WDH - Earnings call transcript Q2 2024

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Tracy Lisang

[Interpreted] Good morning, everyone. This is Tracy Lisang with Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's second quarter 2024 Earnings Conference Call. All participants are in a listen-only mode [indiscernible] English [ line ].

As a reminder, today's conference call is being recorded.

discussion safe come U.S. harbor the made forward-looking that the under provision note today from will statements Please of the Securities Reform Litigation and XXXX. Private Act of the

to cause to current public our Certain filings any in The under to, risks update but SEC. uncertainties Forward-looking those materially include, expectations. risks company uncertainties with undertake not law. are to differ applicable the except subject that statements any statements, does our may as are actual and [ results from ] obligation and forward-looking not limited found required

certain Also, [ non-GAAP this call includes discussion earnings reconciliations ]. of our refer between release for non-GAAP to Please GAAP. and matters

Director Head ], [ Mr. and Peng, call Joining us Lee Chairman the of [ today Insurance Jet Secretary. ] our Shen on Business; Xu GM Finance and of Ran Department; Xiaoying, and are Wei, Board Founder, CEO; Mr.

the at call. We some take the of will conference the in of line happy be end questions Mandarin to the

Peng Shen

Shen [Interpreted] Waterdrop's Hello, everyone. This Peng. In anniversary. Xth XXXX, celebrated we May is

Over we have with the faced years, changing its years, complex transformed Particularly [indiscernible]. and proactively X the a past environment, over business. company continuously has these

pursuing greater delivering have on sustainable operations value, emphasis ensuring and growth. We healthy

for we competitiveness amid the new company the the next in technology large next a As language [indiscernible] core exploring wave [indiscernible] are of the the AI, actively models of build application industry company's stage. to

achieving existing a In financial our total million. QX, XXX strategies, The robust CNY company's continued with advance revenue of to performance. overall reached business

over XX.X increase attributable was CNY reflecting million, a XXX%. ordinary of shareholders profit net to Our year-over-year nearly

quarters for since Waterdrop QX of XX profitability XXXX. consecutive has maintained

industry. its leading This quarter, consolidated in position the Waterdrop

profit application build with approaching year, of to offering of ] quarterly billion influence X.XX ] solutions, exploring margin In initiated [ a our new] OP XX%. achieve upgrade [ to an our broader export first [ the customized business reached ] with service good further with in issuers. service we April, Firstly, the users [ quality claims CNY also ] the insurance [LOM brand product to operating

Medical the the in including continually. bilingual [ in loss the operational improved and ] was system with and Secondly, [indiscernible] users reduced medical Crowdfunding [indiscernible] offering efficiency security segment actually our services language multi-level

in our [indiscernible] Moreover, marketing digital our with [ we patient business, health the Thirdly, cooperation and viewable clients. care-related ] platform a in [ improvement achieved CRO consumables. ] high-quality with

end addition, ] [ annual we won to annual had In of responsibility committed and and charity the June, than more XXX and are model Waterdrop development. the care sustainable June, Charity XX,XXX with with the onboarded social project By charity charity gala. platform at projects. In [indiscernible] company organizations public partnered

is challenges the short industry This QX recap the cause to more new may in of concludes which performance. policies, -- adapting our some term. the Currently,

However, long-term from will we are and benefit the high-quality seek actively development in confident industry opportunities.

the maintaining to committed remains growth its targeting financial This guidance, revenue year, robust company profitability. double-digit while

used market interest repurchased The to for our repurchased a $XXX our announced the are we grow on August and the months. been support approved will actively employees open years, XX in $XX and shares company We for our the [indiscernible] XXXX for has continuously next the encouraging of repurchasing Recently, up repurchase the program. ADSs new share company shareholders ESOP, within has investment Also million. million Board million company repurchased XX.X shares in X and over be together. investors to [indiscernible] returns, shareholders' for [indiscernible] and the have and consecutive since ongoing that

dividend the In [indiscernible] first which of what results strong addition XXXX, QX. was actually special in the year purchased, ] our on XXXX, in its paid company cash to March, based we profitability [ to full relating announced of

dividends distribute and healthy remains plan support to a year least of at our Moving forward, business investors. and reward our shareholders if been the once has the to we profitable,

of pleased [ dividend are second amounts special per [ shares as of $X.X is March million with to [ -- ] per of date ] the first about ordinary ordinary $X.XX [indiscernible] to $X.XX share cash the total ADS to dividend shareholders operating dividends. ] entitled approval the October half XXXX and company's XX, of announce ADS The to XXXX XX October or closing the and results. [indiscernible] We on the

in will now I discuss Ran QX. to business to our turn Wei Insurance

Wei Ran

CNY of QX, and CNY FRP, more [ Thank maintained at Q-o-Q about the [Interpreted] generated profit level XXX Operating than X.XX million. CNY million a million XXX about In increase CNY a Insurance business accruing X.X%. ], the XX%. income was you, Shen. billion about profit XXX of (sic) Peng Insurance-related was margin

quarter, hit quarter-over-quarter. X.XX Insurance the X.X% CNY the short-term billion, During FRP up

New our provide via policy advanced recommendations more and WeChat driving product ], the up [indiscernible] XX% [indiscernible], actually and further sequentially. Q-o-Q. number premiums users near we customer platforms [ our of able ] were the of XX.X% We gain to new surged TikTok [ insight acquisition like technology, on, by so

efficiency, range more our offerings diverse needs meeting further customers. expanded from Moreover, and raising has focused existing X.X%. increasing our premiums with synergy and premiums also average We on by short-term product

XX into within customer initiatives enhance line, ] Star In claims initiated and April, high ] claims with our sequential renewal Service a year a like service [ quarter maintaining we hours increase. [ rate to a [indiscernible] satisfaction, program upgrade direct

low-digit FRP teams, our and high-based [indiscernible] was facing The and [indiscernible] and X.X% rise Y-o-Y long-term to which phasing company collections quarterly X,XXX restructured ] Q-o-Q the from premium. ] unchanged lead high-yield challenges, a service ] operations pressured in the reached insurance million by per-capita its CNY performance [ out and [ expanding [ teams,

lifespan ] in promotions premium. sales, [ increase [indiscernible] our To abatement planner increasing ], to contribution, [ ] holiday life user's online XX% of content resulting metrics approach, [ the enhance for positive in we leveraged a premium emphasizing operations [indiscernible]

CNY premiums reached membership XX [ million [ an cluster upgrading product in brand other lineup also ] benefits, service, and visibility. product experience, health with management upgraded user reaching increase insurance We QX. expanding our our ] To we introduced our disability

[indiscernible] the its continued and During brokerage services. company ] upgrades improving business, offline the quarter, building [

cooperation with insurance We either increased product lead consolidated per improved [indiscernible] remember Just competitiveness. [ steadily. premium ] [indiscernible] acquisition also and and in strengthened carriers

Waterdrop application and the the innovation promoted strengthen in protection products, of AI to Shenlanbao insurance improve explore company QX, as and insurance. insurance, technology, inclusive customization model in insurance acquisition in continue child cancer In return the and insurance planner including upgrades synergy user efficiency. on and

for of users, their and risk, to health ] improve patients big company the terms [indiscernible] protection. of reimbursement ability the with insurance with loans providing combination cancer cope [indiscernible] users intensively with a [ upgraded on the In providing products, has cancer and insurance based and new payments

This saying help The series [ pregnancy ] coverage needs product meet [ insurance insurance to of brand, should child's XX and has maternal to us been [ old lead to upgraded [indiscernible] we have the ] the and ] industry. ] years protection birth. continue launched parent-child [ the with our after

of at of field inclusive related for [indiscernible] ] been customers conditions, insurance life exceeding the [ preexisting large disease by XXX and insurance, our premiums million. with insurance, ] scale CNY insurance a [ number chronic In insurance have highly praised products

area ] we QX, in products. and application [indiscernible] [ other investment In insurance continued the in medical R&D

of and secured to end over related QX, more XX X ]. filed [ patents we the Towards RRN

and platform. sound the AI in insurance [ intention identify voice a scenarios, industry. setting This application new standard insurance full-process focused developing on Our R&D service the replicate can human now component customer accurately ], is a

equivalent. technology, certain service in average insurance machine with scenarios our medical CI have performance our consultants cost consultant just customized partnership we ] [indiscernible] operational incidental the solution. insurers AI one in Our met top already -- ] [ now of empowerment of with an XX% quarter, making commercial of human insurers the the features a human [ Leveraging AI of strategic signed which a of this has an first

system our applied [ application, user [ insurance more has Another product ] of [ Bonbon help insurance [indiscernible]. [ tenders terms collect creates ] improves experience. ] policies, is effectively RRN consultants, multiple XX% and a of to so IKO compilation our program, explanation the ]. business. efficiency the of scenarios can [ and [indiscernible] and ] human of It It assisted than recommendation [indiscernible]

development the introduce of company's the and business. we'll health-related June, Next cofounding

Shen. to Back you,

Peng Shen

Ran Wei. Thank you,

donated of and XXXX, where million As QX, user-first through XX.X service Medical of critical, our Crowdfunding. patients business to Waterdrop QX with most service. provide the [ people billion process CNY more X.XX to In continue about around to our cumulatively million ] XXX the [ end personalized we adhered ] optimize users

now and bolstered in platform For [ by the local minimum regions fundraising, aiding of to verification cases communities AI-assisted the ethnic populated supports our bilingual by in case bilingual fraud. infants for minorities, ] spread

and leveraging project multi-level company and credibility, we our [indiscernible] security June, reputation the participated annual service charity in platform. won ] XXXX user the the of Charity Gala. initiatives, will more our at the a to construction and enhancing in In annual Thanks create this Further the continue [indiscernible] capabilities medical future, its [ charitable social the to as value. actually project and model charity company

million, our been a of new pharmaceuticals quarter-over-quarter. We XX.X During the QX. digital from marketing XX serve solutions in CNY a focused during care-related in programs trends up services we on XXX angle. income multi-channel Moreover, this with trials X.X% was base CROs. We've client broader total quarter, collaborated health and engineered clinical and for to

efficiency, promote continue over balance quickly development the [indiscernible]. X top This [ care-related the has The we on established health will competitive investment emphasis will more At to the lead. been we balanced good maintain to time, place same and between and the our ] growth the for year, operational in business position industry. the has years risen and assess the of

[indiscernible] patients bringing to X,XXX In clients. and media ], technology with than The an [ planning [ QX, of to targeted ] XXX online treatment total XXX ] enroll for over patients and AI our over partnership platform a [ members. applies [indiscernible] X option patients, you ] and robust leading less ] in [ enrolled community patient for [indiscernible] patient months, MSC if network [ the for

[ last [indiscernible] enrollment to location visibility, has Now client cooperation With outstanding with international project in expand. our ]. both leading and pharmaceuticals our finished continued [indiscernible] domestic

cooperation in global [indiscernible] pharmaceutical quarter, our with ] of of ] X because the products top good [ This [ companies one reputation.

orders addition, in-hand to accumulate. In the continue

a MSCs ] this half expected of quarter, We a reached leading second with [ of the XXXX. in it cooperation and also cooperation start to [ number currently is ]

the with in participate empower to committed is relative standards. industry platform ] [indiscernible] defined ] [indiscernible] actively and [ [ XMX The

and imagined platform ] AI-enabled model the and DCT Drug shared for quarter, intelligent get [indiscernible] ] [ with This [indiscernible] And we ]. Valuation we project recruitment Society the [ trust. [indiscernible] which practice [ joined subject case by analysis extensive recognition in

management capabilities [ interpretation report has customer -- construction projects as improved. management satisfaction In with multichannel in of help, ]. this reporting the With multiple business the marketing has [ the patient Q&A leading ] patient digital process been terms patient our platform and MSC a return embedded business, significantly in needs, the knowledge-based of such AI and rate

will hand financial Thank our you listening. Xiaoying to discuss over I to Xu for performance. now

Xiaoying Xu

[Interpreted] Thank quarter. everyone. will you, Shen. walk financial Hello, through you highlights our for the second now I

numbers detail all basis, and respectively. on earnings performance Before a detailed be refer that year-over-year please I our for quoted on reminded go [ here release will quarter-over-quarter financial ], our into be to R&D, information please and

QX, care-related million, XXX but X.X In company's health XX.X stable to The income CNY down million, up company million sequentially, performance net (sic) while CNY to insurance-related amounted [ year-over-year income challenges, XXX fees The overall achieved industry amount quarter-over-quarter, despite funding CNY sequentially. of quarter-over-quarter. CNY was CNY CNY X.X% operating remains X.X% the XXX.X service up million XX.X million down X.X% revenue stable. while ], million,

costs CNY and second basis. the costs a In the the operational operational and decrease company's quarter, Y-o-Y operating focus quarter-over-quarter were and on Regarding XXX improving expenses, to continued company million, a on representing efficiency. expenses the overall both

[ XXX Operating the XX.X in period. inclusive the costs million operating second combined costs this [indiscernible] CNY period and decrease of million CNY of CNY consolidation, CNY quarter X.X fell XXXX cost costs from a year. with teams. same in ], increased in decreased cost recruitment This XX.X referral year-over-year, XXX million of of is million personnel fees the costs in service and to CNY influence in by offsetting in And compared patient by million X.X% last partially operating the decrease

service basis, referral cost quarter-over-quarter decreased costs X.X%, the 'XX and mainly of a to [ a in by On operating of ]. decrease fees due

expenses in by million, costs the quarter-over-quarter. XX.X% and expenses XXX mainly in this year-over-year CNY marketing This due decreased S&M traffic is quarter. and channels to were third-party XX% decrease to personnel

increased adjustment. professional expenses by team mainly for X.X%, basis, ] G&A CNY impact comps costs million, X.X% On stock were the decrease XX [ the and in servicing to the due ]. [indiscernible] by because reduced the of year-over-year, [ quarter-over-quarter decreased increasing mainly a it combined personnel to allowance of due

CNY to costs were XX.X% R&D comprehensive personnel and year-over-year share-based decrease expenses down due and XX.X in X.X% quarter-over-quarter the million, expenses.

company XXXX for in to In to the by from the the operations. inflow second of in operating QX Operational the quarter, company's ordinary Net retained shareholders XXX% attributable CNY quarter million net the profit CNY inflow CNY positive period. increased current XX stable a remains million. XX.X -- million with XX.X cash

will continue we quality, performance healthy ahead, [indiscernible] maintaining Looking on optimizing and focusing development. operational financial

And call.] an and thank in spoken were a present today's transcript you conclude Have the will joining. call. with do gentlemen, this ladies good that, we for English by time. [Statements on We live conference interpreter on

Waterdrop (WDH) 4 Sep 242024 Q2 Earnings call transcript