BEIJING, Dec. 6, 2022 /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 third quarter ended September 30, 2022.
Financial and Operational Highlights for the Third Quarter of 2022
Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We delivered another quarter of solid financial performance with revenue increasing by 10.1% sequentially despite the COVID-19 resurgence and soft macroeconomic environment. In addition, our net profit reached RMB169.6 million in the third quarter, which once again demonstrated our ability to maintain our consistent momentum toward achieving the profitability goal we set for the full year.
For our insurance business, we continually launched customized critical illness insurance products waiving health declarations, enriching our product offering to the next level. During the quarter, we enhanced our take rates and sustained our repurchase and renewal rates at high levels. By leveraging the competitive advantages born out of our unique integrated business model, and by maintaining high-frequency engagements with our users at all levels through various channels, we have been able to proactively align our insurance business directions and operational strategies with what users really need. Take one of our customized critical illness products as an example: the product was designed for the children, offering additional medical service benefits for leukemia. It has filled the gap in the insurance coverage for the pediatric group and provided them with more comprehensive protection. Meanwhile, to further meet the needs of younger users, we provided more cost-effective products for this group, and consequently, the premiums contributed from users under 40 increased by 20% quarter over quarter.
For the medical crowdfunding business, our Operational Transparency Committee continued to enhance operational controls related to authenticity and transparency, and launched several new initiatives to increase the transparency of fund flows for each donation. Thanks to our effective measures, there has been no malicious fundraising activities on our platform for several consecutive months.
In the third quarter, our E-find Patient Platform sustained its growth momentum, recruiting more than 900 patients for clinical trials and bringing the total number of clinical trial programs to over 400. In particular, our E-find Patient Platform has established collaborations with a number of leading partners, which has allowed us to work on several international multicenter clinical trials initiated by multinational pharmaceutical companies. Our unique digital patient recruitment capabilities have helped us build up an influential position in the industry.
Looking ahead, we will continue to uphold our commitment to offering multi-level protection, establishing ourselves as a role model for Chinese insurtech and healthcare platforms, and generating increasing value for our users, shareholders, and society."
Financial Results for the Third Quarter of 2022
Operating revenue, net
Net operating revenue for the third quarter of 2022 decreased by 0.9% year over year to RMB772.2 million (US$108.6million) from RMB779.3 million for the same period of 2021, which remained relatively flat.
Operating costs and expenses
Operating costs and expenses decreased by 50.5% year over year to RMB639.6 million (US$89.9 million) for the third quarter of 2022, due to the effective cost control measures taken since the third quarter of 2021. On a quarter-over-quarter basis, operating costs and expenses increased by 17.3%.
Operating profit for the third quarter of 2022 was RMB132.6 million (US$18.6 million), compared with an operating loss of RMB513.0 million for the third quarter of 2021 and a profit of RMB155.9 million for the second quarter of 2022.
Interest income for the third quarter of 2022 was RMB24.3 million (US$3.4 million), compared with RMB11.9 million for the same period of 2021. The increase was primarily due to the increase in our bank balance and short-term investments as a result of the positive operating cash flow generated from the business.
Income tax benefit for the third quarter of 2022 was RMB9.1 million (US$1.3million), compared with an income tax benefit of RMB8.2 million for the same period of 2021.
Net profit attributable to Waterdrop for the third quarter of 2022 was RMB169.6 million (US$23.8million), compared with a net loss of RMB477.0 million for the same period of 2021, and a net profit of RMB206.9 million for the second quarter of 2022.
Adjusted net profit attributable to Waterdrop for the third quarter of 2022 was RMB215.7 million (US$30.3 million), compared with an adjusted net loss of RMB453.6 million for the same period of 2021, and an adjusted net profit of RMB232.5 million for the second quarter of 2022.
Cash and cash equivalents and short-term investments
As of September 30, 2022, the Company had combined cash and cash equivalents and short-term investments of RMB3,588.6 million (US$504.5 million), as compared with RMB2,787.1 million as of December 31, 2021.
Share Repurchase Plan
Pursuant to the share repurchase program launched in September 2021 and amended in September 2022, as of the end of the third quarter of 2022, we cumulatively repurchased approximately 5.8 million ADSs from the open market with cash for a total consideration of approximately US$8.5 million.
Exchange Rate
This announcement contains translations of certain RMB amounts into U.S. dollars ("USD" or "US$") 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 RMB7.1135 to US$1.00, the noon buying rate in effect on September 30, 2022 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 measures, such as adjusted net operating revenue and adjusted net profit/loss, in evaluating the Company's operating results and for financial and operational decision-making purposes. Adjusted net operating revenue represents net operating revenue excluding management fee income from mutual aid business. Adjusted net profit/loss represents net profit/loss excluding share-based compensation expense, the impact of terminating the mutual aid plan and foreign currency exchange gain or losses. Such adjustments have no impact on income tax.
The non-GAAP financial measures are 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 measures have limitations as analytical tools and when assessing the Company's operating performance, investors should not consider them 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 operating revenue and adjusted net profit/loss presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
The Company mitigates these limitations by reconciling the non-GAAP financial measures 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 December 6, 2022 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:
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 |
Elite Entry Number: |
5857670 |
Please dial in 15 minutes before the call is scheduled to begin and provide the Elite Entry Number to join the call.
A telephone replay will be accessible two hours after the conclusion of the conference call through December 13, 2022 by dialing the following numbers:
United States Toll Free: |
1-877-344-7529 |
International: |
1-412-317-0088 |
Access Code: |
4470089 |
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. |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
(All amounts in thousands, unless otherwise noted) |
|||||
As of |
|||||
December 31,2021 |
September 30,2022 |
||||
RMB |
RMB |
USD |
|||
Assets |
|||||
Current assets |
|||||
Cash and cash equivalents |
817,719 |
598,353 |
84,115 |
||
Restricted cash |
667,664 |
464,646 |
65,319 |
||
Short-term investments |
1,969,362 |
2,990,238 |
420,361 |
||
Accounts receivable, net |
643,843 |
762,402 |
107,177 |
||
Current contract assets |
563,611 |
389,314 |
54,729 |
||
Amount due from related parties |
1,049 |
477 |
67 |
||
Prepaid expense and other assets |
369,794 |
338,962 |
47,650 |
||
Total current assets |
5,033,042 |
5,544,392 |
779,418 |
||
Non-current assets |
|||||
Non-current contract assets |
29,889 |
93,728 |
13,176 |
||
Property, equipment and software, net |
44,762 |
35,302 |
4,963 |
||
Intangible assets, net |
56,753 |
56,649 |
7,964 |
||
Long-term investments |
11,812 |
12,034 |
1,692 |
||
Right of use assets, net |
59,081 |
24,944 |
3,507 |
||
Deferred tax assets |
11,840 |
- |
- |
||
Goodwill |
3,420 |
3,420 |
481 |
||
Total non-current assets |
217,557 |
226,077 |
31,783 |
||
Total assets |
5,250,599 |
5,770,469 |
811,201 |
||
Liabilities and Shareholders' Equity |
|||||
Current liabilities |
|||||
Amount due to related parties |
20,449 |
11,886 |
1,671 |
||
Insurance premium payables |
685,028 |
468,504 |
65,861 |
||
Deferred revenue |
803 |
- |
- |
||
Accrued expenses and other current liabilities |
498,752 |
579,313 |
81,439 |
||
Current lease liabilities |
44,113 |
15,815 |
2,223 |
||
Total current liabilities |
1,249,145 |
1,075,518 |
151,194 |
||
Non-current liabilities |
|||||
Non-current lease liabilities |
14,477 |
6,203 |
872 |
||
Deferred tax liabilities |
13,551 |
20,501 |
2,882 |
||
Total non-current liabilities |
28,028 |
26,704 |
3,754 |
||
Total liabilities |
1,277,173 |
1,102,222 |
154,948 |
||
Shareholders' equity |
|||||
Class A ordinary shares |
107 |
107 |
15 |
||
Class B ordinary shares |
27 |
27 |
4 |
||
Treasury stock |
- |
(2) |
- |
||
Additional paid-in capital |
7,329,420 |
7,368,355 |
1,035,827 |
||
Accumulated other comprehensive (loss)/income |
(21,492) |
152,881 |
21,492 |
||
Accumulated deficit |
(3,334,636) |
(2,853,121) |
(401,085) |
||
Total shareholders' equity |
3,973,426 |
4,668,247 |
656,253 |
||
Total liabilities and shareholders' equity |
5,250,599 |
5,770,469 |
811,201 |
WATERDROP INC. |
||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
||||||||||||||
(All amounts in thousands, except for share and per share data, or otherwise noted) |
||||||||||||||
For the Three Months Ended |
For the Nine Months Ended September 30, |
|||||||||||||
September 30, 2021 |
June 30, 2022 |
September 30, 2022 |
2021 |
2022 |
||||||||||
RMB |
RMB |
RMB |
USD |
RMB |
RMB |
USD |
||||||||
Operating revenue, net |
779,305 |
701,418 |
772,192 |
108,553 |
2,602,026 |
2,122,298 |
298,348 |
|||||||
Operating costs and expenses(i) |
||||||||||||||
Operating costs |
(296,317) |
(244,616) |
(341,293) |
(47,978) |
(857,342) |
(740,789) |
(104,138) |
|||||||
Sales and marketing expenses |
(781,671) |
(144,423) |
(137,919) |
(19,388) |
(2,863,759) |
(486,685) |
(68,417) |
|||||||
General and administrative expenses |
(111,419) |
(86,054) |
(82,039) |
(11,533) |
(381,807) |
(270,088) |
(37,968) |
|||||||
Research and development expenses |
(102,889) |
(70,402) |
(78,378) |
(11,018) |
(288,023) |
(219,605) |
(30,872) |
|||||||
Total operating costs and expenses |
(1,292,296) |
(545,495) |
(639,629) |
(89,917) |
(4,390,931) |
(1,717,167) |
(241,395) |
|||||||
Operating (loss)/profit |
(512,991) |
155,923 |
132,563 |
18,636 |
(1,788,905) |
405,131 |
56,953 |
|||||||
Other income |
||||||||||||||
Interest income |
11,928 |
15,213 |
24,331 |
3,420 |
36,470 |
54,036 |
7,596 |
|||||||
Foreign currency exchange gain/(loss) |
12,708 |
163 |
(1,012) |
(142) |
14,965 |
(196) |
(28) |
|||||||
Others, net |
3,133 |
15,888 |
4,598 |
646 |
8,566 |
44,975 |
6,323 |
|||||||
(Loss)/profit before income tax |
(485,222) |
187,187 |
160,480 |
22,560 |
(1,728,904) |
503,946 |
70,844 |
|||||||
Income tax benefit/(expense) |
8,247 |
19,756 |
9,134 |
1,284 |
226,021 |
(22,431) |
(3,153) |
|||||||
Net (loss)/profit attributable to Waterdrop Inc. |
(476,975) |
206,943 |
169,614 |
23,844 |
(1,502,883) |
481,515 |
67,691 |
|||||||
Preferred shares redemption value accretion |
- |
- |
- |
- |
(152,287) |
- |
- |
|||||||
Net (loss)/profit attributable to ordinary shareholders |
(476,975) |
206,943 |
169,614 |
23,844 |
(1,655,170) |
481,515 |
67,691 |
|||||||
Net (loss)/profit |
(476,975) |
206,943 |
169,614 |
23,844 |
(1,502,883) |
481,515 |
67,691 |
|||||||
Other comprehensive (loss)/income: |
||||||||||||||
Foreign currency translation adjustment, net of tax |
(14,140) |
83,901 |
93,742 |
13,178 |
(26,175) |
169,860 |
23,879 |
|||||||
Unrealized (loss)/gains on available for sale investments, net of |
(181) |
3,100 |
341 |
48 |
38 |
4,513 |
634 |
|||||||
Comprehensive (loss)/income |
(491,296) |
293,944 |
263,697 |
37,070 |
(1,529,020) |
655,888 |
92,204 |
|||||||
Weighted average number of ordinary shares used in computing |
||||||||||||||
Basic |
3,940,716,014 |
3,926,602,657 |
3,916,993,146 |
3,916,993,146 |
2,672,182,796 |
3,927,371,780 |
3,927,371,780 |
|||||||
Diluted |
3,940,716,014 |
4,006,060,346 |
3,999,147,416 |
3,999,147,416 |
2,672,182,796 |
4,007,639,428 |
4,007,639,428 |
|||||||
Net (loss)/profit per share attributable to ordinary shareholders |
||||||||||||||
Basic |
(0.12) |
0.05 |
0.04 |
0.01 |
(0.62) |
0.12 |
0.02 |
|||||||
Diluted |
(0.12) |
0.05 |
0.04 |
0.01 |
(0.62) |
0.12 |
0.02 |
|||||||
(i) Share-based compensation expenses are included in the operating costs and expenses as follows. |
||||||||||||||
For the Three Months Ended |
For the Nine Months Ended September 30, |
|||||||||||||
September 30, 2021 |
June 30, 2022 |
September 30, 2022 |
2021 |
2022 |
||||||||||
RMB |
RMB |
RMB |
USD |
RMB |
RMB |
USD |
||||||||
Sales and marketing expenses |
(2,363) |
(1,771) |
(1,912) |
(269) |
(8,977) |
(6,485) |
(912) |
|||||||
General and administrative expenses |
(28,412) |
(19,976) |
(19,665) |
(2,764) |
(164,372) |
(56,562) |
(7,951) |
|||||||
Research and development expenses |
(5,265) |
(3,998) |
(3,975) |
(559) |
(21,038) |
(11,257) |
(1,582) |
|||||||
Total |
(36,040) |
(25,745) |
(25,552) |
(3,592) |
(194,387) |
(74,304) |
(10,445) |
WATERDROP INC. |
||||||||||||||
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS |
||||||||||||||
(All amounts in thousands, unless otherwise noted) |
||||||||||||||
For the Three Months Ended |
For the Nine Months Ended September 30, |
|||||||||||||
September 30, 2021 |
June 30, 2022 |
September 30, 2022 |
2021 |
2022 |
||||||||||
RMB |
RMB |
RMB |
USD |
RMB |
RMB |
USD |
||||||||
Net operating revenue |
779,305 |
701,418 |
772,192 |
108,553 |
2,602,026 |
2,122,298 |
298,348 |
|||||||
Less: |
||||||||||||||
Management fee income |
- |
- |
- |
- |
2,745 (ii) |
- |
- |
|||||||
Adjusted net operating revenue |
779,305 |
701,418 |
772,192 |
108,553 |
2,599,281 |
2,122,298 |
298,348 |
|||||||
For the Three Months Ended |
For the Nine Months Ended September 30, |
|||||||||||||
September 30, 2021 |
June 30, 2022 |
September 30, 2022 |
2021 |
2022 |
||||||||||
RMB |
RMB |
RMB |
USD |
RMB |
RMB |
USD |
||||||||
Net (loss)/profit |
(476,975) |
206,943 |
169,614 |
23,844 |
(1,502,883) |
481,515 |
67,691 |
|||||||
Add: |
||||||||||||||
Share-based compensation expense |
36,040 |
25,745 |
25,552 |
3,592 |
194,387 |
74,304 |
10,445 |
|||||||
Foreign currency exchange (gain)/loss |
(12,708) |
(163) |
1,012 |
142 |
(14,965) |
196 |
28 |
|||||||
Impact of terminating the mutual aid plan (iii) |
- |
- |
19,549 |
2,748 |
96,697 |
19,549 |
2,748 |
|||||||
Adjusted net (loss)/profit |
(453,643) |
232,525 |
215,727 |
30,326 |
(1,226,764) |
575,564 |
80,912 |
|||||||
(ii) This represents the net management fee revenue related to the mutual aid business for the three months ended March 31, 2021 after recording the RMB19.9 million reduction of |
||||||||||||||
(iii) This represents the estimated cost of medical expenses and cost of one-year health insurance coverage. RMB19.9 million (US$3.0 million) was accounted for as a reduction of |
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