Core Insights - Huami Technology (ZEPP.US) experienced a rapid stock price increase of over 48%, reaching a high of $19.26, the highest since March 2022, with a cumulative rise of over 550% in the past month [1] Financial Performance - For the second quarter ending June 30, 2025, the company reported a significant revenue growth of 46.2% year-over-year, exceeding previous guidance and marking the first overall revenue growth since 2021 [1] - The core brand Amazfit has been identified as the growth engine, with strong sales from the Bip 6 and Active 2 series, as well as robust performance from the high-end T-Rex 3 model. New products like the Balance 2 smartwatch and Helio wristband launched in June also contributed significantly [1] - The company reported a GAAP net loss of $7.7 million and an adjusted net loss of $6.16 million, representing a year-over-year reduction of 28.6% and 30.2% respectively, with a stable gross margin of 36.2% [1] Future Outlook - Management anticipates third-quarter revenue to reach between $72 million and $76 million, reflecting a year-over-year growth of 70% to 79% [1] - CEO Huang Wang stated that the current quarter marks the beginning of an upward cycle, supported by a rich pipeline of innovations that will sustain growth in the second half of the year and beyond, reinforcing Amazfit's leadership in the performance wearables sector [1]

Core Insights - Huami Technology (ZEPP.US) reported a significant revenue growth of 46.2% year-on-year for the second quarter ending June 30, 2025, marking the first overall revenue increase since 2021 [1] - The core brand Amazfit has become the growth engine, with strong sales from the Bip 6 and Active 2 series, and the high-end T-Rex 3 model performing well [1] - The company has narrowed its GAAP net loss to $7.7 million and adjusted net loss to $6.16 million, a reduction of 28.6% and 30.2% respectively compared to the same period last year, with a stable gross margin of 36.2% [1] Financial Performance - The financial health of the company continues to improve, with operating expenses decreasing quarter-on-quarter and cash reserves reaching $95.3 million at the end of the period [1] - The company strategically increased inventory to address new product launches and tariff risks while advancing a stock buyback plan to demonstrate long-term confidence [1] Strategic Initiatives - The strategic transformation has shown significant results, with Zepp focusing on building the Amazfit brand ecosystem and launching the AI-enabled Zepp OS 5.0 system [1] - Marketing efforts include signing NFL star Derrick Henry and utilizing multi-platform global marketing, resulting in a second-place brand progress ranking in the U.S. market during Amazon Prime membership days, and a 60% year-on-year sales increase in the EMEA region [1] Future Outlook - For the third quarter, management expects revenue to reach between $72 million and $76 million, representing a year-on-year growth of 70% to 79% [2] - The CEO indicated that this quarter marks the beginning of an upward cycle, supported by a rich pipeline of innovations to sustain growth in the second half of the year and beyond, solidifying Amazfit's leadership in the performance wearables sector [2]

Financial Data and Key Metrics Changes - The company achieved a remarkable 46% year-over-year increase in revenue, reaching $59.4 million, marking the first quarter of year-over-year revenue growth since 2021 [6][20] - Gross margin for Q2 2025 was 36.2%, consistent with Q1 2025 but slightly down year-over-year due to a higher proportion of lower-margin entry-level products [21][22] - Adjusted operating loss narrowed to $4.9 million, an improvement of 42% compared to the previous year [26] Business Line Data and Key Metrics Changes - The Amazfit brand contributed all revenue, with strong demand for the Big Six and Active Two series, as well as the T Rex Three series [20] - The Balance Two smartwatch and Helios Stripe were introduced, with the latter receiving acclaim for its heart rate monitoring capabilities [9][10] - Entry-level products like the BIP Six and Active Two continued to see steady growth, supported by retail and Amazon partnerships [10][11] Market Data and Key Metrics Changes - In the U.S., Amazfit ranked as the second most improved wearable brand year-over-year, with significant sales growth in the EMEA region, particularly in Germany, Italy, and France [19][15] - Sales surged by approximately 60% in the EMEA region during Amazon Prime Day compared to the previous year [15] Company Strategy and Development Direction - The company is focused on a multi-layered global marketing strategy leveraging partnerships with athletes and influencers to enhance brand recognition [12][14] - A commitment to expanding the premium product portfolio is evident, with plans for new product launches to capture additional market share [16][28] - The operational strategy includes diversifying manufacturing across China and Vietnam to mitigate tariff impacts and enhance resilience [12][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, emphasizing the importance of product competitiveness and brand awareness [6][17] - The outlook for Q3 2025 anticipates revenue in the range of $72 million to $76 million, representing 70% to 79% year-over-year growth [28] - Management noted that the upcoming peak season for the industry will drive continued growth and value creation for stakeholders [17][28] Other Important Information - The company has cumulatively retired $8 million of debt since 2023, enhancing its capital structure [27] - Research and development expenses increased by 4.2% year-over-year to $10.3 million, reflecting investments in new technologies [23] Q&A Session Summary Question: What are the drivers behind the recent spike in share price? - Management noted strong product reception and brand visibility, along with a value discovery journey in the market, leading to a revaluation of the company's stock [31][32] Question: How many more product launches are expected in the second half of the year? - Management indicated that there will be exciting new products in the pipeline for Q3 and Q4, matching or exceeding the previous year's launches [33][34] Question: What gross margin expectations are there for the full year? - Management expects gross margins to improve in the second half of the year, potentially reaching closer to 40% as new products are launched [35][36] Question: What percentage of imports to the U.S. comes from Vietnam, and what are the current tariffs? - Management stated that tariffs on products shipped from China to the U.S. are just below 25%, while those from Vietnam are close to zero due to tariff waivers [38] Question: What sales contribution is expected from the new Helios Stripe launch? - Management highlighted that the Helios Stripe has received positive customer feedback and carries a healthy gross margin, with expectations for strong sales performance [44][45] Question: What are the main drivers for the strong guidance for Q3? - Management cited strong performance from entry-level products, successful new product launches, and seasonal trends as key drivers for anticipated growth in Q3 [53][56]

Core Insights - Zepp Health Corporation reported a significant revenue growth of 46.2% year-over-year in Q2 2025, reaching US$59.4 million, marking its first overall revenue growth since 2021, primarily driven by Amazfit products [1][3][10] - The company expects continued strong performance in Q3 2025, projecting revenues between US$72.0 million and US$76.0 million, representing a year-over-year increase of approximately 70% to 79% [3][24] Financial Performance - Revenue for Q2 2025 was US$59.4 million, a 46.2% increase from Q2 2024 and a 54.2% increase from Q1 2025 [3][10] - The GAAP net loss narrowed to US$7.7 million in Q2 2025 from US$10.8 million in Q2 2024, while the adjusted net loss was US$6.16 million compared to US$8.8 million in the same period last year [3][18] - Gross margin remained stable at 36.2%, consistent with the previous quarter, but lower than Q2 2024 due to a higher proportion of lower-margin products [4][11] Product and Market Strategy - The company launched new products, including the Amazfit Balance 2 smartwatch and Helio Strap, which contributed positively to sales [2][3] - The Amazfit brand has seen enhanced global brand awareness, supported by a multi-tiered product strategy that resonates with diverse consumer groups [1][2] - The company has fostered a strong Amazfit Athletes team, now including notable sports figures, to enhance brand recognition and community engagement [1][2] Operational Efficiency - Total operating expenses for Q2 2025 were US$27.6 million, a 5.2% increase year-over-year, while adjusted operating expenses were US$26.4 million [4][16] - The company ended Q2 2025 with US$95.3 million in cash, indicating a stable capital structure and the ability to invest in future opportunities [6][19] Outlook - Management is optimistic about the second half of 2025, with a robust pipeline of innovations expected to drive sustained growth and value [1][2] - The company continues to manage working capital efficiently, with inventory strategically increased to prepare for upcoming product launches [20][21]

Core Viewpoint - Zepp Health's stock price has more than doubled in the past two weeks, with a forecast of 30% revenue growth in Q2, marking the first year-on-year increase in three years [1][6] Group 1: Company Transformation - Zepp Health is transitioning from being a contract manufacturer for Xiaomi to developing its own brand, Amazfit, which is expected to drive growth [3][5] - The company has seen a significant decline in revenue due to its previous reliance on Xiaomi, but is now experiencing a recovery as it focuses on its own brand [5][6] Group 2: Market Dynamics - The cases of Zepp and New Oxygen reflect a shift in investor perception, recognizing that not all Chinese companies should be viewed with the same skepticism [4] - Despite recent stock price increases, Zepp's price-to-sales ratio remains low at 0.46, indicating potential for further upside compared to global competitors [4][5] Group 3: Financial Performance - In Q1, Zepp reported a slight revenue decline of 3.6% to $38.5 million, but anticipates a 30% revenue growth in Q2 [6] - The company is still operating at a loss, with a net loss of $19.7 million in Q1, although it is optimistic about future growth and margin improvements [6][7] Group 4: Product Development - The anticipated revenue growth is attributed to the successful launch of two new products, Amazfit Active 2 and Bip 6, which have received positive market feedback [6] - The company is addressing supply chain bottlenecks and aims to resolve these issues by the end of June [6]

Financial Data and Key Metrics Changes - The company reported a 10% year-over-year growth in Amazfit revenue, marking the first growth after two years of transformation [6] - Gross margin for Q1 2025 was 37.3%, higher than both Q4 2024 and Q1 2024, despite a negative impact from tariffs [28][29] - Operating expenses for Q1 totaled $31.5 million, an increase from $29.3 million in Q4 2024 and $27.8 million in Q1 2024 [30] Business Line Data and Key Metrics Changes - Amazfit branded products achieved a 10.2% year-over-year growth, reflecting strong market reception for new models Active2 and BIP6 [27] - The initial sales momentum of Active2 and BIP6 surpassed previous versions, securing top positions in major markets [12][15] Market Data and Key Metrics Changes - The U.S. market accounts for approximately 15% of the company's revenue, with tariffs currently having minimal impact on operations [9] - In Italy, the company's market share for no SIM smartwatch units reached 23.3%, ranking second in the core wearable smartwatch market [13] Company Strategy and Development Direction - The company is focusing on diversifying its supply chain and optimizing cost management to mitigate risks from geopolitical complexities [6][26] - Plans to strengthen presence in entry-level markets and deepen collaboration with offline channel partners are in place [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving year-over-year growth in overall sales for the first time since 2021, driven by product innovation and partnerships [22][56] - The company remains vigilant regarding macroeconomic challenges but expects operational efficiencies to offset tariff impacts [37] Other Important Information - The company successfully refinanced a significant portion of its short-term debt into long-term instruments, improving liquidity [35] - The anticipated tariff impact for 2025 is estimated to be around $2 million to $3 million, which is expected to be offset by operational efficiency gains [37] Q&A Session Summary Question: Impact of tariffs on U.S. exports produced in Vietnam - The company expects a full-year tariff impact of $2 million to $3 million, which will be offset by global operating efficiency gains [40][41] Question: Market pricing strategies - The company is monitoring competitors and will adjust pricing strategies on a case-by-case basis, but does not plan to be the first mover [47] Question: Operating expenses reduction timeline - A significant reduction in operating expenses is expected in Q2, as Q1 expenses were influenced by product launch events [48] Question: New product launches for the year - The company aims to refresh all major product lines throughout the year, with multiple new product launches planned [50][54]

Financial Data and Key Metrics Changes - The company reported a 10% year-over-year growth in Amazfit revenue, marking the first growth after two years of transformation [7] - Gross margin for Q1 2025 was 37.3%, higher than both Q4 2024 and Q1 2024, despite a negative impact from a 20% U.S. tariff on China-made products [28][29] - Adjusted operating loss for Q1 2025 was $17.2 million, compared to a loss of $13.1 million in the same period of 2024 [33] Business Line Data and Key Metrics Changes - Amazfit branded products achieved a 10.2% year-over-year growth, reflecting strong market reception of newly launched models Active2 and BIP6 [27] - Sales of Amazfit products increased by more than 10% compared to the same quarter last year, indicating a successful strategic shift [11] Market Data and Key Metrics Changes - The U.S. market accounts for about 15% of the company's revenue, with minimal impact from tariffs currently [10] - In Italy, the company's market share of non-SIM smartwatch units reached 23.3%, ranking second in the core wearable smartwatch market [14] Company Strategy and Development Direction - The company is focusing on diversifying its supply chain and optimizing cost management to mitigate risks associated with geopolitical complexities [8] - Plans to strengthen presence in entry-level markets and deepen collaboration with offline channel partners are in place [22] - The company aims to launch a significant number of new products in 2025 and 2026 to restore growth and profitability [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving year-over-year growth in overall sales for the first time since 2021, driven by product innovation and partnerships [22] - The anticipated tariff impact for 2025 is estimated to be around $2 million to $3 million, which is expected to be offset by global operating efficiency gains [37] Other Important Information - The company successfully refinanced a significant portion of its short-term debt into long-term instruments, improving liquidity and balance sheet flexibility [35] - Cash balance as of March 31 was $104 million, a decrease from $110 million in Q4 2024, but managed through improved working capital [33] Q&A Session Summary Question: Impact of tariffs on U.S. exports produced in Vietnam - Management expects a full-year tariff impact of $2 million to $3 million, which will be offset by global operating efficiency gains [40][41] Question: Market pricing strategies - The company is not planning to be the first mover in raising prices and will monitor competitors before making adjustments [46][47] Question: Operating expenses reduction timeline - A significant reduction in operating expenses is expected in Q2, with Q1 being an outlier due to product launch events [48][49] Question: New product releases for the year - The company aims to refresh all major product lines throughout the year, with multiple new product launches planned [50][51]

Core Insights - Zepp Health Corporation reported a 10% year-over-year growth in Amazfit revenue for Q1 2025, despite a challenging macroeconomic environment [1][3][6] - The company successfully launched new smartwatch models, Amazfit Active 2 and Bip 6, which have received positive market reception and are expected to drive further sales growth [1][2][6] - The management anticipates a year-over-year revenue increase for Q2 2025, projecting net revenues between US$50 million and US$55 million, representing a growth of approximately 23% to 35% compared to Q2 2024 [3][21] Financial Performance - Total revenue for Q1 2025 was US$39 million, with Amazfit-branded products growing by 10.2% year-over-year [3][6] - Gross margin improved to 37.3%, up from 36.8% in the same period last year, despite facing additional tariffs [3][7] - The net loss for Q1 2025 was US$19.7 million, compared to a net loss of US$14.8 million in Q1 2024 [15][33] Operating Expenses - Total operating expenses for Q1 2025 were US$32.7 million, a 6.9% increase year-over-year, driven by higher selling and marketing expenses [12][9] - Research and development expenses decreased by 7.8% year-over-year to US$12.4 million, reflecting a focus on resource efficiency [8] - Selling and marketing expenses rose by 28.5% year-over-year to US$13.8 million, primarily due to investments in digital campaigns and product launches [9][12] Cash and Debt Management - The company had a cash balance of US$104 million as of March 31, 2025, after repaying US$11.5 million in short-term debt [3][4] - Long-term borrowings now represent about 70% of total debt, with US$67.8 million of debt retired since early 2023 [4][18] - Improved working capital management contributed to a tighter cash conversion cycle, allowing for continued investment in growth opportunities [16][18] Market Strategy and Outlook - Zepp Health is committed to leveraging open-source technologies and enhancing AI capabilities to improve product offerings and user experience [2] - The company is expanding its brand presence through partnerships with athletes and community events, aiming to strengthen user connections and broaden its market reach [2][21] - Management remains focused on optimizing the supply chain and investing in AI-driven experiences to maintain leadership in the wearable market [2][21]

Financial Data and Key Metrics Changes - Overall sales in Q4 2024 rose by more than 40% quarter over quarter, aligning with guidance [10] - Gross margin for the year 2024 reached 39% compared to 26.2% for the full year 2023 [10][40] - Cash on hand at the end of 2024 was $112 million, providing ample runway for investments [11] Business Line Data and Key Metrics Changes - The successful launch of the T-Rex 3 significantly boosted market demand and sales growth [12] - The T-Rex 3 is noted for its durability, battery life, and AI integration, establishing a strong position in the market [13] - The upcoming Amazfit Active 2 and Bip 6 series are expected to expand market reach and drive sales growth [16] Market Data and Key Metrics Changes - Global smartwatch sales fell by 7% in 2024, with Apple shipments declining by 19% [31] - Sales in China grew from 19% to 25% of the market, marking a significant shift [31] - The Indian market saw a decline from 30% to 23% due to quality issues with ultra-cheap devices [32] Company Strategy and Development Direction - The company is focusing on a brand transition to a high-margin business model and enhancing global marketing [9] - The strategy includes launching one to two new products each quarter in 2025 to drive demand [37][122] - Partnerships with athletes and organizations like HYROX are aimed at increasing brand visibility and market share [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory despite macroeconomic challenges [27] - The company anticipates a recovery in the global market driven by AI features and health data [34] - The outlook for Q1 2025 includes expected revenue growth of 14% to 29% year over year [55] Other Important Information - The company is committed to a share repurchase program in 2025, reflecting confidence in long-term value [28] - Inventory levels were reported at $57 million, the lowest since 2018, indicating strong inventory management [52] - The company has successfully refinanced short-term debts into long-term instruments, improving financial stability [53] Q&A Session Summary Question: Impact of new tariffs on smartwatch imports - Management indicated minimal impact due to proactive supply chain management and dual sourcing strategies [30][61] Question: Percentage of manufacturing outside China - Approximately 20% to 25% of the overall portfolio is manufactured outside China [63] Question: Impairment loss details - The impairment loss was due to investments in upstream and downstream technology companies that did not perform as expected [66][70] Question: Shift in demand towards lower-priced players - Management noted that while the market declined, there are bright spots in the outdoor and sports smartwatch segments, with strong performance from brands like Garmin [75][80] Question: Long-term strategy and vision - The company is diversifying its product portfolio and exploring B2B opportunities while focusing on building a global health ecosystem [90][91] Question: Relationship with Xiaomi - The relationship remains strong, but the company is transitioning to focus on self-branded products for profitability [96][100] Question: Stock liquidity concerns - Management acknowledged the illiquidity of the stock and emphasized ongoing buyback programs and growth strategies to improve market perception [106][110] Question: New product roadmap for 2025 - The company plans to launch multiple new products across different price segments, which is expected to drive revenue growth [118][122]