Waterdrop Inc.

Waterdrop reported second-quarter net operating revenue of RMB 1.448 billion, up 72.8% year over year. Insurance business revenue was about RMB 1.333 billion, up 80.5% year over year. Total operating costs and expenses were about RMB 1.337 billion, up 80.5% year over year; operating profit was about RMB 111 million, up 14.3% year over year and 39.2% quarter over quarter; and net profit attributable to shareholders was about RMB 126 million, down 10.3% year over year but up 27.9% quarter over quarter. Cash and cash equivalents, short-term investments, and other cash positions totaled about RMB 2.653 billion as of June 30, 2026. For guidance, management said full-year 2026 total revenue should grow more than 40% year over year and operating profit should grow over 10%.

Sheng Peng framed the quarter as evidence that Waterdrop is sustaining growth while staying profitable for a tenth consecutive quarter. He emphasized that AI is becoming a core driver across the platform, supporting better conversion, efficiency, and new product development, while the company continues to invest in core businesses and selected new initiatives. He also stressed capital return, highlighting the newly approved dividend and repurchase program as a sign of confidence in the cash position and long-term outlook.

Jieru Li said the quarter delivered RMB 1.448 billion of revenue, with insurance accounting for RMB 1.333 billion and non-insurance businesses contributing 7.9% of revenue, including RMB 63.6 million from medical crowdfunding service fees and RMB 35.2 million from digital clinical trial solutions. She detailed cost pressure from growth investment: sales and marketing was nearly RMB 638 million, driven largely by higher third-party traffic spend, while G&A was RMB 93.4 million and R&D was RMB 68.8 million. She also noted cash and cash equivalents, short-term investments, and other cash positions of RMB 2.653 billion, and reiterated the board-approved dividend of about $10.8 million plus the up-to-$50 million buyback over 12 months.

Analysts focused on Hong Kong insurance sentiment, products for customers with preexisting conditions, AI commercialization, and the company’s acquisition spend. Management said recent Hong Kong tax media coverage reflected enforcement of long-standing rules rather than a new policy, and that underlying demand drivers in the Hong Kong and mainland insurance markets remain intact. On preexisting conditions, management said the opportunity is large because traditional insurance has often left that population underserved, and Waterdrop aims to match customers to differentiated products using platform data and AI. On AI, management said it is not being commercialized as a standalone business; instead, its value should show up through higher top-line growth and profitability, while R&D spending should stay in a reasonable range as AI usage scales.