Summary of Zepp Health Corporation Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $51.5 million, up 33.8% year-over-year, in line with guidance.

Gross Margin: 37.7%, a slight increase of 0.4% year-over-year, but down from 40.4% in Q4 2025.

Gross Profit: $19.4 million, up 35.3% year-over-year.

Operating Loss: Narrowed to $6.3 million from $17.2 million in Q1 2025.

Adjusted Net Loss: $17.9 million (34.8% of sales), compared to $18.1 million (41% of sales) in Q1 2025.

Cash Position: $103.2 million, down from $112.9 million at the end of 2025.

Inventory: Reduced to $62.8 million from $72.8 million in Q4 2025.

2Strategic Updates and Business Highlights

Product Launches: Successful introduction of Amazfit ActiveMax, Active 3 Premium, and T-Rex Ultra 2 contributed to revenue growth.

Premiumization Strategy: Focus on higher-end products is yielding results, with average selling prices increasing over 20% year-over-year.

Partnership with HYROX: A new 3-year exclusive partnership aims to enhance brand positioning in hybrid training, integrating smart wearables with training modes and performance data.

Market Position: Zepp Health ranks among the top 6 smartwatch brands in the U.S. and Europe by value share, indicating strong market presence.

3Forward Guidance and Outlook

Q2 Revenue Guidance: Expected to be between $63 million and $68 million, reflecting 6% to 14% year-over-year growth.

Long-term Strategy: Focus on sustainable growth, quality of revenue, and improved profitability, with continued investment in R&D and marketing.

4Bad News, Challenges, or Points of Concern

Gross Margin Pressures: Anticipated near-term pressure on gross margins due to rising memory component costs and unfavorable foreign currency exchange fluctuations.

Operating Expenses: Increased operating expenses driven by foreign exchange impacts and investments in marketing and R&D, which may affect profitability in the short term.

Product Launch Timing: Potential delays in product launches could impact revenue forecasts, with some products slipping into Q3.

5Notable Q&A Insights

Product Launches: The company anticipates more than nine product launches for the year, with a heavy launch schedule in the first half.

Cost Management: R&D expenses are expected to normalize in the second half of the year as the majority of new product launches are completed. Marketing expenses are also front-loaded, suggesting a decrease in the latter half.

Competitive Pricing: Competitors are raising prices to offset costs, but Zepp Health believes it still has room to increase prices while maintaining a focus on product quality and user experience. This earnings call reflects a strong start to 2026 for Zepp Health, with notable growth in revenue and strategic initiatives aimed at enhancing market positioning, despite facing challenges related to cost pressures and product launch timing.