Zepp Health Corporation Reports Fourth Quarter and Full Year 2025 Unaudited Financial Results

Our gross margin for the fourth quarter reached a record high of 40.4%, a significant 3.6% improvement compared to the fourth quarter of 2024 and a 2.2% increase over the third quarter of 2025. This exceptional margin expansion was driven by a more favourable product mix and our ability to sustain pricing power during promotional periods. We remain on track with the margin enhancement efforts that began in late 2023, and we expect this trend to continue into the new year as we optimize our product mix and improve supply chain efficiencies.

Total GAAP operating expenses for the quarter amounted to US$38.3 million, while adjusted operating expenses^[3] were US$37.1 million, adjusted operating expenses as a percentage of sales improved by 5.7%, compared to the fourth quarter of 2024. Although we experienced an increase in operating expenses due to strategic investments in brand and marketing activities, the majority of this increase was attributable to US$5.2 million specially identified provisions for sales channel optimization and brand and intellectual property protection. We expect these costs to normalize in 2026.

Thanks to strong revenue growth, improved gross margins, and effective cost control, our adjusted operating loss for the fourth quarter was significantly reduced to US$2.7 million, compared with US$7.4 million in the fourth quarter of 2024.

As of December 31, 2025, we ended the quarter with US$112.9 million in cash and cash equivalents, compared with US$102.6 million as of September 30, 2025 and US$110.7 million as of December 31, 2024. The cash balance increase was driven primarily by strong operating performance and tight working capital management. Our inventory balance stood at US$72.8 million, a reduction from US$87.7 million as of September 30, 2025, reflecting our ongoing improvements in inventory management and preparation for upcoming product launches. Since the beginning of 2023, we have proactively reduced our short and long-term debt, lowering our total loan balance by US$58.2 million. We remain focused on optimizing our capital structure going forward. Moreover, our share repurchase program will proceed in 2026, underscoring our confidence in Zepp Health's long-term growth and our commitment to delivering shareholder value.

For the first quarter of 2026, we expect revenue in the range of US$50.0 million to US$55.0 million, representing an increase of 30% to 43% year-over-year. This forecast reflects our strong execution, resilient operations, and continued profitability improvement as we enter the next phase of Zepp Health's growth journey."

Fourth Quarter of 2025 Financial Results

Revenues

Revenues for the fourth quarter of 2025 reached US$85.2 million, an increase by 43.0% and 12.4% from the fourth quarter of 2024 and the third quarter of 2025, respectively. The year-over-year sales increase was driven by growth of all the product lines, including sports, balance and youth lines. The quarter-over-quarter sales growth was mainly driven by the Black Friday and Christmas sales season, as well as the new product launches.

Gross Margin

Gross margin in the fourth quarter of 2025 was 40.4%, compared to 36.8% in the fourth quarter of 2024. The company-record high gross margin was primarily driven by favourable product mix and higher portion of new product sales. The shift away from lower-margin legacy products toward newer, higher-value SKUs naturally elevated our margin profile. At the same time, we maintained price integrity even during highly promotional periods like Black Friday, further boosting margins. The strong gross margin, driven by our product mix, more than offset the headwinds from foreign exchange fluctuations, memory chip cost increases and tariffs amid macroeconomic uncertainties.

Research and Development Expenses

Research and development expenses in the fourth quarter of 2025 were US$11.0 million, which remained relatively stable compared with US$11.1 million and US$10.8 million in the same period of 2024 and third quarter of 2025.We continued to invest in a series of cutting-edge products as well as new technologies, including AI, to maintain our competitive edge against our peers. At the same time, we focused on refined research and development approaches, consistently evaluating resource efficiency to optimize return on investment and productivity.

Selling and Marketing Expenses

Selling and marketing expenses in the fourth quarter of 2025 were US$15.9 million, compared with US$13.3 million and US$12.0 million in the same period of 2024 and the third quarter of 2025. Out of the year over year increase of US$2.6 million, US$1.0 million is directly attributable to certain e-commerce platform charges, which was a kind of fixed-ratio sale channel charges, to drive revenue growth, the remaining US$1.6 million was primarily due to frontloaded investments in marketing and branding activities that fuelled the adoption of new products including Active Max and T-Rex 3 Pro. We continued to invest in selling and marketing activities and expand our Amazfit Athletes team to build brand recognition. At the same time, we consistently pushed on retail profitability and channel mix improvement, including through meticulous refinement of our retail channels and strategic staffing arrangements across sales regions.

General and Administrative Expenses

General and administrative expenses were US$11.4 million in the fourth quarter of 2025, compared with US$6.6 million and US$7.0 million in the same period of 2024 and the third quarter of 2025. The year over year increase is due to US$4.7 million specially identified provision as a result of the termination old business model and sales channel, and another US$0.5 million related to certain brand and IP protection activities. We continued to streamline overhead, maintaining disciplined cost control while improving operating efficiency.

Operating Expenses

Total operating expenses for the fourth quarter of 2025 were US$38.3 million, compared with US$30.9 million and US$29.8 million in the same period of 2024 and the third quarter of 2025. The increase is directly attributable to certain US$1.0 million e-commerce platform charges to drive revenue growth, and US$1.6 million frontloaded of some marketing and branding investments that fuelled the adoption of new products, as well as US$4.7 million specially identified provision for optimizing sales channels and business models, along with US$0.5 million expenditures for brand and intellectual property protections. We will maintain our cost-conscious approach and remain committed to investing in R&D and marketing activities to ensure our long-term competitiveness. 

Operating Income/(Loss)

GAAP and adjusted operating results were loss of US$3.9 million and US$2.7 million, compared with loss of US$8.9 million and US$7.4 million in the fourth quarter of 2024. The operating losses included US$4.7 million specially identified provision for bad debt and business model optimization, and US$0.8 million patent fee and branding protection expenditure, both are occasionally not happening regularly.

Net Income/(Loss)

Net loss attributable to Zepp Health Corporation for the fourth quarter of 2025 was US$11.0 million, compared to net loss of US$36.9 million in the fourth quarter of 2024. The net loss for the fourth quarter of 2025 included operating loss of US$3.9 million, among which US$5.5 million was specially identified provisions for sales channel optimization and brand and intellectual property protection, as well as income tax impacts of US$2.1 million (primarily resulting from valuation allowance for deferred tax assets) and net investment results of US$3.5 million (including impairment loss from investments, loss from equity method investments, and loss from fair value change of long-term investment), both of which are non-cash in nature. Adjusted net loss attributable to Zepp Health Corporation was US$6.4 million, compared to adjusted net loss of US$22.5 million in the fourth quarter of 2024.  

Liquidity and Capital Resources

As of December 31, 2025, the Company had cash balance (including restricted cash) increased sequentially, and end of balance as of US$112.9 million, compared with US$102.6 million of cash balance as of September 30, 2025. This cash position provides ample runway for the Company to invest and seize potential market opportunities.

The Company recorded inventory of US$72.8 million as of December 31, 2025, which was lower than US$87.7 million as of September 30, 2025. We will continue to manage the inventory level tightly. The Company improved its management of accounts receivable collections and accounts payable payment terms. The Company will continue to manage working capital closely.

Long-term and short-term debt levels increased as of December 31, 2025 compared with September 30, 2025 due to timing differences. We manage the overall debt levels to remain stable and optimize debt structure, capitalizing on favourable rates to minimize interest payments. We will take on some debt depends on one quarter and retire some in the other. Since the beginning of 2023, the Company has cumulatively retired US$58.2 million of debt, and will continue to optimize the capital structure for the Company.

Share Repurchase Program Update

The Company announced in its third quarter 2021 earnings release that the board had authorized a share repurchase program of up to US$20 million through November 2022. On November 21, 2022, the board authorized a 12-month extension of the Company's share repurchase program. On November 20, 2023, the board further authorized the Company to extend its share repurchase program for another 12 months. On November 18, 2024, the board further authorized the Company to extend its share repurchase program for another 24 months. Pursuant to the extended share repurchase program, the Company may repurchase its shares in the form of ADSs and/or ordinary shares through November 2026 with an aggregate value equal to the remaining balance under the share repurchase program. As of December 31, 2025, the Company had used US$16.2 million to repurchase approximately 2.2 million ADSs. The Company expects to fund the repurchases under the extended share repurchase program out of its existing cash balance.

Full Year 2025

Revenues

Total revenues of 2025 reached US$258.9 million, an increase of 41.8% from the full year of 2024. In 2025, Amazfit-branded products accounted for 100% of our total revenues, compared with 94.0% in 2024. Sales of our Amazfit-branded product increased by 50.9% as compared with 2024. The year over year sales increase was driven by growth of all the product lines, including sports, balance and youth lines.

Gross Margin

Gross margin in the full year 2025 was 38.3%, compared with 38.5% in the full year of 2024. We remain on track with our margin-expansion strategy initiated in the second half of 2023 and expect the trend to continue into 2026 as we further optimize our product mix and supply chain efficiency. 

Research and Development Expenses

Research and development expenses for the full year 2025 were US$45.3 million, decreased by 1.8% compared to full year of 2024. We continued to invest in a series of cutting-edge products set to launch as well as new technologies, including AI, to maintain our competitive edge against our peers. At the same time, we focused on refined research and development approaches, consistently evaluating resource efficiency to optimize return on investment and productivity.

Selling and Marketing Expenses

Selling and marketing expenses for the full year 2025 were US$53.8 million, an increase of 15.8% year-over-year. Out of the year over year increase of US$7.4 million, US$2.6 million is directly attributable to certain e-commerce platform charges to drive revenue growth, the remaining US$4.8 million was primarily due to frontloaded some investments in marketing and branding activities that fuelled the adoption of new products. At the same time, we consistently pushed on retail profitability and channel mix improvement, which included meticulous refinement of our retail channels and strategic staffing arrangements across sales regions. We are committed to investing efficiently in marketing and branding to ensure our sustainable growth. 

General and Administrative Expenses

General and administrative expenses were US$29.3 million in the full year 2025, an increase from US$24.9 million in the full year of 2024.The year over year increase is due to US$5.7 million specially identified provision as a result of the termination old business model and sales channel and US$1.2 million expense related to certain brand and IP protection activities. Excluding those, general and administrative expenses decreased compared with full year of 2024. We continued to streamline overhead, maintaining disciplined cost control while improving operating efficiency. 

Operating Expenses

Total operating expenses for the full year 2025 were US$128.4 million, an increase of 9.3% year-over-year. Adjusted operating expenses, were US$123.6 million, compared with US$110.4 million for the full year 2024. The increase is directly attributable to certain e-commerce platform charges to drive revenue growth, and frontloading of some marketing and branding investments that fuelled the adoption of new products, as well as certain specially identified provisions. The aggregate impact associated with those items is US$14.3 million. We will maintain our cost-conscious approach and remain committed to investing in R&D and marketing activities to ensure our long-term competitiveness.

Net Income/(Loss)

Net loss attributable to Zepp Health Corporation for the full year of 2025 was US$40.1 million, compared with US$75.7 million in net loss in 2024. The net loss for the full year of 2025 included operating loss of US$29.2 million, among which US$7.2 million was specially identified provisions for sales channel optimization and brand and intellectual property protection, as well as income tax impacts of US$2.5 million (primarily resulting from valuation allowance for deferred tax assets) and net investment results of US$4.2 million (including impairment loss from investments, loss from equity method investments, and gain from fair value change of long-term investment), both of which are non-cash in nature. Adjusted net loss attributable to Zepp Health Corporation was US$31.5 million, compared to adjusted net loss of US$56.7 million in the fourth quarter of 2024.

Outlook

The first quarter is typically a seasonally low quarter for our industry. For the first quarter of 2026, the Company's management currently expects net revenues to be between US$50.0 million and US$55.0 million, which would represent an increase of approximately 30% to 43% from US$38.5 million in the first quarter of 2025.

This outlook is based on current market conditions and reflects the Company's current and preliminary estimates of market, operating conditions and customer demand, which are all subject to change.

Conference Call

The Company's management team will hold a conference call at 9:30 p.m. Eastern Time on Sunday, March 15, 2026 to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

Participants should dial in at least 10 minutes before the scheduled start time and ask to be connected to the call for "Zepp Health Corporation".

Additionally, a live and archived webcast of the conference call will be available at http://ir.zepp.com.

A telephone replay will be available one hour after the call until March 22, 2026 by dialing:

About Zepp Health Corporation

Zepp Health Corporation (NYSE: ZEPP) is a global smart wearable and health technology leader, empowering users to live their healthiest lives by optimizing their health, fitness, and wellness journeys through its leading consumer brands, Amazfit, Zepp Clarity and Zepp Aura. Powered by its proprietary Zepp Digital Management Platform, which includes the Zepp OS, AI chips, biometric sensors and data algorithms, Zepp delivers cloud-based 24/7 actionable insights and guidance to help users attain their wellness goals. To date, Zepp has shipped over 200 million units, and its products are available in more than 90 countries and regions. Founded in 2013 as Huami Corp., the Company changed its name to Zepp Health Corporation in February 2021 to emphasize its health focus with a name that resonates across languages and cultures globally. Zepp has team members and offices across globe, especially in Europe and USA regions.

Use of Non-GAAP Measures

We use adjusted net income/(loss), a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. Adjusted operating expenses represent operating expenses excluding (i) share-based compensation expenses and (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreements. Adjusted operating income/(loss) represents operating income/(loss) excluding: (i) share-based compensation expenses and (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreements. Adjusted EBIT represents net income/(loss) excluding (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreements, (iii) gain/(loss) from fair value change of long-term investments, (iv) impairment loss from long-term investments, (v) income/(loss) from equity method investments, (vi) income tax (benefit)/expense, and (vii) interest income and interest expense. Adjusted net income/(loss) attributable to Zepp Health Corporation is a non-GAAP measure, which excludes (i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreements, (iii) gain/(loss) from fair value change of long-term investments, (iv) impairment loss from long-term investments, (v) income/(loss) from equity method investments, and (vi) tax effects of the above non-GAAP adjustments, and is used as the numerator in computation of adjusted net income/(loss) per share and per ADS attributable to Zepp Health Corporation.

We believe that adjusted EBIT and adjusted net income/(loss) attributable to Zepp Health Corporation help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in net income/(loss) and net income/(loss) attributable to Zepp Health Corporation. We believe adjusted EBIT and adjusted net income/(loss) attributable to Zepp Health Corporation provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Adjusted EBIT and adjusted net income/(loss) attributable to Zepp Health Corporation, should not be considered in isolation or construed as an alternative to net income/(loss), basic and diluted net income/(loss) per share and per ADS attributable to Zepp Health Corporation or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted EBIT and adjusted net income/(loss) attributable to ordinary shareholders, presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the recognition of the Company's Amazfit-branded products; the Company's growth strategies; trends and competition in global wearable technology market; changes in the Company's revenues and certain cost or expense accounting policies; governmental policies relating to the Company's industry and general economic conditions around the globe. Further information regarding these and other risks is included in the Company's filings with the United States Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact: 

In China:
Zepp Health Corporation
Grace Yujia Zhang
Email: ir@zepp.com

Piacente Financial Communications
Tel: +86-10-6508-0677
Email: zepp@tpg-ir.com

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SOURCE Zepp Health Corp.