Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Waterdrop Inc (NYSE:WDH) achieved a total revenue of CNY2.77 billion for the fiscal year 2024, marking a 5.4% year-over-year increase.
• The company has remained profitable for 12 consecutive quarters, with a significant year-over-year increase in profit.
• Waterdrop Inc (NYSE:WDH) announced its third cash dividend, rewarding shareholders with $0.02 per ordinary share and ADS.
• The company has actively repurchased approximately 52.1 million ADS from the open market, costing around USD104 million.
• Waterdrop Inc (NYSE:WDH) has partnered with 115 public charities and hosted over 15,000 charitable projects, demonstrating a strong commitment to social responsibility.

Negative Points

• Insurance-related revenue decreased by 1% year-over-year and 3% quarter-over-quarter, indicating challenges in maintaining growth in this segment.
• Operating costs increased by 7.2% year-over-year in Q4, primarily due to higher referral and service fees.
• Sales and marketing expenses rose by 4.1% year-over-year, driven by increased marketing expenses for third-party traffic channels.
• Long-term insurance product FYP experienced a slight sequential decrease, impacted by product suspension and holiday seasonality.
• Despite AI investments, R&D expenses decreased by 9.3% year-over-year, which may impact future innovation and development.

Q & A Highlights

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Q: Can you provide more details on the company's financial performance in Q4 2024 and the full year? A: Xiaoying Xu, Head of Finance, reported that Q4 revenue reached CNY687 million, a 4.2% year-over-year increase. The full-year revenue totaled CNY2.77 billion. Non-insurance business contributed nearly 15% of total revenue, with Crowdfunding service fees at CNY267.7 million and digital clinical trial solutions income at CNY91.1 million. Operating costs and expenses for Q4 were stable at CNY634 million, with a 1.7% decrease for the full year.

Q: What are the company's plans regarding dividends and share repurchases? A: CEO Shen Peng announced the launch of a third cash dividend of $0.02 per ordinary share and ADS, with plans to distribute dividends semiannually. The company has repurchased approximately 52.1 million ADS in the open market, costing around USD104 million.

Q: How is Waterdrop leveraging AI in its operations? A: Wei Ran, GM of Insurance Technology Business, explained that Waterdrop has been using AI since 2019 to optimize insurance product recommendations and risk control. The company has developed digital infrastructure, including smart CRM and AI risk control systems, enhancing user experience and maintaining its leadership in insure tech.

Q: What are the key achievements in Waterdrop's insurance business for Q4 2024? A: Tracy Lee, Investor Relations, highlighted that the insurance business achieved FYP of CNY1.9 billion, a 24.5% year-over-year growth. Short-term insurance FYP surged 44.2% YoY to CNY1.43 billion, driven by breakthroughs in customer acquisition and new payment channels. Long-term insurance product FYP reached CNY460 million.

Q: What are the future growth projections for Waterdrop in 2025? A: CEO Shen Peng stated that the company targets a 20% annual revenue growth with quarterly increments. The financial performance of Q1 is expected to maintain stable growth and sustained profitability, with strategic investments planned for subsequent quarters to align with accelerated revenue growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.