Zepp Health Q2 Earnings Call Highlights

Zepp Health Q2 Earnings Call Highlights

Q2 revenue rose 6.9% to $63.5 million , while gross margin improved to 37.4% as new launches and a premium product mix supported growth despite higher component costs. Zepp is seeing stronger adoption of higher-priced devices, including premium T-Rex, Active and Balance models, but supply constraints continue to affect Bip, Helio Strap and some newer products. The company plans to raise Bip prices beginning in January 2027. Profitability weakened as marketing investment increased: adjusted operating expenses climbed to $34.8 million and the adjusted operating loss widened to $11.1 million. Zepp expects third-quarter revenue of $68 million to $73 million, down year over year, with management targeting a stronger fourth quarter as supply improves.

Zepp Health NYSE: ZEPP reported second-quarter 2026 revenue of $63.5 million, up 6.9% from a year earlier, as new product launches and a higher-priced product mix supported growth. Gross margin improved to 37.4% from 36.2% a year earlier despite higher memory and component costs, according to management. Founder and Chief Executive Officer Wang Huang said the company’s results reflected “measured rather than explosive growth,” but said the improvement in revenue and gross margin demonstrated progress before newer products had fully ramped in production and distribution channels.

Premium Product Mix Expands Huang said Zepp’s product portfolio is increasingly shifting toward higher-value devices. Within its T-Rex line, the T-Rex Break Pro and T-Rex Orca Two, with U.S. suggested retail prices of about $399 and $549, respectively, represented about 50% of recent global T-Rex family activations. The company also cited adoption of higher-priced Active products. Active 3 Premium and Active Max, both priced at $169 in the U.S., accounted for about 40% of global Active family activations in the second quarter, up from roughly 22% in the first quarter. Their contribution reached approximately 49% in July and 57% through Aug. 25, Huang said. Zepp said total monthly activations for the Active family were broadly comparable with those of the Bip family in July and August, even as Bip supply recovered. The company characterized that comparison as evidence that products largely priced between $100 and $200 can reach a similar activation scale to the entry-level Bip line. The Balance family is central to Zepp’s strategy in hybrid training, targeting athletes combining strength, endurance and recovery activities. Balance 3 starts at $369.99 in the U.S., while Balance 3 Titanium is priced at $499.99 and Balance Ultra at $599.99. Balance 3 and Balance Ultra represented about 26% of global Balance activations in July and about 30% through Aug. 25, compared with about 3% in the second quarter. Huang said total global Balance activations in July increased by more than one-third from the second-quarter monthly average, while activations of older Balance models remained relatively stable. However, he said the newer Balance products had not yet reached their anticipated scale or financial contribution.

Supply Constraints and Bip Price Increase Supply constraints affected the Bip family and Helio Strap during the quarter. Huang said demand for the sub-$100 Bip 6 remained strong after supply recovered, while Bip Max recently accounted for about one-third of global Bip family activations. Beginning in January 2027, Zepp plans to raise p...