Waterdrop Inc. Reports 2024 Q1 Revenue of RMB 704.7 Million, net profit rises 62.2% year-on-year, Sustaining Profitability for Nine Consecutive Quarters

Rhea-AI Summary

On June 5, 2024, Waterdrop (NYSE: WDH) reported Q1 2024 financial results. The company achieved revenue of RMB 704.7 million, a 16.3% year-on-year increase, and a net profit of RMB 80.6 million, up 62.2%. This marks nine consecutive profitable quarters. Operating expenses decreased to 46.4% of revenue. The insurance business saw a 13.1% increase in revenue to RMB 607 million, with life insurance representing 56.4% of the long-term product mix. Waterdrop Medical Crowdfunding raised RMB 63.8 billion, despite an operating loss of RMB 32.2 million. The company also saw 7.3% growth in healthcare-related services revenue, reaching RMB 25.3 million.

Positive

• Revenue increased by 16.3% year-on-year to RMB 704.7 million.
• Net profit rose 62.2% year-on-year to RMB 80.6 million.
• Profitability sustained for nine consecutive quarters.
• Operating expenses decreased to 46.4% of revenue.
• Insurance-related revenue grew 13.1% year-on-year to RMB 607 million.
• Life insurance accounted for 56.4% of the long-term insurance product mix.
• First-year premiums reached RMB 1.755 billion, up 3.7% year-on-year.
• Renewal rate exceeded 95%.
• ShuishouGPT platform enhanced insurance technology, improving sales and quality assurance.
• Waterdrop Medical Crowdfunding raised RMB 63.8 billion, aiding 3.17 million patients.
• Healthcare-related services revenue grew 7.3% year-on-year to RMB 25.3 million.
• Expanded partner network with 179 pharmaceuticals and CROs.
• Signed 88 new cooperation projects.

Negative

• Waterdrop Medical Crowdfunding recorded an operating loss of RMB 32.2 million.
• Despite narrowing losses, the medical crowdfunding sector remains unprofitable.

Insights

Financial Analyst

Waterdrop Inc. has reported a 16.3% increase in net operating revenue and a 62.2% rise in net profit year-over-year for Q1 2024. This marks the ninth consecutive quarter of profitability, a noteworthy achievement in any sector, particularly within insurance and healthcare services. The company's strategy to reduce operating expenses is visible, as these expenses accounted for 46.4% of revenue, down 11% from the previous year. Such cost management has likely contributed to their enhanced profitability.

Revenue from the insurance business grew 13.1% to RMB 607 million, with an operating profit of RMB 129.2 million. This segment's strong performance, especially in life insurance, indicates a robust demand for their insurance products. However, the modest growth in first-year premiums (FYPs) at 3.7% suggests that while current strategies are effective, future growth may require further innovation.

Waterdrop’s stock repurchase program, which repurchased 45.5 million ADSs, reflects confidence in the company's valuation and is often seen positively by investors, as it can enhance earnings per share.

Short-term, these financial results are promising, suggesting continued profitability and efficient cost management. Long-term sustainability will depend on maintaining revenue growth and further optimizing operating costs.

Insurance Market Expert

Waterdrop's insurance segment, particularly life insurance, has shown substantial growth. The increase in the share of life insurance to 56.4% of the long-term insurance product mix indicates improved underwriting quality and increased customer trust. A 95% renewal rate further underscores strong customer retention, highlighting the company's successful efforts in providing valuable insurance services.

The enhanced insurance technology through ShuishouGPT, capable of interacting with users for up to 40 minutes with a 90% accuracy rate, shows significant advancements in automation and customer service. This can lead to increased efficiency and better customer experiences, which are important for retaining clients and attracting new ones in a competitive market.

Overall, these developments strengthen Waterdrop's position in the insurance market, reflecting positively on their long-term potential to generate consistent revenue and profit growth.

Healthcare Services Analyst

Waterdrop Medical Crowdfunding's continued success, raising RMB 63.8 billion and benefiting over 3.17 million patients, underscores the platform's significant social impact. Despite an operational loss of RMB 32.2 million, the narrowing losses suggest improved operational efficiency. The introduction of the 'Guardian Program' and 'Green Transfer Channel' highlights Waterdrop's commitment to enhancing the user experience and trust. These initiatives are likely to bolster the platform's reputation and user base.

The expansion in healthcare-related services, with new partnerships and project signings, is a positive indicator of the company's growth in this sector. Generating revenues of RMB 25.3 million with a 7.3% year-over-year increase, suggests steady progression. The broadening of their partner network signifies potential for extended service offerings and enhanced value to patients.

In the short term, these developments are likely to improve Waterdrop's market presence and user trust. Long-term success will depend on continued innovation and effective management of operational costs in the healthcare services sector.

BEIJING, June 6, 2024 /PRNewswire/ -- On June 5, Waterdrop Inc. (NYSE: WDH), a leading technology platform dedicated to insurance and healthcare services with a positive social impact, unveiled its unaudited financial results for the first quarter of 2024 ended March 31, 2024. During the quarter, Waterdrop reported net operating revenue of RMB 704.7 million, a year-over-year increase of 16.3%. Net profit attributable to ordinary shareholders totaled RMB 80.6 million, up 62.2% from the previous year, sustaining profitability for the ninth consecutive quarter. Operating expenses, including sales and marketing expenses, general and administrative expenses, and R&D expenses, accounted for 46.4% of revenue, a decrease of 11 percentage points year-on-year.

Since announcing its stock repurchase program in September 2021, as of May 31, 2024, Waterdrop has repurchased approximately 45.5 million American Depositary Shares (ADSs) from the open market.

Insurance Business Operating Profit Totaled RMB 129.2 Million, with Life Insurance Accounting for 56.4% of Long-term Insurance Product Mix

Waterdrop's insurance-related revenue increased 13.1% year-on-year to RMB 607 million. The insurance business operating profit reached RMB 129.2 million in Q1 2024. First-year premiums (FYPs) generated by Waterdrop Insurance Marketplace amounted to RMB 1.755 billion, up 3.7% year-on-year.

During the quarter, the insurance business demonstrated significant improvements in underwriting quality, especially within the long-term insurance services segment. Notably, the share of life insurance in the FYPs climbed to 56.4% of the long-term insurance product mix, marking a year-on-year increase of 9.9 percentage points. Moreover, the renewal rate exceeded 95%, underscoring the trust and recognition our insurance services garner from policyholders.

The quarter also saw significant enhancements in insurance technology, notably through the expanded capabilities of the ShuishouGPT platform. In health insurance, the AI insurance consultant can now autonomously interact with users for up to 40 minutes. Additionally, its accuracy in answering insurance-related inquiries exceeds 90%, substantially boosting sales effectiveness and quality assurance. To date, Waterdrop has secured four authorized patents and submitted over ten patent applications related to this technology.

Waterdrop Medical Crowdfunding Raised RMB 63.8 Billion for 3.17 Million Patients, Signing 88 New Medical Service Projects

During the quarter, Waterdrop Medical Crowdfunding upheld its mission of "saving lives" with remarkable success. As of March 31, 2024, the platform had brought in donations totaling RMB 63.8 billion from approximately 456 million policyholders, benefiting over 3.17 million patients since its inception. Despite recording an operating loss of approximately RMB 32.2 million, the losses have narrowed compared to previous periods.

To enhance service quality, Waterdrop Medical Crowdfunding unveiled the 'Guardian Program', a comprehensive initiative that addresses fundraising efficiency, traffic support, fund security, and audit upgrades to deliver a superior fundraising experience and empower patients and financially challenged families. Furthermore, the platform introduced an online 'Green Transfer Channel' that swiftly advances patient expenses within an hour of application approval, especially in critical situations such as ICU admissions, urgent major surgeries, or organ transplants. Additionally, the platform also offers fee waivers for disadvantaged households and provides financial subsidies to patients affected by accidental disasters and major accidents, extending its compassion and support to those in need.

Waterdrop's healthcare-related services business has witnessed significant progress in the first quarter of 2024, generating revenues of approximately RMB 25.3 million, representing a year-on-year growth of 7.3%. The company has expanded its partner network, collaborating with 179 pharmaceuticals and CROs, signing 88 new cooperation projects, and cumulatively enrolling approximately 7,800 patients.

Shen Peng, Founder and CEO of Waterdrop, said, "In the recent quarter, we adhered to our sustainable development strategy and drove a steady improvement in profitability, with technological innovation serving as our cornerstone. While acknowledging the challenges that lie ahead for our business expansion, we remain focused on pursuing sustainable growth. We will continually broaden our operational horizons, aligned with our mission and core business segments, to deliver even greater value to our users and partners."

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SOURCE Waterdrop Inc.

FAQ

What was Waterdrop's Q1 2024 revenue?

Waterdrop's Q1 2024 revenue was RMB 704.7 million.

How much did Waterdrop's net profit increase in Q1 2024?

Waterdrop's net profit increased by 62.2% in Q1 2024.

What is Waterdrop's stock symbol?

Waterdrop's stock symbol is WDH.

How long has Waterdrop sustained profitability?

Waterdrop has sustained profitability for nine consecutive quarters.

How much did Waterdrop Medical Crowdfunding raise?

Waterdrop Medical Crowdfunding raised RMB 63.8 billion.

What were Waterdrop's operating expenses in Q1 2024?

Waterdrop's operating expenses accounted for 46.4% of revenue in Q1 2024.

What was the renewal rate for Waterdrop's insurance services?

The renewal rate for Waterdrop's insurance services exceeded 95%.

How many new cooperation projects did Waterdrop sign in Q1 2024?

Waterdrop signed 88 new cooperation projects in Q1 2024.

What was the operating loss for Waterdrop Medical Crowdfunding?

Waterdrop Medical Crowdfunding recorded an operating loss of RMB 32.2 million.