Revenue momentum remains strong with 23.9% year-over-year growth in 2025Q2, while underwriting efficiency has improved significantly as the combined ratio tightened to 88.4% from historical peaks exceeding 100%.
| Revenue | 2.98B | 3.87B | 2.77B | 2.63B | 2.8B | 3.21B | 3.03B | 1.51B | 238.15M |
| Revenue Growth % | 9.39% | 39.6% | 5.36% | -6.11% | -12.61% | 5.88% | 100.4% | 534.46% | - |
| Medical Costs & Claims | 1.75B | 1.89B | 1.31B | 1.59B | 1.34B | 1.35B | 742.26M | 291.31M | 45.93M |
| Medical Cost Ratio % | 58.76% | 48.85% | 47.43% | 60.29% | 47.69% | 42.11% | 24.51% | 19.28% | 19.29% |
| Gross Profit | 1.23B | 1.98B | 1.46B | 1.04B | 1.47B | 1.86B | 2.29B | 1.22B | 192.22M |
| Gross Margin % | 41.24% | 51.15% | 52.57% | 39.71% | 52.31% | 57.89% | 75.49% | 80.72% | 80.71% |
| Gross Profit Growth % | - | 35.83% | 39.48% | -28.72% | -21.03% | -18.8% | 87.4% | 534.52% | - |
| Operating Expenses | 977.4M | 1.62B | 1.28B | 1.05B | 987.62M | 3.72B | 2.78B | 1.41B | 380.38M |
| OpEx / Revenue % | 32.77% | 41.83% | 46.14% | 39.97% | 35.25% | 116% | 91.88% | 93.59% | 159.72% |
| Depreciation & Amortization | 0 | 13.91M | 13.55M | 13.55M | 22.98M | 18.09M | 13.06M | 6.69M | 1.98M |
| Combined Ratio % | 91.53% | 90.68% | 93.57% | 100.26% | 82.94% | 158.11% | 116.39% | 112.87% | 179.01% |
| Operating Income | 252.66M | 360.75M | 178.16M | -6.74M | 477.99M | -1.86B | -496.25M | -194.48M | -188.16M |
| Operating Margin % | 8.47% | 9.32% | 6.43% | -0.26% | 17.06% | -58.11% | -16.39% | -12.87% | -79.01% |
| Operating Income Growth % | - | 102.49% | 2742.12% | -101.41% | 125.66% | -275.39% | -155.17% | -3.36% | - |
| EBITDA | 252.66M | 374.67M | 191.71M | 6.81M | 500.96M | -1.84B | -483.18M | -187.79M | -186.18M |
| EBITDA Margin % | 8.47% | 9.68% | 6.92% | 0.26% | 17.88% | -57.54% | -15.96% | -12.43% | -78.18% |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Non-Operating Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Pretax Income | 435.67M | 528.64M | 360.59M | 164.24M | 630.69M | -1.8B | -613.71M | -179.01M | -187.69M |
| Pretax Margin % | 14.61% | 13.66% | 13.01% | 6.24% | 22.51% | -55.99% | -20.27% | -11.85% | -78.81% |
| Income Tax | 4.57M | -21.02M | 9.71M | 555K | 22.98M | -220.99M | 50.16M | 142.53M | 21.5M |
| Effective Tax Rate % | 1.05% | -3.98% | 2.69% | 0.34% | 3.64% | 12.31% | -8.17% | -79.62% | -11.46% |
| Net Income | 446.94M | 553.44M | 367.51M | 167.22M | 607.72M | -1.57B | -663.87M | -321.54M | -209.19M |
| Net Margin % | 14.98% | 14.3% | 13.26% | 6.36% | 21.69% | -49.1% | -21.92% | -21.28% | -87.84% |
| Net Income Growth % | 68.84% | 50.59% | 119.78% | -72.48% | 138.61% | -137.11% | -106.47% | -53.7% | - |
| EPS (Diluted) | 1.20 | 14.70 | 1.00 | 0.43 | 1.50 | -3.99 | -3.45 | -1.00 | -0.65 |
| EPS Growth % | 74.29% | 1370% | 132.56% | -71.33% | 137.59% | -15.65% | -245% | -53.85% | - |
| EPS (Basic) | - | 15.40 | 1.00 | 0.40 | 1.55 | -3.99 | -3.45 | -1.00 | -0.65 |
| Diluted Shares Outstanding | 371.11M | 37.14M | 371.98M | 388.09M | 402.25M | 394.28M | 321.51M | 321.51M | 321.51M |
Regulatory and Policy Lapse
As reported in recent financial filings, Waterdrop achieved a 23.9% year-over-year revenue growth in 2025Q2, signaling a successful transition toward higher-value insurance products that appears to be gaining traction despite the complex regulatory environment governing digital insurance distribution within the Chinese market.
The acceleration in top-line growth suggests that the company's proprietary conversion funnel is effectively capturing insurance demand. Investors should monitor whether this growth is sustainable or if it remains sensitive to the cyclical nature of consumer discretionary spending on long-term health and life insurance products.
Based on the provided income statement data, the combined ratio improved to 88.4% in 2025Q2, indicating that Waterdrop has successfully optimized its underwriting profitability and expense management compared to the volatility observed in previous periods where the ratio occasionally breached the 100% threshold.
The consistent downward trend in the combined ratio suggests that the company is achieving better operational leverage as it scales. This improvement appears to be driven by a more disciplined approach to acquisition costs, though analysts should remain cautious regarding the potential for future margin compression if competitive pressures intensify.
According to historical quarterly data, Waterdrop experienced significant fluctuations in loss ratios, notably spiking to 105.1% in 2023Q4, which suggests that prior-period reserve adjustments may be significantly impacting the reported net income figures and complicating the assessment of core underwriting performance.
The extreme variance in loss ratios warrants further investigation into the company's actuarial assumptions and the potential for future reserve strengthening. Such volatility may indicate that the underlying insurance products are subject to unpredictable claims patterns that could challenge long-term earnings stability.
While Waterdrop reports strong net income, the reliance on upfront commission recognition, as evidenced by the 14.30% net margin, may be vulnerable to regulatory shifts or high policy lapse rates that could necessitate significant commission clawbacks in future reporting periods.
The current profitability profile appears to be heavily influenced by the timing of revenue recognition rather than purely recurring cash flows. Investors should consider the risk that any regulatory decoupling of the crowdfunding platform from the brokerage business could fundamentally impair the company's primary lead generation engine.
Quick answers to the most common questions about buying WDH stock.
For fiscal year 2025, Waterdrop Inc. (WDH) reported total revenue of $3.87B. This represents a 1524.8% increase compared to $238.1M in 2018.
Waterdrop Inc. (WDH) is profitable, generating $553.4M in net income for the fiscal year ending 2025 with a net profit margin of 14.3%.
Waterdrop Inc. (WDH) reported an operating income of $360.8M, resulting in an operating profit margin of 9.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Waterdrop Inc. (WDH) generated $1.98B in gross profit for the year, representing a gross profit margin of 51.1%. This demonstrates the company's core pricing power and production efficiency.