The following is a summary of the Zepp Health Corporation (ZEPP) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Zepp Health reported a significant increase in gross margin to 37% in Q1 2024 from 16% in Q1 2023.

• Self-branded product sales now constitute 85% of total revenue, representing a key contributor to the company's financial growth.

• Q1 2024 adjusted operating expenses decreased by 11.4% compared to Q1 2023, reflecting Zepp's successful cost-control measures.

• Despite initial tepidity, Zepp Health expects full-year revenue to fall between $200 million and $300 million.

• The increase in gross margin over consecutive quarters is attributed to a focused strategy on self-branded products, with the margin reaching 37% in Q1 2024, up from 33% in Q3 2023 and 35% in Q4 2023.

• Revenue projections for Q2 2024 range between USD 40 million to USD 55 million, considering planned product launches in subsequent quarters of 2024.

Business Progress:

• The Monthly Active Users (MAU) of the Zepp application exceeded 10 million, indicating successful business transformation.

• Zepp Health diversified its smartwatch offerings and penetrated new markets with the launch of the Amazfit Bip 5 and Helio Ring.

• An upgrade was implemented to Zepp's own operating system, Zepp OS, to version 3.5, which includes the large language model-based Zepp Flow AI system.

• The executive teams operation from Europe and North American offices is expected to ensure quicker decision-making responsive to market dynamics.

• Zepp Health's commitment to ongoing stock repurchase programs and global advertising campaigns are set to enhance the brand's market presence.

• The forthcoming launch of high-margin products alongside products like Helio Ring offers insights into the projected boost in sales volumes.

• Zepp acknowledges non-compliance with New York Stock Exchange requirements but reassures stakeholders that they are working towards regaining compliance.

More details: Zepp Health IR

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