Financial and Operational Highlights for the First Quarter of 2026

• Strong Core Business Growth: Net operating revenue for the first quarter rose to RMB1,242.2 million (US$180.1 million), representing a 64.8% year-over-year increase. Insurance-related income for the quarter reached RMB1,145.8 million (US$166.1 million), up 74.1% from the same period in 2025.
• Year-Over-Year Operating Profit Improvement: In the first quarter of 2026, operating profit was RMB80.0 million (US$11.6 million), representing a 5.3% year-over-year increase.
• Expanded Scale of Medical Crowdfunding: As of March 31, 2026, around 494 million people have cumulatively donated an aggregate of RMB73.5 billion to 3.75 million patients through Waterdrop Medical Crowdfunding.
• Continued Expansion in Patient Enrollment: As of March 31, 2026, the Company had cumulatively enrolled 15,512 patients into 1,718 clinical trial programs through the E-Find Platform.

Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "2026 marks Waterdrop's tenth anniversary. We opened the year with a solid first-quarter result, underpinned by rapid top-line growth.

For our insurance business, we deepened R&D investment to strengthen our traffic infrastructure and user acquisition capabilities. Insurance-related income rose 74.1% year-over-year. On the product side, we aim to bring insurance within reach for more people through inclusive underwriting and affordable pricing. Premiums for pre-existing condition insurance increased 24.3% year-over-year. We also launched 'Shouhu Ruchu,' a competitively priced cancer plan with metastasis coverage and optional recurrence benefits.

Our AI deployment continued to enhance operational efficiency. First-year premiums facilitated by our user-facing 'AI Insurance Expert' increased by 17.7% quarter-over-quarter. Our KEYI.AI underwriting assistant has processed more than 10,000 inquiries to date. To further empower our consultants, we launched 'Claw Copilot,' an application built into our CRM system that integrates KEYI.AI, product knowledge base, and a suite of additional AI tools to provide real-time support during customer interactions.

During this quarter, we upgraded our AI-assisted risk screening framework for Waterdrop Medical Crowdfunding, improving the speed and consistency of campaign intake and initial screening. We also streamlined localized risk operations by integrating multilingual risk specialists and culturally attuned review workflows, while maintaining strict compliance.

In our digital clinical trial business, the E-Find platform leverages proprietary patented technology to match and recommend patients for innovative drug clinical trials based on structured medical records. In the first quarter, we partnered with 243 pharmaceutical companies and contract research organizations and enrolled 957 patients. Revenue from digital clinical trial solutions was approximately RMB24.2 million, up 5.4% year-over-year.

As part of our ongoing shareholder return program, as of May 31, 2026, we had repurchased approximately 61.8 million ADSs for about US$120.1 million, and recently paid a cash dividend of approximately US$10.8 million.

As we look to the future, we remain dedicated to the enduring purpose that has shaped our journey since day one. In 2026, we aim to move faster toward becoming an AI-native company to strengthen execution and support durable value for our users and shareholders."

Financial Results for the First Quarter of 2026

Operating revenue, net

Net operating revenue for the first quarter of 2026 reached RMB1,242.2 million (US$180.1 million), which represents an increase of 64.8% year-over-year from RMB753.7 million for the same period of 2025. On a quarter-over-quarter basis, net operating revenue decreased by 12.0%.

• Insurance-related income includes insurance brokerage income and technical service income. Insurance brokerage income represents brokerage commissions earned from insurance companies. Technical service income is derived from providing analytics and intelligent recommendation service, risk assessment technical service, customer relationship management ("CRM") system-based technical services and marketing services to insurance companies, insurance brokers, and agency companies. Reinforced by cumulative big data, we provide risk assessment technical services through algorithm-driven verification system assessing risk by analyzing user profiles and medical history, tagging risk levels for hierarchical management that help insurers refine their risk analysis capabilities since 2025. We leverage multi-dimensional consumer insights to deliver analytics and intelligent recommendation services, enabling policyholders to be matched with more suitable products and improving sales efficiency. Our insurance-related income amounted to RMB1,145.8 million (US$166.1 million) in the first quarter of 2026, representing an increase of 74.1% year-over-year from RMB658.0 million for the first quarter of 2025, which was mainly due to the increase in technical service income. Our technical service income amounted to RMB421.0 million (US$61.0 million) in the first quarter of 2026, compared with RMB9.4 million for the same quarter of 2025. On a quarter-over-quarter basis, insurance-related income decreased by 12.6%, due to the decrease in technical service income.

• Crowdfunding service fees represent the service income earned when patients successfully withdraw the proceeds from their crowdfunding campaigns. Our role is to operate the Waterdrop Medical Crowdfunding platform to provide crowdfunding related services through the internet, enabling patients with significant medical bills to seek help from caring hearts through technology (the "medical crowdfunding services"). Our medical crowdfunding services generally consist of providing technical and internet support, managing, reviewing and supervising the crowdfunding campaigns, providing comprehensive risk management and anti-fraud measures, and facilitating the collection and transfer of the funds. For the first quarter of 2026, we generated RMB60.7 million (US$8.8 million) in service fees, representing a decrease of 9.5% from RMB67.1 million for the first quarter of 2025. On a quarter-over-quarter basis, crowdfunding service fees slightly decreased by 1.1%.

• Digital clinical trial solution income represents the service income earned from our customers mainly including biopharmaceutical companies and leading biotechnology companies. We match qualified and suitable patients for enrollment in clinical trials for our customers and generate digital clinical trial solution revenue for successful matches and we typically charge our customers a fixed unit price per successful match. For the first quarter of 2026, our digital clinical trial solution income amounted to RMB24.2 million (US$3.5 million), representing an increase of 5.4% from RMB23.0 million in the same period of 2025. On a quarter-over-quarter basis, digital clinical trial solution income decreased by 32.2%.

Operating costs and expenses

Operating costs and expenses increased by 71.5% year-over-year to RMB1,162.3 million (US$168.5 million) for the first quarter of 2026. On a quarter-over-quarter basis, operating costs and expenses decreased by 12.4%.

• Operating costs increased by 30.1% year-over-year to RMB486.8 million (US$70.6 million) for the first quarter of 2026, as compared with RMB374.2 million for the first quarter of 2025, which was primarily driven by (i) an increase of RMB53.9 million in costs of referral and service fees, (ii) an increase of RMB38.9 million in the costs for short message service (SMS) costs for new user onboarding and authentication processes; and (iii) an increase of RMB7.3 million in personnel costs. On a quarter-over-quarter basis, operating costs decreased by 28.1% from RMB677.3 million, primarily due to (i) a decrease of RMB201.9 million in costs of referral and service fees, partially offset by (ii) an increase of RMB12.3 million in the costs for SMS.

• Sales and marketing expenses increased by 213.8% year-over-year to RMB541.1 million (US$78.4 million) for the first quarter of 2026, as compared with RMB172.4 million for the same quarter of 2025. The increase was primarily due to an increase of RMB361.4 million in marketing expenses for third-party traffic channels. On a quarter-over-quarter basis, sales and marketing expenses increased by 6.8% from RMB506.8 million, primarily due to an increase of RMB29.4 million in marketing expenses for third-party traffic channels.

• General and administrative expenses decreased by 4.3% year-over-year to RMB71.7 million (US$10.4 million) for the first quarter of 2026, as compared with RMB74.9 million for the same quarter of 2025. On a quarter-over-quarter basis, general and administrative expenses decreased by 7.0% from RMB77.1 million, due to a decrease of RMB6.5 million in professional service fees.

• Research and development expenses increased by 11.5% year-over-year to RMB62.7 million (US$9.1 million) for the first quarter of 2026, as compared with RMB56.2 million for the same period of 2025, which was primarily driven by an increase of RMB6.7 million in cloud server fees and other IT support expenses. On a quarter-over-quarter basis, research and development expenses decreased by 5.2% from RMB66.2 million. The decrease was primarily due to (i) a decrease of RMB4.3 million in personnel costs and share-based compensation expenses, partially offset by (ii) an increase of RMB1.2 million in cloud server fees and other IT support expenses.

Operating profit for the first quarter of 2026 was RMB80.0 million (US$11.6 million), as compared with RMB75.9 million for the first quarter of 2025 and RMB83.9 million for the fourth quarter of 2025.

Interest income for the first quarter of 2026 was RMB29.1 million (US$4.2 million), as compared with RMB33.8 million for the first quarter of 2025 and RMB34.8 million for the fourth quarter of 2025.

Income tax expense for the first quarter of 2026 was RMB6.8 million (US$1.0 million), as compared with income tax expense of RMB13.3 million for the first quarter of 2025 and income tax benefit of RMB41.7 million for the fourth quarter of 2025.

Net profit attributable to the Company's ordinary shareholders for the first quarter of 2026 was RMB98.4 million (US$14.3 million), as compared with RMB108.2 million for the same period of 2025, and RMB162.1 million for the fourth quarter of 2025.

Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP⁽¹⁾) for the first quarter of 2026 was RMB106.3 million (US$15.4 million), as compared with RMB130.0 million for the same period of 2025 and RMB170.2 million for the fourth quarter of 2025.

Cash position⁽²⁾

As of March 31, 2026, cash position of the Company was RMB2,880.7 million (US$417.6 million), as compared with RMB3,249.0 million as of December 31, 2025.

Share Repurchase Programs

Pursuant to the share repurchase programs launched in September 2021, September 2022, September 2023, September 2024, and September 2025, respectively, we had cumulatively repurchased approximately 61.8 million ADSs from the open market with cash for a total consideration of approximately US$120.1 million as of May 31, 2026.

Supplemental Information

We organize and report our business in the following operating segments:

• Insurance, which mainly includes insurance brokerage service and technical service;
• Crowdfunding, which mainly includes crowdfunding service; and
• Others, which do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and are aggregated.

The table below sets forth the segment operating results, with three-month ended March 31, 2026.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8980 to US$1.00, the noon buying rate in effect on March 31, 2026 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

Non-GAAP Financial Measure

The Company uses non-GAAP financial measure, adjusted net profit attributable to our ordinary shareholders, in evaluating the Company's operating results and for financial and operational decision-making purposes. Adjusted net profit attributable to our ordinary shareholders represents net profit attributable to our ordinary shareholders excluding share-based compensation expense attributable to our ordinary shareholders and foreign currency exchange gain or losses. Such adjustments have no impact on income tax.

The non-GAAP financial measure is not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measure has limitations as analytical tools and when assessing the Company's operating performance, investors should not consider it in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Investors are encouraged to review the Company's historical non-GAAP financial measure to the most directly comparable GAAP measure. Adjusted net profit attributable to our ordinary shareholders presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measure differently, limiting its usefulness as a comparative measure to our data.

The Company mitigates these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance.

For more information on the non-GAAP financial measure, please see the table captioned "Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. Among other things, quotations in this announcement, contain forward-looking statements. Waterdrop may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Waterdrop's beliefs, plans and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Waterdrop's mission, goals and strategies; Waterdrop's future business development, financial condition and results of operations; the expected growth of the insurance, medical crowdfunding and healthcare industry in China; Waterdrop's expectations regarding demand for and market acceptance of our products and services; Waterdrop's expectations regarding its relationships with consumers, insurance carriers and other partners; competition in the industry and relevant government policies and regulations relating to insurance, medical crowdfunding and healthcare industry. Further information regarding these and other risks is included in Waterdrop's filings with the SEC. All information provided in this press release is as of the date of this press release, and Waterdrop does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Conference Call Information

Waterdrop's management team will hold a conference call on June 16, 2026 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time on the same day) to discuss the financial results. Dial-in details for the earnings conference call are as follows:

Participants can choose between the Chinese and the English interpretation lines. Please note that the English interpretation option will be in listen-only mode. Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call.

Telephone replays will be accessible two hours after the conclusion of the conference call through June 23, 2026 by dialing the following numbers:

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.waterdrop-inc.com/.

About Waterdrop Inc.

Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare services with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com.

For investor inquiries, please contact
Waterdrop Inc.
IR@shuidi-inc.com 

Waterdrop's management team will hold a conference call on June 16, 2026 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time on the same day) to discuss the financial results. Dial-in details for the earnings conference call are as follows:

Participants can choose between the Chinese and the English interpretation lines. Please note that the English interpretation option will be in listen-only mode. Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call.

Telephone replays will be accessible two hours after the conclusion of the conference call through June 23, 2026 by dialing the following numbers:

Additionally, live and archived webcasts of the conference call will be available at the Company's investor relations website at http://ir.waterdrop-inc.com/.

About Waterdrop Inc.

Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com.

For investor inquiries, please contact

Waterdrop Inc.
IR@shuidi-inc.com

The Company will provide a hard copy of its annual report containing the audited consolidated financial statements, free of charge, to its shareholders upon request. Requests should be directed to the Company's IR Department at IR@shuidi-inc.com. 

About Waterdrop Inc.

Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com.

For investor inquiries, please contact:
Waterdrop Inc.
IR@shuidi-inc.com

Waterdrop's management team will hold a conference call on March 25, 2026 at 8:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time on the same day) to discuss the financial results. Dial-in details for the earnings conference call are as follows:

Participants can choose between the Chinese and the English interpretation lines. Please note that the English interpretation option will be in listen-only mode. Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call.

Telephone replays will be accessible two hours after the conclusion of the conference call through April 1, 2026 by dialing the following numbers:

Additionally, live and archived webcasts of the conference call will be available at the Company's investor relations website at http://ir.waterdrop-inc.com/.

About Waterdrop Inc.

Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com.

For investor inquiries, please contact

Waterdrop Inc.
IR@shuidi-inc.com

Financial and Operational Highlights for the Third Quarter of 2025

• Substantial profit growth: In the third quarter of 2025, operating profit was RMB113.8 million (US$16.0 million), marking a strong year-over-year increase of 329.8%. Net profit attributable to our ordinary shareholders reached RMB158.5 million (US$22.3 million), representing a solid year-over-year increase of 60.1%.
• Rapid revenue expansion in the core business: Net operating revenue was RMB974.9 million (US$136.9 million), representing an increase of 38.4% year-over-year. Insurance-related income amounted to RMB869.7 million (US$122.2 million) in the third quarter of 2025, rising by 44.8% from the same period of 2024.
• Medical crowdfunding coverage: As of September 30, 2025, approximately 485 million people had cumulatively donated a total of RMB71.2 billion to 3.61 million patients through Waterdrop Medical Crowdfunding.
• Patient recruitment performance: As of September 30, 2025, the Company had cumulatively enrolled 13,282 patients into 1,491 clinical trial programs through the E-Find Platform.

Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We are pleased to announce another quarter of outstanding performance, marked by robust revenue expansion and significant profit growth.

For our insurance business, we upgraded our data infrastructure and real-time identification capabilities, allowing us to gain profound insights of our users within milliseconds. This enables us to optimize traffic utilization and sharpen user-acquisition performance, fueling a 32.3% sequential increase in insurance premiums. Moreover, we prioritize user needs and continue to deliver innovative insurance products to users and their loved ones. In this quarter, we introduced 'Quan Jia Fu Family Protection Plan', which covers up to nine family members under a single policy, and upgraded 'Guo Min Bao Mid-to-High-End Medical Insurance' with an expanded network of quality private hospitals.

Our commitment to AI is creating a faster, more efficient, and more intelligent platform. By deploying AI at key touchpoints, we are unlocking new levels of performance. Premiums facilitated by our 'AI Medical Insurance Expert' increased by 82% on a quarter-over-quarter basis. Thanks to our 'KEYI.AI' underwriting assistant, underwriting workflow is streamlined and the corresponding processing time is dramatically reduced, turning tasks that previously took several minutes into a near-instantaneous process. Meanwhile, our 'AI Customer Service Agent' can now independently handle approximately 600,000 inquiries in one month. To democratize these capabilities, we have launched 'Waterdrop Sea.AI', a low-code platform that empowers our employees to build and deploy custom AI solutions, further accelerating innovation across the organization.

During the third quarter, Waterdrop Medical Crowdfunding markedly fortified its campaign risk control measures. By analyzing donation visit data to identify subtle patterns, advanced analytics have improved the identification capabilities of our algorithm model. This, in turn, has improved automatic early-warning systems to better detect and reduce fraud. This quarter also witnessed the rollout of a strengthened donor evaluation system, which now offers comprehensive evaluation rationales and gives donors clear insights into how their contributions are allocated and used. These measures have profoundly enhanced the transparency, rationality, and traceability of fund distribution.

During this quarter, the E-Find Platform has consistently delivered satisfactory fulfillment quality by collaborating across our ecosystem channels and enhancing digital capabilities. At the same time, the number of ongoing projects has increased steadily. In the third quarter, we expanded our collaboration network by partnering with 216 pharmaceutical and contract research organizations. Furthermore, the number of patients enrolled reached 1,066, fueling a 31.3% year-over-year increase in revenue.

We deeply value the trust of our investors and are dedicated to delivering strong returns for shareholders. By the end of November 2025, the company had cumulatively repurchased around 58.1 million ADSs from the open market. We also recently completed our latest cash dividend of approximately US$10.9 million.

In 2025 and beyond, we expect business momentum to continue. AI is driving more and more pragmatic advancements in our business, shaping future services for better experience, improving efficiency, and bringing tangible value to users and our shareholders."

Financial Results for the Third Quarter of 2025

Operating revenue, net

Net operating revenue for the third quarter of 2025 increased by 38.4% year-over-year to RMB974.9 million (US$136.9 million) from RMB704.1 million for the same period of 2024. On a quarter-over-quarter basis, net operating revenue increased by 16.3%.

• Insurance-related income includes insurance brokerage income and technical service income. Insurance brokerage income represents brokerage commissions earned from insurance companies. Technical service income is derived from providing technical services including analytics and intelligent recommendation service, risk assessment technical service, customer relationship maintenance, customer complaint management, claim assistance and investigation service, and user referral services, among other things, to insurance companies, insurance brokers, and agency companies. We leverage multi-dimensional consumer insights to deliver analytics and intelligent recommendation services, enabling policyholders to be matched with more suitable products and improving sales efficiency. We provide risk assessment services through the analysis of potential insureds' information, providing risk assessment results that help insurers refine their risk analysis capabilities. Consideration for each of these services is primarily based on standard unit prices and service volumes rendered during the period. Our insurance-related income amounted to RMB869.7 million (US$122.2 million) in the third quarter of 2025, representing an increase of 44.8% year-over-year from RMB600.7 million for the third quarter of 2024, which was mainly due to the increase in technical service income. Our technical service income amounted to RMB196.4 million (US$27.6 million) in the third quarter of 2025, comparing with RMB10.2 million for the same quarter of 2024. On a quarter-over-quarter basis, insurance-related income increased by 17.8%.
• Crowdfunding service fees represent the service income earned when patients successfully withdraw the proceeds from their crowdfunding campaigns. Our role is to operate the Waterdrop Medical Crowdfunding platform to provide crowdfunding related services through the internet, enabling patients with significant medical bills to seek help from caring hearts through technology (the "medical crowdfunding services"). Our medical crowdfunding services generally consist of providing technical and internet support, managing, reviewing and supervising the crowdfunding campaigns, providing comprehensive risk management and anti-fraud measures, and facilitating the collection and transfer of the funds. For the third quarter of 2025, we generated RMB65.7 million (US$9.2 million) in service fees, maintaining nearly the same level as RMB65.8 for the third quarter of 2024. On a quarter-over-quarter basis, crowdfunding service fees slightly decreased by 2.6%.
• Digital clinical trial solution income represents the service income earned from our customers mainly including biopharmaceutical companies and leading biotechnology companies. We match qualified and suitable patients for enrollment in clinical trials for our customers and generate digital clinical trial solution revenue for successful matches and we typically charge our customers a fixed unit price per successful match. For the third quarter of 2025, our digital clinical trial solution income amounted to RMB31.9 million (US$4.5 million), representing an increase of 31.3% from RMB24.3 million in the same period of 2024. On a quarter-over-quarter basis, digital clinical trial solution income increased by 14.9%.

Operating costs and expenses

Operating costs and expenses increased by 27.1% year-over-year to RMB861.1 million (US$121.0 million) for the third quarter of 2025. On a quarter-over-quarter basis, operating costs and expenses increased by 16.3%.

• Operating costs increased by 39.5% year-over-year to RMB475.1 million (US$66.7 million) for the third quarter of 2025, as compared with RMB340.6 million for the third quarter of 2024, which was primarily driven by (i) an increase of RMB66.7 million in costs of referral and service fees, (ii) an increase of RMB32.4 million in personnel costs, and (iii) an increase of RMB16.9 million in the costs for the crowdfunding consultants team. On a quarter-over-quarter basis, operating costs increased by 14.1% from RMB416.5 million, primarily due to (i) an increase of RMB25.6 million in costs of referral and service fees, and (ii) an increase of RMB16.4 million in personnel costs.
• Sales and marketing expenses increased by 40.3% year-over-year to RMB243.0 million (US$34.1 million) for the third quarter of 2025, as compared with RMB173.2 million for the same quarter of 2024. The increase was primarily due to an increase of RMB79.0 million in marketing expenses for third-party traffic channels, partially offset by a decrease of RMB7.1 million in outsourced sales and marketing service fees to third parties. On a quarter-over-quarter basis, sales and marketing expenses increased by 22.2% from RMB198.8 million, primarily due to an increase of RMB49.1 million in marketing expenses for third-party traffic channels.
• General and administrative expenses decreased by 23.7% year-over-year to RMB84.7 million (US$11.9 million) for the third quarter of 2025, as compared with RMB111.0 million for the same quarter of 2024. The year-over-year variance was due to (i) a decrease of RMB15.6 million in personnel costs and share-based compensation expenses, and (ii) an impairment of intangible assets related to Shenlanbao of RMB20.6 million recorded in the third quarter of 2024, with no corresponding item in the third quarter of 2025, and offset by (iii) an increase of RMB8.8 million in allowance for credit losses. On a quarter-over-quarter basis, general and administrative expenses increased by 15.4% from RMB73.4 million, due to an increase of RMB19.1 million in allowance for credit losses, partially offset by a decrease of RMB6.2 million in personnel costs and share-based compensation expenses.
• Research and development expenses increased by 10.2% year-over-year to RMB58.3 million (US$8.2 million) for the third quarter of 2025, as compared with RMB53.0 million for the same period of 2024, which was primarily driven by (i) an increase of RMB3.2 million in personnel costs and share-based compensation expenses, and (ii) an increase of RMB2.7 million in cloud server expense and other related technical support expenses. On a quarter-over-quarter basis, research and development expenses increased by 12.3% from RMB51.9 million. The increase was primarily due to (i) an increase of RMB4.7 million in personnel costs and share-based compensation expenses, and (ii) an increase of RMB2.2 million in cloud server and other related technical support expenses.

Operating profit for the third quarter of 2025 was RMB113.8 million (US$16.0 million), as compared with RMB26.5 million for the third quarter of 2024 and RMB97.3 million for the second quarter of 2025.

Interest income for the third quarter of 2025 was RMB37.5 million (US$5.3 million), as compared with RMB36.0 million for the third quarter of 2024 and RMB29.5 million for the second quarter of 2025.

Income tax expense for the third quarter of 2025 was RMB9.6 million (US$1.4 million), as compared with income tax benefit of RMB7.8 million for the third quarter of 2024 and income tax benefit of RMB2.9 million for the second quarter of 2025.

Net profit attributable to the Company's ordinary shareholders for the third quarter of 2025 was RMB158.5 million (US$22.3 million), as compared with RMB99.0 million for the same period of 2024, and RMB140.2 million for the second quarter of 2025.

Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP⁽¹⁾) for the third quarter of 2025 was RMB167.7 million (US$23.6 million), as compared with RMB126.0 million for the same period of 2024 and RMB151.6 million for the second quarter of 2025. 

Cash position⁽²⁾

As of September 30, 2025, cash position of the Company was RMB3,510.0 million (US$493.1 million), as compared with RMB3,670.3 million as of December 31, 2024.

Share Repurchase Programs

Pursuant to the share repurchase programs launched in September 2021, September 2022, September 2023, September 2024, and September 2025, respectively, we had cumulatively repurchased approximately 58.1 million ADSs from the open market with cash for a total consideration of approximately US$113.4 million as of November 30, 2025.

Supplemental Information

We organize and report our business in the following operating segments:

• Insurance, which mainly includes insurance brokerage service and technical service;
• Crowdfunding, which mainly includes crowdfunding service; and
• Others, which do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and are aggregated.

The table below sets forth the segment operating results, with three-month and nine-month ended September 30, 2024 retrospectively adjusted to conform to this presentation.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB7.1190 to US$1.00, the noon buying rate in effect on September 30, 2025 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

Non-GAAP Financial Measure

The Company uses non-GAAP financial measure, adjusted net profit attributable to our ordinary shareholders, in evaluating the Company's operating results and for financial and operational decision-making purposes. Adjusted net profit attributable to our ordinary shareholders represents net profit attributable to our ordinary shareholders excluding share-based compensation expense attributable to our ordinary shareholders, foreign currency exchange gain or losses, impairment of intangible assets acquired from business combination and related tax effects on non-GAAP adjustments.

The non-GAAP financial measure is not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measure has limitations as analytical tools and when assessing the Company's operating performance, investors should not consider it in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Investors are encouraged to review the Company's historical non-GAAP financial measure to the most directly comparable GAAP measure. Adjusted net profit attributable to our ordinary shareholders presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measure differently, limiting its usefulness as a comparative measure to our data.

The Company mitigates these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance.

For more information on the non-GAAP financial measure, please see the table captioned "Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. Among other things, quotations in this announcement, contain forward-looking statements. Waterdrop may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Waterdrop's beliefs, plans and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Waterdrop's mission, goals and strategies; Waterdrop's future business development, financial condition and results of operations; the expected growth of the insurance, medical crowdfunding and healthcare industry in China; Waterdrop's expectations regarding demand for and market acceptance of our products and services; Waterdrop's expectations regarding its relationships with consumers, insurance carriers and other partners; competition in the industry and relevant government policies and regulations relating to insurance, medical crowdfunding and healthcare industry. Further information regarding these and other risks is included in Waterdrop's filings with the SEC. All information provided in this press release is as of the date of this press release, and Waterdrop does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Conference Call Information

Waterdrop's management team will hold a conference call on December 3, 2025 at 7:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time on the same day) to discuss the financial results. Dial-in details for the earnings conference call are as follows:

Participants can choose between the Chinese and the English interpretation lines. Please note that the English interpretation option will be in listen-only mode. Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call.

Telephone replays will be accessible two hours after the conclusion of the conference call through December 10, 2025 by dialing the following numbers:

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.waterdrop-inc.com/.

About Waterdrop Inc.

Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com.

For investor inquiries, please contact
Waterdrop Inc.
IR@shuidi-inc.com 

Waterdrop's management team will hold a conference call on December 3, 2025 at 7:00 AM U.S. Eastern Time (8:00 PM Beijing/Hong Kong Time on the same day) to discuss the financial results. Dial-in details for the earnings conference call are as follows:

Participants can choose between the Chinese and the English interpretation lines. Please note that the English interpretation option will be in listen-only mode. Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call.

Telephone replays will be accessible two hours after the conclusion of the conference call through December 10, 2025 by dialing the following numbers:

Additionally, live and archived webcasts of the conference call will be available at the Company's investor relations website at http://ir.waterdrop-inc.com/.

About Waterdrop Inc.

Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com.

For investor inquiries, please contact

Waterdrop Inc.
IR@shuidi-inc.com

Financial and Operational Highlights for the Second Quarter of 2025

• Further improvement in profitability: In the second quarter of 2025, net profit attributable to our ordinary shareholders reached RMB140.2 million (US$19.6 million), representing a solid increase of 58.7% year-over-year. We continued to generate positive operating cash flow during the second quarter of 2025.
• Significant growth in insurance premiums: The first-year premiums ("FYP") generated through our insurance business reached RMB3,204.3 million (US$447.3 million) during the second quarter of 2025, representing an increase of 80.2% year-over-year. Net operating revenue was RMB838.0 million (US$117.0 million), representing an increase of 23.9% year-over-year.
• Medical crowdfunding coverage: As of June 30, 2025, around 480 million people had cumulatively donated an aggregate of RMB70.0 billion to 3.54 million patients through Waterdrop Medical Crowdfunding.
• Patient recruitment performance: As of June 30, 2025, the Company had cumulatively enrolled 12,216 patients into 1,385 clinical trial programs through the E-Find Platform.

Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We are proud to announce that we have delivered strong revenue and profit, fueled by the further integration of AI into our sales and service processes.

The insurance business delivered an exceptional quarter. Year-over-year, FYP grew by 95.0% in short-term policies and 45.4% in long-term ones. This robust growth drove significant increases in both segment revenue and operating profit, expanding the operating margin by 2 percentage points. These results underscore the effectiveness of our strategic focus on enhanced user acquisition, accelerated product iteration, and the implementation of AI-enhanced services.

Our "Waterdrop Guardian" AI Application Suite constantly evolves, either interacting directly with end users or empowering our online consultants behind the scenes. Premiums facilitated by 'AI Medical Insurance Expert' climbed 155% compared to the previous quarter. 'AI Customer Service Agent' resolved 60% of inquiries on first contact, enhancing user experience. 'Life Planner Copilot' has handled 300,000 insurance product-related consultations from our online consultants, driving a double-digit productivity growth in Q2. We recently launched 'KEYI.AI', a real-time AI underwriting assistant for consultants, with plans to extend its availability to industry partners later this year.

On a separate note, we completed the acquisition of the remaining equity in Shenlanbao in June and anticipate further accelerating synergies.

During the second quarter, Waterdrop Medical Crowdfunding upgraded its risk assessment capabilities. A large-language-model ("LLM") engine now scans every campaign's content, comments and hidden clues, feeding insights into a smart matrix that tracks 15 high-risk scenarios, and refines itself to identify risks more accurately. Additionally, this quarter we partnered with Guangzhou's Civil Affairs Bureau to launch 'Waterdrop Co-Help', the first project under our new designation as a government-endorsed platform that integrates social and public welfare resources.

In this quarter, E-Find Platform expanded its collaboration to 198 pharmaceutical and contract research organizations. Meanwhile, we initiated services for 114 new programs. The number of patients enrolled also reached a historic high, with 999 patients enrolled in the second quarter of 2025, representing a 34.2% year-over-year revenue growth.

With a commitment to superior shareholder returns, we are pleased to announce that our board of directors of the Company (the "Board") has recently approved an enhanced cash dividend of US$10.9 million, representing a 50% increase over the previous dividend. The Board has also authorized a fifth annual share repurchase scheme. Since the launch of our first share repurchase program in 2021, we have repurchased approximately 55.7 million ADSs for US$109.0 million as of August 31, 2025.

Looking ahead to the second half of 2025, we will strive to deliver both top-line and bottom-line growth. We believe that tech-driven innovation is the core strategy and source of business excellence, and look forward to delivering a compelling success story, as well as value to our users, partners and shareholders." 

Financial Results for the Second Quarter of 2025

Operating revenue, net

Net operating revenue for the second quarter of 2025 increased by 23.9% year-over-year to RMB838.0 million (US$117.0 million) from RMB676.2 million for the same period of 2024. On a quarter-over-quarter basis, net operating revenue increased by 11.2%.

• Insurance-related income includes insurance brokerage income and technical service income. Insurance brokerage income represents brokerage commissions earned from insurance companies. Technical service income is derived from providing technical services including risk control technical service, user analytics and intelligent recommendation service, customer relationship maintenance, customer complaint management, claim review, and user referral services, among other things, to insurance companies, insurance brokers, and agency companies. Our insurance-related income amounted to RMB738.6 million (US$103.1 million) in the second quarter of 2025, representing an increase of 28.7% year-over-year from RMB573.8 million for the second quarter of 2024, which was mainly due to the increase in technical service income. On a quarter-over-quarter basis, insurance-related income increased by 12.2%.
• Crowdfunding service fees represent the service income earned when patients successfully withdraw the proceeds from their crowdfunding campaigns. Our role is to operate the Waterdrop Medical Crowdfunding platform to provide crowdfunding related services through the internet, enabling patients with significant medical bills to seek help from caring hearts through technology (the "medical crowdfunding services"). Our medical crowdfunding services generally consist of providing technical and internet support, managing, reviewing and supervising the crowdfunding campaigns, providing comprehensive risk management and anti-fraud measures, and facilitating the collection and transfer of the funds. For the second quarter of 2025, we generated RMB67.4 million (US$9.4 million) in service fees, representing a slight decrease of 2.7% year-over-year from RMB69.3 million for the second quarter of 2024. On a quarter-over-quarter basis, crowdfunding service fees remained stable.
• Digital clinical trial solution income represents the service income earned from our customers mainly including biopharmaceutical companies and leading biotechnology companies. We match qualified and suitable patients for enrollment in clinical trials for our customers and generate digital clinical trial solution revenue for successful matches and we typically charge our customers a fixed unit price per successful match. For the second quarter of 2025, our digital clinical trial solution income amounted to RMB27.7 million (US$3.9 million), representing an increase of 34.2% from RMB20.7 million in the same period of 2024. On a quarter-over-quarter basis, digital clinical trial solution income increased by 20.6%.

Operating costs and expenses

Operating costs and expenses increased by 18.7% year-over-year to RMB740.6 million (US$103.4 million) for the second quarter of 2025. On a quarter-over-quarter basis, operating costs and expenses increased by 9.3%.

• Operating costs increased by 30.5% year over year to RMB416.5 million (US$58.1 million) for the second quarter of 2025, as compared with RMB319.1 million for the second quarter of 2024, which was primarily driven by (i) an increase of RMB73.4 million in costs of referral and service fees, (ii) an increase of RMB10.8 million in the costs for the crowdfunding consultants team, and (iii) an increase of RMB7.0 million in personnel costs. On a quarter-over-quarter basis, operating costs increased by 11.3% from RMB374.2 million, primarily due to (i) an increase of RMB25.0 million in costs of referral and service fees, and (ii) an increase of RMB7.3 million in personnel costs. 
• Sales and marketing expenses increased by 26.3% year-over-year to RMB198.8 million (US$27.7 million) for the second quarter of 2025, as compared with RMB157.4 million for the same quarter of 2024. The increase was primarily due to an increase of RMB44.3 million in marketing expenses for third-party traffic channels. On a quarter-over-quarter basis, sales and marketing expenses increased by 15.3% from RMB172.4 million, primarily due to an increase of RMB25.4 million in marketing expenses for third-party traffic channels.
• General and administrative expenses decreased by 21.9% year-over-year to RMB73.4 million (US$10.2 million) for the second quarter of 2025, compared with RMB94.0 million for the same quarter of 2024. The year-over-year variance was due to (i) a decrease of RMB13.4 million in allowance for credit losses, and (ii) a decrease of RMB6.0 million in professional service fees. On a quarter-over-quarter basis, general and administrative expenses decreased by 2.1% from RMB74.9 million, due to our effective cost control measures.
• Research and development expenses remained stable at RMB51.9 million (US$7.3 million) for the second quarter of 2025, maintaining nearly the same level as RMB53.3 million for the same period of 2024. On a quarter-over-quarter basis, research and development expenses decreased by 7.6% from RMB56.2 million. The decrease was primarily due to a decrease of RMB3.8 million in personnel costs and share-based compensation expenses.

Operating profit for the second quarter of 2025 was RMB97.3 million (US$13.6 million), as compared with RMB52.4 million for the second quarter of 2024 and RMB75.9 million for the first quarter of 2025.

Interest income for the second quarter of 2025 was RMB29.5 million (US$4.1 million), as compared with RMB37.5 million for the second quarter of 2024 and RMB33.8 million for the first quarter of 2025, which was mainly due to the decrease of cash position.

Income tax benefit for the second quarter of 2025 was RMB2.9 million (US$0.4 million), as compared with income tax expense of RMB7.0 million for the second quarter of 2024 and RMB13.3 million for the first quarter of 2025.

Net profit attributable to the Company's ordinary shareholders for the second quarter of 2025 was RMB140.2 million (US$19.6 million), as compared with RMB88.3 million for the same period of 2024, and RMB108.2 million for the first quarter of 2025.

Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP⁽¹⁾) for the second quarter of 2025 was RMB151.6 million (US$21.2 million), as compared with RMB108.7 million for the same period of 2024, and RMB130.0 million for the first quarter of 2025. 

Cash position⁽²⁾

As of June 30, 2025, cash position of the Company was RMB3,406.7 million (US$475.6 million), as compared with RMB3,670.3 million as of December 31, 2024.

Share Repurchase Programs

Pursuant to the share repurchase programs launched in September 2021, September 2022, September 2023 and September 2024, respectively, we had cumulatively repurchased approximately 55.7 million ADSs from the open market with cash for a total consideration of approximately US$109.0 million as of August 31, 2025.

Our Board has approved a new share repurchase program whereby the Company is authorized to repurchase its own ordinary shares in the form of American depository shares with an aggregate value of up to US$50 million during the 12-month period through September 9, 2026. The Company expects to fund the repurchase from its existing cash balance. The Company's proposed repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The timing and dollar amount of repurchase transactions will be subject to the requirements of the Securities and Exchange Commission Rule 10b-18 and/or Rule 10b5-1. The Board will review the share repurchase program periodically, and may authorize adjustment to its terms and size or suspend or discontinue the program.

Cash Dividend

The Board has approved a cash dividend of US$0.03 per ADS or US$0.003 per ordinary share, for a total amount of approximately US$10.9 million, to shareholders of record as of the close of business on October 10, 2025. The payment date is expected to be on or around November 4, 2025, for holders of ordinary shares and on or around November 7, 2025, for holders of ADSs.

Supplemental Information

We organize and report our business in the following operating segments:

• Insurance, which mainly includes insurance brokerage service and technical service;
• Crowdfunding, which mainly includes crowdfunding service; and
• Others, which do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and are aggregated.

The table below sets forth the segment operating results, with three-month and six-month ended June 30, 2024 retrospectively adjusted to conform to this presentation.