Waterdrop (WDH) | News Based Sentiment Analysis

• On September 4, 2025, Waterdrop Inc. announced its unaudited Q2 2025 financial results, reporting net operating revenue of RMB 838.0 million (USD 192.6 million), a 23.9% year-over-year increase. This growth, combined with a 58.7% year-over-year jump in net profit attributable to ordinary shareholders to RMB 140.2 million, demonstrates continued strong financial performance and marks their fourteenth consecutive profitable quarter.
• Waterdrop’s insurance business continues to be a key driver of growth, with first-year premiums (FYPs) reaching RMB 3.2 billion, an 80.2% increase year-over-year. Specifically, short-term policies saw a 95.0% FYP growth, while long-term policies grew by 45.4%, contributing to a 28.7% year-over-year increase in insurance-related revenue to RMB 738.6 million.
• The company is actively returning capital to shareholders, approving a 50% increase in its cash dividend to US$10.9 million (or $0.03 per ADS), payable around November 4, 2025. Additionally, Waterdrop authorized a new share repurchase program of up to US$50 million through September 9, 2026, having already repurchased approximately 55.7 million ADSs for US$109.0 million since September 2021.
• Waterdrop is investing in innovation, with its Digital Clinical Trial Solution generating RMB 27.7 million in revenue, a 34.2% year-over-year increase. The E-Find Platform expanded collaborations to 198 pharmaceutical and contract research organizations and enrolled a record 999 patients in Q2 2025, showcasing growth in this diversifying segment.
• Despite the positive results, Waterdrop’s Q2 EPS of $0.05 missed analysts’ consensus estimates of $0.26, triggering a short-term market sell-off. However, shares subsequently hit a new 52-week high of $2.18 on September 5th, demonstrating market volatility and a complex reaction to the news.
• AI integration is driving efficiency gains across Waterdrop’s operations, with AI-driven models improving conversion rates by nearly 50% compared to traditional methods. AI-powered voice services also led to a 155% increase in insurance premiums compared to Q1 2025, and Waterdrop’s AI innovation was recognized by Harvard Business School.
• Institutional investors are showing increased interest, with several hedge funds acquiring new stakes in Waterdrop in Q2, resulting in collective institutional ownership of 1.96% of the stock as of September 6, 2025. This suggests growing confidence among larger investors despite the recent earnings miss.

The Investment Story: September was a month of strong financial performance for Waterdrop, driven by robust growth in its insurance business and successful capital allocation strategies, though tempered by an earnings miss and resulting market volatility. The company continues to invest in innovation and return value to shareholders.

What It Means for Investors: The strong revenue and profit growth, coupled with the increased dividend and share repurchase program, are positive signals for investors. However, the earnings miss and fluctuating stock price highlight the need for continued monitoring of the company’s ability to meet expectations and navigate market sentiment.

Looking Ahead: Investors should watch for the November 4, 2025 dividend payment and monitor the progress of the US$50 million share repurchase program. Continued growth in the digital clinical trial solution and further AI integration will also be key areas to observe.

The Bottom Line: Waterdrop Inc. remains a compelling growth story with a commitment to shareholder value, but investors should be prepared for potential volatility and closely track the company’s execution against its ambitious growth targets.