WDH

This article first appeared on GuruFocus. Total Net Operating Revenue: RMB1,448 million, up 72.8% year over year. Insurance Business Revenue: RMB1,333 million, up 80.5% year over year and 16.4% quarter over quarter. Non-Insurance Revenue: ~7.9% of total revenue, including RMB63.6 million from medical crowdfunding service fees and RMB35.2 million from digital clinical trial solutions. Operating Profit: ~RMB111 million, up 14.3% year over year and 39.2% quarter over quarter. Insurance Business Operating Profit: RMB180 million, up 20% quarter over quarter. Net Profit Attributable to Shareholders: ~RMB126 million, down 10.3% year over year but up 27.9% quarter over quarter. Total Operating Costs and Expenses: ~RMB1,337 million, up 80.5% year over year. Operating Costs: RMB537 million, up 29% year over year. Sales and Marketing Expenses: ~RMB638 million, versus RMB199 million in the same quarter of 2025. G&A Expenses: RMB93.4 million, up 27.2% year over year. R&D Expenses: RMB68.8 million, up 32.4% year over year. Cash Position: Cash and cash equivalents, short-term investments, and other cash positions totaled ~RMB2,653 million as of June 30, 2026. Share Repurchase: ~62.9 million ADS repurchased for ~$121 million as of August 31, 2026; new sixth program of up to $50 million approved over next 12 months. Cash Dividend: $0.03 per ADS (~$0.003 per ordinary share), aggregate ~$10.8 million, payable early November 2026. Newly Acquired Insurance Customers: Up 32.3% sequentially. First-Year Premiums of Long-Term Insurance: Up 33.4% sequentially. Medical Crowdfunding: Cumulative contributions from ~499 million donors; RMB74.7 billion raised for 3.82 million patients as of June 30, 2026. Digital Clinical Trial Enrollment: Over 1,500 patients enrolled in the quarter, up 54% year over year; cumulative patients served surpassing 17,000. Chronic Disease Enrollment: Up 80% year over year in Q2. Full Year 2026 Guidance: Targets more than 40% year-over-year growth in total revenue and over 10% growth in operating profit. Warning! GuruFocus has detected 6 Warning Signs with WDH. Is WDH fairly valued? Test your thesis with our free DCF calculator. Release Date: September 08, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenue grew 72.8% year-over-year to RMB1.45 billion in Q2 2026, maintaining strong growth momentum. Insurance business revenue increased 80.5% year-over-year, driven by optimized user acquisition and conversion. Net profit attributable to ordinary shareholders was RMB130 million, marking 18 consecutive quarters of profitability since Q1 2022. AI integration across core business scenarios contributed nearly RMB100 million in FYP and improved operational efficiency. Shareholder returns prioritized with a new cash dividend of $0.03 per ADS and a sixth share repurchase program of up to $50 million. Net profit attributable to shareholders decreased 10.3% year-over-year due to tax-related items and non-recurring gains and losses. Total operating costs and expenses rose 80.5% year-over-year, primarily from increased marketing and personnel costs. Sales and marketing expenses surged to RMB638 million from RMB199 million, reflecting heavy investment in public domain traffic. G&A expenses increased 27.2% year-over-year, mainly due to a RMB33.3 million allowance for credit losses. R&D expenses grew 32.4% year-over-year, driven by higher cloud server fees, token fees, and personnel costs. Q: Media reported that mainland tax authorities made tax policy dividends regarding Hong Kong insurance. Has management seen any change in international or domestic business?A: Tracy Lee, Investor Relations Manager, clarified that what is being seen reflects the enforcement of long-standing tax rules rather than a new policy specifically targeting Hong Kong insurance. While media coverage has had some effect on customer sentiment, the fundamental drivers of Hong Kong insurance products currency allocation, access to global healthcare resources, and inheritance planning remain unchanged. Mainland China insurance growth is driven by rising health protection awareness, policy tailwinds for commercial health insurance, continued product innovation, and a structural shift of household savings into long-term assets amid low interest rates. Waterdrop serves a diversified customer base across multiple markets and remains confident in serving user demand wherever it rises. Q: Several insurers have recently launched health insurance products targeting customers with pre-existing conditions. How does management evaluate this opportunity, and what is Waterdrop's product strategy in this area?A: Chenyang Wei, Independent Director, noted that as chronic illness becomes more common, people with pre-existing conditions are far more typical than the "clean standard life." The industry consensus is shifting from insuring more healthy people to protecting the health of more people. Waterdrop's strategy centers on lowering coverage thresholds by segmenting disease risk and building differentiated underwriting and claims capabilities. The company breaks demand down by scenario, age, and condition, co-designs terms with insurer partners, and uses platform and AI insights to match the right product to the right customer. Longer-term, health cover for people with pre-existing conditions could become more like auto insurance buyable, claimable, and renewable. Q: Is there a clear timeline for AI agents to start generating commercial value? How will AI investment impact the R&D expense ratio going forward? What other new initiatives is the company exploring?A: Management stated that AI is expanding across four value chains acquisition, pre-screening, claims, and renewal and is not being commercialized as a standalone business; its value shows up in top-line and bottom-line growth. AI directly supports user consultation and purchase decisions, driving nearly RMB100 million in FYP, while tools like Kui.ai and AI pre-sales assistants help life planners close more cases. The overall R&D ratio is expected to remain stable, though resources are actively shifting toward AI in talent and token costs, with disciplined ROI management. On new initiatives, Waterdrop is incubating a portable AI office assistant a smart hardware product leveraging its AI agent know-how, in-house R&D, and China supply chain strength with pilot sales across major global markets showing encouraging early feedback, though financial impact remains limited for now. Q: From both product and supply perspectives, which insurance category does management view as having the strongest growth potential?A: Chenyang Wei, Independent Director, identified two forces reshaping health insurance: rising health protection awareness and an aging population. The market is shifting from standardized products to more tailored, demand-driven coverage, including insurance for pre-existing conditions, high-end medical insurance, and products bundled with health management and elderly care services. This category plays directly into Waterdrop's strengths broad online reach, precise targeting, AI capability to spot protection gaps in specific customer groups, and matching them with the right products and faster service at the point of user consultation. Q: Noticing the strong growth in Q2, could you walk us through recent customer acquisition investment and outcomes, and what can be expected on the cost side for the rest of 2026 and into 2027?A: Li Zhu, CFO, explained that the Q2 user acquisition investment is already showing results insurance revenue and operating profit both grew further from the previous quarter, and new users were up more than 30% sequentially, driven by better reach, conversion, and product supply. The strategy is not simply pursuing cost reduction; the focus is on leveraging AI to better align product supply with user profiles and improve conversion efficiency. AI is embedded across the entire process from customer acquisition to service. For the second half of 2026 and full year 2027, the company expects to maintain an active user acquisition pace, targeting average customer segments and broadening user application coverage, with user value gradually realized through renewals and upsells over the customer life cycle. Q: What were the key financial highlights for the second quarter of 2026?A: Li Zhu, CFO, reported net operating revenue of RMB1,448 million, up 72.8% year over year. The insurance business contributed about RMB1,333 million, up 80.5% year over year. Operating profit reached about RMB111 million, up 14.3% year over year and 39.2% quarter over quarter. Net profit attributable to shareholders was around RMB126 million, down 10.3% year over year but up 27.9% quarter over quarter, due to tax-related items and non-recurring gains and losses. Cash and cash equivalents, short-term investments, and other cash positions totaled about RMB2.653 billion as of June 30, 2026. Q: What is the outlook for the full year 2026?A: Shen Peng, Founder, Chairman, and CEO, stated that for the full year of 2026, Waterdrop targets more than 40% year-over-year growth in total revenue and over 10% growth in operating profit. The company expects current incremental investment to continue translating into a solid user base and future product potential, with technology and AI regarded as core drivers of growth. Q: What shareholder return initiatives were recently approved?A: The Board approved two new initiatives. First, a cash dividend of $0.03 per ADS, or $0.003 per ordinary share, payable to holders of record on October 9, 2026, with aggregate payment of approximately $10.8 million to be made in early November. Second, the sixth share repurchase program of up to $50 million over the next 12 months. Since the initial program launched in 2021, the company has repurchased approximately 62.9 million ADS for $121 million as of August 31, 2026. Q: How did the insurance business perform in Q2 2026, and what product innovations were launched?A: Chenyang Wei, Independent Director, reported insurance-related income reached RMB1.33 billion, up 80.5% year over year and 16.4% quarter over quarter, with operating profit of RMB180 million, up 20% from the previous quarter. Newly acquired customers rose 32.3% sequentially, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Tuesday, Sept. 8, 2026, at 8 a.m. ET Founder, Chairman, and Chief Executive Officer - Sheng Peng Director and General Manager of Insurance Business - Wei Ran Finance Vice President, Head of Strategy and Capital Markets - Jieru Li Investor Relations - Tracy Lee Operator: Good morning, ladies and gentlemen. And thank you for standing by for Waterdrop Inc. Second Quarter 26 Financial Results Earnings Conference Call. At this time, all participants are in a listen only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to Ms. Tracy Lee. Please proceed, Ms. Lee. Tracy Lee: Thank you, operator. The ambassador and analyst, this is Tracy Lee from Boyshop Investor Relations. Please note that discussion today will contain forward looking statements made under the Safe Harbor provision of U.S. Private Securities and Litigation Reform Act of 2000. Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risk and uncertainties include, but not limited to, those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward looking statement. Except as required by applicable law. Also, this call include discussion of certain non GAAP matters. Please refer to our earnings release for reconciliation between non GAAP and GAAP. Joining us today on the call are Mr. Sheng Peng, our founder, chairman, and CEO, Mr. Wei Ran, director and GM of insurance business, Ms. Jieru Li, finance VP, head of strategy and capital markets, Certain members of our management team will deliver their remarks in Mandarin. Followed by an English translation. Moreover, a webcast reply will be available on our Investor Relations website. I will now turn the call over to our CEO, Sheng Peng. Please go ahead. Peng Shen: Dear investors and analysts, thank you for joining What Is Your Second Quarter 26 Earnings Conference Call. In this quarter, we maintained growth momentum and achieved a total revenue of 1.45 billion yen, up 72.8% year over year. And the net profit attributable to our ordinary shareholders of 130 million since the first quarter of 22, we have maintained profitability for 10 consecutive quarters. Segment wise, our insurance business continued to optimize user acquisition and conversion, driving 80.5% year over year revenue growth. What is your medical crowdfunding has cumulatively raised medical funds for 3.82 million patients. As of the reporting end. Our digital claims and trial solution business performed strongly with quarterly patient enrollment over 50% year over year. This growth trend was underpinned by deep integration of AI, across our core business scenarios. And at the end of June, the company has filed 80 AI-native large language model patents, including 10 of them overseas. With strong performance and cash reserve, continue to prioritize shareholder returns Our board recently approved the 2 new initiatives. Firstly, the board has approved a cash dividend of $0.03 per ADS. Or $0.003 per ordinary share Payable to holders of the record on October 9, 2026. The aggregate dividend payment is approximately $10.8 million. With payments to be made in early November. Second, the board approved the fixed share repurchase program of up to $50 million over the next 12 months. Is the initial program launched in 2021, we have repurchased approximately 62.9 million ADS for $121 million as of August 31, 2026. The company remains committed to sustainable development and to giving back to society in meaningful ways. As of June 30, 26, what is your charitable-- the charity platform has partnered with 119 public charitable organizations and launched more than 15.6 thousand charity programs. What is your program's focus on growth and investment in core businesses? We expect that our current incremental investment income to continue translating to a solid user base in the future productive potential. We always regard technology as the core driver of big companies' growth. Today, our AI capabilities are evenly bended across the platform. Enabling us to better capture growth opportunities in our existing businesses. And further sharpen our competitive edge. At the same time, we are actively piloting new AI driven initiatives. For global markets and have made early progress into that market. For full year of 2026, Waterdrop targets more than 40% year over year growth in total revenue and over 10% of growth in operating profit. This conclude our overview of Waterdrop's business performance Now we will walk you through each of our business segments in more detail. Wei Ran: Hello, everyone. This is. Let me brief you on our insurance business. The second quarter, insurance related income reached 1.33 billion yen, up 80.5% year over year and 15.4% for the quarter. Operating profit was 180 million, up 20% for the from the previous quarter. With continued refinement in our AI driven user insight and conversion capabilities, newly acquired customers rose 32.3% sequentially. The first year premiums of long-term insurance grew 33.4% sequentially. As we capture market demand for endowment insurance this quarter. On the product side, our core strategy remains improving the ability of the insurance products. This quarter, we delivered several new products in line with this direction, including the launch of Gongyibao, Market first long term critical illness insurance product, recording no health disclosure and offering 5-year guarantee of renewability. We are also expanding our Tiejiaobang matrix. Which now includes the max market for specified disease insurance offering lifetime coverage with no health disclosure. During this quarter, products with users with preexisting conditions contribute 310 million renminbi FIP, and disability insurance added 84 million. that is for today. On the service side, we have adopted differentiated scenario based operations across customer touch points. And this quarter, AI applications across our user facing interactions helped generate nearly 100 million in 5 p. Among them, AI for insurance generates FYP in millions each month. FYP facilitated by our AI medical insurance experts rose by 25.6% sequentially. In the WeChat scenario, we AI executed our strategies directly from the demand identification and user profiling to key moment engagement and batch outreach. Contributing over 10 million in FYP during this quarter. Long term insurance sales, the value of AI ultimately comes down to expanding what our life planners can do. As for our underwriting assistant, Kuiyi.ai, had answered more than 130 thousand underwriting question. since its launch. Our AI super sales representatives have constantly outperformed human life planners on annual premium policies. And the number of users served grew grow nearly 50% sequentially. Powered by multi agent collaboration, our AI conversion model captures user preference from natural language interaction turning them into durable profile we can draw on over time. And proactively surface topics tailored to each user, extending the reach of every life planner we have. That concludes our update on the insurance business. for the second quarter. Next, let me briefly update on Waterdrop's medical and healthcare businesses. As of the end of June 26, Waterdrop's medical crowdfunding had cumulative contributions from around 499 million? Of donors, up to 3.82 million patients and raised a total of 74.7 billion yen. This quarter, we continue to upgrade our AI driven risk control model, further improving asset concealment detection and sensitive identity detection. By combining semantic analysis of ID information, medical and user generated content, the operating engine can better identify hidden inconsistency and improve risk control efficiency. Okay, in our healthcare businesses, our performance exceeding expectations across several key metrics. We enrolled more than 1.5 thousand patients in this quarter, 54% year over year. And cumulative patients served surpassing 17 thousand. Growth was driven mainly by the higher matching efficiency and stronger enrollment capability. Oncology projects remain our core focus. While chronic disease projects are growing most of its sequential growth data. Although chronic disease studies have a larger patient pool, they typically carry a high screening failure rate and in place greater demands on matching profession and speed. Chronic disease enrollment increased 80% year over year in the second quarter. Further validating our enrollment ability in high screening failures enrolled. Meanwhile, our proven enrollment track record is translating into deeper and broader trust among paid partners. And this quarter, E-Find platform signed 167 new products and a number of pharmaceutical companies and CROs we partnered with surpassed 255. Going forward, we are going to continue to optimize the operational efficiency and work with our partners to advance digitalization across the clinical trial process. This concludes our update on profiling and healthcare Hello, everyone. Jieru Li: This is Jieru Li. Next, I will walk you through our financial highlights for the second quarter of 26. Before I go into details, please be reminded that all the numbers quoted here will be in RMB Please refer to our earnings release for detailed information on our financial performance on both the year over year and quarter over quarter basis, respectively. In the second quarter of 26, Waterdrop delivered net operating revenue of 1.448 billion. Up 72.8% year over year, maintaining a strong growth momentum. Our insurance business contributed about 1.333 billion yen in revenue, representing an 80.5% increase year over year. Non insurance businesses accounted for around 7.9% of total revenue, including 63.6 million yuan from medical crowdfunding service fees and 35.2 million yuan from our digital clinical trial solution. Total operating costs and expenses came in at about 1.337 billion yuan in the second quarter. Up 80.5% year over year. Operating costs were 537 million, increasing 29% year over year. The increase was primarily driven by business scale expansion including an increase of around 63.8 million yuan in cost of referrals and service fees. As well as an increase of 21.4 million yuan in short message service costs. And 11.2 million yuan in personnel cost, respectively. Sales and marketing expenses reached nearly 638 million compared with 199 million in the same quarter of 2020. 5. The year-over-year increase mainly reflected our active step up in public domain traffic investment. With marketing expenses for third party traffic channels increasing by about 450 million and marketing related professional technical service fees increasing by around 21.8 million yen. G and A expenses were 93.4 million, up 27.2% year over year mainly due to an increase of 33.3 million in allowance for credit losses. This was partially offset by decreases of nearly 10.5 million in personnel costs and share based compensation expenses. R&D expenses were 68.8 million up 32.4% year over year. The increase was mainly driven by cloud server fees token fees, and other active support expenses. Which rose by about 11.1 million yen as well as an increase of 6.3 million in personnel cost and share based compensation expenses. For this quarter, operating profit reached about 111 million up 14.3% year over year and 39.2% quarter over quarter. However, due to tax related items, nonrecurring gains and losses, net profit attributable to shareholders was around 126 million, down 10.3% year over year, but up 27.9% quarter over quarter. As of June 30, 2026, cash and cash equivalents, short term investments, and other cash positions totaled about 2.653 billion yen Our cash reserve maintains ample and provides solid support for both business investments and shareholder returns. In terms of shareholder returns, since the launch of our first share repurchase program, we have cumulatively repurchased 62.9 million ADS for across approximately $120 million as of August 31, 2026. And recently, the board approved the fixed share repurchase program and in which we plan to repurchase up to $50 million over the next 12 months. And also approved a cash dividend of approximately $10.8 million. Overall, both the quality and scale of growth in our core businesses improved this quarter. The continued deployment of AI across every scenario in our business is becoming an important driver of efficiency gains. Meanwhile, we are expanding proactively while investing prudently. In new initiatives and global markets, Which for now have very limited impact on our current year financial results. As these initiatives reach a larger scale, we will keep the capital markets informed in a timely manner. In the future, the company will remain committed to disciplined strategic investment and continue creating long term value for users and shareholders. That concludes the company's financial results for the second quarter of 26. Operator: We will now move on to the Q&A session. Okay, thank you, Jieru. Ladies and gentlemen, we will now begin our Q&A session. on your telephone. To withdraw your question, please press 2. In addition, this conference is being webcast live in on the C-Enter platform. If you are joining through the platform, you may also submit your questions in writing there. Okay, We now proceed to take our first question, and it comes from the line of Amy Chen of Citi. Amy Chen: The question is in terms of the Mainland China business in Hong Kong, media have reported that Mainland tax authorities made tax policy dividends. Has management seen any change ever in international business? Or domestic business? Peng Shen: You call you think you should have gone through the single GB. So it goes through the C-end. Regarding recent market intention, are we reading that what we are seeing reflects the inform enforcement of tax rules that has long been in place, rather than a new policy specifically targeting Hong Kong insurance. In the midterm, the media coverage have some effect on our customer sentiment. The differentiated value of Hong Kong insurance products like a low currency allocation, access to global health care resources, and a heritage planning, remain clear. Fundamental drivers of the Hong Kong insurance market, has not changed. Turning to the drivers of Mainland China insurance market today, growth is driven by a rising health protection awareness. Policy tailwinds for commercial health insurance. Continued product innovation, and structural shifts of household savings into long term assets. Such as insurance. In the current low interest rate environment. Waterdrop serves as a diversified customer base across multiple markets and in multiple service models, and our business mix remains solid. We are confident in serving user demand wherever it arises. Operator: We will now take our next question from Tsingtao Chen of CICC. Tsingtao Chen: The question is, we have noticed that several insurers have recently launched health insurance products targeting customers with preexisting conditions. How does management evaluate this opportunity in this category, and what is Waterdrop's product strategy in this area. Wei Ran: Can be To give a top-down view, that is to answer your latter question. As checkouts become more common, the credit email and living with previous conditions are far more typical. So a clean, standardized is actually quite rare. And traditional health care insurance have long focus on healthy lives, leaving the people with preexisting conditions still go unprotected. Industry consensus to clear or shift shifting our brand and ensuring more healthy people to protecting the health of more people. This is both a real demand side opportunity and a clear path of commercial insurance that extends beyond as coverage. And early practice was single level inclusive, health plans, that logic is now expanding to more commercial medical insurance, critical illness insurance, disability insurance, and others. This is not simply easing underwriting. It is about segmenting the risk and building differentiated underwriting and claims. So the certain risks can actually be written and paid. For Waterdrop, Broadening coverage is central to our product. Strategy. As of today, we break the demand down by scenario, age, and condition, and codesign terms coverage with our insurer partners On the acquisition side, we use platform and AI in sites to match the right product to the right customer. So people with preexisting conditions can actually find something that works for them. Longer term, our view is that health cover for people with preexisting conditions can become more, like, auto insurance. People can actually buy it, claim on it, and renew it. Accessibility and the sustainability will have to move together. Operator: Okay. We will now take our next question from Liu Wu of international. Liu Wu: The question is, is there a clear timeline for AIA to start generating commercial value? And how will AI investment impact on R&D expenses going forward? Peng Shen: And what are the new initiatives in the company currently exploring As previously introduced, our AI is expanding across the board value chain, from acquisition to received pre screening and claims, and its roles vary by stage. We are not commercializing AI as a standalone business and its value will show up in our top line growth and bottom line growth we deliver. And as I introduced it earlier, in the user targeting and conversion, our AI directly support user consideration and the purchase decision. Giving nearly 100 million in FYP. And in our long term insurance and services, tools like Kuiyi.ai and our AI presenter system that help our life planners work more efficiently and close more cases In operations, our AI customer service, and quality inspection application have fully absorbed the actual volume and the scale In our R&D side, the overall R&D ratio is stable, but we, actively shifted resources towards AI. Both in the talent and in token cost. As usage scales, the spend will grow naturally but we are a disciplined about ROI on each scenario. And it will keep the overall ratio to a reasonable range. And then turning to our new initiative, we are incubating a portable AI office assistant a smart hardware product that will leverage our AI agent know how, in house R&D, and China supply chain strength. It is in pilot sales across major global markets with some encouraging early feedback. That said it is still in the early stage and its financial impact is limited for now, And the experience we are gaining along the way, both for the business for the company overall, is genuinely valuable. Operator: And we will now take our next question from Kate Liu of UOB Kay Hian. Kate Liu: Her question is for product and supply perspective, what which insurance category does the management view as having strong growth potential? Wei Ran: There are 2 forces that we are shaping our health insurance: a rising Health Protection Awareness and an aging population. So the market is shifting from the standardized product to more tailored to actual needs. Demand driven coverage, including, for example, insurance for pre-existing conditions, and high-end medical insurance, and it protects bundled with health management, and the elderly care services The unmet demand that traditional products never really served is being unlocked. We will keep building in this area. And this can create play right into the strength we have built through our online platform. We can reach broadly and target precisely leveraging our AI capability and spot protection gaps in specific customer groups. Connecting them with the right products and deliver better, faster service at the point of consumer application. So we will keep building on what we are uniquely good at. Operator: Okay. We will now take our next question from CITIC Securities. Analyst: The question is, I am noticing the strong growth in Q2, and could you walk us through your recent customer acquisition investment and Qualcomm and what we can expect on the cost side for the rest of 2026 and into 2027. Peng Shen: The increase in investments They are both in the user acquisition in Q2. That has already show up in the numbers. Like insurance revenue and operating profit both grow further from the last quarter. And the new users were actually up more than 30% sequentially. This is a combined result of better reach out and the conversion and product supply. And in terms of the user acquisition strategy, we are now actually not simply pursuing the cost of What matters most is how we leverage AI capability to better align our product supply with our user profile and improving conversion efficiency. So currently, AI is has been embedding across the entire process from our customer acquisition to service and it is continually improving our efficiency at our core operations. For the second half of 26 and the full year of 27, our strategic direction remains consistent. We expect to maintain an active user acquisition pace extending our reach to target customer segments and furthering user education coverage And at the same time, we expect the user value generated by the current period acquisition will be gradually realized through renewals and up cells and cross-sells Over the sequential user life cycle. Operator: We have received no further questions online, and this concludes our Q&A session for today. Thank you to all the investors and analysts who joined us today. Betsy, operator, back to you. We are now approaching the end of the conference call. Thank you for your participation in today's conference. You may now disconnect. Have a good day. Before you buy stock in Waterdrop, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Waterdrop wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Waterdrop (WDH) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

BEIJING, Sept. 8, 2026 /PRNewswire/ -- On September 8, Waterdrop Inc. (NYSE: WDH) released its unaudited financial results for the second quarter ended June 30, 2026. In Q2 2026, the company's operating revenue reached RMB1,448.2 million, up 72.8% year-over-year; net profit attributable to ordinary shareholders was RMB125.8 million, marking 18 consecutive quarters of profitability. As of August 31, 2026, the company had cumulatively repurchased approximately 62.9 million ADSs (American Depositary Shares) from the open market. With solid performance in Q2, the company achieved rapid revenue growth. Going forward, Waterdrop will continue to increase investment in AI technology innovation, making healthcare and financial services more accessible to the public. Insurance Business Grows Steadily, AI Penetration Continues to Rise This quarter, the insurance business maintained strong growth, with insurance-related revenue up 80.5% year-over-year. Meanwhile, profitability continued to improve, with insurance business operating profit reaching RMB183.6 million, up 20% quarter-over-quarter. Waterdrop is comprehensively accelerating the application of AI technology across the entire insurance value chain. Premiums facilitated by 'AI Medical Insurance Expert' rose by 25.6% quarter-over-quarter. First-year premiums for long-term insurance grew 33.4% quarter-over-quarter. In terms of product innovation, leveraging its massive claims data and user profile analytics, Waterdrop has broken the traditional static logic of blanket rejection for people with chronic diseases, removing barriers to coverage for users with pre-existing conditions one by one. This quarter, Waterdrop launched 'Rongyibao,' the market's first long-term critical illness insurance product that requires no health disclosure and offers five-year guaranteed renewability, covering more than 100 critical illnesses with optional riders for accidental death and disability benefits. At the same time, the company expanded 'Jixing Gaozhao' series with the market's first lifetime specified disease insurance product requiring no health disclosure. Waterdrop Medical Crowdfunding: 499 Million Users Have Donated RMB74.7 Billion to 3.82 Million Patients This quarter, Waterdrop Medical Crowdfunding continued to fulfill its role in providing emergency relief. Since its launch in 2016, approximately 499 million donors have cumulatively contributed RMB74.7 billion to 3.82 million patients with critical illnesses through Waterdrop Medical Crowdfunding. Waterdrop Medical Crowdfunding has always practiced the philosophy of "tech for good," building a dual safeguard system for case authenticity verification and transparent fund flow through AI technology. This quarter, Waterdrop Medical Crowdfunding introduced AI in risk management: relying on the semantic parsing capabilities of large models combined with strategic analysis, it built an intelligent identification matrix for multiple high-risk scenarios, precisely detecting dimensions such as fundraiser sensitive-identity recognition and abnormal assets. This has significantly improved the accuracy and efficiency of platform risk identification, ensuring the authenticity and reliability of fundraising cases. In addition, Waterdrop Medical Crowdfunding has launched AI fundraising assistants in 548 cities nationwide. Leveraging intelligent, round-the-clock service, the assistants provide professional support to fundraising users across the country — especially those in remote areas and those unfamiliar with internet operations. Services cover end-to-end fundraising Q&A, basic critical-illness health education, and efficient fundraising guidance, making critical illness relief more precise and convenient and filling gaps left by human service coverage. E-Find Platform: Q2 Revenue RMB35.2 Million, Partners with 255 Pharma Companies and CROs Waterdrop's digital clinical trial solutions business grew steadily, with E-Find Platform's net revenue reaching RMB35.2 million, up 26.8% year-over-year. This quarter, E-Find Platform established partnerships with 255 well-known domestic and overseas pharma companies and CROs. As of June 30, 2026, it had cumulatively delivered 1,873 clinical trial projects with 17,052 enrolled patients. In terms of social responsibility, in response to severe rainstorms and floods across multiple areas of Guangxi and debris-flow disasters at the Jilong Port in Jilong County, Shigatse, Tibet, Waterdrop urgently established a disaster relief emergency response team and quickly launched rescue operations. Waterdrop Charity immediately launched a "Relief" special section on its homepage and, in collaboration with multiple foundations, rushed aid to affected areas — delivering over 2,000 relief supply packages to the Guangxi disaster zone and doing its utmost to help affected communities through the crisis. Shen Peng, Founder and CEO of Waterdrop Inc., said: "Waterdrop has always regarded technology as our core driver. With AI embedded across our platforms, we are well positioned to capture the growing demand in our existing businesses. In the future, we remain committed to delivering greater value for our shareholders in the years to come." View original content:https://www.prnewswire.com/apac/news-releases/waterdrop-inc-reports-second-quarter-2026-unaudited-financial-results-302872187.html

BEIJING, Sept. 8, 2026 /PRNewswire/ -- Waterdrop Inc. ("Waterdrop", the "Company" or "we") (NYSE: WDH), a leading technology platform dedicated to insurance and healthcare services with a positive social impact, today announced its unaudited financial results for the three and six months ended June 30, 2026 and a cash dividend. Financial and Operational Highlights for the Second Quarter of 2026 Strong Core Business Growth: Net operating revenue for the second quarter rose to RMB1,448.2 million (US$213.4 million), representing a robust year-over-year increase of 72.8%. Insurance-related income for the quarter reached RMB1,333.2 million (US$196.5 million), up 80.5% from the same period in 2025. Improved Operating Performance: In the second quarter of 2026, operating profit was RMB111.3 million (US$16.4 million), marking a 39.2% quarter-over-quarter increase and a 14.3% year-over-year increase. Broader Reach of Medical Crowdfunding: As of June 30, 2026, approximately 499 million individuals had cumulatively donated an aggregate of RMB74.7 billion to 3.82 million patients through Waterdrop Medical Crowdfunding. Continued Expansion in Patient Enrollment: As of June 30, 2026, the Company had facilitated the enrollment of 17,052 patients across 1,873 clinical trial programs through the E-Find Platform. Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We are pleased to report another quarter of accelerating growth and strengthening profitability. Our AI initiatives continued to translate into tangible operating leverage. We delivered solid results in insurance business, with an 80.5% year-over-year growth and a 16.4% quarter-over-quarter growth in insurance-related income. Continued refinement of our AI models improved conversion efficiency, leading to a 32.3% sequential increase in the number of new customers acquired. Expanding access to insurance protection remains our core product strategy. During the quarter, we introduced 'Rongyi Bao,' the market's first long-term critical illness insurance product that requires no health disclosure and offers five-year guaranteed renewability. Together with our deepening insights into evolving user needs, these efforts translated into premium growth, with long-term premiums up 33.4% quarter-over-quarter. AI is becoming the foundational layer powering how we sell and serve. Our AI deployment continued to enhance service efficiency and operational quality across our insurance business. In this quarter, premiums facilitated by our 'AI Medical Insurance Expert' rose by 25.6% sequentially. Our 'KEYI.AI' underwriting assistant has processed more than 13,000 inquiries to date. The number of users served by 'AI Super Pre-Sales Assistant' climbed by nearly 50% sequentially. Our AI-powered risk controls for Medical Crowdfunding resulted in marked improvement this quarter. As part of our risk review system, a new asset verification cross-references documents, medical records, and user-generated content to assess the possibility of undisclosed assets, such as property and vehicles, or unreported sources of income, and flags potential inconsistencies across the information reviewed. Within our digital clinical trial business, the E-Find Platform delivered notably strong performance, especially in the chronic disease area. In the second quarter, we partnered with 255 pharmaceutical companies and contract research organizations and enrolled 1,540 patients. Revenue from digital clinical trial solutions was approximately RMB35.2 million, up 26.8% year-over-year. Underscoring the commitment to shareholder returns, the board of directors of the Company (the "Board") has authorized the Company's sixth share repurchase program. Since the initial program launched in 2021, we had repurchased approximately 62.9 million ADSs for US$121.3 million as of August 31, 2026. We are also pleased to announce that, the Board has approved our sixth cash dividend of approximately US$10.8 million. Waterdrop has always regarded technology as our core driver. With AI embedded across our platforms, we are well positioned to capture the growing demand in our existing businesses. Meanwhile, we continue to incubate new AI-driven business initiatives targeting global markets. We remain committed to delivering greater value for our shareholders in the years to come." Financial Results for the Second Quarter of 2026 Operating revenue, net Net operating revenue for the second quarter of 2026 reached RMB1,448.2 million (US$213.4 million), which represents an increase of 72.8% year-over-year from RMB838.0 million for the same period of 2025. On a quarter-over-quarter basis, net operating revenue increased by 16.6%. 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 analytics and intelligent recommendation service, risk assessment technical service and marketing services to insurance companies, insurance brokers, and insurance agencies. Reinforced by cumulative big data, we provide risk assessment technical services through an algorithm-driven verification system assessing risk by analyzing user profiles and medical histories, tagging risk levels for hierarchical management that help insurers refine their risk analysis capabilities since 2025. We leverage multi-dimensional consumer insights to deliver analytics and intelligent recommendation services, enabling policyholders to be matched with more suitable products and improving sales efficiency. Our insurance-related income amounted to RMB1,333.2 million (US$196.5 million) in the second quarter of 2026, representing an increase of 80.5% year-over-year from RMB738.6 million for the second quarter of 2025, driven mainly by enhanced risk assessment service capabilities and increased first-year premiums ("FYP") generated through our platform. Our technical service income amounted to RMB488.0 million (US$71.9 million) in the second quarter of 2026, compared with RMB160.9 million for the same quarter of 2025. On a quarter-over-quarter basis, insurance-related income increased by 16.4%, mainly due to the increase in insurance brokerage income. 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 second quarter of 2026, we generated RMB63.6 million (US$9.4 million) in service fees, representing a decrease of 5.7% from RMB67.4 million for the second quarter of 2025. On a quarter-over-quarter basis, crowdfunding service fees increased by 4.7%. 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 second quarter of 2026, our digital clinical trial solution income amounted to RMB35.2 million (US$5.2 million), representing an increase of 26.8% from RMB27.7 million in the same period of 2025. On a quarter-over-quarter basis, digital clinical trial solution income increased by 45.1%. Operating costs and expenses Operating costs and expenses increased by 80.5% year-over-year to RMB1,336.9 million (US$197.0 million) for the second quarter of 2026. On a quarter-over-quarter basis, operating costs and expenses increased by 15.0%. Operating costs increased by 29.0% year-over-year to RMB537.3 million (US$79.2 million) for the second quarter of 2026, as compared with RMB416.5 million for the second quarter of 2025, which was primarily driven by (i) an increase of RMB63.8 million in costs of referral and service fees, (ii) an increase of RMB21.4 million in short message service (SMS) costs for new user onboarding and authentication processes, (iii) an increase of RMB11.2 million in personnel costs, and (iv) an increase of RMB8.2 million in the costs for the digital clinical trial solution consultants team. On a quarter-over-quarter basis, operating costs increased by 10.4% from RMB486.8 million, primarily due to (i) an increase of RMB34.9 million in costs of referral and service fees, (ii) an increase of RMB11.2 million in personnel costs, and (iii) an increase of RMB8.3 million in the costs for the digital clinical trial solution consultants team, partially offset by (iv) a decrease of RMB12.7 million in the costs for SMS due to the decrease of volume of SMS sent during the quarter. Sales and marketing expenses increased by 220.7% year-over-year to RMB637.5 million (US$94.0 million) for the second quarter of 2026, as compared with RMB198.8 million for the same quarter of 2025. The increase was primarily due to (i) an increase of RMB415.0 million in marketing expenses for third-party traffic channels, and (ii) an increase of RMB21.8 million in marketing-related professional technical service fees. On a quarter-over-quarter basis, sales and marketing expenses increased by 17.8% from RMB541.1 million, primarily due to (i) an increase of RMB79.0 million in marketing expenses for third-party traffic channels, and (ii) an increase of RMB12.2 million in marketing-related professional technical service fees. General and administrative expenses increased by 27.2% year-over-year to RMB93.4 million (US$13.8 million) for the second quarter of 2026, as compared with RMB73.4 million for the same quarter of 2025. The increase was primarily due to (i) an increase of RMB33.3 million in allowance for credit losses, partially offset by (ii) a decrease of RMB10.5 million in personnel costs and share-based compensation expenses. On a quarter-over-quarter basis, general and administrative expenses increased by 30.2% from RMB71.7 million, due to (i) an increase of RMB30.2 million in allowance for credit losses, partially offset by (ii) a decrease of RMB10.8 million in personnel costs and share-based compensation expenses. Research and development expenses increased by 32.4% year-over-year to RMB68.8 million (US$10.1 million) for the second quarter of 2026, as compared with RMB51.9 million for the same period of 2025, which was primarily driven by (i) an increase of RMB11.1 million in cloud server fees, token fees and other IT support expenses, and (ii) an increase of RMB6.3 million in personnel costs and share-based compensation expenses. On a quarter-over-quarter basis, research and development expenses increased by 9.7% from RMB62.7 million. The increase was primarily due to (i) an increase of RMB4.0 million in cloud server fees and other IT support expenses, and (ii) an increase of RMB2.0 million in personnel costs and share-based compensation expenses. Operating profit for the second quarter of 2026 was RMB111.3 million (US$16.4 million), as compared with RMB97.3 million for the second quarter of 2025 and RMB80.0 million for the first quarter of 2026. Interest income for the second quarter of 2026 was RMB25.4 million (US$3.7 million), as compared with RMB29.5 million for the second quarter of 2025 and RMB29.1 million for the first quarter of 2026. Income tax expense for the second quarter of 2026 was RMB22.3 million (US$3.3 million), as compared with income tax benefit of RMB2.9 million for the second quarter of 2025 and income tax expense of RMB6.8 million for the first quarter of 2026. Net profit attributable to the Company's ordinary shareholders for the second quarter of 2026 was RMB125.8 million (US$18.5 million), as compared with RMB140.2 million for the same period of 2025 and RMB98.4 million for the first quarter of 2026. Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP(1)) for the second quarter of 2026 was RMB135.5 million (US$20.0 million), as compared with RMB151.6 million for the same period of 2025 and RMB106.3 million for the first quarter of 2026. Cash position(2) As of June 30, 2026, cash position of the Company was RMB2,652.7 million (US$391.0 million), as compared with RMB3,249.0 million as of December 31, 2025. Share Repurchase Programs Pursuant to the share repurchase programs launched in September 2021, September 2022, September 2023, September 2024, September 2025, and September 2026, respectively, we had cumulatively repurchased approximately 62.9 million ADSs from the open market with cash for a total consideration of approximately US$121.3 million as of August 31, 2026. Our Board has approved a new share repurchase program whereby the Company is authorized to repurchase its own ordinary shares in the form of American depository shares with an aggregate value of up to US$50 million during the 12-month period through September 10, 2027. The Company expects to fund the repurchase from its existing cash balance. The Company's proposed repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The timing and dollar amount of repurchase transactions will be subject to the requirements of the Securities and Exchange Commission Rule 10b-18 and/or Rule 10b5-1. The Board will review the share repurchase program periodically, and may authorize adjustment to its terms and size or suspend or discontinue the program. Cash Dividend The Board has approved a cash dividend of US$0.03 per ADS or US$0.003 per ordinary share to shareholders of record as of the close of business on October 9, 2026. The aggregate amount of the dividend is expected to be approximately US$10.8 million. The payment date is expected to be on or around November 3, 2026, for holders of ordinary shares and on or around November 6, 2026, for holders of ADSs. 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 three and six-month ended June 30, 2026. Subsequent to June 30, 2026, a wholly owned subsidiary of the Company entered into a secured term loan facility amounting to US$40.0 million with an independent third-party borrower, which has been fully drawn. The borrowings bear interest at 10% per annum, mature 24 months after the respective drawdown dates, and are secured by the borrower's limited partnership interest in a private investment fund. Exchange Rate This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") 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 RMB6.7851 to US$1.00, the noon buying rate in effect on June 30, 2026 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 and foreign currency exchange gain or losses. 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 "Reconciliations 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 September 8, 2026 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: 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 through September 15, 2026 by dialing the following numbers: Additionally, live and archived webcasts of the conference call will 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 services 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 services to billions through technology. For more information, please visit www.waterdrop-inc.com. For investor inquiries, please contact Waterdrop [email protected] View original content:https://www.prnewswire.com/news-releases/waterdrop-inc-announces-second-quarter-2026-unaudited-financial-results-and-a-cash-dividend-302872033.html

Interested in Waterdrop Inc. Unsponsored ADR? Here are five stocks we like better. Strong Q2 growth: Waterdrop’s revenue rose 72.8% year over year to RMB 1.45 billion, with the company remaining profitable for its 18th consecutive quarter. Management is targeting more than 40% full-year revenue growth and over 10% operating-profit growth in 2026. Insurance expansion supported by investment and AI: Insurance revenue increased 80.5% to RMB 1.33 billion, while new customers rose 32.3% sequentially. Waterdrop plans to sustain customer-acquisition spending and use AI to improve product matching, conversion, underwriting and customer service. Shareholder returns continue: The board approved a $0.03-per-ADS dividend and a new share-repurchase program of up to $50 million over 12 months. The company held RMB 2.65 billion in cash and related investments at the end of June. Waterdrop (NYSE:WDH) reported second-quarter 2026 revenue of RMB 1.45 billion, up 72.8% from a year earlier, while management said the company remained profitable for its 18th consecutive quarter. Net profit attributable to ordinary shareholders was cited at approximately RMB 130 million in opening remarks, while Finance VP and Head of Strategy and Capital Markets Jieru Li later described attributable net profit as about RMB 126 million. Founder, Chairman and CEO Peng Shen said the company expects its current investment in growth to build a larger user base and support future profit potential. For full-year 2026, Waterdrop is targeting total revenue growth of more than 40% year over year and operating-profit growth of more than 10%. → 3 Stocks With September Catalysts Investors Shouldn’t Ignore Waterdrop’s insurance business generated RMB 1.33 billion in second-quarter revenue, up 80.5% year over year and 15.4% sequentially, according to Director and General Manager of Insurance Business Ran Wei. Segment operating profit was RMB 180 million, up 20% from the first quarter. New insurance customers increased 32.3% sequentially as the company continued investing in customer acquisition and conversion. First-year premiums for long-term insurance rose 33.4% sequentially, which management attributed to demand for endowment insurance products during the quarter. → Why Hewlett Packard Enterprise’s Sell-Off May Not Last Shen said Waterdrop does not intend to pursue lower acquisition costs alone. Instead, the company is using AI to better align product supply with customer profiles and improve conversion. Management expects to maintain an active acquisition pace through the second half of 2026 and into 2027, with the aim of capturing value over customer lifecycles through renewals, upselling, cross-selling and family insurance purchases. Waterdrop also highlighted insurance products for people with preexisting conditions. Such products contributed RMB 310 million in first-year premiums during the quarter, while disability insurance generated RMB 84 million in first-year premiums. The company introduced Rongyi Bao, which it described as a long-term critical-illness insurance product with no health disclosure requirement and five-year guaranteed renewability. → 3 Earnings Season Winners That Analysts Can't Stop Upgrading Wei said the broader health-insurance market is moving toward more specialized products as health awareness rises and China’s population ages. Management identified coverage for people with preexisting conditions, mid- to high-end medical insurance, and products incorporating health management and elderly-care services as areas with growth potential. Management emphasized AI as a central component of Waterdrop’s operating strategy rather than a standalone business segment. Shen said the company measures AI’s value through the efficiency and growth it produces across customer acquisition, risk screening, claims and service operations. AI applications in customer-facing insurance scenarios facilitated nearly RMB 100 million in first-year premiums during the quarter, the company said. Waterdrop’s AI medical-insurance expert tools facilitated a 25.6% sequential increase in first-year premiums, while its WeCom operating scenario contributed more than RMB 10 million in such premiums. The company said its underwriting assistant, KEYI.AI, had answered more than 13,000 underwriting questions since launch. Its AI sales assistant has outperformed human life planners in annual premium per lead, according to management. Waterdrop had filed 88 large-language-model patents as of the end of June, including 10 outside China. Li said research and development expense rose 32.4% year over year to RMB 68.8 million, driven in part by cloud-server, token and other information-technology support costs, as well as personnel expenses. Shen said the overall R&D expense ratio remains in a relatively stable range, though the company is shifting resources toward AI talent, algorithms, models and token costs. Waterdrop is also piloting a portable AI office assistant, a smart hardware product being tested in major global markets. Shen said initial feedback has been encouraging, but the initiative remains at an early stage and currently has limited financial impact. As of June 30, Waterdrop Medical Crowdfunding had received contributions from about 499 million donors, helped 3.82 million patients and raised approximately RMB 74.7 billion cumulatively. The company said it has upgraded AI-driven risk controls to identify potential asset concealment and sensitive identities by analyzing identification information, medical materials, user-generated content and other data. In its healthcare business, Waterdrop enrolled more than 1,500 patients during the quarter, up 54% year over year, and had served more than 17,000 patients cumulatively. Management said improved document structuring and AI matching models enabled the platform to process more complex enrollment criteria. Chronic-disease enrollment increased 80% year over year, while oncology remained the business’s core area. The company’s E-Find platform added 167 projects during the quarter, and its pharmaceutical company and contract research organization partner count exceeded 255. Waterdrop reported operating profit of about RMB 111 million, up 14.3% year over year and 39.2% sequentially. Total operating costs and expenses increased 80.5% year over year to approximately RMB 1.34 billion. Sales and marketing expense rose to nearly RMB 638 million from RMB 199 million a year earlier, primarily reflecting increased investment in third-party traffic channels. As of June 30, the company held RMB 2.65 billion in cash, cash equivalents, short-term investments and other cash positions. The board approved a cash dividend of $0.03 per American depositary share, or $0.003 per ordinary share, totaling about $10.8 million. The dividend is payable in early November to holders of record as of Oct. 9. The board also approved a new share-repurchase program authorizing up to $50 million in repurchases over the next 12 months. Waterdrop said it had repurchased approximately 62.9 million ADS for about $121 million as of Aug. 31 under programs launched since 2021. Waterdrop Inc (NYSE: WDH) is a China-based insurtech and health protection platform that leverages digital technology to connect consumers with insurance and healthcare services. Through its mobile app and online marketplace, Waterdrop offers a range of microinsurance and critical illness products designed to provide affordable coverage for everyday risks. The platform also features crowdfunding channels that enable users to contribute to medical expense relief for individuals facing serious health challenges. Since its founding in 2016 and headquartered in Shanghai, Waterdrop has grown its partner network to include leading insurance carriers and medical institutions across mainland China. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Waterdrop Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Image source: The Motley Fool. Tuesday, June 16, 2026 at 8 a.m. ET Chief Executive Officer — Peng Shen Insurance Business Head — Wei Ran Healthcare and Crowdfunding Business Head — Xu Xiaoying Peng Shen: Dear investors and analysts, thank you for joining Waterdrop's first quarter 206 earnings conference call. In the first quarter, we continued our last year's growth momentum with total revenue of 1.24 billion yuan at 64.8% year-on-year, and net profit attributable to ordinary shareholders of more than 98 million yuan. Since the first quarter of 2022, we have maintained a gap-proof visibility for 17 consecutive quarters. By second, our insurance business continues its user acquisition strategy with insurance-related income at 74.1% year-over-year. As these capabilities have been validated, we sharpened our focus on user experience while continuing to optimize our traffic channels and user-targeting efficiency. The Khorfani distance remains stable, having raised the medical cost for a cumulative 3.75 million patients by the end of the Q1. And our digital clinical trial solution business is the standard enrollment growth, with more than 15,500 patients enrolled to date. On the technology front, we are accelerating our shift toward an AI-native company. As of March 31, 2006, we had filed 75 LLM-related patent applications, including nine international ones and were recently granted two more national invention patents in intelligence, semantic understanding, and the multimodal recognition. These technologies will be progressively applied to the insurance scenario, such as intelligent customer service and claims, improving service quality and efficiency. On capital returns, we continue to share our growth with our shareholders. In early May, we completed our fifth cash dividend since our IPO, totaling approximately $10.8 million. Our share repurchase program also continued steadily. By the end of May 2006, we had repurchased approximately $61.8 million ADF in open market for about $120 million. As of the end of May 2006, cumulated cash dividends and share repurchases since ICO had totaled approximately $170 million. Meanwhile, we remain committed to giving back to society. At the end of the Q1, the Waterdrop Charity platform had partnered with 119 public charitable organizations and launched over 15,500 charity programs. Looking ahead, we aim to seize industry opportunities and make growth our top priority this year. Building on our proven user-targeting capabilities, we will increase marketing investment further. For 2026, we are targeting approximately 40% top-line growth with operating profit scale is expected to remain broadly stable. We expect this current investment to allow greater profit potential in the coming years, and the user-based extension will further support the company's long-term development. And that covers our overall performance in Q1. Next, I will walk through each of those business segments in detail. Wei Ran: Hello everyone, this is Wei Ran. Let me walk you through the progress of the insurance business. In the first quarter, insurance-related income reached $1.15 billion at 74.1% year-over-year, with operating profit of $115 million. The operating margin of Q1 is 13.3%. The year-over-year top-line growth mainly reflects a continuation of our last year user acquisition strategy. In the first quarter, we continue to step up public domain user targeting and increase our investment in traffic and AI, driving significant premium growth. On a quarter-over-quarter basis, while the income declined, our insurance operating margin rose by 2 percentage points. This was mainly because we proactively cut some lower ROI channels during this quarter. At the same time, we are actively expanding into other high-quality traffic channels while running our mature ones with refined operations, enhancing our traffic infrastructure, and optimizing our model to drive continued improvement in ROI. On the supply side, we are committed to giving users more diverse product offerings, which continue to earn user recognition. During this quarter, FIP from our pre-existing condition products about 24.3% year-over-year, and the disability insurance products contribute $89 million in FIP. At the product level, we continue to iterate. For example, we upgraded our inclusive cancer worry-free medical insurance service, extending the coverage for out-of-the-hospital prescriptions and related medical devices, as well as the as well as a range of advanced cancer therapies. We also recently launched the Shuidi Hulian focused cancer-specified GV products with a singular health discloser and a lower the bar to lifelong cancer protection. And on the service side, we took multiple steps to improve the customer experience. We launched a dedicated customer complaint hotline make it easier for users to raise concerns and we also connect the payment channels with our customer service system, expanding frontline operations and enable faster refund processing. And for elderly customers, we simplified procedures for the children acting on their behalf and introduced a faster track service channel. Together, this initiative upgraded our access balance service capability. We also continued to apply our LLM capabilities and AI tools to streamline the workflow and improve operating efficiency. The user-facing AI applications contributed approximately 87 them in incremental premiums in Q1 at 17.7% sequentially. Through real-time support on our mini-programs, WeChat, phone calls, and WECOM, including our AI Pro insurance and AI medical insurance experts, WECOM AI, and other tools. For our frontline consultants, Kui Yi Zuo AI had handled more than 10,000 underwriting inquiries to date. In late March, we began internal beta testing of the cloud copilot on CRM and WECOM, bringing together our product knowledge base, the Creedo AI, and the other two agent tools. So our consultants can get instant answers on products, underwriting, and other common questions with lots of switching between the systems and documents. Cloud Copilot also supports the self, the easy review, top track replay and refinement, and performance analysis. And after self-service, our AI user service agent now in regular operation supports more than 1 million service interactions per month. And the AI service quality Copilot continue to deliver efficiency of more than twice in a manual-only basis through this baseline. On the AI infrastructure side, our low-cost platform, Waterdrop Digital AI, now offers more than 30 purpose-fueled agents, each tailored to a specific scenario for our internal team and external clients in all the user-facing work. So, that concludes our insurance business update for the first quarter. Xu Xiaoying: Thank you, Yuan. This is Xu Xiaoying. And now, next, I will walk you through our first quarter performance on our card bonding and the healthcare business. As of the end of March 2016, approximately 494 million people had cumulatively donated a total of $73.5 billion to 3.75 million patients through the Waterdrop Medical Profiling Platform. This quarter, we pursued two priorities for Waterdrop Medical Profiling. The AI capability viewing and better service in linguistic diverse regions. For AI review, we complete an quarterly upgrade involving towards an AI-assisted model without compromising risk control quality. Our RISC model can structure the content materially quickly and applies the preset rules for preliminary screening, short-term intake and the first-class review and treat our RISC specialists for complex cases. Secondly, we improve the service for patients in linguistically diverse communities, including areas where a minority language widely spoken and this quarter we systematically refined our service workflows and adapted the review standard to their real needs. We added a minority language specialist to work alongside our existing campaign consultants on upfront consultation and the document guidance and the dispute resolution and reducing the communication cost that caused by language barriers. In addition we set up a dedicated service team in which the translator and the risk control specialist can track each case end-to-end and promptly resolve the bottlenecks, ensuring a strict risk control compliance while respecting local culture sensitivity. Turning to our healthcare business, we sustain a high quality growth this quarter, broaden LLN application across the core business scenarios. We partnered with 243 pharmaceutical companies and CROs and initiated services for 128 new programs. Our e-fund platform's single-quarter patron enrollment rose 16% year-over-year, and the newly-signed project in this quarter increased 53%, reflecting the wider partnership coverage and the deeper client engagement. As of the end of the first quarter of 2006, the platform had cumulatively enrolled over 15,500 patients. In January 2006, our intelligent drug patient matching technology secured a national invention patent, which is the first of this kind in China. This quarter, we focused on building up our upstream data structuring capability and connecting it with the matching in game. Across part of our service workflow, the platform has now established a standardized pipeline from the data structuring to intelligent product matching, promptly generating suitability recommendation against the trial protocol. Supported by these AI capabilities, we continue to build our case library, medical case library, and complex indications in rare cancers with a more balanced mix across therapeutic areas, strengthening the foundation for sustainable mid-term to long-term growth. And that covers our core funding and the healthcare businesses. I will now get through our financial headlines for the first quarter of 2016. Before I go into details, please be reminded that all numbers quoted here will be in Renminbi, and please refer to our earnings relist to pull detailed information on our financial performance on both year-over-year and quarter-by-quarter basis, respectively. In the first quarter of 2006, Waterdrop's total revenue reached $1.24 billion, up 64.8% year-over-year, sustaining rapid growth. In fact, second, the insurance related income contributed approximately 1.15 billion at 74.1% year-over-year, while the non-insurance business together accounted for about 7.8% of total revenue, with corresponding services of approximately 60.73 million, and digital clinical trial solution income of approximately 24.2 million. And the cost, our total operating cost and expenses for this first quarter were approximately 1.16 billion at about 71.5% year-over-year. Operating costs for this quarter reached 487 million at 30.1% year-over-year driven by our business extension. Cost of referral and services increased by about $53.9 million, while short-message service costs and the personal costs arose by $38.9 million and $17.3 million, respectively. Sales and marketing expenses reached $541 million, a significant increase from $172 million in the same period last year. Mainly because we progressively scale up traffic investment over the past year and reinforced workforce momentum. Marketing expenses for third-quarter traffic channels rose by approximately $361 million year-over-year. General and administrative expenses were $71.7 million, down 4.3% year-over-year mainly due to the lower professional services this quarter. and development expenses were about 62.7 million, an 11.5% year-over-year increase, currently due to an approximately 6.7 million right in cloud and the technology and the technical services. For the third quarter, operating profit was around 79.95 million, a modest year-over-year increase of 5.3%. However, affected by the net operating action in this quarter, the net profit attributable to all investor shareholders was approximately 98.4 million, down 9.1% year-over-year. As of the end of March 2026, the company maintained an anvil cash reserve with cash and cash equivalents, short-term investments, and other cash positions totaled about approximately $2.88 billion. And on the capital return since our IPO through May 1st, 2026, we accumulated a repurchase total of approximately $61.8 million for about 120 million U.S. dollars and it recently completed a tax dividend over approximately $10.8 million.Overall, the growth momentum of our core business agreement is strong and in the first quarter, Waterdrop delivered 64.8% year-over-year revenue growth and by stepping up the investment in traffic and AI, continues to strengthen our long-term competitiveness. Operator: And ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining. Have a good time. 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Interested in Waterdrop Inc. Unsponsored ADR? Here are five stocks we like better. Revenue jumped 64.8% year over year to CNY 1.24 billion in Q1 2026, driven mainly by a surge in insurance-related income. Waterdrop said it is targeting about 40% full-year top-line growth while keeping operating profit broadly stable. Insurance remained the main growth engine, with segment revenue up 74.1% to CNY 1.15 billion and operating margin improving to 13.3%. Management said growth was supported by higher marketing and AI investment, alongside product expansion in areas like cancer and disability coverage. AI adoption expanded across the business, with user-facing AI tools adding about CNY 87 million in incremental premiums and service agents handling more than 1 million interactions per month. Waterdrop also reported 75 LLM-related patent applications and continued beta testing of internal AI tools for sales and service teams. Waterdrop (NYSE:WDH) reported sharply higher first-quarter 2026 revenue as its insurance business continued to scale, while profit attributable to ordinary shareholders declined year over year amid increased marketing and technology investment. Founder, Chairman and CEO Shen Peng said total revenue rose 64.8% from a year earlier to CNY 1.24 billion. Net profit attributable to ordinary shareholders was more than CNY 98 million, and the company has maintained GAAP profitability for 17 consecutive quarters since the first quarter of 2022, he said. → Viasat's Orbiting Profits: Space Force Jackpot? Shen said Waterdrop is prioritizing growth in 2026, supported by greater marketing investment and AI development. The company is targeting approximately 40% top-line growth for the full year, while operating profit scale is expected to remain “broadly stable.” Waterdrop’s insurance-related income reached CNY 1.15 billion in the quarter, up 74.1% year over year, according to management. The segment generated operating profit of CNY 150 million, with an operating margin of 13.3%. → Meta to Follow Alphabet's Footsteps? What an Equity Raise Could Mean Yuan Wei, director and general manager of the insurance business, said the growth reflected the continuation of Waterdrop’s user acquisition strategy, including increased spending on public-domain user targeting, traffic channels and AI. While insurance income declined sequentially, the segment’s operating margin improved by two percentage points, which management attributed to cutting some lower-return traffic channels and refining mature channels. Waterdrop also highlighted product expansion in the quarter. First-year premiums from products for customers with pre-existing conditions rose 24.3% year over year, while disability insurance products contributed CNY 89 million in first-year premiums. The company said it upgraded its inclusive cancer medical insurance product to expand coverage for out-of-hospital prescriptions, related medical devices and advanced cancer therapies. It also launched a cancer-specific disease product with simpler health disclosure requirements. → Oil Could Dip, But These 3 Energy Stocks Still Look Built to Win On customer service, the company said it introduced a dedicated complaint hotline, connected payment channels with customer service systems to speed refund handling and simplified procedures for elderly customers whose children act on their behalf. Shen said Waterdrop is accelerating its transition toward becoming an “AI-native company.” As of March 31, 2026, the company had filed 75 large-language-model-related patent applications, including nine international applications, and had recently received two additional national invention patents in intelligent semantic understanding and multimodal recognition. In insurance, management said user-facing AI applications contributed approximately CNY 87 million in incremental premiums during the quarter, up 17.7% sequentially. Those applications include AI insurance and medical insurance experts deployed through mini programs, WeChat, phone calls and WeCom. The company said KEYI.AI had handled more than 10,000 underwriting inquiries to date. In late March, Waterdrop began internal beta testing of Claw Copilot on CRM and WeCom, combining product knowledge, KEYI.AI and other agent tools to support consultants with product questions, sales lead review, talk-track refinement and performance analytics. Management said its AI user service agent now supports more than 1 million service interactions per month, while its AI Service Quality Copilot is delivering efficiency of more than twice a manual-only baseline. Waterdrop’s low-code AI platform, Waterdrop CDAI, now offers more than 30 purpose-built agents for internal teams and external clients. Waterdrop said its medical crowdfunding platform remained stable in the quarter. As of the end of March 2026, approximately 494 million people had cumulatively donated CNY 73.5 billion to 3.785 million patients through the platform, according to Yao Hu, who reviewed the crowdfunding and healthcare businesses. Yao said the company focused on AI-assisted review capabilities and improved service in linguistically diverse regions. Waterdrop said its risk model now applies preset rules for preliminary screening and first-pass reviews, freeing risk specialists to focus on more complex cases. The company also added minority-language specialists and created a dedicated service team involving translators and risk-control specialists to support consultations, document guidance and dispute resolution while maintaining compliance and risk controls. In Waterdrop’s digital clinical trial solutions business, Yao said the company partnered with 243 pharmaceutical companies and contract research organizations and initiated services for 128 new programs during the quarter. The company said patient enrollment on its E-Find platform rose 16% year over year in the quarter, while newly signed projects increased 53%. As of the end of the first quarter, the platform had cumulatively enrolled more than 50,500 patients. Waterdrop said its intelligent drug-patient matching technology received a national invention patent in January 2026. During the quarter, the company focused on upstream data structuring and connecting those capabilities with its matching engine to generate suitability recommendations against trial protocols. Management said the company is also building a medical case library for complex indications and rare cancers. Head of Finance Xu Xiaying said total operating costs and expenses were approximately CNY 1.16 billion, up 71.5% year over year. Operating costs rose 30.1% to CNY 487 million, driven by business expansion, including higher referral and service costs, short message service costs and personnel costs. Sales and marketing expenses increased to CNY 541 million from CNY 172 million a year earlier, mainly due to higher traffic investments. General and administrative expenses declined 4.3% to CNY 71.7 million, while research and development expenses rose 11.5% to CNY 62.7 million, mainly due to higher cloud and technical service costs. Operating profit was approximately CNY 79.95 million, up 5.3% year over year. Net profit attributable to ordinary shareholders was approximately CNY 98.4 million, down 9.1% from a year earlier. Waterdrop ended March with cash and cash equivalents, short-term investments and other cash positions totaling approximately CNY 2.88 billion. Shen said the company completed its fifth cash dividend since its initial public offering in early May, totaling approximately $10.8 million. By the end of May 2026, Waterdrop had repurchased approximately 61.8 million American depositary shares for about $120 million, bringing cumulative cash dividends and repurchases since the IPO to approximately $170 million. Waterdrop Inc (NYSE: WDH) is a China-based insurtech and health protection platform that leverages digital technology to connect consumers with insurance and healthcare services. Through its mobile app and online marketplace, Waterdrop offers a range of microinsurance and critical illness products designed to provide affordable coverage for everyday risks. The platform also features crowdfunding channels that enable users to contribute to medical expense relief for individuals facing serious health challenges. Since its founding in 2016 and headquartered in Shanghai, Waterdrop has grown its partner network to include leading insurance carriers and medical institutions across mainland China. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Waterdrop Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for June 2026.

BEIJING, June 16, 2026 /PRNewswire/ -- Waterdrop Inc. ("Waterdrop", the "Company" or "we") (NYSE: WDH), a leading technology platform dedicated to insurance and healthcare services with a positive social impact, today announced its unaudited financial results for the three months ended March 31, 2026. Financial and Operational Highlights for the First Quarter of 2026 Strong Core Business Growth: Net operating revenue for the first quarter rose to RMB1,242.2 million (US$180.1 million), representing a 64.8% year-over-year increase. Insurance-related income for the quarter reached RMB1,145.8 million (US$166.1 million), up 74.1% from the same period in 2025. Year-Over-Year Operating Profit Improvement: In the first quarter of 2026, operating profit was RMB80.0 million (US$11.6 million), representing a 5.3% year-over-year increase. Expanded Scale of Medical Crowdfunding: As of March 31, 2026, around 494 million people have cumulatively donated an aggregate of RMB73.5 billion to 3.75 million patients through Waterdrop Medical Crowdfunding. Continued Expansion in Patient Enrollment: As of March 31, 2026, the Company had cumulatively enrolled 15,512 patients into 1,718 clinical trial programs through the E-Find Platform. Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "2026 marks Waterdrop's tenth anniversary. We opened the year with a solid first-quarter result, underpinned by rapid top-line growth. For our insurance business, we deepened R&D investment to strengthen our traffic infrastructure and user acquisition capabilities. Insurance-related income rose 74.1% year-over-year. On the product side, we aim to bring insurance within reach for more people through inclusive underwriting and affordable pricing. Premiums for pre-existing condition insurance increased 24.3% year-over-year. We also launched 'Shouhu Ruchu,' a competitively priced cancer plan with metastasis coverage and optional recurrence benefits. Our AI deployment continued to enhance operational efficiency. First-year premiums facilitated by our user-facing 'AI Insurance Expert' increased by 17.7% quarter-over-quarter. Our KEYI.AI underwriting assistant has processed more than 10,000 inquiries to date. To further empower our consultants, we launched 'Claw Copilot,' an application built into our CRM system that integrates KEYI.AI, product knowledge base, and a suite of additional AI tools to provide real-time support during customer interactions. During this quarter, we upgraded our AI-assisted risk screening framework for Waterdrop Medical Crowdfunding, improving the speed and consistency of campaign intake and initial screening. We also streamlined localized risk operations by integrating multilingual risk specialists and culturally attuned review workflows, while maintaining strict compliance. In our digital clinical trial business, the E-Find platform leverages proprietary patented technology to match and recommend patients for innovative drug clinical trials based on structured medical records. In the first quarter, we partnered with 243 pharmaceutical companies and contract research organizations and enrolled 957 patients. Revenue from digital clinical trial solutions was approximately RMB24.2 million, up 5.4% year-over-year. As part of our ongoing shareholder return program, as of May 31, 2026, we had repurchased approximately 61.8 million ADSs for about US$120.1 million, and recently paid a cash dividend of approximately US$10.8 million. As we look to the future, we remain dedicated to the enduring purpose that has shaped our journey since day one. In 2026, we aim to move faster toward becoming an AI-native company to strengthen execution and support durable value for our users and shareholders." Financial Results for the First Quarter of 2026 Operating revenue, net Net operating revenue for the first quarter of 2026 reached RMB1,242.2 million (US$180.1 million), which represents an increase of 64.8% year-over-year from RMB753.7 million for the same period of 2025. On a quarter-over-quarter basis, net operating revenue decreased by 12.0%. 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 analytics and intelligent recommendation service, risk assessment technical service, customer relationship management ("CRM") system-based technical services and marketing services to insurance companies, insurance brokers, and agency companies. Reinforced by cumulative big data, we provide risk assessment technical services through algorithm-driven verification system assessing risk by analyzing user profiles and medical history, tagging risk levels for hierarchical management that help insurers refine their risk analysis capabilities since 2025. We leverage multi-dimensional consumer insights to deliver analytics and intelligent recommendation services, enabling policyholders to be matched with more suitable products and improving sales efficiency. Our insurance-related income amounted to RMB1,145.8 million (US$166.1 million) in the first quarter of 2026, representing an increase of 74.1% year-over-year from RMB658.0 million for the first quarter of 2025, which was mainly due to the increase in technical service income. Our technical service income amounted to RMB421.0 million (US$61.0 million) in the first quarter of 2026, compared with RMB9.4 million for the same quarter of 2025. On a quarter-over-quarter basis, insurance-related income decreased by 12.6%, due to the decrease in technical service income. 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 2026, we generated RMB60.7 million (US$8.8 million) in service fees, representing a decrease of 9.5% from RMB67.1 million for the first quarter of 2025. On a quarter-over-quarter basis, crowdfunding service fees slightly decreased by 1.1%. 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 2026, our digital clinical trial solution income amounted to RMB24.2 million (US$3.5 million), representing an increase of 5.4% from RMB23.0 million in the same period of 2025. On a quarter-over-quarter basis, digital clinical trial solution income decreased by 32.2%. Operating costs and expenses Operating costs and expenses increased by 71.5% year-over-year to RMB1,162.3 million (US$168.5 million) for the first quarter of 2026. On a quarter-over-quarter basis, operating costs and expenses decreased by 12.4%. Operating costs increased by 30.1% year-over-year to RMB486.8 million (US$70.6 million) for the first quarter of 2026, as compared with RMB374.2 million for the first quarter of 2025, which was primarily driven by (i) an increase of RMB53.9 million in costs of referral and service fees, (ii) an increase of RMB38.9 million in the costs for short message service (SMS) costs for new user onboarding and authentication processes; and (iii) an increase of RMB7.3 million in personnel costs. On a quarter-over-quarter basis, operating costs decreased by 28.1% from RMB677.3 million, primarily due to (i) a decrease of RMB201.9 million in costs of referral and service fees, partially offset by (ii) an increase of RMB12.3 million in the costs for SMS. Sales and marketing expenses increased by 213.8% year-over-year to RMB541.1 million (US$78.4 million) for the first quarter of 2026, as compared with RMB172.4 million for the same quarter of 2025. The increase was primarily due to an increase of RMB361.4 million in marketing expenses for third-party traffic channels. On a quarter-over-quarter basis, sales and marketing expenses increased by 6.8% from RMB506.8 million, primarily due to an increase of RMB29.4 million in marketing expenses for third-party traffic channels. General and administrative expenses decreased by 4.3% year-over-year to RMB71.7 million (US$10.4 million) for the first quarter of 2026, as compared with RMB74.9 million for the same quarter of 2025. On a quarter-over-quarter basis, general and administrative expenses decreased by 7.0% from RMB77.1 million, due to a decrease of RMB6.5 million in professional service fees. Research and development expenses increased by 11.5% year-over-year to RMB62.7 million (US$9.1 million) for the first quarter of 2026, as compared with RMB56.2 million for the same period of 2025, which was primarily driven by an increase of RMB6.7 million in cloud server fees and other IT support expenses. On a quarter-over-quarter basis, research and development expenses decreased by 5.2% from RMB66.2 million. The decrease was primarily due to (i) a decrease of RMB4.3 million in personnel costs and share-based compensation expenses, partially offset by (ii) an increase of RMB1.2 million in cloud server fees and other IT support expenses. Operating profit for the first quarter of 2026 was RMB80.0 million (US$11.6 million), as compared with RMB75.9 million for the first quarter of 2025 and RMB83.9 million for the fourth quarter of 2025. Interest income for the first quarter of 2026 was RMB29.1 million (US$4.2 million), as compared with RMB33.8 million for the first quarter of 2025 and RMB34.8 million for the fourth quarter of 2025. Income tax expense for the first quarter of 2026 was RMB6.8 million (US$1.0 million), as compared with income tax expense of RMB13.3 million for the first quarter of 2025 and income tax benefit of RMB41.7 million for the fourth quarter of 2025. Net profit attributable to the Company's ordinary shareholders for the first quarter of 2026 was RMB98.4 million (US$14.3 million), as compared with RMB108.2 million for the same period of 2025, and RMB162.1 million for the fourth quarter of 2025. Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP(1)) for the first quarter of 2026 was RMB106.3 million (US$15.4 million), as compared with RMB130.0 million for the same period of 2025 and RMB170.2 million for the fourth quarter of 2025. Cash position(2) As of March 31, 2026, cash position of the Company was RMB2,880.7 million (US$417.6 million), as compared with RMB3,249.0 million as of December 31, 2025. Share Repurchase Programs Pursuant to the share repurchase programs launched in September 2021, September 2022, September 2023, September 2024, and September 2025, respectively, we had cumulatively repurchased approximately 61.8 million ADSs from the open market with cash for a total consideration of approximately US$120.1 million as of May 31, 2026. Supplemental Information We organize and report our business in the following operating segments: Insurance, which mainly includes insurance brokerage service and technical service; Crowdfunding, which mainly includes crowdfunding service; and Others, which do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and are aggregated. The table below sets forth the segment operating results, with three-month ended March 31, 2026. Exchange Rate This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") 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 RMB6.8980 to US$1.00, the noon buying rate in effect on March 31, 2026 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 and foreign currency exchange gain or losses. 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 "Reconciliations 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 16, 2026 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: 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 through June 23, 2026 by dialing the following numbers: 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 services 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 [email protected] View original content:https://www.prnewswire.com/news-releases/waterdrop-inc-announces-first-quarter-2026-unaudited-financial-results-302801217.html

This article first appeared on GuruFocus. Release Date: June 16, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Waterdrop Inc (NYSE:WDH) reported a significant year-over-year revenue growth of 64.8% in Q1 2026, reaching RMB1.24 billion. The insurance business segment saw a substantial increase in income, up 74.1% year over year, driven by effective user acquisition strategies. The company is accelerating its shift towards becoming an AI-native company, with 75 LLM-related patent applications filed and new patents granted. Waterdrop Inc (NYSE:WDH) completed its fifth cash dividend since IPO, distributing approximately $10.8 million to shareholders. The company maintained a strong cash reserve, with cash and cash equivalents totaling approximately RMB2.88 billion as of March 2026. Despite the revenue growth, the net profit attributable to ordinary shareholders decreased by 9.1% year over year to approximately RMB98.4 million. Sales and marketing expenses increased significantly, reaching RMB541 million, primarily due to increased traffic investments. Operating profit showed only a modest year-over-year increase of 5.3%, indicating potential challenges in cost management. The company faced a decline in quarter-over-quarter income in the insurance segment, despite an increase in operating margin. Research and development expenses rose by 11.5% year over year, driven by increased cloud and technical service costs. Warning! GuruFocus has detected 6 Warning Signs with WDH. Is WDH fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the growth strategy for the insurance business and how it impacted the first quarter results? A: Ran Wei, Director and GM of Insurance Business, explained that the insurance-related income reached RMB1.15 billion, up 74.1% year over year. The growth was driven by a continued focus on user acquisition and investment in traffic and AI, which led to significant premium growth. The operating margin improved due to cutting lower ROI channels and expanding into high-quality traffic channels. Q: How is Waterdrop leveraging AI in its operations, particularly in the insurance segment? A: Ran Wei highlighted that AI applications contributed approximately RMB87 million in incremental premiums in Q1. AI tools like AI-pro insurance and AI medical insurance experts are used for real-time support, handling underwriting inquiries, and improving service efficiency. The company is also testing the Claude Copilot for CRM and WeCom to streamline operations. Q: What advancements have been made in the Waterdrop Medical Crowdfunding platform? A: The platform has seen cumulative donations of TWD73.5 billion to 3.75 million patients. The focus this quarter was on AI capability building and improving services in diverse regions. AI-assisted models were introduced for risk control, and service workflows were refined to cater to linguistically diverse communities. Q: Can you provide insights into the financial performance and cost management for Q1 2026? A: The unidentified company representative reported that total revenue reached RMB1.24 billion, up 64.8% year-over-year. Operating costs increased by 30.1% due to business expansion, while sales and marketing expenses rose significantly due to increased traffic investments. Despite these costs, the company maintained a strong cash reserve of approximately RMB2.88 billion. Q: What are the future growth projections and strategic priorities for Waterdrop in 2026? A: CEO Shen Peng stated that the company aims for approximately 40% top-line growth with stable operating profit. The focus will be on increasing marketing investment to expand the user base, which is expected to unlock greater profit potential and support long-term development. For the complete transcript of the earnings call, please refer to the full earnings call transcript.