Customer Metrics - The number of IoT PaaS customers decreased from 5,108 in 2022 to 3,966 in 2023, and is projected to decline slightly to 3,710 in 2024, primarily due to macroeconomic headwinds and a focus on high-quality customers [549]. - The number of premium IoT PaaS customers increased from 265 in 2023 to 298 in 2024, reflecting successful product enhancement efforts and a focus on long-term partnerships [551]. - The dollar-based net expansion rate for IoT PaaS improved significantly, reaching 122% as of December 31, 2024, compared to 51% in 2022, driven by increasing demand and effective customer-focused strategies [556]. Revenue and Profitability - Total revenue for 2023 was US$229.99 million, with IoT PaaS contributing US$167.69 million, representing 72.9% of total revenue [558]. - Revenue increased by 29.8% from US$230.0 million in 2023 to US$298.6 million in 2024, driven by growth in IoT PaaS and Smart Solution revenue [579]. - Net profit for 2024 was US$5.0 million, marking the first fiscal year of net profitability on a GAAP basis, compared to a net loss of US$60.3 million in 2023 [591]. - The company recorded a net loss of US$146.2 million in 2022, reduced to a net loss of US$60.3 million in 2023, and achieved a net profit of US$5.0 million in 2024, marking its first year of GAAP profitability [596][598]. - Non-GAAP adjusted profit improved from a loss of US$77.2 million in 2022 to a profit of US$20.4 million in 2023, and further to US$75.3 million in 2024 [596]. Cost and Efficiency - The cost of revenue for IoT PaaS decreased from 43.2% of revenue in 2022 to 38.4% in 2024, indicating improved efficiency and economies of scale [563]. - Cost of revenue rose by 27.4% from US$123.3 million in 2023 to US$157.2 million in 2024, in line with revenue growth [580]. - Gross profit for IoT PaaS increased from US$62.92 million in 2022 to US$102.26 million in 2024, with gross margin improving from 41.1% to 47.1% [565]. - Gross profit increased by 32.6% from US$106.7 million in 2023 to US$141.4 million in 2024, with gross margin improving from 46.4% to 47.4% [581]. - Research and development expenses are primarily driven by employee-related costs and cloud infrastructure, indicating a continued investment in innovation [566]. - Research and development expenses decreased by 7.1% from US$102.3 million in 2023 to US$95.0 million in 2024, due to strategic streamlining [585]. - General and administrative expenses fell by 15.4% from US$80.7 million in 2023 to US$68.3 million in 2024, primarily from reduced credit-related impairments [587]. Segment Performance - The Smart Solution segment, rebranded in 2024, generated revenue of US$41.97 million, accounting for 14.0% of total revenue [558]. - IoT PaaS revenue grew by 29.4% from US$167.7 million in 2023 to US$217.1 million in 2024, with a dollar-based net expansion rate increasing to 122% [583]. - Smart Solution revenue surged by 58.3% from US$26.5 million in 2023 to US$42.0 million in 2024, reflecting rising customer demand [583]. Cash Flow and Investments - As of December 31, 2024, the company had US$847.9 million in cash and cash equivalents and short-term investments, with US$537.7 million held in Hong Kong [597]. - The net cash generated from operating activities was US$36.4 million in 2023 and increased to US$80.4 million in 2024 [599][600]. - The company generated US$107.4 million from investing activities in 2024, primarily from the disposal of short-term investments [603]. - Capital expenditures increased significantly from US$0.7 million in 2022 to US$13.1 million in 2024, indicating a focus on growth and infrastructure [610]. - The company has US$6.7 million in remaining non-cancellable contractual commitments related to third-party cloud infrastructure agreements as of December 31, 2024 [611]. - The company incurred share-based compensation expenses of US$67.8 million in 2024, impacting the difference between net profit and cash generated from operating activities [600]. - The company aims to finance future working capital and capital expenditures through anticipated cash generated from operations and financing activities [598]. International Operations and Currency Impact - The company operates internationally with local offices in multiple regions, expecting continued growth in international activities [545]. - The financial statements are affected by currency translation, particularly as revenue is predominantly denominated in RMB while reporting is in U.S. dollars [545]. Strategic Focus - The company has prioritized enhancing its AI cloud platform and products to support long-term growth and efficiency [596].

Core Insights - Tuya Smart emphasizes the integration of AI and IoT at the 2025 TUYA Global Developer Summit, showcasing its commitment to advancing AIoT technologies [1] - The company introduced its AI Agent Development Platform and three major technology engines—Tuya.AI, TuyaOpen, and HEDV—to enhance developer capabilities and accelerate AI commercialization [1] AI Agent Development Platform - The AI Agent Development Platform provides developers with tools to manage intelligent agents, integrating global large language models for seamless functionality [2] - Developers can create customized smart agents for various applications, enhancing user experiences [3] Tuya.AI - Tuya.AI offers comprehensive AI hardware development solutions, addressing challenges in mass production and enabling rapid market access for developers [4][5] - The platform allows for quick integration of AI capabilities into smart devices, significantly improving commercial value and reducing time-to-market [5] TuyaOpen - TuyaOpen is an open-source development framework aimed at fostering innovation in the AIoT industry, supporting a wide range of creative implementations [6][7] - It inherits capabilities from TuyaOS and integrates an AI inference engine, facilitating cloud-edge integration and expediting product commercialization [8] HEDV - The HEDV edge computing platform addresses the need for robust data security and customized development in complex business scenarios [9][10] - It features a distributed architecture for flexible deployment, ensuring data security while maintaining scalability for high-concurrency environments [11] Future Outlook - Tuya aims to empower global developers with advanced tools for AIoT implementation, fostering innovation and driving the commercial era of AIoT [12]

Core Insights - The 2025 TUYA Global Developer Conference was held in Shenzhen, focusing on the intelligent transformation of industries through AI and IoT technologies [1] - Wu Di, head of intelligent algorithms at Volcano Engine, shared insights on how AI is reshaping industry ecosystems, emphasizing the exponential growth of AIoT chips and edge capabilities in the coming years [1] - The collaboration between Volcano Engine and Tuya Smart aims to enhance AI capabilities in various products, improving user interaction experiences through advanced technologies [4][5] Group 1: AIoT Development - AIoT chips and edge capabilities are expected to experience geometric growth, with edge devices acting as "data optimizers" to provide precise sensor inputs and smart information preprocessing [1] - The collaboration between Volcano Engine and Tuya Smart has led to significant improvements in voice command recognition accuracy by over 20%, even in noisy environments [4] - The integration of large language models enhances the ability of AI products to engage in creative dialogues, increasing user engagement and product appeal [4][5] Group 2: Edge-Cloud Collaboration - Edge devices and cloud models are essential for AIoT applications, especially in scenarios with limited connectivity or high privacy requirements [1] - The real-time conversational AI embedded hardware solution from Volcano Engine enables devices to understand and respond to user needs, providing personalized services [5] - Future collaborations will focus on exploring applications in smart health monitoring and energy efficiency, leveraging multi-modal technologies for enhanced user interactions [6]

为了帮助个人开发者有效降低开发智能产品的门槛，涂鸦之前推出过完全开源、充分开放的开发框架--- TuyaOpen Framework 。 它基于涂鸦沉淀十年 潜心研发的 TuyaOS 操作系统 所构建 ， 不仅拥有跨平台、跨系统、组件化和安全合规等核心特性，而且更加开放极具可玩性，目前已经经过全球亿级 设备和百万级用户的验证，一经推出就受到了广大开发者的欢迎。 TuyaOpen+AI=无限可能 开发者可以无缝调用国内合规的大模型（如 DeepSeek、通义千问、豆包等），或灵活对接海外顶尖的 AI 大模型服务（如 ChatGPT、Claude、Gemini 等）； 通过涂鸦多样化的工具生态，开发者能够实现文字和语音对话、图片生成、视频生成等多种 AI 功能； 此外，TuyaOpen 支持行业内主流的开源软硬件生态，开发者可以轻松地将项目移植和部署到任意芯片或开发板上。使 开发者能够快速体验 Al 技术带来的 创新，并加速产品开发周期。 功能亮点与应用价值 1、功能亮点 1.1 开放生态，降低开发门槛 因此，涂鸦本次火力全开， 通过深度融合 AI 大模型能力，再次重磅升级 TuyaOpen Framework ...

Core Viewpoint - Tuya Smart's former CFO Liu Yao has joined xTool, a Shenzhen-based laser engraving machine company, to prepare for its potential IPO in Hong Kong or the US [1] Group 1: Company Developments - Liu Yao has extensive experience, having completed over $10 billion in financing projects and served as CFO at Tuya Smart, which went public on the NYSE in 2021 and completed a dual listing in Hong Kong in 2022 [1] - xTool, established in 2021 under the parent company Makeblock, focuses on consumer-grade laser engraving and cutting machines, transitioning from its initial industrial-grade laser equipment [2] - xTool's revenue exceeded 1 billion yuan in 2023, with projections for 2024 revenue between 2 billion to 3 billion yuan [1] Group 2: Strategic Moves - xTool is exploring product diversification beyond laser printers, having participated in the B-round financing of Snapmaker, a company specializing in 3D printers [2] - The company aims to leverage Liu Yao's financial expertise to enhance its market position and facilitate the upcoming IPO process [1]

Group 1 - xTool has surpassed 2 billion in revenue, driven by strong demand in the overseas DIY market, although the industry is becoming increasingly crowded [2] - iMile reported a 52% year-on-year increase in logistics orders during Ramadan, achieving a record high and demonstrating strong capabilities in the Middle East logistics market [4][6] - Ningde Times and Sinopec have signed a framework agreement to build over 500 battery swap stations this year, with a long-term goal of expanding to 10,000 stations [7] Group 2 - In 2024, China became the largest source of car imports for the EU, with an import value of 12.7 billion euros, marking a 1591.3% increase from 2019 [7] - Tesla's sales in Europe have sharply declined, with a 36.8% year-on-year decrease in France and a 63.9% drop in Sweden for March [7] - A surge in interest for "A+H" listing models is observed as mainland companies increasingly seek to go public in Hong Kong, enhancing market liquidity and activity [9]

Core Viewpoint - Liu Yao, former CFO of Tuya Smart, has joined Shenzhen-based laser engraving machine startup xTool, where he will oversee financial and operational aspects. xTool, established in 2021, focuses on laser engraving and cutting machines for various sectors including personal creation, education, and industry. The company is projected to achieve revenue between 2 billion to 3 billion yuan in 2024, following a revenue of over 1 billion yuan in 2023 [1][2]. Company Overview - xTool is a brand under Makeblock, founded in 2021, and specializes in laser engraving and cutting machines. The founder, Wang Jianjun, has a background in aerospace engineering and has maintained a low public profile [1][2]. - The company transitioned from industrial-grade laser equipment to consumer-grade products, leveraging Makeblock's supply chain and marketing channels to become a leading brand in its niche [3]. Financial Performance - xTool's revenue exceeded 1 billion yuan in 2023, with expectations to reach between 2 billion to 3 billion yuan in 2024 [1][2]. - The company has successfully crowdfunded its flagship product, xTool M1, raising over 2.6 million USD in 2021, and its latest clothing printing machine has raised nearly 5 million USD on Kickstarter [3]. Market Dynamics - The global laser engraving machine market was valued at 658 million USD in 2023 and is projected to grow to 1.88 billion USD by 2030, with a compound annual growth rate (CAGR) of 14.67% [4]. - The demand for DIY products has surged, particularly during the pandemic, leading to increased interest in laser engraving machines [4]. Competitive Landscape - While xTool is currently a leading player in the market, it faces competition from emerging brands like Flux and Snapmaker. The industry is becoming crowded, prompting xTool to explore product diversification beyond laser engraving machines [5]. - xTool has participated in the B-round financing of Shenzhen Fast Manufacturing Technology Co., which focuses on 3D printers, indicating a strategic move towards expanding its product offerings [5]. Strategic Importance of Leadership - Liu Yao's extensive experience in strategic planning and fundraising, particularly from his tenure at Swiss Bank, is expected to be crucial for xTool's growth and potential public listing [2][6].

Core Insights - Tuya Smart is redefining the role of AI in the smart home ecosystem by transforming technology into emotionally intelligent companions [1][12] - The collaboration with DeepSeek enables Tuya to integrate advanced AI capabilities into its AIoT platform, enhancing the emotional resonance of smart home devices [2][12] Group 1: Emotional Intelligence in Smart Devices - Tuya's integration of DeepSeek's AI model allows smart devices to engage in more natural, human-like communication, improving user interactions and emotional dynamics at home [3][12] - Examples of emotionally responsive devices include companion robots that can initiate relevant conversations based on user cues, enhancing feelings of being noticed and understood [4][12] Group 2: Innovative AI Companion Products - Tuya and DeepSeek are exploring new AI-driven companion products, such as holographic projection companions that provide immersive interactions and personal coaching [7][8] - Other innovative products include AI pet robots that simulate real pet interactions and AI jewelry that detects emotional fluctuations, offering companionship through light and temperature changes [9][10] Group 3: Future Directions and Market Opportunities - The partnership aims to inspire global developers to create emotionally intelligent products, expanding business opportunities in the companion economy [7][12] - Tuya's focus on the evolving companion economy will drive innovation in companion services, infusing the intelligent era with warmth and care [12]

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of $5.30, representing an 81% upside potential [8][17]. Core Insights - The company achieved a revenue of $298.6 million in 2024, marking a 29.8% year-over-year growth, and recorded its first positive net income of $5 million under GAAP [3][17]. - The growth was primarily driven by strong performance in IoT PaaS and smart solutions, with IoT PaaS revenue reaching $217.1 million, up 29.4% [4][17]. - The overall gross profit margin improved to 47.4%, with IoT PaaS gross margin increasing by 3.4 percentage points [4][17]. - The company successfully reduced total operating expenses by 11.0% year-over-year through strategic team streamlining and cost control [4][17]. - The number of premium IoT PaaS customers increased to 298, contributing 86.9% of total revenue, indicating enhanced customer stickiness [4][5]. Financial Data and Forecast - Revenue projections for 2025-2027 are $359 million, $425 million, and $494 million, with respective growth rates of 20.2%, 18.3%, and 16.3% [3][8]. - Non-GAAP net profit is expected to grow significantly, reaching $110 million by 2027, with a corresponding EPS of $0.18 [3][8]. - The company maintains a strong liquidity position with a net cash balance exceeding $1 billion by the end of 2024 [4][17]. Business Strategy and Development - The company continues to invest in AI technologies, launching the Tuya AI Agent development platform, integrating major language models to enhance developer capabilities [6][7]. - The focus remains on developing AI devices and smart applications, particularly in audio-video interaction and decision automation [7][8]. - The company is committed to returning value to shareholders, having approved a second dividend totaling approximately $37 million for 2024 [7][8].

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of $5.30, representing an 81% upside potential from the current price [8][17]. Core Insights - The company achieved significant revenue growth, with 2024 revenue reaching $298.6 million, a 29.8% increase year-over-year. This growth was driven by strong performance in IoT PaaS and smart solutions [3][17]. - The company reported its first positive net income under GAAP in 2024, with a net profit of $5 million, compared to a net loss of $60.3 million in 2023. The NON-GAAP net profit was $75.3 million, reflecting a 268.5% year-over-year increase [3][17]. - The overall gross profit margin improved to 47.4% in 2024, up 1 percentage point from 2023, indicating enhanced profitability, particularly in the IoT PaaS segment [3][17]. Financial Data and Forecast - Revenue projections for 2025-2027 are $359 million, $425 million, and $494 million, respectively, with year-over-year growth rates of 20.2%, 18.3%, and 16.3% [3][8]. - The company expects to maintain a strong gross profit margin, with estimates of 46.4% for 2025 and 45.7% for 2026 [3][11]. - The net profit forecast for 2025 is $42 million, increasing to $110 million by 2027, indicating a strong upward trend in profitability [3][14]. Business Strategy and Customer Base - The company is focusing on optimizing its customer structure, with an increase in premium IoT PaaS customers contributing a higher percentage of total revenue, rising from 83.4% in 2023 to 86.9% in 2024 [4][5]. - The developer ecosystem is expanding, with 1.316 million registered developers and over 1.07 million smart device SKUs developed through the platform [5][6]. - The company is prioritizing AI investments, launching the Tuya AI Agent development platform to integrate various large language models, enhancing its service offerings [6][7]. Dividend Policy - The company announced a second dividend for 2024, totaling approximately $37 million, reflecting confidence in its financial health and commitment to returning value to shareholders [7][8].