Waterdrop Inc. Q2 FY2025 earnings call

Peng Shen's remarks

• Integration of AI with insurance and healthcare sectors began to deliver satisfying results in Q2, revenue growth accelerated with quarterly revenue reaching a certain million, up 23.9% year over year. Operating profit increased 85.9% year over year and operating margin lifted by 3.9 percentage points.
• EasterTech business leverages technological innovation to bring inclusive protection, Waterdrop Guardian AI application suite rolled out across key processes, FYP in Q2 increased 80% year over year and productivity per capita improved significantly.
• Waterdrop Medical corresponding platform upgraded risk assessment system by integrating large language model capabilities, as of June 30, raised medical funds for 3.54 million patients, eFine platform patients reached historical high.
• Kept improving AI technology stack, submitted 60 patent applications related to large language models, nine of them filed internationally, AI-driven business innovation included in Harvard Business School's case collection.
• Actively engaged in social return initiatives, Waterdrop welfare platform collaborated with 118 public charitable organizations, initiated over 15,500 public welfare projects, participated in relief efforts in North China in July.
• Board approved enhanced cash dividend of $10.9 million (50% increase over previous dividend) and authorized annual share repurchase plan, repurchased approximately 55.7 million ADS for $109 million as of August 31, 2025.

Ran Wei's remarks

• Insurance business delivered robust growth in Q2: FYP reached a certain billion, up 80.2% year over year and 53.1% quarter over quarter; insurance-related revenue was about a certain million, up 28.7% year over year and 12.2% quarter over quarter; operating margin improved to 23.1%, up nearly two percentage points year over year.
• Short-term products: increased investment in customer acquisition and technology, FYP to a certain billion, up 95% year over year and 62.1% quarter over quarter; applied AI tools to enhance marketing materials production, speed and quantity, facilitate better conversion in different scenarios.
• Long-term insurance: actively explore efficiency improvement of AI tools for online sales consultants and planners, long-term FYP reached CNY770 million, up 45.4% year over year and 30.5% quarter over quarter; launched Life Planner Co-Pilot tool, Kueyi AI in August, AI super pre-sales assistant on Wecom.
• Product portfolio expansion: new long-term medical plans, mid to high-end plan, maternity series version 6.0; products for people with pre-existing conditions contributed quarterly premium of a certain million, up 146.6% year over year.
• AI customer service and quality control: AI customer service agent scaled rapidly, online insurers achieved 100% AI coverage; AI quality control assistance boosted Q and A efficiency by 94% compared with traditional manual way.

Jasmine Lee's remarks

• As of June 2025, around 480 million people cumulatively donated RMB70 billion to about 3,540,000 patients through WhatsApp medical profiling platform; Tactical Group increased R and D investment on personal medical profiling risk control, improved detective accuracy for case-level and fund-level risk, developed abnormal behavior recognition model.
• Partnered with Guangzhou civil affairs bureaucracy to launch Cool Help project, integrates social and public welfare resources.

Xu Xiaoying's remarks

• Q2 financial highlights: total revenue reached a certain million, up 23.9% year over year and 11.2% quarter over quarter; insurance business contributed a certain million, up 28.7% year over year; digital clinical trial solutions used RMB27.7 million, up 34.2% year over year.
• Operating costs and expenses: total operating costs and expenses around a certain million, 18.7% higher than same period last year; operating cost for a certain million, 30.5% increase from last year, mainly due to increase in referral and service fee; sales and marketing expenses amounted to a certain million, up 26.3% compared to last year, primarily due to increase in marketing expenses for third-party traffic channels; general and administrative expenses decreased by 21.9% year over year to a certain million, primarily because of tightened operational control and allowance for credit losses RMB13.4 million less than last year; R and D expenses were a certain million, remaining stable.
• Operating profit: operating profit reached a certain million, up 85.9% year over year; net profit attributable to the company's ordinary shareholders reached RMB140 million, up 58.7% year over year; held billion in cash reserve with operating cash flow remaining positive.

In the second quarter, quarterly revenue reached a certain million, up 23.9% year over year. The insurance business contributed a certain million, showing a year-on-year increase of 28.7%. The digital clinical trial solutions revenue was RMB 27.7 million, with a year-on-year increase of 34.2%. Specifically, the insurance business' first-year premium (FYP) in Q2 increased 80.2% year over year to a certain billion, and insurance-related revenue was about a certain million, up 28.7% year over year. The digital clinical trial solutions' revenue was RMB 27.7 million, up 34.2% year over year.

• Will continue to leverage technology and AI to expand user base, optimize operations to enhance efficiency, facilitating stable growth of business revenue and profits.
• Will continue to pull resources to adjust internal structure of R and D expenses, allocate more resources to AI capabilities building.
• Will persist in creating long-term value for shareholders and society.

• Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from current expectations.
• Potential risks and uncertainties include those outlined in public filings with the SEC.