Waterdrop (NYSE:WDH) Releases Quarterly Earnings Results, Beats Estimates By $0.02 EPS

Key Points

• Beat estimates: Waterdrop reported Q EPS of $0.06 (vs. $0.04 est.) and revenue of $201.7M (vs. $117.7M est.); FY2025 revenue rose 43.5% to CNY 3.98B and net profit climbed 64.8% to CNY 570M, with the board approving a $0.03/ADS dividend and about $118M in ADS repurchases.
• Insurance & AI-driven growth: The insurance segment surged (Q4 insurance income +125% YoY; full-year +51.3% with ~18% operating margin) while Waterdrop is accelerating an AI-native strategy—filing LLM patents and deploying multi‑modal AI agents—to boost premiums and agent productivity.
• Rising costs could pressure margins: Operating costs jumped sharply (Q4 operating costs +109% YoY; sales & marketing +178% to ~CNY 510M) as the company scales marketing and AI investments, which may weigh on near-term profitability despite a cash balance of ~CNY 3.25B.

Waterdrop (NYSE:WDH - Get Free Report) announced its quarterly earnings data on Wednesday. The company reported $0.06 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.04 by $0.02, FiscalAI reports. Waterdrop had a net margin of 15.58% and a return on equity of 9.99%. The company had revenue of $201.71 million during the quarter, compared to analysts' expectations of $117.69 million.

Here are the key takeaways from Waterdrop's conference call:

• 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.
• 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.
• 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.
• 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.
• 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).

Waterdrop Stock Performance

Shares of WDH stock opened at $1.67 on Wednesday. Waterdrop has a one year low of $1.16 and a one year high of $2.18. The firm's 50 day moving average price is $1.75 and its 200-day moving average price is $1.79. The firm has a market cap of $604.98 million, a P/E ratio of 8.76 and a beta of -0.28.

Hedge Funds Weigh In On Waterdrop

Institutional investors have recently modified their holdings of the business. Sei Investments Co. purchased a new stake in shares of Waterdrop during the third quarter worth approximately $26,000. Russell Investments Group Ltd. acquired a new stake in shares of Waterdrop in the 3rd quarter valued at about $36,000. Marshall Wace LLP acquired a new stake in shares of Waterdrop during the second quarter worth about $25,000. Arrowstreet Capital Limited Partnership increased its position in Waterdrop by 184.0% in the 3rd quarter. Arrowstreet Capital Limited Partnership now owns 39,372 shares of the company's stock valued at $74,000 after acquiring an additional 25,510 shares during the period. Finally, Centiva Capital LP purchased a new stake in Waterdrop during the 3rd quarter valued at approximately $59,000. Institutional investors and hedge funds own 1.96% of the company's stock.

Wall Street Analysts Forecast Growth

Separately, Wall Street Zen downgraded Waterdrop from a "buy" rating to a "hold" rating in a research report on Saturday, January 3rd. Two analysts have rated the stock with a Hold rating, According to MarketBeat, the stock currently has an average rating of "Hold" and a consensus price target of $2.00.

Waterdrop Company Profile

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.

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