Waterdrop’s Earnings Call Highlights Growth and Challenges

Waterdrop, Inc. ADR Class A ((WDH)) has held its Q4 earnings call. Read on for the main highlights of the call.

Waterdrop, Inc. ADR Class A recently held its earnings call, revealing a generally positive sentiment with substantial achievements in revenue growth, profitability, and technological advancements, particularly in AI and insurtech. However, the call also highlighted some challenges in the insurance segment’s revenue and operating costs.

Record Annual Revenue Growth

Waterdrop reported a remarkable annual revenue of $2.77 billion, marking a 5.4% increase year-over-year. The fourth quarter alone contributed $687 million to this figure, showcasing a strong performance.

Consistent Profitability

The company has maintained a streak of profitability for twelve consecutive quarters, with a net profit attributable to ordinary shareholders exceeding $99.6 million in Q4.

Cash Dividend Announcement

Reflecting its stable operations and significant profit increase, Waterdrop announced a cash dividend of $0.20 per ordinary share and $0.02 per ADS.

AI and Insurtech Advancements

In 2024, Waterdrop deployed AI tools and large language models, significantly enhancing online sales, broker support, and operational efficiencies.

Insurance Business Growth

The insurance segment achieved a first-year premium (FYP) of about RMB1.9 billion, representing a 24.5% year-over-year growth in Q4, driven by breakthroughs in customer acquisition channels.

Recognition and Compliance Achievements

Waterdrop Medical Crowdfunding was officially recognized as a pioneer in China’s medical profiling sector, following new legislation and security designation.

Insurance Revenue Decline

Despite overall growth, insurance-related revenue saw a slight decline, reaching RMB $580 million, down 1% year-over-year and 3% quarter-on-quarter.

Quarter-on-Quarter Insurance FYP Decrease

The insurance business experienced a 7% quarter-on-quarter decrease in FYP, attributed to product suspension and seasonal factors.

Operating Cost Increase

Operating costs rose by 7.2% year-over-year to $323.8 million in Q4, primarily due to increased referral and service fees.

Forward-Looking Guidance

Waterdrop’s guidance for the future remains optimistic, with a strong cash position of $3.67 billion as of December 31, 2024, supporting future growth plans. The company continues to focus on AI-driven initiatives to enhance operational efficiency while maintaining profitability.

In summary, Waterdrop’s earnings call painted a picture of robust growth and profitability, driven by technological advancements and strategic initiatives. Despite some challenges in the insurance segment, the company’s forward-looking guidance suggests a promising outlook.