Waterdrop Q4 2025 Earnings Report

Waterdrop EPS Results

• Actual EPS: $0.06
• Consensus EPS: $0.04
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

Waterdrop Revenue Results

• Actual Revenue: $201.71 million
• Expected Revenue: $117.69 million
• Beat/Miss: Beat by +$84.02 million
• YoY Revenue Growth: N/A

Waterdrop Announcement Details

• Quarter: Q4 2025
• Date: 3/26/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, March 25, 2026
• Conference Call Time: 8:00AM ET

Waterdrop (NYSE:WDH) 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. By integrating data analytics and automated underwriting, the company streamlines policy issuance and claims processing, reducing costs and improving user experience. Key offerings include short‐term accident plans, chronic disease coverage, and supplemental critical illness policies, all accessible via a single user interface.

Waterdrop went public on the New York Stock Exchange in mid-2021, marking a milestone in its expansion beyond charitable giving into a full-service digital insurance ecosystem. Its operations focus primarily on the Chinese market, where rising healthcare costs and insurance awareness are driving demand for innovative risk protection solutions. As it continues to enhance its technology platform and forge strategic partnerships, Waterdrop aims to broaden its product suite and deepen its outreach to underserved customer segments.

Waterdrop Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: FY2025 revenue reached CNY 3.98 billion (+43.5% YoY) and net profit attributable to ordinary shareholders was CNY 570 million (+64.8% YoY), marking 16 consecutive quarters of GAAP profitability; the board approved a $0.03 per ADS cash dividend and the company has repurchased 60.7 million ADSs for about $118 million.
• Positive Sentiment: The insurance segment showed strong momentum—Q4 insurance-related income rose 125% YoY to CNY 1.31 billion and full-year insurance income was ~CNY 3.58 billion (+51.3% YoY) with ~18% operating margin—while AI features drove a 33% sequential increase in premiums and improved agent productivity.
• Positive Sentiment: Waterdrop is pushing an AI-native strategy: it filed 72 LLM-related patent applications (9 international), deployed multi-modal AI agents across acquisition, sales, service and R&D under "Waterdrop C AI," and unveiled CloudSphere for autonomous multi-agent collaboration and partner integrations.
• Positive Sentiment: The medical platform reported cumulative donations of CNY 72.3 billion to 3.68 million patients, implemented LLM-based dynamic data masking and authenticity checks, and its E-Find patient-matching technology received a national invention patent while setting record clinical trial enrollments.
• Negative Sentiment: Operating costs and expenses rose sharply (Q4 operating costs +109% YoY, sales & marketing up ~178% YoY to ~CNY 510 million) as the company scaled marketing and AI investments, which could pressure near-term margins despite a healthy cash balance (~CNY 3.25 billion).

Presentation

[Tracy Li, Haed of Investor Relations at Waterdrop]

Good morning, everyone. This is Tracy Li from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's fourth quarter and fiscal year 2024 earnings conference call. All participants are in listen-only mode in our English line. As a reminder, today's conference call is being recorded. Please note that discussion today will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from our current expectations.

[Tracy Li, Haed of Investor Relations at Waterdrop]

Potential risks 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 statements except as required in applicable law. Also, this call includes discussion of certain non-GAAP measures. Please refer to our earnings release for reconciliation between non-GAAP and GAAP. Joining us today on the call are Mr. Shen Peng, our Founder, Chairman, and CEO, Mr. Wei Ran, Director and GM of Insurance Business, Mrs. Xiaoying Xu, Head of Finance Department, and Mrs. Jieru Li, Board Secretary. We'll be happy to take some of the questions from the participants on the line at the end of the conference call. Now let's turn to our CEO, Shen Peng, to start.

[Shen Peng, Founder, Chairman, and CEO at Waterdrop]

Dear investors and analysts, thank you for joining Waterdrop fourth quarter and fiscal year 2025 earnings conference call. Looking back at 2025, we executed firmly on our AI plus insurance strategy, delivering tangible progress in both AI application and business growth. Our financial performance were robust. We saw significant top line and bottom line expansion, further solidified our core fundamentals.

[Shen Peng, Founder, Chairman, and CEO at Waterdrop]

For the fiscal year 2025, our revenue reached RMB 3.98 billion, up 43.5%, with our net profit attributable to ordinary shareholders reached RMB 570 million, registering year-on-year growth of 64.8%. Notably, we met our guidance to the market and have now delivered GAAP profitability for 16 consecutive quarters. Our insurtech segment was SML, with revenue surging 61.3% and an operating margin of roughly 18%. Furthermore, our LLM integration significantly added the value of our medical performance platform.

[Shen Peng, Founder, Chairman, and CEO at Waterdrop]

Our platform has responded to 3.68 million patients since it was launched. Our digital clinical trial solutions enrolled over 4,000 patients this year. Reflecting their strong performance in the second half of 2025, our board approved our fifth cash dividend of $0.03 per ADS, totaling $10.8 million. This will be paid in late April to early May to shareholders of record as of April 2024 on the 6th, U.S. at ET time. Meanwhile, our share repurchase remains on track, with 60.7 million ADSs repurchased for about $118 million as of the end of February 2025, 6th.

[Shen Peng, Founder, Chairman, and CEO at Waterdrop]

On the technology front, we are accelerating our shift to become an AI-native company. As of year-end 2023, we filed 72 LLM-related patent applications, including nine international ones. Throughout the year, we deployed a multi-modal AI agent supporting text, voice, and virtual interactions across all four workflows, from acquisition and conversion, sales, productivity, and customer service to quality control and R&D. Every stage is now production-ready, delivering measurable operational gains.

[Shen Peng, Founder, Chairman, and CEO at Waterdrop]

These capabilities are unified under the Waterdrop CDOT AI, our company-wide platform for configuring scenario-specific agents, now also open to industry partners. Beyond internet use, we are pioneering open collaboration for Waterdrop Guardian AI Copilot, which is called CloudSphere. Built on a distributed architecture design, our CloudSphere enables different AI agents to autonomously communicate and collaborate. Early demos have already validated its core workflow, seamless multi-round dialogue, and automatic topic closure between AI agents.

[Shen Peng, Founder, Chairman, and CEO at Waterdrop]

In terms of ESG, we partnered with 119 organizations to sponsor over 15,500 projects, earning global recognition for our poverty reduction efforts and upgrading our ESG rating to A+. As we enter our tenth anniversary in 2026, our goal is to move beyond just using AI tools to becoming truly AI-native company. We aim to visually reconstruct our entire value chain, embedding AI as a structural competitive advantage. We expect to sustain the momentum this year with moderately higher investment in marketing and AI, targeting double-digit growth in both revenue and profit. Now I will pass to Ran Wei to introduce the development of insurance business.

[Wei Ran, Director and General Manager of Insurance Business at Waterdrop]

Thanks, Shen Peng. In the fourth quarter, our insurance business continued its strong momentum. Insurance related income surged 125% year-over-year to RMB 1.31 billion, while operating profits grew 42% year-over-year to RMB 160 million. On the traffic side, we have sharpened our real-time user identification, leveraging our self-deployed 50-millisecond data models, we can now capture potential user attributes with millisecond precision in high concurrency traffic.

[Wei Ran, Director and General Manager of Insurance Business at Waterdrop]

This allows for hourly health updates and rapid A/B testing, which has significantly improved the accuracy of our high quality traffic filtering and laid a solid foundation for our FYP growth. Regarding product supply, our market first has been launched version 2.0 this quarter. New zero deductible features now covers both projected long-term medical costs and routine medical expenses. Additionally, our pre-existing condition product gained strong traction with FYP at nearly 70%. Well, our disability insurance contributed about 100 million FYP, validating our long-term strategy. Most importantly, AI is now embedded in every node of our service chain.

[Wei Ran, Director and General Manager of Insurance Business at Waterdrop]

On the user side, our AI Pro Insurance agent on the mini program drove 33% sequential increase in premiums, while our AI medical insurance experts generated over RMB 50 million in FYP at 145% quarter-over-quarter. We have also extended this AI capability to standard health products with calm generating incremental mock premiums of over RMB 1 million. For human agent empowerment, our Life Planner Copilot has cumulatively assisted in over 370,000 inquiries as of this quarter end.

[Wei Ran, Director and General Manager of Insurance Business at Waterdrop]

Our Waterdrop CDOT AI platform is now fully operational and having completed the fourth quarter roll out of the core module like workflow agent, batch testing, and proactive task triggers. This infrastructure powers our Xiaofu AI planner deployed across both our WeChat official account and mini programs to handle the product recommendations, business facilitation, and user-agent matching. We have even opened the platform to our partners like insurers to uplift the industry-wide efficiency.

[Wei Ran, Director and General Manager of Insurance Business at Waterdrop]

In after-sales, our AI customer service agents handled over 1.4 million inquiries per month. They adopt our quality control copilot to boost per capita efficiency to 2.75 times that of the manual-only baseline. This concludes the insurance business update for the fourth quarter. Now I will pass to Jieru Li to introduce the progress of our medical crowdfunding and the health care business.

[Jieru Li, Board Secretary at Waterdrop]

Thank you, Ran Wei. As of the end of 2025, approximately 490 million people have cumulatively donated a total of 72.3 billion-3.68 million patients through our Waterdrop Medical Crowdfunding platform. This quarter, while maintaining robust platform governance and user experience, we strengthened risk control in two key areas to protect our users' privacy. We have fully upgraded our system with large language models capable of identifying sensitive data and applying dynamic data masking in real time. Critical information frequently seen in the comments like user ID numbers, bank accounts, and the medical record IDs.

[Jieru Li, Board Secretary at Waterdrop]

We have moved from the manual redaction to automatically detecting and masking. This guarantees end-to-end security for user data across our entire platform, fundamentally preventing any risk of information theft. Secondly, our content authenticity. We deployed a new model combining a medical knowledge graph with a credential validation. This system can cross-reference the clinical logic to precisely identify the fabricated risks, ensuring every donation to reach those patients who are truly in need.

[Jieru Li, Board Secretary at Waterdrop]

On the user service front, we launched a standardized inquiry toolkit to bring full clarity to our service scope, fee structures, and content deadlines. This initiative reinforced our commitment to transparency and ensure our users are fully informed. Moving to the healthcare business, our E-Find platform is in high quality growth, partnered with 224 pharmaceutical companies and enrolled in a record of 14,055 or 555 cumulative patients. Initiated 131 new programs. Once again, we set a new quarterly enrollment record.

[Jieru Li, Board Secretary at Waterdrop]

This quarter, we achieved a major milestone. Our proprietary E-Find patient matching technology, the first of its kind in China, was officially granted a national invention patent. By combining deep neural networks with natural language processing, our technology achieves end-to-end precision matching between patients and clinical trials. It uses rule-based filtering for structured data like age and lab results, while analyzing unstructured medical records against that trial criteria to uncover the hidden match.

[Jieru Li, Board Secretary at Waterdrop]

The dual engine approach strongly shrinks the weeks of manual screening workloads down to minutes, strongly accelerating the clinical trial process. Building on this, we are significantly expanding our accounts while continuing to grow our patient base in complex and rare cancer cases. Our revenue in digital clinical trial revenue related to chronic disease 30% this quarter compared to the previous three-quarter average. This extends the ability to tap multiple disease and departments and have made a solid foundation for our sustainable long-term growth. Now I will pass to Xiaoying, our Head of Finance, to discuss our financial performance in this quarter.

[Xiaoying Xu, Head of Finance at Waterdrop]

Thanks, Jieru. Hello, everyone. I will now walk you through our financial highlights for the fourth quarter and the fiscal year 2025. Before I go into details, please be reminded that all numbers quoted here will be RMB, and please refer to our earnings release for detailed information on our financial performance on both the year-on-year and quarter-over-quarter basis, respectively.

[Xiaoying Xu, Head of Finance at Waterdrop]

In the fourth quarter, our performance growth accelerated significantly, with quarterly revenue more than doubling year-on-year to RMB 1.41 billion at 105.5%. For the full year 2025, revenue reached RMB 3.98 billion at 43.5% year-on-year, concluding the year on a strong note. By segment, the insurance segment remained a stable cornerstone, with full year insurance-related income reaching approximately RMB 3.58 billion at 51.3% year-on-year. The other segments accounted for about 10.1% of the total revenue, with medical consulting services at RMB 260 million, and with digital clinical trial sourcing income at RMB 118 million.

[Xiaoying Xu, Head of Finance at Waterdrop]

Operating costs for the quarter reached RMB 680 million at a 109.2% year-over-year, driven by a RMB 320 million increase in costs under referral and service fees, and a RMB 26.8 million rise in SMS costs. Driven by rapid business expansion, operating costs and expenses in the fourth quarter rose to RMB 1.33 billion at 109.4% year-over-year. For the full year, operating costs and expenses increased 39.1% from 2024. Though the pace of revenue growth, sales and marketing expenses was roughly RMB 510 million at 178.4% year-over-year, with significant improvement in customer acquisition efficiency.

[Xiaoying Xu, Head of Finance at Waterdrop]

The company proactively scaled up investment, resulting in a roughly RMB 280 million year-on-year increase in marketing expenses for third-party traffic channels. G&A expenses were RMB 77.1 million, amounting to year-on-year increase of 4.6%, mainly due to a RMB 6.7 million increase in allowance for party losses and a RMB 5.2 million in professional services, partially offset by RMB 6.5 million reduction in personnel costs. In research and development, expenses were approximately RMB 66.2 million, at 21.9% year-on-year, primarily driven by a RMB 6.4 million increase in personnel costs and a RMB 5.8 million rise in cloud services. Company profits improved significantly year-on-year

[Xiaoying Xu, Head of Finance at Waterdrop]

For full year, the net profit attributed to the ordinary shareholders was about RMB 570 million at 54.8%. The company maintained ample cash position of about RMB 3.25 billion as of the end of 2025, providing a strong support for our future growth. This concludes our financial overview for the fourth quarter and the fiscal year 2025.

[Tracy Li, Haed of Investor Relations at Waterdrop]

Now, ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining. Have a good time.

Participants

Executives

• Jieru Li, Board Secretary
• Shen Peng, Founder, Chairman, and CEO
• Tracy Li, Haed of Investor Relations
• Wei Ran, Director and General Manager of Insurance Business
• Xiaoying Xu, Head of Finance