Waterdrop Inc. American Depositary Shares (each representing the right to receive 10 Class A Ordinary Shares) 2026 Q2 Earnings Call

Dear investor and analyst, this is Tracy Lee from Waterdrop Investor Relations. Please note that the discussion today will contain forward-looking statements made under the safe harbor provision of U.S. Private Securities and the 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 statement, except as required under applicable law. Also, this call includes discussion of certain non-GAAP measures. Please refer to our earnings release for reconciliation between non-GAAP and GAAP.

Joining us today on the call are Mr. Shen Peng, our founder, chairman, and CEO, Mr. Yuan Wei, director and GM of insurance business, Mrs. Li Jie Ru, finance VP, head of strategy and capital markets. Certain members of our management team will deliver their remarks in Mandarin, followed by an English translation. Moreover, a webcast reply will be available on our investor relations website. I will now turn the call over to our CEO, Shen Peng. Please go ahead. Dear investors and analysts, thank you for joining Waterdrop's second quarter 2026 earnings conference call. In this quarter, we maintained growth momentum and achieved a total revenue of CNY 1.45 billion, up 72.8% year-over-year, and a net profit attributable to our ordinary shareholders of CNY 130 million. Since the first quarter of 2022, we have maintained profitability for 18 consecutive quarters.

Segment-wise, our insurance business continued to optimize user acquisition and conversion, driving 80.5% year-over-year revenue growth. Waterdrop Medical Crowdfunding has cumulatively raised medical funds for 3.82 million patients as of the quarter end. Our digital clinic autonomy solution business performed strongly, with quarterly patient enrollment up over 50% year-over-year. These growth trends were underpinned by a deep integration of AI across our core business scenarios. As of the end of June, the company has filed 88 large language model patents, including 10 of them overseas.

Segment-wise, our insurance business continued to optimize user acquisition and conversion, driving 80.5% year-over-year revenue growth. Waterdrop Medical Crowdfunding has cumulatively raised medical funds for 3.82 million patients as of the quarter end. Our digital clinic autonomy solution business performed strongly, with quarterly patient enrollment up over 50% year-over-year.

These growth trends were underpinned by a deep integration of AI across our core business scenarios. As of the end of June, the company has filed 88 large language model patents, including 10 of them overseas.

With strong performance and cash reserves, we continue to prioritize shareholder returns. Our board recently approved two new initiatives. Firstly, the board has approved a cash dividend of $0.03 per ADS, or $0.003 per ordinary share, payable to holders of the record on October 9, 2026. The aggregate dividend payment is approximately $10.8 million, with payments to be made in early November. Second, the board approved a fixed share repurchase program of up to $50 million over the next 12 months. Since the initial program launched in 2021, we have repurchased approximately 62.9 million ADS for $121 million as of August 31, 2026.

The company remains committed to sustainable development and to giving back to society in meaningful ways. As of June 30, 2026, Waterdrop Charity platform has partnered with 119 public charitable organizations and launched more than 15,600 charity programs.

水滴持续聚焦重点的增长和投入。我们预期当前增长投入将持续转化为坚实的用户基础，以及未来的利润空间。我们相信科技是公司的发展核心引擎。当前AI能力已深度嵌入各个业务平台，使我们能够更精准地把握住既有业务中的不断增长的市场需求，巩固并增强竞争壁垒。与此同时，我们也在积极地孵化面向全球的AI驱动的新业务，并在局部市场已经取得了初步进展。面向2026年全年，我们预期收入同比增长40%以上，营业利润同比增长10%以上。以上是水滴公司的整体业绩表现。接下来我们将会展开介绍各业务的情况。 Waterdrop remains focused on growth and investment in core businesses.

We expect that our current incremental investment to continue translating to solid user base and future product potential. We always regard technology as a core driver of the company's growth. Today, our AI capabilities are deeply embedded across the platform, enabling us to better capture growth opportunities in our existing businesses and further sharpen our competitive edge. At the same time, we are actively piloting new AI-driven initiatives for global markets and have made early progress in select markets. For full year of 2026, Waterdrop targets more than 40% year-over-year growth in total revenue and over 10% growth in operating profit. This concludes our overview of Waterdrop's business performance. Now we will walk you through each of our business segments in more detail.

大家好，我是冉炜，我来汇报一下保险业务的进展。二季度保险业务相关收入达到3.3亿元，同比增长80.5%，环比提升16.4%。业务经营利润约1.8亿元，环比提升20%。基于AI模型，在用户需求洞察与转化上的持续打磨，转化效率环比优化。季度内，新用户环比增长32.3%。长险方面，凭借需求洞察和多元供给能力，我们及时承接住了本季度分红储蓄型产品的需求窗口，带动长险保费环比增长33.4%。 Hello, everyone. This is Quan Wei.

Let me briefly update you on our insurance business. In the second quarter, insurance-related income reached 1.33 billion CNY, up 80.5% year-over-year and 15.4% quarter-over-quarter. Operating profit was 180 million CNY, up 20% from the previous quarter. With continued refinement in our AI-driven user insight and conversion capabilities, newly acquired customers grew 32.3% sequentially. The first year premiums of long-term insurance grew 33.4% sequentially as we capture market demand for endowment insurance this quarter.

在供给端，提升保险产品的可及性是我们在产品端持续发力的主题策略。本季度在这个方向又有多款产品落地。重疾险方向，我们推出了业内首款免健康告知五年保障续保的长期重疾险产品，容易保，涵盖超百种重大疾病，并可附加意外身故与伤残责任。同时拓宽既有高照系列产品举证，新增业内首款终身免健康告知的特定疾病保险。二季度，我们的带病体贴的产品贡献保费约3.1亿元，智能险贡献保费约8,400万元。 On the product side, our core strategy remains improving the accessibility of insurance products.

This quarter, we delivered several new products in line with this direction, including the launch of Rongyi Bao, the market first long-term critical illness insurance product requiring no health disclosure and offering five-year guaranteed renewability. We also expanded our Jixing Gaozhao product matrix, which now includes the market first specified disease insurance offering lifetime coverage with no health disclosure. During this quarter, products for users with preexisting conditions contributed CNY 310 million FYP and disability insurance at CNY 84 million.