Dylan Chu

Dylan Chu asked for more color on new product momentum, specifically the T-Rex 3 Pro launch and initial feedback on the 44mm version compared to the T-Rex 3, holiday season demand signals, and the rationale behind the Q4 guidance given strong product pipeline and inventory build. He also inquired about the channel strategy for Q4 and 2026, focusing on online and offline growth opportunities.

Answer

CFO Leon Deng indicated positive holiday season demand signals, supporting the Q4 guidance, which is prudently set. He noted strong demand for Helio Strap and T-Rex 3, with the T-Rex 3 Pro (48mm version) performing better than the T-Rex 3 at launch despite its higher price. Regarding channel strategy, he highlighted rapid online growth (Amazon, Brand.com) outpacing traditional offline channels, expecting continued online expansion. Offline channels present significant untapped potential once supply constraints for products like Helio Strap and T-Rex 3 Pro are resolved, with online prioritized for new product launches due to better gross margin potential.

Dylan Chu from Point72 inquired about the initial feedback and sales momentum of the T-Rex 3 Pro (both 48mm and 44mm versions) compared to the T-Rex 3, the company's outlook on holiday season demand, and the rationale behind the Q4 revenue guidance given the strong product pipeline and inventory build. He also asked about Zepp Health's channel strategy for Q4 and 2026, focusing on online versus offline growth opportunities.

Answer

CEO Wayne Huang stated that holiday season signals are positive, and the T-Rex 3 Pro is performing very well, even better than the T-Rex 3 launch despite its higher price point. He acknowledged a prudent approach to guidance. Regarding channel strategy, he noted rapid online growth (Amazon, Brand.com) outpacing offline, especially for premium products. While online will continue to be a significant growth driver, offline expansion is planned for next year once supply constraints (e.g., Helio Strap) are resolved, with online growth offering better gross margins.

Dylan Chu of Point72 Hong Kong asked about the expected sales contribution and gross margin profile for the new HelioStripe, the company's medium-term gross margin targets, and the timeline for resolving the product's supply constraints.

Answer

CFO Leon Cheng Deng highlighted that the HelioStripe, launched in June, is gaining significant traction and currently faces more demand than supply. He noted it carries a healthy gross margin comparable to the company average. Looking ahead, Deng stated that as the product mix shifts towards more premium devices, the company expects gross margins to expand beyond its current 40% target over the next two to three years. He also confirmed that the supply constraints for the HelioStripe are expected to be resolved during Q3 2025.

The analyst asked about the expected sales contribution and gross margin of the new HelioStripe, the medium-term (2-3 year) gross margin outlook, and the timeline for resolving the HelioStripe's supply constraints.

Answer

Management stated that the HelioStripe, launched in June, is a popular and high-margin product that is currently supply-constrained, with the issue expected to be resolved in Q3. They anticipate the overall product mix will continue to improve, pushing the medium-term gross margin above the current 40% target.