BEIJING, June 5, 2024 /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 three months ended March 31, 2024.
Financial and Operational Highlights for the First Quarter of 2024
Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We are thrilled to kick off 2024 with solid first quarter financial results. The quarterly net profit attributable to our ordinary shareholders reached RMB80.6 million, representing a quarter-over-quarter growth of 36.5%. We are also pleased to have maintained profitability for nine consecutive quarters.
Waterdrop Insurance Marketplace has continually improved online traffic conversion capabilities and efficiency. We have been leveraging various content distribution platforms and optimizing our product offerings accordingly. Our capability in tailoring various products to meet user needs continues to improve. Targeting a market segment, we have successfully upgraded one of our star products "Jiehaoyun" to version 2.0, which gained top recognition on various platforms. The FYP generated through our insurance business increased by 15.0% sequentially. Meanwhile, we have effectively sustained the policy renewal rate at above 95%.
Regarding Waterdrop Medical Crowdfunding, we ensured stringent oversight over the transparency of fundraising activities on our platform and strengthened our risk management measures. For instance, before manual verification, we integrated algorithm recognition to identify false or fake medical documents and mitigate related risks effectively.
In this quarter, our healthcare-related business continued its momentum, bringing the number of collaborating pharmaceutical companies and contract research organizations (collectively, "CROs") to 179. In addition, we enrolled over 800 patients and started providing services to 88 new programs in the first quarter of 2024. We accelerated the implementation of our digital capabilities in clinical trial solution and multichannel marketing to serve a broader client base.
Looking ahead, we are committed to patiently building core technology competitiveness for the Company, supporting the long-term strategic execution to maintain stable profitability. Guided by our mission and values, we will continuously explore more customized, cost-effective products and services, while expanding our business boundaries."
Financial Results for the First Quarter of 2024
Operating revenue, net
Net operating revenue for the first quarter of 2024 increased by 16.3% year over year to RMB704.7 million (US$97.6 million) from RMB606.2 million for the same period of 2023. On a quarter-over-quarter basis, net operating revenue increased by 6.9%. We started to consolidate the financial results of Shenzhen Cunzhen Qiushi Technology Co., Ltd. and its subsidiaries (collectively, "Cunzhen Qiushi", also known as "Shenlanbao") in the third quarter of 2023. Net operating revenue generated by Shenlanbao for the first quarter of 2024 was RMB59.7 million (US$8.3 million).
Operating costs and expenses
Operating costs and expenses increased by 10.5% year over year to RMB658.3 million (US$91.2 million) for the first quarter of 2024. On a quarter-over-quarter basis, operating costs and expenses increased by 4.0%. Operating costs and expenses from Shenlanbao was RMB63.1 million (US$8.7 million).
Operating profit for the first quarter of 2024 was RMB46.4 million (US$6.4 million), as compared with RMB10.3 million for the first quarter of 2023 and RMB26.6 million for the fourth quarter of 2023.
Interest income for the first quarter of 2024 was RMB39.8 million (US$5.5 million), as compared with RMB30.9 million for the first quarter of 2023 and RMB34.7 million for the fourth quarter of 2023. The increase was primarily due to the increase in our short-term and long-term investments and interest rate.
Income tax expense for the first quarter of 2024 was RMB8.6 million (US$1.2 million), as compared with an income tax benefit of RMB2.6 million for the first quarter of 2023 and an income tax expense of RMB15.2 million for the fourth quarter of 2023.
Net profit attributable to the Company's ordinary shareholders for the first quarter of 2024 was RMB80.6 million (US$11.2 million), as compared with RMB49.7 million for the same period of 2023, and RMB59.1 million for the fourth quarter of 2023.
Adjusted net profit attributable to the Company's ordinary shareholders for the first quarter of 2024 was RMB98.4 million (US$13.6 million), as compared with RMB96.4 million for the same period of 2023, and RMB74.7 million for the fourth quarter of 2023.
Cash and cash equivalents and short-term investments
As of March 31, 2024, the Company had combined cash and cash equivalents and short-term investments of RMB3,484.4 million (US$482.6 million), as compared with RMB3,393.4 million as of December 31, 2023.
Share Repurchase Programs
Pursuant to the share repurchase programs launched in September 2021, September 2022 and September 2023, respectively, we had cumulatively repurchased approximately 45.5 million ADSs from the open market with cash for a total consideration of approximately US$95.9 million as of May 31, 2024.
Supplemental Information
Starting from the second quarter of 2023, our chief operating decision maker starts to manage the business by three operating segments and assess the performance and allocate resources under the new operating segment structure.
Therefore, we organize and report our business in three operating segments:
As a result, we have updated our segments reporting information to reflect the new operating and reporting structure.
Comparative figures were retrospectively adjusted to conform to this presentation.
For the Three Months Ended |
||||||||||||||||||||
March 31, 2023 |
December 31, |
March 31, 2024 |
||||||||||||||||||
RMB |
RMB |
RMB |
USD |
|||||||||||||||||
(All amounts in thousands) |
||||||||||||||||||||
Operating revenue, net |
||||||||||||||||||||
Insurance* |
536,343 |
587,866 |
606,777 |
84,038 |
||||||||||||||||
Crowdfunding |
42,022 |
40,013 |
67,350 |
9,328 |
||||||||||||||||
Others |
27,800 |
31,485 |
30,573 |
4,234 |
||||||||||||||||
Total consolidated operating |
606,165 |
659,364 |
704,700 |
97,600 |
||||||||||||||||
Operating profit/(loss) |
||||||||||||||||||||
Insurance* |
154,955 |
128,223 |
129,163 |
17,889 |
||||||||||||||||
Crowdfunding |
(61,134) |
(51,718) |
(32,237) |
(4,465) |
||||||||||||||||
Others |
(36,567) |
(27,078) |
(31,432) |
(4,354) |
||||||||||||||||
Total segment operating |
57,254 |
49,427 |
65,494 |
9,070 |
||||||||||||||||
Unallocated item** |
(46,926) |
(22,788) |
(19,130) |
(2,649) |
||||||||||||||||
Total consolidated operating |
10,328 |
26,639 |
46,364 |
6,421 |
||||||||||||||||
Total other income |
36,771 |
44,463 |
42,781 |
5,926 |
||||||||||||||||
Profit before income tax |
47,099 |
71,102 |
89,145 |
12,347 |
||||||||||||||||
Income tax benefit/(expense) |
2,626 |
(15,164) |
(8,588) |
(1,189) |
||||||||||||||||
Net profit |
49,725 |
55,938 |
80,557 |
11,158 |
||||||||||||||||
* The Company started to consolidate the financial results of Shenlanbao since July 4, 2023 and reported the results of |
||||||||||||||||||||
** The share-based compensation represents an unallocated item in the segment information because our management does |
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 RMB7.2203 to US$1.00, the noon buying rate in effect on March 29, 2024 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 "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 June 5, 2024 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: |
8399398 |
English Interpretation Line (Listen-only Mode) Entry Number: |
0418783 |
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 12, 2024 by dialing the following numbers:
United States Toll Free: |
1-877-344-7529 |
International: |
1-412-317-0088 |
Chinese Line Access Code: |
2937700 |
English Interpretation Line Access Code: |
1729095 |
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, 2023 |
March 31, 2024 |
|||||
RMB |
RMB |
USD |
||||
Assets |
||||||
Current assets |
||||||
Cash and cash equivalents |
396,905 |
321,780 |
44,566 |
|||
Restricted cash |
577,121 |
404,201 |
55,981 |
|||
Short-term investments |
2,996,527 |
3,162,661 |
438,023 |
|||
Accounts receivable, net |
693,110 |
726,815 |
100,663 |
|||
Current contract assets |
572,871 |
594,282 |
82,307 |
|||
Amount due from related parties |
65 |
163 |
23 |
|||
Prepaid expense and other assets |
189,846 |
163,368 |
22,626 |
|||
Total current assets |
5,426,445 |
5,373,270 |
744,189 |
|||
Non-current assets |
||||||
Non-current contract assets |
134,383 |
141,542 |
19,603 |
|||
Property, equipment and software, net |
33,878 |
32,950 |
4,564 |
|||
Intangible assets, net |
177,407 |
173,667 |
24,053 |
|||
Long-term investments |
211,758 |
217,397 |
30,109 |
|||
Right of use assets, net |
59,851 |
68,512 |
9,489 |
|||
Deferred tax assets |
24,190 |
25,042 |
3,468 |
|||
Goodwill |
80,751 |
80,751 |
11,184 |
|||
Total non-current assets |
722,218 |
739,861 |
102,470 |
|||
Total assets |
6,148,663 |
6,113,131 |
846,659 |
|||
Liabilities, Mezzanine Equity and Shareholders' Equity |
||||||
Current liabilities |
||||||
Amount due to related parties |
9,509 |
12,794 |
1,772 |
|||
Insurance premium payables |
591,953 |
405,672 |
56,185 |
|||
Accrued expenses and other current liabilities |
597,684 |
790,723 |
109,514 |
|||
Short-term loans |
137,557 |
75,173 |
10,411 |
|||
Current lease liabilities |
32,908 |
34,320 |
4,753 |
|||
Total current liabilities |
1,369,611 |
1,318,682 |
182,635 |
|||
Non-current liabilities |
||||||
Non-current lease liabilities |
27,293 |
33,465 |
4,635 |
|||
Deferred tax liabilities |
73,305 |
82,380 |
11,409 |
|||
Total non-current liabilities |
100,598 |
115,845 |
16,044 |
|||
Total liabilities |
1,470,209 |
1,434,527 |
198,679 |
|||
Mezzanine Equity |
||||||
Redeemable non-controlling interests |
92,760 |
92,685 |
12,837 |
|||
Shareholders' equity |
||||||
Class A ordinary shares |
112 |
112 |
16 |
|||
Class B ordinary shares |
27 |
27 |
4 |
|||
Treasury stock |
(12) |
(13) |
(2) |
|||
Additional paid-in capital |
7,003,423 |
6,897,876 |
955,345 |
|||
Accumulated other comprehensive income |
144,107 |
169,250 |
23,441 |
|||
Accumulated deficit |
(2,561,963) |
(2,481,333) |
(343,661) |
|||
Total shareholders' equity |
4,585,694 |
4,585,919 |
635,143 |
|||
Total liabilities, mezzanine equity and shareholders' equity |
6,148,663 |
6,113,131 |
846,659 |
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, 2023 |
December 31, 2023 |
March 31, 2024 |
||||||||
RMB |
RMB |
RMB |
USD |
|||||||
Operating revenue, net |
606,165 |
659,364 |
704,700 |
97,600 |
||||||
Operating costs and expenses(i) |
||||||||||
Operating costs |
(247,983) |
(302,143) |
(331,243) |
(45,877) |
||||||
Sales and marketing expenses |
(173,401) |
(174,817) |
(182,146) |
(25,227) |
||||||
General and administrative expenses |
(95,798) |
(95,959) |
(88,961) |
(12,321) |
||||||
Research and development expenses |
(78,655) |
(59,806) |
(55,986) |
(7,754) |
||||||
Total operating costs and expenses |
(595,837) |
(632,725) |
(658,336) |
(91,179) |
||||||
Operating profit |
10,328 |
26,639 |
46,364 |
6,421 |
||||||
Other income |
||||||||||
Interest income |
30,876 |
34,659 |
39,804 |
5,513 |
||||||
Foreign currency exchange gain |
282 |
6,956 |
1,514 |
210 |
||||||
Others, net |
5,613 |
2,848 |
1,463 |
203 |
||||||
Profit before income tax |
47,099 |
71,102 |
89,145 |
12,347 |
||||||
Income tax benefit/(expense) |
2,626 |
(15,164) |
(8,588) |
(1,189) |
||||||
Net profit |
49,725 |
55,938 |
80,557 |
11,158 |
||||||
Net loss attributable to mezzanine equity classified as non- |
- |
(3,119) |
(75) |
(10) |
||||||
Net profit attributable to ordinary shareholders |
49,725 |
59,057 |
80,632 |
11,168 |
||||||
Other comprehensive income/(loss): |
||||||||||
Foreign currency translation adjustment, net of tax |
3,386 |
(39,390) |
25,143 |
3,482 |
||||||
Unrealized gain on available for sale investments, net of tax |
1,957 |
- |
- |
- |
||||||
Total comprehensive income |
55,068 |
16,548 |
105,700 |
14,640 |
||||||
Total comprehensive loss attributable to mezzanine equity classified |
- |
(3,119) |
(75) |
(10) |
||||||
Total comprehensive income attributable to ordinary shareholders |
55,068 |
19,667 |
105,775 |
14,650 |
||||||
Weighted average number of ordinary shares used in computing net profit per share |
||||||||||
Basic |
3,866,785,745 |
3,698,466,876 |
3,696,619,172 |
3,696,619,172 |
||||||
Diluted |
4,027,428,601 |
3,762,270,456 |
3,756,462,107 |
3,756,462,107 |
||||||
Net profit per share attributable to ordinary shareholders |
||||||||||
Basic |
0.01 |
0.02 |
0.02 |
0.00 |
||||||
Diluted |
0.01 |
0.02 |
0.02 |
0.00 |
||||||
(i) Share-based compensation expenses are included in the operating costs and expenses as follows. |
||||||||||
For the Three Months Ended |
||||||||||
March 31, 2023 |
December 31, 2023 |
March 31, 2024 |
||||||||
RMB |
RMB |
RMB |
USD |
|||||||
Sales and marketing expenses |
(16,529) |
(1,991) |
(1,820) |
(252) |
||||||
General and administrative expenses |
(26,460) |
(18,693) |
(14,327) |
(1,984) |
||||||
Research and development expenses |
(3,937) |
(2,104) |
(2,983) |
(413) |
||||||
Total |
(46,926) |
(22,788) |
(19,130) |
(2,649) |
WATERDROP INC. |
||||||||||
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS |
||||||||||
(All amounts in thousands, unless otherwise noted) |
||||||||||
For the Three Months Ended |
||||||||||
March 31, 2023 |
December 31, 2023 |
March 31, 2024 |
||||||||
RMB |
RMB |
RMB |
USD |
|||||||
Net profit attributable to the Company's ordinary shareholders |
49,725 |
59,057 |
80,632 |
11,168 |
||||||
Add: |
||||||||||
Share-based compensation expense attributable to the Company's |
46,926 |
22,556 |
19,260 |
2,667 |
||||||
Foreign currency exchange gain |
(282) |
(6,956) |
(1,514) |
(210) |
||||||
Adjusted net profit attributable to the Company's ordinary |
96,369 |
74,657 |
98,378 |
13,625 |