Waterdrop Inc.

Good morning, everyone. This is Tracy Lee from WaterDrop Ambassador Relations. It's my pleasure to welcome everyone to WaterDrop's first quarter 215 earnest conference call. All participants are in listening mode in our English line. As a reminder, today's conference call is being recorded. Please note that discussion today will come from forward-looking statements made under the proper provision of U.S. private security and the Legislative Reform Act of 1995. Forward-looking statements are subject to risk and uncertainty that may cause actual results to differ materially from our current expectations. But these risk and uncertainty are not limited to those outlined in our public findings with the SEC. The company does not undertake any obligation to update any forward-looking statements except that it requires any applicable law. Also, this call includes discussion of certain non-GAAP matters. Please refer to our earnings release for consideration between non-GAAP and GAAP. Joining us today on the call are Mr. Shen Hong, our founder, chairman, and CEO, Mr. Yang Wei, director and GM of insurance business, Mrs. Shih-Yin, head of finance department, and Mrs. Jeffery, board secretary. We will be happy to take some of the questions in the mentoring line at the end of the conference call. Good afternoon, everyone. This is Shinpong. In the first quarter, water drops achieved robust business growth while maintaining a steady profitability. our revenue reached over $715 million, passed by 7% year-over-year, with net profit attributed to the company's ordinary shareholders about $110 million, a significant 34.2% year-over-year growth. This marks our 13th consecutive quarter of gap profitability. That segment, our insurance business continues proactive with growth strategies driving first-year premiums up by 19% year-over-year, contributing to an 8% year-over-year increase in insurance revenue. For medical profiling, as a pioneer of online service platforms for individuals seeking financial help, we strictly adhere to regulatory guidelines, giving delivery assistance 3.47 million patients. Each one's platform maintains stable execution, with over 11,000 patients enrolled today. With further advanced AI capabilities, establishing industry benchmarks for insurance applications are indeed extended into one total of 56 million by 3.6% of the product. Our WaterDrop Guardian AI insurance experts expanded across more scenarios, including internal use and maternity insurance, WeCom, and accidental partnership. Region 2 shareholders remain our priority. By end of May 25, we have repurchased approximately 54.2 million ADS in the open market, totaling $1.07 million. This May, we distributed our third cash dividend of $7.3 million. Waterjump remains committed to social responsibility and sustainable development, actively creating shared value for society. As of March 31, 2025, Waterjump Charity Platform has partnered with 117 public charitable organizations, launching over 15.5 thousand projects, including rapid response to the spec earthquake. Currently, we expect our revenue growth rate in subsequent quarters to To further increase, we anticipate that the annual revenue will grow by over 20% year-over-year. In the second half of the year, the company intended to increase its investment in driving business growth, which may have a certain negative impact on the annual profit. I will now pass the roundtable to update our performance in insurances. Thank you, Shintong. In the first quarter, our insurance business achieved an FIP of approximately 2.09 million, with a year-over-year growth of 19.3% and a quarter-over-quarter growth of 10.2%. Insurance-related revenues reached about 616 million, increasing by 8.4% year-over-year and by 13% quarter-over-quarter. The insurance business generated operating profits of approximately $115 million, with an operating profit margin of 23%. FIT for Charleston insurance reached $1.5 billion, with 30.1% yield year growth and 4.6% part-on-counter growth. On the customer acquisition side, centered on one-job insurance branding, we implemented personalized marketing strategies across traffic platforms, including TikTok, WeChat channels, and the Xiaolongshu, by leveraging real-time API capability. Currently, we explore upgraded coverage and value-added service for existing users, driving premium growth from both new and existing customer bases. On the supply side, we have continued to innovate in medium medical insurance, insurance both substandard risk and maternity insurance offerings. During the quarter, our products both substandard risk generated premium of 280 million, representing year-on-year growth exceeding 200%. We have further strengthened our cooperation with insurance companies to develop more customized innovation products. And for the first time, incorporating medication subsidies, providing expecting mothers with enhanced benefits. In late April, In partnership with Azure, we launched the Training Box, the industry's first medium medical insurance product with both health declaration waivers and guaranteed renewal. This product is available for chronic disease patients and individuals with suboptimal health, allowing renewal up to age 105 and setting new standards for medical insurance coverage. FYP for long-term insurance reached 590 million, representing a 1.6% year-over-year decline with a 27.6% quarter-to-quarter increase. The year-over-year decrease was primarily attributable to the pressure on life insurance products. Our early observed significant growth in disability insurance and critical unit insurance. Disability insurance products have contributed over 87 million in premiums. Within critical illness insurance, our series featuring a flexible health declaration, continuing to gain user recognition since its launch, with multiple upgrades and integrative iterations. During this quarter, we also introduced an upgraded version of Tampa Law, a specific insurance product for type 2 diabetes patients, as well as The industry first expanded its long-term charity insurance, furthering vulnerable innovation in a lot of health insurance products. The traditional online staffing made a steady, corner-to-corner growth in the workforce size, with productivity per capita achieving both year-on-year and sequentially increased. Triland.org continues to refine its online web planner model, independently contributing 110 million in premiums each month. The platform also strengthened its technology collaboration with World Health Insurance Platform, launching an AI service application currently in beta testing, which can now handle over 150 third cases. World Health continues to thrive the development of large memory model capabilities. As of the end of Q1, the company has filed 51 patents related to LLM technologies. And applications continue to enhance operational efficiency across all business segments. The AI service quality co-pilot has improved quality, management efficiency by leveraging LLM reasoning capabilities in unique operation efficiency by 83%. The AI insurance expert has made significant progress across multiple credit lines, like the AI insurance expert in medical insurance is gradually scaling its capacity, facilitating two million in monthly premiums in outbounding Europe. Additionally, WeCom's service extended its career with the significant launch of a maternity insurance service for WeCom clients in March, achieving end-to-end policy underwriting and premium generation. In customer service, our AI-powered support system operated 24-7, resulting in 52% of users in clear risk automatically. In specific scenarios, it already handled 94% of service requests without human intervention. Beyond medical insurance and customer service, we are actively expanding the AI insurance expert application to new murals through ongoing R&D efforts. This concludes our business, insurance business. Thank you, Juan. I will now pass to our board of directors, Jeff Meade, to update our performance, medical profiling, and the healthcare business. Thank you, Ren-Wei. As of the end of March 25, around 475 million people cumulatively donated 68.8 billion yen to about 3.47 million patients through our workshop medical for funding platform. We focused on three key tasks this quarter. First, we optimized our process design by introducing an online pledge requirement as the campaign initiation stage. Through this pledge, we will clearly communicate to communicate the platform's orientation to users. Additionally, we have carefully educated users about our social supervision mechanisms, as well as relevant laws and regulations. Much like the health declaration in insurance application, this matter establishes an interrogative guard Additionally, we will continue to enhance its risk control verification stability through systematic infrastructure improvements. We deliver standardized verification guidelines for three high-risk scenarios, housing, vehicle ownership, and income by integrating official verification channels from traffic management bureaus and local government service platforms covering 92% of the cities nationwide. We've significantly improved the efficiency and quality of risk verification. Regarding the most concerned issue of bond security, WaterDrop implemented an intelligent monitoring platform combining systems of civilians and manual follow-up. For five high-risk scenarios, the system can generate optimal risk control solutions based on algorithm models. Determining the ideal frequency and timing for human intervention, the technological approach has effectively reduced the risk of fraud, misappropriation, and ensuring safety of donated funds. In this part of the job, healthcare-related business maintains steady development. The Digital Clean for Child Solution business started with 285 pharmaceuticals and CROs. security of 77 new projects. During this quarter, 822 patients have been enrolled, and the cumulative number of enrolled patients in the launch reached 11,250. Revenue from digital clinical trials has grown by 11.5% over the years. The platform continues to gain the oncology view, expanding its collaborative projects in thrice-big grafts, capturing intestinal tumors, thereby strengthen its industry competitiveness. Additionally, leveraging extensive patient database and digital recruitment strategies, the platform achieved a multiple workflow in chronic and rare diseases, earning well-supplied recognition. Currently, in this quarter, the platform has actively expanded its digital-only channel marketing initiative. Loving is, after the modern trends loaded up, partnered with a medical device company to jointly develop an intelligent service system for diabetes. This product is expected to be launched in the second quarter, collaborating with our partners to enhance the efficiency of patient health management. Now I will hand over to Xiaoyin, our head of finance department, to discuss our financial performance in this quarter. Thank you, Jasmine. Hello, everyone. I am now walking through our financial highlights for the first quarter of 2005. Before I go into detail, please be reminded that all members of the board here will be on this and it's great to refer to our earnings release for detailed information on our financial performance on both the year-over-year and quarter-to-quarter basis, respectively. And the first quarter of 2025, all business that may have afforded off the reverse-solid performance. So what about the combination of revenue, which is 754 million, representing a 7% year-over-year invoice. By this assessment, insurance related income contributed approximately $658 million in revenue up by 8.4% per year. For funding services amounted to $67.1 million per year. Digital clinical trial solution distance generated about $23 million in revenue. growing by 11.5% year-over-year. In terms of operations, the company focused on enhancing efficiency and quality. In first quarter, total operating costs and expenses amounted to approximately 678 yen, representing a year-over-year increase of about 3%. The growth rate was lower than the revenue growth rate. Among this, operating costs for this quarter reached of 374 meetings, an increase of 13% on YYP. This was primarily due to and about 37.7 million raised in cost of referral services during this period. Along with the notice of 2.8 million increase in cost for Digital Queen's retired version of the consulting team. South End marketing expenses amounted to 172 meetings, differing by approximately The reduction was primarily reflected in also the marketing service fee and related operational costs. Through the progressive application of CI capabilities, internal operational efficiency continued to improve with the decrease of 5.9 million and 5.6 million respectively in this area this quarter. Mobility investment in customer acquisition led to a year-over-year 4.5 million increase in marketing expenses for third-party traffic channels. Under this combined effect, sales and marketing expenses for the period decreased by 5.4 million year-over-year. General and administrative expenses were 74.9 million down 15.8% year-over-year, currently attributable to improvements in the company's medicine efficiency and a reduction in real estate professional services. R&D expenses were approximately 56.2 million, remaining a stable year-over-year. However, the structure of R&D costs have further adjusted to focus more on good and bad facilities. In the first quarter, the company achieved net profit attributes to the ordinary shareholders of 108 million, representing significant year-over-year growth of 34.2%. As of the end of Q1 2025, the company maintained ample cash reserves of about 3.54 billion, with operating cash flow continuing to be positive. This quarter, the company generated net operating cash inflow of 94.5 million providing sufficient financial support for future business growth. In summary, the strong first quarter performance demonstrates what a sustainable and stable, healthy world with notable progress across multiple business segments. Moving forward, we will adhere to the business path of driving growth and improving efficiency through technological involvement and continue to deliver steady And ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining. Have a good time.