Zepp Health Corporation Q3 FY2025 earnings call

• Revenue grew 78.5% YOY, turning cash balance from outflow to inflow.
• Multi-tier product strategy drove gross margin growth, with the T-Rex 3 Pro launch in September being a highlight, featuring enhanced durability and outdoor safety features.
• Balance 2 and Helio Strap continued strong performance with updates and new training modes.
• Gross margin expanded sequentially to 38% due to mix management and margin improvement initiatives.
• Operating expenses remained prudent with balanced investment in R&D and marketing.
• Acquired core assets from Wild.AI for personalized wellness coaching.
• Received RED Network Security certificate, enhancing user trust.
• Athletes contribute to product development, with new brand ambassadors and partnerships like HYROX.

In the third quarter of 2025, Zepp Health's revenue grew 78.5% year-over-year to $75.8 million. The product segments include the flagship Amazfit T-Rex 3 Pro, which was well-received, with enhanced durability and outdoor features. The Balance 2 and Helio Strap continued performing well, offering advanced analytics. Entry-level lines like Bip 6 and Active 2 maintained steady sales. Gross margin was 38.2% (excluding tariffs), up 2% sequentially from Q2 2025, driven by new products and favorable product mix. Revenue contribution from the T-Rex 3 Pro launch, Balance 2, Helio Strap, and entry-level lines contributed to the overall revenue growth.

• Anticipates Q4 2025 revenue to be between $82 million and $86 million, a 38%-45% year-over-year growth.
• Expect to be operationally profitable in Q4 2025.
• Cash balance expected to continue growing in Q4 2025.
• Margin expansion strategy to continue as new product launches gain scale.

• Supply constraints on Helio Strap due to memory chip issues and typhoon-related shipment delays.
• Tariff impacts on entry-level products and potential margin pressure.
• Macroeconomic factors affecting consumer electronics demand and supply chain dynamics.

Q: Could you give more color on supply constraints of Helio Strap?

A: Helio Strap faced issues due to memory chip problems affecting industry lead times and typhoon-related delays, but efforts are underway to resolve.

Q: Regarding product launches, was T-Rex Pro the only product launched last quarter?

A: In Q3, only the T-Rex 3 Pro 48-millimeter version was launched. The 44-millimeter version started selling on October 25th, with more new products to be revealed later.

Q: Could you give more color on T-Rex 3 Pro launch and 4Q guide?

A: T-Rex 3 Pro 48-millimeter version performed well, and the 44-millimeter version is seeing increasing activation. Q4 guide is based on positive holiday season signals and new product launches, with online growth expected to continue.

Q: Outlook for Q4 top line guidance, price and volume growth assumptions, and marketing initiatives?

A: Q4 guidance is prudent, assuming strong holiday season. Price growth from new premium products, volume growth from new launches. Marketing expenses to be flat with focus on ROI. New products and online channel growth are key drivers.

Q: Any other new product launches this year and product iteration plans next year?

A: T-Rex 3 Pro 44-millimeter version launched in Q4. Next year will maintain cadence of 2-3 new product launches per quarter, with focus on different segments like entry-level, challenger, and sports lines.