BEIJING, June 2, 2023 /PRNewswire/ -- Waterdrop Inc. ("Waterdrop", the "Company" or "we") (NYSE: WDH), a leading technology platform dedicated to insurance and healthcare service with a positive social impact, today announced its unaudited financial results for the first quarter ended March 31, 2023.
Financial and Operational Highlights for the First Quarter of 2023
Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "In the first quarter, we continued to demonstrate resilient and high-quality development, with net operating revenue reaching RMB606.2 million. Moreover, we are proud to have achieved another quarter of profitability. Our net profit reached RMB49.7 million, which again showcased our consistent efforts towards building a pattern of sustainable and high-quality business growth.
For our insurance business, we further optimized our user acquisition strategies during the first quarter and saw a quarterly increase in the number of new users. Meanwhile, we continually streamlined channel operations and improved our service quality. As a result, our renewal rate sustained at a high level. We also continued to enrich our product offerings, including tailored products for specific user groups, specially the underaged and the elderly. On the technology side, we further upgraded our AI-empowered dialogue robot,.which can now conduct a ten-minute call independently and is expected to help accelerate business development to a greater extent.
As for the medical crowdfunding business, we have focused on optimizing and improving our operational capabilities. By adjusting risk control strategies, we have basically eliminated cases with unreasonable fundraising targets. Our Operational Transparency Committee has also established a mechanism to examine service processes and improve the practice of consultants. Meanwhile, we continued to actively collaborate with multiple parties to crack down on dishonest fundraising practices. This year, we were honored as the "Consumer New Force" Integrity Commitment Enterprise at the Integrity Beijing 3.15 Gala.
In terms of clinical trial solution business, as the impact of the pandemic and holidays gradually subsided, E-find Patient Platform showed continued growth. In the first quarter, we successfully enrolled over 700 patients and launched more than 70 clinical trial programs, boosting the progress of drug development for over 120 pharmaceutical companies and CROs. E-find Patient Platform maintained competitive in the field of oncology while consciously exploring other diseases, including but not limited to psoriasis, atopic dermatitis, and asthma.
Moving forward, we will continue to play an active role in promoting the multi-level diversification of medical payment system in China and empowering Chinese insurance and healthcare industry participants. "
Financial Results for the First Quarter of 2023
Operating revenue, net
Net operating revenue for the first quarter of 2023 decreased by 6.6% year over year to RMB606.2 million (US$88.3 million) from RMB648.7 million for the same period of 2022.
Operating costs and expenses
Operating costs and expenses increased by 12.0% year over year to RMB595.8 million (US$86.8 million) for the first quarter of 2023. On a quarter-over-quarter basis, operating costs and expenses decreased by 1.8%.
Operating profit for the first quarter of 2023 was RMB10.3 million (US$1.5 million), as compared with an operating profit of RMB116.6 million for the first quarter of 2022 and a profit of RMB72.9 million for the fourth quarter of 2022.
Interest income for the first quarter of 2023 was RMB30.9 million (US$4.5 million), as compared with RMB14.5 million for the same period of 2022. The increase was primarily due to the increase in our short-term investments.
Income tax benefit for the first quarter of 2023 was RMB2.6 million (US$0.4 million), as compared with an income tax expense of RMB51.3 million for the same period of 2022.
Net profit attributable to Waterdrop for the first quarter of 2023 was RMB49.7 million (US$7.2 million), as compared with a net profit of RMB105.0 million for the same period of 2022, and a net profit of RMB126.2 million for the fourth quarter of 2022.
Adjusted net profit attributable to Waterdrop for the first quarter of 2023 was RMB96.4 million (US$14.0 million), as compared with an adjusted net profit of RMB127.3 million for the same period of 2022, and an adjusted net profit of RMB159.7 million for the fourth quarter of 2022.
Cash and cash equivalents and short-term investments
As of March 31, 2023, the Company had combined cash and cash equivalents and short-term investments of RMB3,597.3 million (US$523.8 million), as compared with RMB3,704.5 million as of December 31, 2022.
Share Repurchase Plan
Pursuant to the share repurchase program launched in September 2021 and amended in September 2022, as of May 31, 2023, we cumulatively repurchased approximately 24.9 million ADSs from the open market with cash for a total consideration of approximately US$61.2 million.
Exchange Rate
This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") 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 RMB6.8676 to US$1.00, the noon buying rate in effect on March 31, 2023 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 Measures
The Company uses non-GAAP financial measure, adjusted net profit, in evaluating the Company's operating results and for financial and operational decision-making purposes. Adjusted net profit represents net profit excluding share-based compensation expense 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 measures to the most directly comparable GAAP measures. Adjusted net profit 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 measures, all of which should be considered when evaluating the Company's performance.
For more information on the non-GAAP financial measures, 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 Securities and Exchange Commission (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 2, 2023 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:
International: |
1-412-317-6061 |
United States Toll Free: |
1-888-317-6003 |
Hong Kong Toll Free: |
800-963976 |
Hong Kong: |
852-58081995 |
Mainland China: |
4001-206115 |
Chinese Line (Mandarin) Entry Number: |
6683992 |
English Interpretation Line (Listen-only Mode) Entry Number: |
8700524 |
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 9, 2023 by dialing the following numbers:
United States Toll Free: |
1-877-344-7529 |
International: |
1-412-317-0088 |
Chinese Line Access Code: |
1702325 |
English Interpretation Line Access Code: |
8201572 |
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 INC. |
|||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
(All amounts in thousands, unless otherwise noted) |
|||||
As of |
|||||
December 31, 2022 |
March 31, 2023 |
||||
RMB |
RMB |
USD |
|||
Assets |
|||||
Current assets |
|||||
Cash and cash equivalents |
1,574,171 |
722,800 |
105,248 |
||
Restricted cash |
517,364 |
523,644 |
76,248 |
||
Short-term investments |
2,130,377 |
2,874,526 |
418,563 |
||
Accounts receivable, net |
675,796 |
692,826 |
100,883 |
||
Current contract assets |
450,085 |
456,233 |
66,433 |
||
Amount due from related parties |
358 |
107 |
16 |
||
Prepaid expense and other assets |
342,468 |
257,578 |
37,507 |
||
Total current assets |
5,690,619 |
5,527,714 |
804,898 |
||
Non-current assets |
|||||
Non-current contract assets |
103,591 |
104,591 |
15,230 |
||
Property, equipment and software, net |
31,397 |
31,465 |
4,582 |
||
Intangible assets, net |
56,614 |
56,580 |
8,239 |
||
Long-term investments |
11,969 |
9,900 |
1,442 |
||
Right of use assets, net |
18,447 |
70,162 |
10,216 |
||
Deferred tax assets |
6,166 |
7,016 |
1,022 |
||
Goodwill |
3,420 |
3,420 |
498 |
||
Total non-current assets |
231,604 |
283,134 |
41,229 |
||
Total assets |
5,922,223 |
5,810,848 |
846,127 |
||
Liabilities and Shareholders' Equity |
|||||
Current liabilities |
|||||
Amount due to related parties |
11,553 |
11,009 |
1,603 |
||
Insurance premium payables |
516,661 |
523,151 |
76,177 |
||
Accrued expenses and other current liabilities |
584,123 |
535,351 |
77,953 |
||
Current lease liabilities |
9,354 |
29,583 |
4,308 |
||
Total current liabilities |
1,121,691 |
1,099,094 |
160,041 |
||
Non-current liabilities |
|||||
Non-current lease liabilities |
4,701 |
40,586 |
5,910 |
||
Deferred tax liabilities |
29,703 |
25,252 |
3,677 |
||
Total non-current liabilities |
34,404 |
65,838 |
9,587 |
||
Total liabilities |
1,156,095 |
1,164,932 |
169,628 |
||
Shareholders' equity |
|||||
Class A ordinary shares |
108 |
109 |
16 |
||
Class B ordinary shares |
27 |
27 |
4 |
||
Treasury stock |
(3) |
(7) |
(1) |
||
Additional paid-in capital |
7,384,670 |
7,211,658 |
1,050,099 |
||
Accumulated other comprehensive income |
108,245 |
113,588 |
16,540 |
||
Accumulated deficit |
(2,726,919) |
(2,679,459) |
(390,159) |
||
Total shareholders' equity |
4,766,128 |
4,645,916 |
676,499 |
||
Total liabilities and shareholders' equity |
5,922,223 |
5,810,848 |
846,127 |
WATERDROP INC. |
||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
||||||||
(All amounts in thousands, except for share and per share data, or otherwise noted) |
||||||||
For the Three Months Ended |
||||||||
March 31, 2022 |
December 31, 2022 |
March 31, 2023 |
||||||
RMB |
RMB |
RMB |
USD |
|||||
Operating revenue, net |
648,688 |
679,470 |
606,165 |
88,264 |
||||
Operating costs and expenses(i) |
||||||||
Operating costs |
(154,880) |
(278,573) |
(247,983) |
(36,109) |
||||
Sales and marketing expenses |
(204,343) |
(137,793) |
(173,401) |
(25,249) |
||||
General and administrative expenses |
(101,995) |
(118,563) |
(95,798) |
(13,949) |
||||
Research and development expenses |
(70,825) |
(71,685) |
(78,655) |
(11,453) |
||||
Total operating costs and expenses |
(532,043) |
(606,614) |
(595,837) |
(86,760) |
||||
Operating profit |
116,645 |
72,856 |
10,328 |
1,504 |
||||
Other income |
||||||||
Interest income |
14,492 |
27,677 |
30,876 |
4,496 |
||||
Foreign currency exchange gain |
653 |
4,260 |
282 |
41 |
||||
Others, net |
24,489 |
21,954 |
5,613 |
817 |
||||
Profit before income tax |
156,279 |
126,747 |
47,099 |
6,858 |
||||
Income tax (expense)/benefit |
(51,321) |
(545) |
2,626 |
382 |
||||
Net profit attributable to Waterdrop Inc. |
104,958 |
126,202 |
49,725 |
7,240 |
||||
Net profit attributable to ordinary shareholders |
104,958 |
126,202 |
49,725 |
7,240 |
||||
Net profit |
104,958 |
126,202 |
49,725 |
7,240 |
||||
Other comprehensive income: |
||||||||
Foreign currency translation adjustment, net of tax |
(7,783) |
(40,297) |
3,386 |
493 |
||||
Unrealized (loss)/gains on available for sale investments, net of tax |
1,072 |
(4,339) |
1,957 |
285 |
||||
Comprehensive income |
98,247 |
81,566 |
55,068 |
8,018 |
||||
Weighted average number of ordinary shares used in computing |
||||||||
Basic |
3,938,758,720 |
3,903,634,639 |
3,866,785,745 |
3,866,785,745 |
||||
Diluted |
4,017,949,706 |
4,067,145,456 |
4,027,428,601 |
4,027,428,601 |
||||
Net profit per share attributable to ordinary shareholders |
||||||||
Basic |
0.03 |
0.03 |
0.01 |
0.00 |
||||
Diluted |
0.03 |
0.03 |
0.01 |
0.00 |
||||
(i) Share-based compensation expenses are included in the operating costs and expenses as follows. |
||||||||
For the Three Months Ended |
||||||||
March 31, 2022 |
December 31, 2022 |
March 31, 2023 |
||||||
RMB |
RMB |
RMB |
USD |
|||||
Sales and marketing expenses |
(2,802) |
(9,635) |
(16,529) |
(2,407) |
||||
General and administrative expenses |
(16,921) |
(23,886) |
(26,460) |
(3,853) |
||||
Research and development expenses |
(3,284) |
(4,201) |
(3,937) |
(573) |
||||
Total |
(23,007) |
(37,722) |
(46,926) |
(6,833) |
WATERDROP INC. |
||||||||
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS |
||||||||
(All amounts in thousands, unless otherwise noted) |
||||||||
For the Three Months Ended |
||||||||
March 31, 2022 |
December 31, 2022 |
March 31, 2023 |
||||||
RMB |
RMB |
RMB |
USD |
|||||
Net profit |
104,958 |
126,202 |
49,725 |
7,240 |
||||
Add: |
||||||||
Share-based compensation expense |
23,007 |
37,722 |
46,926 |
6,833 |
||||
Foreign currency exchange gain |
(653) |
(4,260) |
(282) |
(41) |
||||
Adjusted net profit |
127,312 |
159,664 |
96,369 |
14,032 |