Financial Data and Key Metrics Changes - Total net revenues for Q3 2021 were RMB1.6 billion, a decrease of 28.1% year-over-year [7] - Revenue from Xiaomi products declined by 45% year-over-year, contributing to the overall revenue drop [18] - Gross margin for Q3 2021 was 20.2%, essentially flat with a 40 basis point difference from the previous year [18] - Net income as a percentage of sales declined slightly year-over-year due to lower interest income and higher interest expenses [19] Business Line Data and Key Metrics Changes - Shipments of self-branded products grew by 88.9% year-over-year, accounting for 38.6% of total net revenues [8] - Year-over-year revenue growth for self-branded products was 84%, 81%, and 38% in the first three quarters of 2021 [16] - Operating expenses decreased sequentially since last year's Q3, with sales and marketing expenses down 22%, R&D down 37%, and G&A down 32% [19] Market Data and Key Metrics Changes - Amazfit ranked number two in Southeast Asia for smart wearable brands [9] - In the US, self-branded product shipment volume more than doubled in Q3 2021 [9] - Shipments in Germany increased by 150% in Q3 2021 [9] - In Italy, Amazfit ranked number one in the adult smartwatch market as of September 2021 [10] Company Strategy and Development Direction - The company aims to increase the contribution of self-branded products to around 40% this year and potentially towards a 50-50 split next year [31] - The introduction of new products like the Amazfit GTR 3 and GTS 3 series is part of the strategy to enhance brand presence and product offerings [12] - A share repurchase program of 20 million shares was approved to demonstrate confidence in long-term growth [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for Q4 2021 due to new product launches despite ongoing supply chain challenges [21] - Supply chain issues, including chip shortages and higher freight costs, have impacted sales and are expected to continue affecting operations [17][28] - The company is focused on maintaining cost control while supporting growth initiatives [19] Other Important Information - The newly launched Zepp OS is expected to be a cornerstone of the company's health management platform [12] - The company is actively pursuing collaborations to enhance its product offerings and market reach [13] Q&A Session Summary Question: Why did the margin decline significantly quarter-on-quarter? - Management indicated that the margin did not move much quarter-on-quarter, attributing the decline to a product mix issue, with Xiaomi products accounting for a larger share of revenue [25] Question: Was the shipment shortfall due to demand or supply bottlenecks? - Management clarified that the shortfall was primarily due to supply issues, particularly chip shortages and higher freight costs, rather than a lack of demand [28] Question: What is the target for self-branded product revenue contribution? - The company aims for a split of close to 40% self-branded and 60% Xiaomi for this year, with aspirations to improve this ratio next year [31] Question: What is the expected normalized gross margin for self-branded products? - Management indicated a target gross margin range of 25% to 35% for self-branded products, influenced by seasonal patterns and new product launches [34] Question: What are the competitive advantages of the new GT 3 Pro? - The GT 3 Pro's competitive advantages include the Zepp OS, longer battery life, and attractive design, which have received positive consumer feedback [40] Question: Any updates on value-added services like insurance? - The company is continuing pilots with large insurance companies and discussing long-term contracts based on the success of these pilots [43]

Financial Performance (Q3 2021) - Revenue decreased by 28.1% from RMB 2,235.1 million in 3Q20 to RMB 1,606.1 million (US$249.3 million) in 3Q21[7, 21] - Adjusted net income attributable to Zepp decreased by 45.8% from RMB 120.8 million in 3Q20 to RMB 65.5 million (US$10.2 million) in 3Q21[13] - Gross margin slightly decreased from 20.6% in 3Q20 to 20.2% in 3Q21[21] Financial Performance (9M 2021) - Revenue decreased by 2.9% from RMB 4,588.5 million in 9M20 to RMB 4,460.8 million (US$712.1 million) in 9M21[7, 21] - Adjusted net income attributable to Zepp increased by 2.1% from RMB 165.5 million in 9M20 to RMB 168.9 million (US$26.2 million) in 9M21[13] - Gross margin remained the same at 21.5% compared to last year[21] Product Performance - Xiaomi wearable products revenue decreased by 44.7%[7] - Self-branded wearable products revenue increased by 37.9%[7] Business Outlook - The company expects net revenues to be between RMB 1.75 billion and RMB 2.0 billion for the fourth quarter of 2021, compared with RMB 1.97 billion in the fourth quarter of 2020[17]

Zepp Health Corporation (NYSE:ZEPP) Q2 2021 Earnings Conference Call August 19, 2021 8:00 AM ET Company Participants Grace Zhang - Director of Investor Relations Huang Wang - Chairman of Board of Directors & Chief Executive Officer Leon Deng - Chief Financial Officer Mike Yeung - Chief Operating Officer Conference Call Participants Clive Cheung - Credit Suisse Andre Lin - Citi Marcel Münch - DONGXii Operator Hello, ladies and gentlemen, thank you for standing by for Zepp Health Corporation Second Quarter 20 ...

Zepp Health Corp (NYSE:ZEPP) Q1 2021 Earnings Conference Call May 13, 2021 8:00 AM ET Company Participants Grace Zhang - Director, IR Huang Wang - Founder, Chairman & CEO Leon Deng - CFO Conference Call Participants Clive Cheung - Crédit Suisse Andre Lin - Citigroup Michelle Zhang - China Renaissance Securities Operator Hello, ladies and gentlemen, thank you for standing by for Zepp Health Corp.'s First Quarter 2021 Earnings Conference Call. [Operator Instructions]. I will now turn the call over to your hos ...

Financial Data and Key Metrics Changes - The company reported a revenue growth of 20% year-over-year, driven by the shipment of 15.9 million units, which is an increase of 16.1% from the previous year [8][20] - Gross margin decreased by 460 basis points year-over-year, primarily due to product mix and the higher volume of lower-margin Xiaomi products [21][22] - Operating expenses increased by 51.3% year-over-year, comprising 17% of revenue compared to 13.5% in the previous year [24] Business Line Data and Key Metrics Changes - The largest portion of revenue growth was attributed to the Xiaomi Mi-Band 5, alongside new product launches under the company's own brand [20] - R&D expenses increased by 38.8% year-over-year, comprising 7.7% of revenue, while sales and marketing expenses rose by 104.2% year-over-year, making up 5.2% of revenue [22][23] Market Data and Key Metrics Changes - The company achieved a market share of number one in Spain and Indonesia, with significant growth in the Indian market (323.7%) and Western Europe (241.6%) [12] - International shipments accounted for 49.5% of total shipments in the third quarter [12] Company Strategy and Development Direction - The company is focused on innovation and expanding its product portfolio, having launched five new smartwatch products in the third quarter [8][9] - The strategy includes geographic expansion and partnerships, such as the extended cooperation with Xiaomi and the introduction of products in over 2,800 Walmart stores in the U.S. [11][13] - The company is also engaging in academic research projects to enhance healthcare services through its wearable devices [15][16] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the impact of COVID-19 on future sales, particularly with new lockdowns in key markets [24][25] - The guidance for fourth quarter 2020 net revenues is expected to be between RMB 1.95 billion and RMB 2.15 billion, reflecting current market conditions [25] Other Important Information - The company appointed a new independent director and a new Chief Financial Officer, enhancing its leadership team [17][19] - The cash position remained strong, with cash and cash equivalents of RMB 2,556 million, up 42% from the previous year [24] Q&A Session Summary Question: Concerns about gross margin sustainability - Management acknowledged that the gross margin is affected by the product mix, particularly with Xiaomi products, but expects it to stabilize and potentially improve in the future [28][30] Question: R&D and sales and marketing investments - Management emphasized the importance of long-term investments in R&D and sales and marketing to build a foundation for future growth, especially as the pandemic subsides [31][32] Question: Health monitoring functionalities in smartwatches - Management noted the increasing consumer adoption of health monitoring features and the barriers related to medical device certification [34][35] Question: Distribution channel expansion for Amazfit products - Management reported meaningful progress in expanding distribution channels, including entry into Walmart stores and partnerships with major online platforms [48] Question: Shipment growth outlook for Xiaomi Band and Amazfit products - Management indicated that while the Xiaomi Band market may stabilize, they expect continued growth in their own branded products alongside gross margin expansion [50]

Financial Data and Key Metrics Changes - Revenues in Q2 2020 increased by 9.5% to RMB1.137 billion from RMB1.039 billion in Q2 2019 [15] - Unit sales grew by 7.2% year-over-year, with a total of approximately 8.9 million units sold [14] - Gross profit decreased by 8.6% to RMB253.4 million, resulting in a gross margin of 22.3%, down from 26.7% a year ago [15][16] - Operating income for Q2 2020 was RMB9.4 million, down from RMB22.1 million in the same quarter last year [21] Business Line Data and Key Metrics Changes - Smartwatch shipments grew by 30% year-over-year in Q2 2020, indicating strong demand for the company's main brands [6] - The launch of Xiaomi's Mi Band 5 contributed to product shipments, with a focus on transitioning from older models [6][16] Market Data and Key Metrics Changes - The company experienced a significant impact from COVID-19, affecting retail sales globally, particularly in the Americas and Europe [16] - Despite the pandemic, the company anticipates a strong recovery in sales, particularly for its branded products in both domestic and overseas markets [37] Company Strategy and Development Direction - The company is focused on connecting health with technology, with a strategy to expand into healthcare services globally [11][7] - Investment in R&D remains a priority, with a 25% increase in R&D expenses to RMB117.2 million, reflecting a commitment to innovation and product development [18] - The introduction of the Zepp brand aims to target a different audience with a focus on digital health solutions [32] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenges posed by COVID-19 and expects a strong second half of 2020 [13][22] - The company anticipates net revenues for Q3 2020 to be between RMB2.1 billion and RMB2.15 billion, representing a 13% to 16% increase from Q3 2019 [22] Other Important Information - The company is engaged in R&D related to COVID-19 detection signals, showcasing its commitment to addressing current health challenges [18] - The partnership with Prudential Corporation Asia aims to integrate health metrics into digital health applications, expanding the company's reach in the healthcare sector [10][33] Q&A Session Summary Question: Sales and marketing expenses in Q2 - Management highlighted that expenses were directed towards channel expansion in Europe and Southeast Asia, including hiring new personnel [25] Question: R&D expectations for the second half of 2020 - Management expects R&D expenses to remain moderate in the second half of 2020 and early 2021, despite anticipated revenue growth [26] Question: Status of contract renewal with Xiaomi - Management indicated a strong relationship with Xiaomi, emphasizing that contract negotiations are ongoing and optimistic for future agreements [27] Question: Strategy for the Zepp brand - The Zepp brand is aimed at a different audience, focusing on digital health solutions and stylish product features [32] Question: Geographic sales distribution and recovery in overseas markets - Management noted that a significant portion of Amazfit products is sold overseas, particularly in Europe and Southeast Asia, with improvements expected as the pandemic situation stabilizes [41] Question: Pricing trends and average selling price - Management acknowledged that the average selling price was affected by discounts on older models but expects an increase in ASP with the launch of Mi Band 5 [45] Question: Product mix contribution in the next quarter - Management anticipates a similar product mix as previous quarters, with a 70-30 split between Xiaomi and self-branded products [47]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2020 increased by 36.1% to RMB 1.1 billion from RMB 0.8 billion in Q1 2019 [16] - Gross profit rose by 12.5% to RMB 244.6 million, with a gross margin of 22.5%, down from 27.2% a year ago due to changes in product mix and sales promotions [16] - Total operating expenses increased by 60.2% to RMB 224.1 million, reflecting investments in R&D and marketing [16][18] - Net income attributable to ordinary shareholders decreased to RMB 19.2 million from RMB 85.6 million in Q1 2019 [19] Business Line Data and Key Metrics Changes - The company shipped 7.6 million units in Q1 2020, a 35.7% increase year-over-year, driven by strong demand for both self-branded products and Mi-Band 4 [14] - The introduction of new products, including smart gym hubs and fitness earphones, is part of the strategy to expand the product portfolio [19] Market Data and Key Metrics Changes - The company ranked number one in market share for smartwatches in India, Indonesia, and Spain, and number three in Russia and Mainland China [8] - The company is now present in over 70 countries with 137 channel distributors, showcasing strong global brand recognition [8] Company Strategy and Development Direction - The company aims to build a comprehensive health and fitness ecosystem, focusing on wearable technologies and health tech [7] - Continued investment in R&D and marketing is emphasized to drive long-term growth and profitability [15] - Partnerships with Xiaomi and Timex are highlighted as key collaborations for product launches [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for products despite the impact of COVID-19, anticipating a recovery in sales as market conditions improve [13][20] - The company expects net revenues for Q2 2020 to be between RMB 1 billion to RMB 1.05 billion, reflecting current market conditions [20] Other Important Information - The company has made significant progress in healthcare initiatives, including partnerships for monitoring respiratory diseases using wearable devices [10] - A research article on infectious disease prediction based on wearable device data was published, indicating the potential for health surveillance systems [11] Q&A Session Summary Question: Outlook for 2020 amidst COVID-19 - Management acknowledged uncertainty but noted positive signs in primary markets, hoping for sales recovery in the second half of the year [23] Question: Consumer awareness on health impacting product sales - Management confirmed increased global awareness of health due to COVID-19, which could boost future product demand [26] Question: Drivers behind strong Q1 revenue - Revenue growth was driven by high demand for Mi-Band products and Amazfit smartwatches, offsetting the pandemic's impact [28] Question: Updates on new product features - New products with health-related features are planned, including Mi-Band 5, with no delays in R&D due to COVID-19 [30][38] Question: Factors impacting gross margin - Gross margin was affected by discounts on Mi-Band products, with expectations for improved margins as new products are released [32] Question: Recovery in specific markets - Management noted recovery signs in Europe and emphasized the importance of independent sales channels for Amazfit products [36]