Waterdrop's Q2 2025 Earnings Call: Contradictions Emerge on Insurance Growth, AI Integration, and Operating Margins

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: Total revenue up 23.9% YOY and 11.2% QoQ; absolute amount not disclosed.
• Operating Margin: Operating margin up 3.9 percentage points YOY; absolute margin not disclosed.

Business Commentary:

* Revenue Growth and AI Integration: - Waterdrop reported revenue of CNY1.24 billion in Q2 2025, up 23.9% year over year. - The growth was driven by the integration of AI with insurance and healthcare sectors, enhancing operational efficiency and productivity.

• Insurance Business Expansion:
• The insurance business contributed CNY915 million, showing a year-on-year increase of 28.7%

• This expansion was attributed to increased investment in customer acquisition and technology, AI-driven enhancements in customer acquisition and conversion rates, and the introduction of new long-term medical plans.

• Healthcare Sector Advancements:

• In the digital clinical trial business, there was a 34.2% year-over-year revenue growth.

• The growth was driven by expanded collaborations with pharmaceutical companies, increased new program initiations, and improved service capabilities through AI integration.

• Operating Profit Improvement:

• The company's operating profit reached CNY340 million, indicating an 85.9% year-on-year growth.

• The improvement was due to increased operational efficiency, higher revenue growth than cost increases, and better management of operating expenses.

• Dividend and Share Repurchase Initiatives:

• Waterdrop announced an enhanced cash dividend of $10.9 million, representing a 50% increase over the previous dividend.
• The Board also authorized an annual share repurchase plan, aiming to repay shareholders' trust and create long-term value.

Sentiment Analysis:

• Management cited revenue up 23.9% YOY (11.2% QoQ), operating profit up 85.9% YOY, and operating margin up 3.9 percentage points. Insurance first-year premium rose 80.2% YOY; insurance operating margin reached 23.1% (up ~200 bps YOY). Net profit attributable to ordinary shareholders was RMB140 million, up ~58.7% YOY. Company highlighted AI-driven efficiency gains across acquisition, sales, service, and QA.