MILPITAS,Calif.,Aug. 22,2024 -- Zepp Health Corporation ("Zepp" or the "Company") (NYSE: ZEPP) today reported revenues of US$40.6million;a basic and diluted net lossper share of US$0.04; and a basic and diluted net lossper ADS of US$0.17 forthe secondquarter ended June30,2024; adjustedbasic and diluted net lossper share of US$0.04; and adjustedbasic and diluted net lossper ADS of US$0.15. Each ADS represents four Class A ordinary shares.

Starting from the second quarter of 2024,the Company changed its reporting currency from Renminbi ("RMB") to U.S.dollar ("US$"),to reduce the impact of increased volatility of the RMB to US$ exchange rate on the Company's reported operating results. Since self-branded products sales of the Company is more heavily exposed to U.S. dollar or quasi-U.S. dollar denominated markets,changing the reporting currency to US$ will more accurately reflect the Company's performance and underlying nature of its operations. Prior period numbers have been recast into the new reporting currency accordingly.

Mr. Wang 'Wayne' Huang,Chairman and CEO of Zepp,commented,"Our second quarter performance aligned with our guidance,highlighted by a sequential increase in self-branded product sales and the achievement of a historically high gross margin. Despite a year-over-year decline in revenue,we are confident that the most challenging phase of our transformation has now been successfully navigated."

Wang added,"We recently launched Zepp OS 4,a major leap in wearable tech by integratingOpenAI's GPT-4,making Amazfit smartwatches more effective wellness companions. As we gear up for IFA in Berlin,we're excited to unveil the T-Rex 3 outdoor smartwatch with our custom-designed chips and new Open Wearable Stereo (OWS) earbuds. This integration of smartwatches,rings,and OWS headphones has created a seamless user experience loop,giving us a competitive edge and positioning us for growth. Additionally,our R&D team has made significant AI breakthroughs,and we plan to release new AI hardware within six months,marking a new chapter in wearable technology.These efforts are part of our broader strategy to increase global visibility of our brand and products. By aligning with prominent athletes and sports events,we continue to build a strong,recognizable brand identity and create meaningful connections with consumers worldwide. Through these brand and market investments,we have solidified our presence in major populous countries such as China,India,and Brazil. Additionally,we achieved a breakthrough in Germany,deepened our partnership with Decathlon in France,and steadily improved our global gross margin. We believe our growth momentum will continue into the second half of the year."

Mr. Leon Deng,Zepp's Chief Financial Officer,added,"In the second quarter,our self-branded product sales increased by 6% sequentially,while gross margin reached 40%,continuing the quarter-over-quarter expansion that began in the third quarter of2023. This marks the highest gross margin in the Company's history. This improvement was largely driven by the higher gross margin of self-branded products,thanks to a greater proportion of new products and a more selective approach to inventory clearance. We expect this positive gross margin trend to persist into the second half of the year. It is important to reiterate our strategy of prioritizing profitability and leveraging self-branded revenue to sustain the overall performance of the Company. Our net loss for the first half of 2024 narrowed year-over-year despite a decrease in sales. With the new product launches planned for the second half of 2024,we are confident in a recovery of profitability growth momentum. In addition,our cash balance remained steady at approximately USD129 million,with inventory levels reaching their lowest point sincethe first quarter of2023. We will continue executing our share repurchase program to demonstrate our confidence in Zepp's corporate strategy."

Second Quarter of 2024 Financial Summary

For the Three Months Ended

For the Six Months Ended

Number in millions,except for percentages and

per- share/ADS amounts

June 30,

2024

June 30,

2023

June 30,

2024

June 30,

2023

Revenue US$

40.6

92.4

80.6

186.7

Gross margin

40.3%

22.0%

38.5%

18.9%

Net loss US$

(10.8)

(10.1)

(25.6)

(30.1)

Adjusted EBIT US$[3]

(9.5)

(9.2)

(21.5)

(28.0)

Net loss attributable to Zepp Health Corporation US$

(10.8)

(10.0)

(25.6)

(30.0)

Adjusted net loss attributable to Zepp Health

Corporation US$[1]

(9.9)

(8.5)

(22.4)

(24.9)

Basic/diluted net loss per ADS US$

(0.17)

(0.16)

(0.39)

(0.49)

Adjusted basic/diluted net loss per ADS US$[2]

(0.15)

(0.14)

(0.34)

(0.41)

Units shipped in millions

1.3

3.8

2.5

7.3

[1] Adjusted net income/(loss) attributable to Zepp Health Corporation is a non-GAAP measure,which excludes share-based compensation expenses. The tax effect from the adjustment of the Share-based compensation expenses is nil. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

[2] Adjusted diluted net income/(loss) is the abbreviation of adjusted net income/(loss) attributable toZepp Health Corporation,which is a non-GAAP measure and excludes share-based compensation expenses attributable to Zepp Health Corporation,and is used as the numerator in computation of adjusted basic and diluted net loss per ADS attributable to Zepp Health Corporation.

[3] Adjusted EBIT is a non-GAAP financial measure,which is defined as net loss,excluding (i) share-based compensation expenses,(ii) income tax (benefit)/expense,(iii) interest income,(iv) interest expense.

Second Quarter 2024 Financial Results

Revenues

Revenues for the second quarter of 2024reached US$40.6million,a decrease by 56.0% from the secondquarter of 2023. The decrease was primarily due to the decrease in the sales of Xiaomi wearable products,as well as the decrease in sales of self-branded products,as the launch of new self-branded products is more heavily weighted towards the second half of 2024. However,compared with the first quarter of 2024,revenue increased by 1.7%,primarily driven by the increase of self-branded products sales,which more than offset the decline in the sales of Xiaomi wearable products.

Total units shipped in the second quarter of 2024 decreased by 65.8% year-over-year to 1.3 million,compared with 3.8 million in the second quarter of 2023.

Gross Margin

Gross margin in the second quarter of 2024 was 40.3%,compared to 22.0% in the same period of 2023. We reached another record-high quarterly gross margin since the third quarter of 2023,supported by the strong performance of our self-branded products and a more favourable product mix,with a higher proportion of new products and a reduction in clearance sales,which typically have lower margins.

Research and Development Expenses

Research and development expenses in the second quarter of 2024 were US$10.8 million,a decrease by 15.3% year-over-year. This accounted for 26.6% of revenues,compared to 13.8% for the same period in 2023. The decrease in research and development expenses was as a result of our refined research and development approaches,as we consistently evaluated resource efficiency to ensure maximum return on investment and productivity. We are committed to investing in new technologies,including AI,to maintain our competitive edge against our peers.

Selling and Marketing Expenses

Selling and marketing expenses in the second quarter of 2024 were US$10.6 million,a slight increase by 3.3% year-over-year. This accounted for 26.0% of revenues,compared to 11.0% for the same period in 2023.

The increase was primarily as a result of the investment in marketing campaigns during the summer sports season to boost our brand awareness. At the same time,we consistently pushed on retail profitability and channel mix improvement,which included meticulous refinement of our retail channels and strategic staffing arrangements across sales regions. We are committed to investing efficiently in marketing and branding to ensure our sustained growth.

General and Administrative Expenses

General and administrative expenses were US$4.9 million in the second quarter of 2024,a decrease by 37.2% year-over-year. This accounted for 11.9% of revenues,compared with 8.3% in the same period in 2023. The decrease in absolute value was largely attributable to our personnel optimization initiative and strict administrative expense control.

Operating Expenses

Total operating expenses for the second quarter of 2024 were US$26.2 million,a decrease by 14.6% year-over-year. Adjusted operating expenses,which exclude share-based compensation,were US$25.3 million. We will maintain our cost-conscious approach in the upcoming quarters. We expect our operating expenses to either remain at current levels or decrease further. Concurrently,we remain committed to investing in R&D and marketing activities to ensure our long-term competitiveness.

Operating Income/(Loss)

Operating loss for the second quarter of 2024 was US$9.9 million,compared to US$10.4 million for the second quarter of 2023. Adjusted operating loss for the second quarter of 2024 was US$9.0 million,compared to US$8.8 million for the second quarter of 2023. Operating loss was narrowed largely due to the improved gross margin of our self-branded products and reduced operating expenses.

Net Income/(Loss)

Net lossattributable to Zepp Health Corporation for the secondquarter of 2024was US$10.8million,compared toUS$10.0 million in the second quarter of2023. Adjusted net lossattributable to Zepp Health Corporation,which excludes share-based compensation expenses attributable to Zepp Health Corporation,was US$9.9million,compared to US$8.5million in the second quarter of2023. Net loss and adjusted net loss attributable to Zepp Health Corporation for the first half of 2024 was US$25.6 million and US$22.4 million,both of which represent an improvement as compared to US$30.0 million and US$24.9 million in the first half of 2023,respectively.

Liquidity and Capital Resources

As of June 30,2024,the Company had cash and cash equivalents and restricted cash of US$128.7 million,which was in similar level compared with the first quarter of 2024,despite a loss position. This cash position provides run way for the company to invest and seize potential market opportunities.

The Company continued to manage its working capital and inventory efficiently and recorded inventory levels of US$71.9 million as of June 30,2024. This reached another lowest level since June 30,2019,marking a decrease by 1.3% and 29.8% compared with March 31,2024 and June 30,2023,respectively. We will continue to manage working capital tightly. Also,we anticipate further reductions in our debt level in the upcoming quarters.

Shares Outstanding

As of June 30,the Company had a total of 236.5 million common shares outstanding,representing the equivalent of 59.1 million ADSs assuming the conversion of all common shares into ADSs.

Share Repurchase Program Update

The Company announced in its third quarter 2021 earnings release that the board had authorized a share repurchase program of up to US$20 million through November 2022.On November 21,2022,the board authorized a 12-month extension of the Company's share repurchase program. On November 20,the board further authorized the Company to extend its share repurchase program for another 12 months. Pursuant to the extended share repurchase program,the Company may repurchase its shares in the form of American depositary shares and/or ordinary shares through November 2024 with an aggregate value equal to the remaining balance under the share repurchase program. As ofJune30,the Company had used US$14.1million to repurchase 6,223,578ADSs. The Company expects to fund the repurchases under the extended share repurchase program out of its existing cash balance.

Outlook

For the thirdquarter of 2024,the Company's management currently expects net revenues to be between US$45 million and US$60million,it represents 18% to 59% growth for revenue of self-branded products compared with second quarter of 2024.

This outlook is based on current market conditions and reflects the Company's current and preliminary estimates of market,operating conditions and customer demand,which are all subject to change.

Conference Call

The Company's management team will hold a conference call at 9:30p.m. Eastern Time on Wednesday,August 21,2024(9:30a.m. Beijing Time on August 22,2024) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

US (Toll Free):

+1-888-346-8982

International:

+1-412-902-4272

Mainland China (Toll Free):

400-120-1203

Hong Kong (Toll Free):

800-905-945

Hong Kong:

+852-3018-4992

Participants should dial in at least 10 minutes before the scheduled start time and ask to be connected to the call for "Zepp Health Corporation".

Additionally,a live and archived webcast of the conference call will be available at http://ir.zepp.com.

A telephone replay will be available one hour after the call until August 28,2024by dialing:

US Toll Free:

+1-877-344-7529

International:

+1-412-317-0088

Replay Passcode:

2544714

About Zepp Health Corporation

Zepp Health Corporation (NYSE: ZEPP) is a global smart wearable and health technology leader,empowering users to live their healthiest lives by optimizing their health,fitness,and wellness journeys through its leading consumer brands,Amazfit,Zepp Clarity and Zepp Aura. Powered by its proprietary Zepp Digital Management Platform,which includes the Zepp OS,AI chips,biometric sensors and data algorithms,Zepp delivers cloud-based 24/7 actionable insights and guidance to help users attain their wellness goals. To date,Zepp has shipped over 200 million units,and its products are available in more than 90 countries and regions. Founded in 2013 as Huami Corp.,the Company changed its name to Zepp Health Corporation inFebruary 2021 to emphasize its health focus with a name that resonates across languages and cultures globally. Zepp has team members and offices across globe,especially in Europe and USA regions.

Use of Non-GAAP Measures

We use adjusted net income/(loss),a non-GAAP financial measure,in evaluating our operating results and for financial and operational decision-making purposes. Adjusted operating expenses represent operating expenses excluding share-based compensation expenses. Adjusted operating income/(loss) represents operating income/(loss) excluding share-based compensation expenses.Adjusted EBIT represents net income/(loss) excluding share-based compensation expenses,income tax (benefit)/expense,interest income and interest expense. Adjusted net income/(loss) represents net income/(loss) excluding share-based compensation expenses,and such adjustment has no impact on income tax.Adjusted net income/(loss) attributable to Zepp Health Corporation is a non-GAAP measure,and is used as the numerator in computation of adjusted net income/(loss) per share and per ADS attributable to Zepp Health Corporation.

We believe that adjusted net income/(loss),adjusted EBIT and adjusted net income/(loss) attributable to Zepp Health Corporation help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in net income/(loss) and net income/(loss) attributable to Zepp Health Corporation. We believe that adjusted net income/(loss),adjusted EBIT and adjusted net income/(loss) attributable to Zepp Health Corporation provides useful information about our operating results,enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Adjusted net income/(loss),adjusted EBIT and adjusted net income/(loss) attributable to Zepp Health Corporation,should not be considered in isolation or construed as an alternative to net income/(loss),basic and diluted net income/(loss) per share and per ADS attributable to Zepp Health Corporation or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted net income/(loss),adjusted EBIT and adjusted net income/(loss) attributable to ordinary shareholders,presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently,limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: the cooperation with Xiaomi,the recognition of the Company's self-branded products; the Company's growth strategies; trends and competition in global wearable technology market; changes in the Company's revenues and certain cost or expense accounting policies; governmental policies relating to the Company's industry and general economic conditions in China and the global. Further information regarding these and other risks is included in the Company's filings with the United States Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release,and the Company undertakes no obligation to update any forward-looking statement,except as required under applicable law.

For investor and media inquiries,please contact:

In China:

Zepp Health Corporation

Grace Yujia Zhang

Email: ir@zepp.com

Piacente Financial Communications

Tel: +86-10-6508-0677

Email: zepp@tpg-ir.com

Zepp Health Corporation

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of U.S. dollars ("US$")

except for number of shares and per share data,or otherwise noted)

As of December 31,

As of June30,

2023

2024

US$

US$

Assets

Current assets:

Cash and cash equivalents

133,669

118,601

Restricted cash

6,800

10,070

Accounts receivable,net

60,727

42,183

Amounts due from related parties

8,605

5,531

Inventories,net

84,887

71,908

Short-term investments

5,153

4,770

Prepaid expenses and other current assets

16,891

16,722

Total current assets

316,732

269,785

Property,plant and equipment,net

8,929

7,881

Intangible asset,net

9,868

8,561

Goodwill

9,581

9,581

Long-term investments

238,540

234,543

Deferred tax assets

32,401

31,480

Amount due from related parties,non-current

2,951

3,255

Other non-current assets

9,698

7,647

Operating lease right-of-use assets

6,819

4,446

Total assets

635,519

577,179

Zepp Health Corporation

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS- CONTINUED

(Amounts in thousands of U.S. dollars ("US$")

except for number of shares and per share data,

2023

2024

US$

US$

Liabilities

Current liabilities:

Accounts payable

37,286

26,344

Advance from customers

233

227

Amount due to related parties

3,475

2,709

Accrued expenses and other current liabilities

44,450

34,856

Income tax payables

986

1,008

Notes payable

66,991

64,124

Short-term bank borrowings

1,690

65,362

Total current liabilities

155,111

194,630

Deferred tax liabilities

4,169

4,013

Long-term borrowings

120,020

52,902

Other non-current liabilities

270

67

Non-current operating lease liabilities

3,197

2,659

Total liabilities

282,767

254,271

Zepp Health Corporation

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS- CONTINUED

(Amounts in thousands of U.S. dollars ("US$")

except for number of shares and per share data,

2023

2024

US$

US$

Equity

Ordinary shares

26

26

Additional paid-in capital

273,386

276,317

Treasury stock

(12,874)

(14,061)

Accumulated retained earnings

104,351

78,745

Accumulated other comprehensive loss

(14,008)

(19,500)

Total Zepp Health Corporation shareholders' equity

350,881

321,527

Noncontrolling interest

1,871

1,381

Total equity

352,752

322,908

Total liabilities and equity

635,179

Zepp Health Corporation

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of U.S. dollars ("US$")

except for number of shares and per share data,or otherwise noted)

For the Three Months EndedJune 30,

2023

2024

US$

US$

Revenues

92,449

40,642

Cost of revenues

(72,124)

(24,281)

Gross profit

20,325

16,361

Operating expenses:

Selling and marketing

(10,214)

(10,555)

General and administrative

(7,727)

(4,853)

Research and development

(12,771)

(10,818)

Total operating expenses

(30,712)

(26,226)

Operating loss

(10,387)

(9,865)

Other income and expenses:

Interest income

848

948

Interest expense

(1,756)

(1,373)

Other (expense)/income,net

(112)

127

Gain/(loss) from fair value change of long-term investments

541

(300)

Loss before income tax and lossfrom equity methodinvestments

(10,866)

(10,463)

Income tax benefits/(expenses)

1,656

(47)

Loss before income from equity method investments

(9,210)

(10,510)

Net loss from equity method investments

(856)

(337)

Net loss

(10,066)

(10,847)

Less: Net loss attributable to noncontrolling interest

(26)

(10)

Net lossattributable to Zepp Health Corporation

(10,040)

(10,837)

Net loss per share attributable to Zepp Health Corporation

Basic loss per ordinary share

(0.04)

(0.04)

Diluted loss per ordinary share

(0.04)

(0.04)

Net lossper ADS (4 ordinary shares equal to 1 ADS)

ADS – basic

(0.16)

(0.17)

ADS – diluted

(0.16)

(0.17)

Weighted average number of shares used in computingnet loss per

share

Ordinary share – basic

243,550,673

260,399,926

Ordinary share – diluted

243,926

Zepp Health Corporation

Reconciliation of GAAP and Non-GAAP Results

(Amounts in thousands of U.S. dollars ("US$")

except for number of shares and per share data,or otherwise noted)

For the Three Months Ended June30,

2023

2024

US$

US$

Total operating expenses

(30,226)

Share-based compensation expenses[1]

1,590

906

Total adjusted operating expenses

(29,122)

(25,320)

Operating loss

(10,865)

Share-based compensation expenses

1,590

906

Adjusted operating loss

(8,797)

(8,959)

Netloss

(10,847)

Share-based compensation expenses

1,590

906

Income tax (benefits)/expenses

(1,656)

47

Interest income

(848)

(948)

Interest expense

1,756

1,373

Adjusted EBIT

(9,224)

(9,469)

Net lossattributable to Zepp Health Corporation

(10,837)

Share-based compensation expenses

1,590

906

Adjusted net loss attributable to Zepp Health

Corporation[1]

(8,450)

(9,931)

Adjusted net loss per share attributable to

Zepp Health Corporation

Adjusted basic loss per ordinary share

(0.03)

(0.04)

Adjusted diluted loss per ordinary share

(0.03)

(0.04)

Adjusted net lossper ADS (4 ordinary sharesequal to 1

ADS)

ADS – basic

(0.14)

(0.15)

ADS – diluted

(0.14)

(0.15)

Weighted average number of shares used incomputing

adjusted net loss per share

Ordinary share – basic

243,926

Share-based compensation expenses included

are follows:

Selling and marketing

138

87

General and administrative

752

412

Research and development

700

407

Total

1,590

906

Zepp Health Corporation

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of U.S. dollars ("US$")

except for number of shares and per share data,or otherwise noted)

For the SixMonths Ended June30,

2023

2024

US$

US$

Revenues

186,742

80,599

Cost of revenues

(151,387)

(49,538)

Gross profit

35,355

31,061

Operating expenses:

Selling and marketing

(22,787)

(21,324)

General and administrative

(15,009)

(11,273)

Research and development

(30,014)

(24,239)

Total operating expenses

(67,810)

(56,836)

Operating loss

(32,455)

(25,775)

Other income and expenses:

Interest income

1,452

1,960

Interest expense

(3,702)

(2,816)

Other (expense)/income,net

(402)

195

Gain from fair value change of long-term investments

998

1,803

Investment income

34

-

Loss before income tax and lossfrom equity methodinvestments

(34,075)

(24,633)

Income tax benefits/(expenses)

5,271

(119)

Loss before income from equity method investments

(28,804)

(24,752)

Net loss from equity method investments

(1,284)

(896)

Net loss

(30,088)

(25,648)

Less: Net loss attributable to noncontrolling interest

(54)

(42)

Net lossattributable to Zepp Health Corporation

(30,034)

(25,606)

Net loss per share attributable to Zepp Health Corporation

Basic loss per ordinary share

(0.12)

(0.10)

Diluted loss per ordinary share

(0.12)

(0.10)

Net lossper ADS (4 ordinary shares equal to 1 ADS)

ADS – basic

(0.49)

(0.39)

ADS – diluted

(0.49)

(0.39)

Weighted average number of shares used in computingnet loss per

share

Ordinary share – basic

243,947,113

259,962,803

Ordinary share – diluted

243,803

Zepp Health Corporation

Reconciliation of GAAP and Non-GAAP Results

(Amounts in thousands of U.S. dollars ("US$")

except for number of shares and per share data,

2023

2024

US$

US$

Total operating expenses

(67,836)

Share-based compensation expenses[1]

5,107

3,189

Total adjusted operating expenses

(62,703)

(53,647)

Operating loss

(32,775)

Share-based compensation expenses

5,189

Adjusted operating loss

(27,348)

(22,586)

Netloss

(30,648)

Share-based compensation expenses

5,189

Income tax (benefits)/expenses

(5,271)

119

Interest income

(1,452)

(1,960)

Interest expense

3,702

2,816

Adjusted EBIT

(28,002)

(21,484)

Net lossattributable to Zepp Health Corporation

(30,606)

Share-based compensation expenses

5,189

Adjusted net loss attributable to Zepp Health

Corporation[1]

(24,927)

(22,417)

Adjusted net loss per share attributable to

Zepp Health Corporation

Adjusted basic loss per ordinary share

(0.10)

(0.09)

Adjusted diluted loss per ordinary share

(0.10)

(0.09)

Adjusted net lossper ADS (4 ordinary sharesequal to 1

ADS)

ADS – basic

(0.41)

(0.34)

ADS – diluted

(0.41)

(0.34)

Weighted average number of shares used incomputing

adjusted net loss per share

Ordinary share – basic

243,803

Share-based compensation expenses included

are follows:

Selling and marketing

314

337

General and administrative

2,316

1,472

Research and development

2,477

1,380

Total

5,107

3,189