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Highlights

  • Revenue reached USD 59.4 million, up 46.2% year-over-year, exceeding the upper end of prior guidance.
  • Net loss narrowed to USD 7.7 million, reflecting a 28.6% improvement compared to Q2 2024.
  • Q3 revenue is forecast between USD 72.0 million and USD 76.0 million, implying 70% to 79% year-over-year growth.

Zepp Health Corporation (NYSE: ZEPP) announced unaudited financial results for the second quarter of 2025, marking its first year-over-year revenue growth since 2021. Total revenue came in at USD 59.4 million, representing a 46.2% increase over the same period in 2024 and a 54.2% improvement over the previous quarter. Growth was primarily driven by strong global demand for Amazfit-branded products, including the Bip 6, Active 2, and T-Rex 3, as well as new launches like the Balance 2 smartwatch and Helio Strap.

Gross margin remained stable at 36.2%, consistent with Q1 2025 but lower than the prior year’s level due to a greater mix of lower-margin entry-level products and clearance of legacy inventory. The company anticipates a margin uplift in Q3 2025 as it benefits from full-quarter sales of the newly launched Balance 2 and other higher-margin devices.

Operating expenses totaled USD 27.6 million, up 5.2% year-over-year, with adjusted operating expenses (excluding share-based compensation and intangible amortization) at USD 26.4 million. Zepp continues to invest in product development and global brand building, reflected in a 3.1% increase in research and development expenses to USD 11.2 million. Selling and marketing costs rose 14.2% year-over-year to USD 12.1 million but declined 12.9% from Q1 2025 due to fewer large-scale launch events.

The company reported an operating loss of USD 6.1 million, narrowed by 38.2% compared to the same quarter last year. GAAP net loss was USD 7.7 million, down from USD 10.8 million in Q2 2024, while adjusted net loss was USD 6.16 million versus USD 8.8 million in the prior year. The efficiency improvements reflect both cost optimization efforts and stronger top-line growth.

Zepp closed the quarter with USD 95.3 million in cash and cash equivalents. Inventory rose to USD 79.9 million as the company prepared for upcoming product launches and sought to offset tariff-related risks. Debt levels remained stable, with USD 68.0 million retired since early 2023. The company's share repurchase program remains active, with USD 16.0 million used to buy back approximately 2.2 million ADSs as of June 30, 2025.

Looking ahead, Zepp forecasts Q3 2025 revenue between USD 72.0 million and USD 76.0 million, representing approximately 70% to 79% growth compared to Q3 2024. The projection reflects expectations of continued momentum across its Amazfit product portfolio, particularly the flagship Balance 2 and the rugged T-Rex 3 series. Management noted that strategic investments in AI-driven features, including Zepp OS 5.0 and Zepp Flow 2.0, are supporting product differentiation.