Waterdrop achieves 38.4% revenue growth and 60.1% profit increase in Q3 2025, driven by AI integration and solid insurance performance.

Good morning everyone. This is Tracy Lee from Waterdrop Investor Relations It's my pleasure to welcome everyone to Waterdrop's third quarter 2025 earnings conference call. All participants are in listen only mode in our English line. As a reminder, today's conference is being recorded. Please note that discussion today will contain forward looking statements made under the Safe harbor Provision of the US Private Security and the 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 not limited to, those outlined in our public filings with SEC. The company does not undertake any obligation to update any forward looking statements except as required and applicable law. Also, this call includes discussion of certain non GAAP measures. Please refer to our earnings release for reconciliation between non GAAP and GAAP. Joining us today on the call are Mr. Yuan Wei, Director and GM of Insurance Business, Ms. Xu Xiaoming, Head of Finance Department and Ms. Jie Luyi, Board Secretary. We'll be happy to take some of the questions in the Q&A session at the end of the conference call. In third quarter, the company continued its growth trend with overall revenue reaching over 970 million yuan at 38.4% year on year. Meanwhile, AI played a significant role in enhancing business quality and efficiency, driving net profit attributable to the ordinary shareholders to about 160 million yuan a year on year increase of 60.1%. For the first three quarters of 2025, the company's total revenue amounted to 2.57 billion yuan, up 23.1% year on year. Well, net profit attributed to ordinary shareholders reached about 410 million yuan, rising 51.9% compared to the same period last year. The company has maintained GAAP profitability for 15 consecutive quarters since the first quarter of 2022. By segment, backed by the full integration of AI, our InsureTech business continued its solid performance with operating profit reaching about 180 million yuan in this quarter, a year on year increase of 44.0%. The medical profiling platform maintains stable operations and has raised medical campaign for accumulating a total of 3.61 million patients as of the end of this quarter. The City of Clinical Trial Solutions business continues to excel in project fulfillment, enrolled over 1,000 patients in one single quarter, demonstrating robust growth momentum this quarter we continue to invest in AI. As of the end of September, the company has built 69 patent applications centered on large language models, including nine international filings during this quarter, our Intelligent Chatbot has been upgraded to a new hybrid attention mechanism. This updated system can select the appropriate reasoning method more flexibly, making it better at understanding and handling long conversations. The inference throughput currently is double that of the original burden. In a key move to system our AI capabilities, we launched Waterdrop CPoint AI in late September, a low code AI platform that empowers our employees to smoothly build and deploy tailored solutions for various tasks such as marketing and customer service across apps, website and WeChat official account. Going forward, we'll also explore its application in non insurance areas, providing strong support for the company growth Waterdrop is dedicated to creating value for society is dedicated to creating value for society. In this quarter we updated our ESG measures, released the 2024 Annual ESG Report and disclosed multiple new environmental data and continue to enhance our ESG governance framework in public Welfare. As of September 30, 2025, Waterdrop Charity Platform has collaborated with 119 and launched more than 15,500 projects. Together with Guangzhou Civil Affairs Bureau, we established the Waterdrop Co Help program which allows patients in need to apply for assistance online and offline, providing an innovative model that integrates government aids and individual campaigns. We extend our appreciation to our shareholders for their enduring trust and support. In early November, we completed our fourth cash dividend distribution since IPO with a total payout of around $10.9 million. By the end of November 2025, we had repurchased approximately 58.1 million ADS in the open market totaling $113 million. Building on our robust business performance, we are confident in existing full year revenue and profit guidance. Moving forward, we will leverage advancing AI technologies to drive integration and innovation across our operations, fueling sustainable long term growth. Next, I will pass it to Yuan Wei to introduce the development of insurance business in Q3. Hi everyone, this is the third quarter our insurance business maintains significant growth momentum. Insurance related revenue reached about 870 million, increasing by 44.8% year on year and 17.8% quarter on quarter. The business achieved an operating profit margin of 20.3% this quarter. We optimized our real time identification capabilities in public traffic scenarios. At the data infrastructure level, we fully integrated the data links among advertising operation and risk control system. The integration slashed our end to end decision latency to under 50 milliseconds. Such a response feed allow us to generate more comprehensive decision making and perform precise stratification immediately upon receiving an advertising requirement, thereby enhancing the ability to identify and filter high quality traffic that is Proportion. We continue to increase through integration. We also match users with suitable coverage of premise based on their specific needs and payment capability and payment capacity. Now the entire system is deeply integrated with our corporate data lake and AI platform including self training and health updates to continually refine our marketing strategies. On the supply side, we continue to drive product innovation. In this quarter we introduced Family Protection plan which covers up to nine family members under one single policy and upgraded Kuominbao leaids to high end medical insurance with an expanded network of quality private hospital for crypto insurance. We further enriched our SHOHE series by introducing modular options tailored to diverse budget needs. We also upgraded the disability insurance series. It has achieved a comprehensive coverage ranging extensive protection Pre existing condition Insurance contributed about 400 million yuan in FIT during this quarter a year on year increase of 103.9%. On the service side, we deploy AI more widely enhancing operational efficiency. We extended the rollout of AI Pro insurance module on our WeChat mini program homepage. This is LLM powered module offers user real time Q and A and personalize the recommendations, driving a 36% sequential increase in facilitated FYP in voice services. AI medical insurance experts continue to boost efficiency in third quarter it assisted in achieving an 82% increase in FIP compared to the Q2 in the WECOM service scenario. The lead productivity of AI medical insurance experts in September doubled that of June. AI application also continue to empower long term insurance services. As of the end of this quarter, the knowledge base to AI Life Planner Copilot had cumulatively assisted in over 340,000 insurance products related consultation the underwriting assistant Kuyi Point AI reduced the response time from underwriting cases for the traditional manual model of 5 minutes to 1 second. The AI Super Pre sales assistant has consistently maintained higher APL than human agents and beginning in September the scenario has been fully transitioned to AI operation in Azure Self Services, our AI customer service agent now can handle over 600,000 in queries in one month, solving 85% of online cases independently. At the end of September, we launched Waterdrop CPoint AI, a local platform that is accelerating the development of AI application across multiple business scenarios. That concludes our insurance update in this quarter. Hi Emily Dearz Now I will walk you through the third quarter's progress in crowdfunding and healthcare sectors. As of September 30, 2025, approximately 485 million people had accumulated donated a total of 71.2 billion to 3.61 million patients through WaterDog Medical corresponding in the third quarter, we focused on strengthening the campaign risk control measures. We expand core scenarios strategically incorporating differentiated modification to our workflow, which boosted the efficiency of the review process. By analyzing donation visit data to identify subtle patterns, advanced analysts now can refine the identification capabilities of our algorithm model. This in turn has improved automatically early warning systems to better detect and reduce fraud. Additionally, the platform continues prioritizing the transparency of campaign authenticity. This quarter we fortified our special case review mechanism by fully discoding course of the request review and potential usage of bond with real time display, review timeline and the reviewer's status. This now gives donors clear insight into how their contribution how their donations are allocated and used. These measures have profoundly enhanced the transparency, irrationality and traceability of bond distribution and our healthcare business continue its strong performance this quarter the EFINE platform expanded collaboration network by partnering with 216 Pharmaceutical and contract research organizations. Meanwhile, we initiated services for 125 new programs. For the first time, we successfully enrolled over 1000 patients in one single quarter. Since it launched, the program has achieved a cumulative enrollment of more than 13,000 patients. Windsor leveraged its massive patient database and advanced digital ability to expand collaboration projects in areas like psoriasis tumors and digestive tumors, accelerating clinical development process of our partners. Notably in the challenging field of gynecological tumor, quarterly enrollment increased by 130% compared to the previous year's full cover average level. The company has also made significant strides in chronic disease. Building on its existing focus on skin disease, respiratory condition and hypertension, the company has expanded its disease coverage into the rheumatology and the immunology. Enhancing digital matching accuracy between patient database and project libraries remain a key strategic focus for Waterdrop. This quarter we upgraded our algorithm medical data structure matching enabling thriving performance across multiple high quality, high difficulty projects serve the ecosystem synergy and refined project operations. Watershed consistently delivers satisfactory fulfillment quality driving sustained order growth as a result of digital clinical trial solution incoming. The third quarter reached 31.85 million, marking a 31.3% year on year increase in the digital omnichannel marketing. We advanced LLM powered applications in medical patients. There is narrow launching projects in patient health management, knowledge promotion and digital humans. The company secured a three year contract with a world leading pharmaceutical for patient management, serving hundreds of thousands of patients and profoundly improving service efficiency and user experience. Now I will hand it over to hi Xiaoyin, our head of Finance department to discuss our financial performance in this quarter. Hello everyone. I will now walk you through our financial highlights for the third quarter of 2025. Before I go into details, please be reminded that all numbers quoted here will be in RMB and please refer to our earnings release for detailed information on our financial performance on both the year on year and quarter on quarter basis respectively. In the third quarter, the company reported total revenue of $975 million, marking a year on year growth of 38.4%, reflecting a strong growth trajectory by segment. Our insurance business generated about $870 million in revenue at 44.8% year on year, performing service fees at around 65.66 million, remaining stable year on year and digital clinical trial Solutions contributed over 31.85 of million yuan with a year on year increase of 31.3%. Operating cost and expenses totaled approximately 861 million yuan, marking a year on year increase of 27.1%. This growth rate of operating cost was lower than the revenue growth, further boosting profitability. Operating costs for this quarter reached $475 million at 39.5% year on year, driven by a $66.7 million rise in cost of referral and service fee, along with 32.4 million $16.9 million increase in personal costs and cost of performing consultancy. Thousand marketing expenses amounted to 243 million, rising 4.