Tuya reports Q3 2025 unaudited financial results

SANTA CLARA, Calif., Nov. 25, 2025 /PRNewswire/ -- Tuya Inc. ("Tuya" or the "Company") (NYSE: TUYA; HKEX: 2391), a global leading AI cloud platform service provider, today announced its unaudited financial results for the third quarter ended September 30, 2025.

Third Quarter 2025 Financial Highlights

• Total revenue was US$82.5 million, up approximately 1.1% year-over-year (3Q2024: US$81.6 million).
• Platform-as-a-service ("PaaS") revenue was US$59.2 million, up approximately 2.4% year-over-year (3Q2024: US$57.9 million).
• Software-as-a-service ("SaaS") and others revenue was US$11.5 million, up approximately 15.4% year-over-year (3Q2024: US$9.9 million).
• Smart solution revenue was US$11.8 million, down approximately 14.6% year-over-year (3Q2024: US$13.8 million).
• Overall gross margin was 48.3%, up 2.3 percentage point year-over-year (3Q2024: 46.0%). Gross margin of PaaS increased to 48.8%, up 1.9 percentage points year-over-year (3Q2024: 46.9%).
• Operating margin was 4.6%, improved by 25.6 percentage points year-over-year (3Q2024: negative 21.0%). Non-GAAP operating margin was 10.8% (3Q2024: 9.1%).
• Net margin was 18.2%, improved by 23.6 percentage points year-over-year (3Q2024: negative 5.4%). Non-GAAP net margin was 24.4% (3Q2024: 24.7%).
• Net profits were US$15.0 million, compared to a loss of US$4.4 million in the same period of 2024. Non-GAAP net profits were US$20.1 million (3Q2024: US$20.1 million).
• Net cash generated from operating activities was US$30.0 million, up approximately 25.7% year-over-year (3Q2024: US$23.9 million).
• Total cash and cash equivalents, time deposits and treasury securities recorded as short-term and long-term investments were US$1,026.5 million as of September 30, 2025, compared to US$1,016.7 million as of December 31, 2024.

For further information on the non-GAAP financial measures presented above, see the section headed "Use of Non-GAAP Financial Measures."

Third Quarter 2025 Operating Highlights

• PaaS customers1 for the third quarter of 2025 were approximately 2,200 (3Q2024: approximately 2,200). Total customers for the third quarter of 2025 were approximately 3,100 (3Q2024: 3,100).
• Premium PaaS customers2 for the trailing 12 months ended September 30, 2025 were 280 (3Q2024: 286). In the third quarter of 2025, the Company's premium PaaS customers contributed approximately 88.0% of its PaaS revenue (3Q2024: approximately 85.6%).
• Dollar-based net expansion rate ("DBNER")3 of PaaS for the trailing 12 months ended September 30, 2025 was 109% (3Q2024: 124%).
• Registered AI developers were over 1,622,000 as of September 30, 2025, up 23% from approximately 1,316,000 developers as of December 31, 2024.

1. The Company defines a PaaS customer for a given period as a customer who has directly placed orders for PaaS with the Company during that period.
2. The Company defines a premium PaaS customer as a customer as of a given date that contributed more than US$100,000 of PaaS revenue during the immediately preceding 12-month period.
3. The Company calculates DBNER of PaaS for a trailing 12-month period by first identifying all customers in the prior 12-month period (i.e., those have placed at least one order for PaaS during that period), and then calculating the quotient from dividing the PaaS revenue generated from such customers in the current trailing 12-month period by the PaaS revenue generated from the same group of customers in the prior 12-month period. The Company's DBNER may change from period to period, due to a combination of various factors, including changes in the customers' purchase cycles and amounts and the Company's customer mix, among other things. DBNER indicates the Company's ability to expand customer use of the Tuya platform over time and generate revenue growth from existing customers.

Xueji (Jerry) Wang, Founder and Chief Executive Officer of Tuya, commented, "Amid ongoing global trade uncertainties, Tuya delivered another quarter of strong execution and resilient performance. We achieved our ninth consecutive quarter of year-over-year revenue growth, driven by steady demand for our core PaaS and SaaS offerings and the continued enhancement of our product portfolio. Looking ahead, we remain focused on deepening our relationships with core customers, strengthening our global presence, and advancing product innovation, particularly in AI-driven software and developer services. Through disciplined operations and sustained investment in key technologies, we aim to further enhance the value we create for customers, partners, and shareholders."

Yi (Alex) Yang, Director and Chief Financial Officer of Tuya, added, "In the third quarter, Tuya maintained a solid financial foundation. Gross margin improved to 48.3% year over year, and we continued to expand operating leverage through disciplined cost management. GAAP net profit turned positive and showed a significant improvement from the prior year, while non-GAAP profitability remained strong with a net margin of 24.4%. We generated US$30 million in operating cash flow during the quarter and maintained a robust net cash position of over US$1.0 billion. These financial strengths provide us the flexibility to navigate external uncertainties and continue investing in long-term growth initiatives."

Third Quarter 2025 Unaudited Financial Results

REVENUE

Total revenue in the third quarter of 2025 increased by 1.1% to US$82.5 million from US$81.6 million in the same period of 2024.

• PaaS revenue in the third quarter of 2025 increased by 2.4% to US$59.2 million from US$57.9 million in the same period of 2024, primarily due to increasing demand compared with the same period of 2024 and the Company's strategic focus on customer needs and product enhancements, despite the disruptions in the international business environment due to tariff-related headwinds since this April. As a result, the Company's DBNER of PaaS for the trailing 12 months ended September 30, 2025 softened to 109%, compared to 124% for the trailing 12 months ended September 30, 2024.
• SaaS and others revenue in the third quarter of 2025 increased by 15.4% to US$11.5 million from US$9.9 million in the same period of 2024, primarily due to an increase in revenue from cloud software products. During the quarter, the Company remained committed to offering value-added services and a diverse range of software products with compelling value propositions to its customers.
• Smart solution revenue in the third quarter of 2025 decreased by 14.6% to US$11.8 million from US$13.8 million in the same period of 2024.

COST OF REVENUE

Cost of revenue in the third quarter of 2025 decreased by 3.2% to US$42.7 million from US$44.1 million in the same period of 2024.

GROSS PROFIT AND GROSS MARGIN

Total gross profit in the third quarter of 2025 increased by 6.1% to US$39.8 million from US$37.5 million in the same period of 2024. The gross margin in the third quarter of 2025 was 48.3%, compared to 46.0% in the same period of 2024.

• PaaS gross margin in the third quarter of 2025 was 48.8%, compared to 46.9% in the same period of 2024.
• SaaS and others gross margin in the third quarter of 2025 was 70.8%, compared to 71.6% in the same period of 2024.
• Smart solution gross margin in the third quarter of 2025 was 23.8%, compared to 23.5% in the same period of 2024.

Gross margin of each revenue stream increased or fluctuated primarily due to changes in products and solutions mix. As an AI developer platform with rich ecosystem of smart devices and applications, the Company is committed to focusing on software products with compelling value propositions while maintaining cost efficiency.

OPERATING EXPENSES

Operating expenses decreased by 34.1% to US$36.0 million in the third quarter of 2025 from US$54.6 million in the same period of 2024. Non-GAAP operating expenses increased by 2.6% to US$30.9 million in the third quarter of 2025 from US$30.1 million in the same period of 2024. For further information on the non-GAAP financial measures presented above, see the section headed "Use of Non-GAAP Financial Measures."

• Research and development expenses in the third quarter of 2025 were US$22.8 million, down 8.4% from US$24.9 million in the same period of 2024, primarily because of (i) the lower share-based compensation expenses as equity incentive awards granted at higher valuations in previous years have been gradually amortized and (ii) partially offset by employee-related costs due to regular team movements. Non-GAAP adjusted research and development expenses in the third quarter of 2025 were US$21.7 million, compared to US$19.9 million in the same period of 2024.
• Sales and marketing expenses in the third quarter of 2025 were US$8.0 million, down 17.3% from US$9.7 million in the same period of 2024, primarily because of (i) the decrease in employee-related costs due to regular team movements, (ii) the lower share-based compensation expenses as equity incentive awards granted at higher valuations in previous years have been gradually amortized. Non-GAAP adjusted sales and marketing expenses in the third quarter of 2025 were US$7.5 million, compared to US$8.0 million in the same period of 2024.
• General and administrative expenses in the third quarter of 2025 were US$8.5 million, down 62.0% from US$22.3 million in the same period of 2024, primarily because of (i) the lower share-based compensation expenses as equity incentive awards granted at higher valuations in previous years have been gradually amortized, (ii) a decrease in professional service costs, among other things. Non-GAAP adjusted general and administrative expenses in the third quarter of 2025 were US$4.9 million, compared to US$4.4 million in the same period of 2024.
• Other operating income, net in the third quarter of 2025 was US$3.2 million, primarily due to the receipt of software value-added tax refunds.

LOSS/PROFIT FROM OPERATIONS AND OPERATING MARGIN

Profit from operations in the third quarter of 2025 was US$3.8 million, compared to a loss of US$17.1 million in the same period of 2024. The Company had a non-GAAP profit from operations of US$8.9 million in the third quarter of 2025, compared to a non-GAAP profit from operations of US$7.4 million in the same period of 2024, consistently achieving operating profitability and leverage.

Operating margin in the third quarter of 2025 was 4.6%, improved by 25.6 percentage points from negative 21.0% in the same period of 2024. Non-GAAP operating margin in the third quarter of 2025 was 10.8%, improved by 1.7 percentage points from 9.1% in the same period of 2024.

NET LOSS/PROFIT AND NET MARGIN

Net profit in the third quarter of 2025 was US$15.0 million, compared to a loss of US$4.4 million in the same period of 2024. Non-GAAP net profit in the third quarter of 2025 was US$20.1 million, compared to US$20.1 million in the same period of 2024, consistently demonstrating profitability and improved leverage, despite being partially impacted by interest rate cuts.

Net margin in the third quarter of 2025 was 18.2%, improved by 23.6 percentage points from negative 5.4% in the same period of 2024. Non-GAAP net margin in the third quarter of 2025 was 24.4%, compared to 24.7% in the same period of 2024.

BASIC AND DILUTED NET LOSS/PROFIT PER ADS

Basic and diluted net profit per ADS was US$0.02 in the third quarter of 2025, compared to basic and diluted net loss of US$0.01 in the same period of 2024. Each ADS represents one Class A ordinary share.

Non-GAAP basic and diluted net profit per ADS was US$0.03 in the third quarter of 2025, compared to non-GAAP basic and diluted net profit of US$0.04 in the same period of 2024.

CASH AND CASH EQUIVALENTS, TIME DEPOSITS AND TREASURY SECURITIES RECORDED AS SHORT-TERM AND LONG-TERM INVESTMENTS

Cash and cash equivalents, time deposits and treasury securities recorded as short-term and long-term investments were US$1,026.5 million as of September 30, 2025, compared to US$1,016.7 million as of December 31, 2024. The Company believes its current cash position is sufficient to meet its current liquidity and working capital needs.

NET CASH GENERATED FROM OPERATING ACTIVITIES

Net cash generated from operating activities in the third quarter of 2025 was US$30.0 million, compared to US$23.9 million in the same period of 2024. The net cash generated from operating activities for the third quarter of 2025 mainly due to working capital changes in the ordinary course of business.

For further information on non-GAAP financial measures presented above, see the section headed "Use of Non-GAAP Financial Measures."

Business Outlook

Based on recent trends, the overall operating environment for connected devices and intelligent solutions remains complex but is demonstrating greater stability compared with earlier in the year. Participants across the value chain – including manufacturers, brands, and channel partners – maintain a cautious approach to planning; however, we are observing a normalization in project execution and clearer demand visibility in several of our core categories.

At the same time, enterprises and consumers worldwide are accelerating their adoption of AI technologies and smart hardware. In the third quarter, Tuya continued to advance its AI and platform strategy by enhancing its AI-powered PaaS and SaaS offerings, expanding industry-focused solutions such as space-intelligence, and further cultivating its global developer and partner ecosystem. These initiatives are designed to reinforce our position as a leading AI developer platform and drive diversified, higher-value revenue streams over the long term.

Building on the progress achieved in recent quarters, including sustained profitability, an improved margin profile, and strong operating cash flow, the Company remains focused on disciplined execution while selectively investing in key product, technology, and market growth opportunities. Tuya believes that its platform capabilities, ecosystem strengths, and solid financial position provide a strong foundation to navigate near-term uncertainties and capture long-term structural opportunities in the global intelligent technology market.

In response to this evolving market environment, the Company will remain committed to continuously iterating and improving its products and services and further enhancing software and hardware capabilities, particularly by leveraging the AI capabilities, expanding key customer base, investing in innovations and new opportunities, diversifying revenue streams, and further optimizing operating efficiency. At the same time, the Company understands that future trajectories may encounter challenges, including shifting consumer spending patterns, regional economic disparities, inventory management, foreign exchange rate and interest rates volatility, the imposition of new tariffs, or adjustments in existing tariffs or trade barriers, and broader geopolitical uncertainties.

Conference Call Information

The Company's management will hold a conference call at 07:30 P.M. Eastern Time on Monday, November 24, 2025 (08:30 A.M. Hong Kong Time on Tuesday, November 25, 2025) to discuss the financial results. In advance of the conference call, all participants must use the following links to complete the online registration process. Upon registering, each participant will receive the dial-in information and a unique PIN (personal access code) to join the call, and an email confirmation with the details.

Participants Online Webcast Registration:
https://edge.media-server.com/mmc/p/qmezjvzg

Participants Call Registration:
https://register-conf.media-server.com/register/BI86c04c19c52a48c6bb64d46104c02dff

A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.tuya.com, and a replay of the webcast will be available following the session.