Q3 2025 Waterdrop Inc Earnings Call

Speaker #1: Good morning, everyone. This is Tracy Lee from Waterdrop Investor Relations. It’s my pleasure to welcome everyone to Waterdrop's third quarter 2025 earnings conference call.

Tracy Lee: Good morning, everyone. This is Tracy Lee from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's Q3 2025 earnings conference call. All participants are in a listen-only mode in our English line. As a reminder, today's conference is being recorded. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward-looking statement except as required by applicable law. Also, this call includes discussion of certain non-GAAP measures.

Tracy Lee: Good morning, everyone. This is Tracy Lee from Waterdrop investor relations. It's my pleasure to welcome everyone to Waterdrop's Q3 2025 Earnings Conference Call. All participants are in a listen-only mode in our English line. As a reminder, today's conference is being recorded. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Speaker #1: All participants are in listen-only mode in our English line. As a reminder, today's conference is being recorded. Please note that the discussion today will consist of overlooking statements made at the end of the safe harbor provision of the U.S.

Speaker #1: Private security and the Litigation Reform Act of 1995. Overlooking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.

Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward-looking statement except as required by applicable law. Also, this call includes discussion of certain non-GAAP measures.

Speaker #1: Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. The company does not entertain any obligation to update any forward-looking statements except as required by applicable law.

Speaker #1: Also, this call includes a discussion of certain non-tax matters. Please refer to our earnings release for reconsideration. Between non-tax and GAAP, joining us today on the call are Mr. Yang Wei, Director and GM of Insurance Business; Ms. Xu Xiaoying, Head of the Finance Department; and Ms. Jia Ruili.

Tracy Lee: Please refer to our earnings release for a reconciliation between non-GAAP and GAAP. Joining us today on the call are Mr. Yongwei, Director and GM of Insurance Systems; Ms. Xu Xiaoying, Head of Finance Department; and Ms. Jiayu Lee, Board Secretary. We'll be happy to take some of the questions in the Q&A session at the end of the conference call. In Q4, the company continued its growth trend, with overall revenue reaching over CNY 970 million, up 38.4% year-on-year. Meanwhile, AI played a significant role in enhancing business quality and efficiency, driving net profit attributable to the ordinary shareholders to about CNY 160 million, a year-on-year increase of 60.1%. For the first three quarters of 2025, the company's total revenue amounted to CNY 2.57 billion, up 23.1% year-on-year. Well, net profit attributable to ordinary shareholders reached about CNY 410 million, rising 51.9% compared to the same period last year.

Please refer to our earnings release for a reconciliation between non-GAAP and GAAP. Joining us today on the call are Mr. Wei Ran, Director and GM of Insurance Systems; Ms. Xu Xiaoying, Head of Finance Department; and Ms. Jieru Li, Board Secretary. We'll be happy to take some of the questions in the Q&A session at the end of the conference call. In Q4, the company continued its growth trend, with overall revenue reaching over CNY 970 million, up 38.4% year-on-year.

Speaker #1: Both secretaries, we will be happy to take some of the questions in the many lines at the end of the conference call. In Q3, the company continued its growth trend, with overall revenue reaching over $970 million, up 38.4% year-on-year.

Meanwhile, AI played a significant role in enhancing business quality and efficiency, driving net profit attributable to the ordinary shareholders to about CNY 160 million, a year-on-year increase of 60.1%. For the first three quarters of 2025, the company's total revenue amounted to CNY 2.57 billion, up 23.1% year-on-year. Well, net profit attributable to ordinary shareholders reached about CNY 410 million, rising 51.9% compared to the same period last year.

Speaker #1: Meanwhile, AI played a significant role in enhancing business quality and efficiency, driving net profit attributable to ordinary shareholders to about $160 million, a year-on-year increase of 60.1%.

Speaker #1: For the first three quarters of 2025, the company's total revenue amounted to $2.57 billion, up 23.1% year-on-year. Well, net profit attributable to ordinary shareholders reached about $410 million, rising 51.9% compared to the same period last year.

Speaker #1: The company has maintained gap profitability for 15 consecutive quarters since the first quarter of 2022. By segment, backed by the full integration of AI, our insurtech business continued its solid performance, with operating profit reaching about $180 million this quarter, a year-on-year increase of 44.2%.

Tracy Lee: The company has maintained GAAP profitability for 15 consecutive quarters since Q1 of 2022. By segment, backed by the full integration of AI, our insurtech business continued its solid performance, with operating profit reaching about CNY 180 million in this quarter, a year-on-year increase of 44.0%. The medical crowdfunding platform maintained stable operations and has raised medical campaigns for a cumulative total of 3.61 million patients as of the end of this quarter. The digital clinical trial solution business continued to excel in project fulfillment, enrolling over 1,000 patients in one single quarter, demonstrating robust growth momentum. This quarter, we continued to invest in AI. As of the end of September, the company had filed 69 patent applications centered on large language models, including nine international filings. During this quarter, our intelligent chatbot has been upgraded to a new hybrid attention mechanism.

The company has maintained GAAP profitability for 15 consecutive quarters since Q1 of 2022. By segment, backed by the full integration of AI, our insurtech business continued its solid performance, with operating profit reaching about CNY 180 million in this quarter, a year-on-year increase of 44.0%. The medical crowdfunding platform maintained stable operations and has raised medical campaigns for a cumulative total of 3.61 million patients as of the end of this quarter.

Speaker #1: The medical performance platform maintains stable operations and has raised medical campaigns for a cumulative total of $3.61 million patients as of the end of this quarter.

The digital clinical trial solution business continued to excel in project fulfillment, enrolling over 1,000 patients in one single quarter, demonstrating robust growth momentum. This quarter, we continued to invest in AI. As of the end of September, the company had filed 69 patent applications centered on large language models, including nine international filings. During this quarter, our intelligent chatbot has been upgraded to a new hybrid attention mechanism.

Speaker #1: The clinical trial solution business continued to excel in project fulfillment. In roughly over 1,000 patients in one single quarter, we are demonstrating robust growth momentum.

Speaker #1: This quarter, we continue to invest in AI. As of the end of September, the company had sold 69 patent applications centered on large language models.

Speaker #1: Including my international filings, during this quarter, our intelligent chatbot has been upgraded to a new hybrid attention mechanism. This updated system can select the appropriate reasoning method more flexibly, making it better at understanding and handling long conversations.

Tracy Lee: This updated system can select the appropriate reasoning method more flexibly, making it better at understanding and handling long conversations. The inference throughput currently is double that of the original version. In a key move to systematize our AI capabilities, we launched Waterdrop CI in late September, a low-code AI platform that empowers our employees to smoothly build and deploy tailored solutions for various tasks, such as marketing and customer service across apps, websites, and WeChat official accounts. Going forward, we'll also explore its application in non-insurance areas, providing strong support for the company's growth. Waterdrop, grounded in sustainable development, is dedicated to creating value for society. In this quarter, we updated our ESG matters, released the 2024 annual ESG report, disclosed multiple new environmental data, and continued to enhance our ESG governance framework.

This updated system can select the appropriate reasoning method more flexibly, making it better at understanding and handling long conversations. The inference throughput currently is double that of the original version. In a key move to systematize our AI capabilities, we launched Waterdrop CI in late September, a low-code AI platform that empowers our employees to smoothly build and deploy tailored solutions for various tasks, such as marketing and customer service across apps, websites, and WeChat official accounts.

Speaker #1: The inference throughput currently is double that of the original version. In key moves to systematize our AI capabilities, we launched Waterdrop C.AI in late September, a low-code AI platform that empowers our employees to smoothly build and deploy tailored solutions for various tasks, such as marketing and customer service, across apps, websites, and WeChat official accounts.

Going forward, we'll also explore its application in non-insurance areas, providing strong support for the company's growth. Waterdrop, grounded in sustainable development, is dedicated to creating value for society. In this quarter, we updated our ESG matters, released the 2024 annual ESG report, disclosed multiple new environmental data, and continued to enhance our ESG governance framework.

Speaker #1: Going forward, we are also exploring its application in non-insurance areas, providing strong support for the company's growth. Waterdrop, grounded in sustainable development, is dedicated to creating value for society.

Speaker #1: In this quarter, we updated our ESG measures, released the 2024 annual ESG report, and disclosed multiple new environmental data points while continuing to enhance our ESG governance framework.

Speaker #1: In public welfare, as of September 30, 2025, Waterdrop Charity Platform has collaborated with 119 charities and launched more than 15,500 projects. Together with the Guangzhou Civil Affairs Bureau, we established the Waterdrop Co-Help Program, which allows patients in need to apply for assistance online and offline, providing an innovative model that integrates government aid and individual campaigns.

Tracy Lee: In public welfare, as of 30 September 2025, Waterdrop Charity Platform has collaborated with 119 charities and launched more than 15,500 projects. Together with Guangzhou Civil Affairs Bureau, we established the Waterdrop Co-Help Program, which allows patients in need to apply for assistance online and offline, providing an innovative model that integrates government acts and individual campaigns. We extend our appreciation to our shareholders for their enduring trust and support. In early November, we completed our fourth cash dividend distribution since IPO, with a total payout of around $10.9 million. By the end of November 2025, we had repurchased approximately 58.1 million ADS in the open market, totaling $113 million. Building on our robust business performance, we are confident in exhibiting full-year revenue and profit guidance. Moving forward, we will leverage advancing AI technologies to drive integration and innovation across our operations, fueling sustainable long-term growth.

In public welfare, as of 30 September 2025, Waterdrop Charity Platform has collaborated with 119 charities and launched more than 15,500 projects. Together with Guangzhou Civil Affairs Bureau, we established the Waterdrop Co-Help Program, which allows patients in need to apply for assistance online and offline, providing an innovative model that integrates government acts and individual campaigns. We extend our appreciation to our shareholders for their enduring trust and support.

Speaker #1: We extend our appreciation to our shareholders for their enduring trust and support. In early November, we completed our fourth cash dividend distribution since our IPO.

In early November, we completed our fourth cash dividend distribution since IPO, with a total payout of around $10.9 million. By the end of November 2025, we had repurchased approximately 58.1 million ADS in the open market, totaling $113 million. Building on our robust business performance, we are confident in exhibiting full-year revenue and profit guidance.

Speaker #1: With a total payout of around $10.9 million, by the end of November 2025, we had repurchased approximately 58.1 million ADS in the open market.

Speaker #1: Totaling $113 million and building on our robust business performance, we are confident in our existing full-year revenue and profit guidance. Moving forward, we will leverage advancing AI technologies to drive integration and innovation across our operations.

Moving forward, we will leverage advancing AI technologies to drive integration and innovation across our operations, fueling sustainable long-term growth. Next, I will pass to Wei Ran to introduce the development of insurance business in Q3.

Speaker #1: Feeling sustainable long-term growth. Next, I will pass the round to introduce the development of the insurance business. Thank you, Sri. Hi, everyone. This is Yang Wei.

Tracy Lee: Next, I will pass to Yongwei to introduce the development of insurance business in Q3. Hi, everyone. This is Yongwei. In Q3, our insurance business maintained significant growth momentum. Insurance-related revenue reached about CNY 870 million, increasing by 44.8% year-on-year and 17.8% quarter-on-quarter. The business achieved an operating profit margin of 20.3%. This quarter, we optimized our real-time identification capabilities in public traffic scenarios. At the data infrastructure level, we fully integrated the data links among advertising, operation, and risk control systems. The integration slashed our end-to-end decision latency to under 50 milliseconds. Section response speed allowed us to generate more comprehensive decision-making and perform precise stratification immediately upon receiving an advertising requirement, thereby enhancing the ability to identify and filter high-quality traffic. That proportion we continue to increase through integration.

Wei Ran: Hi, everyone. This is Wei Ran. In Q3, our insurance business maintained significant growth momentum. Insurance-related revenue reached about CNY 870 million, increasing by 44.8% year-on-year and 17.8% quarter-on-quarter. The business achieved an operating profit margin of 20.3%.

Speaker #1: In the third quarter, our insurance business maintains significant growth momentum. Insurance-related revenue reached about $807 million, increasing by 44.8% year-on-year and 17.8% quarter-on-quarter. The business achieved an operating profit margin of 20.3%.

This quarter, we optimized our real-time identification capabilities in public traffic scenarios. At the data infrastructure level, we fully integrated the data links among advertising, operation, and risk control systems. The integration slashed our end-to-end decision latency to under 50 milliseconds.

Speaker #1: This quarter, we optimized our real-time identification capabilities in public traffic scenarios at the data infrastructure level. We fully integrated the data links among advertising, operations, and risk control systems.

Speaker #1: The integration/our end-to-end decision latency to under 50 milliseconds. Section response speed allowed us to generate more comprehensive decision-making and perform precise stratification immediately upon receiving an advertising requirement.

Section response speed allowed us to generate more comprehensive decision-making and perform precise stratification immediately upon receiving an advertising requirement, thereby enhancing the ability to identify and filter high-quality traffic. That proportion we continue to increase through integration. We also match users with suitable coverage options based on their specific needs, payment capability, and the payment capacity.

Speaker #1: Thereby enhancing the ability to identify and filter high-quality traffic. That's the proportion we continue to increase through integration. We also matched users with suitable coverage options based on their specific needs and payment capability.

Tracy Lee: We also match users with suitable coverage options based on their specific needs, payment capability, and the payment capacity. Now, the entire system is deeply integrated with our corporate data lake and AI platform, including self-training and health updates to continually refine our marketing strategies. On the supply side, we continue to drive product innovation. In this quarter, we introduced Guominbao Family Protection Plan, which covers up to nine family members under one single policy, and upgraded Guominbao to high-end medical insurance with an expanded network of quality private hospitals. For critical illness insurance, we further enriched our Shouhu Gen X series by introducing modular options tailored to diverse budget needs. We also upgraded the Wheel Shouhu Disability Insurance series, enhanced, achieving a comprehensive coverage ranging from extensive protection. Pre-existing condition insurance contributed about CNY 400 million in FYP during this quarter, a year-on-year increase of 103.9%.

Speaker #1: And the payment capacity. Now, the entire system is deeply integrated with our corporate data lake and AI platform, including self-training and health updates, to continually refine our marketing strategies.

Now, the entire system is deeply integrated with our corporate data lake and AI platform, including self-training and health updates to continually refine our marketing strategies. On the supply side, we continue to drive product innovation. In this quarter, we introduced Guominbao Family Protection Plan, which covers up to nine family members under one single policy, and upgraded Guominbao to high-end medical insurance with an expanded network of quality private hospitals.

Speaker #1: On the supply side, we continue to drive product innovation. In this quarter, we introduced 24 family protection plans, which cover up to nine family members under one single policy.

Speaker #1: An upgraded Guomingbao leads to high-end medical insurance with an expanded network of quality private hospitals. For critical illness insurance, we further enriched our Shouhu Junhai series by introducing modular options tailored to diverse budget needs.

For critical illness insurance, we further enriched our Shouhu Gen X series by introducing modular options tailored to diverse budget needs. We also upgraded the Wheel Shouhu Disability Insurance series, enhanced, achieving a comprehensive coverage ranging from extensive protection. Pre-existing condition insurance contributed about CNY 400 million in FYP during this quarter, a year-on-year increase of 103.9%.

Speaker #1: We also upgraded the Wu Shouhu disability insurance series; it has achieved comprehensive coverage, providing extensive protection. Pre-existing condition insurance contributed about $400 million in FIP during this quarter.

Speaker #1: A year-on-year increase of 103.9%. On the service side, we deployed AI more widely, enhancing operational efficiency. We expanded the rollout of the AI Pro insurance module on our WeChat mini program homepage.

Tracy Lee: On the service side, we deployed AI more widely, enhancing operational efficiency. We expanded the rollout of AI Pro Insurance module on our WeChat Mini Program homepage. This LLM-powered module offers users real-time Q&A and personalized recommendations, driving a 36% sequential increase in facilitated FYP. In voice services, AI medical insurance experts continue to boost efficiency. In Q3, it assisted in achieving an 82% increase in FYP compared to Q2. In the WeCom service scenarios, the per-lead productivity of AI medical insurance experts in September doubled that of June. AI applications also continue to empower long-term insurance services. As of the end of this quarter, the knowledge base to AI Life Planner Copilot had cumulatively assisted in over 340,000 insurance product-related consultations. The underwriting assistance, C Point AI, reduced the response time from underwriting cases for the traditional manual model of five minutes to one second.

On the service side, we deployed AI more widely, enhancing operational efficiency. We expanded the rollout of AI Pro Insurance module on our WeChat Mini Program homepage. This LLM-powered module offers users real-time Q&A and personalized recommendations, driving a 36% sequential increase in facilitated FYP. In voice services, AI medical insurance experts continue to boost efficiency.

Speaker #1: This LLM-powered module offers users real-time Q&A and personalized recommendations, driving a 36% sequential increase in facilitated FIP. In voice services, AI medical insurance experts continue to boost efficiency; in the third quarter, they assisted in achieving an 82% increase in FIP.

In Q3, it assisted in achieving an 82% increase in FYP compared to Q2. In the WeCom service scenarios, the per-lead productivity of AI medical insurance experts in September doubled that of June. AI applications also continue to empower long-term insurance services. As of the end of this quarter, the knowledge base to AI Life Planner Copilot had cumulatively assisted in over 340,000 insurance product-related consultations.

Speaker #1: Compared to Q2, in the week following the service scenarios, the per-lead productivity of AI medical insurance experts in September doubled that of June.

Speaker #1: AI applications continue to empower long-term insurance services. As of the end of this quarter, the knowledge base for the AI life planner copilot has accumulated assistance in over 340,000 insurance product-related consultations.

The underwriting assistance, C Point AI, reduced the response time from underwriting cases for the traditional manual model of five minutes to one second. The AI super pre-sales assistant has consistently maintained higher APL than human agents. Beginning in September, the scenario has been fully transitioned to AI operations. In after-sales services, our AI customer service agent now can handle over 600,000 insurers in one month, solving 85% of online cases independently.

Speaker #1: The underwriting assistance, Ke Yi Point AI, reduced the response time from underwriting cases for the traditional manual model of five minutes to one second.

Speaker #1: The AI super pre-sales assistant has consistently maintained higher APL than the human agent. Beginning in September, the scenario has been fully transitioned to AI operations.

Tracy Lee: The AI super pre-sales assistant has consistently maintained higher APL than human agents. Beginning in September, the scenario has been fully transitioned to AI operations. In after-sales services, our AI customer service agent now can handle over 600,000 insurers in one month, solving 85% of online cases independently. At the end of September, we launched Waterdrop C Point AI, a local platform that is accelerating the development of AI applications across multiple business scenarios. That concludes our insurance update in this quarter. Hi, I'm Li Zhiyu. Now, I will walk you through the Q3 progress in profiling and healthcare sectors. As of 30 September 2025, approximately 485 million people had cumulative visibility, a total of 71.2 billion to 3.61 million patients through Waterdrop medical profiling. In this Q3, we focused on strengthening the campaign risk control matters.

Speaker #1: After self-services, our AI customer service agents now can handle over 600,000 insurers in one month, solving 85% of online cases instantly. At the end of September, we launched Waterdrop C Point AI, a local platform that is accelerating the development of AI applications across multiple business scenarios.

At the end of September, we launched Waterdrop C Point AI, a local platform that is accelerating the development of AI applications across multiple business scenarios. That concludes our insurance update in this quarter.

Speaker #1: That concludes our insurance update for this quarter. Hi, Emily. Now, I will walk you through the third quarter progress in the corresponding and healthcare sectors.

Jieru Li: Hi, I'm Li Jieru. Now, I will walk you through the Q3 progress in profiling and healthcare sectors. As of 30 September 2025, approximately 485 million people had cumulative visibility, a total of 71.2 billion to 3.61 million patients through Waterdrop medical profiling. In this Q3, we focused on strengthening the campaign risk control matters.

Speaker #1: As of September 30, 2025, approximately 485 million people had accumulated disabilities. A total of 71.2 billion to 3.61 million patients have been served through Waterdrop medical.

Speaker #1: In the third quarter, we focused on strengthening the campaign risk control merits. We extended the core scenario strategically, incorporating differentiated modifications to our workflow, which boosted the efficiency of the review process.

Tracy Lee: We expanded core scenarios strategically, incorporating differentiated modifications to our workflow, which boosted the efficiency of the review process. By analyzing donation visit data to identify structural patterns, advanced analysts now can refine the identification capabilities of our algorithm model. This, in turn, has improved automatic early warning systems to better detect and reduce fraud. Additionally, the platform continues prioritizing the transparency of campaign authenticity. This quarter, we fortified our special case review mechanism by fully deploying the course of the request review and potential usage of funds, with real-time display review timeline and the reviewer's progress status. This now gives donors clear insight into how their contribution, how their donations are allocated and used. These matters have profoundly enhanced the transparency, rationality, and the traceability of fund distribution.

We expanded core scenarios strategically, incorporating differentiated modifications to our workflow, which boosted the efficiency of the review process. By analyzing donation visit data to identify structural patterns, advanced analysts now can refine the identification capabilities of our algorithm model. This, in turn, has improved automatic early warning systems to better detect and reduce fraud.

Speaker #1: By analyzing donation visit data to identify subtle patterns, advanced analysts can now refine the identification capabilities of our algorithm model. This, in turn, has improved automatic early warning systems to better detect and reduce fraud.

Speaker #1: Additionally, the platform continues to prioritize the transparency of campaigns. This quarter, we fortified our special case review mechanism by fully disclosing the course of the request to review and the potential usage of bonds.

Additionally, the platform continues prioritizing the transparency of campaign authenticity. This quarter, we fortified our special case review mechanism by fully deploying the course of the request review and potential usage of funds, with real-time display review timeline and the reviewer's progress status. This now gives donors clear insight into how their contribution, how their donations are allocated and used.

Speaker #1: With a real-time display of the review timeline and the reviewers' presentation status, this now gives donors clear insight into how their contributions, how their donations are allocated and used in this scenario to profoundly enhance the transparency, rationality, and traceability of bond distribution.

These matters have profoundly enhanced the transparency, rationality, and the traceability of fund distribution. In our healthcare business, continuing strong performance this quarter, the E-Find platform expanded collaboration networks by partnering with 216 pharmaceutical and contract research organizations. Meanwhile, we initiated services for 125 new programs. For the first time, we successfully enrolled over 1,000 patients in one single quarter.

Speaker #1: And our healthcare business continues with strong performance this quarter. The eFIND platform expanded collaboration networks by partnering with 216 pharmaceutical and contract research organizations.

Tracy Lee: In our healthcare business, continuing strong performance this quarter, the E-Find platform expanded collaboration networks by partnering with 216 pharmaceutical and contract research organizations. Meanwhile, we initiated services for 125 new programs. For the first time, we successfully enrolled over 1,000 patients in one single quarter. Since its launch, the program has achieved accumulative enrollment of more than 13,000 patients. Waterdrop leveraged its massive patient database and advanced digital ability to expand collaboration projects in areas like psoriasis tumors and digestive tumors, accelerating the clinical development process of our partners. Notably, in the challenging field of gynecological tumors, quarterly enrollment increased by 130% compared to the previous full quarter average level. The company has also made significant strides in chronic disease. Building on its existing focus on skin disease, respiratory conditions, and diabetic hypertension, the company has expanded its disease coverage into the rheumatology and the immunology.

Speaker #1: Meanwhile, we initiated services for 125 new programs. For the first time, we successfully enrolled over 1,000 patients in a single quarter. Since its launch, the program has achieved accumulated enrollment of more than 13,000 patients.

Since its launch, the program has achieved accumulative enrollment of more than 13,000 patients. Waterdrop leveraged its massive patient database and advanced digital ability to expand collaboration projects in areas like psoriasis tumors and digestive tumors, accelerating the clinical development process of our partners. Notably, in the challenging field of gynecological tumors, quarterly enrollment increased by 130% compared to the previous full quarter average level.

Speaker #1: Waterdrop leveraged its massive patient database and advanced digital capabilities to expand collaboration projects in areas like thoracic tumors and digestive tumors, accelerating the clinical development processes of our partners.

Speaker #1: Notably, in the challenging field of gynecological tumors, quarterly enrollment increased by 130% compared to the previous four-quarter average level. The company has also made significant strides in chronic disease, building on its existing focus on skin diseases, respiratory conditions, and dermatic hypertension.

The company has also made significant strides in chronic disease. Building on its existing focus on skin disease, respiratory conditions, and diabetic hypertension, the company has expanded its disease coverage into the rheumatology and the immunology. Enhancing digital matching accuracy between patient database and the project libraries remains a key strategic focus for Waterdrop.

Speaker #1: The company has expanded its disease coverage into rheumatology and immunology. Enhancing digital matching accuracy between the patient database and the project libraries remains a key strategic focus for Waterdrop.

Tracy Lee: Enhancing digital matching accuracy between patient database and the project libraries remains a key strategic focus for Waterdrop. This quarter, we upgraded our algorithm medical data structure matching, enabling thriving performance across multiple high-quality, high-difficulty projects. Through the ecosystem synergy and refined project operations, Waterdrop consistently delivers satisfactory fulfillment quality, driving sustained order growth. As a result, the digital clinical trial solution income in Q3 reached RMB 31.85 million, marking a 31.3% year-on-year increase. In the digital omnichannel marketing, we advanced LLM-powered applications in medical patient service scenarios, launching projects in patient health management, knowledge promotion, and digital humans. The company secured a three-year contract with a world-leading pharmaceutical for patient management, serving hundreds of thousands of patients and profoundly improving service efficiency and user experience. Now, I will hand over to Xiaoying, our head of finance department, to discuss our financial performance in this quarter. Hello, everyone.

Speaker #1: This quarter, we upgraded our algorithm and medical data structure matching, enabling thriving performance across multiple high-quality, high-difficulty projects. Through the ecosystem synergy and refined project operations, Waterdrop consistently delivers satisfactory fulfillment quality.

This quarter, we upgraded our algorithm medical data structure matching, enabling thriving performance across multiple high-quality, high-difficulty projects. Through the ecosystem synergy and refined project operations, Waterdrop consistently delivers satisfactory fulfillment quality, driving sustained order growth. As a result, the digital clinical trial solution income in Q3 reached RMB 31.85 million, marking a 31.3% year-on-year increase.

Speaker #1: Driving sustained order growth. As a result of the digital clinical trial solution incoming, the third quarter reached $31.85 million, marking a 31.3% year-on-year increase.

In the digital omnichannel marketing, we advanced LLM-powered applications in medical patient service scenarios, launching projects in patient health management, knowledge promotion, and digital humans.

Speaker #1: In digital omnichannel marketing, we advanced LLM-powered applications in medical patient service scenarios, launching projects in patient health management, knowledge promotion, and digital humans.

The company secured a three-year contract with a world-leading pharmaceutical for patient management, serving hundreds of thousands of patients and profoundly improving service efficiency and user experience. Now, I will hand over to Xiaoying, our head of finance department, to discuss our financial performance in this quarter.

Speaker #1: The company secured a three-year contract with Overwhelming Pharmaceuticals for patient management, serving hundreds of thousands of patients and profoundly improving service efficiency and user experience.

Speaker #1: Now I will hand over to Xiaoying Xu, our head of the finance department, to discuss our financial performance in this quarter. Hello, everyone. I will now walk you through our financial highlights for the third quarter of 2025.

Xiaoying Xu: Hello, everyone. I will now walk you through our financial highlights for Q3 of 2025. Before I go into details, please be reminded that all numbers quoted here will be RMB, and please refer to our earnings release for detailed information on our financial performance on both the year-on-year and quarter-on-quarter basis, respectively. In Q3, the company reported total revenue of RMB 975 million, marking a year-on-year growth of 38.4%, reflecting a strong growth trajectory.

Tracy Lee: I will now walk you through our financial highlights for Q3 of 2025. Before I go into details, please be reminded that all numbers quoted here will be RMB, and please refer to our earnings release for detailed information on our financial performance on both the year-on-year and quarter-on-quarter basis, respectively. In Q3, the company reported total revenue of RMB 975 million, marking a year-on-year growth of 38.4%, reflecting a strong growth trajectory. By segment, our insurance business generated about RMB 870 million in revenue, up 44.8% year-on-year. Profiling service fees stood at around RMB 65.66 million, remaining stable year-on-year. Digital clinical trial solutions contributed over RMB 31.85 million, with a year-on-year increase of 31.3%. Operating costs and expenses totaled approximately RMB 861 million, marking a year-on-year increase of 27.1%. This growth rate of operating costs was lower than the revenue growth, further boosting profitability.

Speaker #1: Before I go into details, please be reminded that all numbers quoted here will be in R&D. Please refer to our earnings release for detailed information on our financial performance on both a year-on-year and quarter-on-quarter basis.

Speaker #1: Respectively, in the third quarter, the company reported total revenue of $975 million, marking a year-on-year growth of 38.4% and reflecting a strong growth trajectory. By segment, our insurance business generated about $870 million in revenue.

By segment, our insurance business generated about RMB 870 million in revenue, up 44.8% year-on-year. Profiling service fees stood at around RMB 65.66 million, remaining stable year-on-year. Digital clinical trial solutions contributed over RMB 31.85 million, with a year-on-year increase of 31.3%. Operating costs and expenses totaled approximately RMB 861 million, marking a year-on-year increase of 27.1%.

Speaker #1: At 44.8% year-on-year, corresponding service fees exceeded approximately $65.66 million, remaining stable year-on-year. Additionally, digital clinical trial solutions contributed over $31.85 million, with a year-on-year increase of 31.3%.

Speaker #1: Operating costs and expenses totaled approximately $861 million, marking a year-on-year increase of 27.1%. This growth rate of operating costs was lower than the revenue growth, further boosting profitability.

This growth rate of operating costs was lower than the revenue growth, further boosting profitability. Operating costs for this quarter reached CNY 475 million, up 39.5% year-on-year, driven by CNY 66.7 million rise in cost of a referral and service fee, along with CNY 32.4 million and CNY 16.9 million increase in personal costs, and the cost of profiling consultant fees. Sales and marketing expenses amounted to CNY 243 million, rising 40.3% year-on-year.

Speaker #1: Operating costs for this quarter reached $475 million, up 39.5% year-on-year, driven by a $66.7 million rise in referral and service fees. This was accompanied by increases of $32.4 million in personal costs and $66.9 million in consultant fees.

Tracy Lee: Operating costs for this quarter reached CNY 475 million, up 39.5% year-on-year, driven by CNY 66.7 million rise in cost of a referral and service fee, along with CNY 32.4 million and CNY 16.9 million increase in personal costs, and the cost of profiling consultant fees. Sales and marketing expenses amounted to CNY 243 million, rising 40.3% year-on-year. This growth mainly because of the enhanced AI applications, which improved the user identification accuracy and the conversion rate. Based on this, we boosted our traffic investment, resulting in CNY 79 million year-on-year rise in the marketing expenses for the third-party traffic channels. General and administrative expenses declined 23.7% year-on-year to CNY 84.7 million. Key factors include a CNY 15.6 million reduction in personal costs and the absence of last year's CNY 20.6 million impairment loss, which contributed to the delta decrease.

Speaker #1: The marketing census amounted to 243 million, rising 40.3% year-on-year. This growth is mainly due to the enhanced AI applications, which improved user identification accuracy and conversion rates.

This growth mainly because of the enhanced AI applications, which improved the user identification accuracy and the conversion rate. Based on this, we boosted our traffic investment, resulting in CNY 79 million year-on-year rise in the marketing expenses for the third-party traffic channels. General and administrative expenses declined 23.7% year-on-year to CNY 84.7 million.

Speaker #1: Based on this, we boosted our traffic investment, resulting in a $79 million year-on-year rise in the marketing census for the third quarter traffic channels. General and administrative expenses declined 23.7% year-on-year to $84.7 million.

Key factors include a CNY 15.6 million reduction in personal costs and the absence of last year's CNY 20.6 million impairment loss, which contributed to the delta decrease. The R&D expenses rose 10.2% to over RMB 58.3 million, with personal costs, cross-server expenses, and other technical support expenses increasing by 3.2 and 2.7 million, respectively, compared to the same period of 2024. In this quarter, the company reported an operating profit of nearly RMB 114 million, marking a substantial year-on-year increase of 329.8%. Net profit attributable to the company's ordinary shareholders reached RMB 158 million, up 60.1% year-on-year. As of the end of this period, the company held ample cash position of about RMB 3.61 billion. Net operating cash flow remained positive, providing firm financial support for business expansion and technological development. In summary, during this quarter, we focused on refined management while achieving scaled growth. Moving forward, the company will advance with greater productivity and further strong acts to reach a new stage of development. Ladies and gentlemen, with that, we will conclude today's conference call.

Speaker #1: Key factors include a $15.6 million reduction in personal costs and the absence of last year's $20.6 million impairment loss, which contributed to the delta decrease.

Speaker #1: The R&D expenses rose 10.2% to over $58.3 million, with personnel costs and cross-service expenses, as well as other technical support expenses, increasing by 3.2% and $2.7 million, respectively, compared to the same period of 2024.

Tracy Lee: The R&D expenses rose 10.2% to over RMB 58.3 million, with personal costs, cross-server expenses, and other technical support expenses increasing by 3.2 and 2.7 million, respectively, compared to the same period of 2024. In this quarter, the company reported an operating profit of nearly RMB 114 million, marking a substantial year-on-year increase of 329.8%. Net profit attributable to the company's ordinary shareholders reached RMB 158 million, up 60.1% year-on-year. As of the end of this period, the company held ample cash position of about RMB 3.61 billion. Net operating cash flow remained positive, providing firm financial support for business expansion and technological development. In summary, during this quarter, we focused on refined management while achieving scaled growth. Moving forward, the company will advance with greater productivity and further strong acts to reach a new stage of development. Ladies and gentlemen, with that, we will conclude today's conference call.

Speaker #1: In this quarter, the company reported an operating profit of nearly $114 million, marking a substantial year-on-year increase of 329.8%. Net profit attributable to the company's ordinary shareholders reached $1.158 million at a 60.1% year-on-year increase.

Speaker #1: As of the end of this period, the company held ample cash positions of about $3.61 billion. Net operating cash flow remained positive, providing firm financial support for business expansion and technological development.

Speaker #1: And in summary, during this quarter, we focused on refining management while achieving scale growth. Moving forward, the company will advance with greater productivity and programming to reach a new stage of development.

Tracy Lee: We do thank you for joining. Have a good time.

Tracy Lee: We do thank you for joining. Have a good time.