Tuya Revenue Climbs 16% as AI Strategy Gains Traction

The company’s growth was primarily fueled by its Platform-as-a-Service (PaaS) division, which brought in US$67.9 million, marking a 16.9% year-over-year rise. While gross margins dipped slightly to 46.3% due to semiconductor supply-chain pricing pressures, Tuya managed to significantly widen its operating margin to 10.0%, up from 1.4% a year ago. Net profit reached US$18.6 million, reflecting a 48% improvement compared to the second quarter of 2025.

CEO Xueji Wang emphasized that the company is moving beyond simple connectivity, focusing on the real-world deployment of generative AI. The launch of Tuya Cobuilder, designed to shorten the development cycle for AI-enabled hardware, appears to be central to this shift. Despite caution among global manufacturers and ongoing trade-policy headwinds, the company maintains a robust liquidity position with US$976.1 million in cash and short-term investments, providing a buffer for continued R&D and ecosystem expansion.