Zepp Health NYSE: ZEPP reported a stronger start to 2026, with management pointing to new Amazfit product launches, a higher-end product mix and expanding positioning in hybrid training as the main drivers of first-quarter growth.
On the company’s earnings call, Founder and Chief Executive Officer Wang Huang said Amazfit branded revenue rose 33.8% year over year in the first quarter, despite the period being a traditionally softer season for consumer electronics. Chief Financial Officer Leon Deng said total revenue for the quarter was $51.5 million, also up 33.8% from a year earlier and in line with the company’s guidance range.
Management attributed the growth primarily to launches including the Amazfit Active Max, Active 3 Premium and T-Rex Ultra 2. Huang said the quarter reflected “early validation” of the company’s efforts to improve its premium product mix, pricing power and positioning in performance-oriented training.
Premium products lift pricing and margins
Huang said Zepp Health is seeing evidence that customers are moving up the price ladder within certain product families. In March and April, he said premium T-Rex models priced at $399 and $549 accounted for nearly 50% of total T-Rex family unit sales.
He added that the company’s average selling price increased more than 20% year over year in the first quarter. The T-Rex Ultra 2, made with grade 5 titanium, raised Amazfit’s price ceiling to $550, which Huang said was the highest in the brand’s history.
Deng said gross margin was 37.7% in the first quarter, up 0.4 percentage points from the prior-year period but down from a record 40.4% in the fourth quarter of 2025. He said the sequential decline reflected the usual first-quarter refresh of entry-level products, which carry lower margins, as well as higher memory component costs and unfavorable foreign currency movements.
Gross profit increased 35.3% year over year to $19.4 million. Deng said the margin expansion from a year earlier showed the resilience of the company’s operating model and continued improvement in brand positioning.
Hybrid training remains central to strategy
Huang said Zepp Health is working to build a global leadership position in hybrid training, integrating endurance, strength and recovery through hardware, artificial intelligence-driven training intelligence, software and data.
A key part of that effort is an expanded exclusive three-year global partnership with HYROX, the hybrid endurance sports organization. Huang said the partnership will cover categories including smartwatches, smart rings, smart cameras, smart glasses and smart straps, along with connected app experiences, HYROX-specific training modes and performance data integrations.
“This partnership represents more than a sponsorship,” Huang said, describing it as a way for Zepp Health to participate in and help shape the emerging hybrid training category.
During the question-and-answer session, Deng said the HYROX partnership is intended to help Amazfit become a preferred brand when users move from casual tracking to more serious sports training. He said Zepp Health wants to strengthen features that help HYROX athletes track and improve their race performance.
New products target running, outdoor and entry-level users
Management highlighted several products intended to broaden the Amazfit portfolio. Huang said the Balance 3 and Balance Ultra were introduced at the HYROX event in New York, with features designed for users balancing strength, endurance, recovery, work stress and daily life. He said those products are powered by Hybrid Charge Energy Intelligence in the Zepp App, which combines Bio Charge, life load and training load into a single view of personal capacity.
The company also recently launched the Cheetah 2 lineup, including the Cheetah 2 Pro for marathon training and the Cheetah 2 Ultra for mountain and trail environments. Huang said both integrate with Zepp Coach and include running metrics, personalized training plans, recovery insights and third-party training platform integrations.
At the value end of the portfolio, Huang cited Active Max and Active 3 Premium, positioned around $169, as products reaching everyday fitness users and entry-level runners. He also noted the launch of Bip Max, the latest addition to the company’s entry-level series.
According to Huang, Amazfit gained sequential value share in EMEA, the U.S. and Asia-Pacific during the quarter. He cited third-party data showing Amazfit ranked among the top six smartwatch brands in both the United States and Europe by value share.
Expenses rise as company invests in launches and branding
Total adjusted operating expenses were $35.7 million in the first quarter, compared with $31.5 million a year earlier and $37.1 million in the fourth quarter. Deng said the year-over-year increase included foreign currency translation effects, e-commerce platform charges tied to sales growth and front-loaded marketing and branding investments, including CES and HYROX.
Adjusted research and development expenses were $11.9 million, up from $11.5 million a year earlier, reflecting investment in upcoming product launches and new technologies, including AI. Adjusted selling and marketing expenses rose to $16.4 million from $13.8 million. Adjusted general and administrative expenses were $7.4 million, compared with $6.2 million a year earlier.
Zepp Health’s operating loss narrowed to $6.3 million from $17.2 million in the prior-year quarter. Adjusted net loss was $17.9 million, or 34.8% of sales, compared with $18.1 million, or 41% of sales, in the first quarter of 2025.
Deng said higher memory costs are expected to pressure gross margins in the near term, citing the industry transition from DDR4 to DDR5 and high-bandwidth memory, as well as AI and data center demand tightening supply. He said the company has prepared through diversified sourcing and engineering efforts to optimize memory requirements.
Second-quarter revenue forecast calls for continued growth
For the second quarter of 2026, Zepp Health expects revenue of $63 million to $68 million, representing year-over-year growth of about 6% to 14%. Management said the outlook reflects product demand, normal shipment timing and product launch phasing.
In response to an analyst question, Deng said the company could launch more than nine products this year, exceeding the number previously discussed. He also said R&D and marketing expenses were more heavily weighted toward the first half of the year because of the product launch schedule and events, and that expenses should move closer to a roughly $30 million quarterly run rate, or lower, later in the year.
Zepp Health ended the quarter with $103.2 million in cash and cash equivalents, nearly flat with $103.8 million a year earlier and down from $112.9 million at the end of 2025. Inventory declined to $62.8 million from $72.8 million at the end of the fourth quarter.
Deng said total debt remained broadly stable, and the company has retired $46.7 million of debt since the beginning of 2023. He also said Zepp Health had repurchased $17 million under its $20 million authorized share repurchase program as of March 31, 2026.
About Zepp Health NYSE: ZEPP
Zepp Health Corp is a technology company specializing in the design, development and sale of smart wearable devices and health management solutions. Through its flagship Amazfit brand and the Zepp software ecosystem, the company offers a range of products—including smartwatches, fitness bands, smart scales and health-oriented mobile applications—designed to track key biometric data such as heart rate, sleep patterns, blood oxygen levels and activity metrics. Zepp Health's integrated platform enables users to monitor wellness and fitness goals while leveraging cloud-based analytics for personalized insights.
At the core of Zepp Health's offering is its Zepp cloud platform, which aggregates and analyzes data collected from its hardware lineup.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Zepp Health, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Zepp Health wasn't on the list.
While Zepp Health currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
MarketBeat just released its list of the 7 hottest IPOs expected to hit Wall Street in 2026. See which companies are preparing to go public and why investors are watching closely.
Get This Free Report
