Key Highlights

  • First-quarter 2026 revenue reached $51.5 million, up 33.8% year over year, with gross margin at 37.7%, in line with guidance.
  • Amazfit-branded products made up 100% of full-year 2025 revenue, up from 94.0% in 2024, confirming the exit from the legacy Xiaomi-ecosystem OEM business.
  • The company remains unprofitable on a GAAP basis, posting a $19.6 million net loss in the quarter, though losses have narrowed year over year.
  • Cash stood at $103.2 million as of March 31, 2026, against roughly $238 million in combined notes payable and bank borrowings.

Zepp Health Corporation (NYSE:ZEPP), the Amazfit smartwatch maker, told investors on June 8, 2026 that first-quarter revenue rose 33.8% year over year to $51.5 million as its premium T-Rex and Active lines gained share. The company is still losing money and still far smaller than Apple, Garmin or Samsung, but its shift from Xiaomi-ecosystem supplier to a fully self-branded, AI-enabled wearables company is now essentially complete.

Why Zepp Health Is Back on Investors' Radar

Zepp Health Corporation, trading on the New York Stock Exchange as ZEPP, reported first-quarter 2026 results on June 8, 2026 showing the smallest major wearable-technology name still growing faster than the broader smartwatch category. Revenue of $51.5 million compares with $38.5 million a year earlier, a 33.8% increase that chief executive Wayne Huang said landed "in line with our guidance range," even in what the company calls a seasonally soft quarter.

The interest stems less from Zepp's scale, still a fraction of Apple's or Garmin's wearables revenue, and more from a narrative management has built since late 2023: a shift from low-margin, private-label devices sold through Xiaomi's ecosystem toward a self-owned Amazfit brand built around "Hybrid Training," premium pricing and AI coaching software.

Company and Business-Model Overview

Incorporated in the Cayman Islands with operations centered in Hefei, China, Zepp Health was founded in 2013 as Huami Corporation and renamed in February 2021. It designs smartwatches, fitness bands and hearables sold mainly under the Amazfit brand, alongside smaller Zepp Clarity and Zepp Aura lines. Per its June 2026 release, Zepp has shipped over 200 million units and serves more than 53 million users across 150-plus countries.

Zepp OS, the company's software layer, increasingly carries generative-AI features. Investor materials describe a "Zepp Digital Health Management Platform" combining proprietary AI chips, biometric sensors and data algorithms, with coaching tools using large language models "to recognize natural language descriptions, for human-like interactions." The first-quarter release introduced HybridCharge, a Zepp App feature folding BioCharge, LifeLoad and Training Load metrics into one readiness score, alongside Zepp Coach training-plan software.

Catalyst Analysis: Zepp Health (ZEPP) Leans Into Premium Hardware and AI Coaching

The clearest catalyst was product cadence. Zepp launched the Amazfit Active Max, Active 3 Premium and rugged T-Rex Ultra 2, then followed with the Balance 3, Balance Ultra, Bip Max and Cheetah 2 Pro/Ultra. Premium T-Rex Pro and T-Rex Ultra models accounted for nearly half of total T-Rex unit sales in March and April 2026, evidence, management argues, that buyers are trading up within the lineup.

A second catalyst is the April 2026 extension of Zepp's HYROX sponsorship into an exclusive three-year global wearable-technology partnership, giving it a channel into gyms and coaches beyond casual users.

Latest Financial and Operational Performance

For the three months ended March 31, 2026, Zepp reported revenue of $51.5 million and gross profit of $19.4 million, up 35.3% from $14.4 million a year earlier. Gross margin of 37.7% expanded 0.4 points year over year but retreated from a record 40.4% in the fourth quarter of 2025; management blamed the annual refresh of lower-margin entry-level products, elevated memory-chip costs and renminbi appreciation.

Operating expenses rose to $37.1 million from $32.7 million, split across R&D ($13.1 million), selling and marketing ($16.6 million) and G&A ($7.4 million), reflecting currency translation and investment in "new technologies, including AI." The GAAP operating loss narrowed to $17.7 million from $18.4 million; adjusted operating loss narrowed to $16.3 million from $17.2 million.

Revenue, Profitability, Cash and Debt Position

GAAP net loss attributable to Zepp was $19.6 million, or $1.24 per ADS, essentially flat with the $19.7 million loss a year earlier; adjusted net loss was $17.9 million. Full-year 2025 revenue reached $258.9 million, up 41.8% from $182.6 million in 2024, with GAAP net loss narrowing sharply to $40.1 million from $75.7 million. Amazfit-branded products accounted for 100% of 2025 revenue, up from 94.0% in 2024: the legacy Xiaomi-ecosystem, private-label business has effectively been wound down.

Zepp ended the quarter with cash and restricted cash of $103.2 million, down from $112.9 million at year-end 2025 but roughly flat with $103.8 million a year earlier, a decline attributed to seasonal operating losses. Inventory fell to $62.8 million from $72.8 million on tighter management despite "strategic risk purchases" ahead of future launches.

Notes payable stood at $111.1 million, short-term bank borrowings at $87.0 million and long-term borrowings at $40.0 million, a combined debt load of roughly $238 million. Zepp has cumulatively retired $46.4 million of debt since early 2023. Each ADS represents 16 ordinary shares. Under its buyback program, extended through November 2026, Zepp had repurchased about 2.3 million ADSs for $17.0 million by quarter-end.

Growth Opportunities and Upcoming Milestones

Management's roadmap centers on premiumization: expanding Amazfit from the roughly $169 Active series to the $550 T-Rex Ultra flagship, layered with Zepp Coach, HybridCharge and Hybrid Training modes tied to HYROX. The Amazfit Helio Strap, a recovery-focused band introduced in 2025, remains part of the portfolio alongside T-Rex and Active, though it faced supply constraints in its launch quarter.

For the second quarter of 2026, Zepp guided revenue to $63.0-68.0 million, implying growth of roughly 6%-14% from $59.4 million a year earlier: a deceleration from the first quarter's 33.8% pace worth watching for signs of demand slowdown versus a product-cycle lull.

Material Company-Specific Risks

Zepp's China-centric footprint carries risks common to U.S.-listed Chinese issuers: its Cayman Islands parent oversees operations run largely out of Hefei, and the company has repeatedly flagged that renminbi appreciation pressures costs, since spending is mostly RMB-denominated while revenue is reported in dollars. Management also cited tariffs and macroeconomic uncertainty as recent headwinds. Competitively, Amazfit sits well behind Apple Watch, Garmin and Samsung's Galaxy Watch in brand recognition and pricing power, and now competes directly with Xiaomi's own in-house wearables. The company remains GAAP loss-making, and softer second-quarter guidance shows the growth rebound has not yet translated into profitability.

Outlook

In an upside case, continued trade-up within T-Rex and Active, sustained margin gains, and deeper HYROX and Zepp Coach engagement could push Zepp toward the adjusted operating breakeven it briefly touched in the third quarter of 2025. In a base case, growth normalizes toward the high single digits to mid-teens implied by guidance, margins hold in the high-30% range, and GAAP losses keep narrowing without reaching profitability this year. In a downside case, renewed currency headwinds or weaker product reception could compress margins and slow debt reduction. Nothing here is a share-price prediction.

Conclusion

Zepp Health Corporation's first-quarter 2026 results show a company that has largely separated from its Xiaomi-ecosystem roots and is now betting on premium, AI-assisted Amazfit hardware to close the gap with larger rivals. Revenue growth of 33.8% and a narrower net loss are real progress for ZEPP, but with second-quarter guidance implying a sharp slowdown and GAAP losses still near $20 million a quarter, the challenge to the global giants remains a work in progress.

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Share prices can rise or fall, and past performance does not guarantee future results. Investors should conduct independent research and consult a licensed financial adviser before making investment decisions.