Financial Performance - In Q2 2025, Tunya Inc. generated revenues of approximately $80.1 million, representing a 9.3% year-over-year growth, while total revenues for 2025 reached about $155 million, reflecting a 15% year-over-year growth [4][5][9] - The company maintained a blended gross margin of around 48% for both Q2 and the first half of the year, with a non-GAAP operating margin of 10% and a net margin of 25% [5][14] - Non-GAAP operating profit grew approximately 127% year-over-year, indicating strong operating leverage within the business model [6][14] Business Segment Performance - The PaaS segment achieved a year-over-year growth of 7%, while Smart Solutions grew by 16.7% [9] - SaaS and other revenues were approximately $11 million, up 15.6% year-over-year, driven by an increase in recurring revenue [10] - The gross margin for PaaS reached a historical high of 48.7%, while Smart Solutions and SaaS delivered gross margins of 22.5% and 70% respectively [12][14] Market Performance - In Europe, long-term customers achieved double-digit growth in niche categories such as ambient lighting and home appliances [10] - In North America, demand for flagship AI solutions like the SmartBird feeder remained strong, reflecting consumer willingness to pay for AI-driven experiences [11] - In Asia Pacific, deployments progressed as expected, with significant contributions from smart home products in Singapore [10][11] Company Strategy and Industry Competition - The company aims to deepen relationships with core customers and meet diverse needs through tailored product solutions [21] - Tunya Inc. plans to seize regional opportunities, focusing on high-demand categories in Europe and promoting smart solutions in Asia Pacific [21] - The strategy includes accelerating AI innovation among developers and enhancing the AIoT ecosystem [20][21] Management Commentary on Operating Environment and Future Outlook - Management acknowledged ongoing uncertainties in the global trade environment, particularly regarding tariff policies, which may impact demand and pricing strategies [26][30] - The company remains optimistic about Q4, expecting improvements despite current pressures [31] - Management emphasized the importance of maintaining stable profitability and cash flow to support future dividend payments [40] Other Important Information - The company successfully concluded a class action lawsuit, which alleviated potential future risks and expenses [13] - Tunya Inc. generated strong operating cash flow of over $18 million in Q2 and maintained a net cash balance of over $1 billion [14] Q&A Session Summary Question: Growth outlook in light of global trading environment - Management indicated that uncertainties regarding tariffs persist, affecting consumer electronics demand, but expects gradual improvement in Q4 [26][31] Question: FX impact on top line growth - Management acknowledged some pressure from currency fluctuations but stated it is currently under control [31] Question: Competitive advantage in IoT PaaS segment - Management highlighted efforts to motivate developers to transition from traditional IoT applications to AI applications, enhancing competitive positioning [36] Question: Shareholder return policy - Management confirmed that dividends will be considered a regular policy based on stable profitability and cash flow [40] Question: Drivers for gross margin and AI-related revenue impact - Management noted that gross margins reflect competitiveness and value propositions, with expectations for SaaS margins to remain above 70% [46][48] Question: Shift of supply chains due to U.S. tariffs - Management confirmed that supply chain shifts have been ongoing for years, with varying impacts across different product categories [60][62] Question: Margin profile expectations over the next 3-5 years - Management expressed confidence in maintaining gross margins above 20% for solutions and emphasized scalability as a key driver for future margin improvements [68][70]

Financial Data and Key Metrics Changes - In Q2 2025, Tunya Inc. generated revenues of approximately US$80.1 million, representing a 9.3% year-over-year growth, while total revenues for 2025 reached about US$155 million, reflecting a 15% year-over-year growth [6][10] - The company maintained a blended gross margin of around 48% for both Q2 and the first half of the year, with a non-GAAP operating margin of 10% and a net margin of 25% [7][16] - Non-GAAP operating profit grew approximately 127% year-over-year, indicating strong operating leverage within the business model [8] Business Segment Data and Key Metrics Changes - The PaaS segment achieved a year-over-year growth of 7%, while Smart Solutions grew by 16.7% [11][12] - SaaS and other revenues were about US$11 million, up 15.6% year-over-year, driven by an increase in recurring revenue [13] - The gross margin for Smart Solutions was reported at 22.5%, while the overall blended gross margin for Q2 was 48.4% [14][15] Market Data and Key Metrics Changes - In Europe, long-term customers achieved double-digit growth in niche categories such as ambient lighting and home appliances [13] - In North America, the flagship AI solution, the SmartBird feeder, saw strong demand, reflecting consumer willingness to pay for AI-driven experiences [14] - In Asia Pacific, deployments progressed as expected, with significant contributions from smart home products in Singapore [13] Company Strategy and Development Direction - The company aims to deepen relationships with core customers and meet diverse needs through tailored product solutions [24] - Tunya Inc. plans to seize regional opportunities, focusing on high-demand categories in Europe and promoting smart solutions in Asia Pacific [24] - The strategy includes accelerating AI innovation among developers and enhancing the commercialization of AI hardware innovations [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing uncertainties in the global trade environment, particularly regarding tariff policies, which may impact demand and pricing strategies [29][30] - The company expects pressure in Q3 but anticipates improvement in Q4 as the market stabilizes [34] - Management expressed confidence in the company's long-term growth potential despite current macro challenges [26] Other Important Information - Tunya Inc. achieved a cash dividend of about US$33 million, reflecting its commitment to returning value to shareholders [24] - The company successfully defended against class action lawsuits initiated in 2022, concluding related expenses and mitigating future risks [16] Q&A Session Summary Question: What is the management's expectation for business growth in Q3 and the rest of the year? - Management indicated that uncertainties regarding tariffs persist, affecting consumer electronics demand, and expressed a cautious outlook for Q3 with potential improvement in Q4 [29][34] Question: Can management provide updates on constant currency growth and FX impacts? - Management confirmed that while there are pressures from currency fluctuations, they are currently under control [34] Question: How does management view the competitive landscape in the IoT PaaS segment? - Management emphasized efforts to motivate developers to transition from traditional IoT applications to AI applications, highlighting the integration of AI capabilities into products [38] Question: What is the company's approach to shareholder returns? - Management stated that dividends will be based on stable profitability and healthy cash flow, considering it a regular policy for shareholder returns [41] Question: What are the key drivers for gross margin going forward? - Management noted that gross margins reflect the competitiveness of technology and value propositions, with expectations to maintain margins above 20% for solutions and 70% for SaaS [46][49] Question: Are there any shifts in the supply chain due to U.S. tariffs? - Management acknowledged ongoing shifts in supply chains but noted that many manufacturers have already relocated production to other countries over the years [60][62]