Transcript: Tuya Q2 2026 Earnings Conference Call

On Monday, Tuya (NYSE: TUYA ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Tuya Inc. 9 million. The company is advancing its AI-driven strategy, focusing on AI Home, AI Energy, and AI Robot applications, and launched Tuya Build for AI hardware development. 8% and AI adoption at 72%.

6 million. 09 million registered developers on the platform, enhancing product definition and development efficiency. Management anticipates gradual demand recovery, with strong demand in Europe for energy-related solutions and promising growth in AI-native categories in China. Full Transcript OPERATOR Good morning and good evening, ladies and gentlemen.

's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be informed that today's conference is being recorded.

I now turn the call over to your first speaker today, Ms. Regina Wang, Investor Relations Associate Director of Tuya. Please go ahead. Regina Wang, Investor Relations Associate Director Thank you, operator.

Hello everyone. Welcome to our second quarter 2026 earnings conference call. Joining us today is our founder and CEO, Mr. Jerry Wang, and our co-founder and CFO, Mr.

Alex Yang. com. A replay of this call will also be available on our IR website in a few hours. Before we continue, I'd like to refer you to our safe harbor statement in our earnings press release which applies to this call, as we will make forward-looking statements.

With that, I will now turn the call over to our founder and CEO, Mr. Jerry Wang. Jerry Wang, CEO Hello everyone, and thank you for joining Tuya's earnings conference call for the second quarter of 2026. Tuya maintained solid growth momentum during the quarter despite the continued complexity of the global operating environment.

9 million, a year-over-year increase of 16%, with growth accelerating from the first quarter. 9% year over year. These results reflect the ongoing rising smart product penetration, including steady demand across home appliances, increased adoption of differentiated solutions such as smart door locks, and growing demand for emerging AI-enabled product categories, and also underscore the resilience of our platform business across different regions and product categories.

In terms of strategic execution, we continue to advance our AI-driven development strategy, extending our AI capabilities beyond foundation models and standalone features towards platformization, productization, and scenario-based deployment. In the second quarter, shipment volumes of AI companion product solutions continued to expand, and consumer acceptance of new forms of AI hardware began to be validated.

Meanwhile, we launched Tuya Build which applied MIME coding to AI hardware development, enabling developers to cover the core development process from product concept to physical device validation using natural language, further shortening AI hardware development segments. These developments further reinforce AI evolution from a mere conversational tool into a technology that operates in real physical environments and participates in sensing, stemming, and execution. Looking ahead, we will deepen our focus on the following three key areas.

First, we will continue to advance AI-native application and product innovation, centering on high-potential scenarios such as AI Home, AI Energy, and AI Robot. We will drive the large-scale adoption of AI across a broader range of physical devices. Second, we will continue to enhance AI development tools such as line coding, agent orchestration, and cloud—edge—device collaboration, further shortening the cycle from ideation and development to deployment on physical devices or AI hardware.

Third, we will advance the global expansion of proven solutions while further strengthening our developing ecosystem and industry partnerships to jointly explore long-term opportunities in the AI application market. Now let me turn the call over to our co-founder and CFO, Alex Yang, who will share more details about our financial performance and business progress. Alex Yang, CFO Hello everyone, this is Alex. I will now provide a brief overview of our second quarter results.

Please note that unless otherwise stated, all figures are in US dollars and all comparisons are on a year-over-year basis. 3% growth recorded in the first quarter. Our PaaS business maintained strong growth, where revenue from the smart home and robot products segment also increased by double digits of our total revenue. 9%, serving as the important growth driver for the quarter.

5% of the PaaS revenue, with our core customer base remaining stable. 9%, primarily driven by growth in cloud-based service revenue such as video cloud storage. We continue to advance the value-added services, including video and AI-driven energy saving, among others. We enable applications capabilities while gradually strengthening our renewal and recurring service capability.

2%, primarily driven by growing customer demand from smart security, energy, and other differentiated smart products. We will continue to increase the contribution of high value-added products and strengthen their integration with the software and value-added services. Looking at the specific driver of PaaS, home appliances, smart door locks, electronics and energy products, and AI companion product solutions performed relatively well during the quarter.

Growth in the home appliances segments was mainly driven by customers' rollout of the smart-enabled models, the expansion of their geographic reach, a higher contribution from smart-enabled products, and the migration of short-term overseas brand projects from our customers' legacy solutions into Tuya's. Growth in smart door locks was primarily driven by increased adoption of audio, video, and low-power Wi-Fi solutions. By comparison, demand recovery in categories such as traditional lighting and IP cameras has been relatively slow, reflecting continued divergence in performance across production and regions.

In AI Companion product shipment volumes of the devices powered by our solutions continue to expand. During the June 18 shopping festival in China, Fazuzu built on Tuya solutions ranks first in the AI toy categories on Tmall, while a number of other ecosystem products also deliver strong ranking and sales performance across major e-commerce platforms. This provided early validation of both consumer acceptance and the commercialization potential of the new form of AI device.

Beyond basic voice interactions, we have been building out capabilities in multimodal perception, persona and memory, content services, and user engagement, helping customers accelerate the development and mass production of AI-native consumer hardware. In the energy sectors, solutions including EV chargers, smart power distribution, metering, and home energy management maintain solid growth. We are expanding our AI energy capabilities from electricity consumption analytics, abnormal alerts, and personalized recommendations towards dynamic electricity tariff management and user-authorized automated device coordination.

Within the smart home ecosystem, customers’ adoptions of Matter-based solutions continue to increase across categories such as electronic products, lighting, and climate control. In parallel, we enhanced local control, multi-protocol interoperability, and third-party ecosystem compatibilities. 3%. 9%.

Gross margin fluctuations were mainly driven by the volatilities in upstream semiconductors’ cost and changes in business mix, in line with expectations. 1% year over year to approximately US$43 million. On expenses, we maintained disciplined expense management while continuing to invest in AI R&D and platform capability. 4% year over year, primarily due to lower share-based compensation expenses.

3 million, with a GAAP operating margin of 10%. 3%. While delivering revenue growth, we maintained relatively stable core operating profitability. 9 million.

The year-over-year decline in non-GAAP net profit was primarily due to lower financial income and foreign exchange losses, while core operating profit continued to grow. 2 million during the quarter and remained positive at the end of the second quarter. The company’s total liquidity, including cash and cash equivalents, time deposits, and treasury securities, amounted to approximately US$976 million, continuing to provide ample resources to support the development of AI capability, global business expansion, and our ability to navigate external uncertainties and long-term strategic investment.

Next, I’ll briefly walk you through our progress in the AI developer ecosystem. 09 million. Launched during the second quarter, Tuya Co-Builder served as the AI developer gateway to the Tuya Developer Platform, applying natural-language coding to AI hardware development. By describing their requirements in natural language, developers can complete product definition, app user interface, embedded firmware, AI agents, and workflow development in one place, and then proceed directly to device flashing and debugging.

This covers the core development process from product concept to physical device validation and helps shorten the AI hardware development cycles. Since launch, Tuya Co-Builder’s AI-powered panel generation capabilities have expanded to cover 30 product categories, with average generation time for a single panel reduced to approximately 190 seconds. This progress demonstrates that we are advancing our developer tools beyond development assistance toward end-to-end delivery capability spanning product definition, software generation, and deployment on physical devices.

At the application layer, we continue to enhance AI device task-execution capabilities, control reliability, and response efficiency, while exploring subscription-based and value-added services across scenarios such as AI-driven energy saving, pet care, and video. Understanding certain scenarios has already begun to generate early payment and renewals. We’ll continue to focus on high-frequency use cases and long-term user value. From a broader perspective, AI capabilities are gradually expanding beyond single-model integrations and into device sensory, contextual understanding, memory, agent orchestration, and device-side execution.

We’ll continue to leverage the strength of our platform, device ecosystem, and global developer base to translate AI capability into scalable commercial value across a broader range of real-world scenarios. In summary, our revenue growth accelerated in the second quarter of 2026, with the PaaS business continuing to serve as a primary growth engine. Meanwhile, our AI capabilities are being commercialized in parallel across multiple paths including PaaS, smart products, and AI applications. Despite the impact on gross margin from semiconductor supply-chain price fluctuations and business-mix change, we maintain stable operating profitability and ample financial resources.

Looking ahead, we’ll remain focused on AI-native applications, physical AI scenarios, and developer platform capability, and continue to advance the transformation of AI technologies from tool-level capabilities into tangible and scalable commercial value. Thank you all. Operator, right now we can begin the Q&A. OPERATOR We will now begin the question and answer session.

To ask a question now, please press star-11 on your telephone and wait for your name to be announced. To withdraw your question, please press star-11 again. One moment for our first question. We will now take our first question from the line of Yang Liu of Morgan Stanley.

Please ask your question. Yang, your line is open. Yang Liu, Analyst at Morgan Stanley Thanks for the opportunity and congratulations on the solid earnings. My question is about the future demand outlook.

Based on your discussion with key customers in the current environment, what is the growth or demand outlook going into the second half of 2026? S. or in Europe and ASEAN, et cetera. Thank you.

Jerry Wang, CEO Okay, thank you. Thank you. So, right now, we see that the end demand and internal momentum is still within our expectation. As we stated in the beginning of this year, the entire customers and consumer side, they’re looking to consume more and transfer more legacy devices and solutions into the new AI ones that we provide.

So this maintenance continues. What we see is that we have the accelerating type of rebounding on the demand side, so this will be the overall tier view. We see that the recovery will not come overnight, so it’s gradually climbing. What we found here is that momentum still continues, especially based on those very positive sell-through feedbacks from the end-user side.

If I break down into the geographic areas, there are different types of demand drivers. Europe still shows very strong demand, especially for all types of energy-related segments, including the new AI home management solutions we provide as a total solution, or different types of energy-efficiency improvement single devices—no matter whether we provide as a PaaS or we provide as home and robot products and the solution together—that still shows very strong demand. That’s the first one. In Southeast Asia and Latin America, the driving forces majorly come from our strong channels in the telecom carriers.

We tried to establish a strategic partnership along with them around two and a half years ago, and we’re starting to commercialize that part—through their own channels to deliver some comprehensive total solutions for their users in the AIoT fields. That’s a very strong potential and very promising one, because they’re running on the B2B cycle; by the end of the time it’s B2C, but they run really strong B2B cycles rather than the retail cycles. They’re complaining on that. The Middle East is still kind of in a pause right now because of the military conflict going on in the second quarter.

So right now we still kind of wait and see. The customer is still there, and the customer is still doing a lot of preparations, including product development and new concept definitions and that type of stuff. But right now they think that overall the business is not coming back yet, and we’re looking forward to have a better scenario perhaps maybe end of Q3 or Q4. We’re looking forward to have some agreement for those conflicting countries, and then we’ll be able to catch the demand, and so that will go.

In North America, the sell-through is still there, but some price-sensitive, especially low-price, types of devices show kind of fluctuations by the pricing rates coming from the supply-chain side. So we are restructuring that type of product mix along with my customers to deliver a better sell-through in the second half of this year. For China, right now we’re seeing some really good, promising categories, including part of the home appliances. We can find out recently that the major brands right now are speeding up the transformations from the legacy type of devices into the smart ones, and from first-generation IoT-type smart devices into the AI ones.

So we are catching the transformation trend and helping a lot of China brands to do that. The second one is that in China, AI-native categories are starting to boom, like the AI Companion. Our first market we’re starting to break through for AI Companion is from China, so that’s why Fazuzu sales really in Tmall.