Zepp Health's Q2 2025 Earnings Call: Discrepancies in Product Strategy, Margins, and Supply Chain

Product launch strategy and timeline, gross margin expectations, Helio Strap supply constraints, tariff impact and management strategy, and product launch strategy and sales contribution are the key contradictions discussed in Zepp Health's latest 2025Q2 earnings call.



Revenue Growth and Product Success:
- Zepp Health delivered a remarkable 46% year-over-year increase in revenue to $59.4 million in Q2 2025, marking its first quarter of year-over-year revenue growth since Q2 2021.
- This growth was driven by strong performance of the Amazfit brand, particularly the adventure series T-Rex smartwatch and the introduction of new products such as the Balance 2 smartwatch and Helio Strap.

Product Diversification and New Launches:
- Zepp expanded its product portfolio with new launches, including the Balance 2 smartwatch and Helio Strap, which were well-received by customers and experts.
- The Balance 2, priced at $299, integrates advanced features like GPS, heart rate variability, and recovery insights, consolidating capabilities from multiple devices into a single offering.

Gross Margin and Product Cost Management:
- The company’s gross margin was reported at 36.2% for Q2 2025, slightly down year-over-year due to a higher proportion of lower-margin entry-level products.
- Zepp is expected to see an increase in gross margin in the upcoming quarters as a result of the launch of new premium products and strategic pricing.

Operational Resilience and Supply Chain Management:
- Zepp's flexible supply chain and multi-region sourcing strategy effectively mitigated trade uncertainties and shifting tariff policies.
- The company strategically diversified its manufacturing capacity across China and Vietnam, enhancing operational resilience and cost management.