Waterdrop (WDH) Q2 2026 earnings call transcript

Thank you, Operator. Dear Ambassador and Analyst, this is Tracy Lee from World Job Investor Relations. Please note that discussion today will contain forward-looking statements made under the Safe Harbor provision of U. S. private securities and the Litigation Reform Act of 1995. Forward-looking statements are separate through risk and incentives that may cause extra results differed maturely from our current expectations. Potential risk and uncertainty includes but not limited to those outlined in our public findings with the SEC. The company does not undertake any obligation to update any forward-looking statement except as required under applicable law. Also, this call includes discussion of certain NGAP measures. Please refer to our earnings release for reconciliation between NGAP and GAAP. Joining us today on the call, I'm Mr. Shen Peng, our founder, chairman, and CEO.

Mr. Yuan Wei, director and GM of insurance business. Mrs. Li Jiewu, finance VP, head of strategy in the 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, Shen Peng. Please go ahead.

Thank you. and analysts, thank you for joining Wooded Drop's second quarter 2006 earnings conference call. In this quarter, we maintain growth momentum and achieve a total revenue of 1.45 billion yen at 72.8% year-over-year and the net profit attributable to our ordinary shareholders of 130 million yen. Since the first quarter of 2022, we have maintained profitability for 18 consecutive quarters.

The Segment-wise, our insurance business continues to optimize user acquisition and conversion, driving 80.5% euro-year revenue growth. Woodardrop Medical for Funding has accumulated rates of medical funds for 3.82 million patients as of that quarter end. Our digital clinical trial solution business performed strongly, with quarterly patient enrollment at over 50% year-over-year. These growth trends were entertained by a deep integration of AI across our core business scenario.

And at the end of June, the company has filed 8080 large-like renato patents, including 10 of them overseas. On the other hand, the company will be in the 6th fashion page in its 2nd year, before the period of July, from June 2006, the 10th month , the year has had a full total of RDS for the month, the $ADS for the month, the $ADS for the month of $0.03. The fund for $108,000 that is $10800. On the other hand, the company will be in the 6th fashion to 1-2010. We will have the right to continue to rise after the last month, who will have the right to move to 5,000 million dollars in the cash flow.

Since 2021 announced the first week's return plan, in the end of the last year, the company will have the 6,290 million dollars of $1. s, as well as $1.21 million. The company is to do a long-term development and the current return of cash flow. With strong performance and cash reserves, we continue to prioritize shareholder returns. Our board recently approved the two new initiatives. Firstly, the board has approved a cash dividend of $0.03 per ADS or $0.03 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 $15 million over the next 12 months. Since the initial program launched in 2021, we have repurchased approximately 62.9 million ADFs for $121 million as of August 31, 2006. The company remains committed to sustainable development and to giving back to society in meaningful ways. As of June 30, 2006, WorldJob Charity Platform has partnered with 119 public charitable organizations and launched more than 15,600 charity programs.

We have AI What is your government'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 its future productive potential. We also regard technology as a core driver of the company's growth. Today, our AI capabilities are definitely abandoned 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 in plus markets. For the full year of 2026, Waterdrop targets were more than 40% year-over-year growth in total revenue and over 10% growth in operating profit.

This concludes our overview of Waterdrop's business performance. Now we will walk you through HFO business segments in more detail.

16% 4% 利用率约1.8亿元 环比提升20% 基于AI模型 在用户需求洞察与转化上的持续打磨 转化效率环比优化 机动内新用户环比与增长32.3% 常险方面 凭借需求洞察和多元供给能力 我们及时承接住了本季度分红储蓄型产品的需求窗口 带动常险保费环比增长33.4% Hello, everyone. This is Zhang Wei. Let me briefly update you on our insurance business. In the second quarter, insurance-related income reached 1.33 billion yuan at 80.5% year-over-year and 16.4% quarter. Operating profit was 180 million yuan at 20% from the previous quarter. With continued refinement in our AI-driven user insight and conversion capabilities, newly acquired customers growth 32.3% sequentially. The first-tier premiums of long-term insurance growth 33.4% sequentially as we capture market demands for insolvent insurance this quarter.

On the product side, Our core strategy is improving the accessibility of insurance products. This quarter, we delivered several new products in line with this direction, including the launch of Gong Yiba, the market-first long-term critical illness insurance product, requiring no health disclosure and offering five-year guaranteed renewability. We're also expanding our Zixing Gaozhou product metrics, which now includes the market-first specified disease insurance, offering lifetime coverage with no health disclosure.

During this quarter, products for users with pre-existing conditions contribute 310 million yuan in FIP and disability insurance at 84 million.

and the service side, we will be able to provide the service to the service provider. We adopted differentiated scenario operations across customer touch points And this quarter AI applications across our user interaction scenarios helped generate immediately 100 million in FIP. Among them, AI Pro Insurance generates FIP in millions each month. FIP is facilitated by our AI medical insurance experts, rose by 25.6% sequentially. In a week-end scenario, AI executed our strategies directly from the demand identification and user profiling to key movement engagement and batch outreach, contributing over 10 million yuan in FIP during this quarter.

The long-term insurance sales, the value of AI ultimately comes down to expanding what our life planners can do. As a part in, our enterwriting assistant, Koi. ai, has answered more than 13,000 enterwriting questions. In this launch, our AI super-preserved assistants have constantly outperformed human life planners on annual premium per lead. And the number of users it served has grown nearly 50% sequentially. Powered by multi-agent collaboration, our AI conversion model captures user preference from natural language interaction, turning them to doable profile we can draw on over time, and proactively surface topics tailored to each user, effectively extending the reach of every live planner we have. That concludes our update on the insurance business for the second quarter.

四点九九一人 累计受助换者达到三百八十二万人 累计重返金额约747亿元 本季度我们继续聚焦AI风控模型 重点推进两个关键模块的迭代进展 一是资产隐瞒识别模块 原有方式中 风控策略更多一类给予业务经验人工设定的规则 本季度我们进一步扩大AI语理解的能力的应用程度 以模型协同的方式对身份证据其医疗材料与用户生存内容进行联合语义分析 识别房产 割产以及收入等维度的隐瞒信息 并由AI风控模型的信息的真实性与关联性做出研判 自动识别其中可能存在的资产状况隐形矛盾 升级后的风控模型体系相较原有证则规则 The coverings are more effective and more effective and more effective. 2. The Next, let me briefly update on what to drop medical co-founding and healthcare businesses. As of the end of June 2006, Waterdrop Medical Profunding had a cumulatively contribution from around 499 million donors, helped 3.82 million patients, and raised a total of 74.7 billion. This quarter, we continued to upgrade our AI-driven risk control models, further improving asset concealment detection and sensitive identity detection. By combining semantic analysis of ID information, medical materials, and user-generated content, the upgraded engine can better identify hidden inconsistency and improve risk control efficiency.

。 Okay. is to help with the team members to help the patient's treatment environment and to help the patient's treatment environment. This is the related situation of the health care industry.

enrollment capability. Oncology projects remain network core focus, while chronic disease projects are growing most of the sequential growth this quarter. Although chronic disease studies have a larger patient pool, they typically carry a high screening failure rate and increase 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 failure year-old. Meanwhile, our proven enrollment track record is translating into deeper and broader trust among partners. In this quarter, Event Platform signed 167 new projects, and a number of pharmaceutical companies and CROs we partnered with was 255. Going forward, we will continue to optimize operational efficiency and work with our partners to advance digitalization across the clinical disease profession.

This concludes our update on the core funding and healthcare businesses.

Hello everyone, this is Lili Du. Next, I will walk you through our financial highlights for the second quarter of 2026. Before I go into details, please remind us that all the numbers quoted here will be in RMB, and 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 2026, Waterdrop delivered net operational revenue of 1,448 million yuan, up 72.8% year-over-year, maintaining a strong growth momentum. Our insurance business contributed about 1,333 million yuan in revenue, representing an 80.5% increase year-over-year. Nine 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 solutions.

Total operating costs and expenses came in at about 1,337 million yuan in the second quarter, up 80.5% year-over-year. Operating costs were 537 million yuan, 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 referral 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 costs, respectively. Sales and marketing expenses reached nearly 638 million yuan compared with 199 million yuan in the same quarter of 2025. 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 415 million yuan and marketing-related professional technical service fees increasing by around 21.8 million yuan.

GNA expenses were 93.4 million yuan, up 27.2 percent year-over-year, mainly due to an increase of 33.3 million yuan in allowance for credit losses. This was partially offset by decreases of nearly 10.5 million yuan in personnel costs and share-based compensation expenses. R&D expenses were 68.8 million yuan, up 32.4% year-over-year. The increase was mainly driven by cloud server fees, token fees, and other IT support expenses, which rose by about 11.1 million yuan, as well as an increase of 6.3 million yuan in personnel costs and share-based compensation expenses. For this quarter, operating profits reached about 111 million yuan, up 14.3% year-over-year and 39.2% quarter-over-quarter. However, due to tax-related items and non-recurring gains and losses, net profit attributable to shareholders was around 126 million yuan, 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 yuan. Our cash reserve maintains EMBO and provides solid support for both business investments and shareholder returns.

In terms of shareholder returns, since the long-term offers to share repurchase program, We have cumulatively repurchased 62.9 million ADS for approximately $120 million as of August 31, 2026. And recently, the board approved the fixed share repurchase program, in which we plan to repurchase up to $50 million over the next 12 months, and also approved the fixed cash dividend of approximately $10.8 million U. S. dollars.

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 gain. Meanwhile we expanding proactively while investing presently in new initiatives in global markets which for now have very limited impact on our current period financial results As these initiatives reach a larger scale we will keep the capital market informed in a timely manner. In the future, the company will remain committed to this point of strategic investment and continue creating long-term value for users and shareholders.

That concludes the company's financial results for the second quarter of 2026. We will now move on to the Q&A session.

The impact of the supply chain will also be very important to the extent the potential. The market has been strong in the market. This brings in the current state of the new market and national security of the market. The U. S. market economy and international market and economic economic development. The company covers the multiple customers, the market and the market. The entire business is very important. Regardless of the customers' demand is located in every product. We have the ability to do better and better service. That's all.

Regarding recent market attention, we're reading that what we're seeing reflects the enforcement of tax rules that have long in place rather than a new policy specifically targeting Hong Kong insurance. In the midterm, the media coverage has some effect on our customer sentiment. As a depreciating value of a Hong Kong insurance product, like a loaded currency allocation, access to global healthcare resources and inheritance funding are unique and fundamental drivers of the Hong Kong insurance market have now been changed.

Turning to the drivers of mainland China insurance market today, the growth is driven by a writing health protection awareness, policy telling for commercial health insurance, continued product innovation, and the structural shift of household savings into long-term assets such as insurance in the current low interest rate in the moment. Waterdrop serves as diversifying user customer base across multiple markets and multiple service models, and our business makes remain solid and we're confident in serving user demand wherever it rises.

理想辞职的完美标题其实已经很少 而传统健康险长期更擅长保健康人 大量引病人群慢病人群的保障需求是客观存在的 所以行业共识比较清楚 就是要从保更多保健康人转向保更多人健康 This is the demand for the future, which is also the product of the expansion of the plan, and is the fact that it is the future for the protection of the market.

The product of the market's most famous for the first time is the public health market. It has been an increase of the business of the market. The supply chain has been increased by the market. It has been a long-term improvement and the market. It has been a long-term improvement. This is not a simple way to get into the market. .

责任范围 同时在霍克端 进入互联网平台的AI用户洞察方面的优势 让对的用户买到它适合的保险成品 通常期来看的话 随着未来医保和商保数据逐渐打通 保夫和中介更有能力把分工模型和服务能力做得更深 未来代病体健康检将有机会更接近车险这样的大众化保证 We believe that the disease will be more difficult to do with the disease. That's it.

healthcare insurance has long focused on healthy life, but millions of people with pre-existing conditions do go unprotected. The industry convinced us it's clear for shifting our ground 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 is bending as coverage. And early practice with single level inclusive health plans, that logic is more than to more the commercial medical insurance, criminal insurance, disability insurance, and others. This is not simply losing and writing. It is segmenting the disease risk and building depreciated and writing and claims. So the certain risk can actually be written and paid. As the water drop, lowering coverage threshold is central to our product strategy.

As the supply side, we break the demand down by scenarios, age, and conditions, and co-design terms and coverage with our insurer partners. On the acquisition side, we use platform and AI insights to match the right product to the right customer. So, people with pre-existing conditions can actually find something that works for them. Longer term, our view is that a health cover for people with pre-existing conditions can become more like auto insurance. People can actually buy it, claim on it, and renew it. Accessibility and sustainability will have to move together.

三点我们说到两个来自于国家军丸国际分析制作物的问题 请教他管理从AI agent商业化价值产生是否有明确的时间线 AI 投入对研发费用率有什么样的影响 以及目前公司还有哪些新方向先在那里面探索吗 感谢提问关于我们这个AI的投入和商业化价值的方量 包括这个公司在做的一些创新型的业务 我整体来回答一下 就是如前面这个业绩发布的时候 我们也介绍过 我们公司的这个AI的能力 其实是嵌入到我们的核心业务 尤其是像保险业务的货客和保理赔 等各个业务环节当中去的 所以我们看待AI商业化以及AI价值呢 也是基于各个环节的具体的提效空间 或者是增长空间的不同来去做衡量 那整体来说我们还是希望能够通过AI能力 AI 工具的全面融合 最终还是能够提升公司整体 在财务上的收入增长的能力 和这个利润创造的能力 所以我们认为 AI 包括 AI 应用的价值呢 最后还是会体现在公司整体的 这个业绩的交互上 我们不会有一个单独的这个 AI 板块的 单独的这样商业化的区分 那也像前面说过 就是我们在不同的这个服务场景下 其实用 AI 的方式会不同 比如说我们在获克 随便转化的场景 那 AI 其实现在是可以直接参与 用户关于保险的资讯和购买的决策的那这个季度内内呢这一类的场景整体辅助实现的保费已经接近1亿元了那在长浅的这个转化的尤其是我们服务顾问的服务的场景下 AI 的工具主要是能够帮助这些顾问去提升他们的处理信息和展业的效率然后能够间接的助力转化助力转化然后也能够去释放他们的产能那这边我们 AI 的工具比如说也有这个叫核保助手可以到 AI 包括超级售前小助理 这个都在业务中 在日常的经营中在落地 那在中后台的运营支持的场景方面 我们的AI质减和AI客服等应用 也已经是在全量的运营 基本上在全面承接我们业务规模扩张 这个周期内带来的服务量的增长 关于我们在AI上的投入 From checker from we 那主要还是把研发资源 向这个更侧重于这个AI前沿科技的投入上面去做清洗 那这里面去包括我们在算法和模型相关人材梯队的一些建设 那也包括我们在支撑 I应用落地所需要的一些Token相关的这个成本的投入 那我们预期后续呢 随着AI应用电容量的持续提升 这份投入平均还是会预计 保持一个自然的增长 那与此同时我们从财务管理的视角 整体也会去评估在各个场景下 这个AI复农带来的投入产出的效果 把整体的研发费用率 还是维持在一个合理的区间内 那这个是公司整体在AI上的 应用的落地 包括价值的衡量 以及我们在研发费用率的投入上面的情况 然后还有关于 与我看有问题问到我们的这个创新的业务 其实一直以来我们都还是非常关注 是怎么基于我们自身的这个 包括在AI应用端 我们自己所探索 积累下来这些能力 我们自己突自一的服务和运营的能力 能够面向更广泛的行业和市场 寻找时代创新的机会 那目前我们在做的呢 其实还是依托在 就是在自由业务服务场景下 打磨出来的AI agent know-how 还有我们自由的研发能力 当然也结合了中国在全球的供应链体系内的独特的优势 我们也在孵化一个定位是随身AI办公助手的智能硬件产品 目前已经在全球主要市场进行了试点的销售 也收到了一些比较初步的积极的反馈 但整体来看这个业务还是处于比较早期的阶段 还是需要一个周期去验证 包括当前对公司的财务报表的影响也是非常有限的 那我们也相信这个过程中积累的经验, 无论是向右本身还是对公司整体的能力的成见, 都是非常有价值的。 以上。 As previously introduced, our AI is screening crowds for value chains, the acquisition that we received pre-screening and claims, and it rose by stage.

we're 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 were introduced earlier in the user targeting and conversion our AI directly supports user consultation and purchase decisions driven nearly 100 million in AFIP and in our long-term insurance advisory 我們所使用的東西, 我們用的 tools like our CoE. AI 和 our AI Pre-Sales Assistance 支援助我們活動 更多活動 更多活動 我們的手法 活動 和化學生物 的活動 和雲 增進行 消費 在我們 我們在 我們在 我們 我們 AQI shift its resources towards AI, both in the talent and in token cost. As usage scales, the spend will grow naturally, but we are disciplined about ROI and their age scenarios, 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's supply chain strength. Edding and pilot sales across major global markets With some encouraging early feedback, That said, it's still at an early stage, And its financial impact is limited for now, And the experience we're gaining along the way, Both for the business and for the company overall, Is generally valuable.

The amount that traditional products never really serve is being a lot. We will keep building in this area. And this category is playing right into the strengths we've viewed through our online platform. We can reach broadly and target precisely, leveraging our AI capability. And spot protection gaps and specific customer groups connecting them with the right products,and deliver better, faster service at the point of user consultation. So we will keep building on what we are uniquely good by.

What matters most for us is how we leverage AI capability to better align our product supply with our user profile and improving conversion efficiency. 所以,Curantly,EIA是影阅益領域的整整整組來自顧工程於個成功 啊,它向是設定的費用負們的運作 2016年2016年的2087年,了解整項組的方式 是設定正式稅項定設定作決定的以期 去打擊 customers segments and broadening user education coverage. And at this time, we expect the user value generated by the current peer-reviewed acquisition to be gradually realized through renewals and upsells and pro-sells over the sequential user life circle.

Thank you to all the investors and analysts who joined us today. BECI Operator, back to you.