Financial Performance - Total revenue for the six months ended June 30, 2022, was $117.9 million, a decrease of approximately 16.7% year-over-year from $141.5 million[14]. - IoT Platform as a Service (PaaS) revenue was $89.4 million, down about 29.5% year-over-year from $126.7 million[14]. - Software as a Service (SaaS) and other revenue increased by approximately 127.6% year-over-year to $12.9 million from $5.7 million[14]. - Overall gross margin for the six months ended June 30, 2022, rose to 42.1%, an increase of 0.4 percentage points from 41.7% in the same period last year[14]. - The net operating profit margin for the six months ended June 30, 2022, was negative 80.5%, a decline of 22.0 percentage points from negative 58.5% in the same period last year[14]. - The operating loss for the six months ended June 30, 2022, was $94.9 million, compared to an operating loss of $82.8 million in the same period of 2021, with an operating margin of negative 80.5%[21]. - Net loss for the six months ended June 30, 2022, was $90.8 million, compared to a net loss of $78.7 million in the same period of 2021, with a net margin of negative 77.1%[22]. - The company reported a net loss of $90.8 million for the six months ended June 30, 2022, compared to a net loss of $78.7 million for the same period in 2021, with a cumulative loss of $458.7 million as of June 30, 2022[26]. - The company reported a total cash flow of $(365,363) thousand for the six months ended June 30, 2022, compared to an increase of $926,082 thousand for the same period in 2021[38]. - The company reported a pre-tax loss of $90,520 thousand for the six months ended June 30, 2022, compared to a pre-tax loss of $78,395 thousand for the same period in 2021, representing an increase of approximately 15%[146]. Customer and Market Growth - The number of IoT PaaS customers increased to approximately 3,800, up from 3,300 in the same period last year[15]. - The number of registered IoT devices and software developers exceeded 629,000, a growth of 23.3% from approximately 510,000 as of December 31, 2021[15]. - The company achieved over 100% year-on-year growth in value-added services products such as "OEM APP" and "voice skill generation" in the second quarter[36]. - The company anticipates challenges in the second half of 2022 due to economic downturns, high global inflation, and inventory backlogs among manufacturers and retailers[40]. - Despite challenges, the company remains confident in the long-term growth prospects of the industry and aims to enhance product and service iterations, expand customer base, and diversify revenue sources[40]. Shareholder Actions and Capital Management - The company repurchased approximately $55.0 million of shares in the form of American Depositary Shares, representing about 27.5% of the $200 million authorized under the repurchase plan announced on August 30, 2021[14]. - The company completed its dual primary listing on the Hong Kong Stock Exchange on July 5, 2022, issuing 7,300,000 Class A ordinary shares[16]. - The net proceeds from the global offering were approximately HKD 70.0 million, which will be used as disclosed in the prospectus[16]. - The company has not utilized the net proceeds from the global offering as of the report date[74]. - The company plans to seek strategic partnerships, investments, and acquisitions, allocating 15% of the net proceeds for this purpose over the next five years[74]. Research and Development - R&D expenses increased by 9.6% to $84.8 million for the six months ended June 30, 2022, compared to $77.4 million in the same period of 2021, due to strategic restructuring[20]. - The company’s research and development efforts are focused on enhancing product offerings and technological advancements[188]. - The company emphasizes the use of non-GAAP financial metrics to assess operational performance, which may not reflect all expenses impacting operations[79]. Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code as per the Listing Rules, except for the separation of the roles of Chairman and CEO, which is held by Mr. Wang[46]. - The Audit Committee has reviewed the unaudited consolidated interim financial information for the six months ended June 30, 2022, and found no disagreements with the accounting policies adopted by the company[52]. - The company has established four committees: Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee, each with clear written terms of reference[49]. - The company’s governance structure includes various committees such as the audit committee and the remuneration committee to ensure compliance and oversight[188]. Financial Position and Assets - Cash and cash equivalents, along with short-term investments, totaled $951.5 million as of June 30, 2022, deemed sufficient to meet liquidity and operational needs[24]. - As of June 30, 2022, cash and cash equivalents, along with short-term investments, amounted to $951.5 million, down from $1,066.1 million as of December 31, 2021[26]. - Total assets amounted to $1,101,622, a decrease of 11.7% from $1,248,150 as of December 31, 2021[85]. - Total liabilities decreased to $108,084, down 19.6% from $134,489 as of December 31, 2021[85]. - The company’s total liabilities related to cloud-based connectivity and IoT services decreased from $2,669 million in 2021 to $1,985 million in 2022, reflecting a decrease of approximately 25.6%[122]. Future Outlook - The company provided a positive outlook for the future, indicating plans for continued market expansion and product development[190]. - Future earnings guidance suggests a continued upward trend in revenue growth[190]. - The company is committed to maintaining compliance with regulatory requirements and corporate governance standards[189].

Financial Performance - Total revenue for the six months ended June 30, 2022 was US$117.9 million, down approximately 16.7% year over year from US$141.5 million[7]. - IoT platform-as-a-service (PaaS) revenue decreased by 29.5% to US$89.4 million from US$126.7 million in the same period of 2021[13]. - SaaS and other revenue increased by 127.6% to US$12.9 million from US$5.7 million in the same period of 2021[14]. - Overall gross margin increased to 42.1%, up 0.4 percentage points year over year[7]. - Operating margin for the six months ended June 30, 2022 was negative 80.5%, down 22.0 percentage points year over year[7]. - Net loss for the six months ended June 30, 2022, was US$90.8 million, compared to US$78.7 million in the same period of 2021, with a non-GAAP net loss of US$56.0 million[22]. - Loss from operations was US$94.9 million for the six months ended June 30, 2022, compared to US$82.8 million in the same period of 2021, with a non-GAAP loss from operations of US$60.1 million[21]. - Non-GAAP loss from operations narrowed by 15.9% to US$22.3 million in the second quarter of 2022 from US$26.5 million in the same period of 2021[47]. - Non-GAAP operating margin improved to negative 35.6% in the second quarter of 2022, indicating early success of efficiency-centric initiatives[47]. Cash and Investments - Total cash, cash equivalents, and short-term investments were US$951.5 million as of June 30, 2022, down from US$1.07 billion as of December 31, 2021[7]. - Cash and cash equivalents at the end of the period were $599,213 thousand, down from $964,576 thousand at the beginning of the period[133]. - Cash flows from investing activities resulted in a net cash outflow of $254,789 thousand in 2022, compared to $152,734 thousand in 2021, highlighting increased investment activity[131]. - The Group's cash and cash equivalents, along with short-term investments, are deemed sufficient to meet anticipated working capital requirements for at least the next 12 months[138]. - As of June 30, 2022, total short-term investments amounted to US$352,300, a significant increase from US$102,134 as of December 31, 2021, representing a growth of approximately 245%[149]. Customer and Market Metrics - IoT PaaS customers increased to approximately 3,800 from 3,300 year over year[8]. - Dollar-based net expansion rate (DBNER) of IoT PaaS decreased to 84% from 211% year over year[8]. - Registered IoT device and software developers increased by 23.3% to over 629,000 as of June 30, 2022[9]. - Smart device distribution revenue increased by 70.3% to US$15.6 million from US$9.1 million in the same period of 2021[15]. - Total revenue from the To-Business ("2B") SaaS and others business reached US$12.9 million in the first half of 2022, up 127.6% year-over-year[41]. Expenses and Losses - Research and development expenses for the six months ended June 30, 2022, were US$84.8 million, up 9.6% from US$77.4 million in the same period of 2021[19]. - Sales and marketing expenses decreased by 15.3% to US$30.3 million for the six months ended June 30, 2022, compared to US$35.8 million in the same period of 2021[19]. - Non-GAAP loss from operations for the six months ended June 30, 2022 was $60,116 thousand, compared to $51,002 thousand for the same period in 2021, indicating an increase in losses of approximately 17.8%[112]. - Non-GAAP net loss for the six months ended June 30, 2022 was $55,996 thousand, compared to $46,870 thousand in 2021, reflecting an increase of about 19.5%[112]. Governance and Shareholder Information - The weighted voting rights structure allows certain beneficiaries to control the company despite not holding a majority economic interest, with Mr. Wang and Mr. Chen controlling approximately 74.19% of effective voting rights[55]. - The company has established four committees: Audit, Compensation, Nomination, and Corporate Governance, to oversee various aspects of its affairs[63]. - The company has complied with the Corporate Governance Code since its listing on July 5, 2022, with specific deviations noted regarding the roles of chairman and CEO[59]. - As of June 30, 2022, the total number of Class A Ordinary Shares issued was 499,146,560 and Class B Ordinary Shares was 79,400,000[76]. - Mr. Wang holds 68,100,000 Class A Ordinary Shares, representing approximately 13.64% of the total Class A shares[76]. Equity Incentive Plan - The 2015 Equity Incentive Plan was amended on June 15, 2022, to comply with the Listing Rules, aiming to attract and retain key personnel[88]. - The plan allows for the issuance of options, restricted shares, and RSUs, with the possibility of distributing ADSs instead of Class A Ordinary Shares[89]. - The remaining life of the 2015 Equity Incentive Plan is approximately 2 years and 3 months[93]. - The maximum exercisable term for options granted is ten years from the date of grant[92]. - The number of outstanding options under the 2015 Equity Incentive Plan is 59,063,975 Class A Ordinary Shares, which is about 10.21% of the issued Shares, with 29,976,225 options vested and 29,087,750 unvested[94]. Operational Challenges - The company anticipates challenges in the consumer discretionary industry in H2 2022, including economic decline, high inflation, and supply chain issues, but remains confident in long-term growth prospects[49]. - The COVID-19 pandemic has impacted selling and operating activities in key cities in China during H1 2022, but operations have resumed as of August 29, 2022[50]. Other Financial Metrics - Total current assets decreased from $1,191,268 thousand as of December 31, 2021 to $1,054,329 thousand as of June 30, 2022, representing a decline of approximately 11.5%[120]. - Total liabilities decreased from $134,489 thousand as of December 31, 2021 to $108,084 thousand as of June 30, 2022, a decrease of approximately 19.6%[120]. - Shareholders' equity decreased from $1,113,661 thousand as of December 31, 2021 to $993,538 thousand as of June 30, 2022, representing a decline of about 10.8%[123]. - The Group's total property, equipment, and software, net, decreased to US$5,301 as of June 30, 2022, from US$6,805 as of December 31, 2021, reflecting a decline of about 22%[156]. - The Group recorded inventory write-downs of US$1,695 for the six months ended June 30, 2022, compared to US$603 for the same period in 2021, showing an increase of about 181%[152].

Tuya, Inc. (NYSE:TUYA) Q2 2022 Results Conference Call August 29, 2022 08:00 PM ET Company Participants Reg Chai - Capital Market Associate Director Jerry Wang - Founder, CEO and Director Jessie Liu - Senior VP, CFO and Director Conference Call Participants Liu Yang - Morgan Stanley John Wang - Goldman Banks Presentation Operator Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Tuya Inc. Second Quarter 2022 Earnings Conference Call. [Operator Instructions] I wi ...

Tuya, Inc. (NYSE:TUYA) Q1 2022 Earnings Conference Call June 14, 2022 8:00 PM ET Company Participants Reg Chai - Capital Market Associate Director Jerry Wang - Founder, CEO and Director Jessie Liu - Senior VP, CFO and Director Conference Call Participants Yang Liu - Morgan Stanley Operator Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Tuya Incorporated First Quarter 2022 Earnings Conference Call. [Operator Instructions] I'll now turn the call over to the fir ...

Tuya Inc. (NYSE:TUYA) Q4 2021 Earnings Conference Call March 14, 2022 8:00 PM ET Corporate Participants Reg Chai - Associate Director, IR Jerry Wang - Chief Executive Officer Jessie Liu - Chief Financial Officer Conference Call Participants Yang Liu - Morgan Stanley Liping Zhao - CICC Operator Good morning and good evening ladies and gentlemen. Thank you for standing by and welcome to Tuya Inc.'s Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. We will be ...

[Report Overview](index=1&type=section&id=Report%20Overview) [Fourth Quarter 2021 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202021%20Financial%20Highlights) Tuya Inc's Q4 2021 revenue grew 19.0% YoY to $75.0 million, driven by a 204.8% surge in SaaS and other revenue | Metric | Fourth Quarter 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | | Total Revenue | 75.0 | 19.0% | | IoT PaaS Revenue | 62.1 | 13.9% | | SaaS and Other Revenue | 7.3 | 204.8% | | Overall Gross Margin | 43.2% | +4.9pp | | IoT PaaS Gross Margin | 42.5% | +2.4pp | | Operating Margin | -68.8% | -39.1pp | | Non-GAAP Operating Margin | -45.3% | -20.5pp | | Cash, Cash Equivalents & Short-term Investments (as of 12/31/2021) | 1,070.0 | - | | Share Repurchase | 25.1 | - | [Full Year 2021 Financial Highlights](index=1&type=section&id=Full%20Year%202021%20Financial%20Highlights) For fiscal year 2021, total revenue grew 67.9% to $302.1 million, with strong performance in both IoT PaaS and SaaS segments | Metric | Fiscal Year 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | | Total Revenue | 302.1 | 67.9% | | IoT PaaS Revenue | 261.4 | 72.3% | | SaaS and Other Revenue | 18.6 | 203.0% | | Overall Gross Margin | 42.3% | +7.9pp | | Operating Margin | -60.8% | -22.0pp | | Non-GAAP Operating Margin | -38.9% | -5.3pp | | Share Repurchase | 53.6 | - | [Operating Highlights](index=2&type=section&id=Operating%20Highlights) The company saw significant growth in its customer base and registered developers in 2021, maintaining a high dollar-based net expansion rate | Metric | Fourth Quarter 2021 | Fiscal Year 2021 | YoY Growth (%) | | :--- | :--- | :--- | :--- | | IoT PaaS Customers | ~3,300 | ~5,500 | - | | Total Customers | ~4,800 | ~8,400 | - | | Premium IoT PaaS Customers (as of 12/31/2021) | - | 311 | - | | Premium IoT PaaS Customers' Contribution to IoT PaaS Revenue (Q4) | 87.3% | - | - | | Premium IoT PaaS Customers' Contribution to IoT PaaS Revenue (FY) | - | 88.6% | - | | IoT PaaS Dollar-Based Net Expansion Rate (DBNER) (as of 12/31/2021) | - | 153% | -28pp (YoY) | | Registered Developers (as of 12/31/2021) | - | >510,000 | 94.7% | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management expressed satisfaction with 2021 performance despite macro challenges and outlined a focus on core strengths and operational efficiency - CEO Xueji Wang was pleased with the company's first year as a public company, noting customer growth to **approximately 8,400** and a **DBNER above 150%** despite the pandemic, macro uncertainties, and supply chain constraints[7](index=7&type=chunk) - The company will focus on its core competitive advantages, solidify its market leadership, and optimize operational efficiency to navigate the macroeconomic downturn[7](index=7&type=chunk) - CFO Yao Liu highlighted that 2021 total revenue **exceeded $300 million**, gross margin improved to **42.3%**, and the company holds **over $1 billion in cash reserves**, enabling continued investment in R&D and services while optimizing for profitability[7](index=7&type=chunk) [Fourth Quarter 2021 Unaudited Financial Results](index=3&type=section&id=Fourth%20Quarter%202021%20Unaudited%20Financial%20Results) [Revenue (Q4)](index=3&type=section&id=REVENUE_Q4) Q4 2021 total revenue grew 19.0% YoY to $75.0 million, driven by a 13.9% increase in IoT PaaS and a 204.8% surge in SaaS and other revenue | Revenue Category | Q4 2020 (Million USD) | Q4 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 63.0 | 75.0 | 19.0% | | IoT PaaS Revenue | 54.5 | 62.1 | 13.9% | | SaaS and Other Revenue | 2.4 | 7.3 | 204.8% | | Smart Device Distribution Revenue | 6.2 | 5.6 | -8.8% | - IoT PaaS revenue growth was driven by increased SKUs and product categories, higher sales from existing customers, and new customer acquisition[10](index=10&type=chunk) - SaaS and other revenue growth was primarily driven by increased market demand for complex industry SaaS products and value-added services[11](index=11&type=chunk) [Cost of Revenue (Q4)](index=3&type=section&id=COST%20OF%20REVENUE_Q4) Q4 2021 cost of revenue increased by 9.6% YoY to $42.6 million, primarily due to the company's business growth | Metric | Q4 2020 (Million USD) | Q4 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Cost of Revenue | 38.9 | 42.6 | 9.6% | [Gross Profit and Gross Margin (Q4)](index=3&type=section&id=GROSS%20PROFIT%20AND%20GROSS%20MARGIN_Q4) Total gross profit for Q4 2021 rose 34.1% YoY to $32.4 million, with the overall gross margin improving to 43.2% | Metric | Q4 2020 | Q4 2021 | Change | | :--- | :--- | :--- | :--- | | Total Gross Profit (Million USD) | 24.1 | 32.4 | +34.1% | | Total Gross Margin | 38.3% | 43.2% | +4.9pp | | IoT PaaS Gross Margin | 40.1% | 42.5% | +2.4pp | | SaaS and Other Gross Margin | 73.8% | 73.4% | -0.4pp | | Smart Device Distribution Gross Margin | 8.8% | 10.6% | +1.8pp | - The increase in IoT PaaS gross margin was mainly due to improved economies of scale, enhanced deployment efficiency from R&D initiatives, and product line expansion[13](index=13&type=chunk) [Operating Expenses (Q4)](index=3&type=section&id=OPERATING%20EXPENSES_Q4) Q4 2021 operating expenses increased 95.9% YoY to $83.9 million, mainly driven by higher share-based compensation and employee-related costs | Expense Category | Q4 2020 (Million USD) | Q4 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Operating Expenses | 42.8 | 83.9 | 95.9% | | Research and Development | 25.5 | 46.2 | 81.4% | | Sales and Marketing | 11.8 | 18.4 | 56.3% | | General and Administrative | 6.2 | 21.0 | 237.8% | | Other Operating Income | 0.7 | 1.7 | - | - The increase in R&D expenses was primarily due to higher share-based compensation and the expansion of R&D staff, with headcount **growing by approximately 56% YoY**[15](index=15&type=chunk) - The significant increase in G&A expenses was mainly due to higher share-based compensation, employee-related costs, and professional service fees[17](index=17&type=chunk) [Loss from Operations and Operating Margin (Q4)](index=4&type=section&id=LOSS%20FROM%20OPERATIONS%20AND%20OPERATING%20MARGIN_Q4) The operating loss for Q4 2021 widened to $51.6 million, with the operating margin deteriorating to negative 68.8% | Metric | Q4 2020 (Million USD) | Q4 2021 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Loss from Operations | 18.7 | 51.6 | Widened | | Non-GAAP Loss from Operations | 15.7 | 33.9 | Widened | | Operating Margin | -29.7% | -68.8% | -39.1pp | | Non-GAAP Operating Margin | -24.8% | -45.3% | -20.5pp | [Net Loss and Net Margin (Q4)](index=4&type=section&id=NET%20LOSS%20AND%20NET%20MARGIN_Q4) Q4 2021 net loss was $48.8 million with a net margin of negative 65.2%, both deteriorating compared to the prior year period | Metric | Q4 2020 (Million USD) | Q4 2021 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Net Loss | 18.4 | 48.8 | Widened | | Non-GAAP Net Loss | 15.3 | 31.2 | Widened | | Net Margin | -29.2% | -65.2% | -36.0pp | | Non-GAAP Net Margin | -24.3% | -41.6% | -17.3pp | [Basic and Diluted Net Loss per ADS (Q4)](index=4&type=section&id=BASIC%20AND%20DILUTED%20NET%20LOSS%20PER%20ADS_Q4) Basic and diluted net loss per ADS was $0.09 in Q4 2021, while the non-GAAP equivalent was $0.06 | Metric | Q4 2020 (USD) | Q4 2021 (USD) | | :--- | :--- | :--- | | Basic and Diluted Net Loss per ADS | 0.08 | 0.09 | | Non-GAAP Basic and Diluted Net Loss per ADS | 0.07 | 0.06 | [Cash and Cash Equivalents, and Short-term Investments (Q4)](index=4&type=section&id=CASH%20AND%20CASH%20EQUIVALENTS%2C%20AND%20SHORT-TERM%20INVESTMENTS_Q4) As of December 31, 2021, the company held $1.07 billion in cash, cash equivalents, and short-term investments | Metric | As of Dec 31, 2020 (Million USD) | As of Dec 31, 2021 (Million USD) | | :--- | :--- | :--- | | Cash and Cash Equivalents, and Short-term Investments | 179.8 | 1,070.0 | [Net Cash Used in Operating Activities (Q4)](index=4&type=section&id=NET%20CASH%20USED%20IN%20OPERATING%20ACTIVITIES_Q4) Net cash used in operating activities for Q4 2021 was $53.2 million, a significant increase from the prior year period | Metric | Q4 2020 (Million USD) | Q4 2021 (Million USD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | 9.0 | 53.2 | | Percentage of Revenue | 14.3% | 71.0% | - The increase in net cash outflow from operating activities was primarily due to employee-related expenses and changes in working capital[22](index=22&type=chunk) [Share Repurchase (Q4)](index=5&type=section&id=SHARE%20REPURCHASE_Q4) In Q4 2021, the company repurchased approximately 4.3 million ADSs for a total consideration of about $25.1 million | Metric | Q4 2021 | | :--- | :--- | | ADSs Repurchased | Approx 4.3 million | | Total Consideration | Approx $25.1 million | [Outstanding Ordinary Shares Under Equity Incentive Plan (Q4)](index=5&type=section&id=OUTSTANDING%20ORDINARY%20SHARES%20UNDER%20EQUITY%20INCENTIVE%20PLAN_Q4) The company issued 5.0 million Class A ordinary shares in October 2021 for future equity incentive awards to employees - On October 18, 2021, the company issued 5.0 million Class A ordinary shares to The Bank of New York Mellon for future equity incentive awards to employees[24](index=24&type=chunk) [Strategic Investments (Q4)](index=5&type=section&id=STRATEGIC%20INVESTMENTS_Q4) The company made strategic equity investments totaling $30.7 million in several private IoT-related companies during Q4 2021 - In Q4 2021, the company invested in several private IoT-related companies to enhance the development of its IoT ecosystem[25](index=25&type=chunk) | Metric | As of Dec 31, 2021 (Million USD) | | :--- | :--- | | Total Strategic Investments | 30.7 | [Fiscal Year 2021 Unaudited Financial Results](index=5&type=section&id=Fiscal%20Year%202021%20Unaudited%20Financial%20Results) [Revenue (FY)](index=5&type=section&id=REVENUE_FY) Fiscal year 2021 total revenue grew 67.9% YoY to $302.1 million, driven by strong growth in IoT PaaS and SaaS segments | Revenue Category | FY 2020 (Million USD) | FY 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 179.9 | 302.1 | 67.9% | | IoT PaaS Revenue | 151.7 | 261.4 | 72.3% | | SaaS and Other Revenue | 6.1 | 18.6 | 203.0% | | Smart Device Distribution Revenue | 22.1 | 22.2 | 0.5% | [Cost of Revenue (FY)](index=5&type=section&id=COST%20OF%20REVENUE_FY) Fiscal year 2021 cost of revenue increased by 47.7% YoY to $174.2 million | Metric | FY 2020 (Million USD) | FY 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Cost of Revenue | 117.9 | 174.2 | 47.7% | [Gross Profit and Gross Margin (FY)](index=5&type=section&id=GROSS%20PROFIT%20AND%20GROSS%20MARGIN_FY) Total gross profit for fiscal year 2021 increased 106.4% YoY to $127.9 million, with the overall gross margin improving to 42.3% | Metric | FY 2020 | FY 2021 | Change | | :--- | :--- | :--- | :--- | | Total Gross Profit (Million USD) | 61.9 | 127.9 | +106.4% | | Total Gross Margin | 34.4% | 42.3% | +7.9pp | | IoT PaaS Gross Margin | 35.9% | 42.4% | +6.5pp | | SaaS and Other Gross Margin | 75.6% | 73.7% | -1.9pp | | Smart Device Distribution Gross Margin | 13.0% | 14.9% | +1.9pp | [Operating Expenses (FY)](index=5&type=section&id=OPERATING%20EXPENSES_FY) Fiscal year 2021 operating expenses rose 136.3% YoY to $311.4 million, mainly due to a significant increase in share-based compensation | Expense Category | FY 2020 (Million USD) | FY 2021 (Million USD) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Operating Expenses | 131.8 | 311.4 | 136.3% | | Research and Development | 77.4 | 174.3 | 125.1% | | Sales and Marketing | 37.6 | 75.4 | 100.7% | | General and Administrative | 17.9 | 71.6 | 300.7% | | Other Operating Income | 1.1 | 9.8 | - | - The increase in operating expenses was primarily due to share-based compensation expenses, which **rose from $9.4 million to $66.1 million**[29](index=29&type=chunk) [Loss from Operations and Operating Margin (FY)](index=6&type=section&id=LOSS%20FROM%20OPERATIONS%20AND%20OPERATING%20MARGIN_FY) The operating loss for fiscal year 2021 widened to $183.6 million, with the operating margin deteriorating to negative 60.8% | Metric | FY 2020 (Million USD) | FY 2021 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Loss from Operations | 69.8 | 183.6 | Widened | | Non-GAAP Loss from Operations | 60.4 | 117.5 | Widened | | Operating Margin | -38.8% | -60.8% | -22.0pp | | Non-GAAP Operating Margin | -33.6% | -38.9% | -5.3pp | [Net Loss and Net Margin (FY)](index=6&type=section&id=NET%20LOSS%20AND%20NET%20MARGIN_FY) Fiscal year 2021 net loss was $175.4 million with a net margin of negative 58.1%, both deteriorating compared to the prior year | Metric | FY 2020 (Million USD) | FY 2021 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Net Loss | 66.9 | 175.4 | Widened | | Non-GAAP Net Loss | 57.5 | 109.3 | Widened | | Net Margin | -37.2% | -58.1% | -20.9pp | | Non-GAAP Net Margin | -31.9% | -36.2% | -4.3pp | [Basic and Diluted Net Loss per ADS (FY)](index=6&type=section&id=BASIC%20AND%20DILUTED%20NET%20LOSS%20PER%20ADS_FY) Basic and diluted net loss per ADS was $0.36 for fiscal year 2021, while the non-GAAP equivalent was $0.22 | Metric | FY 2020 (USD) | FY 2021 (USD) | | :--- | :--- | :--- | | Basic and Diluted Net Loss per ADS | 0.30 | 0.36 | | Non-GAAP Basic and Diluted Net Loss per ADS | 0.26 | 0.22 | [Net Cash Used in Operating Activities (FY)](index=6&type=section&id=NET%20CASH%20USED%20IN%20OPERATING%20ACTIVITIES_FY) Net cash used in operating activities for fiscal year 2021 was $126.1 million, a significant increase from the prior year | Metric | FY 2020 (Million USD) | FY 2021 (Million USD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | 49.2 | 126.1 | | Percentage of Revenue | 27.4% | 41.7% | [Share Repurchase (FY)](index=6&type=section&id=SHARE%20REPURCHASE_FY) In fiscal year 2021, the company repurchased approximately 7.0 million ADSs for a total consideration of about $53.6 million | Metric | FY 2021 | | :--- | :--- | | ADSs Repurchased | Approx 7.0 million | | Total Consideration | Approx $53.6 million | [Outstanding Ordinary Shares Under Equity Incentive Plan (FY)](index=6&type=section&id=OUTSTANDING%20ORDINARY%20SHARES%20UNDER%20EQUITY%20INCENTIVE%20PLAN_FY) The company issued a total of 10.0 million Class A ordinary shares in 2021 for future equity incentive awards to employees - In 2021, the company issued a total of 10.0 million Class A ordinary shares to The Bank of New York Mellon for future equity incentive awards to employees[36](index=36&type=chunk) [Business Outlook](index=6&type=section&id=Business%20Outlook) The company forecasts Q1 2022 total revenue to be between $50 million and $57 million, subject to various macro and operational risks | Metric | Q1 2022 Forecast (Million USD) | | :--- | :--- | | Total Revenue | 50 - 57 | - The company's Q1 2022 revenue forecast is subject to various factors, including macroeconomic conditions, the COVID-19 pandemic, inflation, currency fluctuations, and geopolitical tensions[37](index=37&type=chunk) - Recent COVID-19 resurgences in multiple locations in China may cause delays in product delivery and acceptance, potentially deferring revenue recognition, leading to a wider guidance range[38](index=38&type=chunk) [Company Information](index=7&type=section&id=Company%20Information) [About Tuya Inc.](index=7&type=section&id=About%20Tuya%20Inc.) Tuya Inc is a leading global IoT cloud development platform that aims to build an IoT developer ecosystem and enable everything to be smart - Tuya Inc is a leading global IoT cloud development platform with a mission to build an IoT developer ecosystem and enable everything to be smart[40](index=40&type=chunk) - The company offers a full suite of Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) products[40](index=40&type=chunk) [Conference Call Information](index=7&type=section&id=Conference%20Call%20Information) Company management will hold an earnings conference call on March 14, 2022, U.S. Eastern Time, to discuss the financial results - Company management will hold an earnings conference call on March 14, 2022, U.S. Eastern Time[39](index=39&type=chunk) - A live and archived webcast of the conference call will be available on the company's investor relations website[39](index=39&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) [Use of Non-GAAP Financial Measures](index=7&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP metrics, which exclude share-based compensation, as supplementary measures to evaluate its operational performance - The company uses non-GAAP operating expenses, non-GAAP loss from operations, non-GAAP net loss, and non-GAAP basic and diluted net loss per ADS as supplementary measures[41](index=41&type=chunk) - Non-GAAP measures are defined by excluding share-based compensation expenses, which management believes helps in assessing operational performance and business planning[41](index=41&type=chunk) - Non-GAAP financial measures are not defined under U.S. GAAP and have limitations; they should not be relied upon in isolation, and the company encourages a full review of financial information[43](index=43&type=chunk) [Reconciliation of Non-GAAP Measures](index=15&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The report provides reconciliation tables for non-GAAP operating expenses, operating loss, and net loss to their most comparable U.S. GAAP measures | Metric (Million USD) | Q4 2020 | Q4 2021 | FY 2020 | FY 2021 | | :--- | :--- | :--- | :--- | :--- | | **Operating Expenses Reconciliation:** | | | | | | R&D Expenses (GAAP) | (25,467) | (46,187) | (77,430) | (174,289) | | Add: Share-based compensation | 961 | 4,093 | 2,596 | 14,542 | | R&D Expenses (Non-GAAP) | (24,506) | (42,094) | (74,834) | (159,747) | | Sales and Marketing Expenses (GAAP) | (11,792) | (18,433) | (37,556) | (75,384) | | Add: Share-based compensation | 404 | 1,634 | 1,529 | 6,702 | | Sales and Marketing Expenses (Non-GAAP) | (11,388) | (16,799) | (36,027) | (68,682) | | General and Administrative Expenses (GAAP) | (6,220) | (21,011) | (17,868) | (71,589) | | Add: Share-based compensation | 1,687 | 11,900 | 5,321 | 44,845 | | General and Administrative Expenses (Non-GAAP) | (4,533) | (9,111) | (12,547) | (26,744) | | **Loss from Operations Reconciliation:** | | | | | | Loss from Operations (GAAP) | (18,705) | (51,556) | (69,846) | (183,560) | | Add: Share-based compensation expenses | 3,052 | 17,627 | 9,446 | 66,089 | | Loss from Operations (Non-GAAP) | (15,653) | (33,929) | (60,400) | (117,471) | | Operating Margin (Non-GAAP) | (24.8)% | (45.3)% | (33.6)% | (38.9)% | | **Net Loss Reconciliation:** | | | | | | Net Loss (GAAP) | (18,381) | (48,844) | (66,912) | (175,424) | | Add: Share-based compensation expenses | 3,052 | 17,627 | 9,446 | 66,089 | | Net Loss (Non-GAAP) | (15,329) | (31,217) | (57,466) | (109,335) | | Net Margin (Non-GAAP) | (24.3)% | (41.6)% | (31.9)% | (36.2)% | [Legal & Investor Information](index=8&type=section&id=Legal%20%26%20Investor%20Information) [Safe Harbor Statement](index=8&type=section&id=Safe%20Harbor%20Statement) This press release contains forward-looking statements protected under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995 - This press release contains forward-looking statements that are subject to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995[45](index=45&type=chunk) - Forward-looking statements involve inherent risks and uncertainties, and actual results may differ materially from those contained in the statements[45](index=45&type=chunk) - The company does not undertake any obligation to publicly update any forward-looking statement, except as required under applicable law[45](index=45&type=chunk) [Investor Relations Contact](index=8&type=section&id=Investor%20Relations%20Contact) Contact information for Tuya Inc and The Blueshirt Group is provided for investor relations inquiries - Investors may contact ir@tuya.com or Gary Dvorchak of The Blueshirt Group for investor relations information[46](index=46&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2021, total assets grew significantly to $1.25 billion, driven by a substantial increase in cash and short-term investments | Metric (Thousand USD) | As of Dec 31, 2020 | As of Dec 31, 2021 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | 158,792 | 963,938 | | Short-term investments | 20,976 | 102,134 | | Total assets | 267,323 | 1,248,150 | | **Liabilities:** | | | | Total liabilities | 98,323 | 134,489 | | **Shareholders' Equity:** | | | | Total shareholders' equity | (164,667) | 1,113,661 | - As of December 31, 2021, the company's cash, cash equivalents, and short-term investments totaled **$1.066 billion**, a substantial increase from $179.8 million at the end of 2020[49](index=49&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=12&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) For both Q4 and fiscal year 2021, the company's net loss and comprehensive loss widened compared to the prior year periods | Metric (Thousand USD) | Q4 2020 | Q4 2021 | FY 2020 | FY 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 63,015 | 74,967 | 179,874 | 302,076 | | Net loss | (18,381) | (48,844) | (66,912) | (175,424) | | Comprehensive loss | (16,687) | (47,276) | (64,030) | (173,585) | | Net loss per ADS, basic and diluted | (0.08) | (0.09) | (0.30) | (0.36) | | Total share-based compensation expenses | 3,052 | 17,627 | 9,446 | 66,089 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities increased significantly in both Q4 and fiscal year 2021, while financing activities provided a major cash inflow for the full year | Metric (Thousand USD) | Q4 2020 | Q4 2021 | FY 2020 | FY 2021 | | :--- | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (9,006) | (53,194) | (49,211) | (126,103) | | Net cash provided by/(used in) investing activities | 25,537 | 23,627 | (7,852) | (112,957) | | Net cash (used in)/provided by financing activities | (172) | (43,841) | (172) | 1,041,802 | | Cash and cash equivalents at end of period | 158,955 | 964,576 | 158,955 | 964,576 |

Financial Data and Key Metrics Changes - In Q3 2021, Tuya achieved total revenues of approximately $85.6 million, reflecting a year-over-year growth of roughly 45% [5][18] - The gross margin increased slightly to 42.6% from 34.4% year-over-year, indicating improved efficiency and economies of scale [22] - Non-GAAP net loss was $31.2 million, with a non-GAAP net margin of negative 36.5%, down from negative 17% in the same period of 2020 [27] Business Line Data and Key Metrics Changes - IoT PaaS revenue reached $72.6 million, achieving year-over-year growth of 37.4% [18] - SaaS and other segments saw revenue increase to $5.6 million, representing a year-over-year growth of 214.2% [20] - The number of premium IoT PaaS customers grew to 306, up 87.7% from the previous year [19] Market Data and Key Metrics Changes - The dollar-based net expansion rate for IoT PaaS was 179%, maintaining a strong performance for eight consecutive quarters [6][20] - The company acquired over 1,000 new IoT PaaS customers, growing customer accounts by 46% year-over-year [7] Company Strategy and Development Direction - Tuya aims to strengthen its competitive barriers in cross-device connectivity and expand its product reach through outdoor product lines and IoT device capabilities [9] - The company is focusing on creating an open PaaS platform to enable developers to create personalized and differentiated products [10] - Tuya is launching private cloud solutions to meet customer demands for data privacy and control, which is expected to open a new market [15][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as chip shortages and shipping difficulties but expressed confidence in long-term growth prospects [5][14] - The company expects total revenue for Q4 2021 to be in the range of $72 million to $77 million, reflecting cautious optimism amid macroeconomic uncertainties [30] Other Important Information - Tuya's cash, cash equivalents, and short-term investments increased to $1,179.6 million, providing sufficient liquidity for operations [29] - The company repurchased approximately 2.8 million ADS for about $28.6 million, demonstrating confidence in its long-term growth [29] Q&A Session Summary Question: What are the development plans for the SaaS business? - Management highlighted strong growth in the SaaS segment and plans to expand into various business scenarios beyond home applications [32][33] Question: What is the outlook for domestic revenue? - Management indicated a balanced distribution of business across global regions and plans to increase the proportion of revenue generated in China [41][42] Question: What is the financial contribution from the newly released IoT PaaS on private cloud? - Management clarified that the private cloud PaaS is in early development and aims to open a new market rather than replace existing offerings [46] Question: What is the outlook for next year's demand from premium customers? - Management noted that customers are cautious due to macroeconomic factors but expressed interest in expanding new product categories next year [48]

Financial Data and Key Metrics Changes - Total revenues grew by 118% year-over-year to $84.7 million [5] - IoT PaaS revenue increased by 153.9% to $76.9 million, while SaaS revenue rose by 175% to $3.4 million [22][24] - Gross profit increased by 203.9% to $35.7 million, with gross margin improving to 42.2% from 30.3% year-over-year [24] - Non-GAAP operating margin was negative 31.3%, narrowing from negative 35.7% in the same period of 2020 [29] Business Line Data and Key Metrics Changes - IoT PaaS business achieved over 160% year-over-year growth, while SaaS business also saw significant growth [5] - The number of premium customers grew to 285, up from 216 in the previous quarter [7] - The number of IoT PaaS customers increased by nearly 113% year-over-year, reaching over 700 new customers [8] Market Data and Key Metrics Changes - North America contributed about 30% of revenue, Europe about one-third, with strong growth observed in Latin America, particularly Mexico, which saw a fourfold increase in revenue [39] - Revenue contribution from lighting and electrical products dropped to around 56-57%, while appliance products contributed over 15% [40] Company Strategy and Development Direction - The company is focused on leveraging its IoT platform to help customers navigate challenges such as semiconductor shortages [6] - Continued investment in R&D is critical for growth, with R&D personnel increasing by approximately 120% year-over-year [26][21] - The company aims to expand its SaaS business and has established partnerships with leading real estate and hotel groups [48] Management's Comments on Operating Environment and Future Outlook - Management noted macro headwinds impacting the industry but expressed confidence in the company's growth strategy [5] - For Q3 2021, the company expects total revenues to be in the range of $83 million to $86 million, reflecting current market conditions [32] - Management remains optimistic about recovery in Q4, particularly for e-commerce customers affected by recent challenges [37] Other Important Information - The company passed security certifications from IOXT Alliance, enhancing its compliance capabilities [20] - Employee count increased to over 3,500, with R&D staff making up over 70% [21] Q&A Session Summary Question: Could management give more color on the MCU chipset replacement plan? - Management stated that all major product categories are eligible for the MCU chipset replacement plan, which aims to help customers overcome semiconductor shortages [34] Question: What is the impact of Amazon or other e-commerce stores? - Management indicated that the majority of customers sell IoT products through offline channels, estimating that 80% of Tuya IoT devices were sold offline, with limited impact on e-commerce customers [36] Question: What is the revenue mix by product category and region in Q2? - Management reported that North America contributed about 30% and Europe about one-third of revenue, with strong growth in Latin America [39] Question: Which SaaS business categories are growing faster? - Management noted that appliance and sensor security products grew more than three times, with entertainment and energy conservation categories showing even higher growth rates [44]