Good morning, everyone. This is Tracy Lisang from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's Second Quarter 2025 Earnings Conference Call. All participants are in listen-only mode in our English line. As a reminder, today's conference call is being recorded. Please note that discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities 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 are not limited to, those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward-looking statements except as required in applicable law. Also, this call includes discussion of certain non-GAAP matters. Please refer to our earnings release for a reconciliation between non-GAAP and GAAP. Joining us today on the call are Mr. Peng Shen, our Founder, Chairman and CEO, Mr. Ran Wei, Director and GM of the Insurance Business, Mrs. Xu Xiaoying, Head of Finance Department, and Mrs. Jasmine Lee, Board Secretary. We will be happy to take some of your questions in the middle of the conference call.

Good morning, everyone. In the second quarter, we are pleased to see the integration of AI with the insurance and healthcare sectors begin to deliver satisfying results. Revenue growth accelerated further with quarterly revenue reaching $XX million, up 23.9% year over year. Powered by AI, the company's operational efficiency significantly improved, driving an 85.9% year-over-year increase in operating profit and lifting the operating margin by 3.9 percentage points. Our EasterTech business leverages technological innovation to bring inclusive protection for more users. Our Waterdrop Guardian AI application suite has been rolled out across customer acquisition, sales, underwriting, customer service, quality assurance, and other key processes. With that, FYP in Q2 increased 80% year over year and productivity per capita improved significantly. Waterdrop Medical's corresponding platform has also upgraded its risk assessment system by integrating large language model capabilities for case authenticity and transparency. As of June 30, it has raised medical funds for 3.54 million patients. With the market rebounding, the number of patients enrolled in our eFine platform also reached a historic high, with nearly 1,000 patients enrolled in 2025, where operations remain robust and improving. We keep improving our AI technology stack. Our self-developed multi-agent collaboration framework can be reused extensively, helping us quickly build different types of agented chatbots and enabling AI agents to collaborate within milliseconds. Thanks to this, we can provide more stable AI agents to handle increasingly complex situations. We are also creating proxy reward models and adding the GRPO algorithm. This allows agents to break away from fixed scripts and adapt their communication strategies based on customer behavior. To address the slow response issue when making AI agent calls, we implemented a distributed key-value cache. It significantly speeds up the influence of the first token. As of June 30, the company has submitted 60 patent applications related to large language models, with nine of them filed internationally. Our AI-driven business innovation was recently included in Harvard Business School's case collection, receiving recognition from a world-renowned academic institution. Based on these technologies, we will continue to expand the use of AI in our insurance and healthcare sectors, constantly creating value for our business and the industry. The company is also actively engaged in social return initiatives. As of June 30, 2025, our Waterdrop welfare platform has collaborated with 118 public charitable organizations. It has initiated over 15,500 public welfare projects. In July, it participated in the relief efforts for the Swab disease in North China, providing assistance to the affected people through monitoring and material donations. This year marks our ninth anniversary since the company's establishment. We are very grateful for the continuous support from our shareholders and investors over time. The company has actively conducted share repurchases in the open market for four consecutive years. To keep repaying shareholders' trust, our Board recently approved two new initiatives. On one hand, we are pleased to announce that our Board has approved an enhanced cash dividend of $10.9 million, representing a 50% increase over the previous dividend. The dividend per ordinary share was $0.3 and the dividend per ADS will be $0.3. The Board has also authorized its annual share repurchase plan. Since our first share repurchase program was launched in 2021, we have repurchased approximately 55.7 million ADS for $109 million as of August 31, 2025. Looking ahead, we will build on the current performance and make further efforts to achieve our business goals for the year of 2025 and the medium and long-term business development, striving to create more value for our stakeholders. Next, I will now pass the runway to introduce the development of the insurance business in Q2.

Thank you, Peng Shen. In Q2, our insurance business delivered robust growth. The first-year premium reached $XX billion, up 80.2% year over year and 53.1% quarter over quarter. Insurance-related revenue was about $XX million, up 28.7% year over year and 12.2% quarter over quarter. Operating margin improved to 23.1%, up by nearly two percentage points year over year, driven by our deeper AI integration. For short-term products, we increased the investment in customer acquisition and technology, representing FYP to $XX billion, up 95% year over year and 62.1% quarter over quarter. In customer acquisition, we continuously tap into AI capabilities, integrating user outreach and recommendation AI models, driving continuous breakthroughs in customer acquisition from a public domain. We are increasingly applying AI tools to enhance the production, speed, and quantity of marketing materials to support front-end customer acquisition efforts. At the same time, we use AI to facilitate better conversion across different scenarios. For example, our new AI Pro insurance model, the app, and the Mini Program use a large network model for real-time matching and convert nearly 50% better than traditional advertising slots. In the voice services, narrow AI medical insurance experts continue to improve efficiency. In Q2, it assisted in achieving a 155% increase in the scale of insurance premiums compared to Q1. And points continue expanding in the second half of the year. In weak comp scenarios, AI medical insurance experts launched as of March and by June lifted FIP per lead 58% compared to that in May. On products, we expanded our portfolio. We have new long-term medical plans such as those that require no health declaration and guarantee renewal for five years. We also rolled out a mid to high-end plan with zero deductible and nationwide eligibility, along with version 6.0 of our maternity series, Jiahao Yun; we were the first in the market to accept expectant mothers with pre-existing conditions. Our products for people with pre-existing conditions contributed a quarterly premium of $XX million, a year-on-year increase of 146.6%. In terms of long-term insurance, we actively explore the efficiency improvement of AI tools for online sales consultants and planners, which contributed to the long-term FIP reaching CNY770 million, a year-on-year increase of 45.4% and a sequential increase of 30.5%. With the assistance of AI tools, the productivity of the traditional online sales team has achieved double-digit growth both year-on-year and quarter-on-quarter. Shenandoah independently contributed FIP of $XX million. We've given online sales consultants and planners an insurance product knowledge-based query tool called Life Planner Co-Pilot. It's based on a life to an array model, and the knowledge base has information on about 7,000 insurance products. It helps consultants search for relevant insurance contract terms in real-time. In total, it has handled 300,000 insurance product-related consultations. Through months of internal testing, we launched Kueyi AI in August. Think of it as an insurance-focused deep seat. It delivers expert underwriting answers for every informed product with industry-leading accuracy, and we plan to open the platform to our partners to accelerate AI adoption across the industry value chain. Besides tools for agents, we have launched an AI super pre-sales assistant on Wecom. It can receive customer consultations 24/7. It can determine what customers' insurance needs are and their intention to buy insurance on its own, match suitable products based on customers' situations, and make appointments with the most appropriate salesman. According to the data since its launch, the AI assistant is more efficient than a human assistant and has effectively improved the team's work efficiency. On the supply side of long-term products, we keep pushing health insurance innovation. We kept refining our Zixin's order of critical units aligned with easy health declarations and introduced the cost-effective study official series critical unit plan. Additionally, we rolled out a no health declaration income protection insurance product. Besides that, disability insurance crossed the $XX million mark in quarterly FYP for the first time and is showing strong user effectiveness. Since its rollout in March, our AI customer service agent has scaled rapidly, aiding support alongside tax. In joint alone, it handled 215,000 service sessions, lifting the first contact resolution rate. Online insurers have now achieved 100% AI coverage. Meanwhile, in Q2, our AI quality control assistance boosted Q&A efficiency by 94% compared with the traditional manual approach. This concludes the insurance business update. Now I will hand over to our Board Secretary, Jasmine Lee, to review our Q2 progress in the core funding and healthcare sectors.

Thank you, Ran Wei. As of June 2025, around 480 million people cumulatively donated RMB70 billion to about 3,540,000 patients through our WhatsApp medical profiling platform. That is by Tactical Group, we again increased R&D investment on our personal medical profiling risk control. For case-level risk, language model metrics can now identify 15 high-risk scenarios such as suspected identity, abnormal spending, or ethical violations. It does this by analyzing every word in the campaign's context, comments, and hidden clues, which greatly improves the detection accuracy. For fund-level risk, a dynamic monitoring algorithm checks the diagnosis timeline, commercial insurance payout, and the fundraising speed. If anything is wrong with the fund, it will automatically limit or post the campaign. Then a manual review will be carried out within minutes. To address malicious promotion activities, we developed an abnormal behavior recognition model. We incorporated crucial factors such as donation conversion rate, information dissemination patterns, and SaaS characteristics. This model demonstrates top accuracy in the industry and can detect and stop malicious campaigns in real-time. On May 27, we partnered with the Guangzhou civil affairs bureaucracy to launch the order of Cool Help. It is the first project under our new designation as a government-endorsed platform that integrates social and public welfare resources. This project ensures that welfare resources can accurately reach the target population by integrating the system with Zhihoban's platform. At the same time, in places like Guangzhou, co-health space, and hospitals, the platform is improving its serviceability and actively responding to and exploring the government-enterprise collaboration innovation model. Turning to our healthcare business, we continue to advance on a steady and upward trajectory. The digital clinical trial business has entered a phase of rapid scale-up coupled with efficiency gains. The Yifan platform expanded its collaboration to 198 pharmaceutical and contracted research organizations. Meanwhile, we initiated service for 114 new programs. The number of patients enrolled also reached a historic high with 999 patients enrolled in 2025, representing a 34.2% year-over-year revenue growth. Our digital omni-channel marketing business also accelerated. We renewed our three-year contract with a leading global multinational pharmaceutical. Through the application of AI in patient services and health education management, we achieved a 105% increase in productivity per capita, representing a substantial enhancement in our service capability. Looking ahead, we will deepen our L&M capabilities and algorithmic position to unlock further growth as healthcare digitization accelerates. Now I will hand over to Xu Xiaoying, our Head of Finance Department to discuss our financial performance in this quarter.

Thank you, Jasmine Lee. Hello, everyone. I will now walk you through our financial highlights for Q2 2025. Before I go into detail, 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 a year-over-year and quarter-over-quarter basis respectively. Following steady growth in the previous quarter, the company has further achieved significant year-on-year and quarter-on-quarter growth in both revenue and profit this quarter. As Peng Shen and Ran Wei just mentioned, the further development of the company's AI application has improved business operation efficiency across multiple segments, including customer acquisition, sales, service, and quality control, providing strong motivation for performance growth in the second quarter. In Q2, Waterdrop achieved remarkable financial results with total revenue amounting to $XX million, representing a year-on-year increase of 23.9% and a quarter-over-quarter increase of 11.2%. By segment, the insurance business contributed $XX million, showing a year-on-year increase of 28.7%. The corresponding service fees generated $XX million remained stable on a year-over-year basis. The digital clinical trial solutions used RMB 27.7 million with a year-on-year increase of 34.2%. Meanwhile, the company has been enhancing its operational efficiency. In Q2, the total operating costs and expenses were around $XX million, which is about 18.7% higher than the same period last year, as the growth rate of costs and expenses was lower than that of revenue. This quarter, the operating cost amounted to $XX million, a 30.5% increase from last year. This was mainly due to the increase of $XX million in referral and service fees this quarter. Additionally, the company made extra efforts in the medical refining business to assist more users. Moreover, as the company has been enhancing its AI capability to attract more users, during this quarter, it acquired users while considering both efficiency and user experience. The sales and marketing expenses amounted to $XX million, representing a 26.3% increase compared to last year. This is primarily due to an increase of $XX million in marketing expenses for third-party traffic channels. General and administrative expenses decreased by 21.9% year over year to $XX million for 2025. This was primarily because the company tightened its operational control, and allowances for credit losses were RMB 13.4 million less than last year. The R&D expenses remained stable at $XX million for the same period last year. In the future, we will continue to allocate more resources to AI capability building. In terms of operating profit in Q2, the company's operating profit reached $XX million, showing a high-speed year-on-year growth of 85.9%. The operating profit margins of the company as a whole and its insurance business have both further improved. Net profit attributable to the company's ordinary shareholders reached RMB 140 million, up 58.7% year over year. As of June 30, 2025, we held $XX billion in cash reserves with operating cash flow remaining positive, providing a solid foundation for continued growth and strategic investment. In conclusion, Waterdrop's excellent performance in this quarter further demonstrates its robust operational stability and the effective synergy among diverse business segments. Looking ahead, we will continue to leverage technology and AI to expand our user base. At the same time, we will optimize our operations to enhance efficiency, thereby facilitating stable growth of business revenue and profits. Additionally, we will persist in creating long-term value for shareholders and society. And ladies and gentlemen, with that, we will conclude today's conference call. We thank you for joining us. Have a good time.