Full Press Release Details
Health Corporation Reports Fourth Quarter and Full Year 2025 Unaudited Financial Results
Calif., March 15th 2026 /PRNewswire/ -- Zepp Health Corporation ("Zepp" or the "Company") (NYSE: ZEPP)
today announced its unaudited financial results for the fourth quarter and full year of 2025.
Quarter 2025 Financial and Operating Highlights:
1 Adjusted net income/(loss) attributable to Zepp Health Corporation 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 investment, (iv) impairment loss from long-term
investments, (v) income/(loss) from equity method investments, and (vi) tax effects of the above non-GAAP adjustments. See "Reconciliation
of GAAP and non-GAAP results" at the end of this press release.
Year 2025 Financial and Operating Highlights:
"2025 marked a pivotal year for Zepp Health as our branded products
delivered over 50% year-over-year revenue growth and recorded margin expansion," commented Wayne Huang, Founder, Chairman and CEO
"These results reflect the success of our multi-year transformation
as we evolve from a volume-driven wearable brand into a premium-focused global brand built around Hybrid Training. Through our expanding
product portfolio-from the $169 Active series to the $550 T-Rex Ultra flagship-together with growing pricing power and deeper
engagement with performance communities such as HYROX, Amazfit is increasingly becoming part of how athletes train, compete, and share
Mr. Leon Deng, Zepp's Chief Financial Officer, added, "In
the fourth quarter of 2025, we delivered robust revenue growth, with total revenue reaching US$85.2 million, a 43.0% increase compared
to the fourth quarter of 2024. This performance was driven by strong sales of our Amazfit-branded products during the Black Friday and
Christmas sales seasons. We are confident in our ability to maintain this growth momentum into 2026.
2 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. See "Reconciliation of GAAP and non-GAAP results"
at the end of this press release.
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.
GAAP operating expenses for the quarter amounted to US$38.3 million, while adjusted operating expenses3 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."
3 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. Please refer to the section titled "Reconciliation of GAAP and non-GAAP results"
Quarter of 2025 Financial Results
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 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
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
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
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 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.
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.
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
of December 31, 2025, the Company had cash balance (including restricted cash) increased sequentially, and end of balance as of