Zepp Health Corporation, the Netherlands-based parent of the Amazfit brand fitness and healthcare wearables products, reported that the third quarter increased 78.5 percent year-over-year (y/y) to $75.8 million. The revenue growth was primarily driven by new product launches, particularly the T-Rex 3 Pro in the third quarter of 2025 and was further supported by product launches in the second quarter of 2025. The revenue increase was partially offset by some supply constraints on the Amazfit Helio Strap, as well as an end-of-quarter typhoon that delayed some product sales in the third quarter of 2025.

“We are pleased to report another exceptional performance for the third quarter of 2025, a result that underscores the ongoing effectiveness of our strategic brand and product evolution,” offered Wayne Huang, chairman and CEO, Zepp Health. “This quarter’s strong results were further fueled by our well-executed, multi-tier product strategy, which drove consistent gross margin growth quarter-over-quarter.”

Profitability and Expenses
Gross margin in the third quarter was 38.2 percent of net sales, representing a 2.4 percentage point decrease from 40.6 percent in the third quarter of 2024. The year-over-year decline was attributed primarily to lower gross margins associated with entry-level products.

However, the T-Rex product line reportedly showed strong margin performance, as the launch of the T-Rex 3 Pro in September helped to offset the impact of Prime Day discounts on the T-Rex 3. Sequentially, gross margin improved by 2.0 percentage points compared to the second quarter of 2025, driven by a higher contribution from new products and a more favorable product mix. Zepp said this was partially offset by promotions on entry-level models, as well as the impact of front-loaded shipments ahead of U.S. tariffs on China-manufactured goods.

“We remain on track with our margin-expansion strategy initiated in the second half of 2023 and expect further progress as new product launches gain scale,” the company noted in its Q3 earnings release.

Research & Development (R&D) expenses in the third quarter were $10.8 million, which “remained stable” compared with $10.9 million in the Q3 period last year.

“We continued to invest in new technologies, including AI, to maintain our competitive edge against our peers,” the company said. “Furthermore, our pipeline is robust with a series of cutting-edge products set to launch. At the same time, we focused on refined research and development approaches, as we consistently evaluated resource efficiency to optimize return on investment and productivity.”

Selling & Marketing expenses were $12.0 million in the third quarter, an increase of 0.9 percent versus Q3 last year. The year-over-year increase was attributed primarily to the front-loading of certain expenses aimed at building brand recognition and acquiring market share.

“We continued to invest in selling and marketing activities and expand our Amazfit Athletes team to build brand recognition,” Zepp said. “At the same time, we consistently pushed on retail profitability and channel mix improvement, which included meticulous refinement of our retail channels and strategic staffing arrangements across sales regions. We are committed to investing efficiently in marketing and branding to ensure our sustainable growth.”

General & Administrative (G&A) expenses were $7.0 million in the third quarter, unchanged year-over-year, and with a modest sequential increase of $2.6 million from the second quarter of 2025, primarily due to normal foreign exchange fluctuations. Excluding these effects, the company stated that G&A expenses have remained stable or slightly lower over the past three quarters, as it continued to streamline overhead, maintaining disciplined cost control while improving operating efficiency.

Total Operating Expenses for the third quarter of 2025 were $29.8 million, which remained flat year-over-year. Adjusted Operating Expenses, which exclude share-based compensation and amortization of intangible assets resulting from acquisitions and business cooperation agreements, were $28.6 million, remaining flat compared to the same period of 2024.

Adjusted expenses as a percentage of sales were 37.7 percent in Q3, said to mark a “significant improvement” from 67.3 percent in Q3 2024.

“We will maintain our cost-conscious approach and remain committed to investing in R&D and marketing activities to ensure our long-term competitiveness,” the company said.

GAAP and Adjusted operating results were a loss of $0.9 million and income of $0.4 million, compared with a loss of $12.5 million and $11.3 million in the third quarter of 2024. Zeppelin said it achieved adjusted operating result breakeven, driven by higher sales, improved product mix, and strict cost control.

Net Loss attributable to Zepp Health Corporation was $1.6 million in the third quarter, compared to a net loss of $13.3 million in the third quarter of 2024. Adjusted Net Loss attributable to Zepp Health Corporation was $0.7 million, compared to an Adjusted Net Loss of $11.8 million in the third quarter of 2024.

Adjusted Net Income/(Loss) attributable to Zepp Health Corporation excludes(i) share-based compensation expenses, (ii) amortization of intangible assets resulting from acquisitions and business cooperation agreements, (iii) gain/(loss) from fair value change of long-term investment, (iv) impairment loss from long-term investments, (v) income/(loss) from equity method investments, (vi) investment income/(loss) and (vii) tax effects of the above non-GAAP adjustments.

Liquidity and Capital Resources
The company had a cash balance (including restricted cash) of $102.6 million at quarter-end, compared with a cash balance of $95.3 million as of June 30. Zepp said the cash position provides “ample runway” for the company to invest and seize potential market opportunities.

“In the fourth quarter of 2025, we expect our overall cash position to grow from its current level,” the company noted.

Inventory was reported at $87.7 million at quarter-end. Inventory reportedly increased as the company strategically built-up stock in key product lines to prepare for upcoming product launches and the fourth-quarter consumer electronics peak season. The company stated that it has improved its management of accounts receivable collections and accounts payable payment terms. The company remains committed to closely managing its working capital.

Long-term and short-term debt levels remained stable in the first three quarters of 2025 following the restructuring Zepp completed during the first quarter. The company announced that it has refinanced a significant portion of its short-term debt into long-term instruments with a more favorable interest rate and a two-year duration, which has significantly reduced near-term liquidity pressure and enhanced its overall capital structure. Since the beginning of 2023, the company has cumulatively retired $64.5 million of debt and will continue to optimize its capital structure.

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 September 30, 2025, the company had used $16.1 million to repurchase approximately 2.2 million ADSs. The company expects to fund the repurchases under the extended share repurchase program out of its existing cash balance.

Recent Development
The company’s board recently approved the amendment and restatement of its 2018 Share Incentive Plan, extending the term of the plan and its evergreen provision by seven years. No other substantive amendment to the plan was made.

Outlook
For the fourth quarter of 2025, the company’s management currently expects net revenues to be between $82.0 million and $86.0 million, representing an increase of approximately 38 percent to 45 percent from $59.5 million in the fourth quarter of 2024.

This outlook is 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.

“We are excited to enter the fourth quarter of 2025 with strong momentum and clear growth drivers across our diverse product lines. We stay focused on long-term shareholder value and empowering users’ well-being through sports technology,” added Huang.

Image courtesy Amazfit/Zepp Health Corporation