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Zepp Health Corp

Zepp Health CorpZEPP決算レポート

NYSE · 産業 · 電子コンピュータ

Zepp Health Corp is a global digital health and smart wearable technology company. It develops and sells fitness trackers, smartwatches, and AI-powered health monitoring tools, serving individual consumers, sports teams, and healthcare providers across Asia, North America, and Europe, with core focus on wellness tracking and remote health management solutions.

What changed in Zepp Health Corp's 20-F — 2024 vs 2025

Top changes in Zepp Health Corp's 2025 20-F

539 paragraphs added · 516 removed · 407 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

157 edited+58 added−68 removed543 unchanged
Labor costs in in many areas of the world have risen in recent years, which in turn may be reflected in the manufacturing fees charged by these contract manufacturers to us. In addition, we have witnessed growing inflation rates in many areas of the world, which adversely affects us and our suppliers alike.
Labor costs in many areas of the world have risen in recent years, which in turn may be reflected in the manufacturing fees charged by these contract manufacturers to us. In addition, we have witnessed growing inflation rates in many areas of the world, which adversely affects us and our suppliers alike.
It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide.
It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our ADSs.
These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our ADSs.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “—Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.” We face various legal and operational risks and uncertainties associated with being based in or having our operations primarily in China and the complex and evolving PRC laws and regulations.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” and “—Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.” We face various legal and operational risks and uncertainties associated with being based in or having our operations in China and the complex and evolving PRC laws and regulations.
If we or any of the VIEs are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: ● discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our WFOE and the VIEs; ● imposing fines, confiscating the income from our WFOE or the VIEs, or imposing other requirements with which we or the VIEs may not be able to comply; 36 Table of Contents ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIEs and deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over the VIEs; or ● restricting or prohibiting our use of the proceeds of our initial public offering and our ADS offering in April 2019 to finance our business and operations in China.
If we or any of the VIEs are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: ● discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our WFOE and the VIEs; 35 Table of Contents ● imposing fines, confiscating the income from our WFOE or the VIEs, or imposing other requirements with which we or the VIEs may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIEs and deregistering the equity pledges of the VIEs, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over the VIEs; or ● restricting or prohibiting our use of the proceeds of our initial public offering and our ADS offering in April 2019 to finance our business and operations in China.
For example, the smart wearables market has a multitude of participants, including consumer electronics companies specialized in smart wearable technology, such as Fitbit and Garmin; large, broad-based consumer electronics companies that either compete in our market or adjacent markets, or have announced plans to do so, such as Huawei, Apple, Samsung and Xiaomi; traditional health and fitness companies and traditional watch companies.
For example, the smart wearables market has a multitude of participants, including consumer electronics companies specialized in smart wearable technology, such as Google Fitbit and Garmin; large, broad-based consumer electronics companies that either compete in our market or adjacent markets, or have announced plans to do so, such as Huawei, Apple, Samsung and Xiaomi; traditional health and fitness companies and traditional watch companies.
Although we purchased products liability insurance in 2024, which covers a wide range of our products, a successful claim brought against us due to injuries suffered by our users in excess of our available insurance coverage may have a material adverse effect on our financial conditions, results of operations and reputation.
Although we purchased products liability insurance, which covers a wide range of our products, a successful claim brought against us due to injuries suffered by our users in excess of our available insurance coverage may have a material adverse effect on our financial conditions, results of operations and reputation.
In addition, our business, financial condition and results of operations could be adversely affected to the extent that an outbreak harms the global or Chinese economy in general, such as wars, acts of terrorism, snowstorms, earthquakes, fire, floods, environmental accidents, power shortage or communication interruptions.
In addition, our business, financial condition and results of operations could be adversely affected to the extent that an outbreak harms the global economy in general, such as wars, acts of terrorism, snowstorms, earthquakes, fire, floods, environmental accidents, power shortage or communication interruptions.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022 and 2023 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022, 2023 and 2024 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2025.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022 and 2023 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024.
For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022, 2023 and 2024 and do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2025.
It also remains uncertain whether increased tariffs and trade tensions will create further disruptions and uncertainties to the international trade and lead to a downturn to the global economy. Currently, we supply markets outside of North America from China and serve the North American market from Vietnam.
It also remains uncertain whether increased tariffs and trade tensions will create further disruptions and uncertainties to the international trade and lead to a downturn to the global economy. Currently, we supply markets outside of North America primarily from China and serve the North American market primarily from Vietnam.
Risk Factors—Risks Related to Our Business—We are susceptible to supply shortages, long lead time for raw materials and components, and supply changes, any of which could disrupt our supply chain and have a material adverse impact on our results of operation because some of the key components of our products come from a limited number of sources of supply.” 15 Table of Contents ● We operate in highly competitive markets and the scale and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our revenue and profitability.
Risk Factors—Risks Related to Our Business—We are susceptible to supply shortages, long lead time for raw materials and components, and supply changes, any of which could disrupt our supply chain and have a material adverse impact on our results of operation because some of the key components of our products come from a limited number of sources of supply.” 14 Table of Contents ● We operate in highly competitive markets and the scale and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our revenue and profitability.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” 16 Table of Contents ● We rely on contractual arrangements with the VIEs and their shareholders for a large portion of our business operations, which may not be as effective as direct ownership in providing operational control.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” 15 Table of Contents ● We rely on contractual arrangements with the VIEs and their shareholders for a large portion of our business operations, which may not be as effective as direct ownership in providing operational control.
International sales and operations may be subject to risks such as: ● limited brand recognition; ● costs associated with establishing new distribution networks; ● fluctuations in freight costs, which can be influenced by factors beyond our control; ● difficulties in capturing foreign consumers’ preferences and customs; ● difficulties in staffing and managing foreign operations; ● costs and difficulties associated with providing after-sales customer services; ● burdens of complying with a wide variety of local laws and regulations, including packaging and labeling; ● adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash; ● political and economic instability; ● potential cross-border commercial disputes; ● trade restrictions, including sanction-related restrictions; ● differing employment practices and laws and labor disruptions; ● the imposition of government controls; 25 Table of Contents ● lesser degrees of intellectual property protection; ● tariffs and customs duties and the classifications of our goods by applicable governmental bodies; and ● a legal system subject to undue influence or corruption.
International sales and operations may be subject to risks such as: ● limited brand recognition; ● costs associated with establishing new distribution networks; ● fluctuations in freight costs, which can be influenced by factors beyond our control; ● difficulties in capturing foreign consumers’ preferences and customs; ● difficulties in staffing and managing foreign operations; ● costs and difficulties associated with providing after-sales customer services; ● burdens of complying with a wide variety of local laws and regulations, including packaging and labeling; ● adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash; ● political and economic instability; ● potential cross-border commercial disputes; ● trade restrictions, including sanction-related restrictions; ● differing employment practices and laws and labor disruptions; ● the imposition of government controls; ● lesser degrees of intellectual property protection; ● tariffs and customs duties and the classifications of our goods by applicable governmental bodies; and ● a legal system subject to undue influence or corruption.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—As the case in many other civil law jurisdictions, there are uncertainties regarding the interpretation and enforcement of laws, rules and regulations in the jurisdictions in which we operate, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” Furthermore, in connection with offering and listing in an overseas market, we, our PRC subsidiaries and the VIEs, under the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies as well as five supporting guidelines, released by the China Securities Regulatory Commission, or the CSRC, on February 17, 2023, and effective on March 31, 2023, may be required to fulfill filing procedures with and report material events to the CSRC, and under the Measures for Cybersecurity Review, which is effective on February 15, 2022, as well as its relevant laws, regulations and regulatory rules, may be required to go through cybersecurity review by the Cyberspace Administration of China.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—As the case in many other civil law jurisdictions, there are uncertainties regarding the interpretation and enforcement of laws, rules and regulations in the jurisdictions in which we operate, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” 8 Table of Contents Furthermore, in connection with offering and listing in an overseas market, we, our PRC subsidiaries and the VIEs, under the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies as well as five supporting guidelines, released by the China Securities Regulatory Commission, or the CSRC, on February 17, 2023, and effective on March 31, 2023, may be required to fulfill filing procedures with and report material events to the CSRC, and under the Measures for Cybersecurity Review, which is effective on February 15, 2022, as well as its relevant laws, regulations and regulatory rules, may be required to go through cybersecurity review by the Cyberspace Administration of China.
Also, if future laws, administrative regulations or provisions mandate further actions to be taken with respect to existing contractual arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all.
Also, if future laws, administrative regulations or provisions mandate further actions to be taken with respect to existing contractual arrangements, we may face uncertainties as to whether we can complete such actions in a timely manner, or at all.
For example, if the shareholders of the VIEs refuse to transfer their equity interest in the VIEs to us or our designee if we exercise the purchase option pursuant to these contractual arrangements, or if they otherwise act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations. 37 Table of Contents All of the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China.
For example, if the shareholders of the VIEs refuse to transfer their equity interest in the VIEs to us or our designee if we exercise the purchase option pursuant to these contractual arrangements, or if they otherwise act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations. 36 Table of Contents All of the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China.
If we encounter issues with these contract manufacturers, our business, brand and results of operations could be harmed. We do not maintain our own manufacturing capabilities and rely on contract manufactures to produce our products.
If we encounter issues with these contract manufacturers, our business, brand and results of operations could be harmed. We do not maintain our own manufacturing capabilities and rely on contract manufacturers to produce our products.
No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder. 54 Table of Contents The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your Class A ordinary shares.
No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder. 50 Table of Contents The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your Class A ordinary shares.
Risk Factors—Risks Related to Our Corporate Structure—The shareholders of the VIEs may have potential conflicts of interest with us, which may adversely affect our business and financial condition.” There are also substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIEs and their nominee shareholders.
Risk Factors—Risks Related to Our Corporate Structure—The shareholders of the VIEs may have potential conflicts of interest with us, which may adversely affect our business and financial condition.” There are also certain uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with the VIEs and their nominee shareholders.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. 35 Table of Contents Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. 34 Table of Contents Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks.
If the VIEs undergo a voluntary or involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could adversely affect our business, financial condition and results of operations. 38 Table of Contents Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.
If the VIEs undergo a voluntary or involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could adversely affect our business, financial condition and results of operations. 37 Table of Contents Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.
Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs, we believe that we were a PFIC for the taxable year ended December 31, 2024, and we will likely be a PFIC for our current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of active income.
Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs, we believe that we were a PFIC for the taxable year ended December 31, 2025 and we will likely be a PFIC for our current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of active income.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.” ● As the case in many other jurisdictions, there may be uncertainties with respect to effecting service of legal process, enforcing foreign judgments or bringing actions in China or Cayman Islands against us or our management named in this annual report based on foreign laws.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.” 16 Table of Contents ● As the case in many other jurisdictions, there may be uncertainties with respect to effecting service of legal process, enforcing foreign judgments or bringing actions in China or Cayman Islands against us or our management named in this annual report based on foreign laws.
Our research and development effort may not yield the benefits we expect to achieve at all after we dedicate our time and resources into it. 18 Table of Contents We are endeavoring to apply our products in more scenarios, and medical use is one area that we put in significant efforts.
Our research and development effort may not yield the benefits we expect to achieve at all after we dedicate our time and resources into it. 17 Table of Contents We are endeavoring to apply our products in more scenarios, and medical use is one area that we put in significant efforts.
For upgraded services and additional functions to be added to established products, we go through the same procedures. In 2021, we obtained the ISO/IEC 27001 information security management system certification, which was renewed in 2024. However, we cannot guarantee that our efforts will be effective or sufficient.
For upgraded services and additional functions to be added to established products, we go through the same procedures. In 2021, we obtained the ISO/IEC 27001 information security management system certification, which was renewed in 2025. However, we cannot guarantee that our efforts will be effective or sufficient.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—As the case in many other civil law jurisdictions, there are uncertainties regarding the interpretation and enforcement of laws, rules and regulations in the jurisdictions in which we operate, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” 17 Table of Contents ● The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—As the case in many other civil law jurisdictions, there are uncertainties regarding the interpretation and enforcement of laws, rules and regulations in the jurisdictions in which we operate, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” ● The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.
In particular, we face a number of challenges relating to data from transactions and other activities on our platforms, including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; ● addressing concerns related to privacy and sharing, safety, security and other factors; and ● complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal information, including any requests from regulatory and government authorities relating to these data.
In particular, we face a number of challenges relating to data from transactions and other activities on our platforms, including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; ● addressing concerns related to privacy and sharing, safety, security and other factors; and 20 Table of Contents ● complying with applicable laws, rules and regulations relating to the collection, use, storage, transfer, disclosure and security of personal information, including any requests from regulatory and government authorities relating to these data.
If we fail to maintain our relationships with some key customers and such customers terminate their relationship or otherwise reduce the amount of products they purchase from us below our expectations, we could suffer adverse effects on our business, business opportunities, results of operations, financial condition and cash flows.
If we fail to maintain our relationships with key customers and such customers terminate their relationships with us or otherwise reduce the amount of products they purchase from us below our expectations, we could suffer adverse effects on our business, business opportunities, results of operations, financial condition and cash flows.
In addition, an independent registered public accounting firm for a public company may be required to issue an attestation report on the effectiveness of such company’s internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
In addition, an independent registered public accounting firm for a public company may be required to issue an attestation report on the effectiveness of such company’s internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2025.
The delisting of our ADSs by the NYSE would have material negative impacts on the liquidity of our securities and our ability to raise future capital. 50 Table of Contents The trading price of our ADSs has fluctuated and is likely to be volatile, which could result in substantial losses to investors.
The delisting of our ADSs by the NYSE would have material negative impacts on the liquidity of our securities and our ability to raise future capital. 46 Table of Contents The trading price of our ADSs has fluctuated and is likely to be volatile, which could result in substantial losses to investors.
We believe that we were a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the taxable year ended December 31, 2024, which could subject U.S. investors in our ADSs or Class A ordinary shares to significant adverse U.S. income tax consequences.
We believe that we were a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the taxable year ended December 31, 2025, which could subject U.S. investors in our ADSs or Class A ordinary shares to significant adverse U.S. income tax consequences.
If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.
If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to certain uncertainty as to the outcome of any such legal proceedings.
These restrictions may cause a material decline in the value of our ADSs. 55 Table of Contents You may experience dilution of your holdings due to the inability to participate in rights offerings. We may, from time to time, distribute rights to our shareholders, including rights to acquire securities.
These restrictions may cause a material decline in the value of our ADSs. 51 Table of Contents You may experience dilution of your holdings due to the inability to participate in rights offerings. We may, from time to time, distribute rights to our shareholders, including rights to acquire securities.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.” 4 Table of Contents Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ADSs.
Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.” Risks and uncertainties arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ADSs.
Any perception by the public that online transactions or the privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of our business in general, which may reduce the number of orders we receive. Our patents, know-how, trade secrets and other intellectual property rights and proprietary rights are critical to our success.
Any perception by the public that online transactions or the privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of our business in general, which may reduce the number of orders we receive. 22 Table of Contents Our patents, know-how, trade secrets and other intellectual property rights and proprietary rights are critical to our success.
If the stock price of Jiangsu Yitong experiences a substantial and sustained decline, the valuation of this investment may be adjusted and we may need to recognize an impairment loss, which would adversely impact our financial performance. Additionally, we may receive indications of interest from other parties interested in acquiring some or all of our business.
If the stock price of Jiangsu Yitong experiences a substantial and sustained decline, the valuation of this investment may be adjusted and we may need to recognize an impairment loss, which would adversely impact our financial performance. 31 Table of Contents Additionally, we may receive indications of interest from other parties interested in acquiring some or all of our business.
Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises user data. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against us. We generally comply with industry standards and are subject to the terms of our own privacy policies.
Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises user data. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against us. 21 Table of Contents We generally comply with industry standards and are subject to the terms of our own privacy policies.
Organizational Structure.” 3 Table of Contents However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs and we may incur substantial costs to enforce the terms of the arrangements. Uncertainties in the PRC legal system may limit our ability, as a Cayman Islands holding company, to enforce these contractual arrangements.
Organizational Structure.” However, the contractual arrangements may not be as effective as direct ownership in providing us with control over the VIEs and we may incur substantial costs to enforce the terms of the arrangements. Uncertainties in the PRC legal system may limit our ability, as a Cayman Islands holding company, to enforce these contractual arrangements.
We believe that we are currently in compliance with applicable laws, regulations and policies overseen by the Cyberspace Administration of China relating to cybersecurity, privacy, data protection and information security. 21 Table of Contents In addition, regulatory authorities around the world have adopted or are considering a number of legislative and regulatory proposals concerning data protection.
We believe that we are currently in compliance with applicable laws, regulations and policies overseen by the Cyberspace Administration of China relating to cybersecurity, privacy, data protection and information security. In addition, regulatory authorities around the world have adopted or are considering a number of legislative and regulatory proposals concerning data protection.
Because the courts of the Cayman Islands have yet to rule on whether such judgments are penal or punitive in nature, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands. 42 Table of Contents The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law.
Because the courts of the Cayman Islands have yet to rule on whether such judgments are penal or punitive in nature, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands. The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law.
The loss of any key personnel could be disruptive to our operations and research and development activities, reduce our employee retention and revenue, and impair our ability to compete. Certain director may have conflicts of interest. Our director, Mr. Alain Lam, is also the CFO of Xiaomi. Mr.
The loss of any key personnel could be disruptive to our operations and research and development activities, reduce our employee retention and revenue, and impair our ability to compete. 28 Table of Contents Certain director may have conflicts of interest. Our director, Mr. Alain Lam, is also the CFO of Xiaomi. Mr.
If we are unable to maintain successful relationships with dealers and distributors or to expand our distribution channels, our business will suffer. 26 Table of Contents Our large customers may also seek to leverage their position to improve their profitability through increased promotional programs or other measures, which could have a negative impact on our gross margin.
If we are unable to maintain successful relationships with dealers and distributors or to expand our distribution channels, our business will suffer. Our large customers may also seek to leverage their position to improve their profitability through increased promotional programs or other measures, which could have a negative impact on our gross margin.
Accordingly, if we fail to anticipate and satisfy consumer preferences in a timely manner, or if it is perceived that our future products and services will not satisfy consumer preferences, our business may be adversely affected. We do not have internal manufacturing capabilities and rely on several contract manufacturers to produce our products.
Accordingly, if we fail to anticipate and satisfy consumer preferences in a timely manner, or if it is perceived that our future products and services will not satisfy consumer preferences, our business may be adversely affected. 19 Table of Contents We do not have internal manufacturing capabilities and rely on several contract manufacturers to produce our products.
Business Overview—Regulation—Regulation on Employee Share Options.” 48 Table of Contents If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.
Business Overview—Regulation—Regulation on Employee Share Options.” If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.
The following table sets forth the amount of the transfers for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2022 2023 2024 ​ ​ (US$ in thousands) Cash transferred from Hong Kong company to PRC subsidiaries, the VIEs and the subsidiaries of the VIEs ​ (6,025) ​ (26,338) ​ (46,990) Net cash paid by the VIEs to our subsidiaries in operating activities ​ (72,262) ​ (63,305) ​ (87,304) Net cash paid by the VIEs to our subsidiaries in investing activities ​ (43,211) ​ — ​ — ​ 6 Table of Contents For more details, see the condensed consolidating schedule and consolidated financial statements under “Financial Information Related to the VIEs.” Except for the transactions described above, for the years ended December 31, 2022, 2023 and 2024, no assets other than cash were transferred between the Cayman Islands holding company and a subsidiary or a VIE, and no subsidiaries or VIE paid dividends or made other distributions to the holding company.
The following table sets forth the amount of the transfers for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ (US$ in thousands) Cash transferred from Hong Kong company to PRC subsidiaries, the VIEs and the subsidiaries of the VIEs ​ (26,338) ​ (46,990) ​ (63,595) Net cash paid by the VIEs to our subsidiaries in operating activities ​ (63,305) ​ (87,304) ​ (81,459) Net cash paid by the VIEs to our subsidiaries in investing activities ​ — ​ — ​ — ​ 6 Table of Contents For more details, see the condensed consolidating schedule and consolidated financial statements under “Financial Information Related to the VIEs.” Except for the transactions described above, for the years ended December 31, 2023, 2024 and 2025, no assets other than cash were transferred between the Cayman Islands holding company and a subsidiary or a VIE, and no subsidiaries or VIE paid dividends or made other distributions to the holding company.
We can provide no assurance that we will prevail in such litigation, and even if we do prevail, we may not obtain a meaningful recovery. 23 Table of Contents Various other issues may arise with respect to our intellectual property portfolio.
We can provide no assurance that we will prevail in such litigation, and even if we do prevail, we may not obtain a meaningful recovery. Various other issues may arise with respect to our intellectual property portfolio.
The United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters and that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers, predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers, predicated upon the securities laws of the United States or any state in the United States.
In addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state. 40 Table of Contents The United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters and that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers, predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers, predicated upon the securities laws of the United States or any state in the United States.
We would have to pay cash, incur debt, or issue equity securities to pay for any such acquisition and investment, each of which may affect our financial condition or the value of our capital stock and could result in dilution to our shareholders. We had US$226.9 million of short-term and long-term investments as of December 31, 2024.
We would have to pay cash, incur debt, or issue equity securities to pay for any such acquisition and investment, each of which may affect our financial condition or the value of our capital stock and could result in dilution to our shareholders. We had US$220.0 million of short-term and long-term investments as of December 31, 2025.
To date, we have shipped over 200 million units of smart wearable devices and served more than 42 million users in over 90 countries. With outstanding craftsmanship, Amazfit smartwatches have won many design awards, including the iF Design Award and the Red Dot Design Award.
To date, we have shipped over 200 million units of smart wearable devices and served more than 53 million users in over 90 countries with device activation in more than 150 countries. With outstanding craftsmanship, Amazfit smartwatches have won many design awards, including the iF Design Award and the Red Dot Design Award.
Any failure to comply with applicable data security and privacy related regulations could result in regulatory enforcement actions against us, and the misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, damage our reputation and credibility and could have a negative impact on our financial performance.
Any failure to comply with applicable regulations could also result in regulatory enforcement actions against us, and the misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, damage our reputation and credibility and could have a negative impact on revenues and profits.
In addition, our ADSs may decline in value or become worthless if we are unable to assert our contractual control rights over the assets of the VIEs which contributed to 18.0% of our revenues in 2024.
In addition, our ADSs may decline in value or become worthless if we are unable to assert our contractual control rights over the assets of the VIEs which contributed to 8.0% of our revenues in 2025.
GAAP and we consolidate the financial results of the VIEs in our consolidated financial statements in accordance with U.S. GAAP. For more details of these contractual arrangements, see “Item 4. Information on the Company—C.
Accordingly, we treat the VIEs as the consolidated entities under U.S. GAAP and we consolidate the financial results of the VIEs in our consolidated financial statements in accordance with U.S. GAAP. For more details of these contractual arrangements, see “Item 4. Information on the Company—C.
The PRC government imposes regulations on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in U.S. dollars, Euros and Renminbi. In 2024, we received a significant portion of our revenues in Renminbi.
The PRC government imposes regulations on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in U.S. dollars, Euros and Renminbi.
In addition, SAT Public Notice 7 provides clearer criteria than SAT Circular 698 for assessment of reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market.
In addition, SAT Public Notice 7 provides clear criteria for assessment of reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market.
SAT Public Notice 37 replaced a series of important circulars, including, but not limited to, SAT Circular 698, and revised the rules governing the administration of withholding tax on China-source income derived by the non-resident enterprise. SAT Public Notice 37 provided certain key changes to the current withholding regime.
SAT Public Notice 37 replaced a series of important circulars and revised the rules governing the administration of withholding tax on China-source income derived by the non-resident enterprise. SAT Public Notice 37 provided certain key changes to the current withholding regime.
In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Such reserve funds cannot be distributed to us as dividends.
In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital.
China does not have any treaties or other forms of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments.
China does not have any treaties with the United States that provide for the reciprocal recognition and enforcement of foreign judgments.
Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise.
As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise.
Our directors, officers and principal shareholders collectively control a significant amount of our shares, and their interests may not align with the interests of our other shareholders. As of February 28, 2025, our officers, directors and principal shareholders collectively held 93.5% of total voting power.
Our directors, officers and principal shareholders collectively control a significant amount of our shares, and their interests may not align with the interests of our other shareholders. As of February 28, 2026, our officers, directors and principal shareholders collectively held 90.8% of total voting power.
Since we first listed our ADSs on the New York Stock Exchange, or NYSE, on February 8, 2018, the trading prices of our ADSs have been and may continue to be subject to wide fluctuations. In 2024, the trading prices of our ADSs on NYSE have ranged from US$2.06 to US$7.84 per ADS.
Since we first listed our ADSs on the New York Stock Exchange, or NYSE, on February 8, 2018, the trading prices of our ADSs have been and may continue to be subject to wide fluctuations. In 2025, the trading prices of our ADSs on NYSE have ranged from US$2.17 to US$61.27 per ADS.
Foreign exchange regulations in China may also make it difficult for us to make loans or additional capital contributions to our PRC subsidiaries.” 8 Table of Contents Permissions Required from the PRC Authorities for Our Operations We conduct our business in China through our PRC subsidiaries, the VIEs and their subsidiaries.
Foreign exchange regulations in China may also make it difficult for us to make loans or additional capital contributions to our PRC subsidiaries.” Permissions Required from the PRC Authorities for Our Operations We conduct our business in China through our PRC subsidiaries, the VIEs and their subsidiaries. Our operations in China are governed by PRC laws and regulations.
Such claims may further prompt warranty claims, regulatory investigations and litigation. In that case, our brand may suffer from negative publicity, which may then result in loss of consumer confidence and reduction of sales in our products. Furthermore, levels of warranty claims or estimated costs of warranty claims might materially affect our gross margins and operating results.
In that case, our brand may suffer from negative publicity, which may then result in loss of consumer confidence and reduction of sales in our products. 27 Table of Contents Furthermore, levels of warranty claims or estimated costs of warranty claims might materially affect our gross margins and operating results.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in the reported financial information and the quality of our financial statements. 39 Table of Contents Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in the reported financial information and the quality of our financial statements.
As of March 31, 2025, awards to purchase 13,564,827 Class A ordinary shares under the 2015 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates.
As of February 28, 2026, awards to purchase 13,944,827 Class A ordinary shares under the 2015 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates.
We may make loans to our PRC subsidiaries and the VIEs subject to the approval or registration from governmental authorities and limitation of amount, or we may make additional capital contributions to our wholly foreign-owned subsidiaries in China.
We are an offshore holding company conducting our operations in China through our PRC subsidiaries and the VIEs. We may make loans to our PRC subsidiaries and the VIEs subject to the approval or registration from governmental authorities and limitation of amount, or we may make additional capital contributions to our wholly foreign-owned subsidiaries in China.
Our marketing and branding activities may not achieve anticipated results. If we fail to enhance our marketing approaches and experiment with new marketing methods, or fail to do so in a cost-effective manner, our expansion efforts will be hindered. Some of our products are subject to governmental regulation or certification.
If we fail to enhance our marketing approaches and experiment with new marketing methods, or fail to do so in a cost-effective manner, our expansion efforts will be hindered. 25 Table of Contents Some of our products are subject to governmental regulation or certification.
Pursuant to the HFCAA, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Pursuant to the HFCAA, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States. 38 Table of Contents On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong and our auditor was subject to that determination.
It is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the ADSs or ordinary shares.
It is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise.
If our ability to raise such capital is significantly and negatively affected, it could be detrimental to our business, financial condition and prospects, and our ADSs may significantly decline in value.
If our ability to raise such capital is significantly and negatively affected, it could be detrimental to our business, financial condition and prospects, and our ADSs may significantly decline in value. Furthermore, on September 29, 2025, the U.S.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. 43 Table of Contents Our loans or additional capital contributions to our PRC subsidiaries are subject to PRC regulations of loans to, and direct investment in, PRC entities by offshore holding companies.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.
The maximum aggregate number of shares which may be issued pursuant to all awards under the 2015 Plan, the 2018 Plan and the 2023 Plan is 14,328,358, 26,288,918 and 10,322,520 Class A ordinary shares, respectively.
As of January 1, 2026, the maximum aggregate number of shares which may be issued pursuant to all awards under the 2015 Plan, the 2018 Plan and the 2023 Plan is 14,328,358, 28,692,420 and 10,322,520 Class A ordinary shares, respectively.
As of March 31, 2025, awards to purchase 25,701,010 Class A ordinary shares under the 2018 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates.
As of February 28, 2026, awards to purchase 25,210,778 Class A ordinary shares under the 2018 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates.
Powered by our proprietary digital health management platform, which includes the Zepp OS, AI chips, biometric sensors, hardware, and specialized health data algorithms, we deliver cloud-based actionable insights and guidance 24/7 to help users achieve their health goals.
Powered by our proprietary digital health management platform, which includes the Zepp OS, AI chips, biometric sensors, hardware, and specialized health data algorithms, we deliver cloud-based actionable insights and guidance 24/7 to help users achieve their health goals. Behind Amazfit is Zepp, which builds the intelligence that supports its training experience across our wearable ecosystem.
The five-year transition period expired on December 31, 2024. Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could adversely affect our current corporate structure, corporate governance and business operations.
Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could adversely affect our current corporate structure, corporate governance and business operations.
We could be subject to future enforcement action with respect to compliance with governmental economic sanctions laws, which could result in penalties and costs and consequentially have a material effect on our business and operating results.
We could be subject to future enforcement action with respect to compliance with governmental economic sanctions laws, which could result in penalties and costs and consequentially have a material effect on our business and operating results. Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 47 Table of Contents Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles will be required to register such investments with the State Administration of Foreign Exchange or its local branches.
Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles will be required to register such investments with the State Administration of Foreign Exchange or its local branches.
If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition and results of operations. 34 Table of Contents Our use of open source software and external models could negatively affect our ability to sell our products and subject us to possible litigation.
If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition and results of operations.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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PumpBeats TM Blood Pressure Measurement System In July 2021, we introduced PumpBeats TM , a non-invasive and sleeveless blood pressure measurement system on Amazfit smart watches, which enables both spot measurement during day time and continuous monitoring during sleep.
PumpBeats TM Blood Pressure Measurement System In July 2021, we introduced PumpBeats™, a non-invasive and sleeveless blood pressure measurement system on Amazfit smart watches, which enables both spot measurement during day time and continuous monitoring during sleep.
Zepp and Zepp Life Mobile Apps We mainly offer two mobile apps: our “Zepp Life” mobile app, formerly known as the “Mi Fit” mobile app, and our “Zepp” mobile app, formerly known as the “Amazfit” mobile app. Both of our mobile apps sync automatically with, and display real-time data from, our devices.
Zepp and Zepp Life Mobile Apps We mainly offer two mobile apps: our “Zepp” mobile app, formerly known as the “Amazfit” mobile app, and our “Zepp Life” mobile app, formerly known as the “Mi Fit” mobile app. Both of our mobile apps sync automatically with, and display real-time data from, our devices.
Based on five years of technical research and employing our proprietary biosensor array and Huangshan AI chip, the PumpBeats TM algorithm is able to measure blood pressure through the watch’s optical sensors in only 30 seconds. This feature provides users with easy, convenient, accurate readings anytime and anywhere throughout their busy day.
Based on five years of technical research and employing our proprietary biosensor array and Huangshan AI chip, the PumpBeats™ algorithm is able to measure blood pressure through the watch’s optical sensors in only 30 seconds. This feature provides users with easy, convenient, accurate readings anytime and anywhere throughout their busy day.
Combined with the upgraded heart rate tracking algorithm of the GT 4 series, the BioTracker TM 4 could efficiently distinguish heart rate signal from that contaminated by various motion noises, which almost reaches the tracking level of heart rate belts. In September 2023, we announced our latest generation of biosensor array, BioTracker TM 5, on Amazfit Balance and T-Rex 3.
Combined with the upgraded heart rate tracking algorithm of the GT 4 series, the BioTracker™ 4 could efficiently distinguish heart rate signal from that contaminated by various motion noises, which almost reaches the tracking level of heart rate belts. In September 2023, we announced our latest generation of biosensor array, BioTracker™ 5, on Amazfit Balance and T-Rex 3.
PumpBeats TM was first tested in Amazfit GTR 3 Pro introduced in October 2021 and undertaken clinical trial by Peking University First Hospital and Hefei High-tech Zone Cardiovascular Hospital in 2022. In 2023, our blood pressure measurement software, supported by the spot measurement capability of PumpBeats TM , was certified by National Medical Products Administration as Class II medical devices.
PumpBeats™ was first tested in Amazfit GTR 3 Pro introduced in October 2021 and undertaken clinical trial by Peking University First Hospital and Hefei High-tech Zone Cardiovascular Hospital in 2022. In 2023, our blood pressure measurement software, supported by the spot measurement capability of PumpBeats™, was certified by National Medical Products Administration as Class II medical devices.
The smart wearables market has a multitude of participants, including consumer electronics companies specialized in smart wearable technology, such as Fitbit and Garmin, large, broad-based consumer electronics companies that either compete in our market or adjacent markets, or have announced plans to do so, such as Huawei, Apple, Samsung and Fitbit, traditional health and fitness companies and traditional watch companies.
The smart wearables market has a multitude of participants, including consumer electronics companies specialized in smart wearable technology, such as Google Fitbit and Garmin, large, broad-based consumer electronics companies that either compete in our market or adjacent markets, or have announced plans to do so, such as Huawei, Apple, Samsung and Google Fitbit, traditional health and fitness companies and traditional watch companies.
Additionally, we also have developed the AI algorithms to recognize the daily workout or exercise, such as walking, running, cycling, rowing and elliptical training to automatically record the workout for users, and provided AI-powered tailored guidance based on the user’s physical characteristics and workout experience level through the smart coaching solution Zepp Coach TM .
Additionally, we also have developed the AI algorithms to recognize the daily workout or exercise, such as walking, running, cycling, rowing and elliptical training to automatically record the workout for users, and provided AI-powered tailored guidance based on the user’s physical characteristics and workout experience level through the smart coaching solution Zepp Coach™.
To help users train safely, the Zepp Coach TM can even detect whether the user is in an overtrained state, and appropriately reduce the intensity of scheduled exercise plans or recommend a rest day. In 2023, an AI Chat function was provided to enhance Zepp Coach TM as a trial for users of Amazfit devices.
To help users train safely, the Zepp Coach™ can even detect whether the user is in an overtrained state, and appropriately reduce the intensity of scheduled exercise plans or recommend a rest day. In 2023, an AI Chat function was provided to enhance Zepp Coach™ as a trial for users of Amazfit devices.
In October 2021, we introduced the third generation of our biosensor array, BioTracker TM 3, into our smart watch products Amazfit GTS 3, Amazfit GTR 3 and Amazfit GTR 3 Pro. The BioTracker TM 3 monitors blood oxygen level, heart rate, stress level and sleep quality, providing users with easy-to-use enhanced health and sports experience.
In October 2021, we introduced the third generation of our biosensor array, BioTracker™ 3, into our smart watch products Amazfit GTS 3, Amazfit GTR 3 and Amazfit GTR 3 Pro. The BioTracker™ 3 monitors blood oxygen level, heart rate, stress level and sleep quality, providing users with easy-to-use enhanced health and sports experience.
We can also make personalized activity recommendations to help users achieve their fitness goals, such as weight loss, and with the AI Chat feature provided on Zepp Coach TM , users are able to request specific advice which can scientifically improve their sports performance. ● Biometrics.
We can also make personalized activity recommendations to help users achieve their fitness goals, such as weight loss, and with the AI Chat feature provided on Zepp Coach™, users are able to request specific advice which can scientifically improve their sports performance. · Biometrics.
Currently, we supply markets outside North America from China and the North American market from Vietnam. In the medium to long term, we will also explore other sourcing options to further optimize our supply chain and potentially minimize our costs and risks.
Currently, we supply markets outside North America primarily from China and the North American market primarily from Vietnam. In the medium to long term, we will also explore other sourcing options to further optimize our supply chain and potentially minimize our costs and risks.
In September 2022, our brand new smart watch products Amazfit GTS 4 and Amazfit GTR 4 debuted the fourth generation of our biosensor array, BioTracker TM 4, which collects 33% more data and is more accurate than the previous generation.
In September 2022, our brand new smart watch products Amazfit GTS 4 and Amazfit GTR 4 debuted the fourth generation of our biosensor array, BioTracker™ 4, which collects 33% more data and is more accurate than the previous generation.
Zepp Coach TM offers AI-powered tailored guidance based on the user’s physical characteristics and workout experience level, to help them scientifically improve their sports performance and build better fitness habits.
Zepp Coach™ offers AI-powered tailored guidance based on the user’s physical characteristics and workout experience level, to help them scientifically improve their sports performance and build better fitness habits.
To comply with these laws and regulations, we have required our users to consent to our collecting and using their personal information, and established information security systems to protect users’ privacy. 76 Table of Contents Regulation on Employment The Labor Law of the PRC, latest amended on December 29, 2018, the PRC Labor Contract Law, latest amended on December 28, 2012 and the Implementing Regulations of the Employment Contract Law, effective on September 18, 2008, provide requirements concerning employment contracts between an employer and its employees.
To comply with these laws and regulations, we have required our users to consent to our collecting and using their personal information, and established information security systems to protect users’ privacy. 74 Table of Contents Regulation on Employment The Labor Law of the PRC, latest amended on December 29, 2018, the PRC Labor Contract Law, latest amended on December 28, 2012 and the Implementing Regulations of the Employment Contract Law, effective on September 18, 2008, provide requirements concerning employment contracts between an employer and its employees.
The Encouraging Catalogue and the Negative List lay out the basic framework for foreign investment in China, classifying businesses into three categories with regard to foreign investment: “encourage,” “restricted” and “prohibited.” Industries not listed in the Encouraging Catalogue and the Negative List are generally deemed as falling into a fourth category “permitted” unless specifically restricted by other PRC laws.
The Encouraging Catalogue and the Negative List lay out the basic framework for foreign investment in China, classifying businesses into three categories with regard to foreign investment: “encourage,” “restricted” and “prohibited”. Industries not listed in the Encouraging Catalogue and the Negative List are generally deemed as falling into a fourth category “permitted” unless specifically restricted by other PRC laws.
The employer must observe certain form requirements for terminations. 77 Table of Contents There are various labor-related laws in Japan, including the Labor Standards Act (Act No. 49 of April 7, 1947, as amended), the Industrial Safety and Health Act (Act No. 57 of June 8, 1972, as amended), and the Labor Contracts Act (Act No. 128 of December 5, 2007).
The employer must observe certain form requirements for terminations. 75 Table of Contents There are various labor-related laws in Japan, including the Labor Standards Act (Act No. 49 of April 7, 1947, as amended), the Industrial Safety and Health Act (Act No. 57 of June 8, 1972, as amended), and the Labor Contracts Act (Act No. 128 of December 5, 2007).
On February 8, 2018, our ADSs commenced trading on the NYSE under the symbol “HMI.” 57 Table of Contents In February 2021, we, through Anhui Shunyuan Xinke Management Consulting Partnership (Limited Partnership), one of our subsidiaries in China, acquired 29.99% of the total outstanding shares of Jiangsu Yitong, a PRC company listed in Shenzhen Stock Exchange, for an aggregate consideration of US$144.89 million in cash to expand the healthcare ecosystem for Chinese market in the long term.
On February 8, 2018, our ADSs commenced trading on the NYSE under the symbol “HMI.” In February 2021, we, through Anhui Shunyuan Xinke Management Consulting Partnership (Limited Partnership), one of our subsidiaries in China, acquired 29.99% of the total outstanding shares of Jiangsu Yitong, a PRC company listed in Shenzhen Stock Exchange, for an aggregate consideration of US$144.89 million in cash to expand the healthcare ecosystem for Chinese market in the long term.
The term of the Loan Agreement is ten years from the date of the loan agreement and will be extended on a yearly basis unless otherwise instructed by our WFOE until the loan is repaid. 84 Table of Contents Agreements that allow us to receive economic benefits from the VIEs Exclusive Consultation and Service Agreements .
The term of the Loan Agreement is ten years from the date of the loan agreement and will be extended on a yearly basis unless otherwise instructed by our WFOE until the loan is repaid. 81 Table of Contents Agreements that allow us to receive economic benefits from the VIEs Exclusive Consultation and Service Agreements .
As of February 28, 2025, we had registered 79 computer software copyrights. Regulation on Domain Name The domain names are protected under the Administrative Measures on the Internet Domain Names promulgated by the Ministry of Industry and Information Technology, effective on November 1, 2017.
As of February 28, 2026, we had registered 79 computer software copyrights. Regulation on Domain Name The domain names are protected under the Administrative Measures on the Internet Domain Names promulgated by the Ministry of Industry and Information Technology, effective on November 1, 2017.
Although much of the FTC’s focus is on consumer protection, the FTC has conducted numerous discussions on mobile and internet advertising privacy practices and may pursue more rigorous privacy regulation, possibly including regulation of non-identifiable data which could, in combination with other information, become personal data. Such increased regulation may impact our business. 70 Table of Contents Additionally, the U.S.
Although much of the FTC’s focus is on consumer protection, the FTC has conducted numerous discussions on mobile and internet advertising privacy practices and may pursue more rigorous privacy regulation, possibly including regulation of non-identifiable data which could, in combination with other information, become personal data. Such increased regulation may impact our business. Additionally, the U.S.
They are also directors of our company. 83 Table of Contents The following is a summary of the currently effective contractual arrangements by and among our wholly-owned subsidiary, Shunyuan Kaihua (our WFOE), the VIEs and their respective shareholders.
They are also directors of our company. 80 Table of Contents The following is a summary of the currently effective contractual arrangements by and among our wholly-owned subsidiary, Shunyuan Kaihua (our WFOE), the VIEs and their respective shareholders.
This facilitates a seamless connection between users and their devices, allowing for natural, uninterrupted interaction through Zepp Flow. We also collect and analyze software and hardware error data and product defects data to optimize our products. Big Data Technology The real-time iteration of our big data model is enabled by our big data infrastructure and algorithms.
This facilitates a seamless connection between users and their devices, allowing for natural, uninterrupted interaction through Zepp Flow. We also collect and analyze software and hardware error data and product defects data to optimize our products. 60 Table of Contents Big Data Technology The real-time iteration of our big data model is enabled by our big data infrastructure and algorithms.
Main chips and many sensors are primarily supplied by our invested company, Jiangsu Yitong, which enables us to have advanced wearable chip and sensor technology, stable chip supply and efficient cost. We believe that outsourcing the manufacturing of our products enables greater scale and flexibility at lower costs than establishing our own manufacturing facilities.
Main chips and heart-rate sensors are primarily supplied by our invested company, Jiangsu Yitong, which enables us to have advanced wearable chip and sensor technology, stable chip supply and efficient cost. We believe that outsourcing the manufacturing of our products enables greater scale and flexibility at lower costs than establishing our own manufacturing facilities.
Leveraging the world’s first RISC-V open-source instruction set wearable processor, Huangshan-1 features four core artificial intelligence engines—cardiac biometrics engine, ECG, ECG Pro, and Hearth Rhythm Abnormality Monitoring Engine. 60 Table of Contents Huangshan-1 operates alongside an always-on (AON) module designed to transfer sensor data to internal static random access memory without waking the primary processor, with dedicated accelerators for neural network workloads.
Leveraging the world’s first RISC-V open-source instruction set wearable processor, Huangshan-1 features four core artificial intelligence engines—cardiac biometrics engine, ECG, ECG Pro, and Hearth Rhythm Abnormality Monitoring Engine. Huangshan-1 operates alongside an always-on (AON) module designed to transfer sensor data to internal static random access memory without waking the primary processor, with dedicated accelerators for neural network workloads.
During the initial period after launch, we typically maintain low production volume to test the market and then gradually ramp up based on market reception of such new products. Quality Assurance We are committed to maintaining the highest level of quality in our products.
During the initial period after launch, we typically maintain low production volume to test the market and then gradually ramp up based on market reception of such new products. 63 Table of Contents Quality Assurance We are committed to maintaining the highest level of quality in our products.
The provisions apply to both domestic issuer applying to or having completed direct overseas offering or listing and domestic operating entity of the issuer applying to or having completed indirect overseas offering or listing. ​ 82 Table of Contents C.
The provisions apply to both domestic issuer applying to or having completed direct overseas offering or listing and domestic operating entity of the issuer applying to or having completed indirect overseas offering or listing. 79 Table of Contents C.
Patents in China are filed with the China National Intellectual Property Administration.Article 19 of the PRC Patent Law provides that, for an invention or utility model completed in China, any applicant (not just Chinese companies and individuals), before filing a patent application outside of China, must first submit it to the China National Intellectual Property Administration for a confidential examination.
Article 19 of the PRC Patent Law provides that, for an invention or utility model completed in China, any applicant (not just Chinese companies and individuals), before filing a patent application outside of China, must first submit it to the China National Intellectual Property Administration for a confidential examination.
With this new AI Chat dimension, Zepp Coach™ not only can provide personalized training plans and guidance, but it also enables users to request specific advice which can assist their workout practices in real-time. 62 Table of Contents In 2024, we enhanced Zepp Coach TM with a Strength Training program designed to improve runners’ leg strength and overall performance.
With this new AI Chat dimension, Zepp Coach™ not only can provide personalized training plans and guidance, but it also enables users to request specific advice which can assist their workout practices in real-time. In 2024, we enhanced Zepp Coach™ with a Strength Training program designed to improve runners’ leg strength and overall performance.
Designed for fitness-minded individuals who want to train smarter, recover better, and live healthier, we deliver advanced insights across activity, sleep, heart rate, stress, readiness, and nutrition. Data Technology Our strong data technology is vital in enhancing the performance of our products and in further expanding their applications, as well as in enhancing our various data-enabled services.
Designed for fitness-minded individuals who want to train smarter, recover better, and live healthier, we deliver advanced insights across body energy, sports, sleep, heart rate, stress, and nutrition. Data Technology Our strong data technology is vital in enhancing the performance of our products and in further expanding their applications, as well as in enhancing our various data-enabled services.
Our research and development team has responded effectively to technological changes, and is driving continued innovation to unleash the potential of the wearable devices industry. As of December 31, 2024, our total research and development staff consisted of 467 employees. Our global research and development team supports the design and development of our new products.
Our research and development team has responded effectively to technological changes, and is driving continued innovation to unleash the potential of the wearable devices industry. As of December 31, 2025, our total research and development staff consisted of 465 employees. Our global research and development team supports the design and development of our new products.
In the event of a domain name dispute, the disputed parties may lodge a complaint to the designated domain name dispute resolution institution to trigger the domain name dispute resolution procedure, file a suit to the People’s Court or initiate an arbitration procedure. As of February 28, 2025, we had registered 37 domain names.
In the event of a domain name dispute, the disputed parties may lodge a complaint to the designated domain name dispute resolution institution to trigger the domain name dispute resolution procedure, file a suit to the People’s Court or initiate an arbitration procedure. As of February 28, 2026, we had registered 32 domain names.
On December 25, 2024, the Standing Committee of the National People’s Congress of China promulgated the Value-added Tax Law, which will take effect on January 1, 2026.
On December 25, 2024, the Standing Committee of the National People’s Congress of China promulgated the Value-added Tax Law, which took effect on January 1, 2026.
To date, we have shipped over 200 million units of smart wearable devices and served more than 42 million users in over 90 countries. In December 2013, we commenced our operations in China with a focus on developing, manufacturing and selling smart wearable devices.
To date, we have shipped over 200 million units of smart wearable devices and served more than 53 million users in over 90 countries with device activation in more than 150 countries. In December 2013, we commenced our operations in China with a focus on developing, manufacturing and selling smart wearable devices.
On February 26, 2024, we unveiled our latest version of wearable operating system, Zepp OS 3.5, which applies the cutting-edge large language models and comes with the groundbreaking GenAI service Zepp Flow TM , to facilitate a seamless connection between users and their devices all with just the voice, offering a refreshing experience with the language user interface embedded in our product portfolio.
On February 26, 2024, we unveiled Zepp OS 3.5, which applies the cutting-edge large language models and comes with the groundbreaking GenAI service Zepp Flow™, to facilitate a seamless connection between users and their devices all with just the voice, offering a refreshing experience with the language user interface embedded in our product portfolio.
The PRC Enterprise Income Tax Law and its implementation rules which was latest amended on April 23, 2019, permit certain “high and new technology enterprises strongly supported by the state” that independently own core intellectual property and meet statutory criteria, to enjoy a reduced 15% enterprise income tax rate.
The PRC Enterprise Income Tax Law and its implementation rules which was latest amended on December 6, 2024, permit certain “high and new technology enterprises strongly supported by the state” that independently own core intellectual property and meet statutory criteria, to enjoy a reduced 15% enterprise income tax rate.
Property, Plant and Equipment Our principal executive offices are located in Netherlands. We also maintain offices in Asia, North America and Europe. As of December 31, 2024, we owned and leased the office building worldwide with an aggregate floor area of approximately 19,104 square meters.
Property, Plant and Equipment Our principal executive offices are located in Netherlands. We also maintain offices in Asia, North America and Europe. As of December 31, 2025, we owned and leased the office building worldwide with an aggregate floor area of approximately 9,507 square meters.
This latest app version is designed to deliver a more personalized health, wellness, and fitness experience, empowering Amazfit users worldwide to understand their health trends and make informed lifestyle decisions. Since our inception in 2013, we have amassed a large user base.
This latest app version is designed to deliver more personalized sports and health analysis, empowering Amazfit users worldwide to understand their sports performance and health trends, and make informed lifestyle decisions. Since our inception in 2013, we have amassed a large user base.
Backed by the Zepp OS architecture which benefits users from the comprehensive health insights to improve their health through “24/7 health monitoring,” we continue to provide innovative features and functionalities to users through our mobile apps. The Zepp App is a powerful, all-in-one health and fitness platform that transforms every Amazfit device into a personalized performance coach.
Backed by the Zepp OS architecture, which provides users with comprehensive sports and health insights through “24/7 sports and health monitoring,” we continue to provide innovative features and functionalities to users through our mobile apps. The Zepp App is a powerful, all-in-one sports and health platform that transforms every Amazfit device into a personalized performance coach.
Regulation on Medical Device The Regulations on Supervision and Administration of Medical Devices, issued by the State Council on January 4, 2000, and further amended on March 7, 2014, May 4, 2017 and February 9, 2021, respectively, the latest amended version of which took effect on June 1, 2021, divide medical devices into three types.
Regulation on Medical Device The Regulations on Supervision and Administration of Medical Devices, issued by the State Council on January 4, 2000, and further amended on March 7, 2014, May 4, 2017, February 9, 2021 and December 6, 2024, respectively, the latest amended version of which took effect on January 20, 2025, divide medical devices into three types.
In general, prices for our raw materials have been relatively stable. Through close coordination with our customers and manufacturers and frequent purchases of components from suppliers, we are able to carry a few raw material and in-process inventories and achieve prompt production, minimizing inventory risk.
In general, prices for our raw materials have been relatively stable. Through close coordination with our customers and manufacturers and frequent purchases of components from suppliers, we are able to carry a few raw material and in-process inventories and achieve prompt production, minimizing inventory risk. We procure components based on our internal sales and production plan on a weekly basis.
An invention patent is granted to a new technical solution proposed in respect of a product or method or an improvement of a product or method. A utility model is granted to a new technical solution that is practicable for application and proposed in respect of the shape, structure or a combination of both of a product.
A utility model is granted to a new technical solution that is practicable for application and proposed in respect of the shape, structure or a combination of both of a product.
A PRC court may issue a preliminary injunction upon the patent owner’s or an interested party’s request before instituting any legal proceedings or during the proceedings. As of February 28, 2025, we had 663 patents granted and 219 patent applications pending worldwide. Trademark Law The PRC Trademark Law and its implementation rules protect registered trademarks.
A PRC court may issue a preliminary injunction upon the patent owner’s or an interested party’s request before instituting any legal proceedings or during the proceedings. As of February 28, 2026, we had 605 patents granted and 198 patent applications pending worldwide. 69 Table of Contents Trademark Law The PRC Trademark Law and its implementation rules protect registered trademarks.
We introduced Amazfit Smart Scale in 2020, which tracks metrics for 16 key body heath indicators with high measurement accuracy, and recognizes family members sharing the same account to facilitate user experience. In addition, we offer a selection of sportswear, home appliances and various smart watch accessories.
The Amazfit Smart Scale tracks metrics for 16 key body health indicators with high measurement accuracy and recognizes family members sharing the same account to facilitate user experience. In addition, we offer sportswear, home appliances, and various smart watch accessories.
Amazfit is a brand of smartwatches and wearables designed for various fitness levels and lifestyles; Zepp Clarity offers discreet, AI-powered hearing aids to combat hearing loss; and Zepp Aura provides personalized, AI-generated soundscapes to improve sleep and relaxation.
Amazfit is a brand of smartwatches and wearables designed for various fitness levels and lifestyles, offering rich product offerings and full price-range coverage; Zepp Clarity offers discreet, AI-powered hearing aids to combat hearing loss; and Zepp Aura provides personalized, AI-generated soundscapes to improve sleep and relaxation.
Designed for the modern explorer, the Amazfit T-Rex 3 combines military-grade durability, cutting-edge outdoor navigation features, and unparalleled battery life, making it the perfect companion for those who seek adventure in their everyday lives.
Designed for the modern explorer, the Amazfit T-Rex 3 combines military-grade durability, cutting-edge outdoor navigation features, and unparalleled battery life, making it the ideal companion for adventure in everyday life.
Abiding by the data security regulations, we currently utilize our big data technology in the following areas: ● optimize the algorithms that count the number of steps taken by eliminating the effect of certain patterns of the hand movements that are not associated with walking; ● fine-tune our algorithms for tracking sleep duration and quality and then make personalized adjustment based on users’ sleep patterns; 63 Table of Contents ● enhance the performance of our built-in GPS, enabling our products to draw users’ running tracks more accurately and more quickly; ● develop insights into massive market and consumer data, empowering a more streamlined and efficient product design and optimization process; ● perform statistical analysis to identify certain characteristics that are associated with heart diseases and sleep patterns and make related practice recommendations to our users; ● perform statistical analysis to identify certain characteristics that are associated with users’ health and make related recommendations of training courses to our users; and ● develop the capability to perform more granular analysis on the data we collect from our users and to allow our products to recognize types of activities and sports.
Abiding by the data security regulations, we currently utilize our big data technology in the following areas: ● optimize the algorithms that count the number of steps taken by eliminating the effect of certain patterns of the hand movements that are not associated with walking; ● fine-tune our algorithms for tracking sleep duration and quality and then make personalized adjustment based on users’ sleep patterns; ● enhance the performance of our built-in GPS, enabling our products to draw users’ running tracks more accurately and more quickly; ● develop insights into massive market and consumer data, empowering a more streamlined and efficient product design and optimization process; ● perform statistical analysis to identify certain characteristics that are associated with heart diseases and sleep patterns and make related practice recommendations to our users; ● perform statistical analysis to identify certain characteristics that are associated with users’ health and make related recommendations of training courses to our users; ● fine-tune the lightweight language model powering our voice assistant with aggregated user query data to accelerate the recognition and processing of frequently used voice commands, delivering faster and more accurate responses for common daily tasks; and ● develop the capability to perform more granular analysis on the data we collect from our users and to allow our products to recognize types of activities and sports.
Powered by our proprietary digital health management platform, which includes the Zepp OS, AI chips, biometric sensors, hardware, and specialized health data algorithms, we deliver cloud-based actionable insights and guidance 24/7 to help users achieve their health goals.
Powered by our proprietary digital health management platform, which includes the Zepp OS—a proprietary operating system with high compatibility, scalability, and seamless application integration—AI chips, biometric sensors, hardware, and specialized health data algorithms, we deliver cloud-based actionable insights and guidance 24/7 to help users achieve their health goals.
Data Analytics Capability We had approximately 20.9 million Mobile App MAUs as of December 31, 2024, contributing to a large data set for health related data analytics.
Data Analytics Capability We had approximately 16.5 million Mobile App MAUs as of December 31, 2025, contributing to a large data set for health related data analytics.
As of February 28, 2025, we owned 2,350 registered trademarks in different applicable trademark categories and were in the process of applying to register 162 trademarks worldwide.
As of February 28, 2026, we owned 2,385 registered trademarks in different applicable trademark categories and were in the process of applying to register 122 trademarks worldwide.
Regulation on Advertising Business The State Administration for Market Regulation is the government agency responsible for regulating advertising activities in the PRC. 73 Table of Contents According to the PRC laws and regulations, companies that engage in advertising activities must obtain from the State Administration for Market Regulation or its local branches a business license which specifically includes operating an advertising business within its business scope.
According to the PRC laws and regulations, companies that engage in advertising activities must obtain from the State Administration for Market Regulation or its local branches a business license which specifically includes operating an advertising business within its business scope.
To comply with these laws and regulations, we have adopted security policies and measures to protect our cyber system and user information. 74 Table of Contents In addition, on July 7, 2022, the Cyberspace Administration of China promulgated the Measures for the Security Assessment of Cross-border Data Transfer, which took effect on September 1, 2022 and require that any data processor providing important data collected and generated during operations within the territory of the PRC or personal information that should be subject to security assessment according to law to an overseas recipient shall conduct security assessment.
In addition, on July 7, 2022, the Cyberspace Administration of China promulgated the Measures for the Security Assessment of Cross-border Data Transfer, which took effect on September 1, 2022 and require that any data processor providing important data collected and generated during operations within the territory of the PRC or personal information that should be subject to security assessment according to law to an overseas recipient shall conduct security assessment.
With the guidelines of the United Nation Global Compact Sustainable Development Goals, Global Reporting Initiative, and Greenhouse Gas Protocol, we have identified three important pillars in our ESG initiatives: Environmental Sustainability, Social Responsibility and Corporate Governance.
With the guidelines of the United Nation Global Compact Sustainable Development Goals, Global Reporting Initiative, and Greenhouse Gas Protocol, we have identified three important pillars in our ESG initiatives: Environmental Sustainability, Social Responsibility and Corporate Governance. We actively support the ESG and we aim at achieving the ESG initiatives by utilizing the unique characteristics of our business and products.
The PRC Patent Law adopts the principle of “first-to-file” system, which provides that where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first.
The PRC Patent Law adopts the principle of “first-to-file” system, which provides that where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first. Patents in China are filed with the China National Intellectual Property Administration.
As of December 31, 2024, we had 376.8 million registered users of our mobile apps and 20.9 million Mobile App MAUs. We developed our mobile apps to support and expand the functionalities of our smart wearable devices as a way to attract users and promote sales of our wearable devices.
As of December 31, 2025, we had 389.3 million registered users of our mobile apps and 16.5 million Mobile App MAUs. We developed our mobile apps to support and expand the functionalities of our smart wearable devices as a way to attract users and promote sales of our wearable devices.
Regulations Relating to Overseas Issuance and Listing of Securities by Domestic Enterprises On February 17, 2023, the CSRC promulgated a new set of regulations consisting of the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, which came into effect on March 31, 2023, to regulate overseas securities offering and listing activities by domestic companies either in direct or indirect form. ​ 81 Table of Contents The new set of regulations and supporting guidelines promulgated on February 17, 2023 apply to overseas securities offering and listing activities by domestic companies, the “securities” under these regulations and guidelines refer to equity shares, depository receipts, corporate bonds convertible to equity shares and other equity securities.
Regulations Relating to Overseas Issuance and Listing of Securities by Domestic Enterprises On February 17, 2023, the CSRC promulgated a new set of regulations consisting of the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, which came into effect on March 31, 2023, to regulate overseas securities offering and listing activities by domestic companies either in direct or indirect form.
We also continue to increase the utilization of recyclable materials and reduce the use of packaging materials. For instance, we have begun to gradually replace paper user manuals with digital ones for our products.
We strive to leverage our technological capabilities to improve the battery life and optimize the power consumption of our products. We also continue to increase the utilization of recyclable materials and reduce the use of packaging materials. For instance, we have begun to gradually replace paper user manuals with digital ones for our products.
Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide.
Consequently, there can be no assurance that the PRC governmental authorities will constantly take a view that is consistent with the opinion of our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide.
Notably, it establishes a tiered supervision framework where provincial authorities verify important data classifications, and mandates real-time reporting of security incidents involving national interests within 24 hours, and data processors shall, in accordance with relevant state provisions, apply for national security review when carrying out data processing activities that affect or may affect national security.
Notably, it establishes a tiered supervision framework where provincial authorities verify important data classifications, and mandates real-time reporting of security incidents involving national interests within 24 hours, and data processors shall, in accordance with relevant state provisions, apply for national security review when carrying out data processing activities that affect or may affect national security. 72 Table of Contents Regulation on Data Privacy In the United States, we are subject to federal and state laws and regulations regarding data privacy and protection.
In addition, the European Union’s Market Surveillance Regulation, which took effect in July 2021, placed new obligations on certain e-commerce platforms and was designed to reduce the availability of non-compliant products in the European Union when offered by sellers outside of the region that either had or did not have an appointed authorized product compliance representative in Europe.The PRC Consumer Protection Law, as amended on October 25, 2013 and effective on March 15, 2014, sets out the obligations of business operators and the rights and interests of the consumers.
In addition, the European Union’s Market Surveillance Regulation, which took effect in July 2021, placed new obligations on certain e-commerce platforms and was designed to reduce the availability of non-compliant products in the European Union when offered by sellers outside of the region that either had or did not have an appointed authorized product compliance representative in Europe.
The infringing party may also be held liable for the right holder’s damages. 72 Table of Contents Software Copyright Law In order to further implement the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001, and latest amended on January 30, 2013, the National Copyright Administration issued the Computer Software Copyright Registration Procedures on February 20, 2002, which apply to software copyright registration, exclusive licensing contract registration and transfer contract registration.
Software Copyright Law In order to further implement the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001, and latest amended on January 30, 2013, the National Copyright Administration issued the Computer Software Copyright Registration Procedures on February 20, 2002, which apply to software copyright registration, exclusive licensing contract registration and transfer contract registration.
Wang Wayne Huang, Yunfen Lu, Meihui Fan, Bin Fan, Yi Zhang and Xiaojun Zhang, our PRC resident shareholders, have completed all necessary registrations with the local branch of the State Administration of Foreign Exchange or qualified banks as required by SAFE Circular 37 in connection with their direct or indirect offshore investment related to our company. ​ 80 Table of Contents Regulation on Employee Share Options On December 25, 2006, the People’s Bank of China promulgated the Administrative Measures for Individual Foreign Exchange.
Wang Wayne Huang, Yunfen Lu, Meihui Fan, Bin Fan, Yi Zhang and Xiaojun Zhang, our PRC resident shareholders, have completed all necessary registrations with the local branch of the State Administration of Foreign Exchange or qualified banks as required by SAFE Circular 37 in connection with their direct or indirect offshore investment related to our company.
The infringing party will be ordered to stop the infringement immediately, a fine may be imposed and the counterfeit goods will be confiscated.
The infringing party will be ordered to stop the infringement immediately, a fine may be imposed and the counterfeit goods will be confiscated. The infringing party may also be held liable for the right holder’s damages.
In August 2020, we introduced a new brand name, “Zepp”. Since 2020, we have engaged in various marketing and branding activities to promote our Amazfit brand and Zepp brand.
Sales, Branding and Marketing Since September 2015, we have started to use the brand name “Amazfit” to market our products. In August 2020, we introduced a new brand name, “Zepp”. Since 2020, we have engaged in various marketing and branding activities to promote our Amazfit brand and Zepp brand.
We are dedicated to developing AI-powered algorithms that are capable of monitoring various health parameters, including real-time heart rates, heart rate variability, arrhythmia (including atrial fibrillation), blood oxygen SpO 2 , blood pressure, and body temperature variation. These advanced algorithms leverage the bio-sensors integrated into our wearable devices to provide accurate health data.
We are dedicated to developing AI-powered algorithms that are capable of monitoring various health parameters, including real-time heart rates, heart rate variability, arrhythmia (including atrial fibrillation), blood oxygen SpO 2 , blood pressure, and body temperature variation.
Regulation on Information Security The Standing Committee of the National People’s Congress promulgated the Cyber Security Law of the PRC, which became effective on June 1, 2017, to protect cyberspace security and order.
Regulation on Information Security The Standing Committee of the National People’s Congress promulgated the Cyber Security Law of the PRC, which was latest amended on October 28, 2025, and became effective on January 1, 2026, to protect cyberspace security and order.
Regulation on Consumer Protection In the United States, we are subject to federal and state laws and regulations regarding consumer protection. The Federal Trade Commission, or the FTC, establishes regulations and institutes enforcement proceedings with respect to consumer protection and data privacy, including activities on the internet.
The Federal Trade Commission, or the FTC, establishes regulations and institutes enforcement proceedings with respect to consumer protection and data privacy, including activities on the internet.
PRC Dividend Withholding Tax Pursuant to the Enterprise Income Tax Law of the PRC and its implementation rules, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in China to its foreign enterprise investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement.
These changes aim to balance tax neutrality with anti-avoidance measures, reflecting China’s commitment to aligning its fiscal system with OECD consumption tax principles. 76 Table of Contents PRC Dividend Withholding Tax Pursuant to the Enterprise Income Tax Law of the PRC and its implementation rules, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in China to its foreign enterprise investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement.
As of February 28, 2025, we had obtained 653 patents and had submitted 219 additional patent applications. Our issued patents will expire between 2025 and 2049. As of February 28, 2025, we had registered 2,350 trademarks and had submitted 162 additional trademark applications. Our registered trademarks will expire between 2025 and 2038 but can be renewed.
As of February 28, 2026, we had obtained 605 patents and had submitted 198 additional patent applications. Our issued patents will expire between 2026 and 2050. As of February 28, 2026, we had registered 2,385 trademarks and had submitted 122 additional trademark applications. Our registered trademarks will expire between 2026 and 2038 but can be renewed.
Research and Development We are passionate about developing new and innovative products and services that will make the world more connected. Our research and development team and our management team co-lead the product development process, including the upgrades for our existing products and the development of new product lines. We take a user centric approach to product development.
Our research and development team and our management team co-lead the product development process, including the upgrades for our existing products and the development of new product lines. We take a user centric approach to product development.
They use charts and graphs to display analysis of the activity and biometric data collected from users. Our “Zepp Life” mobile app is designed with a focus on sports and fitness functions while our “Zepp” mobile app emphasizes functions relating to health. In October 2024, we launched the enhanced Zepp App 9.
They use charts and graphs to display analysis of the sports and biometric data collected from users. Our “Zepp Life” mobile app emphasizes functions relating to sports. In October 2025, we launched the enhanced Zepp App.
In addition, we are constantly expanding our technology footprint to attract more users to join our Zepp OS ecosystem. For example, we hosted the third Zepp OS Global Online Hackathon, an event designed to bring together some of the most creative minds in the app development.
For example, we hosted the third Zepp OS Global Online Hackathon, an event designed to bring together some of the most creative minds in the app development.
To comply with these laws and regulations, we have obtained the necessary Radio Transmission Equipment Type Approval Certificates for all of our products manufacturing and selling in the PRC.
To comply with these laws and regulations, we have obtained the necessary Radio Transmission Equipment Type Approval Certificates for all of our products manufacturing and selling in the PRC. Regulation on Advertising Business The State Administration for Market Regulation is the government agency responsible for regulating advertising activities in the PRC.
We appreciate the oversight, guidance and feedback from different parties and are committed to collaborating closely with domestic and international organizations to support broader industry-wide ESG practices, to explore multi-dimensional use cases for our technologies, to empower traditional industries with our capabilities and to promote a healthier and joyful lifestyle and the long-term sustainability of our society.
We appreciate the oversight, guidance and feedback from different parties and are committed to collaborating closely with domestic and international organizations to support broader industry-wide ESG practices, to explore multi-dimensional use cases for our technologies, to empower traditional industries with our capabilities and to promote a healthier and joyful lifestyle and the long-term sustainability of our society. 66 Table of Contents Seasonality Our business has historically been subject to seasonal fluctuations, which may be caused by product launches and various promotional events hosted by our distributors.
Regulation on Torts Under the Civil Code of the PRC, which was issued by the National Congress on May 28, 2020, and became effective on January 1, 2021, where damages to other persons are caused by defective products, the infringed person may claim compensation against the producers or the sellers of the product.
The consumers whose interests have been damaged due to their purchase of goods or acceptance of services on online marketplace platforms may claim damages from sellers or service providers. 68 Table of Contents Regulation on Torts Under the Civil Code of the PRC, which was issued by the National Congress on May 28, 2020, and became effective on January 1, 2021, where damages to other persons are caused by defective products, the infringed person may claim compensation against the producers or the sellers of the product.
Software Engineering Our software engineering team is responsible for developing the company-wide software platform to support the integration of our products and applications, the transmission, storage and processing of user data, the implementation of user-product interaction and the development of core technologies.
These advanced algorithms leverage the bio-sensors integrated into our wearable devices to provide accurate health data. 62 Table of Contents Software Engineering Our software engineering team is responsible for developing the company-wide software platform to support the integration of our products and applications, the transmission, storage and processing of user data, the implementation of user-product interaction and the development of core technologies.
On February 15, 2012, the State Administration of Foreign Exchange issued the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed Companies.
Regulation on Employee Share Options On December 25, 2006, the People’s Bank of China promulgated the Administrative Measures for Individual Foreign Exchange. On February 15, 2012, the State Administration of Foreign Exchange issued the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed Companies.
Although our WFOE is currently wholly owned by Hong Kong Zepp Holding Limited, we cannot assure you that we will be able to enjoy the preferential withholding tax rate of 5% under the China-HK Taxation Arrangement. ​ 79 Table of Contents Regulation on Foreign Exchange The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, most recently amended on August 5, 2008.
Although our WFOE is currently wholly owned by Hong Kong Zepp Holding Limited, we cannot assure you that we will be able to enjoy the preferential withholding tax rate of 5% under the China-HK Taxation Arrangement.
The Amazfit Helio Ring, designed to be worn with other Amazfit wearables or as a standalone device, offers functionalities beyond sleep tracking, including features tailored for athlete training and performance enhancement.
Designed to be worn alongside other Amazfit wearables or as a standalone device, the Amazfit Helio Ring offers functionalities beyond sleep tracking, including features tailored for athlete training and performance enhancement. Other Accessories and Products. We also offer a selection of complementary products, including the Amazfit Smart Scale, which we introduced in 2020.
To make a positive contribution to better protect the environment, we have taken a series of measures in energy-saving, recycling, and sustainable product design. Lower power consumption is always a key strategy of us. We strive to leverage our technological capabilities to improve the battery life and optimize the power consumption of our products.
Environmental Sustainability We leverage our technology, infrastructure and relationships with users and suppliers to reduce the environmental impacts of our business. To make a positive contribution to better protect the environment, we have taken a series of measures in energy-saving, recycling, and sustainable product design. Lower power consumption is always a key strategy of us.
By integrating sleep data, exertion levels, and key health metrics, it offers an estimate of user’s body energy levels. This innovative approach helps users optimize performance, recovery, and overall health. ● Sports and fitness.
By integrating multimodal input, it offers an estimate of the user’s body energy levels for the entire day or the morning energy level. This innovative approach helps users optimize performance, recovery, and overall health. · Sports and fitness.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Investing activities Net cash used in investing activities was US$1.6 million for the year ended December 31, 2024, primarily due to purchase of long-term investments of US$7.0 million, partially offset by disposal of long-term investments of US$4.9 million.
Net cash used in investing activities was US$1.6 million for the year ended December 31, 2024, primarily due to purchase of long-term investments of US$7.0 million, partially offset by disposal of long-term investments of US$4.9 million.
Financing activities Net cash provided by financing activities for the year ended December 31, 2024 was US$0.5 million, primarily due to bank borrowings received of US$11.0 million and proceeds from letter of credit factoring of US$5.1 million, partially offset by repayment of bank borrowings of US$12.6 million.
Net cash provided by financing activities for the year ended December 31, 2024 was US$0.5 million, primarily due to bank borrowings received of US$11.0 million and proceeds from letter of credit factoring of US$5.1 million, partially offset by repayment of bank borrowings of US$12.6 million.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2025 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2026 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
According to the Announcement of State Taxation Administration on Promulgation of the Administrative Measures on Non-resident Taxpayers Enjoying Treaty Benefits, effective from January 1, 2020, a Hong Kong entity shall adopt the method of “self-discrimination, declaration of enjoyment, and retention of relevant materials for future reference,” and the above-mentioned requirement of filing application package with the tax authority has been abolished.
According to the Announcement of State Taxation Administration on Promulgation of the Administrative Measures on Non-resident Taxpayers Enjoying Treaty Benefits, effective from January 1, 2020, a Hong Kong entity shall adopt the method of “self-discrimination, declaration of enjoyment, and retention of relevant materials for future reference,” and the requirement of filing application package with the tax authority has been abolished.
See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” 93 Table of Contents B.
See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Jurisdictions in which We Operate—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” 90 Table of Contents B.
Accordingly, Anhui Huami, Anhui Huami Health Technology Co., Ltd. and Shunyuan Kaihua were subject to a tax rate of 15% during the years ended December 31, 2022, 2023 and 2024. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards.
Accordingly, Anhui Huami, Anhui Huami Health Technology Co., Ltd. and Shunyuan Kaihua were subject to a tax rate of 15% during the years ended December 31, 2023, 2024 and 2025. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards.
Other Income Other income primarily consists of subsidies received from local government authorities to encourage technology innovation and investment. 88 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amounts and as percentages of our total revenues.
Other Income Other income primarily consists of subsidies received from local government authorities to encourage technology innovation and investment. 85 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amounts and as percentages of our total revenues.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024. Holding Company Structure Zepp Health Corporation is a holding company with no material operations of its own.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2025. Holding Company Structure Zepp Health Corporation is a holding company with no material operations of its own.
Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and other related regulations, including Circular No. 9, and receives approval from the tax authority.
Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and other related regulations, including Circular No. 9.
We have applied the change of reporting currency retrospectively to our historical results of operations and financial statements included in this annual report. 86 Table of Contents A.
We have applied the change of reporting currency retrospectively to our historical results of operations and financial statements included in this annual report. 83 Table of Contents A.
We continued to manage working capital and inventory efficiently and recorded inventory of US$56.8 million as of December 31, 2024, the lowest level since 2018. We will continue to manage working capital tightly. Net cash provided by operating activities for the year ended December 31, 2023 was US$42.6 million.
We continued to manage working capital and inventory efficiently and recorded inventory of US$56.8 million as of December 31, 2024, the lowest level since 2018. Net cash provided by operating activities for the year ended December 31, 2023 was US$42.6 million.
Cost is determined using the weighted average method. We assess the valuation of inventory and periodically write down and write off the value for estimated excess and obsolete inventory based upon the product life cycle. 97 Table of Contents Inventories are written down if the estimated net realizable value is less than the recorded value.
Cost is determined using the weighted average method. We assess the valuation of inventory and periodically write down and write off the value for estimated excess and obsolete inventory based upon the product life cycle. Inventories are written down if the estimated net realizable value is less than the recorded value.
We will monitor the regulatory developments and continue to evaluate the impact, if any, on our financial results. 92 Table of Contents Netherlands Our subsidiaries, Zepp Europe Holding B.V. and Zepp Netherlands Trading B.V., are located in Netherlands and are subject to a two-tiered income tax rates for taxable income earned as determined in accordance with tax rules and regulations in Netherlands.
We will monitor the regulatory developments and continue to evaluate the impact, if any, on our financial results. Netherlands Our subsidiaries, Zepp Europe Holding B.V. and Zepp Netherlands Trading B.V., are located in Netherlands and are subject to a two-tiered income tax rates for taxable income earned as determined in accordance with tax rules and regulations in Netherlands.
Material cash requirements Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include bank borrowings and operating lease obligations. Bank borrowings.
Material cash requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include bank borrowings and operating lease obligations. Bank borrowings.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. 96 Table of Contents The table below sets forth the respective revenues contribution and assets of Zepp and our wholly-owned subsidiaries and the VIEs as of the dates and for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (1) ​ Total assets (1) ​ ​ For the Year Ended December 31, ​ As of December 31, ​ 2022 2023 2024 2023 2024 Zepp and its wholly-owned subsidiaries 38.7 % 59.9 % 82.0 % 53.1 % 54.8 % VIEs 61.3 % 40.1 % 18.0 % 46.9 % 45.2 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Note: (1) The percentages exclude the inter-company transactions and balances between our subsidiaries and the VIEs.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. 93 Table of Contents The table below sets forth the respective revenues contribution and assets of Zepp and our wholly-owned subsidiaries and the VIEs as of the dates and for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (1) ​ Total assets (1) ​ ​ For the Year Ended December 31, ​ As of December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2025 Zepp and its wholly-owned subsidiaries 59.9 % 82.0 % 92.0 % 54.8 % 61.1 % VIEs 40.1 % 18.0 % 8.0 % 45.2 % 38.9 % Total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Note: (1) The percentages exclude the inter-company transactions and balances between our subsidiaries and the VIEs.
Our capital expenditures were US$1.5 million, US$1.7 million and US$1.5 million in the years ended December 31, 2022, 2023 and 2024, respectively. We will continue to make capital expenditures to meet the expected growth of our business.
Our capital expenditures were US$1.7 million, US$1.5 million and US$0.8 million in the years ended December 31, 2023, 2024 and 2025, respectively. We will continue to make capital expenditures to meet the expected growth of our business.
Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. ​ 98 Table of Contents
Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. ​
For example: ● capital contributions to our PRC subsidiaries must be approved by the Ministry of Commerce or its local counterparts; and ● our loans to our PRC subsidiaries to finance their activities cannot exceed statutory limits and must be registered with the State Administration of Foreign Exchange or its local branches. 94 Table of Contents Operating activities Net cash used in operating activities for the year ended December 31, 2024 was US$24.4 million.
For example: ● capital contributions to our PRC subsidiaries must be approved by the Ministry of Commerce or its local counterparts; and ● our loans to our PRC subsidiaries to finance their activities cannot exceed statutory limits and must be registered with the State Administration of Foreign Exchange or its local branches. 91 Table of Contents Operating activities Net cash used in operating activities for the year ended December 31, 2025 was US$25.7 million.
If Hong Kong Zepp Holding Limited satisfies all the requirements under the tax arrangement and receives approval from the tax authority, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%.
If Hong Kong Zepp Holding Limited satisfies all the requirements under the tax arrangement, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%.
We had interest expense of US$6.8 million for the year ended December 31, 2023 and US$5.6 million for the year ended December 31, 2024.
We had interest expense of US$5.6 million for the year ended December 31, 2024 and US$5.7 million for the year ended December 31, 2025.
Liquidity and Capital Resources The following table sets forth the movements of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ US$ US$ US$ ​ ​ (in thousands) Selected Consolidated Cash Flow Data: ​ ​ ​ Net cash (used in)/provided by operating activities ​ (117,114) 42,602 (24,392) Net cash (used in)/provided by investing activities ​ (6,237) 7,727 (1,579) Net cash provided by/(used in) financing activities ​ 42,366 (41,676) 477 Net (decrease)/increase in cash and cash equivalents and restricted cash ​ (80,985) 8,653 (25,494) Exchange rate effect on cash and cash equivalents ​ (14,774) (9,305) (4,240) Cash, cash equivalents and restricted cash at the beginning of year ​ 236,880 141,121 140,469 Cash, cash equivalents and restricted cash at end of year ​ 141,121 140,469 110,735 ​ As of December 31, 2022, 2023 and 2024, our cash, cash equivalents and restricted cash were US$141.1 million, US$140.5 million and US$110.7 million, respectively, out of which US$38.2 million, US$58.0 million and US$63.0 million were held in U.S. dollars, and US$94.5 million, US$76.9 million and US$39.3 million were held in Renminbi, as of December 31, 2022, 2023 and 2024, respectively.
Liquidity and Capital Resources The following table sets forth the movements of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ US$ ​ ​ ​ US$ ​ ​ ​ US$ ​ ​ (in thousands) Selected Consolidated Cash Flow Data: ​ ​ ​ ​ ​ ​ Net cash provided by/(used in) operating activities ​ 42,602 (24,392) (25,692) Net cash provided by/(used in) investing activities ​ 7,727 (1,579) 1,480 Net cash (used in)/provided by financing activities ​ (41,676) 477 24,835 Net increase/(decrease) in cash and cash equivalents and restricted cash ​ 8,653 (25,494) 623 Exchange rate effect on cash and cash equivalents ​ (9,305) (4,240) 1,575 Cash, cash equivalents and restricted cash at the beginning of year ​ 141,121 140,469 110,735 Cash, cash equivalents and restricted cash at end of year ​ 140,469 110,735 112,933 ​ As of December 31, 2023, 2024 and 2025, our cash, cash equivalents and restricted cash were US$140.5 million, US$110.7 million and US$112.9 million, respectively, out of which US$58.0 million, US$63.0 million and US$16.6 million were held in U.S. dollars, and US$76.9 million, US$39.3 million and US$82.6 million were held in Renminbi, as of December 31, 2023, 2024 and 2025, respectively.
Other expenses, net We had other expenses of US$0.5 million for the year ended December 31, 2023 and other expenses of US$0.7 million for the year ended December 31, 2024. 90 Table of Contents Income taxes benefits/(expenses) We recorded income taxes benefit in the amount of US$2.4 million for the year ended December 31, 2023, as compared to income taxes expenses in the amount of US$13.7 million, primarily result from valuation allowance for deferred tax assets, for the year ended December 31, 2024.
Other (expenses)/income, net We had other expenses of US$0.7 million for the year ended December 31, 2024 and other income of US$0.1 million for the year ended December 31, 2025. 87 Table of Contents Income taxes expenses We recorded income taxes expenses in the amount of US$ 13.7 million for the year ended December 31, 202 4 , as compared to income taxes expenses in the amount of US$2.5 million for the year ended December 31, 2025 , primarily resulting from valuation allowance for deferred tax assets, for the year ended December 31, 202 5 .
The decrease was mainly driven by decrease in the sales of our products, but partially offset by increasing of gross margin. Gross margin in 2024 was 38.5%, 12.3 percentage points higher than 26.2% in 2023. The higher gross margin of Amazfit-branded products was very much driven by the product mix, especially higher gross margin of newly launched products.
Gross margin in 2024 was 38.5%, 12.3 percentage points higher than 26.2% in 2023. The higher gross margin of Amazfit-branded products was very much driven by the product mix, especially higher gross margin of newly launched products.
The following descriptions of critical accounting estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report. For further information, see Note 2 to our consolidated financial statements in this annual report. Inventories, net Inventories consist of raw materials, finished goods and work in process.
The following descriptions of critical accounting estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report. For further information, see Note 2 to our consolidated financial statements in this annual report.
For the years ended December 31, 2022, 2023 and 2024, research and development expenses accounted for 42.8%, 41.9% and 39.3% of our total operating expenses and 12.6%, 14.6% and 25.3% of our revenues, respectively.
For the years ended December 31, 2023, 2024 and 2025, research and development expenses accounted for 41.9%, 39.3% and 35.3% of our total operating expenses and 14.6%, 25.3% and 17.5% of our revenues, respectively.
As of December 31, 2024, the balance of the notes payable and others is US$61.7 million, which includes US$25.1 million payables for short-term bank acceptance notes and US$36.6 million payable for the letter of credits factored in the bank. The short-term bank acceptance notes and the letter of credit are normally settled within three months and twelve months, respectively.
As of December 31, 2025, the balance of the notes payable and others is US$111.7 million, which includes US$17.3 million payables for short-term bank acceptance notes and US$94.4 million payable for the letter of credits factored in the bank. The short-term bank acceptance notes and the letter of credit are normally settled within three months and twelve months, respectively.
The decrease was primarily in line with the decrease in the sales of our products. Gross profit Our gross profit decreased by 24.0% from US$92.4 million for the year ended December 31, 2023 to US$70.2 million for the year ended December 31, 2024.
Gross profit Our gross profit decreased by 24.0% from US$92.4 million for the year ended December 31, 2023 to US$70.2 million for the year ended December 31, 2024. The decrease was mainly driven by decrease in the sales of our products, but partially offset by increasing of gross margin.
Interest income Interest income represents interest earned on bank deposits. We had interest income of US$3.1 million for the year ended December 31, 2023 and US$3.7 million for the year ended December 31, 2024. Interest expenses Interest expense represents interest charges for bank borrowings.
We had interest income of US$3. 7 million for the year ended December 31, 202 4 and US$1.5 million for the year ended December 31, 202 5 . Interest expenses Interest expense represents interest charges for bank borrowings.
Our cash, cash equivalents and restricted cash primarily consist of cash at banks and on hand. 73.2% of our cash, cash equivalents and restricted cash as of December 31, 2024 were held in China, and 70.4% of our cash, cash equivalents and restricted cash were held by the VIEs.
Our cash, cash equivalents and restricted cash primarily consist of cash at banks and on hand. 74.3% of our cash, cash equivalents and restricted cash as of December 31, 2025 were held in China, and 70.9% of our cash, cash equivalents and restricted cash were held by the VIEs.
As of December 31, 2024, we had outstanding bank loans with terms of one to seven years for an aggregate balance of US$117.1 million, including US$39.2 million short-term bank loans and US$35.5 million long-term bank loans used for our daily operations, and US$2.7 million short-term bank loans and US$39.7 million long-term bank loans for the Jiangsu Yitong acquisition with the shares we hold in Jiangsu Yitong as collateral, compared to our outstanding bank loans for an aggregate balance of US$121.7 million as of December 31, 2023.
As of December 31, 2025, we had outstanding bank loans with terms of one to seven years for an aggregate balance of US$115.2 million, including US$46.4 million short-term bank loans and US$26.6 million long-term bank loans used for our daily operations, and US$9.3 million short-term bank loans and US$32.9 million long-term bank loans for the Jiangsu Yitong acquisition with the shares we hold in Jiangsu Yitong as collateral, compared to our outstanding bank loans for an aggregate balance of US$117.1 million as of December 31, 2024.
In addition, each of our wholly foreign-owned subsidiaries in China may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion, and the VIEs may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion.
In addition, each of our wholly foreign-owned subsidiaries in China and the VIEs may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ US$ % US$ % US$ % ​ ​ (in thousands, except for percentages) Summary of Consolidated Statements of Operating Data: ​ ​ ​ ​ ​ ​ Revenues (1) 613,641 100.0 352,860 100.0 182,603 100.0 Cost of revenues (2) 494,784 80.6 260,502 73.8 112,369 61.5 Gross profit 118,857 19.4 92,358 26.2 70,234 38.5 Operating expenses: ​ ​ ​ ​ ​ ​ Research and development (3) 77,296 12.6 51,503 14.6 46,159 25.3 General and administrative (3) 35,109 5.7 26,778 7.6 24,854 13.6 Selling and marketing (3) 68,309 11.1 44,527 12.6 46,471 25.4 Total operating expenses 180,714 29.4 122,808 34.8 117,484 64.3 Operating loss (61,857) (10.1) (30,450) (8.6) (47,250) (25.9) Realized gain from investments 84 0.01 109 0.03 — — Interest income 1,818 0.3 3,089 0.9 3,672 2.0 Interest expenses ​ (8,444) ​ (1.4) ​ (6,752) ​ (1.9) ​ (5,552) ​ (3.0) Gain from fair value change of long-term investments 8,051 1.3 213 0.1 2,011 1.1 Impairment loss from long-term investments (2,000) (0.3) (313) (0.1) (10,129) (5.5) Other income/(expenses), net 6,454 1.1 (525) (0.1) (656) (0.4) Loss before income tax and income/(loss) from equity method investments (55,894) (9.1) (34,629) (9.8) (57,904) (31.7) Income taxes benefit/(provision) 9,865 1.6 2,430 0.7 (13,693) (7.5) Loss before income/(loss) from equity method investments (46,029) (7.5) (32,199) (9.1) (71,597) (39.2) Income/(loss) from equity method investments 2,683 0.4 1,113 0.3 (4,211) (2.3) Net loss (43,346) (7.1) (31,086) (8.8) (75,808) (41.5) Notes: (1) Includes US$253.8 million, US$92.0 million and US$11.0 million with related parties for the years ended December 31, 2022, 2023 and 2024, respectively.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ US$ ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands, except for percentages) Summary of Consolidated Statements of Operating Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenues (1) 352,860 ​ 100.0 ​ 182,603 ​ 100.0 258,897 ​ 100.0 Cost of revenues (2) 260,502 ​ 73.8 ​ 112,369 ​ 61.5 159,707 ​ 61.7 Gross profit 92,358 ​ 26.2 ​ 70,234 ​ 38.5 99,190 ​ 38.3 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development (3) 51,503 ​ 14.6 ​ 46,159 ​ 25.3 45,318 ​ 17.5 General and administrative (3) 26,778 ​ 7.6 ​ 24,854 ​ 13.6 29,273 ​ 11.3 Selling and marketing (3) 44,527 ​ 12.6 ​ 46,471 ​ 25.4 53,829 ​ 20.8 Total operating expenses 122,808 ​ 34.8 ​ 117,484 ​ 64.3 128,420 ​ 49.6 Operating loss (30,450) ​ (8.6) ​ (47,250) ​ (25.9) (29,230) ​ (11.3) Realized gain from investments 109 ​ — ​ — ​ — — ​ — Interest income 3,089 ​ 0.9 ​ 3,672 ​ 2.0 1,526 ​ 0.6 Interest expenses ​ (6,752) ​ (1.9) ​ (5,552) ​ (3.0) ​ (5,697) ​ (2.2) Gain from fair value change of long-term investments 213 ​ 0.1 ​ 2,011 ​ 1.1 76 ​ — Impairment loss from investments (313) ​ (0.1) ​ (10,129) ​ (5.5) (2,194) ​ (0.8) Other (expenses)/income, net (525) ​ (0.1) ​ (656) ​ (0.4) 56 ​ — Loss before income tax and loss from equity method investments (34,629) ​ (9.8) ​ (57,904) ​ (31.7) (35,463) (13.7) Income taxes benefits/(expenses) 2,430 ​ 0.7 ​ (13,693) ​ (7.5) (2,537) (1.0) Loss before loss from equity method investments (32,199) ​ (9.1) ​ (71,597) ​ (39.2) (38,000) (14.7) Income/(loss) from equity method investments 1,113 ​ 0.3 ​ (4,211) ​ (2.3) (2,068) (0.8) Net loss (31,086) ​ (8.8) ​ (75,808) ​ (41.5) (40,068) (15.5) Notes: (1) Includes US$92.0 million , US$11.0 million and nil with related parties for the years ended December 31, 2023, 2024 and 2025 , respectively.
Net cash used in financing activities for the year ended December 31, 2023 was US$41.7 million, primarily due to the repayment of bank borrowings of US$103.8 million, partially offset by the bank borrowings received of US$56.5 million.
Net cash used in financing activities for the year ended December 31, 2023 was US$41.7 million, primarily due to the repayment of bank borrowings of US$103.8 million, partially offset by the bank borrowings received of US$56.5 million. 92 Table of Contents Capital expenditures Our capital expenditures primarily consist of purchases of property, plant and equipment and intangible assets.
Operating lease. We have operating lease arrangements for administrative office spaces in various cities in the PRC and overseas, and financial lease that is immaterial. As of December 31, 2024, we had US$1.4 million of payables within the next 12 months.
This financing structure reflects our strong credit rating with the banks. Operating lease. We have operating lease arrangements for administrative office spaces in various cities in the PRC and overseas, and financial lease that is immaterial. As of December 31, 2025, we had US$1.0 million of payables within the next 12 months.
Expansion into the international markets International expansion represents a significant opportunity to further grow our business. Since our inception in 2013, we have established a strong global presence, particularly in Europe and the U.S. To date, we have shipped over 200 million units of smart wearable devices and served more than 42 million users in over 90 countries.
Since our inception in 2013, we have established a strong global presence, particularly in Europe and the U.S. To date, we have shipped over 200 million units of smart wearable devices and served more than 53 million users in over 90 countries with device activation in more than 150 countries.
The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the State Administration of Foreign Exchange.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the State Administration of Foreign Exchange.
Cost of Revenues Our cost of revenues is comprised of the following: ● material costs; ● manufacturing and fulfillment costs of our products; ● an estimate of warranty costs; and ● related expenses that are directly attributable to the production of products.
We recognize revenue, net of estimated sales returns and value-added taxes. 84 Table of Contents Cost of Revenues Our cost of revenues is comprised of the following: ● material costs; ● manufacturing and fulfillment costs of our products; ● an estimate of warranty costs; and ● related expenses that are directly attributable to the production of products.
Net loss attributable to Zepp Health Corporation As a result of the foregoing, we recorded a net loss of US$43.2 million for the year ended December 31, 2022, and a net loss of US$31.0 million for the year ended December 31, 2023.
Net loss attributable to Zepp Health Corporation As a result of the foregoing, we recorded a net loss of US$ 75.7 million for the year ended December 31, 202 4 , and a net loss of US$40.1 million for the year ended December 31, 202 5 .
(2) Includes US$208.0 million, US$82.2 million and US$9.4 million resulting from related parties sales for the years ended December 31, 2022, 2023 and 2024, respectively. (3) Share-based compensation expenses were included in operating expenses. Our share-based compensation expenses were the result of our grants of options, restricted shares and restricted share units under our share incentive plans to our employees.
(2) Includes US$82.2 million , US$9.4 million and nil resulting from related parties sales for the years ended December 31, 2023, 2024 and 2025 , respectively. (3) Share-based compensation expenses were included in operating expenses.
In addition, to avoid abuse of the two-tiered income tax rate regime, each group of connected entities can nominate only one entity to benefit from the two-tiered income tax rate. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.
In addition, to avoid abuse of the two-tiered income tax rate regime, each group of connected entities can nominate only one entity to benefit from the two-tiered income tax rate.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Operating loss As a result of the factors set out above, we recorded an operating loss of US$30.5 million for the year ended December 31, 2023, and an operating loss of US$47.3 million for the year ended December 31, 2024. The loss was mainly due to lower sales volume, which resulted in an inability to fully cover operating expenses.
The loss was mainly due to lower sales volume, which resulted in an inability to fully cover operating expenses. Interest income Interest income represents interest earned on bank deposits. We had interest income of US$3.1 million for the year ended December 31, 2023 and US$3.7 million for the year ended December 31, 2024.
The difference between our net loss of US$43.3 million and the net cash used in operating activities was primarily due to additional used in working capital, partially offset by the adjustment of non-cash items, which primarily consisted of shared-based compensation, depreciation and amortization expenses, non-cash lease expenses, and provision and write off for excess and obsolete inventories.
The additional cash used in operating activities was partially offset by the adjustment of non-cash items, which primarily consisted of write off for excess and obsolete inventories, provision for accounts receivable, depreciation and amortization expenses, share-based compensation and deferred income taxes.
We also generate a small amount of our revenues from our subscription-based services. Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for the goods or services. We recognize revenue, net of estimated sales returns and value-added taxes.
Revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for the goods or services.
In 2024, Amazfit-branded products accounted for 94.0% of our total revenues, compared with 73.9% in 2023. Sales of our Amazfit-branded product decreased by 34.2% as compared with 2023.
In 2024, Amazfit-branded products accounted for 94.0% of our total revenues, compared with 73.9% in 2023. Sales of our Amazfit-branded product decreased by 34.2% as compared with 2023. This was mainly because in 2024 we only have one new product, the Amazfit T-Rex 3, which was launched by the end of third quarter of 2024.
The Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 was enacted in Hong Kong in December 2022 and took effect from January 1, 2023.
Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. 89 Table of Contents The Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 was enacted in Hong Kong in December 2022 and took effect from January 1, 2023.
Recent Accounting Pronouncements For a summary of recently issued accounting pronouncements, see Note 2 to the consolidated financial statements of Zepp Health Corporation and its subsidiaries pursuant to Item 17 of Part III of this annual report.
Recent Accounting Pronouncements For a summary of recently issued accounting pronouncements, see Note 2 to the consolidated financial statements of Zepp Health Corporation and its subsidiaries pursuant to Item 17 of Part III of this annual report. 95 Table of Contents Off-balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any unconsolidated third parties.
However, given our efficient supply chain management and industry leading market share, we believe we have the ability to control the overall level of material and manufacturing costs as percentage of revenues. 87 Table of Contents Key Line Items and Specific Factors Affecting Our Results of Operations Revenues We generate substantially all of our revenues from sales of smart wearable devices.
We expect our material and manufacturing costs to increase in absolute amounts as we increase our smart wearable device shipment volume. However, given our efficient supply chain management and industry leading market share, we believe we have the ability to control the overall level of material and manufacturing costs as percentage of revenues.
Net cash provided by financing activities for the year ended December 31, 2022 was US$42.4 million, primarily due to proceeds from letter of credit factoring of US$46.1 million, bank borrowings received of US$124.7 million, partially offset by the repayment of bank borrowings of US$108.1 million. 95 Table of Contents Capital expenditures Our capital expenditures primarily consist of purchases of property, plant and equipment and intangible assets.
Financing activities Net cash provided by financing activities was US$24.8 million for the year ended December 31, 2025, primarily due to net proceeds from letter of credit of US$34.5 million and bank borrowings received of US$65.7 million, partially offset by repayment of bank borrowings of US$73.1 million.
To achieve the goal, we have engaged in a variety of marketing and brand promotion campaigns around the world. In particular, we have expanded the Amazfit athletes team by onboarding high-profile Athlete Ambassadors, including five-time Olympic medalist Gabby Thomas and Italian tennis professional Jasmine Polini.
To achieve the goal, we have engaged in a variety of marketing and brand promotion campaigns around the world. In particular, we have expanded the Amazfit athletes team by onboarding high-profile Athlete Ambassadors. Additionally, we are enhancing our partnership with HYROX, with plans to introduce more advanced HYROX products and features.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Our revenues decreased by 42.5% from US$613.6 million for the year ended December 31, 2022 to US$352.9 million for the year ended December 31, 2023. The decrease was primarily resulted from a 63.7% decline in the sales of Xiaomi Wearable Products.
Cost of revenues Our cost of revenues decreased by 56.9% from US$260.5 million for the year ended December 31, 2023 to US$112.4 million for the year ended December 31, 2024. The decrease was primarily in line with the decrease in the sales of our products.
Interest income Interest income represents interest earned on bank deposits. We had interest income of US$1.8 million in 2022 and US$3.1 million in 2023. Interest expenses Interest expense represents interest charges for bank borrowings. We had interest expense of US$8.4 million in 2022 and US$6.8 million in 2023.
Interest expenses Interest expense represents interest charges for bank borrowings. We had interest expense of US$6.8 million for the year ended December 31, 2023 and US$5.6 million for the year ended December 31, 2024.
Additionally, we are enhancing our partnership with HYROX, with plans to introduce more advanced HYROX products and features. These strategic collaborations have increased confidence among key offline retail partners in the US and Europe. This development is expected to drive our growth in the future.
These strategic collaborations have increased confidence among key offline retail partners in the US and Europe. This development is expected to drive our growth in the future. Expansion into the international markets International expansion represents a significant opportunity to further grow our business.
Net cash used in investing activities was US$6.2 million for the year ended December 31, 2022, primarily due to purchase of short-term investments of US$2.4 million, loans provided to related parties of US$2.3 million, and purchase of long-term investments of US$1.9 million.
Investing activities Net cash provided by investing activities was US$1.5 million for the year ended December 31, 2025, primarily due to disposal of long-term investments of US$1.7 million, partially offset by purchase of property, plant and equipment of US$0.5 million and purchase of intangible assets of US$0.3 million.
The decrease was primarily attributable to our repayments of US$12.6 million in short-term and long-term bank loans in 2024, partially offset by bank borrowings received of US$11.0 million. Notes payable and others.
The decrease was primarily attributable to our repayments of US$73.1 million in short-term and long-term bank loans in 2025, partially offset by bank borrowings received of US$65.7 million. The Company’s maturing short-term borrowings are expected to be secured on substantially identical terms and conditions, through the incurrence of new short-term or long-term debt as appropriate.
Other income/(expenses), net We had other income of US$6.5 million in 2022 and other expenses of US$0.5 million in 2023. Income taxes benefits We recorded income taxes benefit in the amount of US$9.9 million in 2022 and income taxes benefit in the amount of US$2.4 million in 2023.
Other expenses, net We had other expenses of US$0.5 million for the year ended December 31, 2023 and other expenses of US$0.7 million for the year ended December 31, 2024.
Net cash used in operating activities for the year ended December 31, 2022 was US$117.1 million.
Cash flows in operating activities are subject to seasonality, whereby operating cash inflows in the second half of the year cannot fully offset the operating cash outflows incurred in the first half of the year. Net cash used in operating activities for the year ended December 31, 2024 was US$24.4 million.
General and administrative expenses General and administrative expenses decreased by 23.7% from US$35.1 million for the year ended December 31, 2022 to US$26.8 million for the year ended December 31, 2023, primarily due to a decrease of US$5.7 million in salary and benefits as we implemented strict expense control measures.
General and administrative expenses General and administrative expenses increased by 17.8% from US$ 24.9 million for the year ended December 31, 202 4 to US$29.3 million for the year ended December 31, 202 5 , primarily due to US$5.7 million specially identified provision as a result of the termination old business model and sales channel and US$1.2 million expense related to certain brand and IP protection activities.
This was mainly because in 2024 we only have one new product, the Amazfit T-Rex 3, which was launched by the end of third quarter of 2024. 89 Table of Contents Cost of revenues Our cost of revenues decreased by 56.9% from US$260.5 million for the year ended December 31, 2023 to US$112.4 million for the year ended December 31, 2024.
Sales of our Amazfit-branded product increased by 50.9% as compared with 202 4 . 86 Table of Contents Cost of revenues Our cost of revenues increased by 42.1% from US$ 112.4 million for the year ended December 31, 202 4 to US$159.7 million for the year ended December 31, 202 5 .
Cost of revenues Our cost of revenues decreased by 47.4% from US$494.8 million for the year ended December 31, 2022 to US$260.5 million for the year ended December 31, 2023. Gross profit Our gross profit decreased by 22.3% from US$118.9 million for the year ended December 31, 2022 to US$92.4 million for the year ended December 31, 2023.
The increase was mainly driven by an increase in the sales of our products. Gross margin in 202 5 was 38.3%. Research and development expenses Research and development expenses decreased by 1.8% from US$ 46.2 million for the year ended December 31, 202 4 to US$45.3 million for the year ended December 31, 202 5 .
Changes in working capital for the year ended December 31, 2022 primarily consisted of US$135.3 million accounts payable payment settlement cash outflow, partially offset and optimized by US$27.9 million better inventory management cash inflow and US$33.9 million cash saving in prepaid expenses and other current assets due to better expense control.
Changes in working capital for the year ended December 31, 2025 primarily consisted of an increase of US$16.2 million in prepaid expenses and other current assets, which was mainly due to export value-added tax refund timing differences.
Selling and marketing expenses Selling and marketing expenses decreased by 34.8% from US$68.3 million for the year ended December 31, 2022 to US$44.5 million for the year ended December 31, 2023, primarily due to (i) a decrease of US$11.6 million in advertisement promotion expenses related to our ongoing efforts to enhance our retail profitability and optimize our mix of sales channels, and (ii) a decrease of US$8.0 million in salary and benefits as we implemented strategic staff allocations across our various sales regions. 91 Table of Contents Operating loss As a result of the factors set out above, we recorded an operating loss of US$61.9 million for the year ended December 31, 2022, and an operating loss of US$30.5 million for the year ended December 31, 2023.
We are committed to investing efficiently in marketing and branding to ensure our sustainable growth. 88 Table of Contents Operating loss As a result of the factors set out above, we recorded an operating loss of US$30.5 million for the year ended December 31, 2023, and an operating loss of US$47.3 million for the year ended December 31, 2024.
Inventories are stated at the lower of cost or net realizable value on a weighted average basis.
If actual results in the future vary from our estimates, we will adjust these estimates, which would affect revenue and earnings in the period such variances are known. Inventories, net Inventories consist of raw materials, finished goods and work in process. Inventories are stated at the lower of cost or net realizable value on a weighted average basis.
Removed
We expect our material and manufacturing costs to increase in absolute amounts as we increase our smart wearable device shipment volume.
Added
Key Line Items and Specific Factors Affecting Our Results of Operations Revenues We generate substantially all of our revenues from sales of smart wearable devices. We also generate a small amount of our revenues from our subscription-based services.
Removed
The decrease was mainly driven by the decrease in the gross profit for sales of Xiaomi Wearable Products, partially offset by the increase in the gross profit for sales of our self-branded wearable products.
Added
Our share-based compensation expenses were the result of our grants of options, restricted shares and restricted share units under our share incentive plans to our employees.
Removed
Research and development expenses Research and development expenses decreased by 33.4% from US$77.3 million for the year ended December 31, 2022 to US$51.5 million for the year ended December 31, 2023, primarily due to a decrease of US$26.8 million in expenses as we refined our research and development approaches to consistently evaluate resource efficiency to ensure maximum return on research and development activities in 2023, partially offset by a decrease of US$4.6 million in government subsidies that we received in 2023.
Added
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenues Our revenues increased by 41.8% from US$182.6 million for the year ended December 31, 2024 to US$258.9 million for the year ended December 31, 2025 . The increase in total revenues mainly resulted from growth of all the product lines, including sports, balance and youth lines.
Removed
In 2023, we recorded US$4.1 million in valuation allowance for deferred tax asset which is a non-cash in nature and does not materially affect our operation.
Added
In 202 5 , Amazfit-branded products accounted for 100.0% of our total revenues, compared with 94.0% in 202 4 .
Removed
Effective from November 1, 2015, the above-mentioned approval requirement has been abolished, but a Hong Kong entity is still required to file application package with the tax authority, and settle the overdue taxes if the preferential 5% tax rate is denied based on the subsequent review of the application package by the tax authority.
Added
The increase was primarily in line with the increase in the sales of our products. Gross profit Our gross profit increased by 41.2% from US$ 70.2 million for the year ended December 31, 202 4 to US$99.2 million for the year ended December 31, 202 5 .
Removed
Off-balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any unconsolidated third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements.
Added
The decrease was as a result of our refined research and development approaches, as we consistently evaluated resource efficiency to ensure maximum return on investment and productivity. We are committed to investing in new technologies and AI to maintain our competitive edge against our peers.
Added
Excluding those, general and administrative expenses decreased compared with full year of 2024. We continued to streamline overhead, maintaining disciplined cost control while improving operating efficiency.
Added
Selling and marketing expenses Selling and marketing expenses increased by 15.8 % from US$ 46.5 million for the year ended December 31, 202 4 to US$ 53.8 million for the year ended December 31, 202 5 .
Added
The increase was primarily due to US$2.6 million directly attributable to certain e-commerce platform charges to drive revenue growth and the remaining US$4.8 million attributable to frontloaded some investments in marketing and branding activities that fueled the adoption of new products.
Added
Operating loss As a result of the factors set out above, we recorded an operating loss of US$ 47.3 million for the year ended December 31, 202 4 , and an operating loss of US$29.2 million for the year ended December 31, 202 5 . Interest income Interest income represents interest earned on bank deposits.
Added
We recorded income tax impacts of US$2.5 million (primarily resulting from valuation allowance for deferred tax assets) and net investment results of US$4.2 million (including impairment loss from investments, loss from equity method investments, and gain from fair value change of long-term investment), both are non-cash in nature.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. Award Agreement.
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. Award Agreement.
Our nominating and corporate governance committee consists of Mr. Wang Wayne Huang, Mr. Jimmy Lai, Dr. Hongjiang Zhang and Mr. Bing Xie. Mr. Huang is the chairperson of our nominating and corporate governance committee. Mr. Jimmy Lai, Dr. Hongjiang Zhang, and Mr.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Mr. Wang Wayne Huang, Mr. Jimmy Lai, Dr. Hongjiang Zhang and Mr. Bing Xie. Mr. Huang is the chairperson of our nominating and corporate governance committee. Mr. Jimmy Lai, Dr. Hongjiang Zhang, and Mr.
HHtech Holdings Limited is wholly owned by Wayne Holding Limited, which in turn is wholly owned by a trust established for the benefit of Mr. Wang Wayne Huang and his family members. Mr. Huang is the sole director of HHtech Holdings Limited, and also the settlor and investment decision maker of the abovementioned trust. Therefore, Mr.
HHtech Holdings Limited is wholly owned by Wayne Holding Limited, which in turn is wholly owned by a trust established for the benefit of Mr. Wang Wayne Huang and his family members. Mr. Huang is the sole director of HHtech Holdings Limited, and also the settlor and investment decision maker of the abovementioned trust. Therefore, Mr.
Zhang is a venture partner at Source Code Capital, a senior advisor of Carlyle Group. He currently also serves as the non-executive chairman of AAC Technologies Holdings Inc. (HKEX: 2018) and an independent non-executive director of XPeng Inc. (HKEX: 9968; NYSE: XPEV). Previously, Mr. Zhang was an independent director of Digital China Group Co., Ltd.
Zhang is a venture partner at Source Code Capital, a senior advisor of Carlyle Group. He currently also serves as the non-executive chairman of AAC Technologies Holdings Inc. (HKEX: 2018) and an independent non-executive director of XPeng Inc. (HKEX: 9968; NYSE: XPEV) and Ant Group. Previously, Mr. Zhang was an independent director of Digital China Group Co., Ltd.
However, without the prior written consent of the participant, no such action may adversely affect in any material way any award previously granted pursuant to the 2015 Plan. ​ 102 Table of Contents 2018 Share Incentive Plan In January 2018, our shareholders and board of directors adopted the 2018 Share Incentive Plan, which we refer to as the 2018 Plan in this annual report, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business.
However, without the prior written consent of the participant, no such action may adversely affect in any material way any award previously granted pursuant to the 2015 Plan. 99 Table of Contents 2018 Share Incentive Plan In January 2018, our shareholders and board of directors adopted the 2018 Share Incentive Plan, which we refer to as the 2018 Plan in this annual report, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; 103 Table of Contents ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
Compensation For the fiscal year ended December 31, 2024, we paid an aggregate of US$1.8 million in cash to our executive officers and US$0.3 million to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Compensation For the fiscal year ended December 31, 2025, we paid an aggregate of US$1.8 million in cash to our executive officers and US$0.3 million to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
To name a few, he was awarded “Anhui Economic Person of the Year 2015,” “ Leading Talents of Strategic Emerging Industry Technology in Anhui” and “Hefei Youth Entrepreneurship.” Mr. Huang received his bachelor’s degree in applied physics from the University of Science and Technology of China in 1997. Mr.
To name a few, he was awarded “Anhui Economic Person of the Year 2015,” “Leading Talents of Strategic Emerging Industry Technology in Anhui” and “Hefei Youth Entrepreneurship.” Mr. Huang received his bachelor’s degree in applied physics from the University of Science and Technology of China in 1997. Mr.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2025 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our total outstanding shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2026 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our total outstanding shares.
However, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient. 103 Table of Contents 2023 Share Incentive Plan In January 2023, our board of directors approved the 2023 Share Incentive Plan, which we refer to as the 2023 Plan in this annual report, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business.
However, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient. 2023 Share Incentive Plan In January 2023, our board of directors approved the 2023 Share Incentive Plan, which we refer to as the 2023 Plan in this annual report, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business.
Xie holds a bachelor of science degree in electronics engineering from Xidian University, and an MBA from Clemson University. Mr. Leon Cheng Deng has served as our chief financial officer since October 2020. Mr. Deng has extensive experience in accounting, financial management, manufacturing, and international business with Royal Philips.
Xie holds a bachelor of science degree in electronics engineering from Xidian University, and an MBA from Clemson University. ​ 97 Table of Contents Mr. Leon Cheng Deng has served as our chief financial officer since October 2020. Mr. Deng has extensive experience in accounting, financial management, manufacturing, and international business with Royal Philips.
Wang Wayne Huang; (ii) 3,800,000 Class A ordinary shares in the form of ADSs and 65,836,680 Class B ordinary shares held by HHtech Holdings Limited, a British Virgin Islands company; and (iii) 3,520,000 Class A ordinary shares (including 400,000 Class A ordinary shares in the form of ADSs) and 15,510,447 Class B ordinary shares beneficially owned by HHtech Holdings Limited as a result of the voting agreement dated January 12, 2018 by and among HHtech Holdings Limited, Fandler Holding Limited, Forest Mountain Holding Limited, Haiyu Holding Limited, Shu Hill Holding Limited and Wenshui Holding Limited.
Wang Wayne Huang; (ii) 3,800,000 Class A ordinary shares in the form of ADSs and 65,836,680 Class B ordinary shares held by HHtech Holdings Limited, a British Virgin Islands company; and (iii) 2,160,000 Class A ordinary shares (including Class A ordinary shares in the form of ADSs) and 15,510,447 Class B ordinary shares beneficially owned by HHtech Holdings Limited as a result of the voting agreement dated January 12, 2018 by and among HHtech Holdings Limited, Fandler Holding Limited, Forest Mountain Holding Limited, Haiyu Holding Limited, Shu Hill Holding Limited and Wenshui Holding Limited.
Pursuant to the currently effective memorandum and articles of association, People Better Limited will be entitled to appoint one director so long as it continues to beneficially own no less than 10% of the issued and outstanding shares of our company. Mr.
Pursuant to the currently effective memorandum and articles of association, People Better Limited will be entitled to appoint one director so long as it continues to beneficially own no less than 10% of the issued and outstanding shares of our company. ​ 96 Table of Contents Mr.
Yeung held several positions in Monster.com, TGC Inc., China.com Corp., Netscape Communications Corporation and Oracle Corporation from 1992 to 2012. Mr. Yeung received his bachelor’s degree and master’s degree in computer science from the University of California, Berkeley in 1992 and Stanford University in 1994, respectively. 99 Table of Contents Mr.
Yeung held several positions in Monster.com, TGC Inc., China.com Corp., Netscape Communications Corporation and Oracle Corporation from 1992 to 2012. Mr. Yeung received his bachelor’s degree and master’s degree in computer science from the University of California, Berkeley in 1992 and Stanford University in 1994, respectively. Mr.
Deng holds a CPA certificate in Australia, and a Chartered Global Management Accountant certification from CIMA. He earned a Bachelor of Finance degree from Shanghai International Studies University, and a Master of International Finance degree from the University of Amsterdam. 100 Table of Contents Dr.
Deng holds a CPA certificate in Australia, and a Chartered Global Management Accountant certification from CIMA. He earned a Bachelor of Finance degree from Shanghai International Studies University, and a Master of International Finance degree from the University of Amsterdam. Dr.
Unless terminated earlier, the 2018 Plan has a term of seven years. Our board of directors has the authority to amend or terminate the plan.
Unless terminated earlier, the 2018 Plan has a term of fourteen years. Our board of directors has the authority to amend or terminate the plan.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. 106 Table of Contents Nominating and Corporate Governance Committee.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
(8) Represents (i) 3,800,000 Class A ordinary shares in the form of ADSs and 65,836,680 Class B ordinary shares held by HHtech Holdings Limited, a British Virgin Islands company; and (ii) 3,520,000 Class A ordinary shares (including 400,000 Class A ordinary shares in the form of ADSs) and 15,510,447 Class B ordinary shares beneficially owned by HHtech Holdings Limited as a result of the voting agreement dated January 12, 2018 by and among HHtech Holdings Limited, Fandler Holding Limited, Forest Mountain Holding Limited, Haiyu Holding Limited, Shu Hill Holding Limited and Wenshui Holding Limited.
(7) Represents (i) 3,800,000 Class A ordinary shares in the form of ADSs and 65,836,680 Class B ordinary shares held by HHtech Holdings Limited, a British Virgin Islands company; and (ii) 2,160,000 Class A ordinary shares (including Class A ordinary shares in the form of ADSs) and 15,510,447 Class B ordinary shares beneficially owned by HHtech Holdings Limited as a result of the voting agreement dated January 12, 2018 by and among HHtech Holdings Limited, Fandler Holding Limited, Forest Mountain Holding Limited, Haiyu Holding Limited, Shu Hill Holding Limited and Wenshui Holding Limited.
China does not have any treaties or other form of reciprocity with the United States or the Cayman Islands that provide for the reciprocal recognition and enforcement of foreign judgments.
China does not have any treaties with the United States or the Cayman Islands that provide for the reciprocal recognition and enforcement of foreign judgments.
Fan obtained a Bachelor’s Degree with a Double Major in Molecular Biology & Cell Biology and Signal & Information Systems at the University of Science and Technology of China. Mr. Jimmy Lai has served as our director since February 2018. In addition to this role, Mr.
Fan obtained a Bachelor’s Degree with a Double Major in Molecular Biology & Cell Biology and Signal & Information Systems at the University of Science and Technology of China. Mr. Jimmy Lai has served as our director since February 2018. Since March 2021. Mr. Lai Mr.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 105 Table of Contents Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; or (ii) seek directly or indirectly, to solicit the services of any of our employees who we employ on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; or (ii) seek directly or indirectly, to solicit the services of any of our employees who we employ on or after the date of the executive officer’s termination, or in the year preceding such termination, without our express consent. 98 Table of Contents We have also entered into indemnification agreements with each of our directors and executive officers.
Bing Xie’s business address is 10005 Meadowbrook Drive, Dallas, Texas, U.S. 75229. Mr. Leon Cheng Deng’s business address is Edisonweg 44 - B08, 4207 HG Gorinchem, The Netherlands. Dr. Hui Wang’s business address is 3090 Bristol Street, Suite 400, Costa Mesa, CA 92626. Mr.
Mr. Bing Xie’s business address is 10005 Meadowbrook Drive, Dallas, Texas, U.S. 75229. Mr. Leon Cheng Deng’s business address is Edisonweg 44 - B08, 4207 HG Gorinchem, The Netherlands. Dr. Hui Wang’s business address is 3090 Bristol Street, Suite 400, Costa Mesa, CA 92626. Mr. Pengtao Yu’s business address is 1551 McCarthy Blvd., Suite 107, Milpitas, CA 95035.
F. Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​
F. Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​ 108 Table of Contents
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. 101 Table of Contents B.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. B.
As of March 31, 2025, awards to purchase 13,564,827 Class A ordinary shares have been granted and are outstanding under the 2015 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
As of February 28, 2026, awards to purchase 13,944,827 Class A ordinary shares have been granted and are outstanding under the 2015 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.
A majority of our directors and executive officers are nationals or residents of jurisdictions other than the United States and most of their assets are located outside the United States.
Enforceability of Civil Liabilities A majority of our operations are conducted outside of the United States, and a majority of our assets are located outside of the United States. Some of our directors and executive officers are nationals or residents of jurisdictions other than the United States and most of their assets are located outside the United States.
As of March 31, 2025, awards to purchase 25,701,010 Class A ordinary shares under the 2018 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates. The following paragraphs describe the principal terms of the 2018 Plan. Types of Awards.
As of February 28, 2026, awards to purchase 25,210,778 Class A ordinary shares under the 2018 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates. The following paragraphs describe the principal terms of the 2018 Plan. Types of Awards.
Alain Lam’s business address is Keliyuan Building, No.72 Anningzhuang East Road, Haidian District, Beijing, 100085, People’s Republic of China. Mr. Mike Yan Yeung’s business address is 1551 McCarthy Blvd, Suite 107, Milpitas, CA, 95035. Mr.
Wang Wayne Huang’s business address is 3090 Bristol Street, Suite 400, Costa Mesa, CA 92626. Mr. Alain Lam’s business address is Keliyuan Building, No.72 Anningzhuang East Road, Haidian District, Beijing, 100085, People’s Republic of China. Mr. Mike Yan Yeung’s business address is 1551 McCarthy Blvd, Suite 107, Milpitas, CA, 95035. Mr.
We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Mr. Jimmy Lai, Dr. Hongjiang Zhang and Mr. Bing Xie. Mr. Lai is the chairman of our audit committee. We have determined that Mr. Jimmy Lai, Dr. Hongjiang Zhang, and Mr.
Each committee’s members and functions are described below. 102 Table of Contents Audit Committee. Our audit committee consists of Mr. Jimmy Lai, Dr. Hongjiang Zhang and Mr. Bing Xie. Mr. Lai is the chairman of our audit committee. We have determined that Mr. Jimmy Lai, Dr. Hongjiang Zhang, and Mr.
Directors and Executive Officers Age Position/Title Wang Wayne Huang ​ 49 ​ Chairman of the Board of Directors and Chief Executive Officer ​ Alain Lam ​ 51 ​ Director ​ Mike Yan Yeung ​ 54 ​ Director and Chief Operating Officer ​ Meihui Fan ​ 46 ​ Director and Chief Technology Officer ​ Jimmy Lai ​ 68 ​ Independent Director ​ Hongjiang Zhang ​ 64 ​ Independent Director ​ Bing Xie ​ 57 ​ Independent Director ​ Leon Cheng Deng ​ 42 ​ Chief Financial Officer ​ Hui Wang ​ 47 ​ Vice President of Corporate Strategy ​ Pengtao Yu ​ 43 ​ Chief Industrial Designer ​ ​ Mr.
Directors and Executive Officers ​ ​ ​ Age ​ ​ ​ Position/Title Wang Wayne Huang ​ 50 ​ Chairman of the Board of Directors and Chief Executive Officer ​ Alain Lam ​ 52 ​ Director ​ Mike Yan Yeung ​ 55 ​ Director and Chief Operating Officer ​ Meihui Fan ​ 47 ​ Director and Chief Technology Officer ​ Jimmy Lai ​ 69 ​ Independent Director ​ Hongjiang Zhang ​ 65 ​ Independent Director ​ Bing Xie ​ 58 ​ Independent Director ​ Leon Cheng Deng ​ 43 ​ Chief Financial Officer ​ Hui Wang ​ 48 ​ Vice President of Corporate Strategy ​ Pengtao Yu ​ 44 ​ Chief Industrial Designer ​ ​ Mr.
The number of Class A ordinary shares available for future issuance upon the exercise of future grants under the 2018 Share Incentive Plan was 26,288,918 as of January 1, 2025.
The number of Class A ordinary shares available for future issuance upon the exercise of future grants under the 2018 Share Incentive Plan was 28,692,420 as of January 1, 2026.
Meihui Fan’s business address is Huami Global Innovation Center, Building B2, Zhong’an Chuanggu Technology Park, No. 900 Wangjiang West Road, Hefei, 230088, People’s Republic of China. Mr. Jimmy Lai’s business address is 9th Floor, No. 8 Zhongyuan Street, Zhonghe District, New Taipei City, Taiwan. Dr. Hongjiang Zhang’s business address is 627 Jurong West St 65, #14-380, Singapore 640627. Mr.
Meihui Fan’s business address is Huami Global Innovation Center, Building B2, Zhong’an Chuanggu Technology Park, No. 900 Wangjiang West Road, Hefei, 230088, People’s Republic of China. Mr. Jimmy Lai’s business address is 9th Floor, No. 8 Zhongyuan Street, Zhonghe District, New Taipei City, Taiwan. Dr. Hongjiang Zhang’s business address is 10700 NE 4TH ST UNIT 2216, BELLEVUE, WA 98004, USA.
The 2015 Plan consists of a share incentive plan for U.S. service providers and a share incentive plan for PRC service providers. The maximum aggregate number of Class A ordinary shares that may be issued pursuant to all awards under the 2015 Plan is 14,328,358 Class A ordinary shares.
The maximum aggregate number of Class A ordinary shares that may be issued pursuant to all awards under the 2015 Plan is 14,328,358 Class A ordinary shares.
However, without the prior written consent of the participant, no such action may adversely affect in any material way any award previously granted pursuant to the 2023 Plan. 104 Table of Contents The following table summarizes, as of March 31, 2025, the awards granted under our 2015 Plan, 2018 Plan and 2023 Plan to several of our executive officers, excluding awards that were forfeited or cancelled after the relevant grant dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Underlying ​ ​ ​ ​ ​ Options and ​ ​ ​ ​ ​ ​ ​ ​ Restricted Shares ​ Exercise Price ​ ​ ​ ​ Name ​ Units ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Mike Yan Yeung * (1) ​ — March 3, 2015 — ​ * 0.79 March 3, 2015 February 28, 2019 ​ ​ * (1) ​ — ​ August 18, 2020 ​ — ​ ​ * (1) ​ — ​ January 3, 2023 ​ — ​ ​ * (1) ​ — ​ February 29, 2024 ​ — Meihui Fan ​ * ​ — ​ May 13, 2021 ​ May 6, 2031 ​ ​ * ​ — ​ January 3, 2023 ​ January 3, 2033 ​ ​ * ​ — ​ February 29, 2024 ​ February 28, 2034 Leon Cheng Deng ​ * (1) ​ — ​ August 31, 2020 ​ — ​ ​ * (1) ​ — ​ January 3, 2023 ​ — ​ ​ * (1) ​ — ​ February 29, 2024 ​ — Hui Wang ​ * ​ — ​ August 20, 2014 ​ August 20, 2024 ​ ​ * ​ — ​ August 18, 2020 ​ August 18, 2030 ​ ​ * ​ — ​ January 3, 2023 ​ January 3, 2033 ​ ​ * ​ — ​ January 3, 2023 ​ January 3, 2033 ​ ​ * ​ — ​ February 29, 2024 ​ February 28, 2034 ​ * — February 29, 2024 February 28, 2034 Pengtao Yu ​ * (1) ​ — ​ March 3, 2015 ​ — ​ ​ * (1) ​ — ​ August 18, 2020 ​ — ​ * (1) ​ — January 3, 2023 — ​ ​ * (1) ​ — ​ February 29, 2024 ​ — Total ​ 10,274,700 ​ ​ ​ ​ ​ ​ Notes: * Less than one percent of our total outstanding shares.
However, without the prior written consent of the participant, no such action may adversely affect in any material way any award previously granted pursuant to the 2023 Plan. 101 Table of Contents The following table summarizes, as of February 28, 2026, the awards granted under our 2015 Plan, 2018 Plan and 2023 Plan to several of our executive officers, excluding awards that were forfeited or cancelled after the relevant grant dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Underlying ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options and ​ ​ ​ ​ ​ ​ ​ ​ Restricted Shares ​ Exercise Price ​ ​ ​ ​ Name ​ Units ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Mike Yan Yeung 1,253,700 (1) ​ — March 3, 2015 — ​ 600,000 0.79 March 3, 2015 February 28, 2019 ​ ​ 1,000,000 (1) ​ — ​ August 18, 2020 ​ — ​ ​ 80,000 (1) ​ — ​ January 3, 2023 ​ — ​ ​ 80,000 (1) ​ — ​ February 29, 2024 ​ — Meihui Fan ​ 1,000,000 ​ — ​ May 13, 2021 ​ May 6, 2031 ​ ​ 80,000 ​ — ​ January 3, 2023 ​ January 3, 2033 ​ ​ 80,000 ​ — ​ February 29, 2024 ​ February 28, 2034 Leon Cheng Deng ​ 1,464,000 (1) ​ — ​ August 31, 2020 ​ — ​ ​ 80,000 (1) ​ — ​ January 3, 2023 ​ — ​ ​ 80,000 (1) ​ — ​ February 29, 2024 ​ — Hui Wang ​ 895,500 ​ — ​ August 20, 2014 ​ August 20, 2024 ​ ​ 800,000 ​ — ​ August 18, 2020 ​ August 18, 2030 ​ ​ 80,000 ​ — ​ January 3, 2023 ​ January 3, 2033 ​ ​ 200,000 ​ — ​ January 3, 2023 ​ January 3, 2033 ​ ​ 80,000 ​ — ​ February 29, 2024 ​ February 28, 2034 ​ 200,000 — February 29, 2024 February 28, 2034 Pengtao Yu ​ 895,500 (1) ​ 0.10 ​ March 3, 2015 ​ — ​ ​ 800,000 (1) ​ — ​ August 18, 2020 ​ — ​ 80,000 (1) ​ — January 3, 2023 — ​ ​ 80,000 (1) ​ — ​ February 29, 2024 ​ — Total ​ 9,908,700 ​ ​ ​ ​ ​ ​ Note: (1) Restricted share units As of February 28, 2026, other employees as a group held outstanding options to purchase 11,361,341 Class A ordinary shares of our company, at a weighted average exercise price of US$0.02 per share, 22,473 restricted shares, and 2,103,826 restricted share units.
Huang is entitled to exercise voting and dispositive power over the shares held by HHtech Holdings Limited. The registered address of HHtech Holdings Limited is at Aegis Chambers, 1st Floor, Ellen Skelton Building, 3076 Sir Francis Drake's Highway, Road Town, Tortola Virgin Islands, British. (2) Represents the Class A ordinary shares in the form of ADSs held by Mr.
The registered address of HHtech Holdings Limited is at Aegis Chambers, 1st Floor, Ellen Skelton Building, 3076 Sir Francis Drake’s Highway, Road Town, Tortola Virgin Islands, British. 106 Table of Contents (2) Represents 2,468,308 Class A ordinary shares in the form of ADSs held by Mr. Mike Yan Yeung.
As of March 31, 2025, awards to purchase 7,741,264 Class A ordinary shares under the 2023 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates. The following paragraphs describe the principal terms of the 2023 Plan. Types of Awards.
As of February 28, 2026, awards to purchase 9,605,240 Class A ordinary shares under the 2023 Plan have been granted and outstanding, excluding awards that were forfeited or cancelled after the relevant grant dates. 100 Table of Contents The following paragraphs describe the principal terms of the 2023 Plan. Types of Awards.
A director is not required to hold any shares in our company to qualify to serve as a director.
C. Board Practices Our board of directors consists of seven directors. A director is not required to hold any shares in our company to qualify to serve as a director.
A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) dies or is found by our company to be or becomes of unsound mind. 107 Table of Contents D.
A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) dies or is found by our company to be or becomes of unsound mind. D. Employees We had 839, 765 and 763 employees as of December 31, 2023, 2024 and 2025, respectively.
We have been informed by our Cayman Islands legal counsel that the United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters and that a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal securities laws, would not be automatically enforceable in the Cayman Islands.
We have appointed Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States. 107 Table of Contents We have been informed by our Cayman Islands legal counsel that the United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters and that a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal securities laws, would not be automatically enforceable in the Cayman Islands.
The calculations in the table below are based on 112,680,748 Class A ordinary shares (excluding the 3,572,300 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under the 2015 Share Incentive Plan, the 2018 Share Incentive Plan and the 2023 Share Incentive Plan, and the 32,090,084 treasury shares in the form of ADSs that we repurchased under our share repurchase program) and 117,208,247 Class B ordinary shares outstanding as of February 28, 2025. 108 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 135,362,012 Class A ordinary shares (excluding a total of 30,911,680 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans or treasury shares in the form of ADSs that we repurchased under our share repurchase program) and 99,277,687 Class B ordinary shares outstanding as of February 28, 2026. 105 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law.
Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis. * Mr.
(7) Represents the Class A ordinary shares in the form of ADSs held by Mr. Pengtao Yu.
(1) Represents (i) 60,076 Class A ordinary shares in the form of ADSs held by Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ Beneficially Owned ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ of ​ ​ Class A ​ Class B ​ Total ​ of total ​ aggregate ​ ​ ordinary ​ ordinary ​ ordinary ​ ordinary ​ voting ​ ​ shares ​ shares ​ shares ​ shares ​ power † Directors and Executive Officers:** ​ Wang Wayne Huang (1) 7,380,076 81,347,127 88,727,203 38.6 % 63.9 % Alain Lam — — — — — ​ Mike Yan Yeung (2) 2,609,108 — 2,609,108 1.1 % * ​ Meihui Fan (3) 1,160,000 3,450,746 4,610,746 2.0 % 2.7 % Jimmy Lai (4) * — * * * ​ Hongjiang Zhang — — — — — ​ Bing Xie ​ — ​ — ​ — ​ — ​ — ​ Leon Cheng Deng (5) * — * * * ​ Hui Wang (6) * — * * * ​ Pengtao Yu (7) * — * * * ​ All Directors and Executive Officers as a Group 16,152,468 81,347,127 97,499,595 42.2 % 64.5 % Principal Shareholders: ​ ​ ​ ​ ​ ​ HHtech Holdings Limited (8) 7,320,000 81,347,127 88,667,127 38.6 % 63.9 % People Better Limited (9) — 35,861,112 35,861,112 15.6 % 27.9 % Allspring Entities (10) ​ 13,669,456 ​ — ​ 13,669,456 ​ 5.9 % 1.1 % Notes: † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ Beneficially Owned ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ ​ ​ ​ ​ ​ ​ ​ Percentage ​ of ​ ​ Class A ​ Class B ​ Total ​ of total ​ aggregate ​ ​ ordinary ​ ordinary ​ ordinary ​ ordinary ​ voting ​ ​ shares ​ shares ​ shares ​ shares ​ power † Directors and Executive Officers:* ​ ​ ​ ​ ​ ​ Wang Wayne Huang (1) 6,511,180 ​ 81,347,127 ​ 87,858,307 ​ 37.4 % 72.7 % Alain Lam — ​ — ​ — ​ — ​ — ​ Mike Yan Yeung (2) 2,468,308 ​ — ​ 2,468,308 ​ 1.1 % 0.2 % Meihui Fan (3) 1,112,000 ​ 3,450,746 ​ 4,562,746 ​ 1.9 % 3.1 % Jimmy Lai — ​ — ​ — ​ — ​ — ​ Hongjiang Zhang — ​ — ​ — ​ — ​ — ​ Bing Xie ​ — ​ — ​ — ​ — ​ — ​ Leon Cheng Deng (4) 1,624,000 ​ — ​ 1,624,000 ​ 0.7 % 0.1 % Hui Wang (5) 2,255,500 ​ — ​ 2,255,500 ​ 1.0 % 0.1 % Pengtao Yu (6) 1,735,856 ​ — ​ 1,735,856 ​ 0.7 % 0.2 % All Directors and Executive Officers as a Group 14,594,844 ​ 81,347,127 ​ 95,941,971 ​ 40.7 % 73.3 % Principal Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HHtech Holdings Limited (7) 6,511,180 ​ 81,347,127 ​ 87,858,307 ​ 37.4 % 72.7 % People Better Limited (8) 17,930,560 ​ 17,930,552 ​ 35,861,112 ​ 15.3 % 17.5 % Notes: † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
To our knowledge, as of February 28, 2025, 137,357,820 of our Class A ordinary shares were held by one record holder in the United States, which was Deutsche Bank Trust Company Americas, the depositary of our ADS program.
People Better Limited is a wholly-owned subsidiary of Fast Pace Limited, which is a wholly-owned subsidiary of Xiaomi. To our knowledge, as of February 28, 2026, 156,808,380 of our Class A ordinary shares were held by one record holder in the United States, which was Deutsche Bank Trust Company Americas, the depositary of our ADS program.
Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against a company in China for disputes if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit. 111 Table of Contents It will be, however, difficult for U.S. shareholders to originate actions against us in the PRC in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding the ADSs or our ordinary shares, to establish a connection to the PRC for a PRC court to have jurisdiction as required under the PRC Civil Procedures Law.
Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against a company in China for disputes if they can establish sufficient nexus or other appropriate connection to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit.
Lai serves as an independent director on the board of directors of FinVolution Group, an NYSE-listed company and an online consumer finance provider in China. Prior to joining China Online Education Group, Mr. Lai served as the chief financial officer of Chukong Technologies Corp., a mobile entertainment platform company in China, from 2013 to 2015. Mr.
Lai served as Chief Financial Officer of China Online Education Company between June 2015 and December 2018. Prior to joining China Online Education Group, Mr. Lai served as the chief financial officer of Chukong Technologies Corp., a mobile entertainment platform company in China, from 2013 to 2015. Mr.
In addition, during his service to Kingsoft, he also served as a director at various public companies listed in the United States, including Cheetah Mobile Inc., Xunlei Limited and 21 Vianet Group, Inc., all listed in the United States. Prior to joining Kingsoft, Dr.
Zhang also served as an executive director and the chief executive officer of Kingsoft Cloud, from January 2012 to December 2016. During his service to Kingsoft, he also served as a director of Cheetah Mobile Inc., Xunlei Limited and 21 Vianet Group, Inc., all listed in the United States. Prior to joining Kingsoft, Dr.
The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.
The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
The maximum aggregate number of shares which may be issued initially pursuant to all awards under the 2018 Plan is 9,559,607 ordinary shares.
In November 2025, our board of directors approved the amendment and restatement of the 2018 Plan to extend the term of the plan and the term of the 2018 Plan’s evergreen provision by seven years. The maximum aggregate number of shares which may be issued initially pursuant to all awards under the 2018 Plan is 9,559,607 ordinary shares.
The registered address of People Better Limited is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. People Better Limited is a wholly-owned subsidiary of Fast Pace Limited, which is a wholly-owned subsidiary of Xiaomi.
(8) Represents 17,930,552 Class B ordinary shares and 17,930,560 Class A ordinary shares (including in the form of ADSs) held by People Better Limited. The registered address of People Better Limited is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
Mike Yan Yeung. (3) Represents (i) the Class A ordinary shares held by Mr. Meihui Fan; and (ii) the 3,450,746 Class B ordinary shares held by Fandler Holding Limited, a British Virgin Islands company. Fandler Holding Limited is wholly owned by Telomere Holding Limited, which in turn is wholly owned by a trust established for the benefit of Mr.
(3) Represents (i) 160,000 Class A ordinary shares in the form of ADSs held by Mr. Meihui Fan; (ii) 520,000 Class A ordinary shares that Mr. Meihui Fan has the right to acquire within 60 days; and (iii) 432,000 Class A ordinary shares and 3,450,746 Class B ordinary shares held by Fandler Holding Limited, a British Virgin Islands company.
Meihui Fan and his family members. Mr. Fan is the sole director of Fandler Holding Limited, and also the settlor and investment decision maker of the abovementioned trust. Therefore, Mr. Fan is entitled to exercise voting and dispositive power over the shares held by Fandler Holding Limited. The registered address of Fandler Holding Limited is at NovaSage Chambers, P.O.
Fandler Holding Limited is wholly owned by Telomere Holding Limited, which in turn is wholly owned by a trust established for the benefit of Mr. Meihui Fan and his family members. Mr. Fan is the sole director of Fandler Holding Limited, and also the settlor and investment decision maker of the abovementioned trust. Therefore, Mr.
Box 4389, Road Town, Tortola, British Virgin Islands. (4) Represents the Class A ordinary shares in the form of ADSs held by Mr. Jimmy Lai. (5) Represents the Class A ordinary shares held by Mr. Leon Cheng Deng. (6) Represents the Class A ordinary shares held by Mr. Hui Wang.
Fan is entitled to exercise voting and dispositive power over the shares held by Fandler Holding Limited. The registered address of Fandler Holding Limited is at NovaSage Chambers, P.O. Box 4389, Road Town, Tortola, British Virgin Islands. (4) Represents 1,624,000 Class A ordinary shares in the form of ADSs held by Mr. Leon Cheng Deng.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2024: ​ ​ ​ ​ As of ​ ​ December 31, ​ ​ 2024 Function: Research and development 467 Selling and marketing 136 Administrative 105 Supply chain management 57 Total 765 ​ As of December 31, 2024, we had 655 employees in mainland China, 51 employees in North America, 50 employees in Europe, 1 employee in South America and 8 employees in other countries in Asia.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, ​ ​ 2025 Function: ​ Research and development 465 Selling and marketing 138 Administrative 105 Supply chain management 55 Total 763 ​ As of December 31, 2025, we had 643 employees in mainland China, 55 employees in North America, 54 employees in Europe, one employee in South America and 10 employees in other countries in Asia. 104 Table of Contents We believe we offer our employees competitive compensation packages and a merit-based work environment that encourages initiative, and as a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.
Removed
Lai also serves as chief financial officer of a biotechnology company, Acepodia, Inc., since March 2021. Mr. Lai has served as the chief financial officer of China Online Education Group, an NYSE-listed company and an online English language education services provider in China, from June 2015 to December 2018. In addition to his role at China Online Education, Mr.
Added
Lai also serves as an independent director on the board of directors of FinVolution Group, an NYSE-listed company and an online consumer finance provider in China, an independent director of Youdao, an NYSE-listed company, an education technology company in China, as well as China Online Education Company, an NYSE-listed company. Mr.
Removed
Zhang also served as a director and the chief executive officer of Kingsoft Cloud, a subsidiary of Kingsoft Corporation Limited, from January 2012 to December 2016.
Added
The 2015 Plan consists of a share incentive plan for U.S. service providers and a share incentive plan for PRC service providers. In April 2026, our board of directors approved the amendment and restatement of the 2015 Plan to extend the term of the plan by 10 years.
Removed
(1) Restricted share units As of March 31, 2025, other employees as a group held outstanding options to purchase 17,634,093 Class A ordinary shares of our company, at a weighted average exercise price of US$0.03 per share, 2,076,217 restricted shares, and 5,491,218 restricted share units. C. Board Practices Our board of directors consists of seven directors.
Added
Huang is entitled to exercise voting and dispositive power over the shares held by HHtech Holdings Limited.
Removed
Employees We had 987, 839 and 765 employees as of December 31, 2022, 2023 and 2024, respectively.
Added
(5) Represents 1,495,500 Class A ordinary shares held by Mr. Hui Wang and 760,000 Class A ordinary shares that Mr. Hui Wang has the right to acquire within 60 days. (6) Represents 1,735,856 Class A ordinary shares in the form of ADSs held by Mr. Pengtao Yu.
Removed
We believe we offer our employees competitive compensation packages and a merit-based work environment that encourages initiative, and as a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.
Added
It will be, however, difficult for U.S. shareholders to originate actions against us in the PRC in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding the ADSs or our ordinary shares, to establish a connection to the PRC for a PRC court to have jurisdiction as required under the PRC Civil Procedures Law.
Removed
Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis. * Less than 1% of our total outstanding ordinary shares and aggregate voting power. ** Mr. Wang Wayne Huang’s business address is 3090 Bristol Street, Suite 400, Costa Mesa, CA 92626. Mr.
Removed
Pengtao Yu’s business address is 1551 McCarthy Blvd., Suite 107, Milpitas, CA 95035. 109 Table of Contents (1) Represents (i) 60,076 Class A ordinary shares in the form of ADSs held by Mr.
Removed
(9) Based on the statement on Schedule 13G filed on February 1, 2019 jointly by (i) People Better Limited, a British Virgin Islands company, (ii) Fast Pace Limited, a British Virgin Island company and (iii) Xiaomi, pursuant to which 35,861,112 Class B ordinary shares are held by People Better Limited.
Removed
(10) Based on the statement on Schedule 13G/A filed on April 11, 2025 by Allspring Global Investments Holdings, LLC., a Delaware limited liability company with the address of 1415 Vantage Park Drive, Charlotte, 28203, North Carolina, United States.
Removed
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. ​ 110 Table of Contents Enforceability of Civil Liabilities A majority of our operations are conducted outside of the United States, and a majority of our assets are located outside of the United States.
Removed
We have appointed Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

6 edited+0 added−0 removed1 unchanged
As of December 31, 2024, the amount due from Xiaomi and its affiliates was US$0.5 million. In the year ended December 31, 2023, we recorded US$92.0 million in revenues from Xiaomi and its affiliate primarily for the sales of Xiaomi Wearable Products. As of December 31, 2023, the amount due from Xiaomi and its affiliates was US$5.4 million.
In the year ended December 31, 2023, we recorded US$92.0 million in revenues from Xiaomi and its affiliate primarily for the sales of Xiaomi Wearable Products. As of December 31, 2023, the amount due from Xiaomi and its affiliates was US$5.4 million.
In 2023, we transferred the technologies related to Huangshan-2/2S smart wearable chips to Whale Microelectronics Co., Ltd., a subsidiary of Jiangsu Yitong, an affiliate of our company, for a total consideration of US$3.0 million. 112 Table of Contents C. Interests of Experts and Counsel Not applicable. ​
In 2023, we transferred the technologies related to Huangshan-2/2S smart wearable chips to Whale Microelectronics Co., Ltd., a subsidiary of Jiangsu Yitong, an affiliate of our company, for a total consideration of US$3.0 million. C. Interests of Experts and Counsel Not applicable. ​ 109 Table of Contents
Directors and Senior Management— Employment Agreements and Indemnification Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—2015 Share Incentive Plan,” “—2018 Share Incentive Plan” and “—2023 Share Incentive Plan.” Our Relationship with Xiaomi As of February 28, 2025, Xiaomi held 15.6% of our total outstanding shares, and has appointed one director to our board.
Directors and Senior Management— Employment Agreements and Indemnification Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—2015 Share Incentive Plan,” “—2018 Share Incentive Plan” and “—2023 Share Incentive Plan.” Our Relationship with Xiaomi As of February 28, 2026, Xiaomi held 15.3% of our total outstanding shares, and has appointed one director to our board.
Other Transactions with Related Parties In 2022, 2023 and 2024, we purchased raw materials from Whale Microelectronics Co., Ltd., a subsidiary of Jiangsu Yitong, an affiliate of our company, with total transaction amount of US$33.0 million, US$12.3 million and US$3.3 million, respectively.
Other Transactions with Related Parties In 2023, 2024 and 2025, we purchased raw materials from Whale Microelectronics Co., Ltd., a subsidiary of Jiangsu Yitong, an affiliate of our company, with total transaction amount of US$12.3 million, US$3.3 million and US$4.3 million, respectively. In 2025, we provided certain R&D services to Whale Microelectronics Co., Ltd, with amount of US$2.1 million.
In the year ended December 31, 2022, we recorded US$253.8 million in revenues from Xiaomi and its affiliate primarily for the sales of Xiaomi Wearable Products and self-branded products and others. As of December 31, 2022, the amount due from Xiaomi and its affiliates was US$17.2 million.
In the year ended December 31, 2024, we recorded US$11.0 million in revenues from Xiaomi and its affiliate primarily for the sales of Xiaomi Wearable Products. As of December 31, 2024, the amount due from Xiaomi and its affiliates was US$0.5 million.
In February 2023, we entered into a new business cooperation agreement with Xiaomi for the next two years, which had expired in January 2025. Transactions with Xiaomi In the year ended December 31, 2024, we recorded US$11.0 million in revenues from Xiaomi and its affiliate primarily for the sales of Xiaomi Wearable Products.
Transactions with Xiaomi In the year ended December 31, 2025, we recorded nil in revenues from Xiaomi and its affiliate primarily for the sales of Xiaomi Wearable Products. As of December 31, 2025, the amount due from Xiaomi and its affiliates was US$0.1 million.

Other ZEPP 10-K year-over-year comparisons