HANGZHOU, China, Aug. 30, 2022 /PRNewswire/ -- Tuya Inc. ("Tuya" or the "Company") (NYSE: TUYA; HKEX: 2391), a global leading IoT cloud development platform, today announced its unaudited financial results for the second quarter of 2022.
Second Quarter 2022 Financial Highlights
Second Quarter 2022 Operating Highlights
[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 group 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, "During the second quarter, global inflation continued to pressure consumer discretionary spending, further slowing a market recovery. Despite the industry-wide challenges, we continued to implement operational and business optimization, as well as product and technology upgrades. These efforts enabled our SaaS and others business segment to achieve a year-over-year growth momentum of over 110% for ten consecutive quarters despite the turbulent global economy. Notably, our Cube solution is making steady progress with the acquisition of new giant customers. On the operating front, the efficiency-centric initiatives we previously announced are already having a positive impact on our financial results. Going forward, we will prudently focus on improving our operational efficiency as we navigate this challenging environment."
Ms. Yao (Jessie) Liu, Director and Chief Financial Officer of Tuya, added, "In the second quarter of 2022, we continued to augment our margin profiles as we maintained our gross profit margin at a healthy level and further narrowed our loss. Our non-GAAP operating margin and non-GAAP net margin significantly improved by 32.8 and 37.5 percentage points quarter over quarter, respectively, reversing the trend of sequential decreases since the third quarter of 2021. In line with our narrowed non-GAAP loss, our operating cash flow in the quarter was on an improved trajectory, demonstrating the initial success of our measures to address market headwinds. As of June 30, 2022, we had a strong cash position of approximately US$951.5 million to adequately meet our liquidity and cash needs for the foreseeable future, which we believe is one of the greatest advantages, giving us resilience to navigate adverse macro environments."
Second Quarter 2022 Unaudited Financial Results
REVENUE
Total revenue in the second quarter of 2022 decreased by 26.1% to US$62.5 million from US$84.7 million in the same period of 2021, mainly due to the decrease in IoT PaaS revenue, partially offset by the increases in smart device distribution revenue and the increases in SaaS and other revenue which continued a year-over-year growth momentum of over 110% for ten consecutive quarters.
COST OF REVENUE
Cost of revenue in the second quarter of 2022 decreased by 26.9% to US$35.8 million from US$49.0 million in the same period of 2021, in line with the decrease in total revenue.
GROSS PROFIT AND GROSS MARGIN
Total gross profit in the second quarter of 2022 decreased by 25.0% to US$26.8 million from US$35.7 million in the same period of 2021 and gross margin increased to 42.8% in the second quarter of 2022 from 42.2% in the same period of 2021.
OPERATING EXPENSES
Operating expenses decreased by 14.2% to US$66.2 million in the second quarter of 2022 from US$77.2 million in the same period of 2021. Non-GAAP operating expenses, defined as operating expenses excluding share-based compensation expenses, decreased by 21.1% to US$49.1 million in the second quarter of 2022 from US$62.2 million in the same period of 2021. Share-based compensation expenses in the second quarter of 2022 were US$17.2 million, compared to US$15.0 million in the same quarter of 2021.
LOSS FROM OPERATIONS AND OPERATING MARGIN
Loss from operations in the second quarter of 2022 narrowed by 5.0% to US$39.5 million from US$41.5 million in the same period of 2021. Non-GAAP loss from operations in the second quarter of 2022 narrowed by 15.9% to US$22.3 million from US$26.5 million in the same period of 2021.
Operating margin in the second quarter of 2022 was negative 63.1%, down 14.1 percentage points from negative 49.0% in the same period of 2021. Non-GAAP operating margin in the second quarter of 2022 was negative 35.6%, down 4.3 percentage points from negative 31.3% in the same period of 2021. The changes in the operating margins were mainly attributed to the greater decline in total revenue despite a significantly narrowed operating loss.
NET LOSS AND NET MARGIN
Net loss was US$35.9 million in the second quarter of 2022, compared to US$38.1 million in the same period of 2021. Non-GAAP net loss was US$18.7 million in the second quarter of 2022, compared to US$23.1 million in the same period of 2021.
Net margin in the second quarter of 2022 was negative 57.3%, down 12.3 percentage points from negative 45.0% in the same period of 2021. Non-GAAP net margin in the second quarter of 2022 was negative 29.9%, down 2.6 percentage points from negative 27.3% in the same period of 2021.
BASIC AND DILUTED NET LOSS PER ADS
Basic and diluted net loss per American Depositary Share ("ADS") were US$0.07 in the second quarter of 2022, compared to US$0.07 in the same period of 2021. Each ADS represents one Class A ordinary share.
Non-GAAP basic and diluted net loss per ADS were US$0.03 in the second quarter of 2022, compared to US$0.04 in the same period of 2021.
CASH AND CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS
Cash and cash equivalents, and short-term investments were US$951.5 million as of June 30, 2022, which the Company believes is sufficient to meet its current liquidity and working capital needs.
NET CASH GENERATED IN OPERATING ACTIVITIES
Net cash generated in operating activities for the second quarter of 2022 was US$0.4 million, or 0.6% of total revenue, compared to US$5.8 million of net cash generated in operating activities, or 6.9% of total revenue in the second quarter of 2021. Compared to the first quarter of 2022, the Company's net operating cash flow in the second quarter of 2022 improved mainly due to the significant decrease in operating expenses, particularly employee-related costs, and working capital changes in the ordinary course of business.
SHARE REPURCHASE
During the quarter ended June 30, 2022, the Company repurchased approximately 11.2 million of ADSs representing the same number of Class A ordinary shares from the open market for a total consideration of approximately US$30.0 million pursuant to the share repurchase program announced on August 30, 2021.
DUAL-PRIMARY LISTING IN HONG KONG
On July 4, 2022, Eastern Time (July 5, 2022, Hong Kong Time), Tuya successfully listed its Class A ordinary shares on the Main Board of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") under the stock code "2391" and the stock short name is "TUYA-W" (the "Listing"). The Company issued 7,300,000 Class A ordinary shares in the Listing (no Class A ordinary shares issued during the stabilization period in connection with the global offering), and totally 578,546,560 ordinary shares were in issue immediately upon the Listing and after the end of stabilization period.
Business Outlook
The global consumer discretionary industry and consumer spending are expected to continue to face a range of challenges in the second half of 2022, including, among other things, a decline or weakness in general economic conditions, global high inflation, inventory backlog experienced by players such as smart device manufacturers, brands and retail channels in the supply chain, fluctuations in foreign exchange rates, geopolitical tensions and conflicts, and competitions brought by technology iteration to the IoT industry. Despite these challenges, the Company remains confident in its long-term growth prospects and stays committed to iterating its products and services, further enhancing its software and embedded hardware capabilities, expanding its customer base, diversifying revenue streams, and further optimizing operating efficiency.
Conference Call Information
The Company's management will hold a conference call at 8:00 P.M. U.S. Eastern Time on Monday, August 29, 2022 (8:00 A.M. Beijing/Hong Kong Time on Tuesday, August 30, 2022) 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://www.netroadshow.com/events/login?show=54a7b9bf&confId=40423
The replay will be accessible through September 6, 2022 by dialing the following numbers:
International: |
+44-204-525-0658 |
United States: |
+1-929-458-6194 |
Access Code: |
545019 |
A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.tuya.com.
About Tuya Inc.
Tuya Inc. (NYSE: TUYA; HKEX: 2391) is a global leading IoT cloud development platform with a mission to build an IoT developer ecosystem and enable everything to be smart. Tuya has pioneered a purpose-built IoT cloud development platform that delivers a full suite of offerings, including Platform-as-a-Service, or PaaS, and Software-as-a-Service, or SaaS, to businesses and developers. Through its IoT cloud development platform, Tuya has enabled developers to activate a vibrant IoT ecosystem of brands, OEMs, partners and end users to engage and communicate through a broad range of smart devices.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP measures, such as non- GAAP operating expenses, non-GAAP loss from operations (including non-GAAP operating margin), non-GAAP net loss (including non-GAAP net margin), and non-GAAP basic and diluted net loss 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 measures excluding the impact of share-based compensation expenses from the respective GAAP measure. The Company presents the non-GAAP financial measure because it is used by the management to evaluate its operating performance and formulate business plans. The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of its operating performance.
Non-GAAP 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 measures is that they do not reflect all items of expenses that affect the Company's operations. Share-based compensation expenses 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 measure 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 financial measures to the nearest U.S. GAAP performance 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.
TUYA INC. |
||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
AS OF DECEMBER 31, 2021 AND JUNE 30, 2022 |
||||||||
(All amounts in US$ thousands ("US$"), except for share and per share data, unless otherwise noted) |
||||||||
As of |
As of |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
963,938 |
599,213 |
||||||
Restricted cash |
638 |
– |
||||||
Short-term investments |
102,134 |
352,300 |
||||||
Accounts receivable, net |
32,701 |
23,571 |
||||||
Notes receivable |
1,393 |
3,978 |
||||||
Inventories, net |
62,582 |
57,152 |
||||||
Prepayments and other current assets |
27,882 |
18,115 |
||||||
Total current assets |
1,191,268 |
1,054,329 |
||||||
Non-current assets: |
||||||||
Property, equipment and software, net |
6,805 |
5,301 |
||||||
Operating lease right-of-use assets, net |
22,181 |
13,956 |
||||||
Long-term investments |
26,078 |
26,562 |
||||||
Other non-current assets |
1,818 |
1,474 |
||||||
Total non-current assets |
56,882 |
47,293 |
||||||
Total assets |
1,248,150 |
1,101,622 |
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
12,212 |
14,945 |
||||||
Advance from customers |
31,088 |
30,396 |
||||||
Deferred revenue, current |
9,254 |
7,407 |
||||||
Accruals and other current liabilities |
50,847 |
32,858 |
||||||
Lease liabilities, current |
5,697 |
4,918 |
||||||
Total current liabilities |
109,098 |
90,524 |
||||||
Non-current liabilities: |
||||||||
Lease liabilities, non-current |
16,048 |
8,413 |
||||||
Deferred revenue, non-current |
859 |
587 |
||||||
Other non-current liabilities |
8,484 |
8,560 |
||||||
Total non-current liabilities |
25,391 |
17,560 |
||||||
Total liabilities |
134,489 |
108,084 |
TUYA INC. |
||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) |
||||||||
AS OF DECEMBER 31, 2021 AND JUNE 30, 2022 |
||||||||
(All amounts in US$ thousands ("US$"), except for share and per share data, unless otherwise noted) |
||||||||
As of |
As of |
|||||||
(Unaudited) |
||||||||
Shareholders' equity: |
||||||||
Class A ordinary shares (US$0.00005 par value; 600,000,000 shares authorized as of December |
25 |
25 |
||||||
Class B ordinary shares (US$0.00005 par value; 200,000,000 shares authorized as of December |
4 |
4 |
||||||
Treasury stock (US$0.00005 par value; 11,604,808 and 25,532,826 shares as of December 31, |
(46,930) |
(94,873) |
||||||
Additional paid-in capital |
1,526,140 |
1,553,978 |
||||||
Accumulated other comprehensive income/(loss) |
2,320 |
(6,876) |
||||||
Accumulated deficit |
(367,898) |
(458,720) |
||||||
Total shareholders' equity |
1,113,661 |
993,538 |
||||||
Total liabilities and shareholders' equity |
1,248,150 |
1,101,622 |
TUYA INC. |
||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
||||||||||||||||
(All amounts in US$ thousands ("US$ "), except for share and per share data, unless otherwise noted) |
||||||||||||||||
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 30, 2021 |
June 30, 2022 |
June 30, 2021 |
June 30, 2022 |
|||||||||||||
Revenue |
84,663 |
62,547 |
141,531 |
117,871 |
||||||||||||
Cost of revenue |
(48,961) |
(35,777) |
(82,446) |
(68,281) |
||||||||||||
Gross profit |
35,702 |
26,770 |
59,085 |
49,590 |
||||||||||||
Operating expenses: |
||||||||||||||||
Research and development expenses |
(42,657) |
(37,221) |
(77,366) |
(84,809) |
||||||||||||
Sales and marketing expenses |
(19,388) |
(15,061) |
(35,800) |
(30,339) |
||||||||||||
General and administrative expenses |
(16,292) |
(17,130) |
(32,354) |
(35,160) |
||||||||||||
Other operating incomes, net |
1,117 |
3,182 |
3,640 |
5,776 |
||||||||||||
Total operating expenses |
(77,220) |
(66,230) |
(141,880) |
(144,532) |
||||||||||||
Loss from operations |
(41,518) |
(39,460) |
(82,795) |
(94,942) |
||||||||||||
Other income/(loss) |
||||||||||||||||
Other non-operating incomes, net |
653 |
694 |
653 |
1,347 |
||||||||||||
Financial income, net |
2,795 |
1,428 |
3,890 |
1,549 |
||||||||||||
Foreign exchange gain/(loss), net |
182 |
1,627 |
(143) |
1,526 |
||||||||||||
Loss before income tax expense |
(37,888) |
(35,711) |
(78,395) |
(90,520) |
||||||||||||
Income tax expense |
(242) |
(158) |
(268) |
(302) |
||||||||||||
Net loss |
(38,130) |
(35,869) |
(78,663) |
(90,822) |
||||||||||||
Net loss attributable to Tuya Inc. |
(38,130) |
(35,869) |
(78,663) |
(90,822) |
||||||||||||
Net loss attribute to ordinary shareholders |
(38,130) |
(35,869) |
(78,663) |
(90,822) |
||||||||||||
Net loss |
(38,130) |
(35,869) |
(78,663) |
(90,822) |
||||||||||||
Other comprehensive income/(loss) |
||||||||||||||||
Changes in fair value of long-term investments |
– |
(1,146) |
– |
(1,146) |
||||||||||||
Foreign currency translation |
740 |
(8,699) |
369 |
(8,050) |
||||||||||||
Total comprehensive loss attributable to Tuya Inc. |
(37,390) |
(45,714) |
(78,294) |
(100,018) |
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, |
|||||||||||||
Net loss attributable to Tuya Inc. |
(38,130) |
(35,869) |
(78,663) |
(90,822) |
||||||||||||
Net loss attributable to ordinary shareholders |
(38,130) |
(35,869) |
(78,663) |
(90,822) |
||||||||||||
Weighted average number of ordinary shares used in computing |
560,936,196 |
550,172,103 |
415,359,514 |
553,471,745 |
||||||||||||
Net loss per share attributable to ordinary shareholders, |
(0.07) |
(0.07) |
(0.19) |
(0.16) |
||||||||||||
Share-based compensation expenses were included in: |
||||||||||||||||
Research and development expenses |
2,956 |
3,452 |
6,801 |
7,582 |
||||||||||||
Sales and marketing expenses |
1,482 |
1,847 |
3,621 |
3,500 |
||||||||||||
General and administrative expenses |
10,573 |
11,871 |
21,371 |
23,744 |
TUYA INC. |
||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||||
(All amounts in US$ thousands ("US$"), except for share and per share data, unless otherwise noted) |
||||||||||||||||
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
Net cash generated from/(used in) operating activities |
5,813 |
401 |
(26,842) |
(56,973) |
||||||||||||
Net cash used in investing activities |
(92,504) |
(112,848) |
(152,734) |
(254,789) |
||||||||||||
Net cash generated from/(used in) financing activities |
27,309 |
(26,894) |
1,104,850 |
(48,645) |
||||||||||||
Effect of exchange rate changes on cash and cash equivalents, |
1,492 |
(6,284) |
808 |
(4,956) |
||||||||||||
Net (decrease)/increase in cash and cash equivalents, |
(57,890) |
(145,625) |
926,082 |
(365,363) |
||||||||||||
Cash and cash equivalents, restricted cash at the beginning of |
1,142,927 |
744,838 |
158,955 |
964,576 |
||||||||||||
Cash and cash equivalents, restricted cash at the end of period |
1,085,037 |
599,213 |
1,085,037 |
599,213 |
TUYA INC. |
||||||||||||||||
RECONCILIATION OF NON- GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE FINANCIAL |
||||||||||||||||
(All amounts in US$ thousands ("US$"), except for share and per share data, unless otherwise noted) |
||||||||||||||||
For the Three Months |
For the Six Months |
|||||||||||||||
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
Reconciliation of operating expenses to non-GAAP |
||||||||||||||||
Research and development expenses |
(42,657) |
(37,221) |
(77,366) |
(84,809) |
||||||||||||
Add: Share-based compensation |
2,956 |
3,452 |
6,801 |
7,582 |
||||||||||||
Adjusted Research and development expenses |
(39,701) |
(33,769) |
(70,565) |
(77,227) |
||||||||||||
Sales and marketing expenses |
(19,388) |
(15,061) |
(35,800) |
(30,339) |
||||||||||||
Add: Share-based compensation |
1,482 |
1,847 |
3,621 |
3,500 |
||||||||||||
Adjusted Sales and marketing expenses |
(17,906) |
(13,214) |
(32,179) |
(26,839) |
||||||||||||
General and administrative expenses |
(16,292) |
(17,130) |
(32,354) |
(35,160) |
||||||||||||
Add: Share-based compensation |
10,573 |
11,871 |
21,371 |
23,744 |
||||||||||||
Adjusted General and administrative expenses |
(5,719) |
(5,259) |
(10,983) |
(11,416) |
||||||||||||
Reconciliation of loss from operations to non-GAAP loss |
||||||||||||||||
Loss from operations |
(41,518) |
(39,460) |
(82,795) |
(94,942) |
||||||||||||
Add: Share-based compensation expenses |
15,011 |
17,170 |
31,793 |
34,826 |
||||||||||||
Non-GAAP Loss from operations |
(26,507) |
(22,290) |
(51,002) |
(60,116) |
||||||||||||
Non-GAAP Operating margin |
(31.3) |
% |
(35.6) |
% |
(36.0) |
% |
(51.0) |
% |
||||||||
Reconciliation of net loss to non-GAAP net loss |
||||||||||||||||
Net loss |
(38,130) |
(35,869) |
(78,663) |
(90,822) |
||||||||||||
Add: Share-based compensation expenses |
15,011 |
17,170 |
31,793 |
34,826 |
||||||||||||
Non-GAAP Net loss |
(23,119) |
(18,699) |
(46,870) |
(55,996) |
||||||||||||
Non-GAAP Net margin |
(27.3) |
% |
(29.9) |
% |
(33.1) |
% |
(47.5) |
% |
||||||||
Weighted average number of ordinary shares used in computing |
560,936,196 |
550,172,103 |
415,359,514 |
553,471,745 |
||||||||||||
Non-GAAP net loss per share attributable to ordinary |
(0.04) |
(0.03) |
(0.11) |
(0.10) |
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