TUYA

Interested in Tuya Inc. Sponsored ADR? Here are five stocks we like better. Tuya’s Q2 revenue rose 16% year over year to $92.9 million, accelerating from 8.3% growth in Q1. PaaS revenue increased 16.9% and smart home and robot products grew 23.2%, while gross profit reached approximately $43 million. The company remained profitable, reporting approximately $9.3 million in GAAP operating profit, $18.6 million in net profit and $6.2 million in operating cash flow. Tuya ended the quarter with roughly $976 million in liquid assets. Management is prioritizing an AI-focused strategy spanning AI home, energy, robots and consumer hardware, supported by its new Tuya Cobuilder developer tool. Regional demand was strongest in Europe, while Middle East activity remained paused and North American price-sensitive device demand fluctuated. Tuya (NYSE:TUYA) reported second-quarter 2026 revenue of $92.9 million, up 16% from a year earlier and accelerating from 8.3% growth in the first quarter, as its platform-as-a-service business and smart home and robot products posted double-digit gains. Founder and CEO Jerry Wang said the company maintained growth despite what he described as a complex global operating environment. He attributed the performance to increasing smart-product penetration, steady demand in home appliances, adoption of differentiated products such as smart door locks, and demand for emerging AI-enabled categories. → 3 Beaten-Down Stocks That Haven’t Gotten the Message About the S&P 500’s Record Run “Our total revenue reached $92.9 million, a year-over-year increase of 16%, with growth accelerating from the first quarter,” Wang said. He added that the company is pursuing an AI-focused strategy centered on platformization, productization and scenario-based deployment rather than solely on foundation models or standalone features. Co-Founder and CFO Alex Yang said PaaS revenue rose 16.9% year over year to approximately $67.9 million, making it the company’s primary growth driver. Tuya’s trailing-12-month PaaS premium customer count stood at 318 at the end of the quarter, and those customers accounted for about 89.5% of PaaS revenue. → 3 Stocks Came Roaring Back—Now They’re Flashing Warning Signs AI application and other revenue increased 3.9% to approximately $11.5 million, driven primarily by cloud-based services including video cloud storage. Smart home and robot products revenue increased 23.2% to approximately $13.5 million, supported by customer demand for smart-security, energy and other differentiated products. Yang said PaaS growth was led by home appliances, smart door locks, electronics, energy products and AI companion product solutions. Home-appliance growth reflected customer rollouts of smart-enabled models, geographic expansion, a larger contribution from smart-enabled products and the migration of certain overseas brand projects from legacy solutions to Tuya’s platform. → 2 Biotech Stocks Shaping Up for Major Breakouts Smart-door-lock demand was supported by adoption of audio-video and low-power Wi-Fi solutions, according to Yang. However, he said demand recovery in traditional lighting and IP cameras remained comparatively slow, demonstrating differing trends across product categories and regions. Tuya’s blended gross margin was 46.3% in the quarter. Segment gross margins were 46.8% for PaaS, 72% for AI application and other revenue, and 21.9% for smart home and robot products. Gross profit increased 11.1% from a year earlier to approximately $43 million. Yang said margin changes were driven by semiconductor-cost volatility and changes in business mix. The company generally passed increased costs through to customers during the quarter, prioritizing gross-profit maintenance rather than holding gross-margin percentages steady. He said the company had built inventory and cost buffers and expects to work toward more stable material costs over the next two or three quarters. GAAP operating expenses declined 10.4% year over year to approximately $33.7 million, primarily because of lower share-based compensation expense. GAAP operating profit totaled about $9.3 million, representing a 10% operating margin, while non-GAAP operating profit was approximately $9.6 million, up 11.7% from a year earlier. Net profit was approximately $18.6 million, and non-GAAP net profit was approximately $18.9 million. Yang said the year-over-year decline in non-GAAP net profit primarily reflected lower financial income and foreign-exchange losses, while core operating profit continued to grow. Operating cash flow was positive at $6.2 million. At quarter-end, Tuya had approximately $976 million in liquid assets, including cash and cash equivalents, time deposits and Treasury securities. Management highlighted continued expansion in shipment volumes for AI companion products. During China’s June 18 Shopping Festival, Fuzozo, a product built on Tuya solutions, ranked first in the AI-toy category on Tmall, according to Yang. Other ecosystem products also recorded strong rankings and sales performance on major e-commerce platforms. Yang said the results offered early validation of consumer acceptance and commercialization potential for AI-device formats. The company has been expanding capabilities in multimodal perception, personalization and memory, content services, and user engagement to help customers develop and mass-produce AI-native consumer hardware. Tuya also launched Tuya Cobuilder during the quarter, an AI developer gateway that uses live coding for AI hardware development. The tool allows developers to use natural-language prompts to define products, create user interfaces, develop embedded firmware and AI agents, build workflows, and proceed to device flashing and debugging. The company said its registered developer base exceeded 2.09 million at the end of the quarter. In just over a month after Cobuilder’s launch, its AI-powered panel-generation capability expanded to 30 product categories, with average generation time for a single panel reduced to approximately 190 seconds. Yang said Tuya views Cobuilder as a way to lower development barriers for both hardware developers and product-focused users who may not have coding experience. The company has begun conducting developer webinars and training sessions around the tool. Responding to questions about demand in the second half, Yang said end-market demand and internal business momentum remained within management’s expectations, though recovery was gradual rather than immediate. Europe continued to show strong demand, particularly for energy-related offerings, AI home-management solutions and energy-efficiency products, he said. In Southeast Asia and Latin America, Tuya is seeing potential from telecom-carrier channels as partnerships established about two and a half years ago move toward scaling and commercialization. Yang said business in the Middle East remained paused amid military conflict during the second quarter, although customers continued product-development and concept-definition work. In North America, the company is seeing fluctuations in price-sensitive, lower-priced devices because of supply-chain price increases, and is working with customers on product mix for the second half. In China, Yang said major brands are accelerating their transition from legacy devices to smart products and from first-generation IoT devices to AI-enabled products. He also cited AI companion devices as an emerging category in the market. Looking ahead, Wang said Tuya plans to focus on AI home, AI energy and AI robot applications; improve tools for live coding, agent orchestration and cloud-edge-device collaboration; and expand proven solutions globally while strengthening its developer ecosystem and industry partnerships. Tuya Inc is a global Internet of Things (IoT) platform provider that enables brands, OEMs and developers to create smart products and solutions. The company offers a suite of cloud services, connectivity modules and software development kits designed to support the full lifecycle of IoT devices. Tuya’s platform is built to facilitate rapid prototyping, secure device management and scalable data analytics, with an emphasis on interoperable solutions for smart homes, commercial buildings and industrial applications. At the core of Tuya’s offering is its IoT operating system, which integrates device hardware, network protocols and application-level services into a unified framework. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tuya Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Total Revenue: $92.9 million, up 16% year over year, accelerating from 8.3% growth in Q1 2026. PaaS Revenue: $67.9 million, up 16.9% year over year. AI Application and Other Revenue: $11.5 million, up 3.9% year over year. Smart Home and Robot Products Revenue: $13.5 million, up 23.2% year over year. Blended Gross Margin: 46.3%. PaaS Gross Margin: 46.8%. AI Application and Others Gross Margin: 72%. Smart Home and Robot Products Gross Margin: 21.9%. Gross Profit: Approximately $43 million, up 11.1% year over year. GAAP Operating Expenses: Approximately $33.7 million, down 10.4% year over year. GAAP Profit from Operations: Approximately $9.3 million, with a GAAP operating margin of 10%. Non-GAAP Profit from Operations: Approximately $9.6 million, up 11.7% year over year, with a non-GAAP operating margin of 10.3%. Net Profit: Approximately $18.6 million. Non-GAAP Net Profit: Approximately $18.9 million. Net Cash from Operating Activities: $6.2 million during the quarter. Total Liquid Assets: Approximately $976 million, including cash, cash equivalents, time deposits, and treasury securities. PaaS Premium Customers: 318 for the trailing 12 months, contributing approximately 89.5% of PaaS revenue. Registered Developers: Exceeded 2.09 million at the end of Q2 2026. Warning! GuruFocus has detected 3 Warning Sign with TUYA. Is TUYA fairly valued? Test your thesis with our free DCF calculator. Release Date: August 25, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenue grew 16% year-over-year to $92.9 million, with PaaS revenue up 16.9%. AI companion product shipments expanded, with Xuzu ranking first in AI toy category on Tmall during June 18 Shopping Festival. Launched Tuya CodeBuilder, an AI-powered live coding tool that reduces AI hardware development cycles and has expanded to 30 product categories. Registered developers on the platform exceeded 2.09 million, strengthening the developer ecosystem. Maintained double-digit non-GAAP operating margin at 10.3%, with net cash from operations positive at $6.2 million. Gross margin declined due to upstream semiconductor cost fluctuations and business mix changes. AI application segment revenue growth slowed to 3.9% year-over-year, impacted by a shift away from lower-margin B2B projects. Demand recovery in traditional lighting and IP camera categories has been slow, reflecting divergent performance across product segments. Middle East business remains paused due to military conflict, with no recovery expected until late Q3 or Q4. North America demand is price-sensitive, with fluctuations in low-price devices due to supply chain pricing increases. Q: What is the growth or demand outlook for the second half of 2026, and can you provide a breakdown by geographic region? A: Alex Yang (Co-Founder, CFO): The overall momentum is within expectations, with a gradual climb rather than an overnight recovery. Europe shows strong demand, especially for energy-related segments and AI home management solutions. Southeast Asia and Latin America are driven by strategic partnerships with telecom carriers, which are scaling into commercialization. The Middle East is paused due to military conflict, with business expected to return possibly by Q3 or Q4. North America is price-sensitive, especially for low-price devices, due to supply chain price increases, but we are adjusting product mixes. China is seeing strong growth in home appliance transformations to AI and booming AI-native categories like AI companions. Q: What were the drivers behind the gross profit margin decline in the IoT PaaS and smart home segments, and what is the margin outlook for the rest of the year? A: Alex Yang (Co-Founder, CFO): The margin decline was primarily due to upstream semiconductor cost fluctuations, which we absorbed by passing through costs to maintain gross profit rather than margin. We have built a good inventory buffer and expect to stabilize cost levels over the next two to three quarters. We aim to stabilize or improve gross margins by offering new capabilities and technologies, focusing on value and competence delivered to customers rather than just cost. Q: What is the current adoption status of Tuya CodeBuilder, and what is the company's strategy for it? A: Alex Yang (Co-Founder, CFO): CodeBuilder was developed after internal use of live coding to improve R&D efficiency. Launched in Q2, it serves as a new default gateway for developers, lowering the barrier to entry. It allows non-developers, like product managers, to define products, add UI, and develop firmware using natural language. We are conducting webinars and training to attract a broader developer base, aiming to enlarge the ecosystem and improve customer R&D efficiency. Q: Why did the AI application segment revenue growth decelerate to 3% in Q2, and what can drive it back to double-digit growth? Also, what is the margin outlook for this segment? A: Alex Yang (Co-Founder, CFO): The slowdown is due to a mix shift, as we are intentionally reducing B2B project-based customization services, which are labor-centric and lower margin. Meanwhile, B2C cloud-based services, such as Video Cloud Storage, grew 22% in Q2. We aim to increase the B2C portion to improve margins, targeting 75% to 80% for cloud-based services, up from the current 72%. This will be achieved by scaling services and improving technical architecture efficiency. Q: Can you provide more color on the performance of the PaaS business and the key growth drivers in Q2? A: Alex Yang (Co-Founder, CFO): PaaS revenue grew 16.9% year-over-year to $67.9 million, driven by strong performance in home appliances, smart door locks, electronics, energy products, and AI companion solutions. Home appliance growth was fueled by customers rolling out smart-enabled models and migrating overseas brand projects to Tuya. Smart door locks benefited from increased adoption of audio-video and low-power Wi-Fi solutions. AI companion products saw expanding shipment volumes, with Xuzu ranking first in AI toy categories on Tmall during the June 18 Shopping Festival. Q: How is the company advancing its AI capabilities beyond foundation models, and what are the key strategic focus areas? A: Jerry Wang (Founder, CEO): We are extending AI capabilities towards platformization, productization, and scenario-based deployment. Key focus areas include AI home, AI energy, and AI robot scenarios. We are enhancing AI development tools like live coding, agent orchestration, and cloud-edge device collaboration to shorten development cycles. We are also advancing global expansion of proven solutions and strengthening the developer ecosystem and industry partnerships. Q: What is the financial performance in terms of profitability and cash flow for Q2 2026? A: Alex Yang (Co-Founder, CFO): We recorded GAAP profit from operations of $9.3 million, with a 10% operating margin. Non-GAAP profit from operations was $9.6 million, up 11.7% year-over-year, with a 10.3% margin. Net profit was $18.6 million, while non-GAAP net profit was $18.9 million. Net cash generated from operating activities was $6.2 million, and total liquid assets were approximately $976 million, providing ample resources for AI development and global expansion. Q: How is the company's developer ecosystem progressing, and what is the impact of Tuya CodeBuilder? A: Alex Yang (Co-Founder, CFO): Registered developers exceeded 2.09 million at the end of Q2. Tuya CodeBuilder, launched in Q2, has expanded its AI-powered panel generation to cover 30 product categories, with average generation time reduced to about 190 seconds. This demonstrates our progress in advancing developer tools beyond assistance towards end-to-end delivery, spanning product definition, software generation, and deployment on physical devices. Q: What are the growth drivers for the smart home and robot products segment, and what is the margin profile? A: Alex Yang (Co-Founder, CFO): Smart home and robot products revenue grew 23.2% year-over-year to $13.5 million, driven by demand for smart security, energy, and differentiated smart products. The gross margin for this segment was 21.9%. We will continue to increase the contribution of high value-added products and strengthen their integration with software and value-added services. Q: How is the company addressing the impact of upstream semiconductor cost fluctuations on margins? A: Alex Yang (Co-Founder, CFO): We have passed through cost increases to maintain gross profit, but we are building a strong inventory buffer to stabilize costs over the next few quarters. We are focusing on delivering value and competence to customers rather than just cost, and we are exploring new capabilities and technologies to improve gross margins overall. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

SANTA CLARA, Calif., Aug. 24, 2026 /PRNewswire/ -- Tuya Inc. ("Tuya" or the "Company") (NYSE: TUYA; HKEX: 2391), a global leading AI cloud platform service provider, today announced its unaudited financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights Total revenue was US$92.9 million, up approximately 16.0% year-over-year (2Q2025: US$80.1 million). Platform-as-a-service ("PaaS") revenue was US$67.9 million, up approximately 16.9% year-over-year (2Q2025: US$58.1 million). AI application & others revenue was US$11.5 million, up approximately 3.9% year-over-year (2Q2025: US$11.1 million). Smart home & robot product revenue was US$13.5 million, up approximately 23.2% year-over-year (2Q2025: US$10.9 million). Overall gross margin was 46.3%, down 2.1 percentage points year-over-year (2Q2025: 48.4%). Gross margin of PaaS was 46.8% (2Q2025: 48.7%). Operating margin was 10.0%, up 8.6 percentage points year-over-year (2Q2025: 1.4%). Non-GAAP operating margin was 10.3% (2Q2025: 10.7%). Net margin was 20.1%, improved by 4.4 percentage points year-over-year (2Q2025: 15.7%). Non-GAAP net margin was 20.4% (2Q2025: 25.1%). Net profits were US$18.6 million (2Q2025: US$12.6 million). Non-GAAP net profits were US$18.9 million (2Q2025: US$20.1 million). Net cash generated from operating activities was US$6.2 million (2Q2025: US$18.2 million). Total cash and cash equivalents, time deposits and treasury securities recorded as short-term and long-term investments were US$976.1 million as of June 30, 2026, compared to US$1,017.3 million as of December 31, 2025. For further information on the non-GAAP financial measures presented above, see the section headed "Use of Non-GAAP Financial Measures." Second Quarter 2026 Operating Highlights Premium PaaS customers[1] for the trailing 12 months ended June 30, 2026 were 318 (2Q2025: 285). In the second quarter of 2026, the Company's premium PaaS customers contributed approximately 89.5% of its PaaS revenue (2Q2025: approximately 88.6%). Registered AI developers were over 2,092,000 as of June 30, 2026, up 16.2% from approximately 1,801,000 developers as of December 31, 2025. The Company defines a premium PaaS customer as a customer as of a given date that contributed more than US$100,000 of PaaS revenue during the immediately preceding 12-month period. Mr. Xueji (Jerry) Wang, Founder and Chief Executive Officer of Tuya, commented, "In the second quarter, despite a complex global operating environment, the Company continued to demonstrate solid growth momentum. Total revenue increased by 16.0% year over year to US$92.9 million, with PaaS revenue increasing by 16.9% and remaining the Company's primary growth driver. This performance reflected resilient demand across selected home appliance categories and increasing adoption of differentiated, AI-enabled products and solutions. Strategically, we continued to advance the productization and real-world deployment of AI. Shipments of our AI-powered companion product solutions continued to expand, while the launch of Tuya Cobuilder further lowered the barriers to AI hardware development by helping developers move more efficiently from product concept to physical-device deployment. Looking ahead, we will remain focused on AI-native application innovation, AI developer platform development and the global expansion of validated solutions." Mr. Yi (Alex) Yang, Director and Chief Financial Officer of Tuya, added, "In the second quarter, total revenue reached US$92.9 million, up 16.0% year over year. PaaS revenue was US$67.9 million, up 16.9%, while Smart home & robot product revenue increased by 23.2% to US$13.5 million and AI application & others revenue increased by 3.9% to US$11.5 million. Despite pressure from product and solution mix and semiconductor supply-chain pricing, gross profit increased by 11.1% year over year to US$43.0 million. Non-GAAP profit from operations increased by 11.7% to US$9.6 million, with non-GAAP operating margin remaining in double digits at 10.3%. We ended the quarter with approximately US$976.1 million in cash and cash equivalents, time deposits and treasury securities, providing continued flexibility to support our AI capabilities, global expansion and long-term strategic investments." Second Quarter 2026 Unaudited Financial Results REVENUE Total revenue in the second quarter of 2026 increased by 16.0% to US$92.9 million from US$80.1 million in the same period of 2025. PaaS revenue in the second quarter of 2026 increased by 16.9% to US$67.9 million from US$58.1 million in the same period of 2025, primarily due to increasing demand compared with the same period of 2025 and the Company's strategic focus on customer needs and product enhancements, despite the disruptions in the international business environment due to tariff-related headwinds since April 2025. Our core customer base remained stable. AI application & others revenue in the second quarter of 2026 increased by 3.9% to US$11.5 million from US$11.1 million in the same period of 2025, primarily due to an increase in revenue from cloud-based services. During the quarter, the Company remained committed to offering recurring value-added services with AI application functions. Smart home & robot product revenue in the second quarter of 2026 increased by 23.2% to US$13.5 million from US$10.9 million in the same period of 2025, primarily due to growing customer demands. GROSS PROFIT AND GROSS MARGIN Total gross profit in the second quarter of 2026 increased by 11.1% to US$43.0 million from US$38.7 million in the same period of 2025. The gross margin in the second quarter of 2026 was 46.3%, compared to 48.4% in the same period of 2025. PaaS gross margin in the second quarter of 2026 was 46.8%, compared to 48.7% in the same period of 2025, partly attributable to recent price fluctuations in the semiconductor supply chain. AI application & others gross margin in the second quarter of 2026 was 72.0%, compared to 72.0% in the same period of 2025. Smart home & robot product gross margin in the second quarter of 2026 was 21.9%, compared to 22.5% in the same period of 2025. Gross margin fluctuated primarily due to changes in product and solution mix, as well as fluctuations in semiconductor supply-chain pricing. As an AI developer platform with a rich ecosystem of smart devices and applications, the Company remains focused on AI offering with compelling value propositions while maintaining economic efficiency. OPERATING EXPENSES Operating expenses decreased by 10.4% to US$33.7 million in the second quarter of 2026 from US$37.7 million in the same period of 2025. Non-GAAP operating expenses increased by 10.9% to US$33.4 million in the second quarter of 2026 from US$30.2 million in the same period of 2025. For further information on the non-GAAP financial measures presented above, see the section headed "Use of Non-GAAP Financial Measures." Research and development expenses in the second quarter of 2026 were US$23.1 million, up 3.4% from US$22.4 million in the same period of 2025, primarily due to i) higher employee-related cost and outsourced labor cost of US$1.2 million, ii) higher third-party cloud service fees of US$0.3 million, iii) partially offset by lower share-based compensation expenses of US$1.1 million as equity incentive awards granted at higher valuations in previous years have been gradually amortized. Non-GAAP adjusted research and development expenses in the second quarter of 2026 were US$22.8 million, compared to US$20.9 million in the same period of 2025. Sales and marketing expenses in the second quarter of 2026 were US$8.3 million, up 6.4% from US$7.8 million in the same period of 2025, primarily because of i) higher employee-related cost of US$0.5 million, ii) higher marketing expense of US$0.2 million, iii) partially offset by lower share-based compensation expenses of US$0.5 million as equity incentive awards granted at higher valuations in previous years have been gradually amortized. Non-GAAP adjusted sales and marketing expenses in the second quarter of 2026 were US$8.3 million, compared to US$7.2 million in the same period of 2025. General and administrative expenses in the second quarter of 2026 were US$4.7 million, down 49.8% from US$9.4 million in the same period of 2025, primarily due to i) lower share-based compensation expenses of US$5.3 million as equity incentive awards granted at higher valuations in previous years have been gradually amortized, ii) partially offset by higher allowance for credit losses of US$0.3 million. Non-GAAP adjusted general and administrative expenses in the second quarter of 2026 were US$4.9 million, compared to US$3.9 million in the same period of 2025. Other operating income, net in the second quarter of 2026 was US$2.4 million, primarily due to the receipt of software value-added tax refunds. PROFIT FROM OPERATIONS AND OPERATING MARGIN Profit from operations in the second quarter of 2026 was US$9.3 million, compared to US$1.1 million in the same period of 2025. The Company had a non-GAAP profit from operations of US$9.6 million in the second quarter of 2026, compared to US$8.6 million in the same period of 2025, demonstrating consistent operating profitability and leverage. Operating margin in the second quarter of 2026 was 10.0%, up 8.6 percentage points from 1.4% in the same period of 2025. Non-GAAP operating margin in the second quarter of 2026 was 10.3%, down 0.4 percentage points from 10.7% in the same period of 2025. NET PROFIT AND NET MARGIN Net profit in the second quarter of 2026 was US$18.6 million, increased by 48.0% from US$12.6 million in the same period of 2025. Non-GAAP net profit in the second quarter of 2026 was US$18.9 million, compared to US$20.1 million in the same period of 2025. Net margin in the second quarter of 2026 was 20.1%, improved by 4.4 percentage points from 15.7% in the same period of 2025. Non-GAAP net margin in the second quarter of 2026 was 20.4%, compared to 25.1% in the same period of 2025. BASIC AND DILUTED NET PROFIT PER ADS Basic and diluted net profit per ADS was US$0.03 in the second quarter of 2026, compared to US$0.02 in the same period of 2025. Each ADS represents one Class A ordinary share. Non-GAAP basic and diluted net profit per ADS was US$0.03 in the second quarter of 2026, compared to US$0.03 in the same period of 2025. CASH AND CASH EQUIVALENTS, TIME DEPOSITS AND TREASURY SECURITIES RECORDED AS SHORT-TERM AND LONG-TERM INVESTMENTS Cash and cash equivalents, time deposits and treasury securities recorded as short-term and long-term investments were US$976.1 million as of June 30, 2026, compared to US$1,017.3 million as of December 31, 2025. The Company believes its current cash position is sufficient to meet its current liquidity and working capital needs. NET CASH GENERATED FROM OPERATING ACTIVITIES Net cash generated from operating activities in the second quarter of 2026 was US$6.2 million, compared to US$18.2 million in the same period of 2025. The net cash generated from operating activities for the second quarter of 2026 mainly due to working capital changes in the ordinary course of business. For further information on non-GAAP financial measures presented above, see the section headed "Use of Non-GAAP Financial Measures." Business Outlook The overall operating environment remains complex, while continuing to show signs of normalization. Participants across the value chain – including manufacturers, brands and channel partners – remain cautious in their planning. At the same time, we have observed more normalized project execution and continued demand recovery across several of our core categories, suggesting that the market is gradually moving from adjustment toward a more stable operating rhythm. Meanwhile, global AI development is entering a new stage of application-led growth. As AI technologies continue to evolve from foundational capabilities toward real-world deployment, enterprises and consumers are increasingly focused on practical use cases, scalable implementation and scenario-based integration with physical devices. This trend is accelerating the convergence of AI and smart hardware and creating new opportunities for application innovation, product expansion and ecosystem collaboration across a wide range of verticals. Against this backdrop, Tuya continues to advance its AI-driven strategy by strengthening its AI developer platform, expanding application-level capabilities and supporting broader deployment across diverse smart-device and industry scenarios. The ongoing evolution of AI applications, together with the Company's platform capabilities, ecosystem strengths and global developer base, will continue to support the creation of diversified, higher-value opportunities over the long term. In this environment, the Company will continue to maintain disciplined execution while selectively investing in AI-driven applications, platform capabilities and ecosystem development. The Company will continue to iterate and improve its products and services, enhance both software and hardware capabilities, and further support customers and developers in bringing AI-driven applications into practical deployment. At the same time, the Company recognizes that its future trajectory may continue to be influenced by a range of external factors, including shifts in consumer demand, regional economic divergence, inventory dynamics, foreign exchange and interest-rate volatility, tariffs and trade-policy adjustments, and broader geopolitical uncertainties. Conference Call Information The Company's management will hold a conference call at 08:30 P.M. U.S. Eastern Time on Monday, August 24, 2026 (08:30 A.M. Hong Kong Time on Tuesday, August 25, 2026) to discuss the financial results. In advance of the conference call, all participants must use the following links to complete the online registration process. Upon registering, each participant will receive the dial-in information and a unique PIN (personal access code) to join the call as well as an email confirmation with the details. Participants Online Webcast Registration:https://edge.media-server.com/mmc/p/x8phnjqd Participants Call Registration:https://register-conf.media-server.com/register/BI2992f21177c7423c83ce142eb2ef031c A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.tuya.com. About Tuya Inc. Tuya Inc. (NYSE: TUYA; HKEX: 2391) is a global leading AI cloud platform service provider with a mission to build an AI developer ecosystem and enable everything to be smart. Tuya has pioneered a purpose-built AI cloud platform with cloud and generative AI capabilities that delivers a full suite of offerings, including Platform-as-a-Service, or PaaS, AI application & others and Smart home & robot products for developers of smart device, commercial applications, and industries. Through its AI developer platform, Tuya has activated a vibrant global developer community of brands, OEMs, AI agents, system integrators and independent software vendors to collectively strive for smart solutions ecosystem embodying the principles of green and low-carbon, security, high efficiency, agility, and openness. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses non-GAAP financial measures, such as non-GAAP operating expenses, non-GAAP profit from operations (including non-GAAP operating margin), non-GAAP net profit (including non-GAAP net margin), and non-GAAP basic and diluted net profit per ADS, as supplemental measures to review and assess its operating performance. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The Company defines non-GAAP financial measures by excluding the impact of share-based compensation expenses and credit-related impairment/(reversal) of long-term investments from the respective GAAP financial measures. The Company presents the non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company also believes that the use of the non-GAAP financial measures facilitates investors' assessment of its operating performance. Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using the aforementioned non-GAAP financial measures is that they do not reflect all items of expenses that affect the Company's operations. Share-based compensation expenses and credit-related impairment/(reversal) of long-term investments have been and may continue to be incurred in the business and are not reflected in the presentation of non-GAAP measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP measures to the most directly comparable U.S. GAAP measures, all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure. Reconciliations of Tuya's non-GAAP financial measures to the most comparable U.S. GAAP measures are included at the end of this press release. Safe Harbor Statement This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statements. In some cases, forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "anticipate", "target", "aim", "estimate", "intend", "plan", "believe", "potential", "continue", "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. The forward-looking statements included in this press release are only made as of the date hereof, and the Company disclaims any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances, except as required by law. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. Investor Relations Contact Tuya Inc.Investor Relations Email: [email protected] HL StrategyHaiyan LI-LABBEEmail: [email protected] Piacente Financial Communications China Tel: +86-10-6508-0677U.S. Tel: +1-212-481-2050Email: [email protected] View original content:https://www.prnewswire.com/news-releases/tuya-reports-second-quarter-2026-unaudited-financial-results-302858533.html

Interested in Tuya Inc. Sponsored ADR? Here are five stocks we like better. Tuya posted stronger Q1 2026 results, with revenue up 8.3% year over year to about $80.9 million and profitability improving, including a GAAP operating margin of 9.2% and net income of $15.8 million. AI is becoming the company’s main growth engine, as Tuya expands “physical AI” applications across smart devices, developer tools and software, including new offerings like Hey Tuya and AI Security Guardian. Core PaaS growth remained solid while hardware shifted toward higher-value products, with PaaS revenue rising 9.8% and AI application revenue up 16.9%, while the company phased out lower-value hardware and focused more on AI-native devices such as smart locks and energy products. Tuya (NYSE:TUYA) reported higher first-quarter 2026 revenue and improved profitability as management said demand continued to recover and the company’s artificial intelligence-related businesses gained traction across software, hardware and developer tools. Founder and CEO Jerry Wang said the company delivered “solid growth momentum and a strong execution capability” despite external uncertainties and regional disruptions. Total revenue rose 8.3% year over year to approximately $80.9 million, with management citing a continued recovery in downstream demand and positive growth for multiple consecutive quarters. → Micron Investors Face a High-Stakes Moment After the Latest Rally Co-founder and CFO Alex Yang said GAAP operating margin reached 9.2%, while non-GAAP operating margin was 10%. Net margin improved to 19.5%, and net profit reached $15.8 million. Tuya recorded profit from operations of about $7.5 million and non-GAAP profit from operations of approximately $8.1 million. Yang attributed the profitability improvement to gross profit growth, disciplined expense management and lower share-based compensation expenses. Total operating expenses were approximately $30.4 million in the quarter, while the company continued investing in AI development and platform capabilities. → How Bad Could Tesla’s Cybertruck Recall Be for Shares? Management emphasized Tuya’s transition toward AI-native applications and what Jerry Wang described as “physical AI,” referring to AI capabilities that interact with and coordinate hardware devices in real-world environments rather than only handling digital tasks. During the quarter, Tuya introduced applications including the AI-powered smart life assistant Hey Tuya and AI Security Guardian. Jerry Wang said these initiatives were intended to validate AI agents’ ability to move beyond digital task handling into physical-world execution and device coordination. → How Berkshire’s New York Times Bet Looks Today Looking ahead, Jerry Wang said Tuya will focus on three areas: advancing AI-native application innovation in consumer categories such as smart toys, expanding proven AI solutions globally in energy and green technology, and strengthening its developer ecosystem through open platforms and enhanced tools. Yang said AI-related business continued to show a strong growth trend and that the company’s revenue mix is shifting toward higher-value segments. He said AI applications are increasingly extending from the platform layer into end devices such as door locks, energy management products, sensors, companion toys and robots. Tuya changed the names of two business segments during the quarter. The former SaaS and others segment is now called AI application and others, while the former Smart solution segment is now called Smart home and robot products. Yang said the changes are presentational and do not affect revenue composition, recognition methods or historical comparability. The PaaS business generated revenue of $59 million, up approximately 9.8% year over year. Tuya ended the quarter with 306 PaaS premium customers, which Yang said reflected stability in the company’s core customer base. The AI application and others segment generated revenue of $11.6 million, up approximately 16.9%. Management said growth was driven by cloud software services and AI application services, including AI cloud storage, energy management and savings, SMS and voice services, app OEM offerings and SDK products. The Smart home and robot products segment generated revenue of $10.2 million, down approximately 6.9%. Yang said the decline reflected Tuya’s decision to phase out lower-value hardware products and shift resources toward higher-value, AI-native hardware terminals. In response to a question from Jefferies analyst Matt Ma, management said it expects recovery in the segment in the coming quarter or two as new offerings begin contributing. Tuya’s blended gross margin was 46.9% in the quarter. By segment, PaaS gross margin was 46.1%, AI application and others gross margin was 71.7%, and Smart home and robot products gross margin was 23%. Yang said the slight year-over-year fluctuation in blended gross margin was mainly due to product mix changes and certain upstream cost variations. In the AI application segment, management said a year-over-year gross margin decline was partly tied to seasonal usage patterns, particularly lower first-quarter usage in the U.S. for service-based revenue. Tuya ended the quarter with more than $1 billion in cash equivalents, time deposits and treasury securities. Yang said the company’s cash position supports continued investment in long-term AI capabilities, the ability to navigate uncertainty and opportunities, and shareholder returns. He also said Tuya will prudently evaluate strategic investment opportunities. Management pointed to several verticals as examples of AI and smart hardware integration. In security, Tuya’s smart door lock business grew 73% year over year. PaaS revenue from Wi-Fi-enabled smart door locks rose 75%, while AI application revenue from video-enabled locks increased 500% year over year. Yang said those results showed that AI and multimodal capabilities are helping the smart lock market evolve from standalone hardware toward a model that combines hardware, software services and AI capabilities. In energy, Yang said PaaS products including EV chargers, metering products and professional metering solutions are emerging as growth drivers. He said demand in Europe for home energy management, energy storage and AI-driven energy-saving solutions continued to grow, and that customers received positive feedback and secured channel partnerships and orders at exhibitions including Light+Building in Frankfurt and Solar Solutions in the Netherlands. Tuya also reported continued progress in its developer ecosystem. At the end of the first quarter, registered AI developers on the platform exceeded 1.96 million. The TuyaOpen documentation platform had accumulated more than 340,000 views and more than 16,000 community members. During the question-and-answer session, Morgan Stanley analyst Yang Liu asked about chipset sourcing and pricing strategy amid global shortages. Management said Tuya noticed cost fluctuations about 1.5 quarters earlier and had taken steps including strategic purchasing before cost increases. Management said this contributed to a slight increase in inventory and that unavoidable cost increases are being passed through downstream without adding margin. Goldman Sachs analyst Timothy Zhao asked about demand and revenue growth outlook amid geopolitical and macro uncertainty. Management said downstream demand began recovering after November of the prior year and continued gradually. Tuya cited stronger momentum in appliances, energy, innovative devices, security and locks, while lighting remained in an evaluation stage. Management also said some categories, such as cameras and control panels with screens, may be more affected by memory chip cost increases. Management said Tuya is balancing fluctuations through its broad hardware category mix and multi-region exposure. Europe, Southeast Asia and Australia were described as areas of strong demand for energy management solutions, while some markets such as Latin America were described as more price-sensitive. In closing, Yang said the first-quarter performance further validated the commercial viability of Tuya’s AI strategy, with the core PaaS business providing a growth foundation and AI application services integrated with physical hardware emerging as a new driver of value creation. Tuya Inc is a global Internet of Things (IoT) platform provider that enables brands, OEMs and developers to create smart products and solutions. The company offers a suite of cloud services, connectivity modules and software development kits designed to support the full lifecycle of IoT devices. Tuya’s platform is built to facilitate rapid prototyping, secure device management and scalable data analytics, with an emphasis on interoperable solutions for smart homes, commercial buildings and industrial applications. At the core of Tuya’s offering is its IoT operating system, which integrates device hardware, network protocols and application-level services into a unified framework. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Tuya Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

This article first appeared on GuruFocus. Total Revenue: USD 80.9 million, up 8.3% year-over-year. Gross Margin: 46.9%, with segment-specific margins of 46.1% for PaaS, 71.7% for AI application and others, and 23% for Smart Home and Robot Products. GAAP Operating Margin: 9.2%, showing significant year-over-year improvement. Non-GAAP Operating Margin: 10%. Net Margin: 19.5%. PaaS Revenue: USD 59 million, up 9.8% year-over-year. AI Application and Others Revenue: USD 11.6 million, up 16.9% year-over-year. Smart Home and Robot Products Revenue: USD 10.2 million, down 6.9% year-over-year. Net Profit: USD 15.8 million. Operating Expenses: USD 30.4 million. Net Operating Cash Flow: Remained positive. Total Cash Equivalent, Time Deposits, and Treasury Securities: Approximately USD 1 billion plus. Number of PaaS Premium Customers: 306. Registered AI Developers: Exceeded 1.96 million. Warning! GuruFocus has detected 4 Warning Sign with TUYA. Is TUYA fairly valued? Test your thesis with our free DCF calculator. Release Date: May 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total revenue increased by 8.3% year over year, showing consistent growth momentum. Gross margin remained healthy, reflecting enhanced product value proposition and platform competitiveness. AI-related business demonstrated strong growth, contributing to the company's steady growth trajectory. Operating margin improved significantly, with GAAP operating margin reaching 9.2% and non-GAAP operating margin at 10%. Net profit reached USD15.8 million, driven by gross profit growth and lower share-based compensation expenses. Smart Home and Robot Product segment experienced a year-over-year revenue decrease of approximately 6.9%. The company faces ongoing uncertainties in the external environment, including geopolitical and macroeconomic challenges. Fluctuations in the product mix and upstream cost variations caused slight year-over-year gross margin fluctuations. The company is dealing with chipset shortages, which could impact cost and pricing strategies. AI application segment's gross margin declined by 2.7 percentage points year over year in the first quarter. Q: Could management update us on Tuya's situation in the value chain, especially regarding chipset sourcing and pricing strategy amidst global shortages? A: Yi Yang, Co-Founder and CFO, explained that Tuya has been proactive in managing chipset fluctuations by leveraging its buying power and strategic purchasing. The company has increased inventory to mitigate cost changes and is passing through inevitable cost increases to downstream customers, while maintaining a focus on minimizing the impact on gross margins. Q: What is Tuya's outlook on demand and revenue growth for the rest of the year, given the dynamic geopolitical and macro environment? A: Yi Yang noted that the international trading environment has stabilized, and downstream demand is gradually recovering. Sectors like appliances, energy, and security are showing positive growth momentum, while lighting remains in an evaluation stage. Tuya is leveraging its comprehensive hardware category mix and multi-region presence to balance fluctuations. Q: How has the competitive landscape evolved with the emergence of device agents, and what are Tuya's advantages in this field? A: Yi Yang highlighted that Tuya is an early adopter of AI capabilities, integrating them into new product designs. The company is leveraging its ecosystem to educate and guide customers in adopting AI features, which are becoming key differentiators in the market. Q: How is Tuya applying AI tools in internal R&D, and what impact does this have on margins and profitability? A: Tuya is using AI extensively across departments, including R&D, finance, and HR, to improve efficiency and capacity. Approximately 40% of UI design codes are generated through AI, and the company is expanding AI usage to enhance development capabilities and meet future demand growth. Q: What is the growth trajectory for the Smart Home and Robot Product segment in 2026, and should we expect a recovery? A: Yi Yang indicated that Tuya expects a recovery in this segment in the coming quarters, driven by new offerings and structural changes. The company is focusing on AI-native devices and reallocating resources to higher-value products, anticipating growth in Q2 or Q3. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Monday, May 11, 2026 at 8:30 p.m. ET Chairman and Chief Executive Officer — Xueji Wang Co-Founder and Chief Financial Officer — Yi Yang Xueji Wang: [Interpreted] Hello, everyone, and thank you for joining Tuya's earnings conference call for the first quarter of 2026. During the quarter, despite ongoing uncertainties in the external environment and disturbances from certain regional factors, the company delivered solid growth momentum and strong execution capabilities, benefiting from a continued recovery in downstream demand, our business scale has been expanding modestly since the fourth quarter. Total revenue increased by 8.3% year-over-year with growth momentum improving quarter-on-quarter and posting positive growth for multiple consecutive quarters. Gross margin remained at a healthy level, reflecting the continued enhancement of our product value proposition and platform competitiveness. [Interpreted] In terms of execution of our key strategies, we continue to advance our AI-driven development strategy. As we have mentioned earlier, AI is shifting from simple feature stacking towards deep integration with hardware devices and vertical industry scenarios. It is gradually evolving from a mere conversational tool into an intelligent agent that interacts and operates in the physical world. This trend has been further validated by a richer portfolio of application offerings and customer scenarios in quarter 1 2026. [Interpreted] At the same time, we are accelerating the transition of AI capabilities from the platform layer to application layer and scenario-based products with successful deployments across multiple real-world use cases. We keep upgrading our developer tools and platform capabilities, empowering global developers to access and apply cutting-edge AI technologies at lower cost and higher efficiency. The sustained growth in AI-related revenue also reflects steady progress across our commercialization efforts. [Interpreted] During the quarter, we introduced a range of applications aligned with this direction, including the AI-powered Smart Life assistant Hey Tuya and AI security Guardian. The significance of these initiatives lies not only in single product, but in validating the capabilities of AI agents to move beyond handling digital tasks into physical world execution and device coordination. We are seeing AI gradually develop the ability to operate across both digital and physical worlds, marking a critical step forward in the real-world deployment of physical AI. [Interpreted] Looking ahead, we will further deepen our strategic focus on the following key areas. First, we will continue to advance AI-native application innovation, centering on high engagement categories such as smart toys. We will accelerate the penetration and large-scale adoption of AI capabilities in consumer scenarios, expanding physical AI into a wider range of everyday use cases. Second, we will scale the global rollout of proven AI solutions, particularly in the energy and green technology sectors. By bringing mature solutions to international markets, we aim to enhance our industry recognition globally. Third, we will continue to strengthen our developer ecosystem. Through open platforms and enhanced tool capabilities, we will lower the barriers to AI application development and work closely with industry partners to drive deeper exploration and commercialization of AI technologies. [Interpreted] Now let me turn the call over to our Co-Founder and CFO, Alex Yang, for a closer look at our financial performance and business progress. Yi Yang: Hello, everyone. This is Alex. I will provide a brief overview of our first quarter results. Please note that, unless otherwise stated, all figures are in U.S. dollars and all comparisons are on a year-over-year basis. In the first quarter of 2026, we generated total revenue of approximately USD 80.9 million, representing a year-over-year increase of around 8.3%. Despite ongoing uncertainties in the external environment, the company maintained its steady growth trajectory. Our core platform business remained stable, while AI-related business continued to demonstrate a strong growth [indiscernible]. Our profitability, our operating margin continued to improve. GAAP operating margin reached 9.2%, representing a significant year-over-year increase, while non-GAAP operating margin was 10%. Net margins further improved to 19.5%, reflecting continued optimization in operating efficiency and cost structure. Overall, the combination of improvements in revenue mix and disciplined expense management has driven sustained profitability gains. Before going into segment details, we would like to note that we have adjusted the name of certain business segments this quarter. So the former SaaS and Others segment has been renamed to AI Application & Others, reflecting our continued push forward AI-enabled software services to add more applications, accurately capturing the transition from traditional cloud services to AI application services. Meanwhile, the former Smart Solutions segment has been renamed to Smart Home & Robot Products, highlighting our increased focus on AI-powered home products, household robotics and scenario-driven AI-initial devices on the hardware side. We would like to emphasize that these changes are purely presentational and do not affect the revenue composition, recognition methods or historical comparabilities of each segment. Within our segments, the PaaS business generated revenue of USD 59 million in this quarter, representing a year-over-year increase of approximately 9.8%. As customer demand gradually recovered, we continue to drive steady growth in our core business through ongoing optimization of our customer mix and PaaS capabilities. At the end of this first quarter, the number of PaaS premium customers reached 306, reflecting the variability of our core customer base and the structural resilience of the platform business. The AI Application & Others segment generated revenue of USD 11.6 million in this quarter, representing a year-over-year increase of approximately 16.9%, continuing to outpace overall company growth. This growth was primarily driven by increased revenue from the cloud software services and AI application services, including AI cloud storage, energy management [ saving ], value-added services like SMS and voice services as well as app OEM and SDK offerings. This reflects the continuous progress in commercialization of our AI applications as more software products completed their AI-driven upgrades. This segment has gradually become a more growth-oriented and software services-centric component of our revenue mix. The Smart Home & Robot Products segment generated revenue of USD 10.2 million, representing a year-over-year decrease of approximately 6.9%. The fluctuation in this segment primarily reflects our proactive efforts to phase out relatively low-value hardware products and optimize the product mix and reallocate resources towards higher value-added, especially AI-initial hardware terminals. As the segment undergoes structural adjustments, we expect the long-term profitability and scalability to gradually improve with a higher mix of higher value products. From an operational perspective, several verticals this quarter has demonstrated structural opportunities driven by the integration of AI and smart hardware. Like in the security segment, our smart door lock business achieved 73% year-over-year growth, driven by upgrades in the multi-modeling Wi-Fi solutions, video intercoms as well as AI voices and vision capabilities. PaaS revenue from Wi-Fi-enabled smart door locks increased 65% year-over-year growth. At the same time, the AI revenues from the video-enabled locks increased substantially 500% year-over-year. This demonstrates that AI and multi-modeling capabilities are driving the traditional smart lock vertical to evolve from a stand-alone hardware model into a higher-value business model of hardware plus software service plus AI capability combined. In the energy sector, related PaaS products, including the EV chargers, metering products and professional metering solutions are emerging as new growth drivers. We are also continuing to advance in the higher-value solutions such as AI-enabled display, gateway and voice capabilities, providing a strong foundation for our customers' product upgrades and future growth. In the AI energy, demand in the European market for home energy management, energy storage and AI-driven energy saving solutions continue to grow. During this quarter, we made solid progress in advancing AI energy-related initiatives with key milestones achieved in the commercialization of energy storage and ecosystem accessories. Our customers received very positive feedback and secured multiple channel partnerships and orders at the exhibition such as Light + Building in Frankfurt and Solar Solutions in the Netherlands. In Singapore's HDB project, new capabilities, app panels and deliveries are progressing on schedule. AI Energy is gradually evolving towards a comprehensive solutions model, integrating hardware bundles, software and AI orchestration plus channel operations. From a regional and scenario perspective, Europe remains a key deployment market for energy and green technology solutions with growing demand for AI energy, smart electrical systems, spatial intelligence applications, AI smart home appliances and AI safety and security protections. In Asia Pacific region, the Singapore HDB project continue to move through implementation and validation, while Southeast Asia and other emerging markets are beginning to generate opportunities in energy management, spatial intelligence and [ SME ] scenarios as well. In China, AI-enabled smart door locks, AI toy and AI home products, including AI companion, continue to attract strong customer interest with some customers already advancing project upgrades and solution integration. On margins, our blended gross margin for this quarter was 46.9%, with slightly year-over-year fluctuation primarily due to the change in the product mix and certain upstream cost variations. By segment, gross margin for PaaS was 46.1%. Gross margin for AI Application & Others was 71.7%, remained stable and reflecting the structural advantage of software and AI-driven business. And the gross margin for Smart Home & Robot Products was 23%, maintaining a level of above 20%. While advancing AI applications and high value, we continue to focus on the cost efficiency and product value. Our expenses, we maintained disciplined cost management during the quarter with total operating expenses, OpEx, of approximately USD 30.4 million, while continually investing in core AI development and platform capability improvements driven by AI and digitization, and digitalizing operations enabled further operating leverage. In terms of profitability, we recorded profit from operations of about USD 7.5 million for this quarter. Non-GAAP profit from operations was approximately USD 8.1 million. Net profit reached USD 15.8 million. The improvement was primarily driven by positive contribution from gross profit growth as well as lower share-based compensation expenses. Our cash flow, net operating cash flow remained positive during this quarter. At the end of this quarter, the company's total cash, cash equivalents, time deposits and treasury securities amounted to approximately USD 1 billion plus. The strong cash position provide solid support for our continued investment in long-term AI capability development, our ability to navigate external uncertainties and opportunities and our [ competitiveness ] to enhance shareholders' returns. We will also prudently evaluate and pursue higher quality strategic investment opportunities. Overall, the company continued to deliver revenue growth and improved profitability in a complex environment while the accelerated development of AI application business is driving the ongoing evaluation of our revenue mix towards higher-value segments. And next, I will briefly walk you through our progress in the AI development ecosystem. Within our development ecosystem, during the first quarter, we continued to advance to the open source capabilities of TuyaOpen and further development on our AI agents. So to better address the diverse needs of AI-native developers, we also launched our new offerings, including the ultra-lightweight agent kit for the hardware developers and the vibe coding based on the Tuya hardware applications. So the vibe coding will be able to help lower the bar for many new developers as well. Those tools enable developers to build a wide range of AI-native hardware products in a more flexible and agile manner. We remain committed to lower the bar for AI hardware and application developments while enhancing flexibility and openness, allowing developers, brands, solution providers to accelerate the process from ideation and prototyping to product commercialization. At the end of the first quarter of 2026, the number of registered AI developers on our platform exceeded 1.96 million, maintaining steady growth. At the same time, engagement within the TuyaOpen community continued to increase. Based on our current ecosystem data, the TuyaOpen documentation platform has been accumulated over 340,000 views with more than 16,000 community members. It has accumulated abundant open-source project resources and launched a standardized demo cases library, covering mainstream application scenarios and development needs. TuyaOpen is gradually evolving from an open-source framework into an open ecosystem infrastructure for the AI hardware innovation. From our deployment perspective, AI capabilities are increasingly extending from the platform layer into a broader range of end devices format. Whether in AI-enabled door locks, energy management solutions, sensors, AI companion toys or AI robots, they all reflect the same underlying trend. AI is evolving from isolated functions towards deep integration with the devices, scenarios and user needs. This is fully aligned with our previously articulated vision of physical AI, enabling AI to engage in real-world environments and actively participate in [ centering ] decision-making and execution in real life. In summary, our first quarter performance further validate the commercial viability of our AI strategy. Our core PaaS business continued to provide a solid growth foundation while the deep integration of AI application services with physical hardware is emerging as a new driver for the value creation. At the same time, we have achieved meaningful progress in deploying AI solutions across high-value scenarios such as energy, entertainment and security. Looking ahead, we will remain focused on 2 key priorities: physical AI scenarios and high value-added AI products. While maintaining financial discipline, we will accelerate the transition of AI technologies from a 2-level capability to products with tangible commercial value, creating sustainable long-term returns to our shareholders. Thank you. Operator, we can begin the Q&A right now. Operator: [Operator Instructions] First question, we have Yang Liu from Morgan Stanley. Yang Liu: Congratulations on the solid results. I would like to ask about the value chain because a lot of the sectors are suffering from the chipset shortage globally. So could management update us in terms of Tuya's situation in value chain, especially the chipset sourcing, and also update us the pricing strategy, if there's any shortage or constraint from the value chain and how to pass through the inflationary cost to the downstream. Yi Yang: Yes. Thank you, Liu. Yes, we really noticed those kind of fluctuations around 1.5 quarters ago. So that's why we gave a heads-up of that type of trend around the end of last year. And so the things we're doing is, the first one is that, considering of large buys of some of the major chips in the industry. And so the fluctuations we maintain as limited as we could because of the buying power. In the same time, for those costs that inevitably we have to increase, so we'll pass through those costs to the downstream side. So that will be the basic idea and how we've been doing. And so you can notice that there are several reactions we've already been doing. The first one is that, in Q1, we already do some strategic purchasing before any cost change. So you can notice that in our balance sheet that our inventory increased slightly. So that majorly is that it's kind of the procurement. We do that before the cost increased. And so that reflected to my inventory level and including my net cash as well. So that's the first one. So we try to use larger inventories to buy more times to working through the fluctuations. The second one is that, you already noticed that, especially on the PaaS side, the change or those kind of difference of the gross margin of PaaS reflects that we're really trying to pass through the cost. But we didn't add the margin on the cost change because we don't want to bring more burden from our downstream side. So that reduced slightly on -- my gross margin on the PaaS as well. We'll continue to keep focus on that and to working along with my customers and through those fluctuations. So no matter, using our scalability to manage the cost difference at the least level as we could. In the same time, we're using our inventories to try to bring more balance coming through with the time. So that will be the basic idea there. But we found that the shortage and the intensity of the momentum continue to increase in Q2 -- in the beginning of Q2. Operator: Our next question will come from the line of Goldman Sachs, Mr. Timothy Zhao. Timothy Zhao: Congrats on the solid results. I think my question is on the revenue front. I noticed that this quarter, you achieved a pretty solid sequential acceleration on the revenue growth. However, given the very dynamic geopolitical and macro environment globally right now, I was just wondering what is your latest thoughts on the demand outlook and revenue growth outlook for the rest of this year? And what measures have you taken to stabilize or further boost the demand? And my second question is that I noticed, as you mentioned, you changed the reporting line or changed the reporting name of the 2 of the segments that you report. Just could you further elaborate on the rationale behind and specifically on AI applications and robotic products? Just wondering if you could share more color on your plan regarding these 2 specific subsegments. Yi Yang: Yes. Thank you for that. So first one on the market environment, we already noticed that as we shared the colors when we released our Q4 results, we found that while the trading -- the international trading environment became stable after the November of last year, so the momentum is starting to recover and the customers are starting to return to a growing trend on the business side. So it's not that conservative. So starting from December, we already see that starting to recover. It's not overnight. So they're doing that gradually. And even though in March, we know that there will be a new fluctuation coming. But overall speaking, the downstream side is recovering. But we have to break down into different sectors. So what we see here is that, like the appliances, like the energy, like the innovative devices, including the securities or the locks, we found that the growth momentum are more positive and almost for sure. So -- because the matter is that we found a more solid [ the amount ] of pain points on the user side and all those sectors, those companies are doing better. But in some other sectors like the lighting, we don't see significant recovery. So it's kind of still doing what we call is into an evaluating stage on the lighting side. And some sectors that those chipset cost variations, not from our side, but from their own side, like the cameras, so all -- like some control panels with the screen, so the memory chip cost variations will bring a more significant cost difference for the finished product for the device side. And the factories and the brands, they can do less to change that direction. So that price increase might be significant for them, like the camera, for business, the entry-level cameras. Usually the FOB price or the retail price will be like -- retail price will be like USD 20 and FOB will be below USD 10. But during those kind of memory chip and non-chip increase, we noticed that the FOB price might be able to hit above USD 15, so which means that the retail price have to increase around -- to USD 35. So that significant increase on the retail price side might bring -- might influence the consumers' buying decision. So we already noticed some sectors might be more sensitive on the -- will be more -- will be impacted more on the cost increase. Some will be more resilient. So that will be on the product sector side. And on the region side, so combined with that is that -- still for the energy that Europe and the Southeast Asia sees strong demand for the -- including Australia, is very strong demand for the energy management solution. Especially in this year, what people are starting to notice is that energy become more and more -- how can I say, energy become more and more crucial and on the cost scalability side. So they have to pre-invest -- they are more willing to pre-invest on any energy efficiency. So for that part. But for some other regions like Latin America, they are more price sensitive. So like I mentioned, some sectors like the cameras for this market consider that they have a lower buying power for the -- based on the macro economy in that sector -- in that region. So for them, that -- so some sectors will meet some challenge out there. So for us is that still we're trying to use our very comprehensive hardware category mix and combined with multi-region mix to go in against different type of fluctuations. We're always looking for opportunity in some regions to balance the seesaw on the other side. So that's overall for the macro environment. And the second one is for the AI transition. Yes, no matter it's AI application or the home robot products, so both sides, we're looking forward to give the market the signal that we're doing so hard to reallocate our resources since 2023 to transit our previous, we'll call, the first version of smart devices offering into the AI-initial offering. So starting from the end of the 2023, we really upgraded our entire platform architectures into large language model hosted, which means that since end of 2023, all those decision-making on the platform side for the device and the software applications can be based on the different large language model or the mainstream one. And in 2024 -- May of 2024, we really launched our hardware agent platform that enable our customers to design an agent on top of the devices to make the devices be more smart and doing some things autonomously. But even no customers understand what it is, but it's the agent. And in last year, we launched our new AI platform as a new AI foundation, including the multi-modeling offerings, including the open-source projects to open some new doors for the new innovation -- innovative ideas for those customers and then give them a bridge, giving a path that how they can combine technology into innovative ideas and make it come to. And in April, in our new developer summit, we launched our new offerings, including the agent kit that allow the hardware designers to do things more freely and including our vibe coding tools that right now, they can design any software, including apps, including the firmware on the hardware side, including the cloud services, they can do that all through vibe coding. So all the things we're doing is that we -- to show that we are kind of an initial AI user and AI enabler. And so for that, we're trying to upgrade our offering in those 2 segments. So take the AI application, for example. We're really starting to provide that for all the cloud storage on the camera side that right now comes in with AI capability. So customers will be able to customize the event. So it's not just [indiscernible] detect any movement on the picture and give you the alarm. And you can find that you [ assume ] false alarm and then you have to turn down the notification, right, because the camera cannot tell whether it's something you should pay attention to or not. Any delivery boys come by, anyone comes from the door, you get alarm. And starting from there, you can build an event that -- so if it's a package, so don't give me notification. And if someone stay at the front door like over 10 minutes a day, a notice. If someone showed up every day and seems like very suspicious, give me a notice. So people start to be able to create their own events and then have the camera to watch out for it. So that means it will provide significantly more values and creating more [indiscernible] pain point for the end user side. So that kind of things upgrade on those kind of offerings is -- it's a natural upgrade from our previous SaaS offering. So we think that right now, we're starting to provide more and more AI capabilities seamlessly to the previous SaaS. And then we show that more and more users start to subscribe that services because of the AI offering, and then we're doing the upgrade on other AI applications. And that's the [indiscernible] scale, it's agent or it's purely services on the recurring model. And for the home products and robotics, so some scenarios is including like the companion that's offering of Tuya toy or AI toy for some customers. Some customers, they have their own brands. They have their own very good toy design capabilities and channel distributions, but they don't have the capability to design things from scratch, especially they don't know anything about coding, they don't know anything about the circuit boards, about the microphone array design. So for some of the part, we're starting to offer the entire solution. And to do that, we'll put more focus not on some, what we call is the, first generation of smart devices; we're starting to focus more on the AI, what we call AI-initial devices. So like the toy, they need the multi-modeling capability. They need the reduced noise canceling and microphone array design and they need the string projection and technologies to reflect different type of reactions from the toy side. So for that part, that's how we allocated the resources since last year. And so right now, for this segment, the direction is that we guide the entire department to put folks on all those kind of AI-enabled and AI-initial devices. And usually, those devices will come naturally with not only the AI feature, but combined with a larger opportunity for the AI application business. So that's how we're driving folks to do that. So not a kind of connected devices segment anymore. It's become a more AI-initial offering for those customers by helping do that. Yes. So that will be the typical use cases. Operator: Our next question will come from the line of Kai Xiao of CICC. Kai Xiao: This is Kai, and I have 2 questions. First one is on competition. So following the emergence of agents, on-device agent deployment has become an industry trend. So could you share how has the competitive landscape evolved in Q1? And how do you view Tuya's advantage in this field? And my second question is on R&D. So could you share how is the company applying AI tools like agent coding tools in internal R&D? And what's the potential impact on margins and profitability? Yi Yang: Yes. So the first one, I already covered some of the parts in the market environment side. So as we see here is that 2 things. The first one, since the customer is trying to kind of escape from over-conservative momentum in our shares, this time to get back into the growth path, so what we're doing is that we just identify the right road map along with them and to fulfill that and help them to providing better products, better offering on their shelf, on their own channels and to catch the customers, catch their own end users, what I mean. And in the same time, we already see that the end user stickiness on AI are growing very, very healthily. So which means that more and more users are trying whatever AI features and AI offerings. And I believe that it's not that significant right now. But in the near future, the consumers when they're sourcing the smart devices, AI features or what type of AI features will be kind of the key differentiations or key factors for them to make the decision. And so we are very happy to see that since second half of last year that our penetration among my ecosystem to integrate the AI capabilities we offer to the new product design and become significant and improved. So that will help us capture the trend. So that's for this part. So what we see is that we'll always be kind of the early adapter and to notice the trend for the industry, maybe 2 or 3 quarters ahead because I can see that how -- what type of technology my customer is trying to pre-study, starting to try and when they start to implement that into the new product road map and produce that. So what we see is in us to consider as early education for the entire industry or in most of the sectors we cover to give them type of the right educational approach that AI will be considered as the next generation of key differentiations for any new things they build and to the market. And so they need to try that or need to try to understand to learn that. Starting from the second half of last year, the customers, majority of the new products or the new projects that they kicked off, they tried that. And so then the new products they start to offer maybe at the end of the last year or at the second of this year, bring that into market going through a long procedure into the development, manufacturing, logistics and to the end design. So that's what we see here. And so it will be a very positive trend. And on the second part is for the AI usage, I'd like to share some things. First one is that at the end of last year, the front end, which means that those ones that design the UI, user interface, and the UX, user experience, are using AI in most for our R&D side overall. And so at the end of last year, around 40% of the codes we designed for UI side are doing through AI. So that's the first one. And we're improving that as well, considering that in this year, in this Q1, the AI coding capability improved a lot. So we found that we can use more AI to do more terminals, including the agent kit I mentioned, for the hardware designers. And the agent kit, a significant part of that is doing by AI. And while we're offering that kit, we also combine with the vibe coding tool for that kit as well. And which means that not us design the kit for AI, but customer will be doing that through the vibe coding more freely as well and very quickly to turn that into a hardware prototype. Also at the same time, the AI usage is not only used for the R&D. So all our departments, including the financial, including the human resources, including the legal department, will be using heavily through AI. So no matter, it's improving our efficiencies on some office processing -- office work processing but also including the data analytics, BI and decision-making, et cetera. So we consider AI to improve the efficiency in 2 parts. The first one is that to release some of my labor to focus more on higher-value work. That's the first one. And the second one is that for the -- even on the coding side, on the development side, that is to enlarge our capacity to meet the future demand growth because we already noticed that while more and more AI-initial developers coming in, that trend is a very good one, is that in this year, we noticed more and more new developers did not come from the hardware industry, which means that people starting to identify that the AI capability might be a new opportunity for new team to engage in the new smart devices business sectors that only come in the new idea and something that didn't happen in the hardware world before. So special one is like the toy companion ones that many of my very fast-growing customers in the toy sectors, they are not toy players out there. And when we'll see, including some of the, what we call, the youth market like they do the batch is -- animation batch is focused on the cartoon. And those batch players, they don't have that business before. So that type of industry breakthrough of crossover players, they require more on the -- they rely more on the AI capability usage themselves and also they are more come with AI-initial ideas or native ideas. So not only to reduce the cost, but also use the same level of cost to improve the capacity to capture those demands. And that's where we'll have more priority to check out too. So like I mentioned that -- so the net cash flow is considered as a strategic strength for the company, not only for the future competition, but also for the future opportunity. I think that's even more important is that while the industry are growing faster and some breakthrough happen, especially like the crossover happens, that we will not hesitate to increase the investment to capture those demand. So I think that will be the overall momentum and so how we use the AI and we empower customers with AI. What we see is that we need to be a very powerful AI user. And until then, we will be able to empower customers. Operator: Our last question will now come from the line of Matt Ma of Jefferies. Matt Ma: I have 2 questions. So the number one is on the Smart Home & Robot Products segment. I would like to know how do we think about the growth trajectory of this segment in 2026? Should we expect a growth recovery in the coming quarters? And my second question is on the AI application segment. We are seeing that the gross margin of this segment has declined by 2.7 percentage points year-on-year in the first quarter. Are there any specific reasons behind that? That's all. Yi Yang: Yes. So the first one is for the AI home and robot products that we're looking for to have the recovery in the coming quarter or in the coming 2 quarters. And because these are structural changes, we have to make the hard decisions. You can see that even to maintain the revenue and the gross profit growth, but in the same time, we cut off some of the products. Even we got the orders, we decided we're not to do that anymore because we don't like the model out there for the long term. And so there is structural hard decisions, even we made some not that good numbers, but we're looking to speed up to catch it up. So we have the new offerings starting to take place in Q2 and looking for to capture orders and deliver that to make it up. So either it's end of the Q2 or it's Q3, we're looking to get the recovery. So that's the first one for the home and robot products. And for the AI applications, yes, we found the seasonal difference. It's very interesting that we find that the key part is that the AI applications is relying on the usage of the end users based on the devices that are running. And the typical thing that we found maybe is that in the Q1, the usage is always kind of the lower season for the entire year. So that's why the usage is kind of low, so the service basis revenue has become lower for us. Maybe one of the reason is that, the Q1, many of the users are kind of the new users and will have the new devices for the Christmas, for the holiday season promotions. And while they're starting to try the products, usually combined with some of the vacations, the usage starting to drop. So we're looking for to see the natural recovery and on the usage side, we're starting to take place on [indiscernible]. So that will be the stuff. So it's kind of very interesting one. Operator: I will now hand the call back to management team for closing remarks. There are no more questions from the line. Allow me to turn the call back. Xuechen Wang: All right. Thank you, operator, and thank you all once again for joining us today. If you have any further questions, please feel free to contact Tuya's IR team. Goodbye, and see you next quarter. Operator: That does conclude today's conference call. 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