Zepp Health Corporation

Hello, ladies and gentlemen. Thank you for standing by for ZEPP 12th Corporation's first quarter of 2026 earnings conference call. At this time, all participants are in listener-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Grace Zong, Director of Investor Relations for the company. Please go ahead, Grace.

Hello, everyone. and welcome to ZEP House Corporation's first quarter 2026 earnings conference call. The company's financial and operating results were issued in a press release of the newsletter services earlier today and are posted online. You can also view the earnings press release and the slides referred to on this call by visiting the IR section of the company's website. Presenting today are Warren Huang, our founder and chief executive officer, and Leon Dunn, our chief financial officer. Joining us today, we also have Mike Young, chief operating officer and general manager of North America, and Eric Flanagan, vice president of capital markets for North America. 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 Security Subsidiation Reform Act of 1995. Forward-looking statements involving foreign 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-S for the fiscal year ended December 31st, 2025 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 statement except as required under applicable law. Please also note that that service 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 unaudited non-gap measures to the unaudited most directly comparable gap measures. I will now turn the call over to our CEO, Mr. Wang Hua. Please go ahead.

Hello, everyone, and thank you for joining us today. We are pleased to begin 2026 with a promising start, delivering another solid quarter. In the first quarter, our mainstream branded revenue grew 33.8% year-over-year, demonstrating exceptional resilience during what is traditionally a software season for the consumer electronics industry. This strong performance was primarily driven by the successful launches of the Amazfit Aptiv Max, Aptiv 3 Premium, and our flagship T-Rex Ultra 2. Delivering this level of goals in a seasonally quieter quarter further enforces our condition that the market opportunity we are capturing is structural rather than cyclical. More importantly, we do not view this quarter simply as a revenue growth story. We see it as another area validation of the structural changes you have been building, stronger premium product mix, improving pricing power, expanding gross margin, and a clearer brand position in performance-oriented training. During our last earnings call, I outline how ZAP Health is evolving into a comprehensive hybrid training platform seamlessly integrating endurance, strength, and recovery through hardware, AI-driven training intelligence, software, and beta. Our 2026 ambition is clear. We aim to build a global leadership position in hybrid training. To advance this strategy, we further deepened our collaboration with HYROX, one of the world's fastest-growing hybrid endurance sports organizations, through a new exclusive three-year global partnership. This expanded partnership enhances the style of athlete experience across training, competition, and recovery. Leveraging a broader portfolio of exclusive smart wearable categories, including smart watches, smart rings, smart cameras, smart glasses, and smart straps. alongside connected app experience, high loss specific training modes, and selected performance data integrations. This partnership represents more than a sponsorship. It is a strategic step for us to participate in and help shape the emerging private training category. By engaging directly with IROC's global athlete community, gym ecosystem, coaches, and race environments, we can build a more authentic connection with users whose training behaviors and strength, endurance, recovery, nutrition, and performance readiness. This gives us a differentiated position in the market other than endurance and general smart lifestyle. While we have the opportunity to build authority around hybrid training, and a more complete training system. We believe one of the most important opportunities is the moment when a user moves from casual checking to more serious training. At that point, the phone ecosystem becomes less important. And the training varies because it's more important. TIROS and gym-based hybrid training help create that moment, allowing a message to enter through app experiences, training content, TIROS-specific modes, and lower-fission products before users make a full device switch. At the recent New York Hyros event, we introduced Balance 3 and Balance Ultra in a real hybrid training environment. This launch setting was intentional. These products are designed for users who balance strength, endurance, recovery, work, stress, and daily life. Powered by hybrid charge energy intelligence in the web app, these brains get a biocharge life load and a training load. into one clear view of personal capacity, helping users better understand when to push, when to recover, and how to maintain consistency over the long term. These activities are important because premiumization is not only about higher price points. It is about building trust in the environments their serious users decide which brand they rely on. By showing up in marathon preparation, trail and expedition environments, and hybrid training communities, Amazfit is strengthening the credibility required to support highly valued products. improved product mix, and long-term pricing power. Our premium racing strategy is strongly supported by our hybrid training positioning. We are already seeing earlier evidence that users are willing to move up the price ladder across certain product families. the things that T-Rex line up. Our highest priced premium models are becoming an increasingly meaningful part of the overall sales mix. This reinforces an important point. Consumers are not choosing a massive story for affordability. In March and April, Our premium QX models priced at $399 and $549 accounted for nearly 50% of total QX family unit sales. As we continue to strengthen our product differentiation and premium brand positioning, Users are showing a growing willingness to engage with Amazfit at more premium price tiers. By embedding hybrid training more deeply into both our hardware and software ecosystem, we are enhancing the perceived value of the Amazfit brand and driving a consistent shift toward higher-end product positioning. This remains one of our key strategic priorities as we move into 2026. In the first quarter, this strategy delivered tangible results. This average selling price point this average selling price increasing more than 20% year-over-year. Notably, even amid rising memory component causes and the broader storage chip price inflection, we were still able to achieve gross margin expansion. Respecting the effectiveness of our product makes improvements and disciplines cause exclusion. In April, we extended this philosophy into one of the world's largest performance communities, running. By adapting our hybrid training methodology to run this, We are enabling them to train more intelligently, improve endurance, and support long-term health and durability. This strategy is embodied in our newly-launched CHIKA 2 lineup, including the CHIKA 2 Pro, a performance-focused watch designed for marathon training, and the Cheetah 2 Ultra, engineered for the most demanding mountain and trail environments, both integrated seamlessly with their coach. These are full suits of running metrics and personalized training plans. recovery insights, and third-party training platform integrations. These devices deliver structural hybrid-style training guidance directly to endurance runners, further strengthening our penetration in the dedicated running segment. Notably, our first quarter growth was for the base across both entry and premium tiers. At the high end, the T-Rex Ultra II, crafted from grade V titanium, elevates our price ceiling to U.S. dollars of $560, marking the scientist in Amazfit's history and further reinforcing our premium-branded positioning. At the same time, in our core value segments, the ActiveMax and Active3 premium positions around the $169 price point of expanding our reach among everyday fitness enthusiasts and entry-level runners beginning their structure training journeys. Most recently, we also introduced HipMax, the latest addition to our most popular entry-level series. Our strategic progress is also reflected in continued market share gains. In the first quarter, we achieved sequential value share expansion across EMEA, the U.S., and Asia Pacific, supported by strong performance across our full product matrix. according to third-party data sources. A mainstay now ranks among the top six smartwatch brands in both the United States and Europe by value share, underscoring the growing global lesson and market change of the brand. to solve it, we continue to strengthen our ecosystem through ZAP OS. Futures such as ZAP Coach, BioCharge, and our expanding of hybrid training and high loss modes are being deployed across a growing range of devices, driving deeper user engagement and retention. As we increasingly tailor our training intelligence for running and other endurance disciplines, our software ecosystem is becoming a key reason users choose and remain loyal to our brand, further widening the competitiveness modes around our platform. Across running, outdoor, and public training, we are increasingly connecting Amazfit products with real performance environments and elite athlete validation. In running, Shiga 2 Pro was supported by major marathon moments in Paris, London, and Boston. including acid-proof points from Yemen river, and . In outdoor, T-Rex altitude continues to gain credibility through high altitude, alpinist, and the real expedition use cases, while increased record strengthens the aspirational outdoor positioning of the T-Rex series. We also continue to build collectability around EV performance moments. During the High North Warsaw Major, a major athlete, Joanna Wierich, completed a clean sweep of all four IROX majors this season, while setting a new IROX world record. We are also supporting Josh Kor's Project 222, his attempt to break the minor world record at the London Diamond League. Together, these moments reflect how Amnesty is showing up at the highest level of both hybrid training and endurance performance. Again, the market is economic backdrop. Our premiumization strategy, expanding pricing power, vertically integrated supply chain, and diversify manufacturing footprint across China and Vietnam provide us with multiple levels to mitigate these pressures. We remain confident that the alignment of our product mix channel strategy and cost structure will support sustainable growth and a clear path towards long-term profitability. Looking ahead to the second quarter, we expect revenue to be in the range of 63 million to 68 million. This outlook reflects continued year-over-year growth supported by demand across our product portfolio, while also accounting for normal shipment timing and product launch facing during the quarter. More importantly, we will continue to focus on the quality of growth, product mix, pricing power, growing across margin structure, and user engagement. rather than only short-term revenue volume. This does. I now turn the call over to Leo to walk through the financial details. Leo, please go ahead.