Waterdrop revenue jumps, but profit falls on swelling marketing expenses
Insurance services provider Waterdrop Inc. (WDH.US) on Tuesday reported its revenue jumped 72.8% year-on-year to 1.45 billion yuan ($216 million) in the second quarter, driven by improvements in its risk assessment service capabilities and increased first-year premiums.
Revenue from the company’s core insurance services rose 80.5% year-on-year to 1.33 billion yuan from 739 million yuan. Within that total, revenue from technical services tripled to 488 million yuan from 161 million yuan a year earlier. The company’s smaller healthcare services, mostly fees from crowdfunding, fell 5.7% year-on-year to 63.6 million yuan.
But Waterdrop’s sales and marketing expenses more than tripled to 638 million in the latest quarter, equal to 44% of its revenue, from 199 million yuan a year ago, when the figure was equal to 24% of revenue. As a result, the company’s net profit fell 10% to 126 million yuan from 140 million yuan a year earlier.
Waterdrop shares rose 4.9% to close at $1.07 on Tuesday after the results were announced. The stock is down about 41% over the last 52 weeks.
By Doug Young
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