Q1 2026 Waterdrop Inc Earnings Call
Speaker #3: Good morning, everyone. This is Tracy Lee from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's first quarter 2026 earnings conference call.
Jieru Li: Good morning, everyone. This is Jasmine Li from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's Q1 2026 earnings conference call. All participants are in listen-only mode in our English line. As a reminder, today's conference call is being recorded. Please note that discussion today will contain forward-looking statements made under the safe harbor provision of the 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 statements except as required in applicable law. Also, this call includes discussion of certain non-GAAP matters. Please refer to our earnings release for a reconciliation between GAAP and non-GAAP.
Jasmine Li: Good morning, everyone. This is Jasmine Li from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's Q1 2026 earnings conference call. All participants are in listen-only mode in our English line. As a reminder, today's conference call is being recorded. Please note that discussion today will contain forward-looking statements made under the safe harbor provision of the 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 statements except as required in applicable law. Also, this call includes discussion of certain non-GAAP matters. Please refer to our earnings release for a reconciliation between GAAP and non-GAAP.
Speaker #3: All participants are in listen-only mode on our English line. As a reminder, this conference call is being recorded. Please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the U.S. Securities Litigation Reform Act of 1995.
Speaker #3: 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.
Speaker #3: The company does not undertake any obligation to update any forward-looking statements, except as required under applicable law. Also, this call includes discussion of certain mandated matters.
Speaker #3: Please refer to our earnings release for reconciliation between mandate and gap. Joining us today on the call are Mr. Shen Peng, our founder, chairman, and CEO; Mr. Yan Wei, director and GM of insurance business; Ms. Xu Xiaoying, head of finance department; and Ms. Li, board secretary.
Jieru Li: Joining us today on the call are Mr. Shen Peng, our Founder, Chairman, and CEO, Mr. Wei Ran, Director and GM of insurance business, Ms. Xu Xiaoying, Head of Finance Department, and then Ms. Jieru Li, Board Secretary. We will take questions in the operator line at the end of the conference call. Now let's invite our CEO, Shen Peng, to start.
Jasmine Li: Joining us today on the call are Mr. Shen Peng, our Founder, Chairman, and CEO, Mr. Wei Ran, Director and GM of insurance business, Ms. Xu Xiaoying, Head of Finance Department, and then Ms. Jieru Li, Board Secretary. We will take questions in the operator line at the end of the conference call. Now let's invite our CEO, Shen Peng, to start. Dear investors and analysts, thank you for joining Waterdrop's Q1 2026 earnings conference call. In Q1, we continued our last year's growth momentum with total revenue of CNY 1.24 billion, up 64.8% year-over-year, and net profit attributable to ordinary shareholders of more than CNY 98 million. In Q1 2022, we have maintained GAAP profitability for 17 consecutive quarters. By segment, our insurance business continued its user acquisition strategy with insurance-related income up 74.1% year-over-year.
Speaker #3: We will take questions in the mandatory line at the end of the conference call. Now, let's invite our CEO, Peng Shen, to start. Dear investors and analysts, thank you for joining Waterdrop's first quarter 2026 earnings conference call.
Shen Peng: Dear investors and analysts, thank you for joining Waterdrop's Q1 2026 earnings conference call. In Q1, we continued our last year's growth momentum with total revenue of CNY 1.24 billion, up 64.8% year-over-year, and net profit attributable to ordinary shareholders of more than CNY 98 million. In Q1 2022, we have maintained GAAP profitability for 17 consecutive quarters. By segment, our insurance business continued its user acquisition strategy with insurance-related income up 74.1% year-over-year.
Speaker #3: In the first quarter, we continued our last year's growth momentum, with total revenue of $1.24 billion, up 64.8% year over year, and net profit attributable to ordinary shareholders of more than RMB 98 million.
Speaker #3: Since the first quarter of 2022, we have maintained GAAP profitability for 17 consecutive quarters. By segment, our insurance business continues its user acquisition strategy, with insurance-related income up 74.1% year over year.
Speaker #3: At this capability, it has been validated. We sharpened our focus on user experience while continuing to optimize our traffic channels and user targeting efficiency.
Shen Peng: As this capability has been validated, we sharpen our focus on user experience while continuing to optimize our traffic channels and user targeting efficiency. The Waterdrop Medical Crowdfunding business remains stable, having raised medical funds for a cumulative 3.75 million patients by the end of Q1. Our digital clinical trial solution business has seen enrollment growth, with more than 15,500 patients enrolled to date. On technology front, we are accelerating our shift toward an AI-native company. As of 31 March 2026, we had filed 75 LLM-related patent applications, including nine international ones, and were recently granted two more national invention patents in intelligent semantic understanding and multimodal recognition. These technologies will be progressively applied to insurance scenarios, such as intelligent customer service and claims, improving service quality and efficiency. On capital returns, we continue to share our growth with our shareholders.
Shen Peng: As this capability has been validated, we sharpen our focus on user experience while continuing to optimize our traffic channels and user targeting efficiency. The Waterdrop Medical Crowdfunding business remains stable, having raised medical funds for a cumulative 3.75 million patients by the end of Q1. Our digital clinical trial solution business has seen enrollment growth, with more than 15,500 patients enrolled to date. On technology front, we are accelerating our shift toward an AI-native company. As of 31 March 2026, we had filed 75 LLM-related patent applications, including nine international ones, and were recently granted two more national invention patents in intelligent semantic understanding and multimodal recognition. These technologies will be progressively applied to insurance scenarios, such as intelligent customer service and claims, improving service quality and efficiency. On capital returns, we continue to share our growth with our shareholders.
Speaker #3: The Grafana business remains stable, having raised medical funds for a cumulative 3.75 million patients by the end of Q1. And our digital clinical trial solution business is sustaining enrollment growth, with more than 15,000 and 500 patients enrolled to date.
Speaker #3: On our technology front, we are accelerating our shift toward an AI-native company. As of March 31, 2026, we had filed 75 LLM-related patents and applications, including nine international ones, and were recently granted two more national invention patents in intelligence, semantic understanding, and multimodal recognition.
Speaker #3: This technology will be progressively applied to the insurance scenario, such as intelligent customer service and claims, improving service quality and efficiency. On capital returns, we continue to share our growth with our shareholders in early May.
Shen Peng: In early May, we completed our fifth cash dividend since our IPO, totaling approximately $10.8 million. Our share repurchase program also continued steadily. By the end of May 2026, we had repurchased approximately 61.8 million ADS in open market for about $120 million. As of the end of May 2026, cumulative cash dividends and share repurchases since IPO has totaled approximately $170 million. Meanwhile, we remain committed to giving back to society. At the end of Q1, the Waterdrop Charity platform had partnered with 119 public charitable organizations and launched over 15,500 charity programs. Looking ahead, we aim to seize industry opportunities and to make growth our top priority this year. Building on our proven user targeting capabilities, we were increasing marketing investments further. For 2026, we are targeting approximately 40% top-line growth, with operating profit scale is expected to remain broadly stable.
Shen Peng: In early May, we completed our fifth cash dividend since our IPO, totaling approximately $10.8 million. Our share repurchase program also continued steadily. By the end of May 2026, we had repurchased approximately 61.8 million ADS in open market for about $120 million. As of the end of May 2026, cumulative cash dividends and share repurchases since IPO has totaled approximately $170 million. Meanwhile, we remain committed to giving back to society. At the end of Q1, the Waterdrop Charity platform had partnered with 119 public charitable organizations and launched over 15,500 charity programs. Looking ahead, we aim to seize industry opportunities and to make growth our top priority this year. Building on our proven user targeting capabilities, we were increasing marketing investments further. For 2026, we are targeting approximately 40% top-line growth, with operating profit scale is expected to remain broadly stable.
Speaker #3: We completed our fifth cash dividend since our IPO, totaling approximately $10.8 million. Our share repurchase program also continues steadily through the end of May 2026.
Speaker #3: We had repurchased approximately 61.8 million ADSs in the open market for about $120 million as of the end of May 2026. Cumulative cash dividends and share repurchases since IPO have totaled approximately $170 million.
Speaker #3: Meanwhile, we remain committed to giving back to society at the end of Q1. The Waterdrop charity platform has partnered with 119 public charitable organizations and launched over 15,500 charity programs.
Speaker #3: Looking ahead, we aim to seize industry opportunities and make growth our top priority this year. Building on our proven user targeting capabilities, we will increase marketing investment further for 2026.
Speaker #3: We are targeting approximately 40% top-line growth, with operating profit scale expected to remain broadly stable. We expect this current investment to allow for greater profit potential in the coming years.
Shen Peng: We expect this current investment to unlock greater profit potential in the coming years, and the user base expansion will further support the company's long-term development. That covers our overall performance in Q1. Next, I will walk through each of those business segments in detail.
Wei Ran: We expect this current investment to unlock greater profit potential in the coming years, and the user base expansion will further support the company's long-term development. That covers our overall performance in Q1. Next, I will walk through each of those business segments in detail. Hello, everyone. This is Wei Ran. Let me walk you through the progress of our insurance business. In Q1, insurance-related income reached CNY 1.15 billion, up 74.1% year-over-year, with operating profits of CNY 150 million. Our operating margin of Q1 is 13.3%. The year-over-year top-line growth mainly reflects the continuation of our last year user acquisition strategy. In Q1, we continued to step up public domain user targeting and increased our investment in traffic and AI, driving significant premium growth. On a quarter-over-quarter basis, while the income declined, our insurance operating margin rose by two percentage points.
Speaker #3: And the user base extension will further support the company's long-term development. That covers our overall performance in Q1. Next, I will walk through each of our business segments in detail.
Speaker #3: Hello, everyone. This is Yan Wei. Let me walk you through the progress of our insurance business. In the first quarter, insurance-related income reached $1.15 billion, up 74.1% year over year, with operating profit of $150 million.
Wei Ran: Hello, everyone. This is Wei Ran. Let me walk you through the progress of our insurance business. In Q1, insurance-related income reached CNY 1.15 billion, up 74.1% year-over-year, with operating profits of CNY 150 million. Our operating margin of Q1 is 13.3%. The year-over-year top-line growth mainly reflects the continuation of our last year user acquisition strategy. In Q1, we continued to step up public domain user targeting and increased our investment in traffic and AI, driving significant premium growth. On a quarter-over-quarter basis, while the income declined, our insurance operating margin rose by two percentage points.
Speaker #3: Operating margin in Q1 is 13.3%. The year-over-year top-line growth mainly reflects the continuation of our user acquisition strategy from last year. In the first quarter, we continued to step up public domain user targeting and increase our investment in traffic and AI, driving significant premium growth.
Speaker #3: And on a quarter-over-quarter basis, while income declined, our insurance operating margin rose by 2 percentage points. This was mainly because we proactively cut some lower ROI channels during this quarter.
Wei Ran: This was mainly because we proactively cut some lower ROI channels during this quarter. At the same time, we are actively expanding into other high-quality traffic channels while running our mature ones with refined operations, enhancing our traffic infrastructure and optimizing our model to drive continued improvement in ROI. On the supply side, we are committed to giving users more diverse product offerings, which continue to earn user recognition. During this quarter, FYP from our pre-existing condition products rose 24.3% year-over-year, and the disability insurance products contributed to CNY 89 million in FYP. At the product level, we continue to iterate. For example, we upgraded our inclusive cancer worry-free medical insurance series, expanding the coverage for out-of-the-hospital prescriptions and related medical devices, as well as a range of advanced cancer therapies.
Wei Ran: This was mainly because we proactively cut some lower ROI channels during this quarter. At the same time, we are actively expanding into other high-quality traffic channels while running our mature ones with refined operations, enhancing our traffic infrastructure and optimizing our model to drive continued improvement in ROI. On the supply side, we are committed to giving users more diverse product offerings, which continue to earn user recognition. During this quarter, FYP from our pre-existing condition products rose 24.3% year-over-year, and the disability insurance products contributed to CNY 89 million in FYP. At the product level, we continue to iterate. For example, we upgraded our inclusive cancer worry-free medical insurance series, expanding the coverage for out-of-the-hospital prescriptions and related medical devices, as well as a range of advanced cancer therapies.
Speaker #3: At the same time, we are actively expanding into other high-quality traffic channels, while running our mature ones with refined operations. We are enhancing our traffic infrastructure and optimizing our models to drive continued improvement in ROI.
Speaker #3: On the supply side, we are committed to giving users more diverse product offerings, which continue to earn user recognition. During this quarter, FYP 4 from our pre-existing position products rose 24.3% year over year.
Speaker #3: And for the disability insurance products in FYP, at the product level we continue to iterate. For example, we upgraded our inclusive Cancer Worry-free Medical Insurance series, expanding the coverage for out-of-hospital prescriptions.
Speaker #3: And related medical devices, as well as a range of advanced cancer therapies. We also recently launched Shoufu Lüchu focused cancer-specified disease products, with a singular health disclosure and a lower bar to lifelong cancer protection.
Wei Ran: We also recently launched the Shouhu Ruchu focused cancer-specified DB product with a simpler health disclosure and a lowered bar to lifelong cancer protection. In our service side, we took multiple steps to improve the customer experience. We launched a dedicated customer complaint hotline to make it easier for users to raise concerns, and we also connected payment channels with our customer service system, expanding frontline operations and enabling faster response processing. For elderly customers, we simplified procedures for their children acting on their behalf and introduced a faster track service channel. Together, these initiatives upgrade our after-sales service capability. We also continue to apply our LLM capabilities and AI tools to streamline the workflow and improve operating efficiency. The user-facing AI applications contributed approximately CNY 87 million in incremental premiums in Q1, up 17.7% sequentially.
Wei Ran: We also recently launched the Shouhu Ruchu focused cancer-specified DB product with a simpler health disclosure and a lowered bar to lifelong cancer protection. In our service side, we took multiple steps to improve the customer experience. We launched a dedicated customer complaint hotline to make it easier for users to raise concerns, and we also connected payment channels with our customer service system, expanding frontline operations and enabling faster response processing. For elderly customers, we simplified procedures for their children acting on their behalf and introduced a faster track service channel. Together, these initiatives upgrade our after-sales service capability. We also continue to apply our LLM capabilities and AI tools to streamline the workflow and improve operating efficiency. The user-facing AI applications contributed approximately CNY 87 million in incremental premiums in Q1, up 17.7% sequentially.
Speaker #3: And on the service side, we took multiple steps to improve the customer experience. We launched a dedicated customer complaint hotline to make it easier for users to raise concerns, and we also connected the payment channels with our customer service system.
Speaker #3: We expanded frontline operations to enable faster refund processing. For elderly customers, we simplified procedures for children acting on their behalf and introduced a faster-track service channel.
Speaker #3: Together, this initiative upgraded our after-sales service capability. We also continue to apply our LLM capabilities and AI tools to streamline workflows and improve operating efficiency.
Speaker #3: The user-facing AI applications contributed approximately $87 million in incremental premiums in Q1, up 17.7% sequentially. This was achieved through real-time support on our mini program, WeChat, phone calls, and WeCom, including our AI Pro insurance and AI medical insurance experts, WeCom AI, and other tools.
Wei Ran: Through real-time support on our mini programs, WeChat, phone calls, and WeCom, including our AI Insurance Expert, AI Medical Insurance Expert, WeCom AI and other tools. For our frontline consultants, KEYI.AI had handled more than 10,000 underwriting inquiries to date. In late March, we began internal beta testing of the Cloud Copilot on CRM and WeCom, bringing together our product knowledge base, the KEYI.AI, and other two agent tools, so our consultants can get instant answers on products, underwriting, and other common questions with lesser switching between the systems and documents. Cloud Copilot also supports the sales lead review, talk track replay, and refinement and performance analytics. In after-sales service, our AI user service agent, now in regular operation, supports more than 1 million service interactions per month.
Wei Ran: Through real-time support on our mini programs, WeChat, phone calls, and WeCom, including our AI Insurance Expert, AI Medical Insurance Expert, WeCom AI and other tools. For our frontline consultants, KEYI.AI had handled more than 10,000 underwriting inquiries to date. In late March, we began internal beta testing of the Cloud Copilot on CRM and WeCom, bringing together our product knowledge base, the KEYI.AI, and other two agent tools, so our consultants can get instant answers on products, underwriting, and other common questions with lesser switching between the systems and documents. Cloud Copilot also supports the sales lead review, talk track replay, and refinement and performance analytics. In after-sales service, our AI user service agent, now in regular operation, supports more than 1 million service interactions per month.
Speaker #3: Our frontline consultants' Co-ease AI has handled more than 10,000 underwriting inquiries to date. In late March, we began internal beta testing of the cloud copilot on CRM and WeCom, bringing together our product knowledge base to Co-ease AI and two other agent tools.
Speaker #3: So our consultants can get instant answers on product underwriting and other common questions, with less switching between systems and documents. Cloud Copilot also supports self-lease review, top track replay, and refinement.
Speaker #3: And performance analytics. In after-sales service, our AI user service agent, now in regular operation, supports more than 1,000 service interactions per month. The AI service quality copilot continues to deliver efficiency at more than twice the manual-only basis.
Jieru Li: The AI Service Quality Copilot continues to deliver efficiency of more than twice the manual-only basis, the baseline. On the AI infrastructure side, our low-code platform, Waterdrop Sea.AI, now offers more than 30 purpose-built agents, each tailored to a specific scenario for our internal team and external clients in all the user-facing work. That concludes our insurance business update for the first quarter. Thank you, Wei Ran. Hey, this is Jieru. Next, I will walk you through our first quarter performance on our crowdfunding and healthcare businesses. As of the end of March 2026, approximately 494 million people had cumulatively donated a total of CNY 73.5 billion to 3.75 million patients through the Waterdrop Medical Crowdfunding platform. This quarter, we pursued two priorities for Waterdrop Medical Crowdfunding, the AI capability building and better service in linguistically diverse regions.
Jieru Li: The AI Service Quality Copilot continues to deliver efficiency of more than twice the manual-only basis, the baseline. On the AI infrastructure side, our low-code platform, Waterdrop Sea.AI, now offers more than 30 purpose-built agents, each tailored to a specific scenario for our internal team and external clients in all the user-facing work. That concludes our insurance business update for the first quarter.
Speaker #3: The baseline: On the AI infrastructure side, our low-code platform, WaterDrop Digital AI, now offers more than 30 purpose-built agents, each tailored to a specific scenario for our internal team and external clients, in all the user-facing work.
Speaker #3: So that concludes our insurance business update for the first quarter. Thank you, Yan Wei. This is Diegu, and now I will walk you through our first quarter performance on our graphene and healthcare business.
Jieru Li: Thank you, Wei Ran. Hey, this is Jieru. Next, I will walk you through our first quarter performance on our crowdfunding and healthcare businesses. As of the end of March 2026, approximately 494 million people had cumulatively donated a total of CNY 73.5 billion to 3.75 million patients through the Waterdrop Medical Crowdfunding platform. This quarter, we pursued two priorities for Waterdrop Medical Crowdfunding, the AI capability building and better service in linguistically diverse regions.
Speaker #3: As of the end of March 2026, approximately 494 million people had cumulatively donated a total of ¥73.5 billion to 3.75 million patients through the Waterdrop medical crowdfunding platform.
Speaker #3: This quarter, we pursued two priorities for Waterdrop medical profounding: AI capability building and better service in linguistically diverse regions. For AI reviews, we completed a quarterly upgrade involving a shift towards an AI-assisted model without compromising risk control quality.
Jieru Li: For AI reviews, we completed a quarterly upgrade involving towards an AI-assisted model without compromising risk control quality. Our risk model can structure the contained material quickly and applies the preset rules for preliminary screening, shorten intake and the first pass review, and frees our risk specialists for complex cases. Secondly, we improved the service for patients in linguistically diverse communities, including areas where minority languages are widely spoken. In this quarter, we systematically refined our service workflows and adapted the review standard to their real needs. We added the minority language specialist to work alongside our existing content consultants on upfront consultation, the document guidance, dispute resolution, and reducing the communication caused by language barriers.
Jieru Li: For AI reviews, we completed a quarterly upgrade involving towards an AI-assisted model without compromising risk control quality. Our risk model can structure the contained material quickly and applies the preset rules for preliminary screening, shorten intake and the first pass review, and frees our risk specialists for complex cases. Secondly, we improved the service for patients in linguistically diverse communities, including areas where minority languages are widely spoken. In this quarter, we systematically refined our service workflows and adapted the review standard to their real needs. We added the minority language specialist to work alongside our existing content consultants on upfront consultation, the document guidance, dispute resolution, and reducing the communication caused by language barriers.
Speaker #3: Our risk model structure can structure the content, matures quickly, and applies the preset rules for preliminary screening, shortened intake, and first cost review, and frees our risk specialists for complex cases.
Speaker #3: Secondly, we improved the service for patients in linguistically diverse communities, including areas where a minority language is spoken. In this quarter, we systematically refined our service workflows and adapted the review standards to their real needs. We added minority language specialists to work alongside our existing content consultants.
Speaker #3: On upfront consultation, and the documents guidance and the dispute resolution, and reducing the communication cost—the cost caused by language barriers. In addition, we set up a dedicated service team in which the translator and the risk control specialist can track each case end-to-end and promptly resolve the bottleneck, ensuring strict risk control compliance while respecting local cultural sensitivities.
Jieru Li: In addition, we set up a dedicated service team in which the translator and the risk control specialist can track each case end to end and promptly resolve bottlenecks, ensuring strict risk control compliance while respecting local culture sensitivities. Turning to our healthcare business, we sustained high quality growth this quarter, broaden LLM application across the core business scenarios. We partnered with 243 pharmaceutical companies year over, and initiated services for 128 new programs. Our E-Find Platform single-quarter patient enrollment rose 16% year-over-year. The newly signed projects in this quarter increased 53%, reflecting the wider partnership coverage and the deeper client engagement. As of the end of Q1 2026, the platform had cumulatively enrolled over 50,500 patients. In January 2026, our intelligent drug-patient matching technology secured a national invention patent, which is the first of this kind in China.
Jieru Li: In addition, we set up a dedicated service team in which the translator and the risk control specialist can track each case end to end and promptly resolve bottlenecks, ensuring strict risk control compliance while respecting local culture sensitivities. Turning to our healthcare business, we sustained high quality growth this quarter, broaden LLM application across the core business scenarios. We partnered with 243 pharmaceutical companies year over, and initiated services for 128 new programs. Our E-Find Platform single-quarter patient enrollment rose 16% year-over-year. The newly signed projects in this quarter increased 53%, reflecting the wider partnership coverage and the deeper client engagement. As of the end of Q1 2026, the platform had cumulatively enrolled over 50,500 patients. In January 2026, our intelligent drug-patient matching technology secured a national invention patent, which is the first of this kind in China.
Speaker #3: Turning to our healthcare business, we sustained high-quality growth this quarter and brought an LLM application across the core business scenarios. We partnered with 243 pharmaceutical companies and initiated services for 128 new programs.
Speaker #3: Our refund platform's single-quarter patient enrollment rose 16% year over year. The newly signed projects in this quarter increased by 53%, reflecting wider partnership coverage and deeper client engagement.
Speaker #3: As of the end of the first quarter of 2026, the platform has cumulatively enrolled over 15,500 patients. In January 2026, our intelligent drug patient matching technology secured a national invention patent.
Speaker #3: This is the first of its kind in China. This quarter, we focused on building our upstream data structuring capability and connecting it with the matching engine.
Xu Xiaoying: This quarter, we focused on building out our upstream data structuring capability and connecting it with the matching engine. Across part of our service workflow, the platform has now established a standardized pipeline from the data structuring to intelligent product matching, promptly generating suitability recommendation against the trial protocol. Supported by these AI capabilities, we continue to build our medical case library in complex indications and rare cancers with a more balanced mix across therapeutic areas, strengthening the foundation for sustainable midterm to long-term growth. That covers our crowdfunding and the healthcare businesses. Hello, everyone. This is Xu Xiaoying. I will now walk you through our financial headlines for Q1 2026.
Xu Xiaoying: This quarter, we focused on building out our upstream data structuring capability and connecting it with the matching engine. Across part of our service workflow, the platform has now established a standardized pipeline from the data structuring to intelligent product matching, promptly generating suitability recommendation against the trial protocol. Supported by these AI capabilities, we continue to build our medical case library in complex indications and rare cancers with a more balanced mix across therapeutic areas, strengthening the foundation for sustainable midterm to long-term growth. That covers our crowdfunding and the healthcare businesses.
Speaker #3: Across part of our service workflow, the platform has now established a standardized pipeline from data structuring to intelligent product matching, promptly generating suitability recommendations against the trial protocol.
Speaker #3: Supported by this AI capability, we continue to build our medical case library, focusing on complex indications and rare cases. With a more balanced mix across therapeutic areas, we are strengthening the foundation for sustainable mid-term to long-term growth.
Speaker #3: And that covers our corresponding and the healthcare businesses. Hello everyone, this is Xu Xiaoying. I will now walk you through our financial headlines for the first quarter of 2026.
Xu Xiaoying: Hello, everyone. This is Xu Xiaoying. I will now walk you through our financial headlines for Q1 2026.
Speaker #3: Before I go into details, please be reminded that all members quoted here will be in R&D, and please refer to our earnings release.
Xu Xiaoying: Before I go into details, please be reminded that all numbers quoted here will be non-GAAP, and please refer to our earnings release for detailed information on our financial performance on both a year-over-year and quarter-over-quarter basis respectively. In Q1 2026, Waterdrop total revenue reached CNY 1.24 billion, up 64.8% year over year, sustaining rapid growth. By segment, the insurance related income contributed approximately CNY 1.15 billion, at 74.1% year over year. While the non-insurance business together accounted for about 7.8% of total revenue, with corresponding services of approximately CNY 60.73 million and digital clinical trial solution income of approximately CNY 24.2 million. Turning to cost, our total operating costs and expenses for this Q1 were approximately CNY 1.16 billion, at about 71.5% year over year. Operating costs for this quarter reached CNY 487 million, at 30.1% year over year, driven by our business expansion.
Xu Xiaoying: Before I go into details, please be reminded that all numbers quoted here will be non-GAAP, and please refer to our earnings release for detailed information on our financial performance on both a year-over-year and quarter-over-quarter basis respectively. In Q1 2026, Waterdrop total revenue reached CNY 1.24 billion, up 64.8% year over year, sustaining rapid growth. By segment, the insurance related income contributed approximately CNY 1.15 billion, at 74.1% year over year. While the non-insurance business together accounted for about 7.8% of total revenue, with corresponding services of approximately CNY 60.73 million and digital clinical trial solution income of approximately CNY 24.2 million. Turning to cost, our total operating costs and expenses for this Q1 were approximately CNY 1.16 billion, at about 71.5% year over year. Operating costs for this quarter reached CNY 487 million, at 30.1% year over year, driven by our business expansion.
Speaker #3: For detailed information on our financial performance on both a year-over-year and quarter-over-quarter basis, in the first quarter of 2026, Waterdrop's total revenue increased 64.8% year over year.
Speaker #3: Sustaining rapid growth. And by segment, the insurance-related income contributed approximately $1.15 billion, up 74.1% year over year, while the non-insurance business together accounted for about 7.8% of total revenue.
Speaker #3: With profound services revenue of approximately $60.73 million, and digital clean control solution income of approximately $24.2 million. As to costs, our total operating costs and expenses for this first quarter were approximately $1.16 billion, up about 71.5% year over year.
Speaker #3: Operating cost for this quarter reached $487 million, up 30.1% year over year, driven by our business expansion. Cost of referral and services increased by about $53.9 million, while short-message service cost and personnel cost rose by $38.9 million and $7.3 million, respectively.
Xu Xiaoying: Cost of referral and services increased by about CNY 63.9 million, while short message service costs and personal costs rose by CNY 38.9 million and CNY 7.3 million respectively. Sales and marketing expenses reached CNY 541 million, a significant increase from CNY 172 million in the same period last year, mainly because we progressively scale up traffic investments over the past year and reinforced growth momentum. Marketing expenses for Q3 traffic channels rose by approximately CNY 361 million year over year. General and administrative expenses were CNY 71.7 million, down 4.3% year over year, mainly due to the lower professional services this quarter. Research and development expenses were about CNY 62.7 million, an 11.5% year over year increase, primarily due to an approximately CNY 6.7 million rise in cloud and the technical services. For Q1, operating profits was around CNY 79.95 million, a modest year over year increase of 5.3%.
Xu Xiaoying: Cost of referral and services increased by about CNY 63.9 million, while short message service costs and personal costs rose by CNY 38.9 million and CNY 7.3 million respectively. Sales and marketing expenses reached CNY 541 million, a significant increase from CNY 172 million in the same period last year, mainly because we progressively scale up traffic investments over the past year and reinforced growth momentum. Marketing expenses for Q3 traffic channels rose by approximately CNY 361 million year over year. General and administrative expenses were CNY 71.7 million, down 4.3% year over year, mainly due to the lower professional services this quarter. Research and development expenses were about CNY 62.7 million, an 11.5% year over year increase, primarily due to an approximately CNY 6.7 million rise in cloud and the technical services. For Q1, operating profits was around CNY 79.95 million, a modest year over year increase of 5.3%.
Speaker #3: Health and marketing expenses reached $541 million, a significant increase from $172 million in the same period last year, mainly because we progressively scaled up traffic investment over the past year and reinforced growth momentum.
Speaker #3: Marketing expenses for third-quarter traffic channels rose by approximately $361 million year over year. General and administrative expenses were $71.7 million, down 4.3% year over year, mainly due to lower professional services this quarter.
Speaker #3: Research and development expenses were about $62.7 million, an 11.5% year-over-year increase. This was primarily due to an approximately $6.7 million rise in cloud and technology, and technical services.
Speaker #3: For the quarter for the first quarter, operating profits was around $79.95 million, a modest year-over-year increase of 5.3%. However, affected by the net operating items in this quarter, the net profit attributable to ordinary shareholders was approximately $98.4 million, down 9.1% year over year.
Xu Xiaoying: However, affected by the net operating items in this quarter, the net profit attributable to ordinary shareholders was approximately CNY 98.4 million, down 9.1% year over year. As of the end of March 2026, the company maintained an ample cash reserve, with cash and cash equivalents, short-term investments and other cash positions totaled approximately CNY 2.88 billion. On the capital return since our IPO through 1 May 2026, we cumulatively repurchased a total of approximately 61.8 million ADS for about $120 million and recently completed a cash dividend of approximately $10.8 million. Overall, the growth momentum of our core business remains strong, in Q1, Waterdrop delivered 64.8% year over year revenue growth. By stepping up the investment in traffic and AI, continues to strengthen our long-term competitiveness. Ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining.
Xu Xiaoying: However, affected by the net operating items in this quarter, the net profit attributable to ordinary shareholders was approximately CNY 98.4 million, down 9.1% year over year. As of the end of March 2026, the company maintained an ample cash reserve, with cash and cash equivalents, short-term investments and other cash positions totaled approximately CNY 2.88 billion. On the capital return since our IPO through 1 May 2026, we cumulatively repurchased a total of approximately 61.8 million ADS for about $120 million and recently completed a cash dividend of approximately $10.8 million. Overall, the growth momentum of our core business remains strong, in Q1, Waterdrop delivered 64.8% year over year revenue growth. By stepping up the investment in traffic and AI, continues to strengthen our long-term competitiveness.
Speaker #3: As of the end of March 2026, the company maintained an ample cash reserve, with cash and cash equivalents, short-term investments, and other cash positions totaling approximately $2.88 million.
Speaker #3: $2.88 billion. And on the capital return, since our FPO through May 1, 2026, we accumulated repurchases totaling approximately 61.8 million ADS for about $120 million U.S. dollars, and recently completed a cash dividend of approximately $10.8 million.
Speaker #3: Overall, the growth momentum of our core business remains strong, and in the first quarter, WaterDrop delivered 64.8% year-over-year revenue growth. By stepping up investment in traffic and AI, we continued to strengthen our long-term competitiveness.
Xu Xiaoying: Ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining.
Jasmine Li: Have a good time.
Jieru Li: Have a good time.
