Amazfit Zepp Q1 2026: the watches are getting better. Why isn’t Wall Street convinced?

Zepp Health opened 2026 with record first-quarter revenue, strong growth, and a narrowing operating loss. The market response was brutal. At the time of writing, NYSE-listed ZEPP was down 19.11% over 5 days against a NASDAQ fall of just 4.07%; subsequently, both moved, but still painted a similar picture.

Relative declines of that magnitude are often due to a failure to meet expectations.

Why? Unlike any other source, we’ve been analysing the Amazfit products that we have reviewed here in detail, the ecosystem, the competition, and the numbers to find out why. The share price is forward-looking after all. Ultimately, the company has to sell product.

The numbers

Revenue of $51.5m grew 33.8% year-on-year, driven in part by the Active Max, Active 3 Premium, and T-Rex Ultra 2 launches. Gross profit rose 35.3% to $19.4m. Wang Huang framed the quarter directly: “This growth reflects the continued success of our multi-year transformation from a volume-driven wearable brand into a premium-focused global brand built around Hybrid Training.”

A gross margin of 37.7% appears to be down from the record 40.4% posted in Q4 2025. Leon Deng pointed to two causes:

• the standard first-quarter refresh of lower-margin entry-level lines, and
• elevated memory component costs as the industry transitions from DDR4 to DDR5, an issue faced by every competitor.

Turning to the cost side in a tad more detail, operating expenses rose to $37.1m from $32.7m, front-loaded for a first half heavy with product launch costs. GAAP net loss was $19.6m, nearly flat on $19.7m a year ago.

Against expectations

The disconnect between Q1 results and the share price reaction is the story of this quarter. Revenue grew 33.8%. The operating loss narrowed. Gross profit rose 35%. By any standard reading of an earnings release, this was a strong performance.

 

Sadly, the market response told a different story. Two factors appear to be in play.

• First, the balance sheet. Current liabilities exceed current assets by $35m, and short-term borrowings nearly doubled in the quarter. Management confirmed this is a reclassification of maturing debt rather than new borrowing, and the $103.2m cash position provides cover. Deng told analysts: “Our longer-term focus remains on maintaining disciplined control over total debt levels.” A balance sheet that reads as stretched is a sufficient reason to sell without reading further.
• Second, the profitability timeline. Q3 2025 reached adjusted operating breakeven at $75.8m revenue. Q2 2026 is guided at $63-68m, well below that level. Deng was direct: “For the 2026 full year, we’re looking at profitable growth over 2025.” That requires delivering over the next six months, starting now.

An interesting aside with a future-leaning perspective. Zepp spent 25.4 per cent of Q1 revenue on R&D against Garmin’s 16.9 per cent. Zepp is building a platform from scratch; Garmin is maintaining one. Nevertheless, Zepp cannot be accused of failing to invest in its future. As always, it’s a case of whether the brand invests wisely. I’ll cover that later with a more considered piece on what appears to be a Hail Mary play with the move toward HYROX.

What’s coming next

Two signals point to a stronger H2.

• The first is the product pipeline. Sources at Amazfit have confirmed 10 or more launches in 2026, with several still to come. The Helio Ring 2 and Helio Strap 2 are both confirmed for H2. The Falcon 2, Amazfit’s premium titanium multi-sport watch competing directly at the Garmin Fenix tier, has leaked via app code and a regulatory filing. The full picture of Amazfit’s 2026 product launches is here.
• The second is pricing. ASP rose more than 20 per cent year-on-year in Q1. None of the 2026 launches has been discounted. Wang Huang was explicit: “users are showing a growing willingness to engage with Amazfit at more premium price tiers.” Q3 and Q4 pricing will determine whether gross margin returns to Q4 2025 territory or stays compressed by memory costs. The full analysis of the Amazfit price rise story is here.

Consider: In many ways, Amazfit appears to want to compete with Garmin head-on, e.g., the Falcon with the Fenix and the Cheetah with the Forerunner 970. Where are the brand’s products and features that try to carve out a new niche with true marketing innovation? OK, HYROX is one, but where are the niche plays like climbing and fishing from Coros, or the Running Track mode (again by the same company)? I sometimes say negative things about Coros, but never that the company fails to innovate. Innovate or die.

My take

The operational picture is improving. Revenue growing, margins expanding, losses narrowing. The share price fall reflects a balance sheet that looks stretched on first reading, a profitability timeline that keeps moving, and an uncertain product trajectory. The company reached adjusted operating breakeven once, in Q3 2025, then guided Q2 2026 below that level. Until Zepp posts two or three consecutive quarters at or above breakeven, the market will remain sceptical regardless of how good the watches get.

For comparison with Garmin’s very different financial position, see Garmin Q1 2026 earnings and this site’s longer-term analysis of where Garmin’s structural vulnerabilities lie.

Sources

• Zepp Health Q1 2026 press release
• ZEPP on NYSE

Frequently Asked Questions

Is Zepp Health profitable?

No. GAAP net loss in Q1 2026 was $19.6m. Adjusted net loss was $17.9m. The company reached adjusted operating breakeven in Q3 2025 at $75.8m revenue, but Q2 2026 is guided below that level.

Why did the ZEPP share price fall after Q1 2026 results?

Current liabilities exceed current assets by $35m, and short-term borrowings nearly doubled in the quarter. The profitability timeline also remains uncertain: Q2 2026 revenue guidance is below the level at which the company previously reached operating breakeven.

What products is Amazfit launching in H2 2026?

The Helio Ring 2 and Helio Strap 2 are both confirmed. The Falcon 2, a premium titanium multi-sport watch, has leaked but has not been officially confirmed. Further T-Rex family additions have also been indicated.

How does Zepp Health’s R&D spending compare to Garmin’s?

Zepp spent 25.4 per cent of Q1 2026 revenue on R&D. Garmin spent 16.9 per cent. In absolute terms, Garmin outspends Zepp by 22 times, but Zepp’s R&D intensity as a proportion of revenue is higher, reflecting the cost of building a platform from a smaller base.

Last Updated on 9 June 2026 by the5krunner