SANTA CLARA, Calif., Aug. 26, 2025 /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, 2025 and the declaration of a cash dividend.

Second Quarter 2025 Financial Highlights

   -- Total revenue was US$80.1 million, up approximately 9.3% year-over-year 
      (2Q2024: US$73.3 million). 
 
   -- Platform-as-a-service ("PaaS") revenue was US$58.1 million, up 
      approximately 7.0% year-over-year (2Q2024: US$54.3 million). 
 
   -- Software-as-a-service ("SaaS") and others revenue was US$11.1 million, up 
      approximately 15.6% year-over-year (2Q2024: US$9.6 million). 
 
   -- Smart solution revenue was US$10.9 million, up approximately 16.7% 
      year-over-year (2Q2024: US$9.4 million). 
 
   -- Overall gross margin was 48.4%, up 0.4 percentage point year-over-year 
      (2Q2024: 48.0%). Gross margin of PaaS increased to 48.7%, up 1.1 
      percentage points year-over-year (2Q2024: 47.6%). 
 
   -- Operating margin was 1.4%, improved by 15.5 percentage points 
      year-over-year (2Q2024: negative 14.1%). Non-GAAP operating margin was 
      10.7% (2Q2024: 10.0%). 
 
   -- Net margin was 15.7%, improved by 11.4 percentage points year-over-year 
      (2Q2024: 4.3%). Non-GAAP net margin was 25.1% (2Q2024: 28.4%). 
 
   -- Net profits were US$12.6 million, up approximately 302.4% year-over-year 
      (2Q2024: US$3.1 million). Non-GAAP net profits were US$20.1 million 
      (2Q2024: US$20.8 million). 
 
   -- Net cash generated from operating activities was US$18.2 million, up 
      approximately 53.8% year-over-year (2Q2024: US$11.8 million). 
 
   -- Total cash and cash equivalents, time deposits and treasury securities 
      recorded as short-term and long-term investments were US$1,006.3 million 
      as of June 30, 2025, compared to US$1,016.7 million as of December 31, 
      2024, decreased mainly due to payment of cash dividends. 

For further information on the non-GAAP financial measures presented above, see the section headed "Use of Non-GAAP Financial Measures."

Second Quarter 2025 Operating Highlights

   -- PaaS customers1 for the second quarter of 2025 were approximately 2,100 
      (2Q2024: approximately 2,100). Total customers for the second quarter of 
      2025 were approximately 3,000 (2Q2024: 3,000). 
 
   -- Premium PaaS customers2 for the trailing 12 months ended June 30, 2025 
      were 285 (2Q2024: 280). In the second quarter of 2025, the Company's 
      premium PaaS customers contributed approximately 88.6% of its PaaS 
      revenue (2Q2024: approximately 84.8%). 
 
   -- Dollar-based net expansion rate ("DBNER")3 of PaaS for the trailing 12 
      months ended June 30, 2025 was 114% (2Q2024: 127%). 
 
   -- Registered AI developers were over 1,514,000 as of June 30, 2025, up 15% 
      from approximately 1,316,000 developers as of December 31, 2024. 
 
1. The Company defines a PaaS customer for a given period as a customer who 
has directly placed orders for PaaS with the Company during that period. 
2. 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. 
3. The Company calculates DBNER of PaaS for a trailing 12-month period by 
first identifying all customers in the prior 12-month period (i.e., those have 
placed at least one order for PaaS during that period), and then calculating 
the quotient from dividing the PaaS revenue generated from such customers in 
the current trailing 12-month period by the PaaS revenue generated from the 
same group of customers in the prior 12-month period. The Company's DBNER may 
change from period to period, due to a combination of various factors, 
including changes in the customers' purchase cycles and amounts and the 
Company's customer mix, among other things. DBNER indicates the Company's 
ability to expand customer use of the Tuya platform over time and generate 
revenue growth from existing customers. 
 

Mr. Xueji (Jerry) Wang, Founder and Chief Executive Officer of Tuya, commented, "Amid global trade uncertainty and continued supply chain pressure in the discretionary consumer electronics sector, Tuya maintained resilient profitability and solid business growth in the first half of 2025. Revenue grew by approximately 15% year over year, while the Company's non-GAAP operating profit rose by around 127%, demonstrating the resilience of our business model and our effective operating leverage. Looking ahead, we will remain committed to our long-term strategy, cultivating deep relationships with core customers and exploring opportunities in regional markets while optimizing resource allocation. Through sound financial management and continuous innovation, Tuya aims to create lasting value for our shareholders and the broader industry."

Mr. Yi (Alex) Yang, Director and Chief Financial Officer of Tuya, added, "Supported by strong product capabilities and a diversified revenue structure, Tuya maintained its healthy financial performance in the second quarter of 2025. All business segments achieved year-over-year growth, driving a total revenue increase of approximately 9.3%. Despite the ongoing pressures on global trade and manufacturing, our overall gross margin remained strong at around 48%. Through prudent cost management and continued expense optimization, the Company's non-GAAP net profit margin also remained above 25%. At the same time, we continued to generate strong net operating cash flow and a solid net cash position, laying a firm foundation for Tuya's long-term, steady, and sustainable growth amid a challenging macroeconomic environment while also providing continued shareholder returns through dividends."

Second Quarter 2025 Unaudited Financial Results

REVENUE

Total revenue in the second quarter of 2025 increased by 9.3% to US$80.1 million from US$73.3 million in the same period of 2024.

   -- PaaS revenue (formerly known as "IoT Paas") in the second quarter of 2025 
      increased by 7.0% to US$58.1 million from US$54.3 million in the same 
      period of 2024, primarily due to increasing demand compared with the same 
      period of 2024 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 this April. As 
      a result, the Company's DBNER of PaaS for the trailing 12 months ended 
      June 30, 2025 softened to 114%, compared to 127% for the trailing 12 
      months ended June 30, 2024. 
 
   -- SaaS and others revenue in the second quarter of 2025 increased by 15.6% 
      to US$11.1 million from US$9.6 million in the same period of 2024, 
      primarily due to an increase in revenue from cloud software products. 
      During the quarter, the Company remained committed to offering 
      value-added services and a diverse range of software products with 
      compelling value propositions to its customers. 
 
   -- Smart solution revenue in the second quarter of 2025 increased by 16.7% 
      to US$10.9 million from US$9.4 million in the same period of 2024, 
      primarily due to the increasing customer demand for smart devices with 
      integrated intelligent software capabilities the Company developed beyond 
      IoT. 

COST OF REVENUE

Cost of revenue in the second quarter of 2025 increased by 8.7% to US$41.4 million from US$38.1 million in the same period of 2024, generally in line with the increase in the Company's total revenue.

GROSS PROFIT AND GROSS MARGIN

Total gross profit in the second quarter of 2025 increased by 10.1% to US$38.7 million from US$35.2 million in the same period of 2024. The gross margin in the second quarter of 2025 was 48.4%, compared to 48.0% in the same period of 2024.

   -- PaaS gross margin in the second quarter of 2025 was 48.7%, compared to 
      47.6% in the same period of 2024. 
 
   -- SaaS and others gross margin in the second quarter of 2025 was 72.0%, 
      compared to 71.0% in the same period of 2024. 
 
   -- Smart solution gross margin in the second quarter of 2025 was 22.5%, 
      compared to 26.8% in the same period of 2024. 

Gross margin of each revenue stream increased or fluctuated primarily due to changes in products and solutions mix. As an AI developer platform with rich ecosystem of smart devices and applications, the Company is committed to focusing on software products with compelling value propositions while maintaining cost efficiency.

OPERATING EXPENSES

Operating expenses decreased by 17.3% to US$37.7 million in the second quarter of 2025 from US$45.5 million in the same period of 2024. Non-GAAP operating expenses increased by 8.3% to US$30.2 million in the second quarter of 2025 from US$27.8 million in the same period of 2024. 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 2025 were 
      US$22.4 million, down 2.7% from US$23.0 million in the same period of 
      2024, primarily because of (i) the lower share-based compensation 
      expenses as equity incentive awards granted at higher valuations in 
      previous years have been gradually amortized and (ii) partially offset by 
      an increase in cloud services costs, and employee-related costs due to 
      regular team movements. Non-GAAP adjusted research and development 
      expenses in the second quarter of 2025 were US$20.9 million, compared to 
      US$19.6 million in the same period of 2024. 
 
   -- Sales and marketing expenses in the second quarter of 2025 were US$7.8 
      million, down 16.6% from US$9.4 million in the same period of 2024, 
      primarily because of (i) the decrease in employee-related costs due to 

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