Zepp Well being (ZEPP) This autumn 2025 Income Transcript

DATE

Sunday, March 15, 2026 at 9:30 p.m. ET

CALL PARTICIPANTS

• Founder and Leader Government Officer — Wang Huang
• Leader Monetary Officer — Leon Cheng Deng
• Leader Working Officer and Normal Supervisor, North The united states — Mike Yeung
• Vice President, Capital Markets, North The united states — Eric Flemming
• Investor Family members Director — Grace Yujia Zhang

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TAKEAWAYS

• Overall Income — $85.2 million, an building up of 43% yr over yr, hitting the higher finish of prior steering.
• Complete-Yr Income — $259 million, up 41.8% in comparison to $183 million in 2024, attaining a renewed enlargement trajectory.
• Amazfit Branded Product Income — Grew 51% for the yr; This autumn gross sales greater 45.4% yr over yr and 12.4% sequentially, indicating broad-based energy.
• Gross Margin — Accomplished 40.4% in This autumn, up 3.6 proportion issues yr over yr and a couple of.2 issues sequentially, attributed to greater top rate product combine and maintained worth integrity in spite of promotional classes.
• Gross Margin (Complete-Yr) — Reached 38.3%, proceeding the growth development since the second one part of 2023.
• Overall Non-GAAP Working Bills — $37.1 million for This autumn, with prices as a p.c of earnings bettering through roughly 6%; absolute bills rose about $8 million pushed through greater provisions, emblem funding, and variable promoting prices.
• Adjusted Web Loss (This autumn) — $6.4 million, an important relief from a $22.5 million loss 12 months prior, pushed through running enhancements and restricted one-off provisions.
• Adjusted Web Loss (Complete-Yr) — $31.5 million, narrowing from $56.7 million in 2024; key drivers come with deferred tax asset provision, one-off provisions, and primary part running loss.
• Money and Money Equivalents — $113 million as of length finish, emerging from $103 million in Q3 and $111 million on the prior year-end; sustained sure running money waft cited as supporting liquidity.
• Stock — Stood at $72.8 million, down from $87.7 million at Q3 finish, as ongoing stock control tasks lowered balances even with some strategic element purchases.
• Top class Phase Efficiency — T-Rex and Steadiness sequence, together with the brand new T-Rex Extremely 2 priced at round $550, drove larger moderate promoting costs and strengthened top rate emblem place.
• Forecast (Q1 2026) — Income steering of $50 million to $55 million, implying 30%-43% year-over-year enlargement, in response to “present visibility into our order ebook and powerful sell-through developments in our key markets.”
• Logo and Athlete Partnerships — Expanded world emblem positioning, mentioning new partnerships with elite athletes together with Josh Kerr as “now not simply emblem ambassadors, they actively use Amazfit gadgets.”
• Product Pipeline — A couple of new merchandise introduced in 2025, together with Amazfit Energetic MAX and Energetic 3 Top class, plus new T-Rex sequence; identical or higher release cadence anticipated for 2026.
• Proportion Repurchase — Dedication to proceed proportion buybacks in 2026 reaffirmed, described as “an efficient use of capital that aligns with our center of attention on handing over sustainable long-term price to shareholders.”
• Debt Control — Debt remained constant after Q1 2025 restructuring; reported building up in This autumn because of refinance of non permanent to long-term debt to protected decrease charges, with cumulative $58 million in debt retired since 2023.
• Expense Construction — CFO Leon Cheng Deng mentioned, “the vast majority of the associated fee building up don’t seem to be structural charge will increase,” mentioning normalizing advertising and G&A prices for 2026 with expectancies for decrease running charge ratios.

SUMMARY

Zepp Well being Company (ZEPP 4.22%) delivered report This autumn gross margin and strong earnings enlargement, pushed through top rate section growth and disciplined stock control. Operational leverage progressed, as considerable advertising and G&A prices have been recognized as non-recurring, positioning the corporate for additional charge efficiencies in 2026. Control highlighted ongoing premiumization, new product launches at larger worth issues, and direct partnerships with most sensible athletes as core drivers for long term earnings growth and emblem credibility. Steadiness sheet energy was once emphasised by way of sequential money enlargement and lively debt optimization, permitting flexibility for persevered proportion repurchases and operational investments.

• Logo technique integrated “construction point publicity” by means of HYROX match integration, with sponsorship visibility embedded at once into athletic effects moderately than conventional promoting.
• The corporate’s product provide was once quickly constrained through Helio Strap production capability in Q3 and This autumn, an element control mentioned can be resolved to satisfy long term call for.
• Moderate promoting worth will increase throughout segments have been described as greater than offsetting reminiscence charge inflation, with vertical provide chain integration offering flexibility amid element pricing pressures.
• Leon Cheng Deng recommended the corporate would possibly leverage AI-driven R&D potency enhancements to keep watch over long-term analysis prices with out sacrificing product innovation.

INDUSTRY GLOSSARY

• SKUs: Inventory Preserving Devices, distinctive identifiers for every distinct product or merchandise introduced on the market.
• BOM: Invoice of Fabrics, the entire checklist of portions, pieces, assemblies, and different fabrics had to manufacture a product.
• RISC-V: An open usual instruction set structure (ISA) used for creating processor chips, related to wearable instrument functionality.
• HYROX: An international aggressive health race structure combining working and practical exercises, utilized by Zepp Well being for embedded sponsorships and emblem positioning.
• ASP: Moderate Promoting Worth, representing the common unit sale worth throughout an organization’s product portfolio.

Complete Convention Name Transcript

Wang Huang, our Founder and Leader Government Officer; and Leon Deng, our Leader Monetary Officer. Becoming a member of us lately will even have Mike Yeung Leader Working Officer and Normal Supervisor of North The united states; and [ Eric Flemming ], VP of Capital Markets in North The united states. Prior to we proceed, please word that lately’s dialogue will include forward-looking statements made beneath the protected harbor provisions of the U.S. Personal Securities Litigation Reform Act of 1995. Ahead-looking statements contain inherent dangers and uncertainties. As such, the corporate’s exact effects is also materially other from the perspectives expressed lately.

Additional data relating to this and different dangers and uncertainties are incorporated within the corporate’s annual document on Shape 20-F for the fiscal yr ended December 31, 2024, different filings as filed with the U.S. Securities and Change cognition. The corporate does now not think any legal responsibility to replace any forward-looking statements, except for as required beneath appropriate regulation. Please additionally word that Zepp’s profits press free up and the convention name contains discussions of unaudited GAAP monetary data in addition to our audited non-GAAP monetary data. Zepp’s press free up incorporates a reconciliation of the unaudited non-GAAP measures to probably the most at once related GAAP measures. I will be able to now flip the decision over to our CEO, Wang. Please cross forward.

Wang Huang: Hi, everybody, and thanks for becoming a member of us lately. Prior to going into the main points of the quarter, let me first proportion how we see Zepp evolving. During the last few years, we’ve been reworking Zepp from a standard variable {hardware} corporate into what we name a hybrid coaching platform. Our purpose isn’t merely to release aggressive gadgets, however to construct a broader functionality gadget that integrates staying power, trade and restoration by way of {hardware} coaching intelligence, device and information features. With that context in thoughts, 2025 was once a robust yr for Zepp For the total yr, Amazfit branded product earnings grew 51% year-over-year.

Within the fourth quarter, Amazfit branded gross sales grew 45% year-over-year, whilst gross margin reached a report point of 40.3%. Importantly, this enlargement was once accomplished with out depending on heavy discounting all the way through the vacation season. Those effects mirror the continuing development of our multiyear transformation as we evolve from a volume-driven trade, towards a emblem lead and top rate targeted world corporate. We additionally exhibit strengthening pricing energy throughout our portfolio as our product makes steady moving against higher-value segments. Becoming our product highlights. Our enlargement in This autumn was once vast founded throughout each access point and top rate segments, as we proceed increasing our portfolio to serve a much broader vary of customers and coaching eventualities.

At CES we introduced a Amazfit Energetic MAX, the latest member of the Energetic circle of relatives. Energetic Max fills the distance between our entry-level way of life watches and our Rocky Outside sequence. It objectives on a regular basis running shoes, starting their health adventure. It includes a colourful AMOLED show, long-rate over 170+ exercise modes and development reinforce for offline maps and coaching steering powered through Zepp Trainer. We additionally not too long ago presented Energetic 3 top rate, designed particularly for brand new and entry-level runners, situated round USD 169 worth tier, Energetic Max and Energetic 3 Top class support the core quantity section of our portfolio, whilst increasing our succeed in amongst customers starting structured coaching. In our Top class portfolio, the T-Rex and Steadiness sequence proceed to accomplish strongly.

In February, we introduced T-Rex Extremely 2, our latest flagship outside watch, constructed with Grade 5 titanium and designed for succeed in sturdiness, Extremely 2 extends the highest finish of our portfolio to across the USD 550 worth point. The absolute best worth level in our historical past. Merchandise like Extremely 2 support the top rate positioning of the Amazfit emblem whilst increasing the marketing of our product portfolio. At the device aspect, we proceed strengthening our ecosystem by way of updates to Zepp OS. Options akin to BioCharge, power advertising, and Zepp Trainer AI-driven coaching steering and now attaining extra gadgets and serving to building up engagement, retention and long-term consumer price.

In combination, our Zepp app, variables and sensor applied sciences are making a more potent ecosystem round our {hardware} basis. From what we imagine is a increasing defensive mode round our platform through expanding switching prices, bettering consumer retention and increasing lifetime price. At the emblem aspect, we’ve additionally made planned investments to carry our credibility within the world functionality sports activities group. This month, we introduced a partnership with Josh Kerr, a 2-time Olympic Medalist and International Champion middle-distance runner. Josh joins our increasing roster of elite athletes, together with Grant Fisher, Tyler Andrews and Ruth Croft.

Those athletes don’t seem to be simply emblem ambassadors, they actively use Amazfit gadgets akin to Steadiness 2, Helio Ring and Helio Strap of their day by day coaching and restoration. When world-class athletes depend on our knowledge and coaching insights to arrange for the absolute best point of pageant, this sends a formidable sign concerning the accuracy, credibility and function features of our era. Any other essential element of our technique is our collaboration with HYROX, one of the most fastest-growing hybrid staying power pageant globally.

At HROX, racers world wide, together with fresh occasions in towns akin to Phoenix and Las Vegas, athletes acquire in entrance in their authentic effects display screen to seize and proportion their completed time, at once underneath the race effects seems offered through Amazfit, making Amazfit probably the most distinguished emblem built-in into that second. When athletes proportion the ones effects throughout social platforms, the manufacturers naturally spreads by way of athelete-generated content material moderately than paid promotion. This isn’t conventional sponsorship visibility. It’s construction point publicity, embedded at once into the athlete enjoy.

Extra widely, HYROX performs a key position in our hybrid coaching technique, which integrates staying power, change and restoration into one coherent functionality gadget, the place variable knowledge, coaching intelligence and real-world functionality validation converge. Having a look forward to 2026. We stay taken with strengthening our top rate product lineup, increasing our ecosystem by way of AI-driven coaching, insights and function applied sciences and deepening our engagement with performance-focused communities. For the primary quarter of 2026, we think earnings within the vary of USD 50 million to USD 55 million, representing an building up of 30% to 43% year-over-year. This outlook displays our self belief that the call for we’re seeing isn’t merely seasonal, however structural.

We imagine we’ve the correct mix of goods, channels and value construction to force sustainable enlargement and a transparent trail against sustained profitability. As our Top class combine continues to make bigger in higher-margin classes scale, we think our margin profile to proceed strengthening. With that, I will be able to now flip the decision over to Leon, to stroll during the monetary main points. Leon, please cross forward.

Leon Cheng Deng: Thanks, Wang. Greetings, everybody. Thanks once more for becoming a member of our fourth quarter and entire yr 2025 profits name. Within the final quarter of 2025, our earnings rose to $85.2 million, up 43% year-over-year, assembly the higher finish of our steering vary. For complete yr 2025, earnings reached $259 million, representing a 41.8% year-over-year enlargement, in comparison with USD 183 million in 2024, marking a go back to enlargement trajectory. Our fourth quarter enlargement was once pushed through broad-based energy throughout our various portfolio.

As Wang discussed, our 2025 This autumn Amazfit branded gross sales greater through 45.4% year-over-year and 12.4% sequentially, fueled through robust execution all the way through the important Black Friday and Christmas gross sales seasons, the place our emblem visibility reached new heights throughout main e-commerce channels. Moreover, our established Top class traces, particularly the T-Rex and Steadiness sequence proceed to look sustained call for. additional validating our premiumization technique and boosting our moderate promoting worth. Glance forward, we’ve simply began promoting off our Energetic 3 Top class/Energetic MAX and T-Rex Extremely 2 watches. And at the side of our upcoming new product launches, we think the highest line growth continues into 2026. Turning now to gross margin.

It was once influenced through quite a lot of elements, together with product combine, product release timing and product lifestyles cycles akin to style upgrades. In This autumn, we accomplished a report gross margin of 40.4%, an excellent growth of three.6 and a couple of.2 proportion issues in comparison with similar length of 2024 and 3rd quarter of 2025. This is a spotlight of this quarter’s monetary functionality and the most powerful indicator of our bettering emblem popularity and provide chain control. This margin functionality was once pushed through 2 key elements that I need to elaborate on. First, we learned a extremely favorable combine shift with larger contributions from the Top class Journey sequence of our Amazfit-branded merchandise.

This shift clear of lower-margin legacy merchandise against more recent high-value SKUs naturally carry our margin profile. 2nd, we have been in a position to deal with worth integrity even all the way through larger promotional classes like Black Friday, additional boosting margins. The robust gross margin pushed through our product combine greater than offset the headwinds we are going through from FX fluctuations, reminiscence chips charge building up and tariffs-aimed macroeconomic uncertainties. Gross margin within the complete yr 2025 was once 38.3%. We stay heading in the right direction with our margin growth technique initiated in the second one part of 2023, and we think the fad to proceed into 2026 as we additional optimize our product combine and provide chain potency. Subsequent, bills.

We stay dedicated to prudent charge control, proceeding this system we started in 2020 to scale back general running prices whilst making an investment for enlargement. Overall non-GAAP running bills for the fourth quarter have been $37.1 million. Bills as a proportion of gross sales progressed through roughly 6% in comparison to This autumn 2024. Alternatively, in absolute quantity, it’s up through round $8 million year-over-year and quarter-over-quarter. I will be able to wreck down the precise driving force of this building up that can assist you perceive the standard of our spend. Roughly round $1 million is at once attributed to sure mounted channel charge investments to force direct most sensible line enlargement. As we send extra gadgets and generate extra earnings, sure variable promoting and logistics bills naturally upward push in tandem.

2nd, we recorded round $5 million year-end provisions noncash adjustment for possible dangerous debt and trade style optimization as a part of our ongoing chance control technique and any other USD 1 million investments in patent charges and emblem coverage to safeguard our highbrow houses and make sure long-term trade luck, in overall $6 million. In any case, and most significantly, we strategically invested round $1 million in front-loaded advertising tasks, together with prematurely prices for elite athlete sponsorships akin to partnerships with Olympic Medalist Josh Kerr, in addition to some investments on advertising and branding actions that stuffed the adoption of latest product launches. As you’ll be able to see, except for for the primary component, the vast majority of the associated fee building up don’t seem to be structural charge will increase.

We predict decrease running prices relative to earnings in 2026, as those one-off prices normalize and can understand additional charge efficiencies. Through line merchandise, adjusted analysis and building bills have been USD 10.2 million, remained reasonably strong quarter-over-quarter and year-over-year. We proceed to spend money on a chain of state-of-the-art merchandise in addition to new applied sciences together with AI, to deal with our aggressive edge towards our friends. On the similar time, we center of attention on delicate analysis and building approaches as we constantly evaluated sources potency to optimize go back on funding and productiveness. Adjusted promoting and advertising bills have been $15.6 million, reflecting the front-loaded branding funding I simply discussed.

We are seeing a robust go back on funding for those advertising bucks as evidenced through our marketplace proportion positive factors in U.S. and Europe. On the similar time, we constantly driven retail profitability and channel combine development. Adjusted G&A bills have been $11.3 million in comparison with USD 6.1 million and USD 6.5 million in the similar length of 2024 and 3rd quarter of 2025. The rise is principally pushed through the year-end provisions I discussed above. Except for the ones, G&A bills remained flat during the yr. We proceed to streamline overhead keeping up disciplined charge keep watch over whilst progressed running potency. Overall adjusted running bills have been USD 123 million in 2025 in comparison with USD 110 million for the total yr 2024.

The rise is at once as a consequence of the explanations I defined above. Adjusted running bills for 2025, apart from those could be USD 110 million. We can deal with our cost-conscious means and stay dedicated to making an investment in R&D and advertising actions to make sure our long-term competitiveness. In This autumn, adjusted web loss attributed to Zepp Well being was once USD 6.4 million, in comparison to adjusted web lack of USD 22.5 million within the fourth quarter of 2024. The online loss in This autumn was once principally a results of working running effects greater than offset through $2 million deferred tax asset provision and a $6 million one-off provisions.

Complete yr adjusted web loss attributed to the corporate was once USD 31.5 million in comparison with the adjusted web lack of USD 56.7 million for 2024. The online loss for 2025 have been principally from deferred tax asset provision, onetime particularly recognized provisions and running loss from the primary part of the yr 2025. In the case of our stability sheet and dealing capital, we proceed to control our stock carefully. In spite of strategic chance purchases of key parts for the long run, our stock balances lowered to USD 72.8 million in comparison with USD 87.7 million as of Q3 2025, reflecting our ongoing enhancements in stock control.

As of December 31, 2025, our money and money equivalents stood at $113 million, in comparison to USD 103 million as of Q3 2025 and $111 million as of December 2024. We delivered any other quarter of sure running money waft, additional strengthening our liquidity place. This constant money era capacity supplies plentiful runway for us to speculate and grasp possible marketplace alternatives. In the case of capital construction, our general long-term and non permanent debt ranges remained reasonably constant following the restructuring we finished in Q1 2025. Alternatively, chances are you’ll understand a sequential building up in our reported debt ranges in This autumn because of refinancing non permanent debt into long-term debt, capitalizing on favorable charges to reduce passion bills.

Whilst we’re taken with decreasing our general debt point over the long term, there is also transient fluctuations in debt ranges quarter-to-quarter because of timing of refinancing and compensation actions. For the reason that starting of 2023, we’ve cumulatively retired USD 58 million of debt, and we’re going to proceed to optimize the capital construction going ahead. Given our self belief within the corporate’s robust basics and sustainable enlargement trajectory, we’re reaffirming our dedication to our proportion repurchase program in 2026. We view this system as an efficient use of capital that aligns with our center of attention on handing over sustainable long-term price to shareholders.

Prior to we speak about steering, I want to stroll you by way of one of the crucial key macroeconomic and commercial explicit elements we’re lately going through, together with the hot reminiscence chip motion. Whilst we don’t seem to be resistant to reminiscence charge inflation, it is very important word that our merchandise have modest reminiscence necessities in comparison to different classes like PC and telephones. Customers do not make a selection our merchandise in response to reminiscence configurations, they make a selection us for the reviews and accuracy we ship. Moreover, we arrange our complete BOM charge holistically, whilst reminiscence prices have risen fairly, our vertically built-in provide chain supplies us with more than one levers to optimize our general charge construction.

We’re often taken with riding potency all over the availability chain through leveraging our scale and integration. Moreover, we’ve deliberately greater stock ranges of sure key parts, together with RISC-V, to make sure we will meet long-term call for. Our robust relationships with providers let us align with expected product call for and whilst provide chain demanding situations are inevitable, we are assured in our talent to navigate them. Finally and most significantly, as demonstrated in previous quarters, we’ve observed a gentle building up within the moderate promoting worth of our merchandise. We firmly imagine that in comparison to our competition, our pricing nonetheless has plentiful room to develop.

Actually, worth will increase have greater than offset the upward thrust in reminiscence prices and helped us in navigating by way of macroeconomic uncertainties. In any case, our outlook for the primary quarter of 2026. We’re coming into the yr with robust momentum. In spite of the primary quarter historically being a slower season for the shopper electronics trade, we think earnings to be within the vary of $50 million to $55 million, representing year-over-year enlargement of roughly 30% to 43%. This steering displays our present visibility into our order ebook and powerful sell-through developments in our key markets. With robust monetary basics, a transparent trail to persevered margin growth and forged operational self-discipline, we’re smartly situated to ship successful enlargement and create long-term shareholder price.

Thanks all to your time lately. I will be able to now open the decision for questions. Operator, please cross forward.

Operator: [Operator Instructions] Your first query comes from Sid Rajeev with Basic Analysis.

Siddharth Rajeev: Congratulations at the robust earnings enlargement and the brand new product launches. Additionally great to look you might be expecting tough earnings enlargement in Q1. What number of new merchandise are you making plans to release this yr in comparison to final yr? Only a tough thought is ok.

Leon Cheng Deng: Hello Sid, I feel it is round identical merchandise is also fairly extra. So if I am not improper, final yr, we’ve introduced round merchandise or so, and this yr almost definitely is on the similar quantum of that or perhaps fairly extra.

Siddharth Rajeev: K. And the way are you getting ready for the hot spike within the U.S. greenback?

Leon Cheng Deng: We don’t seem to be that a lot uncovered to the forex fluctuations at the bucks, proper? I feel a large number of our manufacturing is various in Asia, elsewhere. And if you happen to take a look at our markets, we’re very robust in Western Europe markets in addition to the U.S. markets. So sure, to a point, the greenback reinforced up is in fact giving us some tailwind as a substitute of the headwind.

Siddharth Rajeev: K. Only one extra query, if I would possibly. Relating to running bills, you probably did a excellent activity in stabilizing and even chopping prices in some spaces. Which explicit spaces do you suppose there’s room for additional discounts?

Leon Cheng Deng: I feel if you happen to take a look at the marketing and advertising bills, we — as we simply discussed, in some puts, we in fact front-loaded one of the crucial bills into the excessive seasons as a result of we need to get ready for the impending new product launches as an example. And that are meant to normalize over the quarters as a result of it is very a lot pushed through the product release home windows and the cadence we’ve carried out. Any other one is the G&A price as a result of you could have observed that G&A prices stay on taking place for us. After which I feel there is additionally room to fortify over there. And the final one is R&D.

However I feel on one hand, we wish to make investments R&D to maintain the brand new product launches I simply discussed. You requested concerning the numbers, proper? Alternatively, we see a large number of puts wherein lets undertake AI to in fact fortify our potency on R&D.

Operator: Your subsequent query comes from Peter [indiscernible] with Brooks Investments.

Unknown Analyst: I’ve 2 questions. If it’s essential to supply extra colour at the gross sales functionality of the Journey sequence? And 2d, if you’ll be able to proportion extra about what is the plan for the Amazfit, Strap and Ring for this yr?

Leon Cheng Deng: Sorry, I did not get the primary query, obviously, if you’ll be able to repeat the primary one.

Unknown Analyst: Proper. Sure, if you’ll be able to supply extra colour at the gross sales functionality of the Journey sequence. And the second one query could be what is the plan for the Amazfit strap and ring.

Leon Cheng Deng: K. So thanks. At the first one, at the Journey sequence, you notice that we’ve got introduced many new merchandise in 2025 all over the yr. So we’ve introduced the T-Rex 3 Professional, and we’ve additionally introduced the T-Rex Extremely 2 in February, proper? After which we’ve one of the crucial new merchandise additionally within the T-Rex circle of relatives covered up in 2026. And clearly, the Journey sequence in fact additionally helped us to carry our general product combine and likewise helped us to fortify our ASP for the corporate. So Journey sequence is enjoying increasingly more essential position within the general combine we’ve. So I feel it’s going to proceed to be like that during 2026.

And with reference in your 2d query on Helio Strap and the rings. Helio Strap has made nice functionality and [indiscernible] In 2025, and it’s been the most well liked, if now not the most well liked merchandise amongst that worth vary in our portfolio. However I feel alternatively, we did not manufacture sufficient of the Helio Strap to cater for the Q3 and This autumn excessive seasons. And we’re in fact resolving the availability chain on that. And in 2026, you will have to see extra of the producing of the ones gadgets and also you will have to see the marketplace call for to be happy at the Helio Strap.

Alternatively, we also are operating at the subsequent era of the ones as we talk. So keep tuned for the second one part of this yr.

Operator: As there are not any additional questions, now I might like to show the decision again over to the corporate’s IR Director, Grace Zhang for remaining remarks.

Grace Yujia Zhang: Thanks as soon as once more for becoming a member of us. We are hoping you could have a super day. It’s possible you’ll now disconnect. Thanks.

Wang Huang: Thanks.