Zepp Health Corporation

Ladies and gentlemen, thank you for standing by for ZEP Health Corporation's second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Grace Chong, Director of Investor Relations for the company. Please go ahead, Grace.

Hello, everyone, and welcome to Zapp Health Corporation's second quarter 2025 earnings conference call. The company's financial and operating results were issued in a press release via the newsroom services earlier today and are posted online. You can also view the earnings press release and slides referred on this call by visiting the IR section of the company's website at ir.zapp.com. Participating in today's call are Mr. Wang Huang, our Chairman of the Board of Directors and Chief Executive Officer, and Ms. Liang Deng, our Chief Financial Officer. The company's management will begin with prepared remarks and the call will conclude with a Q&A session. Mr. Mike Yang, our Chief Operating Officer, will join us for the Q&A session. Before we continue, Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties are included in the company's annual report on Form 20-F for the fiscal year ended December 31, 2024, and other filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that debt earnings press release and this conference call include discussions of unaudited gap financial information as well as unaudited non-gap financial information. That press release contains a reconciliation of the unaudited non-gap measures to the unaudited most directly comparable gap measures. I'll now turn the call over to our CEO, Mr. Wang Huang. Please go ahead.

Thank you everyone for joining us today. I'm excited to share that Zapp Health delivered an exceptional performance in the second quarter of 2025, achieving a remarkable 46% year-over-year increase in revenue to $59.4 million, all revenue contributed by Amazfit brand. This is impressive, not only on its own merits, but also as it marks our first quarter of year-over-year revenue growth since the second quarter of 2021, a significant milestone in our business transformation, and this is just the beginning of our growth trajectory. We are confident these initiatives of forging a robust operational and financial foundation to support sustained long-term growth. After years of refining product competitiveness, building brand awareness, and fostering user trust, our strategic vision has never been clearer or more resolute. Core product lines vividly embody our guiding philosophy. Training, recover, evolve. In the second quarter, our adventure series, the T-Rex, smartwatch maintained its competitive edge with sustained volume growth. It is setting new standards in the premium outdoor smartwatch category with extreme durability. I matched battery life in advanced sports modes like high-ross, race, and training modes. Our adventure series is strengthening our credibility among endurance sports professionals and high-performance users, an audience pivotal to our long-term premiumization strategy. Moreover, we introduced a new integrated solution for training and recovery with Balance 2 smartwatch and the Helio Chef. The Balance 2 is designed for multi-sport athletes offering advanced tracking for various sports, heart rate variability, and recovery insights. Priced at $299, this flagship integrates 40,000-plus golf maps worldwide with a 1.5-inch high-brightness sapphire crystal display for clear outdoor visibility, 100-meter water resistance for scuba diving, industrial-leading GPS accuracy, with patterns circularly polarized antenna technology for urban canyons and AI-powered ZAP coach for runners. This all-in-one device consolidates capabilities, typically requiring multiple watches from competing brands. as the most premium offering in Amazfit's mainstream lineup to date. The balance-tube flagship expands our user base and sets a solid foundation for future growth. The HelioShop Amazfit's first screen-free fairness recovery and sleep tracker has garnered extensive praise from KOLs and high customer acclaim, helping us tap into a new underserved market niche. It offers subscription-free 24-7 health marketing and advanced AI juvenile smart training and recovery metrics. and is an attractive alternative to competitors' products, which traditionally require premium subscriptions priced above $200 per year. HelioShape complements the Balance 2 with continuous heart rate monitoring and 27 workout modes. Both devices sync, affect, effortlessly through the ZAP app. Its 24-7 operation, data fusion, and integration into a complete ecosystem distinguish us from prominent competitors. Most recently, Heliosharp has been recognized by professional review influencers, the quantified scientists, as the most accurate heart rate monitoring device among all the watches and fitness trackers they have tested, surpassing industry well-known brands. At the same time, our entry-level BIP6 and lifestyle-oriented Active2 series continue to see steady growth across major global markets. earning strong support from retail and Amazon partners, including better sales placement, increased ordering volume, and deeper co-marketing efforts. This helps further expand brand awareness and reinforce the resilience of our tiered product strategy. Together with the new product launches in the second quarter, we also upgraded Zap OS to Zap OS 5.0 powered by AI. Zap Flow 2.0 redefines training with voice-controlled workouts, real-time environmental data, and personalized fairness insights, delivering an intuitive hands-free experience. Through deep integration with OpenAI and Google Gemini, ZAP OS 5.0 achieved substantial advancements in both functionality and performance at a lower cost. The system now operates faster with expanded capabilities Most notably, our food logging feature recognizes more foods and auto-calculates their calories for users. In the meantime, our hardware and software ecosystem is expanding with integrations from third-party platforms like Java and TrainingPeaks. We are actively working on integrating their sensors and solutions to provide more value to Amazfit users. Operationally, our flexible supply chain and multi-region sourcing strategy have effectively shield us from the impact amidst trade uncertainties and shifting tariffs policies reinforcing our competitive edge by strategically diversifying our manufacturing capacity across China and Vietnam and actively evaluating further expansion opportunities within the NAFTA region. Our operational performance in the first half of this year demonstrates our ability to mitigate majority of the tariffs had been through greater product demands and global efficiency gains. In terms of branding and marketing positioning, our integrated region sports community strategy continues to deliver outstanding results. By strategically leveraging the influence of global celebrated athletes and collaborating closely with emerging sports communities like High Rocks, we have significantly boosted our global brand recognition. This carefully curated partnership has enhanced consumer trust, deepened emotional connections with diverse users demographics, and amplified our market presence worldwide. In the recent high loss event in Chicago and Hong Kong, our product made an extraordinary presence among the sports enthusiasts. We continue to cultivate a robust, amazing athletes team. And today, we have over 10 sports stars on board, including Gabby Thomas and Jasmine Paulini. This quarter, we are thrilled to welcome NFL first-year athlete and pro bowler running back, Derrick Henry. and auto runner road forward to our athlete family. We are committed to continuously creating greater value for the entire Amazfit community, our users, athletes, and all stakeholders alike. Moreover, our targeted Multi-layered global marketing campaigns across platforms like YouTube, TikTok, and Instagram have created a powerful marketing matrix from authentic functionality tests by tech influencers to fairness scenario demonstrations by wellness creators. and high-profile endorsements by professional athletes, this approach has successfully elevated Zapp Health's global brand perception, resonating deeply with our target audience. The recent Amazon Prime Day serves as a perfect showcase of the effectiveness of our marketing outreach. In USA, Amazfit ranked it as the second most improved wearable brand year-over-year. In the EMEA region, our Prime Day sales surged by approximately 60% compared to the 2024 events. In summary, This outstanding quarter represents a powerful validation of our strategic transformation. Our relentless focus on sports tech and premium high-impact products has differentiated our brand in the highly competitive, valuable technology market, innovation, strategic partnerships and operational excellence are filling our momentum and shaping the future of connected sports experience. To capitalize on the industry's upcoming peak season, we are expanding our premium product portfolio with a flagship device. designed to fortify our competitive edge and long-term business soon. So stay tuned. With all the things mentioned above, we are poised to capture additional market share, drive continued growth, creating sustainable value for all stakeholders. Thank you once again for your unwavering support and confidence in ZEPP Health. We are incredibly excited about the future and look forward to delivering continued excellence as we progress through the second half of 2025 and beyond. I will now turn the call over to Leon to go over the highlights of our second quarter financial results.