UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2024
Commission File Number: 001-40210
Tuya Inc.
10/F, Building A,
Huace Center
Xihu District, Hangzhou
City
Zhejiang, 310012
People’s Republic
of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
EXPLANATORY NOTE
We made the announcements dated August 26, 2024, with The
Stock Exchange of Hong Kong Limited in relation to the financial results for the quarter ended June 30, 2024, and our interim results
for the six months ended June 30, 2024, as well as declaration of special dividend. For details, please refer to exhibits 99.1 to this current report on Form 6-K.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Tuya Inc. |
|
|
|
By |
: |
/s/
Yao (Jessie) Liu |
|
Name |
: |
Yao (Jessie) Liu |
|
Title |
: |
Chief Financial Officer |
Date: August 26, 2024
Exhibit 99.1
Hong Kong Exchanges
and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this announcement.
Tuya
Inc.
塗鴉智能*
(A
company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)
(HKEX
Stock Code: 2391)
(NYSE
Stock Ticker: TUYA)
INSIDE
INFORMATION
UNAUDITED
FINANCIAL RESULTS
FOR
THE QUARTER ENDED JUNE 30, 2024
AND
DECLARATION
OF SPECIAL DIVIDEND
This announcement
is issued pursuant to Rule 13.09 of the Rules Governing the Listing of the Securities on The Stock Exchange of Hong Kong Limited
and under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).
Tuya Inc. (“Tuya”
or the “Company”) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries
and consolidated affiliated entities (the “Group”) for the three months ended June 30, 2024.
The Company is
pleased to announce (i) the unaudited condensed consolidated results of the Group for the three months ended June 30, 2024
(the “Q2 Results”) published in accordance with applicable rules of the U.S. Securities and Exchange Commission
(the “SEC”), and (ii) the declaration of a special dividend (the “Special Dividend”).
The Q2 Results
have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”),
which are different from the International Financial Reporting Standards.
Attached hereto
as Schedule I is the full text of the press release issued by the Company on August 26, 2024 (U.S. Eastern Time) in relation to
the Q2 Results and the declaration of the Special Dividend, some of which may constitute material inside information of the Company.
* For identification purposes only
This announcement
contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs, and
expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors
could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking
statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”,
“target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”,
“continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks,
uncertainties or factors is included in the Company’s filings with the SEC. The forward-looking statements included in this announcement
are only made as of the date hereof, and the Company disclaims any obligation to publicly update any forward-looking statement to reflect
subsequent events or circumstances, except as required by law. All forward-looking statements should be evaluated with the understanding
of their inherent uncertainty.
The Company’s
shareholders and potential investors are advised not to place undue reliance on the Q2 Results and to exercise caution in dealing in
securities in the Company.
|
By Order of the
Board |
|
Tuya Inc. |
|
WANG Xueji |
|
Chairman |
Hong Kong, August 26, 2024
As at the date
of this announcement, the Board comprises Mr. WANG Xueji, Mr. CHEN Liaohan, Mr. YANG Yi and Ms. LIU Yao as executive
Directors; and Mr. HUANG Sidney Xuande, Mr. QIU Changheng, Mr. KUOK Meng Xiong (alias GUO Mengxiong) and Mr. YIP
Pak Tung Jason as independent non-executive Directors.
SCHEDULE
I
Tuya
Reports Second Quarter 2024 Unaudited Financial Results and Declaration of Special Dividend
SANTA CLARA, Calif.,
August 26, 2024/PRNewswire/– Tuya Inc. (“Tuya” or the “Company”) (NYSE: TUYA; HKEX:
2391), a global leading cloud platform service provider, today announced its unaudited financial results for the second quarter ended
June 30, 2024 and the declaration of a special cash dividend.
Second Quarter 2024 Financial Highlights
| · | Total
revenue was US$73.3 million, up approximately 28.6% year over year (2Q2023: US$57.0 million). |
| · | IoT
platform-as-a-service (“PaaS”) revenue was US$54.3 million, up approximately
32.0% year over year (2Q2023: US$41.1 million). |
| · | Software-as-a-service
(“SaaS”) and others revenue was US$9.6 million, up approximately 2.4% year
over year (2Q2023: US$9.4 million). |
| · | Smart
solution revenue was US$9.4 million, up approximately 44.2% year over year (2Q2023: US$6.5
million). |
| · | Overall
gross margin increased to 48.0%, up 1.3 percentage points year over year (2Q2023: 46.7%).
Gross margin of IoT PaaS increased to 47.6%, up 3.4 percentage points year over year (2Q2023:
44.2%). |
| · | Operating
margin was negative 14.1%, improved by 41.0 percentage points year over year (2Q2023:
negative 55.1%). Non-GAAP operating margin was 10.0%, improved by 21.2 percentage
points year over year (2Q2023: negative 11.2%), marking the Company’s first positive
quarterly non-GAAP operating margin. |
| · | Net
margin was 4.3%, improved by 45.6 percentage points year over year (2Q2023: negative
41.3%). Non-GAAP net margin was 28.4%, improved by 25.7 percentage points year over
year (2Q2023: 2.7%). |
| · | Net
cash generated from operating activities was US$11.8 million (2Q2023: US$7.5 million). |
| · | Total
cash and cash equivalents, time deposits and treasury securities recorded as short-term and
long-term investments were US$1,000.1 million as of June 30, 2024, compared to US$984.3
million as of December 31, 2023. |
For further information on the non-GAAP
financial measures presented above, see the section headed “Use of Non-GAAP Financial Measures.”
Second Quarter 2024 Operating Highlights
| · | IoT
PaaS customers1 for the second quarter
of 2024 were approximately 2,100 (2Q2023: approximately 2,300). Total customers for the second
quarter of 2024 were approximately 3,000 (2Q2023: approximately 3,300). The Company’s
key-account strategy has enabled it to focus on serving strategic customers. |
| · | Premium
IoT PaaS customers2 for the trailing
12 months ended June 30, 2024 were 280 (2Q2023: 251). In the second quarter of 2024,
the Company’s premium IoT PaaS customers contributed approximately 84.8% of its IoT
PaaS revenue (2Q2023: approximately 79.8%). |
| · | Dollar-based
net expansion rate (“DBNER”)3
of IoT PaaS for the trailing 12 months ended June 30, 2024 was 127% (2Q2023: 58%). |
| · | Registered
IoT device and software developers were over 1,192,000 as of June 30, 2024, up 20.1%
from approximately 993,000 developers as of December 31, 2023. |
| 1. | The
Company defines an IoT PaaS customer for a given period as a customer who has directly placed
orders for IoT PaaS with the Company during that period. |
| 2. | The
Company defines a premium IoT PaaS customer as a customer as of a given date that contributed
more than US$100,000 of IoT PaaS revenue during the immediately preceding 12-month period. |
| 3. | The
Company calculates DBNER of IoT 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
IoT PaaS during that period), and then calculating the quotient from dividing the IoT PaaS
revenue generated from such customers in the current trailing 12-month period by the IoT
PaaS revenue generated from the same Company 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. |
Mr. Xueji
(Jerry) Wang, Founder and Chief Executive Officer of Tuya, commented, “The second quarter of 2024 marks a significant milestone
for our company, as we attained a quarterly non-GAAP operating profit for the first time in our history with an operating margin of about
10%. This achievement demonstrates the effectiveness of our business model and highlights the operational leverage within our business,
as well as our commitment to delivering on our promises. As the world’s leading cloud platform service provider, we are entering
a new phase in the smart technology sector. This progress is fueled by a more favorable competitive environment, GenAI technology advancements,
renewed momentum in the smart consumer electronics and smart business markets, and, more importantly, Tuya’s unwavering commitment
to strategic decisions and execution focused on customers, product innovation, and operations. Looking ahead, we remain focused on driving
long-term revenue growth and achieving solid profit margins, while continuing to deliver the best smart technology solutions to our global
customers and partners.”
Ms. Yao (Jessie)
Liu, Director and Chief Financial Officer of Tuya, added, “Our strong financial performance in the second quarter was underscored
by a 29% year-over-year increase in total revenue, reaching $73.3 million. Our IoT PaaS revenue grew by 32% year-over-year, fueled by
a resurgence in industry demand and our ability to attract new customers while strengthening partnerships with existing ones. Meanwhile,
our smart solutions revenue saw a 44.2% year-over-year increase, reflecting the strong market demand and the value proposition of our
offerings. Crucially, our strong revenue growth, enhanced efficiency, stable gross margins, and excellent control over expenses and costs
led to Tuya’s first-ever non-GAAP operational profitability in this quarter. Looking ahead, we are confident that Tuya’s
strong financial and operational foundation will continue to drive sustainable growth and profit margin improvements.”
Second Quarter 2024 Unaudited Financial
Results
REVENUE
Total revenue in
the second quarter of 2024 increased by 28.6% to US$73.3 million from US$57.0 million in the same period of 2023, mainly due to the increase
in IoT PaaS revenue and smart solution revenue.
| · | IoT
PaaS revenue in the second quarter of 2024 increased by 32.0% to US$54.3 million from US$41.1
million in the same period of 2023, primarily due to reduced downstream inventory backlog,
a global economic recovery compared with the same period of 2023, and the Company’s
strategic focus on customer needs and product enhancements. As a result, the Company’s
DBNER of IoT PaaS for the trailing 12 months ended June 30, 2024 increased to 127% from
58% for the trailing 12 months ended June 30, 2023. |
| · | SaaS
and others revenue in the second quarter of 2024 increased by 2.4% to US$9.6 million from
US$9.4 million in the same period of 2023. 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 second quarter of 2024 increased by 44.2% to US$9.4 million from
US$6.5 million in the same period of 2023, primarily due to the increasing customer demand
for smart devices with integrated intelligent software capabilities the Company developed
beyond IoT. |
COST OF REVENUE
Cost of revenue
in the second quarter of 2024 increased by 25.4% to US$38.1 million from US$30.4 million in the same period of 2023, generally in line
with the increase in the Company’s total revenue.
GROSS PROFIT AND GROSS MARGIN
Total gross profit
in the second quarter of 2024 increased by 32.1% to US$35.2 million from US$26.6 million in the same period of 2023 and gross margin
increased to 48.0% in the second quarter of 2024 from 46.7% in the same period of 2023.
| · | IoT
PaaS gross margin in the second quarter of 2024 was 47.6%, compared to 44.2% in the same
period of 2023, primarily due to the changes in product mix and increased product value. |
| · | SaaS
and others gross margin in the second quarter of 2024 was 71.0%, compared to 74.5% in the
same period of 2023, due to the variations in product and service mix. |
| · | Smart
solution gross margin in the second quarter of 2024 was 26.8%, compared to 23.0% in the same
period of 2023, primarily due to the high-value product solutions the Company provided to
its customers during the second quarter of 2024. |
OPERATING EXPENSES
Operating expenses
decreased by 21.6% to US$45.5 million in the second quarter of 2024 from US$58.1 million in the same period of 2023. Non-GAAP operating
expenses decreased by 15.6% to US$27.8 million in the second quarter of 2024 from US$33.0 million in the same period of 2023. 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 second quarter of 2024 were US$23.0 million, down 13.1% from
US$26.5 million in the same period of 2023, primarily due to the decrease in employee-related
costs. During this quarter, average salaried employee headcount of the Company’s research
and development team was down approximately 16.7% year over year, but remained relatively
stable compared to the previous quarter. Non-GAAP adjusted research and development expenses
in the second quarter of 2024 were US$19.6 million, compared to US$22.5 million in the same
period of 2023. |
| · | Sales
and marketing expenses in the second quarter of 2024 were US$9.4 million, down 4.5% from
US$9.8 million in the same period of 2023, primarily due to the decrease in employee-related
costs. Non-GAAP adjusted sales and marketing expenses in the second quarter of 2024 were
US$8.2 million, compared to US$8.2 million in the same period of 2023. |
| · | General
and administrative expenses in the second quarter of 2024 were US$16.9 million, down 30.5%
compared to US$24.3 million in the same period of 2023, primarily due to the decline in credit-related
impairment of long-term investments. Non-GAAP adjusted general and administrative expenses
in the second quarter of 2024 were US$3.7 million, compared to US$4.8 million in the same
period of 2023. |
| · | Other
operating income, net in the second quarter of 2024 was US$3.7 million, primarily due to
the receipt of software value-added tax refunds and various general subsidies for enterprises. |
LOSS/PROFIT FROM OPERATIONS AND
OPERATING MARGIN
Loss from operations
in the second quarter of 2024 narrowed by 67.1% to US$10.3 million from US$31.4 million in the same period of 2023. The Company had a
non-GAAP profit from operations of US$7.4 million in the second quarter of 2024, compared to a non-GAAP loss from operations of US$6.4
million in the same period of 2023, achieving operating profitability on a non-GAAP basis for the first time.
Operating margin
in the second quarter of 2024 was negative 14.1%, improved by 41.0 percentage points from negative 55.1% in the same period of 2023.
Non-GAAP operating margin in the second quarter of 2024 was 10.0%, improved by 21.2 percentage points from negative 11.2% in the same
period of 2023.
NET LOSS/PROFIT AND NET MARGIN
The Company had
a net profit of US$3.1 million in the second quarter of 2024, compared to a net loss of US$23.5 million in the same period of 2023, marking
it the first fiscal quarter that the Company has achieved break-even profitability on a GAAP basis. The difference between loss from
operations and net profit in the second quarter of 2024 was primarily because of a US$12.5 million interest income achieved mainly due
to well implemented treasury strategies on the Company’s cash, time deposits and treasury securities recorded as short-term and
long-term investments.
The Company had
a non-GAAP net profit of US$20.8 million in the second quarter of 2024, up 1,276.5% compared to US$1.5 million in the same period of
2023, demonstrating the Company’s ability to sustain strong profitability on a non-GAAP basis.
Net margin in the
second quarter of 2024 was 4.3%, improving by 45.6 percentage points from negative 41.3% in the same period of 2023. Non-GAAP net margin
in the second quarter of 2024 was 28.4%, improving by 25.7 percentage points from 2.7% in the same period of 2023.
BASIC AND DILUTED NET LOSS/PROFIT
PER ADS
Basic and diluted
net profit per ADS was US$0.01 in the second quarter of 2024, compared to basic and diluted net loss of US$0.04 in the same period of
2023. Each ADS represents one Class A ordinary share.
Non-GAAP basic
and diluted net profit per ADS was US$0.04 in the second quarter of 2024, compared to non-GAAP basic and diluted net profit of US$0.00
in the same period of 2023.
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$1,000.1 million as of June 30, 2024,
compared to US$984.3 million as of December 31, 2023, which the Company believes 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 second quarter of 2024 was US$11.8 million, compared to US$7.5 million in the same period of 2023. The
net cash generated from operating activities for the second quarter of 2024 improved mainly due to the increase in the Company’s
revenue, and the decrease in operating expenses, particularly employee-related costs, and 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
With the stabilizing
macroeconomic environment, normalizing downstream inventory levels, and growing demand for consumer electronics, the industry is currently
on a positive trajectory. With the effective implementation of the Company’s customer and product strategies, along with the utilization
and innovation of emerging technologies like generative AI, the Company is confident in its business prospects.
The Company will
remain committed to continuously iterating and improving its products and services, further enhancing software and hardware 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 interests rate volatility, and broader
geopolitical uncertainties.
Declaration of Special Dividend and
Record Date
On August 26,
2024, the Board has approved the declaration and distribution of a special dividend (the “Special Dividend”) of US$0.0589
per ordinary share, or US$0.0589 per ADS, to such holders as at the close of business on September 11, 2024, Hong Kong Time and
New York Time, respectively. The aggregate amount of the Special Dividend will be approximately US$33 million, which is payable in U.S.
dollars and in cash, and will be funded by surplus cash and to be paid out from the share premium account of the Company. The determination
to make distributions and the amount of such distributions will be made at the discretion of its Board and will be based upon the Company’s
operations and earnings, including, but not limited, considerations of the Company’s GAAP and Non-GAAP net profits, cash flows,
financial conditions and other relevant factors.
In order to qualify
for the Special Dividend, with respect to ordinary shares registered on the Company’s Hong Kong share register, all valid documents
for the transfers of shares accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong share registrar,
Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan
Chai, Hong Kong, no later than 4:30 p.m. on Wednesday, September 11, 2024, Hong Kong time; and with respect to the ordinary
shares registered on the Company’s principal share register in the Cayman Islands, all valid documents for the transfers of shares
accompanied by the relevant share certificates must be lodged with the Company’s principal share registrar, Maples Fund Services
(Cayman) Limited, at PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman, KY1-1102, Cayman Islands, no later than 3:30 p.m. on
Tuesday, September 10, 2024, Cayman Islands time (due to the time difference between Cayman Islands and Hong Kong).
Dividend to be
paid to the holders of ADSs issued by the depositary of the ADSs will be subject to the terms of the deposit agreement.
The payment date
is expected to be on or around October 9, 2024 for holders of ordinary shares, and on or around October 15, 2024 for holders
of ADSs.
Conference Call Information
The Company’s
management will hold a conference call at 08:30 P.M. Eastern Time on Monday, August 26, 2024 (08:30 A.M. Beijing Time
on Tuesday, August 27, 2024) to discuss the financial results. In advance of the conference call, all participants must use the
following link to complete the online registration process. Upon registering, each participant will receive access details for this conference
including a conference access code, a PIN number (personal access code), the dial-in number, and an e-mail with detailed instructions
to join the conference call.
Online registration: https://register.vevent.com/register/BI51298387e78143d9935bd5c0ea03f104
Additionally, a
live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.tuya.com,
and a replay of the webcast will be available following the session.
About Tuya Inc.
Tuya Inc. (NYSE:
TUYA; HKEX: 2391) is a global leading cloud platform service provider with a mission to build a smart solutions developer ecosystem and
enable everything to be smart. Tuya has pioneered a purpose-built cloud developer platform with cloud and generative AI capabilities
that delivers a full suite of offerings, including Platform-as-a-Service, or PaaS, Software-as-a-Service, or SaaS, and smart solutions
for developers of smart device, commercial applications, and industries. Through its cloud developer platform, Tuya has activated a vibrant
global developer community of brands, OEMs, AI agents, system integrators and independent software vendors to collectively strive for
smart solutions ecosystem embodying the principles of green and low-carbon, security, high efficiency, agility, and openness.
Use of Non-GAAP Financial Measures
In evaluating the
business, the Company considers and uses non-GAAP financial measures, such as non-GAAP operating expenses, non-GAAP loss from operations
(including non-GAAP operating margin), non-GAAP net (loss)/profit (including non-GAAP net margin), and non-GAAP basic and diluted net
(loss)/profit per ADS, as supplemental measures to review and assess its operating performance. The presentation of non-GAAP financial
measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance
with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company defines non-GAAP
financial measures by excluding the impact of share-based compensation expenses, credit-related impairment of long-term investments and
litigation costs from the respective GAAP financial measures. The Company presents the non-GAAP financial measures because they are used
by the management to evaluate its operating performance and formulate business plans. The Company also believes that the use of the non-GAAP
financial measures facilitates investors’ assessment of its operating performance.
Non-GAAP financial
measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations
as analytical tools. One of the key limitations of using the aforementioned non-GAAP financial measures is that they do not reflect all
items of expenses that affect the Company’s operations. Share-based compensation expenses, credit-related impairment of long-term
investments and litigation costs have been and may continue to be incurred in the business and are not reflected in the presentation
of non-GAAP measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including
peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP
measures to the most directly comparable U.S. GAAP measures, all of which should be considered when evaluating the Company’s performance.
The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.
Reconciliations
of Tuya’s non-GAAP financial measures to the most comparable U.S. GAAP measures are included at the end of this press release.
Safe Harbor Statement
This press release
contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs, and
expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors
could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking
statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”,
“target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”,
“continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks,
uncertainties or factors is included in the Company’s filings with the SEC. The forward-looking statements included in this press
release are only made as of the date hereof, and the Company disclaims any obligation to publicly update any forward-looking statement
to reflect subsequent events or circumstances, except as required by law. All forward-looking statements should be evaluated with the
understanding of their inherent uncertainty.
Investor Relations Contact
Tuya Inc.
Investor Relations
Email: ir@tuya.com
The Blueshirt Group
Gary Dvorchak, CFA
Phone: +1 (323) 240-5796
Email: gary@blueshirtgroup.co
TUYA
INC.
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS
OF DECEMBER 31, 2023 AND JUNE 30, 2024
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
As of | | |
As of | |
| |
December 31, | | |
June 30, | |
| |
2023 | | |
2024 | |
ASSETS | |
| | | |
| | |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
| 498,688 | | |
| 614,767 | |
Restricted cash | |
| – | | |
| 152 | |
Short-term investments | |
| 291,023 | | |
| 175,218 | |
Accounts receivable, net | |
| 9,214 | | |
| 6,763 | |
Notes receivable, net | |
| 4,955 | | |
| 7,271 | |
Inventories, net | |
| 32,865 | | |
| 28,088 | |
Prepayments
and other current assets, net | |
| 11,053 | | |
| 19,027 | |
| |
| | | |
| | |
Total
current assets | |
| 847,798 | | |
| 851,286 | |
| |
| | | |
| | |
Non-current assets: | |
| | | |
| | |
Property, equipment and software,
net | |
| 2,589 | | |
| 2,394 | |
Operating lease right-of-use
assets, net | |
| 7,647 | | |
| 6,007 | |
Long-term investments | |
| 207,489 | | |
| 220,401 | |
Other non-current
assets, net | |
| 877 | | |
| 9,562 | |
| |
| | | |
| | |
Total
non-current assets | |
| 218,602 | | |
| 238,364 | |
| |
| | | |
| | |
Total
assets | |
| 1,066,400 | | |
| 1,089,650 | |
| |
| | | |
| | |
LIABILITIES AND SHAREHOLDERS’
EQUITY | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
| 11,577 | | |
| 11,638 | |
Advances from customers | |
| 31,776 | | |
| 32,299 | |
Deferred revenue, current | |
| 6,802 | | |
| 6,504 | |
Accruals and other current liabilities | |
| 32,807 | | |
| 30,625 | |
Incomes tax payables | |
| 689 | | |
| – | |
Lease liabilities,
current | |
| 3,883 | | |
| 3,872 | |
| |
| | | |
| | |
Total
current liabilities | |
| 87,534 | | |
| 84,938 | |
| |
| | | |
| | |
Non-current liabilities: | |
| | | |
| | |
Lease liabilities, non-current | |
| 3,904 | | |
| 2,120 | |
Deferred revenue, non-current | |
| 506 | | |
| 425 | |
Other non-current
liabilities | |
| 3,891 | | |
| 2,300 | |
| |
| | | |
| | |
Total
non-current liabilities | |
| 8,301 | | |
| 4,845 | |
| |
| | | |
| | |
Total
liabilities | |
| 95,835 | | |
| 89,783 | |
TUYA
INC.
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
AS
OF DECEMBER 31, 2023 AND JUNE 30, 2024
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
As of | | |
As of | |
| |
December 31, | | |
June 30, | |
| |
2023 | | |
2024 | |
Shareholders’ equity: | |
| | | |
| | |
Ordinary shares | |
| – | | |
| – | |
Class A ordinary
shares | |
| 25 | | |
| 25 | |
Class B ordinary shares | |
| 4 | | |
| 4 | |
Treasury stock | |
| (53,630 | ) | |
| (43,628 | ) |
Additional paid-in capital | |
| 1,616,105 | | |
| 1,637,052 | |
Accumulated other comprehensive
loss | |
| (17,091 | ) | |
| (18,323 | ) |
Accumulated
deficit | |
| (574,848 | ) | |
| (575,263 | ) |
| |
| | | |
| | |
Total
shareholders’ equity | |
| 970,565 | | |
| 999,867 | |
| |
| | | |
| | |
Total
liabilities and shareholders’ equity | |
| 1,066,400 | | |
| 1,089,650 | |
TUYA
INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE
LOSS
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
|
|
For
the Three Months Ended |
|
|
For
the Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
Revenue |
|
|
57,004 |
|
|
|
73,279 |
|
|
|
104,489 |
|
|
|
134,941 |
|
Cost of revenue |
|
|
(30,363 |
) |
|
|
(38,087 |
) |
|
|
(56,820 |
) |
|
|
(70,264 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
26,641 |
|
|
|
35,192 |
|
|
|
47,669 |
|
|
|
64,677 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
|
(26,474 |
) |
|
|
(22,993 |
) |
|
|
(54,525 |
) |
|
|
(46,467 |
) |
Sales and marketing expenses |
|
|
(9,826 |
) |
|
|
(9,387 |
) |
|
|
(20,085 |
) |
|
|
(18,370 |
) |
General and administrative expenses |
|
|
(24,273 |
) |
|
|
(16,861 |
) |
|
|
(41,066 |
) |
|
|
(32,335 |
) |
Other operating
incomes, net |
|
|
2,514 |
|
|
|
3,705 |
|
|
|
4,294 |
|
|
|
5,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
|
(58,059 |
) |
|
|
(45,536 |
) |
|
|
(111,382 |
) |
|
|
(91,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations |
|
|
(31,418 |
) |
|
|
(10,344 |
) |
|
|
(63,713 |
) |
|
|
(26,711 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating incomes,
net |
|
|
778 |
|
|
|
1,869 |
|
|
|
1,556 |
|
|
|
2,647 |
|
Financial income, net |
|
|
7,305 |
|
|
|
12,452 |
|
|
|
18,775 |
|
|
|
25,259 |
|
Foreign
exchange gain/(loss), net |
|
|
937 |
|
|
|
(257 |
) |
|
|
903 |
|
|
|
(362 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit before income
tax expense |
|
|
(22,398 |
) |
|
|
3,720 |
|
|
|
(42,479 |
) |
|
|
833 |
|
Income
tax expense |
|
|
(1,151 |
) |
|
|
(592 |
) |
|
|
(2,115 |
) |
|
|
(1,248 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/profit |
|
|
(23,549 |
) |
|
|
3,128 |
|
|
|
(44,594 |
) |
|
|
(415 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/profit attributable to Tuya Inc. |
|
|
(23,549 |
) |
|
|
3,128 |
|
|
|
(44,594 |
) |
|
|
(415 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/profit attributable to ordinary shareholders |
|
|
(23,549 |
) |
|
|
3,128 |
|
|
|
(44,594 |
) |
|
|
(415 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/profit |
|
|
(23,549 |
) |
|
|
3,128 |
|
|
|
(44,594 |
) |
|
|
(415 |
) |
Other comprehensive (loss)/income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair value of long-term
investments |
|
|
(1,053 |
) |
|
|
(139 |
) |
|
|
(1,053 |
) |
|
|
(139 |
) |
Transfer out of fair value changes
of long-term investments |
|
|
8,050 |
|
|
|
– |
|
|
|
8,050 |
|
|
|
(65 |
) |
Foreign
currency translation |
|
|
(6,882 |
) |
|
|
(600 |
) |
|
|
(5,254 |
) |
|
|
(1,028 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive (loss)/income attributable to Tuya Inc. |
|
|
(23,434 |
) |
|
|
2,389 |
|
|
|
(42,851 |
) |
|
|
(1,647 |
) |
TUYA
INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE
LOSS (CONTINUED)
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
For
the Three Months Ended | | |
For
the Six Months Ended | |
| |
June 30, | | |
June 30, | | |
June 30, | | |
June 30, | |
| |
2023 | | |
2024 | | |
2023 | | |
2024 | |
Net
(loss)/profit attributable to Tuya Inc. | |
| (23,549 | ) | |
| 3,128 | | |
| (44,594 | ) | |
| (415 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net
(loss)/profit attributable to ordinary shareholders | |
| (23,549 | ) | |
| 3,128 | | |
| (44,594 | ) | |
| (415 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted
average number of ordinary shares used in computing net loss per share | |
| | | |
| | | |
| | | |
| | |
– Basic | |
| 554,945,739 | | |
| 559,710,445 | | |
| 554,472,706 | | |
| 559,421,815 | |
– Diluted | |
| 554,945,739 | | |
| 592,735,568 | | |
| 554,472,706 | | |
| 559,421,815 | |
| |
| | | |
| | | |
| | | |
| | |
Net (loss)/profit per share
attributable to ordinary shareholders | |
| | | |
| | | |
| | | |
| | |
– Basic | |
| (0.04 | ) | |
| 0.01 | | |
| (0.08 | ) | |
| (0.00 | ) |
– Diluted | |
| (0.04 | ) | |
| 0.01 | | |
| (0.08 | ) | |
| (0.00 | ) |
| |
| | | |
| | | |
| | | |
| | |
Share-based compensation
expenses were included in: | |
| | | |
| | | |
| | | |
| | |
Research and development expenses | |
| 4,006 | | |
| 3,376 | | |
| 8,123 | | |
| 6,882 | |
Sales and marketing expenses | |
| 1,620 | | |
| 1,169 | | |
| 3,226 | | |
| 2,554 | |
General and administrative expenses | |
| 11,386 | | |
| 10,864 | | |
| 22,983 | | |
| 21,787 | |
TUYA
INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
|
|
For
the Three
Months Ended |
|
|
For
the Six
Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
Net
cash generated from/(used in) operating activities |
|
|
7,495 |
|
|
|
11,829 |
|
|
|
(11,387 |
) |
|
|
26,319 |
|
Net
cash generated from/(used in) investing activities |
|
|
11,489 |
|
|
|
73,890 |
|
|
|
(22,335 |
) |
|
|
90,085 |
|
Net
cash generated from/(used in) financing activities |
|
|
104 |
|
|
|
(104 |
) |
|
|
(2,067 |
) |
|
|
150 |
|
Effect
of exchange rate changes on cash and cash equivalents, restricted cash |
|
|
(3,791 |
) |
|
|
(197 |
) |
|
|
(2,830 |
) |
|
|
(323 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents, restricted cash |
|
|
15,297 |
|
|
|
85,418 |
|
|
|
(38,619 |
) |
|
|
116,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents, restricted cash at the beginning of period |
|
|
79,245 |
|
|
|
529,501 |
|
|
|
133,161 |
|
|
|
498,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents, restricted cash at the end of period |
|
|
94,542 |
|
|
|
614,919 |
|
|
|
94,542 |
|
|
|
614,919 |
|
TUYA
INC.
UNAUDITED
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE FINANCIAL MEASURES
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
|
|
For
the Three Months Ended |
|
|
For
the Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
Reconciliation
of operating expenses to non-GAAP operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expenses |
|
|
(26,474 |
) |
|
|
(22,993 |
) |
|
|
(54,525 |
) |
|
|
(46,467 |
) |
Add:
Share-based compensation |
|
|
4,006 |
|
|
|
3,376 |
|
|
|
8,123 |
|
|
|
6,882 |
|
Adjusted
Research and development expenses |
|
|
(22,468 |
) |
|
|
(19,617 |
) |
|
|
(46,402 |
) |
|
|
(39,585 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
and marketing expenses |
|
|
(9,826 |
) |
|
|
(9,387 |
) |
|
|
(20,085 |
) |
|
|
(18,370 |
) |
Add:
Share-based compensation |
|
|
1,620 |
|
|
|
1,169 |
|
|
|
3,226 |
|
|
|
2,554 |
|
Adjusted
Sales and marketing expenses |
|
|
(8,206 |
) |
|
|
(8,218 |
) |
|
|
(16,859 |
) |
|
|
(15,816 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses |
|
|
(24,273 |
) |
|
|
(16,861 |
) |
|
|
(41,066 |
) |
|
|
(32,335 |
) |
Add:
Share-based compensation |
|
|
11,386 |
|
|
|
10,864 |
|
|
|
22,983 |
|
|
|
21,787 |
|
Add:
Credit-related impairment of long-term investments |
|
|
8,050 |
|
|
|
189 |
|
|
|
8,050 |
|
|
|
189 |
|
Add:
Litigation costs |
|
|
– |
|
|
|
2,100 |
|
|
|
– |
|
|
|
2,100 |
|
Adjusted
General and administrative expenses |
|
|
(4,837 |
) |
|
|
(3,708 |
) |
|
|
(10,033 |
) |
|
|
(8,259 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of loss from operations to non-GAAP (loss)/profit from operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations |
|
|
(31,418 |
) |
|
|
(10,344 |
) |
|
|
(63,713 |
) |
|
|
(26,711 |
) |
Add:
Share-based compensation expenses |
|
|
17,012 |
|
|
|
15,409 |
|
|
|
34,332 |
|
|
|
31,223 |
|
Add:
Credit-related impairment of long-term investments |
|
|
8,050 |
|
|
|
189 |
|
|
|
8,050 |
|
|
|
189 |
|
Add:
Litigation costs |
|
|
– |
|
|
|
2,100 |
|
|
|
– |
|
|
|
2,100 |
|
Non-GAAP
(Loss)/Profit from operations |
|
|
(6,356 |
) |
|
|
7,354 |
|
|
|
(21,331 |
) |
|
|
6,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Operating margin |
|
|
(11.2 |
)% |
|
|
10.0 |
% |
|
|
(20.4 |
)% |
|
|
5.0 |
% |
| |
For
the Three Months Ended | | |
For
the Six Months Ended | |
| |
June 30, | | |
June 30, | | |
June 30, | | |
June 30, | |
| |
2023 | | |
2024 | | |
2023 | | |
2024 | |
Reconciliation
of net (loss)/profit to non-GAAP net profit/(loss) | |
| | | |
| | | |
| | | |
| | |
Net
(loss)/profit | |
| (23,549 | ) | |
| 3,128 | | |
| (44,594 | ) | |
| (415 | ) |
Add:
Share-based compensation expenses | |
| 17,012 | | |
| 15,409 | | |
| 34,332 | | |
| 31,223 | |
Add:
Credit-related impairment of long-term investments | |
| 8,050 | | |
| 189 | | |
| 8,050 | | |
| 189 | |
Add:
Litigation costs | |
| – | | |
| 2,100 | | |
| – | | |
| 2,100 | |
Non-GAAP
Net profit/(loss) | |
| 1,513 | | |
| 20,826 | | |
| (2,212 | ) | |
| 33,097 | |
| |
| | | |
| | | |
| | | |
| | |
Non-GAAP
Net margin | |
| 2.7 | % | |
| 28.4 | % | |
| (2.1 | )% | |
| 24.5 | % |
| |
| | | |
| | | |
| | | |
| | |
Weighted
average number of ordinary shares used in computing non-GAAP net profit/(loss) per share | |
| | | |
| | | |
| | | |
| | |
–
Basic | |
| 554,945,739 | | |
| 559,710,445 | | |
| 554,472,706 | | |
| 559,421,815 | |
| |
| | | |
| | | |
| | | |
| | |
–
Diluted | |
| 586,513,021 | | |
| 592,735,568 | | |
| 554,472,706 | | |
| 591,970,099 | |
| |
| | | |
| | | |
| | | |
| | |
Non-GAAP
net profit/(loss) per share attributable to ordinary shareholders | |
| | | |
| | | |
| | | |
| | |
–
Basic | |
| 0.00 | | |
| 0.04 | | |
| (0.00 | ) | |
| 0.06 | |
| |
| | | |
| | | |
| | | |
| | |
–
Diluted | |
| 0.00 | | |
| 0.04 | | |
| (0.00 | ) | |
| 0.06 | |
Hong Kong Exchanges
and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this announcement.
Tuya
Inc.
塗鴉智能*
(A
company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability)
(HKEX
Stock Code: 2391)
(NYSE
Stock Ticker: TUYA)
INTERIM
RESULTS ANNOUNCEMENT
FOR
THE SIX MONTHS ENDED JUNE 30, 2024
AND
DECLARATION
OF SPECIAL DIVIDEND
Tuya Inc. (“Tuya”
or the “Company”, HKEX: 2391; NYSE: TUYA), a global leading cloud platform service provider, today announced the unaudited
financial results of the Company, its subsidiaries and consolidated affiliated entities (the “Group”) for the six
months ended June 30, 2024 (the “Reporting Period”), together with comparative figures for the six months ended
June 30, 2023 and the declaration of a special cash dividend.
FINANCIAL HIGHLIGHTS FOR THE SIX
MONTHS ENDED JUNE 30, 2024
· | Total
revenue was US$134.9 million, up approximately 29.1% year-over-year (for the six months
ended June 30, 2023: US$104.5 million). |
· | IoT
platform-as-a-service (“PaaS”) revenue was US$99.9 million, up approximately
33.7% year-over-year (for the six months ended June 30, 2023: US$74.7 million). |
· | Software-as-a-service
(“SaaS”) and others revenue was US$18.2 million, up approximately 2.1% year-over-year
(for the six months ended June 30, 2023: US$17.8 million). |
· | Overall
gross margin increased to 47.9%, up 2.3 percentage points year-over-year (for the six
months ended June 30, 2023: 45.6%). Gross margin of IoT PaaS increased to 47.1%, up
4.6 percentage points year-over-year (for the six months ended June 30, 2023: 42.5%). |
· | Operating
margin was negative 19.8%, up 41.2 percentage points year-over-year (for the six months
ended June 30, 2023: negative 61.0%). Non-GAAP operating margin was 5.0%, up
25.4 percentage points year-over-year (for the six months ended June 30, 2023: negative
20.4%). |
· | Net
margin was negative 0.3%, up 42.4 percentage points year-over-year (for the six months
ended June 30, 2023: negative 42.7%). Non-GAAP net margin was 24.5%, up 26.6
percentage points year-over-year (for the six months ended June 30, 2023: negative 2.1%). |
* | For
identification purposes only. |
· | Net
cash generated from operating activities was US$26.3 million, up approximately 331.1%
year-over-year (net cash used in operating activities for the six months ended June 30,
2023: US$11.4 million). |
· | Total
cash, cash equivalents, time deposits and treasury securities recorded as short-term and
long-term investments were US$1,000.1 million as of June 30, 2024, compared to US$984.3
million as of December 31, 2023. |
OPERATING HIGHLIGHTS FOR THE SIX
MONTHS ENDED JUNE 30, 2024
· | IoT
PaaS customers1
for the six months ended June 30, 2024 were approximately 2,700 (for the six months
ended June 30, 2023: 2,900). Total customers for the six months ended June 30,
2024 were approximately 4,100 (for the six months ended June 30, 2023: 4,300). The Group’s
key-account strategy has enabled it to focus on serving strategic customers. |
· | Premium
IoT PaaS customers2
for the trailing 12 months ended June 30, 2024 were 280 (the trailing 12 months ended
June 30, 2023: 251). In the six months ended June 30, 2024, the Group’s premium
IoT PaaS customers contributed approximately 85.1% (for the six months ended June 30,
2023: 81.1%) of IoT PaaS revenue. |
· | Dollar-based
net expansion rate (“DBNER”)3
of IoT PaaS for the trailing 12 months ended
June 30, 2024 was 127% (the trailing 12 months ended June 30, 2023: 58%). |
· | Registered
IoT device and software developers (“registered developers”) were over 1,192,000
as of June 30, 2024, up 20.1% from approximately 993,000 developers as of December 31,
2023. |
1. | The
Group defines an IoT PaaS customer for a given period as a customer who has directly placed
orders for IoT PaaS with the Group during that period. |
2. | The
Group defines a premium IoT PaaS customer as a customer as of a given date that contributed
more than US$100,000 of IoT PaaS revenue during the immediately preceding 12-month period. |
3. | The
Group calculates DBNER of IoT 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 IoT
PaaS during that period), and then calculating the quotient from dividing the IoT PaaS revenue
generated from such customers in the current trailing 12-month period by the IoT PaaS revenue
generated from the same group of customers in the prior 12-month period. The Group’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 Group’s customer
mix, among other things, DBNER indicates the Group’s ability to expand customer use
of its platform over time and generate revenue growth from existing customers. |
UNAUDITED
FINANCIAL RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2024
Revenue
Total revenue increased
by 29.1% to US$134.9 million in the six months ended June 30, 2024 from US$104.5 million in the same period of 2023, mainly due
to the increase in IoT PaaS revenue and smart solution revenue.
· | IoT
PaaS revenue increased by 33.7% to US$99.9 million in the six months ended June 30,
2024 from US$74.7 million in the same period of 2023, primarily due to reduced downstream
inventory backlog, a global economic recovery compared with the same period of 2023, and
the Group’s strategic focus on customer needs and product enhancements. As a result,
the Company’s DBNER of IoT PaaS for the trailing 12 months ended June 30, 2024
increased to 127% from 58% for the trailing 12 months ended June 30, 2023. |
· | SaaS
and others revenue increased by 2.1% to US$18.2 million in the six months ended June 30,
2024 from US$17.8 million in the same period of 2023, primarily due to an increase in revenue
from cloud software products, partially offset by the decrease in revenue from technical
development services. The Group remained committed to offering value-added services and a
diverse range of software products with compelling value propositions to its customers. |
· | Smart
solution revenue increased by 41.1% to US$16.8 million in the six months ended June 30,
2024 from US$11.9 million in the same period of 2023, primarily due to the increasing customer
demand for smart devices with integrated intelligent software capabilities the Company developed
beyond IoT. |
Cost of revenue
Cost of revenue
increased by 23.7% to US$70.3 million in the six months ended June 30, 2024 from US$56.8 million in the same period of 2023, generally
in line with the increase in the Company’s total revenue.
Gross profit and gross margin
Total gross profit
increased by 35.7% to US$64.7 million in the six months ended June 30, 2024 from US$47.7 million in the same period of 2023 and
gross margin increased to 47.9% in the six months ended June 30, 2024 from 45.6% in the same period of 2023.
· | IoT
PaaS gross margin was 47.1% in the six months ended June 30, 2024, up 4.6 percentage
points compared to 42.5% in the same period of 2023, primarily due to the changes in product
mix, increased product value, and declined provision recorded for certain slow-moving IoT
chips and raw materials inventory in relation to the IoT PaaS business compared to the same
period of last year. |
· | SaaS
and others gross margin was 71.6% in the six months ended June 30, 2024, compared to
74.3% in the same period of 2023, due to the variations in product and service mix. |
· | Smart
solution gross margin was 27.5% in the six months ended June 30, 2024, compared to 22.1%
in the same period of 2023, primarily due to the high-value product solutions the Group provided
to its customers during the Reporting Period. |
Operating expenses
Operating expenses
decreased by 18.0% to US$91.4 million in the six months ended June 30, 2024 from US$111.4 million in the same period of 2023. Non-GAAP
operating expenses decreased by 16.1% to US$57.9 million in the six months ended June 30, 2024 from US$69.0 million in the same
period of 2023. For further information on the non-GAAP financial measures presented above, see the section headed “Use of Non-GAAP
Financial Measures ” in this announcement.
| · | Research
and development expenses were US$46.5 million in the six months ended June 30, 2024,
down 14.8% from US$54.5 million in the same period of 2023, primarily because of the Group’s
strategic streamlining of its research and development team and operations. The Group’s
total salaried research and development headcount as of June 30, 2024 was 1,035, down
18.4% compared to that as of June 30, 2023. Non-GAAP adjusted research and development
expenses in the six months ended June 30, 2024 were US$39.6 million, compared to US$46.4
million in the same period of 2023. |
| · | Sales and
marketing expenses were US$18.4 million in the six months ended June 30, 2024, down
8.5% from US$20.1 million in the same period of 2023, primarily due to the decrease in employee-related
costs. Non-GAAP adjusted sales and marketing expenses in the six months ended June 30,
2024 were US$15.8 million, compared to US$16.9 million in the same period of 2023. |
| · | General
and administrative expenses were US$32.3 million in the six months ended June 30, 2024,
down 21.3% from US$41.1 million in the same period of 2023, primarily due to the decline
in credit-related impairment of long-term investments. Non-GAAP adjusted general and administrative
expenses in the six months ended June 30, 2024 were US$8.3 million, compared to US$10.0
million in the same period of 2023. |
| · | Other operating
incomes, net were US$5.8 million in the six months ended June 30, 2024, primarily due
to the receipts of software value-added tax refund and various general subsidies for enterprises. |
Loss from operations and operating
margin
Loss from operations
was US$26.7 million in the six months ended June 30, 2024, narrowed by 58.1% compared to US$63.7 million in the same period of 2023.
Non-GAAP profit from operations was US$6.8 million in the six months ended June 30, 2024, compared to a non-GAAP loss of US$21.3
million in the same period of 2023.
Operating margin
was negative 19.8% in the six months ended June 30, 2024, improved by 41.2 percentage points from negative 61.0% in the same period
of 2023. Non-GAAP operating margin was 5.0% in the six months ended June 30, 2024, improved by 25.4 percentage points from negative
20.4% in the same period of 2023.
Net loss and net margin
Net loss was US$0.4
million in the six months ended June 30, 2024, narrowed by 99.1% compared to US$44.6 million in the same period of 2023. The differences
between loss from operations and net loss in the six months ended June 30, 2024 was primarily because of a US$25.3 million interest
income achieved mainly due to well implemented treasury strategies on the Group’s cash, time deposits and treasury securities recorded
as short-term and long-term investments.
The Group had a
non-GAAP net profit of US$33.1 million in the six months ended June 30, 2024, compared to a non-GAAP net loss of US$2.2 million
in the same period of 2023.
Net margin was
negative 0.3% in the six months ended June 30, 2024, improved by 42.4 percentage points from negative 42.7% in the same period of
2023, and non-GAAP net margin was 24.5% in the six months ended June 30, 2024, improved by 26.6 percentage points from negative
2.1% in the same period of 2023.
Basic and diluted net loss per
American Depositary Share (“ADS”)
Basic and diluted
net loss per ADS was US$0.00 in the six months ended June 30, 2024, compared to US$0.08 in the same period of 2023. Each ADS represents
one Class A ordinary share of the Company (the “Class A Ordinary Share(s)”).
Non-GAAP basic
and diluted net profit per ADS in the six months ended June 30, 2024 was approximately US$0.06, compared to non-GAAP basic and diluted
net loss of US$0.00 in the same period of 2023.
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$1,000.1 million as of June 30, 2024,
compared to US$984.3 million as of December 31, 2023, which the Group believes is sufficient to meet its current liquidity and working
capital needs. Please also refer to the section headed “Acquisition(s) of Treasury Securities ” in this announcement
for further details regarding the acquisitions of treasury securities by the Group during the Reporting Period.
Net cash generated from operating
activities
Net cash generated
from operating activities was US$26.3 million in the six months ended June 30, 2024, compared to US$11.4 million of net cash used
in operating activities in the same period of 2023. The net cash generated in operating activities in the six months ended June 30,
2024 improved mainly due to the increase in the Company’s revenue, and the decrease in operating expenses, particularly employee-related
costs, and working capital changes in the ordinary course of business.
For further information
on non-GAAP financial measures discussed above, see the section headed “Use of Non-GAAP Financial Measures ” on page 16
of this announcement.
BUSINESS REVIEW AND OUTLOOK
Business review
IoT PaaS customers
for the six months ended June 30, 2024 were approximately 2,700. Total customers for the six months ended June 30, 2024 were
approximately 4,100. The Group defines an IoT PaaS customer for a given period as a customer who has directly placed orders for IoT PaaS
with the Group during that period.
Premium IoT PaaS
customers for the trailing 12 months ended June 30, 2024 were 280. In the six months ended June 30, 2024, the Group’s
premium IoT PaaS customers contributed approximately 85.1% of IoT PaaS revenue. The Group defines a premium IoT PaaS customer as a customer
as of a given date that contributed more than US$100,000 of IoT PaaS revenue during the immediately preceding 12-month period.
DBNER of IoT PaaS
for the trailing 12 months ended June 30, 2024 was 127%. The Group calculates DBNER of IoT 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 IoT PaaS during that period),
and then calculating the quotient from dividing the IoT PaaS revenue generated from such customers in the current trailing 12-month period
by the IoT PaaS revenue generated from the same group of customers in the prior 12-month period. The Group’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 Group’s customer mix, among other things. DBNER indicates the Group’s ability to expand customer use of its platform
over time and generate revenue growth from existing customers.
Registered IoT
device and software developers, or registered developers, were over 1,192,000 as of June 30, 2024, up 20.1% from approximately 993,000
developers as of December 31, 2023.
Outlook
With the stabilizing
macroeconomic environment, normalizing downstream inventory levels, and growing demand for consumer electronics, the industry is currently
on a positive trajectory. With the effective implementation of the Company’s customer and product strategies, along with the utilization
and innovation of emerging technologies like generative AI, the Company is confident in its business prospects.
The Company will
remain committed to continuously iterating and improving its products and services, further enhancing software and hardware 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, and broader
geopolitical uncertainties.
MANAGEMENT DISCUSSION AND ANALYSIS
| 1. | Liquidity
and capital resources |
The Group
has been incurring losses from operations since inception. The Group incurred net losses of US$0.4 million and US$44.6 million for the
six months ended June 30, 2024 and 2023, respectively. Accumulated deficit amounted to US$575.3 million as of June 30, 2024.
However, due to well implementation of the Group’s initiatives to navigate the headwinds and strategies for its long-term development,
the Group achieved a net cash generated from operating activities of US$26.3 million for the six months ended June 30, 2024, compared
to a net cash used in operating activities of US$11.4 million for the six months ended June 30, 2023.
The Group’s
liquidity is based on its ability to enhance its operating cash flow position, obtain capital financing from equity interest investors
to fund its general operations, research and development activities and capital expenditures. The Group’s ability to continue as
a going concern is dependent on management’s ability to execute its business plan successfully, which includes increasing market
acceptance of its products to boost sales volume to achieve economies of scale or strengthen its technology capabilities to provide advanced
products with higher value proposition while applying more effective marketing strategies and cost control measures to better manage
operating cash flow position and obtaining funds from outside sources of financing to generate positive financing cash flows. In March and
April 2021, with the completion of its initial public offering on the New York Stock Exchange and the exercise of the over-allotment
option by underwriters, the Company received net proceeds, after deducting the underwriting discounts and commissions, fees and offering
expenses, of US$904.7 million. On July 5, 2022, the Class A Ordinary Shares of the Company were listed on the Main Board of
the Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) (the “Listing”). In connection
with the Listing, 7,300,000 new Class A Ordinary Shares were issued and allotted at the offer price of HK$19.3 per Class A
Ordinary Share. Net proceeds from the global offering, after deducting the underwriting fees and commissions, were approximately HK$70.0
million (the “Global Offering Net Proceeds”), and no over-allotment option was exercised.
As of
June 30, 2024, the balance of cash and cash equivalents, time deposits and treasury securities recorded as short-term and long-term
investments were US$1,000.1 million, compared to US$984.3 million as of December 31, 2023.
| 2. | Interest-bearing
bank and other borrowings |
As of
June 30, 2024, the Group did not have any interest-bearing bank and other borrowings.
As of
June 30, 2024, the Group did not have any pledge of assets.
Gearing
ratio equals total debt divided by total equity as of the end of the period. Total debt is defined to include short-term borrowings,
current portion of long-term borrowings and long-term borrowings which are all interest-bearing borrowings. As of June 30, 2024,
the gearing ratio of the Group was nil as the Group had no borrowings (as of December 31, 2023: nil).
For the
six months ended June 30, 2024, the Group did not have any significant investments (including any investment in an investee company
with a value of 5% or more of the Group’s total assets as of June 30, 2024) save and except for (i) time deposits of
US$262.1 million presented as short-term investment and long-term investments according to the applicable accounting standards and (ii) the
acquisitions of treasury securities by the Group as referred to below. As of June 30, 2024, the Group did not have other plans for
material investments and capital assets.
Acquisition(s) of
Treasury Securities
Reference
is made to the announcements (the “Announcements”) and circular (the “Circular”) of the Company
dated May 14, 2024 and May 21, 2024, respectively. The Group acquired treasury securities for the six months ended June 30,
2024 and proposed to conduct potential acquisition(s) of treasury securities subject to the maximum acquisition amount of US$400,000,000
in the open market through reputable licensed banks or securities brokerage firms during the relevant mandate period (as specified in
the Circular), which has been approved by the shareholders of the Company at its annual general meeting held on June 20, 2024. For
details, please refer to the Announcements and Circular.
As at
the date of this announcement, the Group acquired treasury securities under such mandate at an aggregate acquisition amount of approximately
US$123.2 million. Save as aforementioned, the Group did not acquire any other treasury securities as at the date of this announcement.
| 6. | Capital
expenditure commitments |
As of
June 30, 2024, the Group did not have any capital expenditure commitments.
As of
June 30, 2024, the Group did not have any material contingent liabilities.
| 8. | Material
acquisitions and disposals |
The Group
did not conduct any material acquisitions and disposals during the six months ended June 30, 2024.
Foreign exchange risk
The revenue
of the Group is predominantly denominated in Renminbi (“RMB”) and a substantial portion of the Group’s expenses
is also denominated in RMB. The Group uses United States dollar as its reporting currency. The functional currency of the Company and
its subsidiaries incorporated in Cayman Islands and Hong Kong is the United States dollar, while the functional currency of the Group’s
other subsidiaries and consolidated affiliated entities is their respective local currency as determined based on the criteria of ASC
830, Foreign Currency Matters. The financial statements of its subsidiaries and consolidated affiliated entities using functional currencies
other than U.S. dollar, such as RMB, are translated to the U.S. dollar. As a result, as RMB depreciates or appreciates against the U.S.
dollar, the Group’s revenue presented in U.S. dollar will be negatively or positively affected. The Group does not believe that
it currently has any significant direct foreign exchange risk arising from its operating activities. As of June 30, 2024, the Group
did not hold any financial instruments for hedging purposes.
Interest rate risk
The Group’s
exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing
bank deposits. The Group has not used any derivative financial instruments to manage its interest risk exposure. Interest-earning instruments
carry a degree of interest rate risk. The Group has not been exposed, nor does the Group anticipate being exposed, to material risks
due to changes in interest rates. However, the Group’s future interest income may be lower than expected due to changes in market
interest rates.
10. |
Employees and remuneration policies |
The following
table sets forth the breakdown of the Group’s salaried employees by function as of June 30, 2024:
| |
Number of | |
Function | |
Employees | |
Research and development | |
| 1,041 | |
Sales and marketing | |
| 302 | |
General and administrative, and others | |
| 107 | |
Total | |
| 1,450 | |
The Group
primarily recruits the employees by its recruitment specialists at human resources department through referrals and online channels,
including the Company’s corporate website and social networking platforms. The Group has adopted a series of training policies
and tailor-made lessons, pursuant to which technology, corporate culture, leadership, and other trainings are regularly provided to the
Group’s employees by internal speakers and third-party consultants. The Group offers its employees competitive compensation packages
and a dynamic work environment that encourages initiative. The Group participates in various government statutory employee benefit plans,
including social insurance, namely pension insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity
insurance, and housing funds. In addition, the Group participates in a supplemental employee commercial healthcare insurance program,
aiming to promote healthy work and healthy life of employees.
CORPORATE GOVERNANCE
The board (the
“Board”) of directors (the “Directors” and each, a “Director”) of the Company
is committed to achieving high corporate governance standards. The Board believes that high corporate governance standards are essential
in providing a framework for the Company to safeguard the interests of shareholders and to enhance corporate value and accountability.
Compliance with the Corporate
Governance Code
For the six months
ended June 30, 2024, the Company has complied with all the code provisions of the Corporate Governance Code set forth in Appendix
C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”),
save and except for the following.
Pursuant to code
provision C.2.1 of the Corporate Governance Code, companies listed on the Hong Kong Stock Exchange are expected to comply with, but may
choose to deviate from the requirement that the responsibilities between the chairman and the chief executive officer should be separate
and should not be performed by the same individual. The Company deviates from this code provision because Mr. WANG Xueji (“Mr. Wang”)
performs both the roles of a co-chairman of the Board and the chief executive officer of the Company. Mr. Wang is a founder of the
Group and has extensive experience in the business operations and management of the Group. The Board believes that, in view of Mr. Wang’s
experience, personal profile and his roles in the Company as mentioned above, Mr. Wang is the Director best suited to identify strategic
opportunities, ensure the consistent leadership within the Company, and focus on the Board due to his extensive understanding of the
Company’s business as the chief executive officer of the Company. The Board also believes that the combined roles of both chairman
and chief executive officer can promote the effective execution of strategic initiatives and facilitate the flow of information between
management and the Board.
The Board considers
that the balance of power and authority will not be impaired due to this arrangement. The reasons are: (i) all major decisions are
made in consultation with members of the Board, including the relevant Board committees, and four independent non-executive Directors;
(ii) Mr. Wang and the other Directors acknowledge and undertake to fulfil their fiduciary duties as directors, which require
them, among other things, to act in the interests of the Company in a manner that is in the best interests of the Company and to make
decisions for the Group accordingly; and (iii) the Board is made up of experienced and talented people who meet regularly to discuss
matters affecting the operations of the Company to ensure a balance of power and authority. In addition, the Group’s overall strategic
and other major businesses, financial and operational policies have been formulated jointly by the Board and senior management after
detailed discussion.
The Board will
continue to review and may recommend separating the roles of chairman of the Board and the chief executive officer of the Company in
the future if and when it is appropriate, taking into account the circumstances of the Group as a whole.
Compliance with the Model Code
for Securities Transactions by Directors of Listed Issuers (the “Model Code”)
The Company has
adopted the Model Code set out in Appendix C3 to the Listing Rules as its code of conduct regarding directors’ securities
transactions. Specific enquiry has been made of all the Directors and the relevant employees and they have confirmed that they have complied
with the Model Code for the six months ended June 30, 2024.
Audit Committee
The audit committee
of the Company (the “Audit Committee”) comprises three independent non-executive Directors, being Mr. HUANG Sidney
Xuande, Mr. KUOK Meng Xiong (alias GUO Mengxiong) and Mr. YIP Pak Tung Jason, with Mr. HUANG Sidney Xuande (being the
independent non-executive Director with the appropriate professional qualifications) as the chairman of the Audit Committee.
The Audit Committee
has reviewed the unaudited condensed consolidated financial statements and interim results of the Group for the Reporting Period, and
there is no disagreement between the Board and the Audit Committee regarding the accounting treatment adopted by the Company.
The Audit Committee
has met with the independent auditor of the Company (the “Auditor”), PricewaterhouseCoopers, and has also discussed
matters with respect to the accounting policies and practices adopted by the Company and internal control and financial reporting matters.
Auditor’s Procedures Performed
on this Announcement
The independent
auditor of the Company, PricewaterhouseCoopers, has reviewed the unaudited condensed consolidated financial statements of the Group for
the six months ended June 30, 2024 in accordance with International Standard on Review Engagements 2410, Review of Interim Financial
Information Performed by the Independent Auditor of the Entity.
OTHER INFORMATION
Declaration of Special Dividend
and Record Date
On August 26,
2024, the Board has approved the declaration and distribution of a special dividend (the “Special Dividend”) of US$0.0589
per ordinary share, or US$0.0589 per ADS, to such holders as at the close of business on September 11, 2024, Hong Kong Time and
New York Time, respectively. The aggregate amount of the Special Dividend will be approximately US$33 million, which is payable in U.S.
dollars and in cash, and will be funded by surplus cash and to be paid out from the share premium account of the Company. The determination
to make distributions and the amount of such distributions will be made at the discretion of its Board and will be based upon the Company’s
operations and earnings, including, but not limited, considerations of the Company’s GAAP and Non-GAAP net profits, cash flows,
financial conditions and other relevant factors.
In order to qualify
for the Special Dividend, with respect to ordinary shares registered on the Company’s Hong Kong share register, all valid documents
for the transfers of shares accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong share registrar,
Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan
Chai, Hong Kong, no later than 4:30 p.m. on Wednesday, September 11, 2024, Hong Kong time; and with respect to the ordinary
shares registered on the Company’s principal share register in the Cayman Islands, all valid documents for the transfers of shares
accompanied by the relevant share certificates must be lodged with the Company’s principal share registrar, Maples Fund Services
(Cayman) Limited, at PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman, KY1-1102, Cayman Islands, no later than 3:30 p.m. on
Tuesday, September 10, 2024, Cayman Islands time (due to the time difference between Cayman Islands and Hong Kong).
Dividend to be
paid to the holders of ADSs issued by the depositary of the ADSs will be subject to the terms of the deposit agreement.
The payment date
is expected to be on or around October 9, 2024 for holders of ordinary shares, and on or around October 15, 2024 for holders
of ADSs.
Use of Proceeds from the Global
Offering
On July 5,
2022, the Class A Ordinary Shares were listed on the Main Board of the Hong Kong Stock Exchange and the Company successfully raised
the Global Offering Net Proceeds (as defined above) of approximately HK$70.0 million. As of the date of this announcement, there was
no change in the intended use of net proceeds as previously disclosed in the section headed “Future Plans and Use of Proceeds”
in the prospectus of the Company dated June 22, 2022 (the “Prospectus”).
As at June 30, 2024, the Company
had utilized the net proceeds as set out in the table below:
|
|
Percentage
of
the total net
proceeds raised
from the Listing |
|
|
Planned
use of
proceeds in the
same manner
and proportion
as stated in the
Prospectus |
|
|
Net
proceeds
unutilized as at
December 31,
2023 |
|
|
Actual
use of
proceeds during
the Reporting
Period |
|
|
Net
proceeds
unutilized as at
June 30, 2024 |
|
|
Expected
timeframe
for utilizing the |
|
|
Approximate
(%) |
|
|
Approximate
(HK$ million) |
|
|
Approximate
(HK$ million) |
|
|
Approximate
(HK$ million) |
|
|
Approximate
(HK$ million) |
|
|
remaining
unutilized
net proceeds |
To
enhance our IoT technologies and infrastructure |
|
|
30 |
% |
|
|
21.0 |
|
|
|
14.7 |
|
|
|
2.1 |
|
|
|
12.6 |
|
|
Over
the course of the next three and a half years |
To
expand and enhance our product offerings |
|
|
30 |
% |
|
|
21.0 |
|
|
|
14.7 |
|
|
|
2.1 |
|
|
|
12.6 |
|
|
Over the
course of the next three and a half years |
For
marketing and branding activities |
|
|
15 |
% |
|
|
10.5 |
|
|
|
7.3 |
|
|
|
1.1 |
|
|
|
6.2 |
|
|
Over the
course of the next three and a half years |
To
pursue strategic partnerships, investments and acquisitions to implement our long-term growth strategies |
|
|
15 |
% |
|
|
10.5 |
|
|
|
7.3 |
|
|
|
1.1 |
|
|
|
6.2 |
|
|
Over the
course of the next three and a half years |
For
general corporate purposes and working capital needs |
|
|
10 |
% |
|
|
7.0 |
|
|
|
4.9 |
|
|
|
0.7 |
|
|
|
4.2 |
|
|
Over
the course of the next three and a half years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
100 |
% |
|
|
70.0 |
|
|
|
48.9 |
|
|
|
7.1 |
|
|
|
41.8 |
|
|
|
Purchase, Sale and Redemption
of the Company’s Listed Securities
During the Reporting
Period, the Company repurchased 223,773 ADSs representing the same number of Class A Ordinary Shares (the “Repurchased
Shares”) from the open market for a total consideration of US$0.4 million. As of the date of this announcement, the Repurchased
Shares are pending cancellation, and would not receive the Special Dividend.
Save as disclosed
above, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company’s securities listed on the
Hong Kong Stock Exchange (including sale of treasury shares) during the Reporting Period. As of the date of this announcement, the Company
does not hold any treasury shares.
Important
Events after the Reporting Period
Save as disclosed
in this announcement, no important events affecting the Group occurred since June 30, 2024 and up to the date of this announcement.
Contingencies
As disclosed in
the announcement of the Company dated July 26, 2023 and in the Form 20-F of the Company for the fiscal year 2022 which was published
on April 26, 2023, the Company was named as a defendant in a putative securities class action lawsuit initiated in August 2022. The Company
filed a motion to dismiss the action in May 2023. On March 5, 2024 (U.S. Eastern Time), the court entered an order granting the Company’s
motion to dismiss in part and denying it in part. On April 25, 2024, the Company further filed a motion for judgment on the pleadings
pursuant to Rule 12(c), seeking to dismiss the remaining claims based on the parties’ pleadings. As of the date of this announcement,
the lawsuit is still ongoing.
Publication
of Interim Results Announcement and Interim Report
This announcement
is published on the website of the Hong Kong Stock Exchange at http://www.hkexnews.hk and on the website of the Company
at https://ir.tuya.com. The interim report of the Company for the six months ended June 30, 2024 and containing all the
information required by the Listing Rules will be dispatched to the shareholders of the Company (if appropriate) and will be made available
on the websites of the Company and the Hong Kong Stock Exchange in due course.
About
Tuya Inc.
Tuya Inc. (NYSE:
TUYA; HKEX: 2391) is a global leading cloud platform service provider with a mission to build a smart solutions developer ecosystem and
enable everything to be smart. Tuya has pioneered a purpose-built cloud developer platform with cloud and generative AI capabilities
that delivers a full suite of offerings, including Platform-as-a-Service, or PaaS, Software-as-a-Service, or SaaS, and smart solutions
for developers of smart device, commercial applications, and industries. Through its cloud developer platform, Tuya has activated a vibrant
global developer community of brands, OEMs, AI agents, system integrators and independent software vendors to collectively strive for
smart solutions ecosystem embodying the principles of green and low-carbon, security, high efficiency, agility, and openness.
Use
of Non-GAAP Financial Measures
In evaluating the
business, the Company considers and uses non-GAAP financial measures, such as non-GAAP operating expenses, non-GAAP loss from operations
(including non-GAAP operating margin), non-GAAP net (loss)/profit (including non-GAAP net margin), and non-GAAP basic and diluted net
(loss)/profit per ADS, as supplemental measures to review and assess its operating performance. The presentation of non-GAAP financial
measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance
with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company defines non-GAAP
financial measures by excluding the impact of share-based compensation expenses, credit-related impairment of long-term investments and
litigation costs from the respective GAAP financial measures. The Company presents the non-GAAP financial measures because they are used
by the management to evaluate its operating performance and formulate business plans. The Company also believes that the use of the non-GAAP
financial measures facilitates investors’ assessment of its operating performance.
Non-GAAP financial
measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations
as analytical tools. One of the key limitations of using the aforementioned non-GAAP financial measures is that they do not reflect all
items of expenses that affect the Group’s operations. Share-based compensation expenses, credit-related impairment of long-term
investments and litigation costs have been and may continue to be incurred in the business and are not reflected in the presentation
of non-GAAP measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including
peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP
measures to the most directly comparable U.S. GAAP measures, all of which should be considered when evaluating the Group’s performance.
The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.
The unaudited reconciliations
of Tuya’s non-GAAP measures to the most comparable U.S. GAAP measures are included at the end of this announcement.
Safe
Harbor Statement
This announcement
contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs, and
expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors
could cause actual results to differ materially from those contained in any forward-looking. In some cases, forward-looking statements
can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”,
“target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”,
“continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks,
uncertainties or factors is included in the Company’s filings with the United States Securities and Exchange Commission. The forward-looking
statements included in this announcement are only made as of the date hereof, and the Company disclaims any obligation to publicly update
any forward-looking statement to reflect subsequent events or circumstances, except as required by law. All forward-looking statements
should be evaluated with the understanding of their inherent uncertainty.
|
By order of the Board |
|
Tuya Inc. |
|
WANG Xueji |
|
Chairman |
Hong Kong, August
26, 2024
As at the date
of this announcement, the Board comprises Mr. WANG Xueji, Mr. CHEN Liaohan, Mr. YANG Yi and Ms. LIU Yao as executive Directors; and Mr.
HUANG Sidney Xuande,Mr. QIU Changheng, Mr. KUOK Meng Xiong (alias GUO Mengxiong) and Mr. YIP Pak Tung Jason as independent non-executive
Directors.
TUYA INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER
31, 2023 AND JUNE 30, 2024
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
| | |
As of December 31, | | |
As
of June
30, | |
| |
Note | | |
2023 | | |
2024 | |
| |
| | |
US$ | | |
US$ | |
ASSETS | |
| | |
| | |
| | |
Current assets: | |
| | |
| | |
| | |
Cash and cash equivalents | |
| | |
498,688 | | |
| 614,767 | |
Restricted cash | |
| | |
– | | |
| 152 | |
Short-term investments | |
| | |
291,023 | | |
| 175,218 | |
Accounts receivable, net | |
7 | | |
9,214 | | |
| 6,763 | |
Notes receivable, net | |
| | |
4,955 | | |
| 7,271 | |
Inventories, net | |
| | |
32,865 | | |
| 28,088 | |
Prepayments and other current
assets, net | |
| | |
11,053 | | |
| 19,027 | |
| |
| | |
| | |
| | |
Total current
assets | |
| | |
847,798 | | |
| 851,286 | |
| |
| | |
| | |
| | |
Non-current assets: | |
| | |
| | |
| | |
Property, equipment and software, net | |
| | |
2,589 | | |
| 2,394 | |
Operating lease right-of-use assets, net | |
| | |
7,647 | | |
| 6,007 | |
Long-term investments | |
| | |
207,489 | | |
| 220,401 | |
Other non-current assets,
net | |
| | |
877 | | |
| 9,562 | |
| |
| | |
| | |
| | |
Total non-current
assets | |
| | |
218,602 | | |
| 238,364 | |
| |
| | |
| | |
| | |
Total assets | |
| | |
1,066,400 | | |
| 1,089,650 | |
| |
| | |
| | |
| | |
LIABILITIES AND SHAREHOLDERS’
EQUITY | |
| | |
| | |
| | |
Current liabilities: | |
| | |
| | |
| | |
Accounts payable | |
8 | | |
11,577 | | |
| 11,638 | |
Advance from customers | |
| | |
31,776 | | |
| 32,299 | |
Deferred revenue, current | |
| | |
6,802 | | |
| 6,504 | |
Accruals and other current liabilities | |
| | |
32,807 | | |
| 30,625 | |
Income tax payable | |
| | |
689 | | |
| – | |
Lease liabilities, current | |
| | |
3,883 | | |
| 3,872 | |
| |
| | |
| | |
| | |
Total current
liabilities | |
| | |
87,534 | | |
| 84,938 | |
TUYA INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (CONTINUED)
AS OF DECEMBER
31, 2023 AND JUNE 30, 2024
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
| | |
As of December 31, | | |
As
of June
30, | |
| |
Note | | |
2023 | | |
2024 | |
| |
| | |
US$ | | |
US$ | |
Non-current liabilities: | |
| | |
| | |
| |
Lease liabilities, non-current | |
| | |
3,904 | | |
2,120 | |
Deferred revenue, non-current | |
| | |
506 | | |
425 | |
Other non-current liabilities | |
| | |
3,891 | | |
2,300 | |
| |
| | |
| | |
| |
Total non-current
liabilities | |
| | |
8,301 | | |
4,845 | |
| |
| | |
| | |
| |
Total liabilities | |
| | |
95,835 | | |
89,783 | |
| |
| | |
| | |
| |
Shareholders’ equity: | |
| | |
| | |
| |
Class A ordinary shares (US$0.00005
par value; 800,000,000 and 800,000,000 shares authorized as of December 31, 2023 and June 30, 2024, respectively; 504,387,299 and
504,387,299 shares issued as of December 31, 2023 and June 30, 2024, respectively; 487,591,968 and 489,654,195 shares outstanding
as of December 31, 2023 and June 30, 2024, respectively) | |
| | |
25 | | |
25 | |
Class B ordinary shares (US$0.00005
par value; 200,000,000 and 200,000,000 shares authorized as of December 31, 2023 and June 30, 2024, respectively; 70,205,300 and
70,205,300 issued and outstanding as of December 31, 2023 and June 30, 2024, respectively) | |
| | |
4 | | |
4 | |
Treasury stock (US$0.00005
par value; 16,795,331 and 14,733,104 shares as of December 31, 2023 and June 30, 2024, respectively) | |
| | |
(53,630 | ) | |
(43,628 | ) |
Additional paid-in capital | |
| | |
1,616,105 | | |
1,637,052 | |
Accumulated other comprehensive loss | |
| | |
(17,091 | ) | |
(18,323 | ) |
Accumulated deficit | |
| | |
(574,848 | ) | |
(575,263 | ) |
| |
| | |
| | |
| |
Total shareholders’
equity | |
| | |
970,565 | | |
999,867 | |
| |
| | |
| | |
| |
Total liabilities
and shareholders’ equity | |
| | |
1,066,400 | | |
1,089,650 | |
TUYA INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
| | |
For
the Six Months Ended | |
| |
| | |
June 30, | | |
June 30, | |
| |
Note | | |
2023 | | |
2024 | |
Revenue | |
3 | | |
104,489 | | |
134,941 | |
Cost of revenue | |
| | |
(56,820 | ) | |
(70,264 | ) |
| |
| | |
| | |
| |
Gross profit | |
| | |
47,669 | | |
64,677 | |
| |
| | |
| | |
| |
Operating expenses: | |
| | |
| | |
| |
Research and development expenses | |
| | |
(54,525 | ) | |
(46,467 | ) |
Sales and marketing expenses | |
| | |
(20,085 | ) | |
(18,370 | ) |
General and administrative expenses | |
| | |
(41,066 | ) | |
(32,335 | ) |
Other operating incomes, net | |
| | |
4,294 | | |
5,784 | |
| |
| | |
| | |
| |
Total operating expenses | |
| | |
(111,382 | ) | |
(91,388 | ) |
| |
| | |
| | |
| |
Loss from operations | |
| | |
(63,713 | ) | |
(26,711 | ) |
| |
| | |
| | |
| |
Other income | |
| | |
| | |
| |
Other non-operating incomes, net | |
| | |
1,556 | | |
2,647 | |
Financial income, net | |
| | |
18,775 | | |
25,259 | |
Foreign exchange gain/(loss),
net | |
| | |
903 | | |
(362 | ) |
| |
| | |
| | |
| |
(Loss)/profit before income tax expense | |
| | |
(42,479 | ) | |
833 | |
Income tax expense | |
4 | | |
(2,115 | ) | |
(1,248 | ) |
| |
| | |
| | |
| |
Net loss | |
| | |
(44,594 | ) | |
(415 | ) |
| |
| | |
| | |
| |
Net loss attributable
to Tuya Inc. | |
| | |
(44,594 | ) | |
(415 | ) |
| |
| | |
| | |
| |
Net loss attributable
to ordinary shareholders | |
| | |
(44,594 | ) | |
(415 | ) |
TUYA INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS (CONTINUED)
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
| | |
For
the Six Months Ended | |
| |
| | |
June 30, | | |
June 30, | |
| |
Note | | |
2023 | | |
2024 | |
Net
loss | |
| | |
(44,594 | ) | |
(415 | ) |
| |
| | |
| | |
| |
Other comprehensive loss | |
| | |
| | |
| |
Changes in fair value of long-term investments | |
| | |
(1,053 | ) | |
(139 | ) |
Transfer out of fair value changes of long-term
investments | |
| | |
8,050 | | |
(65 | ) |
Foreign currency translation | |
| | |
(5,254 | ) | |
(1,028 | ) |
| |
| | |
| | |
| |
Total comprehensive
loss attributable to Tuya Inc. | |
| | |
(42,851 | ) | |
(1,647 | ) |
| |
| | |
| | |
| |
Net loss attributable to Tuya Inc. | |
| | |
(44,594 | ) | |
(415 | ) |
| |
| | |
| | |
| |
Net loss attributable
to ordinary shareholders | |
| | |
(44,594 | ) | |
(415 | ) |
| |
| | |
| | |
| |
Weighted average number of ordinary shares used in
computing net loss per share, basic and diluted | |
6 | | |
554,472,706 | | |
559,421,815 | |
| |
| | |
| | |
| |
Net loss per share attributable to
ordinary shareholders-basic and diluted | |
6 | | |
(0.08 | ) | |
(0.00 | ) |
| |
| | |
| | |
| |
Share-based compensation expenses
were included in: | |
| | |
| | |
| |
Research and development expenses | |
| | |
8,123 | | |
6,882 | |
Sales and marketing expenses | |
| | |
3,226 | | |
2,554 | |
General and administrative expenses | |
| | |
22,983 | | |
21,787 | |
TUYA INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS
OF CASH FLOWS
(All amounts
in US$ thousands (“US$”),
except for share
and per share data, unless otherwise noted)
| |
| | |
For
the Six Months Ended | |
| |
| | |
June 30, | | |
June 30, | |
| |
Note | | |
2023 | | |
2024 | |
Net cash (used in)/generated from operating
activities | |
| | |
(11,387 | ) | |
26,319 | |
Net cash (used in)/generated from investing activities | |
| | |
(22,335 | ) | |
90,085 | |
Net cash (used in)/generated from financing activities | |
| | |
(2,067 | ) | |
150 | |
Effect of exchange rate changes
on cash and cash equivalents, restricted cash | |
| | |
(2,830 | ) | |
(323 | ) |
| |
| | |
| | |
| |
Net
(decrease)/increase in cash and cash equivalents, restricted cash | |
| | |
(38,619 | ) | |
116,231 | |
| |
| | |
| | |
| |
Cash and cash equivalents, restricted cash at the
beginning of period | |
| | |
133,161 | | |
498,688 | |
| |
| | |
| | |
| |
Cash and cash equivalents, restricted
cash at the end of period | |
| | |
94,542 | | |
614,919 | |
NOTES TO THE
CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION:
Tuya
Inc. (the “Company”) was incorporated under the laws of the Cayman Islands on August 28, 2014, as an exempted company
with limited liability. The Company and its subsidiaries and consolidated variable interest entity (“VIE”) (collectively
referred to as the “Group”) are principally engaged in offering PaaS (Platform-as-a-Service) to business customers
developing IoT (Internet of Things) devices, including brands and their OEMs (original equipment manufacturer). Also, the Group offers
Industry SaaS (Software-as-a-Service) and cloud-based value-added services to its customers. The Group also sells finished smart devices
powered by Tuya purchased from qualified OEMs (the “Smart solution”).
Prior
to the incorporation of Tuya Inc. in August 2014, the Group commenced its initial operations through Hangzhou Tuya Technology Co., Ltd.
(“Hangzhou Tuya Technology”), which was established on June 16, 2014 by Wang Xueji and another individual. After a
series of agreements, Hangzhou Tuya Technology was owned by Wang Xueji and other four individuals (collectively, the “Registered
Shareholders”) together with two unrelated investors of Series Angel financing (the “Non-Registered Shareholders VIE
Investors”) by August 2014. In December 2014, Hangzhou Tuya Information Technology Co., Ltd. (“the WFOE”)
was established after the incorporation of Tuya Inc. The Group then entered into a series of contractual arrangements among the WFOE,
Hangzhou Tuya Technology and Hangzhou Tuya Technology’s shareholders in December 2014, and thereafter Hangzhou Tuya Technology
(the “VIE”) became the variable interest entity of the Group. The VIE was controlled by Wang Xueji before and after
this transaction. After the completion of this transaction, the Group’s condensed consolidated financial statements include the
financial statements of the Company, its subsidiaries and the consolidated VIE. In 2019, the VIE agreements were amended and restated,
which amended the VIE’s shareholders list and equity interest of each shareholder as a result of the change in registered share
capital of the VIE and exit of Non-Registered Shareholders VIE Investors as the VIE’s shareholders. The contractual arrangements
were further amended in January 2022. All rights and obligations, clause, and terms regarding VIE accounting and consolidation basis
remained the same. The VIE continues to be under Wang Xueji’s control during the periods presented.
The
VIE operated de minimis business activities and had no material impact on the Company’s financial position, results of operations
or cash flows for the six months ended June 30, 2023 and 2024.
The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not
include all of the information and footnotes required by U.S. GAAP for complete financial statements. Certain information and note disclosures
normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted consistent
with Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements have been prepared on the same basis as
the audited financial statements and include all adjustments as necessary for the fair statement of the Group’s financial position
as of June 30, 2024, results of operations and cash flows for the six months ended June 30, 2023 and 2024. The consolidated balance sheet
at December 31, 2023 has been derived from the audited financial statements at that date but does not include all the information and
footnotes required by U.S. GAAP. The unaudited condensed consolidated financial statements and related disclosures have been prepared
with the presumption that users of the unaudited condensed consolidated financial statements have read or have access to the audited
consolidated financial statements for the preceding fiscal years. Accordingly, these financial statements should be read in conjunction
with the audited consolidated financial statements and related footnotes for the year ended December 31, 2023. The accounting policies
applied are consistent with those of the audited consolidated financial statements for the preceding fiscal year. Results for the six
months ended June 30, 2024 are not necessarily indicative of the results expected for the full fiscal year or for any future period.
The Group’s
revenue was disaggregated by its major revenue streams in the six months presented as follows:
| |
Six months
Ended June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
IoT PaaS | |
74,730 | |
99,898 | |
Smart solution | |
11,937 | |
16,839 | |
SaaS and others | |
17,822 | |
18,204 | |
Total revenue | |
104,489 | |
134,941 | |
| 4. | TAXATION
Cayman Islands |
Under
the current tax laws of Cayman Islands, the Company is not subject to income, corporation or capital gains tax, and no withholding tax
is imposed upon the payment of dividends.
British
Virgin Islands
Under
the current laws of the British Virgin Islands, entities incorporated in the British Virgin Islands are not subject to tax on their income
or capital gains.
Hong
Kong
Under
the current Hong Kong Inland Revenue Ordinance, the Group’s subsidiaries in Hong Kong are subject to 16.5% Hong Kong profit tax
on its taxable income generated from operations in Hong Kong.
PRC
PRC Enterprise Income
Tax (“EIT”)
On March 16,
2007, the National People’s Congress of PRC enacted the Enterprise Income Tax Law (the “new CIT Law”), under
which foreign invested enterprises (“FIEs”) and domestic companies would be subject to enterprise income tax (“EIT”)
at a uniform rate of 25%. The new CIT law became effective on January 1, 2008. In accordance with the implementation rules of
EIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax
rate of 15%. The HNTE certificate is effective for a period of three years. An entity could re-apply for the HNTE certificate when the
prior certificate expires.
The WFOE
(Hangzhou Tuya Information Technology Co., Ltd.) obtained its HNTE certificate with a valid period of three years in November 2018,
and renewed in December 2021. Therefore, the WFOE is eligible to enjoy a preferential tax rate of 15% from the years ended December 31,
2018 to 2023, to the extent it has taxable income under the EIT Law, as long as it maintains the HNTE qualification and duly conducts
relevant EIT filing procedures with the relevant tax authority. As of June 30, 2024, the re-apply HNTE certificate of the WFOE has
been in the process of renewal.
PRC Withholding Income
Tax on Dividends
The EIT
Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body”
is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the
rate of 25% for its global income. The implementing Rules of the EIT Law merely define the location of the “de facto management
body” as “the place where the exercising, in substance, of the overall management and control of the production and business
operation, personnel, accounting, properties, etc., of a non-PRC company is located.”
The EIT
Law also imposes a withholding income tax of 10% on dividends distributed by a FIE to its immediate holding company outside of China,
if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the
received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate
holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement.
According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and
Prevention of Fiscal Evasion in August 2006, dividends paid by a FIE in China to its immediate holding company in Hong Kong can
be subject to withholding tax at a rate of no more than 5% if the immediate holding company in Hong Kong owns directly at least 25% of
the shares of the FIE and could be recognized as a Beneficial Owner of the dividend from PRC tax perspective.
As of
December 31, 2023 and June 30, 2024, the Company did not record any withholding tax on the retained earnings of its subsidiaries
in the PRC as the Group does not have retained earnings for any of the years presented.
United
States
The Company’s
subsidiary in California, United States is subject to U.S. federal corporate tax and California corporate franchise tax on its taxable
income as reported in its statutory financial statements adjusted in accordance with relevant U.S. tax laws. The applicable U.S. federal
corporate tax rate is 21% and the California corporate franchise tax rate is 8.84% or minimum of $0.8, whatever is larger in 2023 and
2024.
On December 22,
2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax
Act”). The Tax Act makes broad and complex changes to the U.S. tax code including, but not limited to: (1) reducing the
U.S. federal corporate tax rate from 35% to 21%; (2) requiring companies to pay a one-time transition tax on certain unrepatriated
earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring
a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; (5) eliminating the corporate
alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (6) creating the base
erosion anti-abuse tax (“BEAT”), a new minimum tax; (7) creating a new limitation on deductible interest expense;
and (8) changing rules related to uses and limitations of net operating loss carry-forwards created in tax years beginning
after December 31, 2017. In addition, the California corporate franchise tax remained the same after the enactment of the Tax Act.
The Company
assessed the impact of Tax Act and concluded that it was not material to the Company.
As the
Group incurred income tax expense mainly from PRC tax jurisdictions, the following information is based mainly on PRC income taxes.
Composition
of income tax expense
The
components of loss/(profit) before tax are as follow:
| |
Six months
Ended June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
Loss/(profit) before tax | |
| |
| |
Loss from PRC entities | |
44,212 | |
15,251 | |
Profit from overseas
entities | |
(1,733 | ) |
(16,084 | ) |
| |
| |
| |
Total loss/(profit) before tax | |
42,479 | |
(833 | ) |
| |
Six months
Ended June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
Current income tax expense | |
2,115 | |
1,248 | |
Deferred income tax | |
– | |
– | |
| |
| |
| |
Total income tax expense | |
2,115 | |
1,248 | |
Reconciliation of the differences
between statutory tax rate and the effective tax rate.
Reconciliation
of the differences between the statutory EIT rate applicable to losses of the consolidated entities and the income tax expenses of the
Group:
| |
Six months
Ended June 30, | |
| |
2023 | | |
2024 | |
PRC Statutory income tax rate | |
25.0 | % | |
25.0 | % |
Effect of tax rates in different tax jurisdiction | |
-3.4 | % | |
-215.1 | % |
Effect
of preferential tax rate for qualified HNTE entities (1) | |
-5.9 | % | |
6.6 | % |
Additional deduction for research and development expenditures | |
15.1 | % | |
-229.4 | % |
Share-based compensation | |
-14.9 | % | |
576.5 | % |
Permanent book-tax differences | |
-0.3 | % | |
-103.4 | % |
Change
in valuation allowance (2) | |
-20.6 | % | |
89.6 | % |
| |
| | |
| |
Effective tax rates | |
-5.0 | % | |
149.8 | % |
| (1) | The
effect of the preferential income tax rate that the WFOE is entitled to enjoy as a qualified
HNTE is 15%. |
| (2) | Valuation
allowance for the six months ended June 30, 2023 and 2024 are related to the deferred
tax assets of certain group entities which reported losses. The Group believes that it is
more likely than not that the deferred tax assets of these entities will not be utilized.
Therefore, valuation allowance has been provided. |
The board
of directors of the Company did not recommend the distribution of any interim dividend for the six months ended June 30, 2023 and
2024.
| 6. | BASIC
AND DILUTED NET LOSS PER SHARE |
Basic
and diluted loss per share have been calculated in accordance with ASC 260 on computation of earnings (loss) per share for each of the
six months ended June 30, 2023 and 2024 are calculated as follows:
| |
Six months
Ended June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
Basic and diluted net loss per share calculation | |
| |
| |
Numerator: | |
| |
| |
Net loss attributable to
Tuya Inc.’s ordinary shareholders, basic and diluted | |
(44,594 | ) |
(415 | ) |
| |
| |
| |
Denominator: | |
| |
| |
Weighted-average ordinary shares outstanding,
basic and diluted | |
554,472,706 | |
559,421,815 | |
| |
| |
| |
Net loss per share attributable to ordinary shareholders: | |
| |
| |
– Basic and Diluted | |
(0.08 | ) |
(0.00 | ) |
7. | ACCOUNTS
RECEIVABLE, NET |
| |
As
of | |
As
of | |
| |
December 31, | |
June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
Accounts receivable, gross | |
12,581 | |
10,730 | |
Less: allowance for doubtful accounts/allowance for credit
losses | |
(3,367 | ) |
(3,967 | ) |
| |
| |
| |
Total accounts receivable, net | |
9,214 | |
6,763 | |
The
Group recorded the allowance for credit losses of US$981 and US$621, respectively,
under ASU 2016-13 Financial
instruments – credit losses for the six months ended June 30, 2023 and 2024. An aging analysis based on relevant invoice dates
is as follows:
| |
As of | |
As of | |
| |
December 31, | |
June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
0-3 months | |
5,518 | |
4,868 | |
3-6 months | |
1,002 | |
572 | |
6-12 months | |
2,238 | |
1,377 | |
Over 1 year | |
3,823 | |
3,913 | |
| |
| |
| |
Total accounts receivable, gross | |
12,581 | |
10,730 | |
| |
As of | |
As of | |
| |
December 31, | |
June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
Total
accounts payable | |
11,577 | |
11,638 | |
An
aging analysis based on relevant invoice dates is as follows:
| |
As of | |
As of | |
| |
December 31, | |
June 30, | |
| |
2023 | |
2024 | |
| |
US$ | |
US$ | |
0-3 months | |
11,153 | |
11,298 | |
3-6 months | |
44 | |
5 | |
6-12 months | |
58 | |
23 | |
Over 1 year | |
322 | |
312 | |
| |
| |
| |
Total accounts
payable | |
11,577 | |
11,638 | |
TUYA
INC.
RECONCILIATION
OF NON-GAAP MEASURES TO
THE
MOST DIRECTLY COMPARABLE FINANCIAL MEASURES
(All
amounts in US$ thousands (“US$”),
except
for share and per share data, unless otherwise noted)
| |
For the
Six Months Ended | |
| |
June 30, | |
|
June 30, | |
| |
2023 | |
|
2024 | |
Reconciliation of operating expenses to non-GAAP operating expenses | |
| |
|
| |
Research and development expenses | |
(54,525 | ) |
|
(46,467 | ) |
Add: Share-based compensation | |
8,123 | |
|
6,882 | |
Adjusted Research and development
expenses | |
(46,402 | ) |
|
(39,585 | ) |
| |
| |
|
| |
Sales and marketing expenses | |
(20,085 | ) |
|
(18,370 | ) |
Add: Share-based compensation | |
3,226 | |
|
2,554 | |
Adjusted Sales and marketing expenses | |
(16,859 | ) |
|
(15,816 | ) |
| |
| |
|
| |
General and administrative expenses | |
(41,066 | ) |
|
(32,335 | ) |
Add: Share-based compensation | |
22,983 | |
|
21,787 | |
Add: Credit-related impairment of long-term investments | |
8,050 | |
|
189 | |
Add: Litigation costs | |
– | |
|
2,100 | |
Adjusted General and administrative
expenses | |
(10,033 | ) |
|
(8,259 | ) |
| |
| |
|
| |
Reconciliation of loss from operations to non-GAAP (loss)/profit from operations | |
| |
|
| |
Loss from operations | |
(63,713 | ) |
|
(26,711 | ) |
Add: Share-based compensation expenses | |
34,332 | |
|
31,223 | |
Add: Credit-related impairment of long-term investments | |
8,050 | |
|
189 | |
Add: Litigation costs | |
– | |
|
2,100 | |
Non-GAAP (Loss)/Profit from operations | |
(21,331 | ) |
|
6,801 | |
| |
| |
|
| |
Non-GAAP Operating margin | |
(20.4 | )% |
|
5.0 | % |
TUYA
INC.
RECONCILIATION
OF NON-GAAP MEASURES TO
THE
MOST DIRECTLY COMPARABLE FINANCIAL MEASURES
(CONTINUED)
(All
amounts in US$ thousands (“US$”),
except
for share and per share data, unless otherwise noted)
| |
For the
Six Months Ended | |
| |
June 30, | |
|
June 30, | |
| |
2023 | |
|
2024 | |
Reconciliation of net loss to non-GAAP net (loss)/profit | |
| |
|
| |
Net loss | |
(44,594 | ) |
|
(415 | ) |
Add: Share-based compensation expenses | |
34,332 | |
|
31,223 | |
Add: Credit-related impairment of long-term investments | |
8,050 | |
|
189 | |
Add: Litigation costs | |
– | |
|
2,100 | |
Non-GAAP Net (loss)/profit | |
(2,212 | ) |
|
33,097 | |
| |
| |
|
| |
Non-GAAP Net margin | |
(2.1 | )% |
|
24.5 | % |
| |
| |
|
| |
Weighted average number of ordinary shares used in computing non-GAAP net (loss)/profit
per share | |
| |
|
| |
– Basic | |
554,472,706 | |
|
559,421,815 | |
– Diluted | |
554,472,706 | |
|
591,970,099 | |
| |
| |
|
| |
Non-GAAP net (loss)/profit per share attributable to ordinary shareholders | |
| |
|
| |
– Basic | |
(0.00 | ) |
|
0.06 | |
– Diluted | |
(0.00 | ) |
|
0.06 | |
Exhibit 99.2
Tuya Announces Changes to Board and Senior Management
SANTA CLARA, Calif., August 26, 2024 /PRNewswire/
-- Tuya Inc. (“Tuya” or the “Company”) (NYSE: TUYA; HKEX: 2391), a global leading cloud platform service provider,
today announced that Ms. Yao (Jessie) Liu has tendered her resignation as a director, the Chief Financial Officer and senior vice
president of Tuya, effective September 16, 2024. Ms. Liu has made this decision to devote more time to her personal endeavors.
The Company is grateful for the invaluable contributions she made during her more than 5-year tenure. “On behalf of Tuya, I
want to express our deep appreciation to Jessie for her invaluable contributions to Tuya. Since joining in 2019, Jessie has been instrumental
in our success, particularly in leading our public listings on the New York Stock Exchange in 2021 and the Hong Kong Stock Exchange in
2022,” said Mr. Xueji (Jerry) Wang, Tuya’s founder, director, and Chief Executive Officer. “Her capital market
and financial expertise have been crucial in shaping Tuya’s strategic direction and strengthening our position in the global IoT
industry. Additionally, Jessie’s efforts in driving operational optimization and efficiency management have significantly contributed
to enhancing our business and financial profitability, even amidst challenging headwinds. We are immensely grateful for her service and
wish her the very best in her future endeavors.”
Reflecting on her time at Tuya, Ms. Liu stated,
“It has been a tremendous honor to be part of Tuya’s journey. I am proud of what we have achieved, especially our commitment
to building a global IoT developer ecosystem. I am grateful to Jerry, the Board, and my colleagues for their trust and support throughout
the years. As I prepare to devote more time to my personal endeavors, I remain confident in Tuya’s bright future as a leading
global cloud platform service provider.”
Following Ms. Liu’s departure, Mr. Yi
(Alex) Yang, a director, co-founder of the Company, will take on the additional role of Chief Financial Officer.
Mr. Yang, who will assume the role of Chief
Financial Officer, brings extensive experience in operational leadership, including expertise relating to both business and financial
management. As a director and co-founder, Mr. Yang has played a pivotal role in Tuya’s growth since its startup, funding and
strategic direction. His deep understanding of our business and related financial operations, combined with his track record in driving
efficiency and profitability, positions him well to continue building on the strong foundation laid by Ms. Liu.
The Company remains fully committed to our long-term
strategic vision of being a global leader in the smart solution industry. The transition in leadership will not alter our focus on delivering
value to our shareholders, enhancing our developer ecosystem, and maintaining our position as a leading cloud platform service provider.
The Board and management team are unified in driving Tuya’s growth and ensuring continuity in our financial and operational strategies.
About Tuya Inc.
Tuya Inc. (NYSE: TUYA; HKEX: 2391) is a global
leading cloud platform service provider with a mission to build a smart solutions developer ecosystem and enable everything to be smart.
Tuya has pioneered a purpose-built cloud developer platform with cloud and generative AI capabilities that delivers a full suite of offerings,
including Platform-as-a-Service, or PaaS, Software-as-a-Service, or SaaS, and smart solutions for developers of smart device, commercial
applications, and industries. Through its cloud developer platform, Tuya has activated a vibrant global developer community of brands,
OEMs, AI agents, system integrators and independent software vendors to collectively strive for smart solutions ecosystem embodying the
principles of green and low-carbon, security, high efficiency, agility, and openness.
Investor Relations Contact
Tuya Inc.
Investor Relations
Email: ir@tuya.com
The Blueshirt Group
Gary Dvorchak, CFA
Phone: +1 (323) 240-5796
Email: gary@blueshirtgroup.co
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