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Tuya's Third Quarter 2025 Financial Results

Tuya Inc. (NYSE: TUYA; HKEX: 2391), a leading global AI cloud platform service provider, recently released its unaudited financial results for the third quarter of 2025, marking compelling growth despite the challenges posed by global trade uncertainties. The Q3 results illustrate Tuya's commitment to innovation and customer satisfaction as it continues to enhance its product portfolio.

Financial Highlights

In the third quarter of 2025, Tuya reported a total revenue of $82.5 million, representing a year-over-year increase of approximately 1.1% from $81.6 million in Q3 2024. The results include:

• - Platform-as-a-Service (PaaS) revenue reached $59.2 million, a rise of around 2.4% from the previous year.
• - Software-as-a-Service (SaaS) and other services contributed $11.5 million, showing a marked increase of 15.4%.
• - Conversely, revenue from smart solutions decreased by 14.6% to $11.8 million.

The overall gross margin improved to 48.3%, up 2.3 percentage points compared to the last year's 46%. Moreover, the operating margin significantly improved to 4.6%, a remarkable recovery from the negative 21% reported the previous year.

Net profits totaled $15 million, a notable rebound from the loss of $4.4 million in Q3 2024. This highlights Tuya’s effective financial management and operational efficiencies, as the company adapts to a volatile market environment. The non-GAAP net profits remained stable at $20.1 million, demonstrating consistent profitability.

Tuya generated $30 million in cash from operating activities, marking a 25.7% increase year-over-year. The total cash and cash equivalents amounted to $1.026 billion, indicating a solid financial foundation for future investments.

Operating Highlights

Tuya's continued growth is reflected in the customer statistics:

• - The number of PaaS customers remained steady at approximately 2,200, while total customers also held at around 3,100.
• - Premium PaaS customers (those contributing more than $100,000) for the trailing twelve months edged down slightly to 280.
• - The dollar-based net expansion rate for PaaS was reported at 109%, down from 124% a year prior, illustrating the challenges in customer spending amid economic unpredictability.

The burgeoning developer community, now over 1.622 million registered AI developers, marked a 23% rise since December 2024. This growth underscores Tuya’s success in fostering an engaging developer ecosystem while driving innovations around AI and smart solutions.

Executive Insights

Xueji (Jerry) Wang, Tuya's CEO, commented, "Despite the ongoing global trade uncertainties, Tuya has delivered another quarter of strong execution and resilient financial performance. We achieved our ninth consecutive quarter of revenue growth. This success stems from robust demand for our core PaaS and SaaS solutions, coupled with enhancements across our product offerings." Wang reiterated the company’s focus on deepening relationships with core customers and advancing innovations, particularly in AI technologies.

CFO Yi (Alex) Yang added insights into the financial health, stating, "Maintaining a solid foothold, our gross margins have improved substantially, and we generated significant operating cash flow this quarter. The positive net profits reflect our disciplined cost management approach amidst external economic pressures."

Strategic Outlook

Looking ahead, Tuya anticipates a more stable operating environment despite the complexities of connected devices and intelligent solutions markets. The adoption of AI technologies by businesses and consumers continues to rise, creating opportunities for Tuya to leverage its AI-powered offerings.

The company is committed to advancing its product innovations, refining its PaaS and SaaS tailored solutions, and enhancing its global partner ecosystems to drive higher-value revenue streams. As it navigates forthcoming challenges—including evolving consumer spending patterns and broader geopolitical uncertainties—Tuya is poised for long-term growth.

In conclusion, Tuya's recent third-quarter results establish a solid foundation for future initiatives, highlighting strong financial health and resilience in a dynamic market.