Waterdrop (WDH) Q2 2024 earnings summary

Executive summary

• Net profit attributable to ordinary shareholders surged 307% year-over-year to CNY 88.3 million in Q2 2024, with positive operating cash flow maintained.

• Celebrated eighth anniversary, emphasizing transformation, healthy operations, and sustainable growth amid a complex environment.

• Maintained profitability for 10 consecutive quarters since Q1 2022.

• Focused on AI and large language models, including piloting the Shuishou model, to enhance competitiveness and operational efficiency.

• Special cash dividend of US$0.02 per ADS approved, with payment expected in November 2024.

Financial highlights

• Net operating revenue was CNY 676 million, stable year-over-year but down 4.1% quarter-over-quarter.

• Net profit attributable to ordinary shareholders rose 307% year-over-year to CNY 88.3 million.

• Insurance business FYP reached CNY 1.78 billion, down 19% year-over-year but up 1.4% sequentially, with an operating profit margin over 21%.

• Operating costs and expenses fell 13.4% year-over-year to CNY 623.8 million.

• Operating cash inflow was positive at CNY 50 million.

Outlook and guidance

• Targeting double-digit revenue growth for the year while maintaining robust profitability.

• Ongoing investment in AI and technology to enhance service offerings and operational efficiency.

• Confident in long-term benefits from high-quality development despite short-term industry challenges.

• Focus remains on digitalization trends in clinical trials and multichannel marketing to broaden the client base.