Financial Data and Key Metrics Changes - The total revenue for Q4 2023 was approximately $64.4 million, reflecting a year-over-year increase of 42.2% [4][18] - Non-GAAP net profit reached around $12.6 million, a quarter-over-quarter increase of about 25% [5] - The blended gross margin achieved a new high of 47.3% [5][24] - Net cash from operating activities was approximately $31.8 million, contributing to a total net cash position of about $984 million by the end of Q4 [6][28] Business Line Data and Key Metrics Changes - IoT PaaS revenue in Q4 was $47.2 million, representing a year-over-year increase of 44.6% [18] - The smart device distribution segment generated revenue of approximately $7.8 million, achieving a year-over-year growth of 64.6% [22] - SaaS and other sectors recorded revenue of $9.5 million in Q4, reflecting a 19.3% year-over-year increase [23] Market Data and Key Metrics Changes - The company observed stronger growth momentum in Southeast Asia and Latin America compared to Europe and America [31] - Inventory normalization began in Q3 2023, leading to healthy restocking activities in retail channels [34] Company Strategy and Development Direction - The company is focusing on engaging high-quality customers, enhancing product offerings, and improving cost efficiency [7] - A key account strategy has been implemented to secure and better serve large customers with long-term potential [8] - The company aims to expand into new smart domains beyond consumer electronics [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in emerging from the industry downturn, with expectations of moderate growth in global discretionary smart device spending for 2024 [31][35] - The company anticipates that the inventory level will remain healthy, with downstream enterprises optimistic about their smart business outlook for 2024 [34] Other Important Information - The company has seen a significant increase in its developer community, with approximately 993,000 registered developers by Q4 [15] - The company has established partnerships with major telecom operators and industry leaders to enhance its smart solutions [9][10] Q&A Session Summary Question: 2024 revenue growth outlook and margin expectations - Management expects moderate growth in global discretionary smart device spending, with Southeast Asia and Latin America showing stronger momentum [31][35] - The gross margin is expected to remain stable, with contributions from IoT PaaS and SaaS segments [36][38] Question: Impairment loss and balance sheet outlook - The company reported a total credit loss of around $15.5 million in 2023, primarily due to strategic investments in underperforming partners [39][40] Question: SaaS segment outlook and key customer progress - The SaaS segment is expected to maintain good momentum, with a steady increase in enterprise customers using cloud storage technology [42][44] Question: Operating expenses and headcount plans for 2024 - Operating expenses are expected to remain stable, with a focus on maintaining the current team size and moderate investments in marketing [48][49]

Financial Performance - Total revenue for Q4 2023 was $64.4 million, representing a year-over-year increase of approximately 42.2% compared to $45.3 million in Q4 2022[6] - The company reported a non-GAAP net profit of $12.6 million in Q4 2023, compared to a non-GAAP net loss of $5.2 million in the same quarter last year[13] - The net loss narrowed by 52.4% to $10.8 million in Q4 2023, down from $22.7 million in Q4 2022[13] - Revenue for the three months ended December 31, 2023, was $64,411,000, representing a 42.3% increase from $45,286,000 in the same period of 2022[26] - Gross profit for the same period increased to $30,463,000, up from $20,186,000, indicating a significant improvement in profitability[26] IoT Platform as a Service (PaaS) Performance - IoT Platform as a Service (PaaS) revenue reached $47.2 million, up about 44.6% year-over-year from $32.6 million in Q4 2022[6] - The net expansion rate for IoT PaaS based on revenue was 103%, significantly up from 51% in Q4 2022[7] - The contribution of high-quality IoT PaaS customers to revenue was approximately 82.7%, up from 77.0% in Q4 2022[7] - The gross margin for the IoT PaaS segment improved to 44.8% in Q4 2023 from 41.5% in the same quarter last year[10] Cash Flow and Financial Position - Operating cash flow was $31.8 million, a significant improvement from a cash outflow of $0.1 million in Q4 2022[6] - Cash and cash equivalents, along with short-term and long-term investments, totaled $984.3 million as of December 31, 2023, compared to $952.0 million as of December 31, 2022[6] - Cash and cash equivalents increased significantly to $498,688,000 as of December 31, 2023, from $133,161,000 a year earlier, marking a growth of 274.5%[29] - Total assets rose slightly to $1,066,400,000 in 2023 from $1,056,139,000 in 2022, indicating stable asset management[25] Operating Expenses and Margins - Operating expenses rose by 2.0% to $54.1 million in Q4 2023, while non-GAAP operating expenses decreased by 13.5% to $30.7 million[11] - The company’s operating loss decreased by 28.0% to $23.6 million in Q4 2023, compared to $32.8 million in Q4 2022[12] - Non-GAAP operating margin improved to -0.4%, up 33.4 percentage points from -33.8% in Q4 2022[6] - The company reported a non-GAAP net loss margin of 16.8% for Q4 2023, an improvement from 50.2% in Q4 2022[30] Customer Metrics - The number of IoT PaaS customers was approximately 2,200, down from about 2,400 in Q4 2022, while total customers were around 3,200, down from 3,400[7] - The number of registered IoT devices and software developers grew to approximately 993,000, a 40.3% increase from about 708,000 developers as of December 31, 2022[7] Future Outlook and Strategy - The company expressed confidence in its financial foundation and growth momentum to support business expansion and product profitability in 2024[8] - The company anticipates continued inflation impacting discretionary consumer electronics spending, while downstream inventory levels are expected to normalize, providing greater flexibility for manufacturers and retailers[17] - The company is committed to iterating and improving its products and services, enhancing software and hardware capabilities, and diversifying revenue sources to optimize operational efficiency[17] Conference Call and Reporting - The upcoming earnings conference call is scheduled for February 27, 2024, at 7:30 PM EST, with access details provided for participants[18] General Information - Tuya Inc. is a leading IoT cloud development platform, offering a comprehensive suite of products including PaaS and SaaS to empower a vibrant IoT ecosystem[19] - The company uses non-GAAP financial metrics to assess business performance, which may not reflect all operating expenses and could limit comparability with other companies[20] - Forward-looking statements are subject to inherent risks and uncertainties, with actual results potentially differing significantly from those projected[21]

Financial Performance - Total revenue for Q4 2023 was US$64.4 million, representing a 42.2% increase year over year from US$45.3 million in Q4 2022[2] - Non-GAAP net profit for Q4 2023 was US$12.6 million, compared to a non-GAAP net loss of US$5.2 million in Q4 2022[17] - The net loss attributable to Tuya Inc. decreased to $10,816 thousand in Q4 2023 from $22,730 thousand in Q4 2022, reflecting a reduction in losses by approximately 52.4%[37] - Non-GAAP net profit turned positive at $12,555 million in Q4 2023, compared to a non-GAAP net loss of $5,220 million in Q4 2022[41] - Net loss decreased from $22,730 million in Q4 2022 to $10,816 million in Q4 2023, representing a decline of about 52.4%[41] Revenue Breakdown - IoT PaaS revenue increased by 44.6% year over year to US$47.2 million, up from US$32.6 million in Q4 2022[2] - Tuya Inc. reported revenue of $64,411 thousand for the three months ended December 31, 2023, representing a 42.4% increase from $45,286 thousand in the same period of 2022[35] Margins and Profitability - Overall gross margin improved to 47.3%, up 2.7 percentage points from 44.6% in Q4 2022[2] - The gross profit for the same period was $30,463 thousand, up from $20,186 thousand, indicating a gross margin improvement[35] - Non-GAAP loss from operations improved from $15,320 million in Q4 2022 to $253 million in Q4 2023, indicating a substantial reduction in operational losses[41] - Non-GAAP net margin improved significantly from -11.5% in Q4 2022 to 19.5% in Q4 2023[41] - The operating margin improved from -72.5% in Q4 2022 to -36.7% in Q4 2023, showing a positive trend in operational efficiency[41] Cash Flow and Liquidity - Net cash generated from operating activities was US$31.8 million, compared to a net cash used of US$0.1 million in Q4 2022[3] - The company reported a net cash generated from operating activities of $31,760 thousand for Q4 2023, a significant turnaround from a cash outflow of $138 thousand in Q4 2022[39] - Total cash and cash equivalents as of December 31, 2023, were US$984.3 million, up from US$952.0 million a year earlier[19] - Cash and cash equivalents increased significantly to $498,688 thousand as of December 31, 2023, compared to $133,161 thousand at the end of 2022, marking a growth of 274.5%[31] Operational Efficiency - Operating margin improved to negative 36.7%, a 35.8 percentage point improvement from negative 72.5% in Q4 2022[16] - Operating expenses for Q4 2023 were $54,087 thousand, slightly higher than $53,016 thousand in Q4 2022, with R&D expenses decreasing to $22,806 thousand from $27,792 thousand[35] - Research and development expenses decreased from $27,792 million in Q4 2022 to $22,806 million in Q4 2023, a reduction of approximately 17.9%[41] - Adjusted sales and marketing expenses slightly decreased from $9,592 million in Q4 2022 to $9,475 million in Q4 2023, a decline of about 1.2%[41] - General and administrative expenses increased significantly from $16,181 million in Q4 2022 to $23,754 million in Q4 2023, an increase of approximately 46.8%[41] Growth and Development - Registered IoT device and software developers reached approximately 993,000, a 40.3% increase from 708,000 in Q4 2022[4] - The dollar-based net expansion rate (DBNER) for IoT PaaS was 103%, significantly up from 51% in the previous year[4] - The company plans to enhance product capabilities and expand its customer base while navigating potential market challenges[22] - Tuya Inc. continues to focus on expanding its IoT cloud development platform, aiming to enhance its developer ecosystem and smart device offerings[24] Assets and Liabilities - Total assets rose to $1,066,400 thousand in 2023 from $1,056,139 thousand in 2022, showing a modest increase of 1.1%[33] - Tuya's total current liabilities increased to $87,534 thousand in 2023 from $81,282 thousand in 2022, reflecting a rise of 7.8%[31] - The company’s total shareholders' equity increased to $970,565 thousand in 2023 from $962,167 thousand in 2022, indicating a growth of 0.4%[33] Shareholder Information - Basic non-GAAP net profit per share increased from -$0.01 in Q4 2022 to $0.02 in Q4 2023, indicating a turnaround in profitability[41] - The weighted average number of diluted shares increased from 554,121,595 in Q4 2022 to 589,438,606 in Q4 2023, reflecting a growth in shareholder base[41]

Tuya, Inc. (NYSE:TUYA) Q3 2023 Earnings Conference Call November 28, 2023 7:30 PM ET Company Participants Reg Chai - IR Director Jerry Wang - Founder and CEO Jessie Liu - CFO Conference Call Participants Mingran Li - CICC Yang Liu - Morgan Stanley Timothy Zhao - Goldman Sachs Operator Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Tuya Inc.'s Third Quarter 2023 Earnings Conference Call. I'll now turn the call over to the first speaker today, Mr. Reg Chai, Inv ...

Financial Performance - Total revenue for Q3 2023 was $61.1 million, representing a year-over-year increase of approximately 35.7% compared to $45.0 million in Q3 2022[6] - In Q3 2023, Tuya achieved total revenue of $61.1 million, a year-over-year increase of 35.7% from $45.0 million in Q3 2022[9] - Revenue for Q3 2023 was $61.09 million, a 36% increase from $45.02 million in Q3 2022[28] - IoT PaaS revenue reached $45.8 million, up about 48.1% year-over-year from $30.9 million in Q3 2022[6] - IoT PaaS revenue rose by 48.1% to $45.8 million, while smart device distribution revenue increased by 32.1% to $6.8 million[9] Profitability Metrics - Gross margin improved to 46.7%, an increase of 3.1 percentage points from 43.6% in Q3 2022[6] - Gross profit for Q3 2023 was $28.5 million, up 45.2% from $19.6 million in Q3 2022, with a gross margin improvement from 43.6% to 46.7%[10] - Operating loss margin was negative 30.3%, an improvement of 59.5 percentage points from negative 89.8% in Q3 2022[6] - The operating loss narrowed by 54.3% to $18.5 million from $40.4 million in Q3 2022, indicating improved operational efficiency[13] - The non-GAAP operating loss reduced by 85.3% to $3.5 million from $23.7 million in the same period last year[13] - The net loss for Q3 2023 narrowed by 85.0% to $4.9 million from $32.6 million in Q3 2022[15] - Non-GAAP net profit increased to $10.1 million, demonstrating significant improvement in profitability despite market uncertainties[12] - The non-GAAP net profit for Q3 2023 was $10.1 million, compared to a non-GAAP net loss of $15.9 million in Q3 2022[15] - The net profit margin for Q3 2023 improved to -8.0%, up 64.5 percentage points from -72.5% in Q3 2022[15] Customer and Market Metrics - The number of IoT PaaS customers was approximately 2,100, down from about 2,700 in Q3 2022[7] - High-quality IoT PaaS customers contributed approximately 83.5% of PaaS revenue, up from 79.8% in Q3 2022[7] - The number of registered IoT devices and software developers exceeded 909,000, a growth of 28.5% from approximately 708,000 as of December 31, 2022[7] - The revenue-based Net Dollar Expansion Rate (DBNER) for IoT PaaS was 78%, up from 63% in Q3 2022[7] Cash Flow and Investments - Cash and cash equivalents, along with short-term and long-term investments, totaled $961.0 million as of September 30, 2023, compared to $952.0 million as of December 31, 2022[6] - Net cash provided by operating activities for Q3 2023 was $16.1 million, an increase from $13.5 million in Q3 2022, primarily due to a significant reduction in operating expenses[16] - Cash and cash equivalents increased to $166.27 million as of September 30, 2023, up from $133.16 million at the end of 2022[24] Operational Efficiency - Operating expenses decreased by 21.7% to $47.0 million compared to $60.1 million in Q3 2022, reflecting strategic cost control[12] - Research and development expenses for Q3 2023 were $24.95 million, down from $32.34 million in Q3 2022[28] - Adjusted sales and marketing expenses decreased from $12,406,000 in Q3 2022 to $8,660,000 in Q3 2023, a decline of 30.3%[33] - The total operating expenses for the nine months ended September 30, 2023, were $68,183,000, down from $106,490,000 for the same period in 2022, a decrease of 36.0%[33] Future Outlook - The company anticipates a moderate recovery in demand for discretionary consumer electronics in Q4 2023, despite ongoing inflationary pressures[17] - The company plans to continue iterating its products and services, enhancing software and hardware capabilities, and diversifying revenue sources to adapt to changing market conditions[17] - The company acknowledges potential challenges ahead, including shifts in consumer spending patterns and geopolitical uncertainties[17] - Tuya's focus on expanding its high-quality customer base and enhancing product capabilities is expected to drive future growth[8] - The company aims to balance growth and profitability, creating sustained value for customers and shareholders[8] Conference and Corporate Information - The company will hold a conference call on November 28, 2023, to discuss financial performance[18] - Tuya Inc. is a leading IoT cloud development platform, providing a comprehensive suite of products for businesses and developers[19]

Exhibit 99.1 Tuya Reports Third Quarter 2023 Unaudited Financial Results SANTA CLARA, Calif., November 28, 2023/PRNewswire/– Tuya Inc. ("Tuya" or the "Company") (NYSE: TUYA; HKEX: 2391), a global leading IoT cloud development platform, today announced its unaudited financial results for the third quarter ended September 30, 2023. Third Quarter 2023 Financial Highlights ● Total revenue was US$61.1 million, up approximately 35.7% year over year (3Q2022: US$45.0 million). ● IoT platform-as-a-service ("PaaS") r ...

Revenue Performance - Total revenue for the six months ended June 30, 2023, was $104.5 million, a decrease of approximately 11.4% year-over-year from $117.9 million[8]. - IoT Platform as a Service (PaaS) revenue was $74.7 million, down about 16.4% year-over-year from $89.4 million[8]. - Software as a Service (SaaS) and other revenue increased by approximately 37.7% year-over-year to $17.8 million from $12.9 million[8]. - Total revenue for the six months ended June 30, 2023, was $104.5 million, a decrease of 11.4% compared to $117.9 million in the same period of 2022[10]. - IoT PaaS revenue decreased by 16.4% to $74.7 million from $89.4 million in the same period of 2022, with a DBNER of 58%[10]. - SaaS and other revenue increased by 37.7% to $17.8 million from $12.9 million in the same period of 2022[10]. - The company reported a revenue of RMB 1.2 billion for the six months ended June 30, 2023, representing a year-over-year increase of 15%[173]. Profitability and Loss - The overall gross margin rose to 45.6%, an increase of 3.5 percentage points year-over-year from 42.1%[8]. - The net profit margin was negative 42.7%, an improvement of 34.4 percentage points year-over-year from negative 77.1%[8]. - Operating loss narrowed to $63.7 million for the six months ended June 30, 2023, compared to $94.9 million in the same period of 2022[14]. - Net loss for the six months ended June 30, 2023, was $44.6 million, a reduction of 50.9% from $90.8 million in the same period of 2022[15]. - The company achieved a significant improvement in non-GAAP net loss, recording a profit of $1.5 million in Q2 2023, marking the first quarter of breakeven on a non-GAAP basis[15]. - The company reported a total comprehensive loss of $42,851,000 for the six months ended June 30, 2023, compared to a loss of $31,517,000 in the same period of 2022[158]. Cash Flow and Liquidity - The net cash used in operating activities was $11.4 million, a decrease of approximately 80.0% year-over-year from $57.0 million[8]. - Cash used in operating activities was approximately $11.4 million for the six months ended June 30, 2023, down from $57.0 million in the same period of 2022[18]. - Cash and cash equivalents, along with short-term investments, totaled $942.3 million as of June 30, 2023, sufficient to meet liquidity and operational needs[17]. - As of June 30, 2023, the company had cash and cash equivalents totaling $942.3 million, slightly down from $954.3 million as of December 31, 2022[19]. - The company’s cash flow from investing activities for the six months ended June 30, 2023, was a net outflow of $22,335, compared to a net outflow of $254,789 in the same period of 2022[83]. Research and Development - Research and development expenses decreased by 35.7% to $54.5 million from $84.8 million in the same period of 2022, with a reduction in the number of salaried R&D personnel by 30.3%[12]. - Research and development expenses for the six months ended June 30, 2023, were $54,525,000, down from $84,809,000 in the same period of 2022, representing a 35.6% reduction[78]. - Investment in R&D for new technologies increased by 30%, focusing on smart home solutions and AI integration[174]. Customer Metrics - As of June 30, 2023, the number of IoT PaaS customers was approximately 2,900, down from 3,800 as of June 30, 2022[9]. - The number of registered IoT devices and software developers exceeded 846,000, a growth of 19.6% from over 708,000 developers as of December 31, 2022[9]. - The number of high-quality IoT PaaS customers contributing over $100,000 in revenue was 251, down from 267 in the previous year[9]. - Customer retention rates improved to 85%, up from 80% in the previous quarter, reflecting better user engagement strategies[172]. Corporate Governance - The company has complied with all provisions of the Corporate Governance Code as of June 30, 2023, except for the separation of roles between the Chairman and CEO, which is currently held by Mr. Wang[32]. - The Audit Committee, consisting of three independent non-executive directors, has reviewed the unaudited consolidated financial statements for the reporting period and found no discrepancies with the accounting policies adopted by the company[37]. - The company has established a Remuneration Committee to review and approve the remuneration policies for directors and senior management, ensuring alignment with corporate objectives[38]. - The company has established a corporate governance committee to ensure compliance with the listing rules and protect shareholder interests[40]. Shareholder Information - As of June 30, 2023, the company has issued 505,393,393 Class A ordinary shares and 70,400,000 Class B ordinary shares[43]. - Mr. Wang holds 75,200,000 Class A ordinary shares, representing approximately 14.88% of the total[42]. - New Enterprise Associates holds 21.71% of Class A ordinary shares with 109,744,738 shares[48]. - The company has authorized a share repurchase plan allowing for the repurchase of up to $200 million of American Depositary Shares within a 12-month period ending August 30, 2022[118]. Future Outlook - The company provided guidance for the next quarter, projecting revenue between $160 million and $170 million, which would represent a growth of 7% to 13%[172]. - The company plans to invest $10 million in marketing to support the launch of new products and increase brand awareness[171]. - The company aims to launch three new products in Q4 2023, which are anticipated to contribute an additional RMB 300 million in revenue[173]. - The company is exploring partnerships with international brands to enhance its global footprint and diversify its product range[174].

Tuya Inc (NYSE:TUYA) Q2 2023 Results Conference Call August 23, 2023 8:30 PM ET Company Participants Reg Chai - Director of Investor Relations Xueji Wang - Founder, Co-Chairman and CEO Yao Liu - Senior VP, CFO and Director Conference Call Participants Yang Liu - Morgan Stanley Timothy Zhao - Goldman Sachs Mingran Li - CICC Operator Good morning, good evening ladies and gentlemen. Thank you for standing by and welcome to Tuya Inc’s Second Quarter 2023 Earnings Conference Call. [Operator Instructions] I’ll no ...

Revenue Performance - Total revenue for the six months ended June 30, 2023, was $104.5 million, a decrease of approximately 11.4% compared to $117.9 million for the same period in 2022[3] - IoT PaaS revenue was $74.7 million, down approximately 16.4% from $89.4 million in the same period of 2022, primarily due to cautious procurement decisions by customers[6] - SaaS and other revenue increased by approximately 37.7% to $17.8 million, compared to $12.9 million for the same period in 2022[3] Profitability Metrics - Overall gross margin increased to 45.6%, up 3.5 percentage points from 42.1% in the same period of 2022[3] - Operating loss margin was negative 61.0%, an improvement of 19.5 percentage points from negative 80.5% in the same period of 2022[4] - Net profit margin was negative 42.7%, an improvement of 34.4 percentage points from negative 77.1% in the same period of 2022[4] Customer and Developer Metrics - As of June 30, 2023, the total number of registered IoT developers exceeded 846,000, a growth of 19.6% from over 708,000 developers as of December 31, 2022[4] - The number of IoT PaaS customers was approximately 2,900, down from 3,800 in the same period of 2022[4] - The company's high-quality IoT PaaS customers contributed approximately 81.1% of IoT PaaS revenue for the six months ended June 30, 2023[14] Financial Position - Cash, cash equivalents, and short-term investments totaled $942.3 million as of June 30, 2023, compared to $954.3 million as of December 31, 2022[4] - The company reported a cash and cash equivalents balance of $942.3 million as of June 30, 2023, sufficient to meet its working capital and operational needs[13] - The company has no interest-bearing bank loans or other borrowings as of June 30, 2023, resulting in a debt-to-equity ratio of zero[19] Operating Expenses - Operating expenses for the six months ended June 30, 2023, were $111.4 million, a decrease of 22.9% compared to $144.5 million for the same period in 2022[8] - Research and development expenses for the six months ended June 30, 2023, were $54.5 million, down 35.7% from $84.8 million in the same period of 2022, primarily due to strategic streamlining of the R&D team[8] Loss and Cash Flow - The net loss for the six months ended June 30, 2023, was $44.6 million, a reduction of 50.9% compared to $90.8 million for the same period in 2022[11] - Cash used in operating activities for the six months ended June 30, 2023, was $11,387,000, significantly improved from $56,973,000 in 2022[45] - The company achieved a significant improvement in non-GAAP net loss, reporting $2.2 million for the six months ended June 30, 2023, compared to $56.0 million in the same period of 2022, marking a 96.0% reduction[11] Strategic Focus and Governance - The company aims to enhance its product and service offerings, expand its key customer base, and invest in innovation and new opportunities to diversify revenue sources[16] - The company has complied with all provisions of the corporate governance code as of June 30, 2023, except for the separation of the roles of Chairman and CEO, which are held by the same individual[25] - The company aims to seek strategic partnerships, investments, and acquisitions to implement its long-term growth strategy, allocating 15% of the net proceeds (approximately HKD 10.5 million) for this purpose[31] Shareholder Information - The company does not recommend the payment of an interim dividend for the six months ended June 30, 2023[32] - The company repurchased approximately 0.7 million Class A ordinary shares and American Depositary Shares for a total consideration of approximately $1.2 million during the six months ended June 30, 2023[29] Assets and Liabilities - As of June 30, 2023, total assets amounted to $1,039,338,000, a decrease from $1,056,139,000 as of December 31, 2022[39] - Total current assets were $1,012,089,000 as of June 30, 2023, compared to $1,023,366,000 as of December 31, 2022, reflecting a slight decline[39] - Total liabilities decreased from $93,972,000 as of December 31, 2022, to $87,116,000 as of June 30, 2023[41] Tax and Regulatory Matters - The company maintained a 15% preferential tax rate for its foreign-invested enterprise in China, valid until December 31, 2024[51] - The effective tax rate for the six months ended June 30, 2023, was -5.0%, compared to -0.3% for the same period in 2022[56] Forward-Looking Statements - Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ significantly from those projected[36]

Financial Performance - Total revenue for Q2 2023 was $57.0 million, a decrease of approximately 8.9% year-over-year (Q2 2022: $62.5 million) [6] - IoT Platform as a Service (PaaS) revenue was $41.1 million, down about 13.5% year-over-year (Q2 2022: $47.6 million) [6] - Software as a Service (SaaS) and other revenue increased by approximately 30.2% year-over-year to $9.4 million (Q2 2022: $7.2 million) [6] - In Q2 2023, total revenue decreased by 8.9% to $57.0 million from $62.5 million in Q2 2022, primarily due to declines in IoT PaaS and smart device distribution revenues [9] - IoT PaaS revenue fell by 13.5% to $41.1 million, with a DBNER of 58%, impacted by cautious customer purchasing decisions and inventory pressures in the non-essential consumer electronics sector [9] - SaaS and other revenues increased by 30.2% to $9.4 million, reflecting the company's focus on providing valuable value-added services and software products [9] - Revenue for the three months ended June 30, 2023, was $57,004 thousand, a decrease of 8.1% compared to $62,547 thousand for the same period in 2022 [25] Profitability Metrics - Overall gross margin rose to 46.7%, an increase of 3.9 percentage points year-over-year (Q2 2022: 42.8%) [6] - Operating profit margin improved to -55.1%, up 8.0 percentage points year-over-year (Q2 2022: -63.1%) [6] - Net profit margin was -41.3%, an increase of 16.0 percentage points year-over-year (Q2 2022: -57.3%) [6] - The operating loss narrowed by 20.4% to $31.4 million, with a non-GAAP operating loss of $6.4 million, improving by 71.5% year-over-year [12] - Net loss decreased by 34.3% to $23.5 million, with a non-GAAP net profit of $1.5 million, marking the first quarter of breakeven under non-GAAP standards [13] - The net profit margin improved to -41.3%, up 16.0 percentage points from -57.3% in Q2 2022, while the non-GAAP net profit margin was 2.7% [13] - The adjusted operating loss for the six months ended June 30, 2023, was $10,033,000, an improvement from the adjusted operating loss of $11,416,000 for the same period in 2022, reflecting a decrease of about 12.1% [31] - The total net loss for the six months ended June 30, 2023, was $44,594,000, a decrease from $90,822,000 for the same period in 2022, marking a reduction of approximately 50.8% [31] Cash Flow and Liquidity - Cash and cash equivalents plus short-term investments totaled $942.3 million as of June 30, 2023, compared to $954.3 million as of December 31, 2022 [6] - The company generated positive operating cash flow of $7.5 million in Q2 2023, reflecting improved operational efficiency [8] - Net cash provided by operating activities for Q2 2023 was $7.5 million, a significant increase of 1,769.1% compared to $0.4 million in Q2 2022, primarily due to a substantial reduction in operating expenses [15] - Cash and cash equivalents, along with restricted cash, increased to $94,542 thousand as of June 30, 2023, from $599,213 thousand at the beginning of the period, marking a significant recovery [29] - The company reported a net cash provided by operating activities of $7,495 thousand for the three months ended June 30, 2023, compared to $401 thousand for the same period in 2022, showing a substantial increase [29] Customer and Market Insights - The number of IoT PaaS customers was approximately 2,300, down from about 2,800 in Q2 2022 [7] - The number of registered IoT devices and software developers exceeded 846,000, a growth of 19.6% from approximately 708,000 as of December 31, 2022 [7] - The net expansion rate for IoT PaaS based on revenue was 58%, down from 84% in Q2 2022 [7] - The company anticipates a gradual recovery in non-essential consumer spending in the global consumer electronics sector as global inflation eases, despite ongoing challenges [16] - The company recognizes potential challenges ahead, including shifts in consumer spending patterns, regional economic disparities, inventory management, currency fluctuations, and geopolitical uncertainties [16] Operational Efficiency - Operating expenses decreased by 12.3% to $58.1 million, with R&D expenses down 28.9% to $26.5 million due to strategic team streamlining [11] - Research and development expenses for the three months ended June 30, 2023, were $4,006 thousand, up from $3,452 thousand for the same period in 2022, indicating a focus on innovation [28] - Research and development expenses for the three months ended June 30, 2023, were $26,474,000, down from $37,221,000 in the same period of 2022, representing a decrease of approximately 29% [31] - The adjusted sales and marketing expenses for the three months ended June 30, 2023, were $22,468,000, compared to $33,769,000 for the same period in 2022, showing a reduction of about 33.5% [31] - The company is committed to continuously iterating its products and services, enhancing hardware and software capabilities, and diversifying revenue sources to adapt to changing market conditions [16] Company Overview - Tuya Inc. operates as a leading IoT cloud development platform, providing a comprehensive suite of products including PaaS and SaaS solutions [18] - The company utilizes non-GAAP financial metrics to assess business performance, which include non-GAAP operating expenses and non-GAAP net profit/loss [19] - Non-GAAP financial metrics are presented to supplement the evaluation of the company's operating performance and are not intended to replace GAAP financial data [19] - The company will hold a conference call on August 23, 2023, to discuss financial performance, with details available through their investor relations website [17] - Forward-looking statements are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, acknowledging inherent risks and uncertainties [20] Asset and Liability Management - As of June 30, 2023, total assets decreased to $1,039,338 thousand from $1,056,139 thousand as of December 31, 2022, representing a decline of approximately 1.6% [22][24] - Total liabilities decreased to $87,116 thousand as of June 30, 2023, down from $93,972 thousand as of December 31, 2022, a reduction of about 7.2% [22][24]