Tuya Inc. Q3 FY2025 earnings call

• Total revenue of USD 82.5 million, ninth consecutive quarter of year-over-year growth. Gross margin above 48%, non-GAAP net margin 24.4%, GAAP net margin 18.2% which expanded by over 23.6 percentage points year-over-year.
• AI adoption: 93.99% of smart devices have AI capabilities, AI agent service handles 135 million daily interactions. New AI agent app in global beta testing, universal AI life assistance to launch at CES.
• Regional performance: China AI Toy growth, Europe AI solutions demand rise, Asia Pacific Cube deployment scaling, North America AI-enabled products growth.

Total revenue for the quarter reached approximately USD 82.5 million. PaaS business generated USD 59.2 million, a 2.4% year-over-year increase, with 280 PaaS premium customers. SaaS and others business generated USD 11.5 million, a 15.4% increase year-over-year. Revenue from Smart Solutions reached USD 11.8 million. PaaS gross margin rose to 48.8%, SaaS and others maintained a gross margin of 70.8%, and Smart Solutions posted a gross margin of 23.8%.

• Short term: 2025 has uncertainties but AI is inevitable for major brands. Long term: Positive growth outlook as AI lowers entry barriers for smart devices.
• 2026: Positive growth outlook as AI becomes default for major players in the industry.

Q: Regarding the business outlook into fourth quarter and 2026.

A: Yi Yang shared that 2025 Q4 regular promotion season softened vs last year, 2026 has positive outlook with AI being inevitable and lowering entry bar for users.

Q: On AI home agent specs, use case and impact on business, and AI impact on PaaS, SaaS, smart solution.

A: Yi Yang explained AI home agent as assistant for home scenarios, naturally interacts with physical devices; AI integrated into PaaS, SaaS, smart solutions, promoting market penetration and potentially GPM.

Q: On overseas order recovery in North America and AI commercialization.

A: Yi Yang mentioned temporary tariff policy gives certainty, waiting for December feedback; AI offered across categories, new verticals like toys opened with positive end user response.

Q: On smart solutions revenue decline and product category expansion.

A: Yi Yang said 2026 outlook better due to macro stability, smart solutions focus on strategically high-value categories with AI differentiation