BEIJING, June 17, 2021 /PRNewswire/ -- Waterdrop Inc.
("Waterdrop", the "Company" or "we") (NYSE: WDH), a leading
technology platform dedicated to insurance and healthcare service
with a positive social impact, today announced its unaudited
financial results for the first quarter ended March 31, 2021.
Financial and Operational Highlights for the First
Quarter of 2021
- We achieved solid business growth in the first quarter of 2021.
The first-year premiums ("FYP") generated through our Waterdrop
Insurance Marketplace reached RMB4,469
million (US$682.1 million),
representing an increase of 42.7% year-over-year.
- The number of insurance customers and FYP per customer both
grew rapidly. Our cumulative paying insurance customers reached
21.9 million as of March 31, 2021.
The FYP per customer increased to RMB1,165, or by 32.1% year-over-year.
- We continued to expand our product offerings. As of
March 31, 2021, we offered 240
insurance products on our platform, as compared with 200 as of
December 31, 2020. Over 90% of our
FYP was contributed by our exclusive customized insurance products.
In terms of product mix, the FYP of critical illness insurance,
increased by 131.8% in the first quarter of 2021, primarily
contributed by the design and sales of products under the new
regulatory definition of critical illness.
- Our consumer acquisition channels achieved a balanced growth.
The FYP generated from internal traffic (excluding mutual aid
channel), third-party traffic, and natural traffic and repeat
purchases increased by 65.2%, 51.6% and 48.4% year-over-year,
respectively.
- Net operating revenue increased by 35.1% to RMB883.4 million (US$134.8
million) year-over-year. Excluding the impact from the
cessation of our mutual aid business in March 2021, the adjusted net operating revenue
increased by 43.2% year-over-year.
- As of March 31, 2021,
approximately 360 million people donated an aggregate of over
RMB40 billion to nearly 1.9 million
patients through our Waterdrop Medical Crowdfunding. Waterdrop
Medical Crowdfunding charges zero service fees and we do not
generate any revenues from Waterdrop Medical Crowdfunding.
Mr. Peng Shen, Founder, Chairman
and Chief Executive Officer of Waterdrop, commented, "We are
pleased to report strong financial and operational growth for the
first quarter of 2021 in our first earnings release as a public
company. Since our inception in 2016, we have benefited from robust
industry development and achieved above-industry growth, and our
unique business model has allowed us to become a leading integrated
technology platform for insurance and healthcare service in
China. Our business model, strong
data insights, and technical capabilities have contributed to
improving the overall efficiencies of the broader industry, while
also empowering our insurance carrier partners. Moving forward, we
are going to continue playing a positive role in advancing the
diversified medical payment system in China and partake in the rapid growth of the
massive Chinese insurance and healthcare market."
Mr. Guang Yang, Co-founder,
Director and General Manager of Insurance Marketplace, commented,
"On the product side, we continued to develop customized products
through deeper collaborations with our partner insurance companies.
Among all products we offer to customers and by FYP contribution,
over 90% are customized and co-designed by us and insurance
carriers. In light of the introduction of the new regulatory
definition of critical illness, we shifted our product offerings to
adapt to the new definition and requirements to better cater to
customer needs, and ensure our sustainable growth. In addition, we
consistently diversify our customer acquisition channels, and the
contribution from natural traffic and repeat purchases as a
percentage of total FYP continued its upward trend."
Mr. Kangping Shi, Chief Financial
Officer of Waterdrop, added, "We had a solid first quarter starting
the year with both FYP and net operating revenues up 42.7% and
35.1%, respectively, from the same period of last year. The
increase in operating costs and expenses were mainly attributable
to expenses related with the cessation of mutual aid business. For
2021, we expect our FYP and top line to grow rapidly, and we will
continue to improve our unit economics performance by optimizing
our customer acquisition strategy."
Financial Results for the First Quarter of 2021
Operating revenue, net
Net operating revenue for the first quarter of 2021 increased by
35.1% to RMB883.4 million
(US$134.8 million) from RMB653.8 million for the same period of
2020, which was primarily due to the growth of
insurance brokerage income and technical service income.
- Net operating revenue from management fee income decreased from
RMB38.9 million for the first quarter
of 2020 to RMB2.7 million
(US$0.4 million) for the first
quarter of 2021, which was mainly due to the cessation of the
mutual aid business at the end of March
2021. Excluding management fee income from mutual aid
business, the Company generated adjusted net operating revenue of
RMB880.6 million (US$134.4 million) for the first quarter of 2021,
representing an increase of 43.2% compared with the same period of
2020.
- On March 26, 2021, the Company
announced the cessation of the Waterdrop Mutual Aid business by the
end of March 2021. In connection with
this, the Company voluntarily covered mutual aid participants'
medical expenses arising from medical conditions diagnosed before
March 31, 2021 that would have
formerly been covered by the ceased mutual aid plan, subject to
certain procedural requirements and eligibility criteria. Following
this adjustment, the Company upgraded its services and offered a
one-year complementary health insurance policy to each participant
with a similar coverage as the participant's original mutual aid
plan. Starting from the end of March
2021, with the cessation of the Waterdrop Mutual Aid
operation, the corresponding management fee income is no longer a
revenue stream for the Company. The estimated cost of medical
expense coverage is RMB15.0 million
(US$2.3 million) and the estimated
cost of one-year health insurance coverage is RMB81.7 million (US$12.5
million). RMB19.9 million
(US$3.0 million) was accounted for as
a reduction of management fee revenue previously recognized for
each participant to the extent of the cumulative amount earned
until March 26, 2021. RMB76.8 million (US$11.8
million) was recorded as operating costs.
Operating costs and expenses
Operating costs and expenses increased by RMB579.1 million, or 75.7%, to RMB1,343.9 million (US$205.1 million) for the first quarter of 2021
from RMB764.9 million for the same
period of 2020.
- Operating costs increased by 125.5% year-over-year to
RMB300.6 million (US$45.9 million) for the first quarter of 2021,
compared with RMB133.3 million for
the first quarter of 2020, which was mainly due to (i) the cost of
RMB76.8 million that incurred in
relation to the cessation of the Waterdrop Mutual Aid business,
(ii) RMB30.8 million increase in
personnel cost as our consultants and insurance agents team rapidly
expanded to support the business growth, and (iii) RMB44.3 million increase in professional and
outsourced customer service fees.
- Sales and marketing expenses increased by 67.7% year-over-year
to RMB837.2 million (US$127.8 million) for the first quarter of 2021,
compared with RMB499.2 million for
the first quarter of 2020. The increase was primarily due to (i) a
RMB247.8 million increase in
marketing expenses to third-party traffic channels as a result of
our business expansion and branding promotions, and (ii) a
RMB100.7 million increase in
outsourced sales and marketing service fees to third parties.
- General and administrative expenses increased by 87.2%
year-over-year to RMB121.3 million
(US$18.5 million) for the first
quarter of 2021, compared with RMB64.8
million for the first quarter of 2020. The increase was
primarily due to (i) a RMB44.6
million increase in share-based compensation expenses, and
(ii) an increase of RMB11.5 million
in professional fees and personnel cost.
- Research and development expenses increased by 25.6%
year-over-year to RMB84.9 million
(US$13.0 million) for the first
quarter of 2021, compared with RMB67.6
million for the first quarter of 2020. The increase was
primarily due to a RMB16.2 million
increase in research and development personnel cost and related
expenses, as our research and development team continued to expand
to enhance our competitive capabilities in technology.
Operating loss for the first quarter
of 2021 was RMB460.6 million (US$70.3 million), compared with operating
loss of RMB111.1 million for the
same period of 2020.
Interest income for the first quarter of
2021 was RMB13.2 million (US$2.0 million), compared
with RMB5.3 million for the same period of 2020. The
increase was primarily due to the increase in cash balance as a
result of the receipt of proceeds from private equity financings
and interest income from short-term investment. The Company
does not generate interest income from the crowdfunding
business.
Income tax benefit for the first
quarter of 2021 was RMB74.3
million (US$11.3 million),
compared with income tax expense of RMB21.8
million for the same period of 2020.
Net loss attributable to Waterdrop for
the first quarter of 2021 was RMB370.2 million (US$56.5 million), compared with net loss of
RMB120.7 million for the same period
of 2020.
Adjusted net loss attributable to
Waterdrop for the first quarter of
2021 was RMB203.1 million
(US$31.0 million), compared with
RMB106.5 million for the same period
of 2020. Adjusted net margin was negative 23.0% for the first
quarter of 2021, compared with negative 16.3% for the first quarter
of 2020.
Cash and cash equivalents and restricted cash
As of March 31, 2021, the Company
had combined cash and cash equivalents and restricted
cash of RMB1,705.4 million
(US$260.3 million), as compared with
RMB1,323.3 million as of
December 31, 2020.
Business Outlook
The Company expects the FYP generated through Waterdrop
Insurance Marketplace to grow more than 50% year-over-year for
the second quarter of 2021. This forecast is based on the current
market conditions and reflects the Company's preliminary view and
estimates, which are all subject to changes.
Exchange Rate
This announcement contains translations of certain RMB amounts
into U.S. dollars ("USD") at specified rates solely for the
convenience of the reader. Unless otherwise stated, all
translations from RMB to USD were made at the rate of
RMB6.5518 to US$1.00, the noon buying rate in effect on
March 31, 2021 in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or USD amounts referred could
be converted into USD or RMB, as the case may be, at any particular
rate or at all. For analytical presentation, all percentages are
calculated using the numbers presented in the financial statements
contained in this earnings release.
Non-GAAP Financial Measures
The Company use non-GAAP financial measures, such as adjusted
net operating revenue and adjusted net loss, in evaluating the
Company's operating results and for financial and operational
decision-making purposes. Adjusted net operating revenue represents
net operating revenue excluding management fee income from mutual
aid business. Adjusted net loss represents net loss excluding
share-based compensation expense, impact of terminating the
mutual aid plan, foreign currency exchange gain or losses, and
share of results of equity method investee. Such adjustments have
no impact on income tax.
These non-GAAP financial measures should not be considered in
isolation or construed as an alternative to net loss or any other
measure of performance or as an indicator of our operating
performance. Investors are encouraged to review the Company's
historical non-GAAP financial measures to the most directly
comparable GAAP measures. Adjusted net operating revenue and
adjusted net loss presented here may not be comparable to similarly
titled measures presented by other companies. Other companies may
calculate similarly titled measures differently, limiting their
usefulness as comparative measures to our data. The Company
encourage investors and others to review its financial information
in its entirety and not rely on a single financial measure.
Safe Harbor Statement
This press release contains statements that may constitute
"forward-looking" statements pursuant to the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "aims,"
"future," "intends," "plans," "believes," "estimates," "likely to"
and similar statements. Among other things, quotations in this
announcement, contain forward-looking statements. Waterdrop may
also make written or oral forward-looking statements in its
periodic reports to the U.S. Securities and Exchange Commission
(the "SEC"), in its annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about
Waterdrop's beliefs, plans and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement, including but not limited to the following: Waterdrop's
mission, goals and strategies; Waterdrop's future business
development, financial condition and results of operations; the
expected growth of the insurance and online healthcare industry in
China; Waterdrop's expectations
regarding demand for and market acceptance of our products and
services; Waterdrop's expectations regarding its relationships with
consumers, insurance carriers and other partners; competition in
the industry and relevant government policies and regulations
relating to insurance and online healthcare industry. Further
information regarding these and other risks is included in
Waterdrop's filings with the SEC. All information provided in this
press release is as of the date of this press release, and
Waterdrop does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
Conference Call Information
Waterdrop's management team will hold a conference call on
June 17, 2021 at 8:00 AM U.S.
Eastern Time (8:00 PM Beijing/Hong Kong Time on the
same day) to discuss the financial results. Dial-in details for the
earnings conference call are as follows:
United
States:
|
1-888-317-6003
|
Hong Kong:
|
852-580-81995
|
Mainland
China:
|
4001-206115
|
International:
|
1-412-317-6061
|
Elite Entry
Number:
|
8371404 #
|
Please dial in 15 minutes before the call is scheduled to begin
and provide the Elite Entry Number to join the call.
A telephone replay will be accessible through June 24, 2021
by dialing the following numbers:
United
States:
|
1-
877-344-7529
|
International:
|
1-412-317-0088
|
Access
Code:
|
10157332 #
|
A live and archived webcast of the conference call will also be
available at the Company's investor relations website at
http://ir.waterdrop-inc.com/.
About Waterdrop Inc.
Waterdrop Inc. (NYSE: WDH) is a leading technology platform
dedicated to insurance and healthcare service with a positive
social impact. Founded in 2016, with the comprehensive coverage of
Waterdrop Insurance Marketplace and Medical Crowdfunding, Waterdrop
aims to bring insurance and healthcare service to billions through
technology. For more information, please visit
www.waterdrop-inc.com.
For investor inquiries, please contact
Waterdrop Inc.
Xiaojiao Cui
IR@shuidi-inc.com
Christensen
In China
Mr. Eric Yuan
Phone: +86-1380-111-0739
E-mail: Eyuan@christensenir.com
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com
WATERDROP
INC.
|
Unaudited
Condensed Consolidated Balance Sheets
|
(All amounts in
thousands, unless otherwise noted)
|
|
|
As
of
|
|
December
31,
2020
|
March
31,
2021
|
|
RMB
|
RMB
|
USD
|
|
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
1,061,962
|
1,107,394
|
169,021
|
Restricted
cash
|
261,387
|
598,027
|
91,277
|
Short-term
investments
|
1,193,160
|
519,661
|
79,316
|
Accounts
receivable
|
539,791
|
645,463
|
98,517
|
Current contract
assets
|
824,544
|
820,264
|
125,197
|
Amount due from
related parties
|
813
|
439
|
67
|
Prepaid expense and
other assets
|
651,080
|
499,674
|
76,263
|
Total current
assets
|
4,532,737
|
4,190,922
|
639,658
|
Non-current
assets
|
|
|
|
Non-current contract
assets
|
24,006
|
24,215
|
3,696
|
Property, equipment
and software, net
|
28,724
|
36,873
|
5,628
|
Intangible assets,
net
|
53,034
|
56,806
|
8,670
|
Long-term
investments
|
2,741
|
2,749
|
420
|
Right of use assets,
net
|
60,694
|
57,001
|
8,700
|
Goodwill
|
3,119
|
3,119
|
476
|
Total non-current
assets
|
172,318
|
180,763
|
27,590
|
Total
assets
|
4,705,055
|
4,371,685
|
667,248
|
|
|
|
|
Liabilities,
Mezzanine Equity and Shareholders' Deficit
|
|
|
|
Current
liabilities
|
|
|
|
Amount due to related
parties
|
9,789
|
12,295
|
1,877
|
Insurance premium
payables
|
607,326
|
602,608
|
91,976
|
Deferred
revenue
|
22,017
|
11,374
|
1,736
|
Accrued expenses and
other current liabilities
|
595,606
|
702,597
|
107,237
|
Current lease
liabilities
|
36,551
|
37,497
|
5,723
|
Total current
liabilities
|
1,271,289
|
1,366,371
|
208,549
|
Non-current
liabilities
|
|
|
|
Non-current lease
liabilities
|
27,709
|
23,150
|
3,533
|
Deferred tax
liabilities
|
225,745
|
151,969
|
23,195
|
Total non-current
liabilities
|
253,454
|
175,119
|
26,728
|
Total
liabilities
|
1,524,743
|
1,541,490
|
235,277
|
|
|
|
|
Total mezzanine
equity
|
4,837,336
|
4,947,623
|
755,154
|
Shareholders'
deficit
|
|
|
|
Ordinary shares
|
41
|
41
|
6
|
Additional paid-in
capital
|
-
|
-
|
-
|
Accumulated other
comprehensive income
|
14,956
|
13,241
|
2,021
|
Accumulated
deficit
|
(1,672,021)
|
(2,130,710)
|
(325,210)
|
Total
shareholders' deficit
|
(1,657,024)
|
(2,117,428)
|
(323,183)
|
Total liabilities,
mezzanine equity and
shareholders' deficit
|
4,705,055
|
4,371,685
|
667,248
|
WATERDROP
INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(All amounts in
thousands, except for share and per share data, or otherwise
noted)
|
|
|
For the Three
Months Ended March 31,
|
|
2020
|
2021
|
|
RMB
|
RMB
|
USD
|
|
|
|
|
Operating revenue,
net
|
653,795
|
883,367
|
134,828
|
Operating costs
and expenses(i)
|
|
|
|
Operating costs
|
(133,288)
|
(300,608)
|
(45,882)
|
Sales and marketing
expenses
|
(499,201)
|
(837,153)
|
(127,775)
|
General and administrative
expenses
|
(64,765)
|
(121,287)
|
(18,512)
|
Research and development
expenses
|
(67,610)
|
(84,875)
|
(12,954)
|
Total operating
costs and expenses
|
(764,864)
|
(1,343,923)
|
(205,123)
|
Operating
loss
|
(111,069)
|
(460,556)
|
(70,295)
|
Other
income
|
|
|
|
Interest income
|
5,312
|
13,215
|
2,017
|
Foreign currency exchange
gain
|
5,235
|
784
|
120
|
Others, net
|
1,632
|
2,101
|
321
|
Loss before income
tax, and share of loss in
equity method investee
|
(98,890)
|
(444,456)
|
(67,837)
|
Income tax
(expense)/benefit
|
(21,838)
|
74,300
|
11,340
|
Share of loss in equity
method investee
|
(3)
|
-
|
-
|
Net loss
attributable to Waterdrop Inc.
|
(120,731)
|
(370,156)
|
(56,497)
|
Preferred shares redemption
value accretion
|
(53,636)
|
(110,287)
|
(16,833)
|
Net loss
attributable to ordinary shareholders
|
(174,367)
|
(480,443)
|
(73,330)
|
Net
loss
|
(120,731)
|
(370,156)
|
(56,497)
|
Other
comprehensive (income)/loss:
|
|
|
|
Foreign currency translation
adjustment, net
of tax
|
61
|
(2,782)
|
(425)
|
Unrealized gains on
available for sale
investments, net of
tax
|
25
|
1,067
|
163
|
Comprehensive
loss
|
(120,645)
|
(371,871)
|
(56,759)
|
Weighted average
number of ordinary shares
used in computing net loss per share
|
1,193,727,557
|
1,191,599,014
|
1,191,599,014
|
Basic and diluted
|
|
|
|
Net loss per share
attributable to ordinary
shareholders
|
|
|
|
Basic and diluted
|
(0.15)
|
(0.40)
|
(0.06)
|
|
(i) Share-based
compensation expenses are included in the operating costs and
expenses as follows:
|
|
|
For the Three
Months Ended March 31,
|
|
2020
|
2021
|
|
RMB
|
RMB
|
USD
|
|
|
|
|
Sales and marketing
expenses
|
(322)
|
(2,981)
|
(455)
|
General and
administrative expenses
|
(17,389)
|
(62,021)
|
(9,466)
|
Research and
development expenses
|
(1,722)
|
(6,176)
|
(943)
|
Total
|
(19,433)
|
(71,178)
|
(10,864)
|
WATERDROP
INC.
|
Reconciliations of
GAAP and Non-GAAP Results
|
(All amounts in
thousands, unless otherwise noted)
|
|
|
For the Three
Months Ended March 31,
|
|
2020
|
2021
|
|
RMB
|
RMB
|
USD
|
|
|
|
|
Net operating
revenue
|
653,795
|
883,367
|
134,828
|
Less:
|
|
|
|
Management fee
income
|
38,886
|
2,745(ii)
|
419
|
Adjusted net
operating revenue
|
614,909
|
880,622
|
134,409
|
|
|
|
For the Three
Months Ended March 31,
|
|
2020
|
2021
|
|
RMB
|
RMB
|
USD
|
|
|
|
|
Net
loss
|
(120,731)
|
(370,156)
|
(56,497)
|
Add:
|
|
|
|
Share-based
compensation expense
|
19,433
|
71,178
|
10,864
|
Foreign currency
exchange gain
|
(5,235)
|
(784)
|
(120)
|
Impact of terminating
the mutual aid plan (iii)
|
-
|
96,697
|
14,759
|
Share of results of
equity method investee
|
3
|
-
|
-
|
Adjusted net
loss
|
(106,530)
|
(203,065)
|
(30,994)
|
|
(ii) This represents
management fee revenue related to the mutual aid business for the
first quarter of 2021 after recording the
RMB19.9 million reduction of management fee revenue previously
recognized for each participant to the extent of the
cumulative amount earned until March 26, 2021.
|
(iii) This represents
the estimated cost of medical expenses and cost of one-year health
insurance coverage. RMB19.9 million
(US$3.0 million) was accounted for as a reduction of management fee
revenue previously recognized for each participant
to the extent of the cumulative amount earned until March 26, 2021.
RMB76.8 million (US$11.8 million) was recorded as operating
costs.
|
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SOURCE Waterdrop Inc.