TUYA(US:TUYA)2022-09-29 16:00Financial 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].