Zepp Health Corporation Reports Second Quarter of 2026 Unaudited Financial Results

MILPITAS, Calif., Sept. 1, 2026 /PRNewswire/ -- Zepp Health Corporation (NYSE: ZEPP) ("Zepp", the "Company" or "we") today announced its unaudited financial results for the second quarter of 2026.

Second Quarter of 2026 Financial and Operating Highlights:

- Revenue reached US$63.5 million, representing year-over-year growth of 6.9%.

- Gross margin was 37.4%, an increase of 1.2 percentage points from the second quarter of 2025. The improvement was primarily driven by a more favorable product mix and growing contribution from higher-value products, partially offset by higher memory and other component costs.

- Net loss attributable to Zepp was US$11.3 million, compared with US$7.7 million in the same period of 2025. The benefits of higher revenue and improved gross margin were offset by foreign-exchange headwinds and increased investment in research and development, marketing and brand building.

- As of June 30, 2026, cash and cash equivalents and restricted cash totaled US$106.3 million, compared with US$95.3 million a year earlier and US$103.2 million as of March 31, 2026, primarily reflecting improved working-capital management.

- During the quarter, the Company launched new products or expanded its portfolio across multiple major product families, including professional running, Hybrid Training, entry-level smartwatches and screen-free fitness and health wearables.

Management Comments:

Wayne Huang, Chairman and Chief Executive Officer of Zepp Health, commented, "Our growth in the second quarter was measured rather than explosive. More importantly, the quality of our growth and the structure of our product portfolio continued to improve. Even before several new products had completed their production ramp and channel deployment, and despite supply continuing to constrain certain high-demand areas, we returned to year-over-year revenue growth and improved gross margin by 1.2 percentage points.

Several product families provide clear evidence of this structural progress. At U.S. suggested retail prices, T-Rex 3 Pro and T-Rex Ultra 2 are priced at approximately US$399 and US$549, respectively. Across global activations, these higher-end models continued to represent approximately 50% of the T-Rex family, demonstrating sustained consumer acceptance of our higher-end products and price ladder.

Active series has established a US$169 price tier that did not exist in the comparable period last year. This tier increased from approximately 22% of global Active family activations in the first quarter to approximately 40% in the second quarter, and reached approximately 57% through August 25, 2026. After Bip supply recovered, global monthly activations of the Active family remained broadly comparable with those of Bip in both July and August to date. This underscores that we have established meaningful scale in the US$100 to US$200 price band.

Balance is beginning to demonstrate how our long-term investment in Hybrid Training can translate into higher-value product demand. Compared with Balance 2 at a U.S. suggested retail price of US$299, the new Balance generation extends from US$369 to US$599. Despite this meaningful increase in price, total global Balance family (Balance 2 and 3 series) activations in July increased by more than one-third from the monthly average in the second quarter, while activations of earlier-generation products remained relatively stable. The new generation is therefore adding to the family rather than simply replacing earlier products. Balance remains at an early stage of growth and has not yet reached the scale we believe the family can ultimately achieve.

These positive indicators have not yet translated into their full revenue potential. T-Rex currently represents a story of sustained higher-end mix rather than rapid unit growth. Balance has only begun to establish growth momentum. Bip and Helio Strap were constrained by supply during the second quarter, while Cheetah and Helio Strap Pro remain at earlier stages of professional credibility and market development. The financial contribution of these product families is therefore developing at different speeds.

Bip supply has now recovered. Seventeen months after its launch, demand for Bip 6 remains very strong following the restoration of supply, while Bip Max has established a meaningful higher price tier within the family. Supported by sustained consumer demand, a more complete product structure, and the continued software evolution enabled by our in-house processor platform and Zepp OS, we are announcing today that we will increase prices across the entire Bip family beginning in January 2027. Our objective is to improve pricing discipline and unit economics while preserving a compelling consumer value proposition over a longer product lifecycle.

Demand for Helio Strap also exceeded available supply during the second quarter. We expect supply to recover partially during the third quarter and to be fully restored during the fourth quarter. As availability improves, we expect Helio Strap to make a more meaningful contribution to our screen-free fitness, training and recovery ecosystem."

Leon Deng, Chief Financial Officer of Zepp Health, commented, "The year-over-year improvement in gross margin, despite higher memory and other component costs, demonstrates that the shift in our product mix is beginning to yield tangible financial benefits. At the same time, foreign-exchange headwinds and continued investment in research and development, marketing and brand building affected profitability during the second quarter.

We will remain disciplined in managing our expenses and cash, while working to expand the contribution of higher-value products, restore supply where demand remains strong, and progressively convert product-mix improvements into stronger revenue growth, healthier unit economics and operating leverage. With our cash and cash equivalents and restricted cash balance of US$106.3 million at the end of the quarter, we are well positioned to continue executing our long-term product and brand strategy."

Third Quarter of 2026 Outlook:

Based on the information currently available, management expects third-quarter 2026 net revenues to be between US$68.0 million and US$73.0 million. In the third quarter of 2025, revenue increased 78.5% year over year to US$75.8 million, creating a high comparison base.

Product mix and consumer demand continued to improve during July and August. However, normal production ramp, supply-recovery and channel-deployment cycles mean that these developments will not be fully reflected in reported revenue immediately. The Company's third-quarter guidance incorporates this timing.

Second Quarter of 2026 Financial Results

Revenues

Revenues for the second quarter of 2026 reached US$63.5 million, an increase by 6.9% from the second quarter of 2025. The year-over-year sales increase was mainly driven by new product launches in the first half of 2026, including the Active 3 Premium, Active Max, and Cheetah models, while second-quarter sales were partially impacted by the new product launch timings and supply availability of the Balance 3 series.

Gross Margin

Gross margin in the second quarter of 2026 was 37.4%, an increase from 36.2% in the same period of 2025. During the quarter, margin performance faced several headwinds, including rising memory costs and RMB appreciation. On a year-over-year basis, margin expansion was primarily driven by an improved product mix from new product launches, though this was partially offset by higher memory component prices. Gross margin moderated from 37.7% in the first quarter of 2026, as mix benefits from new products were largely offset by increased memory costs, while supply constraints further constrained margin accretion.

Research and Development Expenses

Research and development expenses in the second quarter of 2026 were US$11.5 million, compared with US$11.2 million and US$13.1 million in the second quarter of 2025 and first quarter of 2026. Excluding US$0.7 million foreign currency headwinds, research and development expenses were slightly lower than the same period 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 second quarter of 2026 were US$18.3 million, compared with US$12.1 million and US$16.6 million in the second quarter of 2025 and first quarter of 2026. The US$6.2 million year-over-year increase was primarily driven by US$2.9 million in new product launch campaigns and US$1.6 million in e-commerce platform charges, which increased in line with top-line growth. The remaining increase reflected US$0.7 million in sponsorships for new athletes, US$0.5 million related to the HYROX partnership, and US$0.5 million in physical retail and event booth activations.

General and Administrative Expenses

General and administrative expenses were US$6.2 million in the second quarter of 2026, compared with US$4.4 million and US$7.4 million in the second quarter of 2025 and first quarter of 2026. Out of the year-over-year increase of US$1.8 million, substantially all was due to foreign currency headwinds. We continued to streamline overhead, maintaining disciplined cost control while improving operating efficiency.

Operating Expenses

GAAP and adjusted operating expenses[1] for the second quarter of 2026 were US$36.0 million and US$34.8 million, compared with US$27.6 million and US$26.4 million in the second quarter of 2025, and US$37.1 million and US$35.7 million in the first quarter of 2026. Out of the year-over-year increase of US$8.