Yuanbao Inc. American Depositary Shares Q4 FY2025 earnings call

• Technological capabilities: Continued to advance the upgrade and unification of large-model platforms, AI capabilities matured and entered scale-up application stage. Accelerated the deployment of insurance agents across scenarios such as pre-sales, customer service, and claims assistance. Strengthened insurance vertical agent framework and knowledge base capabilities. - Product aspects: Continued to expand and refine insurance product matrix, covering medical insurance, critical illness insurance, accident insurance, etc. Launched innovative products in medical insurance and critical insurance. Focused on accessibility and affordability, innovated products for specific user segments like women, new citizens, etc. - Operational progress: In the fourth quarter, number of new insurances was 7.9 million, an increase of 34.5%. For the full year, new policies reached approximately 30.7 million, with a 36.7% growth. AI team accounted for over 10% of total workforce. Model network had more than 4,900 models and analyzed over 5,700 features.

Fourth quarter total revenue is RMB 11.75 billion, an increase of 32.2%. Net profit is RMB 3.37 billion, an increase of 15.4%, and the net profit rate is 28.7%. For the whole year, total revenue is RMB 37.3 billion, with a 33.1% growth. Net profit is RMB 3.08 billion, with a 51% growth. The net profit rate increased by 3.5% to 29.9%. Revenues from insurance distribution services in the fourth quarter reached $401.1 million, a 35.1% year-over-year increase. Revenues from system services totaled $774.1 million, up 31.1% year-over-year. For the full year 2025, revenues from insurance distribution services reached $1.45 billion, up 33.8% year-over-year, while revenues from system services totaled $2.92 billion, growing by 33.2%.

We didn't give specific earnings guidance on 2026, but we expect to maintain our revenue and net profit growth momentum in 2026. Despite intensified industry competition, we have sustained both revenue growth and margins past 14 quarters, demonstrating ongoing improvements to our tech-driven operational efficiency which has created a self-reinforcing flywheel effect, will scale extension and cost optimization fuel each other, moving us beyond reliance on market talent.

Q: Amy Chen from Citi asked about 2026 top line and bottom line growth guidance and sustainability of marketing efficiency improvement.

A: Didn't give specific earnings guidance on 2026, but expect to maintain revenue and net profit growth momentum in 2026. Despite industry competition, sustained revenue growth and margins past 14 quarters showing tech-driven operational efficiency improvement.

Q: Yue Xu from China Securities asked about dividend plans.

A: Continue to evaluate through diversified operations and capital market strategies to achieve maximum shareholder feedback, but no specific timeline on dividend payout plans.

Q: Thomas Wong of Goldman Sachs asked about 2026 sales and marketing outlook.

A: Expect consumer demand to remain healthy as insurance products innovate, user experience value improve, helping improve user flow. Aim to maintain sales and marketing expenses as percentage of revenue broadly stable with modest potential risk increase.

Q: Sintao Chen of CICC asked about contribution of new and existing users to growth, current policy renewal rates, and plans to improve customer retention.

A: Did not provide detailed breakdown of user composition in quarterly report. Majority of current users are still new users. Customer renewal rates not significantly changed compared with prior fiscal year. Retention strategy focused on product innovation, user education, and industry trends.

Q: Xiaoyue Ding of CITIC Securities asked about policy drivers for commercial health insurance development.

A: Policy environment is direct driver. Report highlights promoting commercial health insurance, innovation of drug routes, etc. After launch of commercial health insurance innovation drug catalog, quickly expanded drug coverage of relevant product series. Consistently innovate to meet protection needs of different populations.

Q: Yingying Xu from Zhejiang Securities asked about evaluation of current AI agents and impact on business model and potential threats to competitive mode.

A: Most insurance sales happen in instant consumption context, while AI agents operate in active problem-solving mindset. Core question is whether content platforms where users spend time will evolve into places for interaction with intelligent agents. AI agents are promising but key in specific usage scenarios.

Q: Jitsun from Shenwang Hongyuan Securities asked about impact of AI application iterations on company's businesses.

A: Yuanbao's core competitive edge in AI anchored by deep vertical expertise, data capabilities, and agentic capabilities. AI in insurance rapidly moving from exploration to large-scale implementation. Future direction is to build AI-driven insurance service platform, making AI important gateway to connect users and insurance products.