Tuya (NYSE:TUYA) executives emphasized steady revenue growth, improving profitability, and expanding AI-related efforts during the company’s fourth quarter and fiscal year 2025 earnings call, while also addressing demand conditions, supply-chain constraints, and shareholder returns.
Full-year revenue growth and higher profitability
Founder and CEO Jerry Wang said the company “maintained stability across our platform business,” delivered “steady full-year revenue growth,” and achieved “a notable improvement in GAAP profitability” amid what he described as a complex and evolving external environment.
Alex Yang said full-year non-GAAP net income reached a record $80.1 million, up approximately $4.7 million compared with 2024. He attributed the year’s profitability to three factors: stability in the core platform business, an initial revenue contribution from AI-related products and applications, and disciplined expense management that drove operating leverage.
Q4 results: margins and cash flow
In the fourth quarter of 2025, Tuya generated revenue of approximately $48.5 million, up 3% year over year. Alex Yang said the company achieved its 10th consecutive quarter of year-over-year growth, despite what he characterized as “more conservative customer procurement cycles.”
Fourth-quarter blended gross margin was 47.6%. Non-GAAP operating margin improved to 11.1% from 10.3% a year earlier, while non-GAAP net margin reached 24.4%.
Tuya reported net operating cash flow of $23.5 million for the quarter, which management said marked the 11th consecutive quarter of positive operating cash flow. Alex Yang said gross margin stability reflected pricing power supported by product value, technology capabilities, and the company’s platform-based business model.
Segment performance and recurring SaaS momentum
Management highlighted growth across segments, with particular attention to recurring services within the SaaS business.
- PaaS: Full-year PaaS revenue was over $230 million, up 6.5% year over year. Alex Yang said Tuya maintained stable growth by optimizing its customer mix and enhancing product capabilities, and noted that PaaS premium customers totaled 291 at the end of 2025.
- SaaS and others: Full-year revenue was $44.8 million, up 13.4%. Alex Yang said recurring services revenue grew 37% year over year and emerged as a key driver.
- Smart solutions: Full-year revenue was $45.7 million, up 8.9%. Alex Yang said AI capabilities were stimulating demand in certain new product categories and improving pricing power.
In response to a question about Tuya’s positioning as agentic AI advances, management said its role remains to offer both turnkey solutions for customers lacking in-house capabilities and infrastructure for customers that want to build more independently. On SaaS recurring revenue, management tied the growth to Tuya’s expanding installed base of devices and the addition of new services enabled by AI on existing hardware categories, including enhancing existing services such as storage by adding AI features.
AI strategy: “Hey Tuya,” developer growth, and key scenarios
Jerry Wang said Tuya continued to incubate new AI+IoT application scenarios and accelerate integration of AI capabilities across the platform and device ecosystem. He described AI as moving beyond “discrete features” to “fully deployable operational applications,” with value increasingly reflected in application maturity, revenue structure improvement, and operational efficiency.
As part of its AI efforts, the company introduced an AI-powered Smart Life Assistant, Hey Tuya, at CES. Management described the product as a way to integrate AI agents with hardware devices to enable more intuitive home experiences and support broader adoption of AI capabilities in everyday scenarios. Alex Yang characterized the effort as leveraging “hundreds of millions” of existing Powered by Tuya devices to allow AI to perceive and interact with the physical world today, without waiting for large-scale deployment of embodied robots.
Alex Yang also provided metrics on the developer ecosystem. By the end of 2025, registered AI+IoT developers exceeded 1.8 million, up 37% year over year, and the cumulative number of AI agents on the platform reached about 16,000 across multiple product categories. He highlighted an overseas development event that included hackathons in Silicon Valley and attracted more than 300 developers, about 90% from overseas, with projects built on Tuya T5 AI development boards and demonstrated as functional prototypes within 48 hours.
Management also discussed internal AI adoption, saying that in a short-term front-end development process, nearly 40% of code was generated with AI assistance, which it said shortened R&D iteration cycles and reduced repetitive development costs. The company said it plans to launch AI development tools, including AI coding services, to lower barriers to AI hardware development and enable more low-code/no-code developers to participate.
When asked about promising AI application scenarios, management pointed to two primary areas: multimodal applications involving audio and video interaction and analysis (including companion devices, toys, and security products), and data analytics and decision-making use cases, with energy management cited as a typical example spanning generation, storage, consumption, and metering.
Macro environment, supply constraints, and shareholder returns
On demand and geopolitical dynamics, management said the global environment remains “more and more dynamic,” but indicated it is seeing more positive indicators, including improving customer confidence following tariff-related news. Management cautioned that demand and orders had not reacted immediately, citing uncertainty about sustainability of policy changes and the timing of developments around the Chinese New Year period.
On semiconductor supply constraints, management said it began noticing production capacity shortages in the fourth quarter. However, it stated the shortages were not expected to materially impact Tuya, citing its position as a significant buyer and noting it had prepared inventory levels to manage supply-cycle dynamics. Management said it had not yet seen immediate cost increases, and indicated it would monitor conditions, adding that the situation could last another one or two quarters.
Tuya ended 2025 with total cash and cash equivalents of $1.017 billion, including time deposits and treasury securities recorded as short-term and long-term investments. Management said the net cash position provides flexibility to support AI capability development, ecosystem expansion, and potential capital allocation initiatives.
On shareholder returns, management said it continues to prioritize returns and announced a new round of dividends. Executives described dividends as an ongoing practice, typically one or two times per year, and said payout levels would reflect net operating cash flow and profitability.
About Tuya (NYSE:TUYA)
Tuya Inc is a global Internet of Things (IoT) platform provider that enables brands, OEMs and developers to create smart products and solutions. The company offers a suite of cloud services, connectivity modules and software development kits designed to support the full lifecycle of IoT devices. Tuya’s platform is built to facilitate rapid prototyping, secure device management and scalable data analytics, with an emphasis on interoperable solutions for smart homes, commercial buildings and industrial applications.
At the core of Tuya’s offering is its IoT operating system, which integrates device hardware, network protocols and application-level services into a unified framework.
Recommended Stories
- Five stocks we like better than Tuya
- America’s 1776 happening again
- I’m 70 With $1.5M: Would Converting $120K a Year to a Roth Be Smart or a Costly Mistake? (Ask An Advisor)
- Gilder: Don’t Buy AI Stocks, Do This Instead
- Your name isn’t on our protected list yet
- The Biggest IPO Ever… Open to Everyday Folks
