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.

   -- 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."

   -- 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. 
   1. 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.