Zepp Health (ZEPP) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 33.8% year-over-year to $51.5 million, driven by new product launches, premiumization strategy, and strong premium product mix.

• Premiumization led to a 20%+ increase in average selling price and gross margin expansion despite higher component costs and RMB appreciation.

• Strategic partnership with HYROX deepened, reinforcing leadership in hybrid training and expanding product ecosystem.

• Market share expanded sequentially across EMEA, U.S., and Asia-Pacific, with Amazfit among the top six smartwatch brands by value share in the U.S. and Europe.

• Amazfit-branded units shipped increased to 0.6 million from 0.5 million in Q1 2025.

Financial highlights

• Q1 2026 revenue: $51.5 million, up 33.8% year-over-year.

• Gross margin: 37.7%, up 0.4% year-over-year, but down from 40.4% in Q4 2025.

• Gross profit: $19.4 million, up 35.3% year-over-year.

• Adjusted operating expenses: $35.7 million, up from $31.5 million in Q1 2025; as a percentage of revenue, decreased to 29.9% from 35.8%.

• Adjusted net loss: $17.9 million (34.8% of sales), improved from $18.1 million (41% of sales) in Q1 2025.

• Cash and cash equivalents: $103.2 million as of March 31, 2026.

• Inventory reduced to $62.8 million from $72.8 million in Q4 2025.

Outlook and guidance

• Q2 2026 revenue expected between $63–68 million, representing 6%–14% year-over-year growth.

• Focus remains on quality of growth, premiumization, product mix, pricing power, and long-term profitability.

• R&D and marketing expenses expected to normalize in the second half of 2026 after front-loaded investments in H1.

• Management targets profitable growth for full year 2026.

• Emphasis on international expansion, new product releases, and value-added service revenue.