Financial and Operational Highlights for the Third Quarter of 2025
Substantial profit growth: In the third quarter of 2025, operating profit was RMB113.8 million (US$16.0 million), marking a strong year-over-year increase of 329.8%. Net profit attributable to our ordinary shareholders reached RMB158.5 million (US$22.3 million), representing a solid year-over-year increase of 60.1%.
Rapid revenue expansion in the core business: Net operating revenue was RMB974.9 million (US$136.9 million), representing an increase of 38.4% year-over-year. Insurance-related income amounted to RMB869.7 million (US$122.2 million) in the third quarter of 2025, rising by 44.8% from the same period of 2024.
Medical crowdfunding coverage: As of September 30, 2025, approximately 485 million people had cumulatively donated a total of RMB71.2 billion to 3.61 million patients through Waterdrop Medical Crowdfunding.
Patient recruitment performance: As of September 30, 2025, the Company had cumulatively enrolled 13,282 patients into 1,491 clinical trial programs through the E-Find Platform.
Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop, commented, "We are pleased to announce another quarter of outstanding performance, marked by robust revenue expansion and significant profit growth.
For our insurance business, we upgraded our data infrastructure and real-time identification capabilities, allowing us to gain profound insights of our users within milliseconds. This enables us to optimize traffic utilization and sharpen user-acquisition performance, fueling a 32.3% sequential increase in insurance premiums. Moreover, we prioritize user needs and continue to deliver innovative insurance products to users and their loved ones. In this quarter, we introduced 'Quan Jia Fu Family Protection Plan', which covers up to nine family members under a single policy, and upgraded 'Guo Min Bao Mid-to-High-End Medical Insurance' with an expanded network of quality private hospitals.
Our commitment to AI is creating a faster, more efficient, and more intelligent platform. By deploying AI at key touchpoints, we are unlocking new levels of performance. Premiums facilitated by our 'AI Medical Insurance Expert' increased by 82% on a quarter-over-quarter basis. Thanks to our 'KEYI.AI' underwriting assistant, underwriting workflow is streamlined and the corresponding processing time is dramatically reduced, turning tasks that previously took several minutes into a near-instantaneous process. Meanwhile, our 'AI Customer Service Agent' can now independently handle approximately 600,000 inquiries in one month. To democratize these capabilities, we have launched 'Waterdrop Sea.AI', a low-code platform that empowers our employees to build and deploy custom AI solutions, further accelerating innovation across the organization.
During the third quarter, Waterdrop Medical Crowdfunding markedly fortified its campaign risk control measures. By analyzing donation visit data to identify subtle patterns, advanced analytics have improved the identification capabilities of our algorithm model. This, in turn, has improved automatic early-warning systems to better detect and reduce fraud. This quarter also witnessed the rollout of a strengthened donor evaluation system, which now offers comprehensive evaluation rationales and gives donors clear insights into how their contributions are allocated and used. These measures have profoundly enhanced the transparency, rationality, and traceability of fund distribution.
During this quarter, the E-Find Platform has consistently delivered satisfactory fulfillment quality by collaborating across our ecosystem channels and enhancing digital capabilities. At the same time, the number of ongoing projects has increased steadily. In the third quarter, we expanded our collaboration network by partnering with 216 pharmaceutical and contract research organizations. Furthermore, the number of patients enrolled reached 1,066, fueling a 31.3% year-over-year increase in revenue.
We deeply value the trust of our investors and are dedicated to delivering strong returns for shareholders. By the end of November 2025, the company had cumulatively repurchased around 58.1 million ADSs from the open market. We also recently completed our latest cash dividend of approximately US$10.9 million.
In 2025 and beyond, we expect business momentum to continue. AI is driving more and more pragmatic advancements in our business, shaping future services for better experience, improving efficiency, and bringing tangible value to users and our shareholders."
Financial Results for the Third Quarter of 2025
Operating revenue, net
Net operating revenue for the third quarter of 2025 increased by 38.4% year-over-year to RMB974.9 million (US$136.9 million) from RMB704.1 million for the same period of 2024. On a quarter-over-quarter basis, net operating revenue increased by 16.3%.
Insurance-related income includes insurance brokerage income and technical service income. Insurance brokerage income represents brokerage commissions earned from insurance companies. Technical service income is derived from providing technical services including analytics and intelligent recommendation service, risk assessment technical service, customer relationship maintenance, customer complaint management, claim assistance and investigation service, and user referral services, among other things, to insurance companies, insurance brokers, and agency companies. We leverage multi-dimensional consumer insights to deliver analytics and intelligent recommendation services, enabling policyholders to be matched with more suitable products and improving sales efficiency. We provide risk assessment services through the analysis of potential insureds' information, providing risk assessment results that help insurers refine their risk analysis capabilities. Consideration for each of these services is primarily based on standard unit prices and service volumes rendered during the period. Our insurance-related income amounted to RMB869.7 million (US$122.2 million) in the third quarter of 2025, representing an increase of 44.8% year-over-year from RMB600.7 million for the third quarter of 2024, which was mainly due to the increase in technical service income. Our technical service income amounted to RMB196.4 million (US$27.6 million) in the third quarter of 2025, comparing with RMB10.2 million for the same quarter of 2024. On a quarter-over-quarter basis, insurance-related income increased by 17.8%.
Crowdfunding service fees represent the service income earned when patients successfully withdraw the proceeds from their crowdfunding campaigns. Our role is to operate the Waterdrop Medical Crowdfunding platform to provide crowdfunding related services through the internet, enabling patients with significant medical bills to seek help from caring hearts through technology (the "medical crowdfunding services"). Our medical crowdfunding services generally consist of providing technical and internet support, managing, reviewing and supervising the crowdfunding campaigns, providing comprehensive risk management and anti-fraud measures, and facilitating the collection and transfer of the funds. For the third quarter of 2025, we generated RMB65.7 million (US$9.2 million) in service fees, maintaining nearly the same level as RMB65.8 for the third quarter of 2024. On a quarter-over-quarter basis, crowdfunding service fees slightly decreased by 2.6%.
Digital clinical trial solution income represents the service income earned from our customers mainly including biopharmaceutical companies and leading biotechnology companies. We match qualified and suitable patients for enrollment in clinical trials for our customers and generate digital clinical trial solution revenue for successful matches and we typically charge our customers a fixed unit price per successful match. For the third quarter of 2025, our digital clinical trial solution income amounted to RMB31.9 million (US$4.5 million), representing an increase of 31.3% from RMB24.3 million in the same period of 2024. On a quarter-over-quarter basis, digital clinical trial solution income increased by 14.9%.
Operating costs and expenses
Operating costs and expenses increased by 27.1% year-over-year to RMB861.1 million (US$121.0 million) for the third quarter of 2025. On a quarter-over-quarter basis, operating costs and expenses increased by 16.3%.
Operating costs increased by 39.5% year-over-year to RMB475.1 million (US$66.7 million) for the third quarter of 2025, as compared with RMB340.6 million for the third quarter of 2024, which was primarily driven by (i) an increase of RMB66.7 million in costs of referral and service fees, (ii) an increase of RMB32.4 million in personnel costs, and (iii) an increase of RMB16.9 million in the costs for the crowdfunding consultants team. On a quarter-over-quarter basis, operating costs increased by 14.1% from RMB416.5 million, primarily due to (i) an increase of RMB25.6 million in costs of referral and service fees, and (ii) an increase of RMB16.4 million in personnel costs.
Sales and marketing expenses increased by 40.3% year-over-year to RMB243.0 million (US$34.1 million) for the third quarter of 2025, as compared with RMB173.2 million for the same quarter of 2024. The increase was primarily due to an increase of RMB79.0 million in marketing expenses for third-party traffic channels, partially offset by a decrease of RMB7.1 million in outsourced sales and marketing service fees to third parties. On a quarter-over-quarter basis, sales and marketing expenses increased by 22.2% from RMB198.8 million, primarily due to an increase of RMB49.1 million in marketing expenses for third-party traffic channels.
General and administrative expenses decreased by 23.7% year-over-year to RMB84.7 million (US$11.9 million) for the third quarter of 2025, as compared with RMB111.0 million for the same quarter of 2024. The year-over-year variance was due to (i) a decrease of RMB15.6 million in personnel costs and share-based compensation expenses, and (ii) an impairment of intangible assets related to Shenlanbao of RMB20.6 million recorded in the third quarter of 2024, with no corresponding item in the third quarter of 2025, and offset by (iii) an increase of RMB8.8 million in allowance for credit losses. On a quarter-over-quarter basis, general and administrative expenses increased by 15.4% from RMB73.4 million, due to an increase of RMB19.1 million in allowance for credit losses, partially offset by a decrease of RMB6.2 million in personnel costs and share-based compensation expenses.
Research and development expenses increased by 10.2% year-over-year to RMB58.3 million (US$8.2 million) for the third quarter of 2025, as compared with RMB53.0 million for the same period of 2024, which was primarily driven by (i) an increase of RMB3.2 million in personnel costs and share-based compensation expenses, and (ii) an increase of RMB2.7 million in cloud server expense and other related technical support expenses. On a quarter-over-quarter basis, research and development expenses increased by 12.3% from RMB51.9 million. The increase was primarily due to (i) an increase of RMB4.7 million in personnel costs and share-based compensation expenses, and (ii) an increase of RMB2.2 million in cloud server and other related technical support expenses.
Operating profit for the third quarter of 2025 was RMB113.8 million (US$16.0 million), as compared with RMB26.5 million for the third quarter of 2024 and RMB97.3 million for the second quarter of 2025.
Interest income for the third quarter of 2025 was RMB37.5 million (US$5.3 million), as compared with RMB36.0 million for the third quarter of 2024 and RMB29.5 million for the second quarter of 2025.
Income tax expense for the third quarter of 2025 was RMB9.6 million (US$1.4 million), as compared with income tax benefit of RMB7.8 million for the third quarter of 2024 and income tax benefit of RMB2.9 million for the second quarter of 2025.
Net profit attributable to the Company's ordinary shareholders for the third quarter of 2025 was RMB158.5 million (US$22.3 million), as compared with RMB99.0 million for the same period of 2024, and RMB140.2 million for the second quarter of 2025.
Adjusted net profit attributable to the Company's ordinary shareholders (non-GAAP(1)) for the third quarter of 2025 was RMB167.7 million (US$23.6 million), as compared with RMB126.0 million for the same period of 2024 and RMB151.6 million for the second quarter of 2025.
Cash position(2)
As of September 30, 2025, cash position of the Company was RMB3,510.0 million (US$493.1 million), as compared with RMB3,670.3 million as of December 31, 2024.
(1) See the sections entitled "Non-GAAP Financial Measure" and "Reconciliations of GAAP and Non-GAAP Results" for more information about the non-GAAP
measures referred to in this announcement.(2) Cash position includes cash and cash equivalents, short-term investments, and long-term debt investments included in long-term investments.
Share Repurchase Programs
Pursuant to the share repurchase programs launched in September 2021, September 2022, September 2023, September 2024, and September 2025, respectively, we had cumulatively repurchased approximately 58.1 million ADSs from the open market with cash for a total consideration of approximately US$113.4 million as of November 30, 2025.
Supplemental Information
We organize and report our business in the following operating segments:
Insurance, which mainly includes insurance brokerage service and technical service;
Crowdfunding, which mainly includes crowdfunding service; and
Others, which do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and are aggregated.
The table below sets forth the segment operating results, with three-month and nine-month ended September 30, 2024 retrospectively adjusted to conform to this presentation.
For the Three Months Ended
For the Nine Months Ended
September 30, 2024
June 30, 2025
September 30, 2025
September 30, 2024
September 30, 2025
RMB
RMB
RMB
USD
RMB
RMB
USD
(All amounts in thousands)
Operating revenue, net
Insurance
600,726
738,561
869,660
122,160
1,781,335
2,266,209
318,332
Crowdfunding
65,839
67,419
65,657
9,223
202,512
200,207
28,123
Others
37,576
31,979
39,543
5,555
101,150
100,097
14,061
Total consolidated operating
revenue, net
704,141
837,959
974,860
136,938
2,084,997
2,566,513
360,516
Operating costs and expenses
Insurance
(478,225)
(567,642)
(693,216)
(97,376)
(1,406,716)
(1,767,433)
(248,271)
Crowdfunding
(83,741)
(99,519)
(98,771)
(13,874)
(275,587)
(295,589)
(41,521)
Others
(69,292)
(58,620)
(60,291)
(8,468)
(191,748)
(172,911)
(24,288)
Operating profit/(loss)
Insurance
122,501
170,919
176,444
24,784
374,619
498,776
70,061
Crowdfunding
(17,902)
(32,100)
(33,114)
(4,651)
(73,075)
(95,382)
(13,398)
Others
(31,716)
(26,641)
(20,748)
(2,913)
(90,598)
(72,814)
(10,227)
Total segment operating profit
72,883
112,178
122,582
17,220
210,946
330,580
46,436
Unallocated items*
(46,413)
(14,842)
(8,817)
(1,240)
(85,748)
(43,586)
(6,121)
Total consolidated operating
profit
26,470
97,336
113,765
15,980
125,198
286,994
40,315
Total other income
60,842
40,032
54,331
7,632
141,989
136,053
19,111
