Zepp Health (ZEPP) Q2 2026 Earnings Call: Revenue Up 6.9%, Q3 Guidance Set
Source Tradingkey
Key Takeaways
- Zepp Health Corporation (NYSE: ZEPP) reported Q2 2026 revenue of $63.5 million, up 6.9% year over year and within management’s guidance.
- Gross margin increased 120 basis points year over year to 37.4%, supported by premium products and higher average selling prices despite rising memory and component costs.
- Adjusted operating expenses rose to $34.8 million from $26.4 million a year earlier, largely due to foreign exchange effects and higher spending on product launches and brand building. Adjusted operating loss widened to $11.1 million.
- Premiumization continued across the T-Rex, Active and Balance product families. Higher-end T-Rex models represented about 50% of recent family activations, while $169 Active products reached approximately 57% through August 25.
- Management guided Q3 2026 revenue to $68 million-$73 million, implying a year-over-year decline of approximately 4%-10% against the prior-year quarter’s high comparison base.
- Bip supply constraints have largely been removed. Management expects Helio Strap supply to recover partially in Q3 and be fully restored in Q4.
Key Financial Data
| Metric | Q2 2026 | Comparison | Key factors |
|---|---|---|---|
| Revenue | $63.5 million | Up 6.9% year over year | New launches including Active 3 Premium, Active Max and Bip Max |
| Gross margin | 37.4% | 36.2% in Q2 2025 | Premium product mix and ASP expansion partly offset by memory costs and RMB appreciation |
| Adjusted operating expenses | $34.8 million | $26.4 million in Q2 2025; $35.7 million in Q1 2026 | Foreign exchange effects and higher selling and marketing investment |
| Adjusted R&D expenses | $10.8 million | $10.3 million in Q2 2025 | Included approximately $0.7 million of foreign exchange headwinds |
| Adjusted selling and marketing expenses | $18.2 million | $12.0 million in Q2 2025 | Product launch campaigns, e-commerce fees, sponsorships and brand initiatives |
| Adjusted G&A expenses | $5.8 million | $4.1 million in Q2 2025 | Primarily foreign exchange effects, plus legal and regulatory spending |
| Adjusted operating loss | $11.1 million | $4.9 million loss in Q2 2025 | Higher operating costs and unfavorable foreign exchange effects |
| First-half net loss | $31.0 million | $27.5 million loss a year earlier | Included approximately $4.5 million of foreign exchange headwinds |
| Inventory | $62.4 million | Flat quarter over quarter; down $17.5 million year over year | Tighter inventory and procurement management |
| Cash and cash equivalents | $106.3 million | Up $3 million from Q1 2026; up $11 million year over year | Working-capital efficiency more than offset the period’s net loss |
Business and Operating Performance
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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