Good morning, everyone. This is Tracy Lee from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. (Operator instructions were provided.) As a reminder, today's conference call is being recorded. Please note that discussion today will include forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward-looking statements, except as required by applicable law. Also, this call includes discussion of certain non-GAAP measures. Please refer to our earnings release for a reconciliation between non-GAAP and GAAP measures. Joining us today on the call are the Chairman and CEO; the General Manager of the Insurance Business; the Head of Finance; and the Board Secretary. We'll be happy to take questions during the Q&A portion of the conference call. Now I will hand the call to our CEO.
Dear investors and analysts, thank you for joining Waterdrop's fourth quarter and fiscal year 2025 earnings conference call. Looking back at 2025, we executed firmly on our AI strategy across insurance and healthcare, delivering tangible progress in both AI application and business growth. Our financial performance was robust. We saw significant top-line and bottom-line expansion, further solidifying our core fundamentals. For the fiscal year 2025, our revenue reached CNY 3.98 billion, up 43.5%; net profit attributable to ordinary shareholders reached CNY 570 million, registering year-on-year growth of 54.8%. Notably, we met our guidance to the market and have now delivered GAAP profitability for 16 consecutive quarters. Our insurance segment performed as announced with revenue surging 51.3% and an operating margin of roughly 18%. Furthermore, our LLM integration significantly enhanced the value of our medical performance platform. Our platform has responded to 3.68 million patient inquiries, and our digital client solutions team enrolled over 4,000 patients this year. Reflecting the strong performance in the second half of 2025, our Board approved a cash dividend of CNY 0.03 per ADS, totaling approximately $10.8 million; this will be paid in late April to early May to shareholders of record as of April 24, 2026 U.S. ET time. Meanwhile, our share repurchase program remains on track with 60.7 million ADS repurchased for about $118 million to date. On technology plans, we are accelerating our shift to become a native AI company. As of year-end 2025, we filed 72 LLM-related patent applications, including numerous international filings. Throughout the year, we deployed LLMs for natural and virtual interactions across all core workflows — from acquisition and conversion, to claims and customer service, through quality control and R&D. Every stage is now production-ready, delivering significant operating gains. This capability is unified under our Guardian AI platform, our internal platform for task-specific agents that is now also open to industry partners. Beyond this, we are pioneering open collaboration infrastructure, which we call Guardian AI Core or Cloud Agent, built on a distributed architecture. Our cloud layer enables different AI agents to autonomously communicate and collaborate. Early demos have already validated core workflows: seamless multi-round dialogue and automated handoffs between AI agents. In terms of ESG, we collaborated with 19 organizations to launch over 15,500 programs, earning global recognition for our carbon reduction efforts and upgrading our ESG rating to A+. As we enter our 10th anniversary in 2026, our goal is to move beyond using AI tools to becoming a truly AI-enabled company. We aim to fundamentally reconstruct our entire value chain, embedding AI as a sustainable competitive advantage. We expect to extend the momentum this year with moderately higher investments in marketing and AI, targeting double-digit growth in both revenue and profit. Now I will pass to Xiaoying Xu to introduce the development of the insurance business.
Thanks. In the fourth quarter, our insurance business continued its strong momentum. Insurance-related income surged 125% year-on-year to CNY 1.31 billion, while operating profit grew 42% year-over-year. On the traffic side, we have sharpened our real-time user monetization by leveraging our sales-deployed AI models; we can now capture potential user attributes within milliseconds in high-concurrency traffic. This allows for real-time updates and personalization, which has significantly improved the accuracy of our high-quality traffic for future sales and made a solid condition for our FYP growth. Regarding product supply, our market-first product version 2.0 was launched this quarter; new zero-deductible features now cover long-term medical costs and route users to medical centers. Additionally, our pre-existing condition product gained strong traction with FYP at 7%. Our disability insurance contributed about CNY 100 million, validating our long-term strategy. And most importantly, AI is now embedded in every node of our operations. On the user side, our AI Pro insurance engine on the mini-program drove a 33% sequential increase in premium, while our AI medical insurance experts generated over 50 million interactions, up 145% quarter-over-quarter. We have also expanded capabilities for standard health products; we can generate incremental monthly premiums of over CNY 1 million. For human agent empowerment, our large-banner copilot accumulated over 370,000 sessions by quarter end. The system is fully operational and completed the fourth quarter with core modules such as local agents, batch testing, and proactive features. This infrastructure powers our sales planner deployers and supports both the share of facial accounts and many programs to handle product recommendations, business facilitation and user-to-agent matching; we have even offered this platform to our insurance partners to uplift industry-wide efficiency. Across the board, our AI customer service agent handled millions of inquiries, and our co-pilot increased efficiency to 2.5x that of manual-only operations. This concludes the insurance business update for the fourth quarter. Now I will pass to the Board Secretary to introduce the progress of our medical and health services.
Thank you, Xiaoying. As of year-end, approximately 49 million people have used our medical platform, with total platform revenue of about CNY 72.3 million. In this quarter, while maintaining robust platform governance and user experience, we strengthened risk controls in two key areas. First, to protect user privacy, we have fully upgraded our system with large language models to identify sensitive data and apply dynamic masking in real time. Critical information frequently seen in components such as ID numbers, bank accounts and medical records is now obfuscated automatically. We have moved to tokenization and data minimization to automate protection and masking. This enhancement leads to end-to-end security for user data across our platform, fundamentally preventing any leakage of information. Second, on data integrity and eligibility, we deployed a new model combining medical natural language understanding with credential validation. This system references clinical logic to precisely identify eligible patients, ensuring every outreach reaches the right patients. On the user service front, we launched standardized service protocols, fee structures and retention guidelines; these initiatives reinforce our commitment to compliance and ensure our users are fully informed. Moving to the healthcare business, our clinical trial platform is in high-quality growth, with 224 pharmaceutical companies enrolled and a record number of patients. We initiated 131 new programs this quarter, again setting a new quarterly enrollment record. This quarter, we achieved a major milestone: our proprietary patient-matching technology, the first of its kind in China, was officially granted a national invention patent. By combining deep neural networks with advanced natural language processing, our technology achieved end-to-end patient matching and clinical-trial eligibility filtering for precise results, analyzing and mapping trusted medical records against trial criteria to uncover the highest matches. The matching engine reduced manual screening workflows from weeks to around two minutes, substantially accelerating the process. Building on this, we significantly expanded our account base and will continue to grow our patient pool in complex and rare-disease areas. Digital clinical trial revenue related to patient enrollment grew about 30% this quarter compared to the previous three-quarter average, demonstrating our ability to scale and laying a solid foundation for sustainable volume growth. And now I will hand the call to our Head of Finance to discuss our financial performance in this quarter.
Thanks. Hello, everyone. I will now walk you through our financial highlights for the fourth quarter and fiscal year 2025. Before I go into details, please be reminded that all numbers quoted here are RMB and please refer to our earnings release for detailed information on our financial performance on both a year-over-year and quarter-over-quarter basis. In the fourth quarter, our performance improved significantly with quarterly revenue more than doubling year-over-year to RMB 1.41 billion, up 105.5%. For the full year 2025, revenue reached RMB 3.98 billion, up 43.5% year-over-year, concluding the year on a strong note. By segment, the insurance business remained the core driver, with full-year insurance revenue at approximately RMB 3.58 billion, up 51.3% year-over-year. Other segments accounted for about 10.1% of total revenue, with medical performance services at RMB 260 million and other income at RMB 118 million. Operating costs for the quarter reached RMB 680 million, up 109.2% year-over-year, driven by a RMB 320 million increase in referral and service fees and an increase in selling and marketing expenditures tied to rapid business expansion. Operating costs and expenses in the fourth quarter rose to RMB 1.33 billion, up 109.4% year-over-year. For the full year, operating costs and expenses increased 39.1% from 2024, slightly below the pace of revenue growth. Selling and marketing expenses were roughly RMB 510 million, up 178.4% year-over-year, with significant improvement in customer acquisition efficiency. The company proactively scaled up investments, resulting in a significant year-over-year increase in platform and marketing expenses for third-party traffic channels. General and administrative expenses were RMB 77.1 million, a modest year-over-year increase of 4.6%, mainly due to an increase in allowance for doubtful accounts, partially offset by RMB 6.5 million reduction in personnel costs. Research and development expenses were approximately RMB 66.2 million, up 21.9% year-over-year, primarily driven by a RMB 6.4 million increase in personnel costs and a RMB 5.8 million increase in cross-border services. Overall profitability improved significantly year-over-year. Net profit attributable to the company's ordinary shareholders for the quarter was RMB 153 million, up 62.7% for the period. For the full year, the net profit attributable to ordinary shareholders reached about RMB 570 million, up 4.8%. The company maintained an ample cash position at the end of 2025, providing strong support for our future growth. This concludes our financial overview for the fourth quarter and fiscal year 2025. Ladies and gentlemen, with that, we will conclude today's conference call. We thank you for joining and wish you a good day.