Tuya Inc. Presentation
First Quarter 2024
May 2024
Disclaimer
This presentation is for informational purposes only and has not been independently verified. Information is subject to change without notice. Forward-looking statements are included, based on current beliefs and expectations, and involve risks and uncertainties. The Company uses non-GAAP financial measures as supplemental measures, which are not defined under U.S. GAAP and have limitations. Reconciliations of non-GAAP measures to U.S. GAAP are provided in the Appendix.
Continual Growth with Profitability in Q1'24
- Total Revenue: +29.9% Y/Y ($61.7 million), demonstrating strong recovery.
- Non-GAAP Net Profits: $12.3 Million (Q1'23: $-3.7 million), showing consistent quarterly profitability.
- Operating Cash Generated: $14.5 Million (Q1'23: $-18.9 million), indicating a strong cash position.
- Net Cash Balance: Approximately $1 Billion.
Content
- Company Introduction
- Key Topline and Financial Updates
- Embracing Generative AI Across the Board
Company Introduction
Tuya aims to "Build a Smart Solutions Developer Ecosystem" and "Enable Everything to Be Smart."
Positioning
#1 The Largest Internet-of-Things (IoT) Cloud Developer Platform Provider.
Key Metrics (as of March 31, 2024, unless noted)
- Global Customers: 3,000 (Served in Q1'24)
- IoT Developers: 1,074,000 (across 200+ Countries and Regions)
- Smart Device SKUs: 967,000
- Intellectual Properties: 2,000+ (including Patents & Copyrights)
Global Operations
Localized operations across North America (California), Latin America (Medellín), Europe (Düsseldorf), UAE (Dubai), India (Gurgaon), East Asia/North Asia/APAC (Tokyo, Shenzhen), and Australia.
Core Focus
Smart, Innovative, Tech-Driven, Ecological in the IoT Field Worldwide.
Evolution of Tuya's Business
Over a decade, Tuya's business has significantly expanded, evolving from IoT PaaS (Device Intelligence) in 2015, to SaaS and Others (Software & Service) by 2020, and to Smart Solutions (Smart Device Solution) by 2023.
Tuya IoT Cloud Developer Platform
The platform is built upon robust Cloud Infrastructure providers including AWS, Azure, Google Cloud, and Tencent Cloud. It offers IoT Cloud Infrastructure & Cloud Capabilities, IoT Developer Kits (SDK & API), and GenAI Technology, Model & Algorithm.
Endorsed by Global Leading Customers
Tuya's platform is utilized and endorsed by numerous global leading companies, including Philips, Schneider Electric, ABB, Honeywell, Sharp, Siemens, Panasonic, Whirlpool, SoftBank, and many others across various sectors.
One Platform, All Smart
Tuya enables everything to be smart with a single connected cloud and app, offering benefits across brands globally and a variety of devices. This approach facilitates globalization in a cost-effective manner and provides interconnected, unified user experiences.
The ecosystem incentivizes end-users to purchase more Tuya-powered devices, fostering growth through increased scenarios and devices powered by the platform, leading to more end-users, brands, and developers. This ultimately results in a better experience for developers and end-users, and higher awareness and global influence.
Key Topline and Financial Updates
Three Consecutive Quarters of YoY Growth Exceeding 30%
Tuya has achieved three consecutive quarters of Year-over-Year (YoY) revenue growth exceeding 30%. This growth occurred despite industry headwinds such as global chip shortages, supply chain disruptions, and destocking cycles.
Revenue Breakdown (Q1'24 vs Q1'23)
| Segment | Q1'23 Revenue (USD'M) | Q1'24 Revenue (USD'M) | YoY Growth |
|---|---|---|---|
| Total Revenue | 47.5 | 61.7 | +30% |
| IoT PaaS | 33.6 | 45.6 | +36% |
| Smart Solution | 5.4 | 7.5 | +37% |
| SaaS and Others | 8.5 | 8.6 | +2% |
Revenue Efficiency
Key efficiency metrics in Q1'24 showed improvement:
- Average Revenue Supported Per Headcount: Increased from $26.5K (Q1'23) to $42.6K (Q1'24).
- Average Gross Profit Supported Per Headcount: Increased from $11.7K (Q1'23) to $20.4K (Q1'24).
- Average Revenue Per Customer: Increased from $16.7K (Q1'23) to $21.0K (Q1'24).
Gross Margin Trends
Gross margins have shown stable increases across segments, with overall gross margin reaching 47.8% in Q1'24. IoT PaaS gross margin was 46.4%, SaaS and Others was 72.3%, and Smart Solution was 28.3%.
Revenue Contribution by Segments (Q1'24)
In Q1'24, Smart Device Distribution contributed 74% of revenue, IoT PaaS contributed 14%, and SaaS and Others contributed 12%.
Financial Performance
Operating Loss
Operating loss in Q1'24 narrowed significantly by 49.3% YoY on a GAAP basis and by 96.3% YoY on a Non-GAAP basis, driven by increased gross profit and decreased operating expenses (OPEX).
Net Profitability
Non-GAAP net profit in Q1'24 was $12.3 million, a substantial improvement from a loss of $3.7 million in Q1'23. This was aided by a $12.8 million interest income from treasury management.
Operating Cash Flow and Net Cash
Net cash generated in operating activities was $14.5 million in Q1'24. The company maintained a strong net cash balance of approximately US$1 Billion as of March 31, 2024.
Balance Sheet Strength
Tuya maintains a strong balance sheet with a low Total Liabilities to Assets Ratio (8.8% in Q1'24) and no debt or capital commitments. Liabilities are primarily operating-related.
Key Business Growth Strategies
- Further enhancement of product capabilities.
- Further expanding high-quality customer base.
- Expand into non-consumer electronics sectors.
- Continuously strengthen developer platform, creating competencies to efficiently serve the highly fragmented IoT Market.
- Embracing Generative AI Across the Board.
The company also saw significant growth in its developer base, with 1,074,000 developers and 37.2% YoY growth.
Embracing Generative AI
On-Device AI Application
Tuya is integrating Generative AI for on-device applications, focusing on Reliability, Immediacy, Autonomy, Efficiency, and Personalization. Key AI applications include Voice Noise Reduction, Speech Recognition, Event Monitoring & Reporting, Animal Detection & Identification, Multiple Devices Control, Image Generation, and Local Sensor Data Processing.
Spatial LLM
The company is leveraging Spatial LLM for scenario integration to create more valuable intelligent spaces. This includes applications in Industrial & Commercial sectors (e.g., NetZero Solution) and Home Scenarios (e.g., Home Energy Management System Solution), as well as specific scenarios like Building Energy Efficiency, Life & Personal Safety, Plant Cultivation, Environmental Management, Health & Wellness, and Pet Companionship.
AI Ecosystem Products
Tuya offers an AI Ecosystem with products like AI Developer (Developer Platform + LLMs) for seamless development, AI Analyst (Intelligent Business Data Portal) for business insights, and AI Terminal (Tailor-made AI Model) for enhanced user experiences in smart homes.
Appendix
Detailed reconciliations of Non-GAAP to GAAP financial figures for Q1'24 are available in the Appendix.
