Zepp Health Corp. Q1 FY2025 earnings call

• Amazfit revenue grew 10% y-o-y, first growth in 2 years.
• Proactively diversified supply chain, shifted U.S. bound productions from China to Vietnam, exploring NAFTA region.
• Launched Amazfit Active 2 and Bip 6, with strong initial sales momentum. Gained market share in Italy and Spain.
• Technology innovations include Zepp OS 4.5 powered by OpenAI, advanced voice control, improved messaging, and camera-powered food log.
• Partnered with athletes like Gabby Thomas and Jasmine Paolini.
• Strategic objectives: strengthen entry-level market, deepen channel partnerships, expand brand exposure, guide users to mid/high-end products.

Amazfit revenue saw a 10% year-over-year growth in the first quarter of 2025, marking the first growth in 2 years after the transformation period. The U.S. accounts for about 15% of the company's revenue.

• Second quarter revenue expected to be in the range of USD 50 million to USD 55 million, showing 23% to 35% year-over-year growth.
• Full year 2025 operating expenses expected at or below 2024 levels.
• Tariff impact in 2025 full year estimated at ~USD 2 million to USD 3 million, expected to be fully offset by global operating efficiency gains.

• Challenging macro terrain in consumer electronics with trade frictions and fluctuating tariff policies.
• Potential price challenges in competitive segments due to varying market conditions.

Q: Could you get more color on the impact of tariffs?

A: Full year tariff impact estimated at ~$2M-$3M, based on ~10% tariff. Category exempt from high tariffs, using Vietnam and considering NAFTA.

Q: Are you or competitors planning to raise prices?

A: Not ruling out, but not first movers; will monitor competitors. Evaluate pricing region-by-region.

Q: When can OpEx reach $25M-$27M per quarter?

A: Q2 expected to show big reduction, with one-time product launch events in Q1 not recurring, and FX headwind hedged.

Q: Details on full year 2025 performance?

A: Many new products lined up, Q2 growth indicates trend to continue, gross margin expected to hover and increase, costs expected in line/lower than 2024, tariff impact offset by efficiency gains.