Financial Data and Key Metrics Changes - Full-year revenue for 2021 reached 6.125 billion RMB, representing a nominal year-over-year growth of 1% [6][16] - Q4 2021 total revenue was 1.7 billion RMB, a decrease of 15.8% year-over-year, primarily due to a decline in Xiaomi product sales and supply chain challenges [16][18] - Net income attributed to Zepp Health for Q4 2021 was 36 million RMB, down from 150 million RMB in Q4 2020 [23] Business Line Data and Key Metrics Changes - Self-branded products accounted for over 47% of total revenue in 2021, up from 31% in 2020, and contributed over half of the gross profit [19] - Shipments of self-branded products increased by 60% in 2021 despite supply chain challenges [16][19] - Gross margin for Q4 2021 was 19.3%, a slight improvement of 30 basis points compared to Q4 2020, supported by a higher proportion of self-branded products [19] Market Data and Key Metrics Changes - Self-branded product shipment volumes in North America increased by approximately 200% year-over-year [7] - Shipments to Italy and France increased by more than 100% in Q4 2021 [7] - Zepp Health ranked number 5 in the global adult smartwatch market according to IDC data for Q4 2021 [7] Company Strategy and Development Direction - The company aims to enhance its product capabilities and brand recognition globally while expanding its smart health ecosystem [8][14] - Plans to launch an AI sleep service and integrate investments in imaging technology to empower users in managing health data [9][14] - The company is focusing on vertical integration to strengthen capabilities in chips, cloud services, algorithms, and operating systems [14] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming supply chain challenges, expecting improvements in the second half of 2022 [17][24] - The ongoing COVID-19 pandemic and geopolitical tensions, particularly the Russia-Ukraine conflict, pose risks to revenue but are manageable in the short term [34][60] - Guidance for Q1 2022 is conservative, with expected net revenues between 0.75 billion and 1 billion RMB, down from 1.15 billion RMB in Q1 2021 [25] Other Important Information - The company announced a special cash dividend of US$0.025 per ordinary share and continued its share buyback program [15][23] - The company has seen a strong increase in its active user base, surpassing 40 million by the end of 2021 [8] Q&A Session Summary Question: Impact of chip shortage on gross margin - Management indicated that a shift towards self-branded products, which have higher gross margins, helped improve overall gross margin despite chip shortages [29][30] Question: Marketing strategy changes in uncertain global environment - Management stated that the marketing strategy remains unchanged, although they are monitoring risks related to the Russia-Ukraine situation [34] Question: Sales performance of the newly launched GT 3 series - The GT 3 series has received positive feedback and is performing well, although supply chain issues have limited potential sales [38] Question: Timeline for regulatory approval of GT 3 series - Management expects a shorter timeline for Chinese regulatory approval, with potential certifications for European and U.S. markets following [40] Question: Current state of the European market - Apart from Russia and Ukraine, the European market is experiencing healthy growth, with strong performance in Western Europe [42] Question: Risks associated with Xiaomi product shipments - Management confirmed a strong ongoing relationship with Xiaomi and noted that while the band market is declining, Xiaomi maintains a significant market share [46][47] Question: R&D expenditure trends - R&D expenses have decreased as a percentage of revenue due to fewer new product launches, but the company remains committed to R&D investment [49][51] Question: COVID-19 impact on manufacturing capacity - COVID-19 has created logistical challenges and impacted sales, particularly during lockdowns in key regions [53][54] Question: Semiconductor supply challenges - Management anticipates improvements in semiconductor supply by the second half of 2022, although challenges may persist in Q2 [56][57]

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]