Tuya, Inc. Q1 FY2025 earnings call

• Revenue grew ~21% y-o-y with solid gross margin, achieving record GAAP net profit in an offseason. - Since年初, faced micro environment uncertainties but leveraged AI capabilities, launching Tuya AI agent development platform and hosting Global Developer Conference 2025. - Q1 blended gross margin 48.5%, net operation expenses down 18% y-o-y due to reduced share-based comp. - Completed foundational AI product dev and service system, driving operating leverage. - MSCI upgraded ESG rating from single A to double A.

In Q1 2025, Tuya achieved approximately $74.7 million in revenue, representing a year-over-year growth of about 21.1%. Revenue growth was led by home appliances, followed by security censoring and electrical analyzing products. SaaS and others generated ~$10 million revenue, growing ~15.5% y-o-y. Smart solution revenue reached ~$11 million, up ~47.1% y-o-y. Blended gross margin stood at about 48.5%, with past gross margin rising to 48.4% due to product mix changes. SaaS had a gross margin of 74.4% and smart solution 25.7%. Regional revenue sources: Europe accounted for about one-third, Asia Pacific (excluding China), China, and Latin America each contributed ~15%, and other regions combined for 5%.

• Acknowledged short-term uncertainties like tariffs and geopolitical pressures. - Believes AI presents strategic opportunities for future, with long-term confidence in AIoT track despite short-term bumps. - Tariffs cause short-term demand uncertainty but expects normalcy post-negotiations.

• Geopolitical pressures and trade fluctuations causing customer hesitation and slowdown in proactive decisions. - Tariffs impacting global economy and retail pricing, potentially lowering buying power and causing macroeconomic concerns.

Q: Regarding AIoT development platform, which AIoT hardware is doing well and customer behavior around tariffs in past 2 months.

A: For AI, audio/video interactive experiences (e.g., bird feeders, toys) and data-based dynamic decision making (e.g., energy management) are popular. Customers are more conservative post-tariff changes, waiting for certainty; tariffs impact indirectly via customers' manufacturing and supply chain decisions.

Q: On AI monetization, pricing model difference vs traditional IoT PaaS, and full year/second quarter outlook.

A: AI monetization integrates into existing PaaS/SaaS models, with possible different pricing for AI-enabled offerings. Short-term tariff uncertainties cause demand bumps, but long-term confident in recovery; PaaS margin expected to remain in right range.

Q: Progress of cooperation with Singapore and Chery, and AI developers expansion.

A: Partnered with Singapore HDB for centralized energy management platform, with deployment starting end of Q3. AI developers are in educating phase, with global demand from various regions, focusing on device and software development.

Q: How Tuya uses AI internally, impact on margins and costs.

A: AI used internally in marketing (content generation), operations (webinar content), HR (resume review), and development (project management, code debugging) to improve efficiency and lower costs.