Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could management elaborate on the AI impact and usage scenarios in the smart solutions business? A: Yi Yang, Co-Founder and COO, explained that 2025 is expected to be a pivotal year for AI devices. The focus will be on audio and video interaction devices, such as pet feeders and control panels, and complex decision-making devices like energy solutions. Additionally, AI integration into toys is gaining traction, with many customers showing interest post-CES. The goal is to lower barriers for developers, fostering a robust market with diverse applications.
Q: How will AI impact unit pricing and margins, and what is the outlook for operating expenses? A: Yi Yang noted that AI is still in its early stages, and commercialization strategies are being explored across PaaS, SaaS, and solutions. While short-term margin impacts are unclear, AI is expected to add value long-term. Operating expenses are manageable, with existing teams already AI-ready, minimizing the need for new hires. The focus remains on scalability and efficient marketing.
Q: What are the growth prospects for SaaS, and could it change the landscape? A: Yi Yang highlighted that SaaS growth is tied to the expansion of the PaaS base. The focus is on increasing recurring revenue models and customer stickiness. While short-term surprises are not expected, SaaS is seen as a long-term growth driver, particularly as it expands into global markets with proven applications.
Q: What is Tuya's view on acquisitions given its strong cash position? A: Yi Yang stated that mergers and acquisitions (M&A) are an open option, with a focus on extending coverage or providing vertical solutions. The priority is to strengthen the global developer ecosystem, and potential targets within this ecosystem are of interest.
Q: What is the outlook for IoT PaaS demand and high-quality customer expansion? A: Yi Yang emphasized a balanced business structure across regions and categories, with Europe being the largest market. The focus is on expanding into non-consumer fields and spatial solutions, leveraging AI to open new opportunities. The goal is to attract high-quality customers by enhancing competitiveness through AI.
Q: How will the revenue structure and competition in AI for IoT affect Tuya? A: Yi Yang explained that PaaS will continue to provide a stable growth base, with SaaS as a long-term growth curve. Solutions may grow faster, potentially impacting overall gross margins. In terms of competition, Tuya aims to lower barriers for developers, fostering innovation and maintaining a competitive edge in the AI-driven IoT market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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