Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached approximately $82.5 million, marking a 1.1% year-over-year increase, representing the ninth consecutive quarter of growth [10][4] - Gross margin remained above 48%, with a GAAP net margin of 18.2%, expanding by more than 23.6 percentage points year-over-year [5][17] - Non-GAAP net margin reached 24.4%, supported by improved gross margin and expense efficiency [5][17] - Total operating expenses declined to $36 million, down 34.1% year-over-year, while operating net cash flow grew to $30 million, a 25.7% increase year-over-year [17][18] Business Line Data and Key Metrics Changes - PaaS business generated $59.2 million, a 2.4% year-over-year increase, with 280 premium customers [11] - SaaS and others business generated $11.5 million, a 15.4% increase year-over-year, driven by growth in cloud software products [11] - Revenue from smart solutions reached $11.8 million, with a strategic focus on high-value solutions like AI energy management [12] Market Data and Key Metrics Changes - In the China market, AI Toy showed healthy growth with over 50 customers launching products powered by Tuya [12] - In the European market, demand for AI-powered solutions such as AI cloud storage and AI energy saving solutions continued to rise [13] - In North America, AI-enabled products like smart bird feeders recorded healthy growth [14] Company Strategy and Development Direction - The company continues to embrace AI, with smart devices equipped with AI capabilities accounting for 93.99% of total shipments [7] - A new AI Agent App is in global beta testing, aimed at developing a universal AI life assistant for users [8] - The company is focused on optimizing its expense structure while maintaining key investments in business development [6][17] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment remains volatile, with cautious customer demand due to macro uncertainties [4] - For Q4 2025, management anticipates a soft demand environment compared to the previous year, but remains optimistic about long-term growth driven by AI adoption [25][27] - The company aims to lower barriers for new users to adopt smart devices through the introduction of an AI assistant [26][37] Other Important Information - The platform had 1.62 million registered developers, a 23% year-over-year increase, with over 12,000 AI agents created [18][19] - The company is focused on maintaining a strong cash position, with a net cash balance above $1 billion [18] Q&A Session Summary Question: Business outlook for Q4 and 2026 customer demand - Management expects soft demand in Q4 due to global macroeconomic uncertainties but is optimistic about growth in 2026 driven by AI adoption [25][27] Question: Details on the AI home agent and its impact - The AI assistant is designed to help users with various home tasks, aiming to simplify the user experience and lower barriers for new users [32][36] Question: Recovery progress in overseas markets, especially North America - Recent tariff agreements provide stability for importers, and management anticipates positive impacts on demand for the next year [47] Question: Latest progress on AI technology and commercialization - AI capabilities are being integrated across all product categories, with significant breakthroughs in sectors like toys [49][50] Question: Reasons for the decline in smart solutions revenue and growth outlook - Management expects a better year in 2026 with less market turbulence and increased AI adoption across various sectors [55][56]

Core Insights - Tuya Smart (TUYA.US) reported Q2 financial results with a revenue increase of 9.3% year-over-year to $80.13 million, slightly below market expectations [1] - Non-GAAP earnings per ADS were $0.03, in line with market expectations [1] Revenue Breakdown - PaaS business revenue reached $58.1 million, a year-over-year increase of approximately 7.0% [1] - SaaS and other business revenue was $11.1 million, reflecting a year-over-year growth of about 15.6% [1] - Smart solutions business revenue amounted to $10.9 million, up approximately 16.7% year-over-year [1] Profitability Metrics - Overall gross margin was 48.4%, an increase of 0.4 percentage points from the previous year [1] - PaaS gross margin improved to 48.7%, up 1.1 percentage points year-over-year [1] - Operating profit margin was 1.4%, a significant increase of 15.5 percentage points from the previous year [1] Net Profit and Cash Flow - Net profit margin was 15.7%, an increase of 11.4 percentage points year-over-year [2] - Net profit reached $12.6 million, a year-over-year growth of approximately 302.4% [2] - Operating cash flow generated was $18.2 million, a year-over-year increase of about 53.8% [3] Customer Metrics - As of June 30, 2025, the total number of PaaS customers was approximately 2,100, unchanged from the previous year [3] - The number of premium PaaS customers was 285, slightly up from 280 in the previous year [3] - Premium PaaS customers contributed approximately 88.6% of PaaS revenue, compared to 84.8% in the previous year [3] Developer Engagement - The number of registered AI developers exceeded 1.514 million, a growth of 15% from approximately 1.316 million as of December 31, 2024 [3]