Yuanbao (NASDAQ:YB) reported double-digit revenue and profit growth for the first quarter of 2026, with management pointing to stronger insurance distribution activity, growth in system services and broader deployment of artificial intelligence across its platform.
The internet insurance company said total first-quarter revenue rose 35.6% year over year to RMB 1.32 billion. Net income increased 31.4% to RMB 388 million, with a net income margin of 29.5%. Chief Executive Officer Rui Fang said the results reflected Yuanbao’s work with insurers on product innovation, personalized recommendations, refined operations, claims services and AI integration.
Revenue Growth Led by System Services
Wan said Yuanbao’s first-quarter revenue growth was “broad-based,” with contributions from both insurance distribution and system services.
- Insurance distribution services generated RMB 411.3 million in revenue, up 27.8% year over year. Wan said the increase reflected a higher volume of policies purchased through Yuanbao’s platform, supported in part by targeted marketing initiatives.
- System service revenue totaled RMB 904.6 million, up 39.8% year over year. Wan attributed the growth to refinements in Yuanbao’s consumer service cycle engine and deeper engagement with existing and newly onboarded insurance carrier partners.
Total operating expenses and costs rose 29.1% year over year to RMB 878.6 million. Selling and marketing expenses increased 29.4% to RMB 638.2 million, reflecting continued investment in consumer acquisition and engagement. Research and development expenses rose 39.7% to RMB 106.3 million as the company expanded its R&D headcount and technical capabilities.
Wan said income tax expense increased to RMB 69.4 million from RMB 6.7 million a year earlier, primarily because of a higher effective tax rate. Non-GAAP adjusted net income was RMB 408.8 million, up 31% year over year, with a non-GAAP adjusted net income margin of 31.1%.
AI Remains Central to Strategy
Management repeatedly emphasized Yuanbao’s investment in AI as a central element of its operating model. Fang said the company’s model matrix included more than 5,000 models capable of analyzing more than 5,800 labels as of quarter-end. He said those models are used across demand identification, product recommendations and claims services.
Fang said Yuanbao has deployed an AI insurance large language model at scale and integrated it into core operations. The company has developed an AI-powered service system based on multi-agent collaboration and launched an intelligent insurance consultation and planning tool for consumers.
According to management, the tool supports product coverage interpretation, underwriting eligibility assessments for users with pre-existing medical conditions, insurance planning suggestions and policy comparisons. Fang said the system uses multi-turn conversations to refine user profiles and deliver more personalized consultation and planning services.
Yuanbao also described its insurance knowledge base as covering thousands of insurance products and policy details, with millions of accumulated professional knowledge data points related to insurance, healthcare and service processes. Fang said the company is moving from “tool-based AI” toward “organization-wide AI” through a platform, skills and scenarios architecture.
Claims and Product Innovation in Focus
Fang said Yuanbao is working with insurance carriers to enhance inclusive insurance offerings, including products aimed at specialized customer segments such as individuals with pre-existing conditions and new urban residents. He also said the company moved to integrate the Commercial Insurance Innovative Drug Catalog into its product offerings.
On claims, management said Yuanbao launched an intelligent claims assistance feature that helps partner insurers conduct preliminary reviews of low-value, low-risk claims. Stella Liu, Yuanbao’s Investor Relations and Strategy Associate Director, said the company’s proprietary claims review system automatically verifies claims documents and calculates claim amounts, which is intended to improve claims-processing efficiency and shorten response times for small-value claims.
Management Addresses Marketing, Regulation and Retention
During the question-and-answer session, Citi analyst Amy Chen asked about marketing efficiency and AI’s role in customer acquisition, conversion and post-sale services. Fang said customer acquisition efficiency remained robust as Yuanbao scaled, citing operating leverage in selling and marketing expenses. He said the company’s model has “consistently been AI-driven” and that there had been no major change in its customer acquisition engine.
In response to a question from Yue Xu of China Security Company about new rules restricting the use of personal accounts to market financial products, including insurance, Fang said the regulation had not had a material impact on Yuanbao’s user acquisition model. He said the company prioritizes compliance, maintains marketing management systems and mandatory compliance reviews, and works with licensed issuers whose product terms are filed with or approved by regulators.
Goldman Sachs analyst Thomas Wong asked about shareholder returns. Fang said the dividend and repurchase program demonstrated management’s confidence in the company’s outlook and commitment to enhancing long-term corporate value. He added that Yuanbao would review shareholder return policies again for 2026.
On customer retention and renewal rates, Fang said online customer acquisition remains important because China’s commercial health insurance market is still under-penetrated. He said Yuanbao is working with insurers on products such as zero-deductible medical insurance and multi-claim critical illness plans, while using AI-enabled claims support to improve user experience and trust.
Outlook Tied to Health Insurance Demand
Fang said the insurance industry is moving toward “high-quality development” driven by structural optimization, value-focused efficiency and ecosystem integration. He said demand for commercial health insurance is being supported by rising consumer awareness of health protection and China’s broader multi-tier healthcare protection system.
Looking ahead, Yuanbao said it will continue investing in AI agents across the insurance process, with a focus on identifying user needs, matching users with suitable products and improving advisory services. Wan said the company will remain focused on high-quality revenue growth, operating leverage and long-term shareholder value.
About Yuanbao (NASDAQ:YB)
Our mission is to protect health and well-being through technology. We are a leading technology-driven online insurance distributor in China. We take pride in pioneering the seamless integration of insurance with cutting-edge technologies, and have constructed a highly efficient full consumer service cycle engine. Through this engine, we successfully distribute suitable and high-quality insurance products to over ten million insurance consumers. According to Frost & Sullivan, we were the largest independent insurance distributor in China’s personal life and accident & health (A&H) insurance market in terms of first year premiums in 2023.
