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Waterdrop Inc. Posts Strong Q1 2025 Results

On June 5, 2025, Waterdrop Inc. (NYSE: WDH), a prominent tech-driven platform committed to transforming insurance and healthcare services, unveiled significant financial results for the first quarter of 2025. This quarter marks a notable achievement for the company, demonstrating a 34.2% year-on-year growth in net profit. This enduring profitability has now been upheld for thirteen consecutive quarters, indicating the company's robust operational health.

Financial Highlights

For the three months ending on March 31, 2025, Waterdrop reported a net operating revenue of RMB 753.7 million. This figure showcases not just resilience, but growth in a competitive market. Notably, net profit attributable to ordinary shareholders reached RMB 108.2 million. Furthermore, operational costs, encompassing areas like sales, administration, and research and development, constituted 40.3% of the revenue—marking a significant 6.1 percentage points reduction compared to the previous year.

Share Repurchase Program

Since initiating its share repurchase program in September 2021, Waterdrop has actively been repurchasing shares from the open market and, as of May 31, 2025, has acquired approximately 54.2 million American Depositary Shares (ADSs). This strategy is seen as a commitment to enhancing shareholder value and reflecting confidence in the company’s long-term prospects.

Performance of the Insurance Business

Waterdrop's insurance segment also displayed robust performance during the quarter, with revenue amounting to RMB 658.0 million, an increase of 8.4% year-on-year. The operating profit from this sector was RMB 151.4 million. The first-year premiums (FYPs) generated grew impressively by 19.3%, hitting RMB 2,092.4 million. This solid growth is attributed to refined user acquisition strategies and improved customer service, focusing on both public and private domains.

Innovations Fueling Growth

Innovation remains a core focus for Waterdrop as it seeks to enhance its product offerings. The flagship product, “Jiehaoyun,” recently upgraded to version 5.0, signifies the company’s commitment to providing cutting-edge solutions. Additionally, Waterdrop has launched a groundbreaking Million Medical Insurance product that combines health declaration waivers with guaranteed renewals over five years—an unprecedented offering in the industry.

Leveraging AI Technology

The integration of AI within Waterdrop's operations has been vital for overall growth. The Waterdrop Guardian AI applications have seen increased usage in various capacities. For instance, the “AI Insurance Expert - Medical Insurance” has facilitated over 2 million yuan in monthly premiums. Moreover, the “AI Service Quality Copilot” has improved operational efficiency by 83% since its introduction. Collaborations with four major property and casualty insurers have also been established to pilot AI solutions in the auto insurance market, setting new benchmarks in this arena.

Medical Crowdfunding Success

In line with its social mission, Waterdrop Medical Crowdfunding has made great strides, raising RMB 68.8 billion for 3.47 million patients since its inception. This initiative not only exemplifies Waterdrop’s commitment to social welfare but also underscores its substantial impact on healthcare access.

Looking Ahead

Waterdrop's Digital Clinical Trial Solution, generating RMB 23.0 million in revenue with an 11.5% year-on-year increase, shows promising growth as the company moves forward. The company has successfully enrolled 11,217 patients across 1,281 clinical trial programs through the E-Find platform.

Mr. Peng Shen, the founder and CEO of Waterdrop, has elaborated on the company’s aspirations, emphasizing the pivotal role of AI in enhancing service quality and the importance of tech-driven value creation. He stated, “Our Q1 performance underscores significant revenue growth and strong profitability, showcasing how technology can deliver immense value to all stakeholders. We are unwavering in our commitment to 'Tech for Good' as we strive to innovate for the future.”

In conclusion, Waterdrop Inc.’s Q1 report not only underscores its financial strength but also sets the stage for ongoing innovation and commitment to public welfare, securing its place as a leader in the insurance and healthcare technology space.