarter of 2024 was RMB53.0 million (US$7.3 million), as compared with RMB26.6 million for the fourth quarter of 2023 and RMB26.5 million for the third quarter of 2024. Interest income for the fourth quarter of 2024 was RMB35.8 million (US$4.9 million), as compared with RMB34.7 million for the fourth quarter of 2023 and RMB36.0 million for the third quarter of 2024. Income tax expense for the fourth quarter of 2024 was RMB1.9 million (US$0.3 million), as compared with RMB15.2 million for the fourth quarter of 2023 and an income tax benefit of RMB7.8 million for the third quarter of 2024. Net profit attributable to the Company's ordinary shareholders for the fourth quarter of 2024 was RMB99.6 million (US$13.6 million), as compared with RMB59.1 million for the same period of 2023, and RMB99.0 million for the third quarter of 2024. Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP(1)) for the fourth quarter of 2024 was RMB107.1 million (US$14.7 million), as compared with RMB74.7 million for the same period of 2023, and RMB126.0 million for the third quarter of 2024. Financial Results for the Fiscal Year of 2024 Net operating revenue for the year of 2024 increased by 5.4% year over year to RMB2,771.8 million (US$379.7 million) from RMB2,630.7 million for the year of 2023, which was primarily due to the increase of crowdfunding service fees and insurance related income. Operating costs and expenses Operating costs and expenses decreased by 1.7% year over year to RMB2,593.7 million (US$355.3 million) for the year of 2024, mainly due to the effective cost control measures. Operating profit for the year of 2024 was RMB178.2 million (US$24.4 million), compared with an operating loss of RMB6.7 million for the year of 2023. Interest income for the year of 2024 was RMB149.1 million (US$20.4 million), compared with RMB136.0 million for the year of 2023. Income tax expense for the year of 2024 was RMB9.7 million (US$1.3 million), compared with RMB0.6 million for the year of 2023. Net profit attributable to the Company's ordinary shareholders for the year of 2024 was RMB367.5 million (US$50.3 million), compared to RMB167.2 million for the year of 2023. Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP) for the year 2024 was RMB440.2 million (US$61.2 million), compared to RMB295.6 million for the year of 2023. Cash position(2) As of December 31, 2024, cash position of the Company was RMB3,670.3 million (US$502.8 million), as compared with RMB3,571.6 million as of December 31, 2023. (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 52.1 million ADSs from the open market with cash for a total consideration of approximately US$103.7 million as of February 28, 2025. Cash Dividend The Board has approved a cash dividend of US$0.02 per ADS or US$0.002 per ordinary share, for a total amount of approximately US$7.3 million, to shareholders of record as of the close of business on April 11, 2025. The payment date is expected to be on or around April 30, 2025 for holders of ordinary shares and on or around May 2, 2025 for holders of ADSs. Supplemental Information We organize and report our business in three operating segments: The table below sets forth the segment operating results, with the twelve-month comparative figures retrospectively adjusted to conform to this presentation. For the Three Months Ended For the Twelve Months Ended December 31, 2023 September 30, 2024 December 31, 2024 December 31, 2023* December 31, 2024 RMB RMB RMB USD RMB RMB USD （All amounts in thousands） Operating revenue, net Insurance 587,866 600,726 582,442 79,794 2,340,915 2,363,777 323,836 Crowdfunding 40,013 65,839 65,138 8,924 162,683 267,650 36,668 Others 31,485 37,576 39,244 5,377 127,109 140,394 19,234 Total consolidated operating revenue, net 659,364 704,141 686,824 94,095 2,630,707 2,771,821 379,738 Operating profit/(loss) Insurance 128,223 122,501 102,586 14,054 528,137 477,205 65,377 Crowdfunding (51,718) (17,902) (22,009) (3,015) (245,776) (95,084) (13,026) Others (27,078) (31,716) (5,933) (811) (155,235) (96,531) (13,226) Total segment operating profit 49,427 72,883 74,644 10,228 127,126 285,590 39,125 Unallocated items** (22,788) (46,413) (21,684) (2,971) (133,869) (107,432) (14,718) Total consolidated operating profit/(loss) 26,639 26,470 52,960 7,257 (6,743) 178,158 24,407 Total other income 44,463 60,842 40,443 5,541 170,983 182,432 24,992 Profit before income tax 71,102 87,312 93,403 12,798 164,240 360,590 49,399 Income tax (expense)/ benefit (15,164) 7,843 (1,936) (265) (555) (9,707) (1,330) Net profit 55,938 95,155 91,467 12,533 163,685 350,883 48,069 * Starting from the second quarter of 2023, our chief operating decision maker began managing the business through three operating segments and assessing performance and allocating resources under this new operating segment structure. The twelve-month comparative figures were retrospectively adjusted to conform to this presentation. ** The share-based compensation and impairment of intangible assets acquired from business combination represent unallocated items in the segment information because our management does not consider these 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 RMB7.2993 to US$1.00, the noon buying rate in effect on December 31, 2024 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, impact of terminating the mutual aid plan, impairment of intangible assets acquired from business combination and related tax effects on non-GAAP adjustments. 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 March 12, 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: 8850389 English Interpretation Line (Listen-only Mode) Entry Number: 2865357 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 March 19, 2025 by dialing the following numbers: United States Toll Free: 1-877-344-7529 International: 1-412-317-0088 Chinese Line Access Code: 3826090 English Interpretation Line Access Code: 4441327 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 contact Waterdrop Inc.[email protected] WATERDROP INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, unless otherwise noted) As of December 31,2023 December 31, 2024 RMB RMB USD Assets Current assets Cash and cash equivalents 396,905 986,323 135,126 Restricted cash 577,121 520,588 71,320 Short-term investments 2,996,527 1,612,619 220,928 Accounts receivable, net 693,110 716,206 98,120 Current contract assets 572,871 619,436 84,862 Amount due from related parties 65 257 35 Prepaid expense and other assets 189,846 182,641 25,020 Total current assets 5,426,445 4,638,070 635,411 Non-current assets Non-current contract assets 134,383 153,749 21,064 Property, equipment and software, net 33,878 240,024 32,883 Intangible assets, net 177,407 153,011 20,962 Long-term investments 211,758 1,114,160 152,639 Right of use assets, net 59,851 46,872 6,421 Deferred tax assets 24,190 27,028 3,703 Goodwill 80,751 80,751 11,063 Total non-current assets 722,218 1,815,595 248,735 Total assets 6,148,663 6,453,665 884,146 Liabilities, Mezzanine Equity and Shareholders' Equity Current liabilities Amount due to related parties 9,509 10,616 1,454 Insurance premium payables 591,953 537,344 73,616 Accrued expenses and other current liabilities 597,684 704,035 96,452 Short-term loans 137,557 198,373 27,177 Current lease liabilities 32,908 34,573 4,736 Total current liabilities 1,369,611 1,484,941 203,435 Non-current liabilities Non-current lease liabilities 27,293 10,971 1,503 Deferred tax liabilities 73,305 84,185 11,533 Total non-current liabilities 100,598 95,156 13,036 Total liabilities 1,470,209 1,580,097 216,471 Mezzanine Equity Redeemable non-controlling interests 92,760 76,133 10,430 Shareholders' equity Class A ordinary shares 112 112 15 Class B ordinary shares 27 27 4 Treasury stock (12) (15) (2) Additional paid-in capital 7,003,423 6,832,214 936,009 Accumulated other comprehensive income 144,107 159,550 21,858 Accumulated deficit (2,561,963) (2,194,453) (300,639) Total shareholders' equity 4,585,694 4,797,435 657,245 Total liabilities, mezzanine equity and shareholders' equity 6,148,663 6,453,665 884,146 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 For the Twelve Months Ended December 31, 2023 September 30, 2024 December 31, 2024 December 31, 2023 December 31, 2024 RMB RMB RMB USD RMB RMB USD Operating revenue, net 659,364 704,141 686,824 94,095 2,630,707 2,771,821 379,738 Operating costs and expenses(ii) Operating costs (302,143) (340,560) (323,836) (44,365) (1,195,544) (1,314,740) (180,119) Sales and marketing expenses (174,817) (173,172) (182,038) (24,939) (740,451) (694,769) (95,183) General and administrative expenses (95,959) (110,988) (73,725) (10,100) (402,395) (367,652) (50,368) Research and development expenses (59,806) (52,951) (54,265) (7,434) (299,060) (216,502) (29,661) Total operating costs and expenses (632,725) (677,671) (633,864) (86,838) (2,637,450) (2,593,663) (355,331) Operating profit/(loss) 26,639 26,470 52,960 7,257 (6,743) 178,158 24,407 Other income Interest income 34,659 36,005 35,802 4,905 136,043 149,121 20,429 Foreign currency exchange gain/ (loss) 6,956 7,909 (963) (132) 4,342 8,016 1,098 Others, net 2,848 16,928 5,604 768 30,598 25,295 3,465 Profit before income tax 71,102 87,312 93,403 12,798 164,240 360,590 49,399 Income tax (expense)/ benefit (15,164) 7,843 (1,936) (265) (555) (9,707) (1,330) Net profit 55,938 95,155 91,467 12,533 163,685 350,883 48,069 Net loss attributable to mezzanine equity classified as non-controlling interests shareholders(i) (3,119) (3,818) (8,148) (1,116) (3,536) (16,627) (2,278) Net profit attributable to ordinary shareholders 59,057 98,973 99,615 13,649 167,221 367,510 50,347 Other comprehensive income: Foreign currency translation adjustment, net of tax (39,390) (83,054) 89,187 12,219 37,413 44,773 6,134 Unrealized loss on available for sale investments, net of tax - - (29,330) (4,018) (1,551) (29,330) (4,018) Total comprehensive income 16,548 12,101 151,324 20,734 199,547 366,326 50,185 Total comprehensive loss attributable to mezzanine equity classified as non-controlling interests shareholders(i) (3,119) (3,818) (8,148) (1,116) (3,536) (16,627) (2,278) Total comprehensive income attributable to ordinary shareholders 19,667 15,919 159,472 21,850 203,083 382,953 52,463 Weighted average number of ordinary shares used in computing net profit per share Basic 3,698,466,876 3,624,431,887 3,620,987,566 3,620,987,566 3,769,679,736 3,650,504,339 3,650,504,339 Diluted 3,762,270,456 3,689,357,838 3,699,552,300 3,699,552,300 3,880,861,496 3,719,776,955 3,719,776,955 Net profit per share attributable to ordinary shareholders Basic 0.02 0.03 0.03 0.00 0.04 0.10 0.01 Diluted 0.02 0.03 0.03 0.00 0.04 0.10 0.01 (i) Corrections were made to certain line items of the comparative figures for the three months ended September 30, 2024, because of an omitted attribution to non-controlling interests, resulted in a reclassification impact amounting to RMB6,168. Accordingly, net profit attributable to ordinary shareholders and net gain (loss) attributable to mezzanine equity classified as non-controlling interests shareholders previously reported at RMB92,805 and RMB2,350 are restated to RMB98,973 and RMB(3,818), respectively. The reclassification does not have a material impact on the consolidated financial statements nor Non-GAAP results. (ii) Share-based compensation expenses are included in the operating costs and expenses as follows. For the Three Months Ended For the Twelve Months Ended December 31, 2023 September 30, 2024 December 31, 2024 December 31, 2023 December 31, 2024 RMB RMB RMB USD RMB RMB USD Sales and marketing expenses (1,991) (1,993) (1,692) (232) (35,352) (6,825) (935) General and administrative expenses (18,693) (21,297) (17,336) (2,375) (85,335) (69,245) (9,486) Research and development expenses (2,104) (2,563) (2,656) (364) (13,182) (10,802) (1,480) Total (22,788) (25,853) (21,684) (2,971) (133,869) (86,872) (11,901) WATERDROP INC. RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, unless otherwise noted) For the Three Months Ended For the Twelve Months Ended December 31, 2023 September 30, 2024 December 31, 2024 December 31, 2023 December 31, 2024 RMB RMB RMB USD RMB RMB USD Net profit attributable to the Company's ordinary shareholders(i) 59,057 98,973 99,615 13,649 167,221 367,510 50,347 Add: Share-based compensation expense attributable to the Company's ordinary shareholders 22,556 25,673 21,502 2,946 132,686 86,449 11,843 Foreign currency exchange (gain)/ loss (6,956) (7,909) 963 132 (4,342) (8,016) (1,098) Impact of terminating the mutual aid plan (iii) - - (14,985) (2,053) - (14,985) (2,053) Impairment of intangible assets acquired from business combination(i) - 12,336 - - - 12,336 2,817 Tax effects on non-GAAP adjustments(i) - (3,084) - - - (3,084) (704) Adjusted net profit attributable to the Company's ordinary shareholders 74,657 125,989 107,095 14,674 295,565 440,210 61,152 (iii) This represents the reversal of the difference between estimated cost of medical expense coverage and actual payment. SOURCE Waterdrop Inc.

Waterdrop Inc. Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results and a Cash Dividend

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