Zepp Health Corporation, the Netherlands-based parent of the Amazfit brand of fitness and healthcare wearables, reported that revenues for the 2026 second quarter increased 6.9 percent year-over-year (y/y) to $63.5 million. The increase was said to be mainly driven by new product launches in the first half of 2026, including the Active 3 Premium, Active Max, and Cheetah models, while second-quarter sales were partially impacted by the new product launch timings and supply availability of the Balance 3 series.

The increase came on top of a 46 percent y/y increase in Q2 last year, which the company said was the first year-over-year growth since Q2 2021. The 2025 second-quarter increase was attributed to the Amazfit Bip 6 and Active 2 ranges, as well as the T-Rex 3 and newly launched products, including the Amazfit Helio strap and Balance 2.

Zepp Health Corporation reports in U.S. dollar ($) currency.

Profitability & Expenses
Gross margin in the second quarter was 37.4 percent of revenue, compared to 36.2 percent in the Q2 2025. During the quarter, margin performance reportedly faced several headwinds, including rising memory costs and appreciation of the Chinese RMB currency. On a year-over-year basis, margin expansion was said to be primarily driven by an improved product mix from new product launches, but was also said to be partially offset by higher memory component prices.

Gross margin moderated from 37.7 percent in the first quarter of 2026, as mix benefits from new products were said to be largely offset by increased memory costs, while supply constraints further constrained margin accretion.

Research & Development (R&D) expenses were $11.5 million in the second quarter, compared with $11.2 million in the second quarter of 2025. Excluding $0.7 million foreign currency headwinds, R&D expenses were slightly lower than the same period of 2025.

“We continued to invest in a series of cutting-edge products as well as new technologies, including AI, to maintain our competitive edge against our peers,” the company said in an earnings release. “At the same time, we focused on refined research and development approaches, consistently evaluating resource efficiency to optimize return on investment and productivity.”

Selling & Marketing expenses were reported at $18.3 million in the second quarter, compared with $12.1 million in the second quarter of 2025. The $6.2 million year-over-year increase was said to be primarily driven by $2.9 million in new product launch campaigns and $1.6 million in e-commerce platform charges, which increased in line with top-line growth. The remaining increase reflected $0.7 million in sponsorships for new athletes, $0.5 million related to the Hyrox partnership, and $0.5 million in physical retail and event booth activations.

General & Administrative expenses were $6.2 million in Q2 2026, compared with $4.4 million in the 2025 second quarter of 2025. Of the $1.8 million year-over-year increase in S&A expenses, “substantially all” of it was reportedly due to foreign currency headwinds.

“We continued to streamline overhead, maintaining disciplined cost control while improving operating efficiency,” the company noted.

GAAP and Adjusted operating expenses for the second quarter were $36.0 million and $34.8 million, respectively, compared with $27.6 million and $26.4 million in the second quarter of 2025. Of the $8.4 million year-over-year increase in operating expenses, $2.7 million was reportedly due to foreign currency impacts. The remaining $5.7 million was primarily due to higher selling and marketing expenses.

“Looking ahead, we anticipate a decline in overall expenses levels as the pace of new product launches moderates,” Zepp wrote.

The company posted a GAAP operating loss of $12.3 million in the quarter, compared with a loss of $6.1 million. The Adjusted operating loss of $11.1 million in the 2026 Q2 period compared with loss of $4.9 million in the second quarter of 2025. Higher revenue and improved gross margin were said to be offset by foreign currency headwinds, as well as increased investment in marketing and branding activities linking to new product launches in the quarter.

The GAAP net loss attributable to Zepp for Q2 2026 was $11.3 million, compared to a GAAP net loss of $7.7 million in Q2 last year. The Adjusted net loss attributable to Zepp for Q2 2026 was $12.5 million and the Adjusted net loss was $6.2 million in the second quarter of 2025. Higher revenue and improved gross margin were offset by foreign currency headwinds, together with increased investment in marketing and brand-building initiatives. As a result, the company recorded a net loss for the period, but the loss was narrowed compared with the first quarter of 2026.

Balance Sheet & Capital Resources Summary
Cash and cash equivalents and restricted cash were $106.3 million at quarter-end, an increase of $11.0 million compared with $95.3 million as of June 30, 2025, and an increase of $3.1 million compared with $103.2 million as of March 31, 2026. The cash balance increase was said to be primarily driven by enhanced working capital efficiency, which more than offset the net loss recorded during the period.

Inventory was $62.4 million as of June 30, 2026, which was flat compared with $62.8 million as of March 31, 2026 and decreased compared with $79.9 million as of June 30, 2025.

“We will continue to manage the inventory level tightly and working capital closely,” the company said.

Long-term and short-term debt levels increased by $6.2 million as of June 30, 2026 compared with March 31, 2026. The increase was said to be “entirely attributable” to a rise in long-term debt, with a corresponding decrease in short-term debt.

“We remain committed to prudently managing our debt profile. Our primary objective is to maintain overall debt levels broadly stable while actively extending the maturity profile by replacing short-term borrowings with long-term debt. During the quarter, we successfully converted $13.3 million of short-term debt into long-term obligations, and we expect to continue this strategy in the coming quarters, supported by sufficient financial headroom and liquidity capacity,” Zepp noted.

Since the beginning of 2023, the company said it has cumulatively retired $40.2 million of debt, and will continue to optimize the capital structure for the company.

Resignation of Director
The company also announced that Alain Lam tendered his resignation as a director of the company, effective September 1, 2026, in order to devote more time to his responsibilities at Xiaomi. Xiaomi will remain as a significant shareholder of the company. The company said it appreciated Lam’s longstanding support and contributions and thanked him for his service on the Board.

Share Repurchase Program Update
The company announced in its third quarter 2021 earnings release that the board had authorized a share repurchase program of up to $20 million through November 2022. On November 21, 2022, the board authorized a 12-month extension of the company’s share repurchase program. On November 20, 2023, the board further authorized the company to extend its share repurchase program for another 12 months. On November 18, 2024, the board further authorized the company to extend its share repurchase program for another 24 months. Pursuant to the extended share repurchase program, the company may repurchase its shares in the form of ADSs and/or ordinary shares through November 2026 with an aggregate value equal to the remaining balance under the share repurchase program.

As of June 30, 2026, the company had used $17.6 million to repurchase approximately 2.4 million ADSs. The company expects to fund the repurchases under the extended share repurchase program out of its existing cash balance.

Outlook
The company’s management currently expects net revenues to come in between $68.0 million and $73.0 million for the third quarter of 2026, compared with $75.8 million in the third quarter of 2025.

The outlook is reportedly based on current market conditions and reflects the company’s current and preliminary estimates of market, operating conditions and customer demand, which are all subject to change.

Image courtesy Amazfit/Zepp Health Corporation