Zepp Health Corporation Reports Fourth Quarter and Full Year 2024 Unaudited Financial Results

Core Insights - Zepp Health Corporation reported a 40% quarter-over-quarter increase in sales for Q4 2024, despite a 28.3% year-over-year decline, primarily due to macroeconomic challenges and changes in product structure [1][2][7] - The company achieved a gross margin of 36.8% in Q4 2024, up from 34.7% in Q4 2023, and a full-year gross margin of 38.5%, significantly higher than 26.2% in 2023 [2][24] - The company ended 2024 with $111 million in cash, down from$ 140 million in 2023, but still positioned to invest in growth opportunities [3][18] Financial Performance - Q4 2024 revenues reached $59.5 million, a decrease of 28.3% year-over-year but a 40.2% increase quarter-over-quarter, driven by the successful launch of the T-Rex 3 [5][7] - Full-year revenues for 2024 totaled$ 182.6 million, a decline of 48.3% from 2023, largely due to an 88% drop in sales of Xiaomi wearable products [23] - The adjusted operating loss for Q4 2024 was $7.4 million, the lowest level in 2024, compared to an adjusted operating income of$ 3.0 million in Q4 2023 [14][16] Cost Management - Total operating expenses for Q4 2024 were $30.9 million, a 9.4% increase year-over-year, while adjusted operating expenses were$ 29.3 million [13][30] - Research and development expenses decreased by 0.6% year-over-year to $11.1 million in Q4 2024, reflecting a focus on resource efficiency [9][25] - Selling and marketing expenses increased by 10.6% year-over-year to$ 13.3 million, driven by promotional campaigns [10][28] Market Position and Strategy - The T-Rex 3 has gained traction in the outdoor and sports watch market, with user activations increasing and positive feedback from users and key opinion leaders [1][2] - The company is expanding its Amazfit brand through partnerships with athletes and collaborations, enhancing brand recognition and market presence [1][2] - The launch of the Amazfit Active 2 and Bip 6 series is expected to further increase market share and brand influence, particularly in emerging markets [1][2] Outlook - For Q1 2025, management expects net revenues to be between $40 million and$ 45 million, indicating a growth of 14% to 29% for Amazfit-branded products compared to Q1 2024 [32]