Zepp Health's Q2 2025 Earnings Call: Navigating Contradictions in Product Strategy, Tariffs, and Margins

Product launch timing and strategy, tariff impact and mitigation strategies, gross margin expectations, gross margin improvement and product mix are the key contradictions discussed in Zepp Health Corporation's latest 2025Q2 earnings call



Revenue Growth and Product Strategy:
- Zepp Health Corporation reported a 46% year-over-year increase in revenue to $59.4 million for Q2 2025, marking the first quarter of year-over-year revenue growth since Q2 2021.
- The growth was driven by the successful integration of the Amazfit brand and the strategic focus on sports tech and premium high-impact products.

Product Launches and Market Penetration:
- The introduction of new products like the Balance 2 smartwatch and the Helio Strap contributed to market expansion and brand recognition.
- Strategic pricing, positive customer feedback, and effective off-site brand awareness initiatives led to increased market share, particularly in the mid- to premium smartwatch segment.

Gross Margin Improvement and Cost Management:
- Gross margin for Q2 2025 was 36.2%, influenced by the product mix, launch timing, and life cycle upgrades.
- The company's commitment to cost management, with an overall adjusted operating cost of $26 million, contributed to maintaining profitability.

Marketing and Branding Success:
- Strong marketing efforts, including partnerships with global athletes like Derrick Henry andRod Farvard, and targeted global marketing campaigns across platforms like YouTube, TikTok, and Instagram, significantly improved brand perception and market presence.
- The company's integrated regional sports community strategy and collaboration with emerging sports communities like HYROX boosted global brand recognition.