Tuya Reports Fourth Quarter and Full Fiscal Year 2022 Unaudited Financial Results.

SANTA CLARA, Calif: Tuya Inc. ("Tuya" or the "Company", together with its subsidiaries and consolidated affiliated entities, the "Group") (NYSE: TUYA; HKEX: 2391), a global leading IoT cloud development platform, today announced its unaudited financial results for the fourth quarter and full fiscal year ended December 31, 2022.

Fourth Quarter 2022 Financial Highlights

Total revenue was US$45.3 million, down approximately 39.6% year over year (4Q2021: US$75.0 million).

IoT platform-as-a-service ("PaaS") revenue was US$32.6 million, down approximately 47.4% year over year (4Q2021: US$62.1 million).

Software-as-a-service ("SaaS") and others revenue was US$7.9 million, up approximately 8.7% year over year (4Q2021: US$7.3 million).

Overall gross margin for the quarter increased to 44.6%, up 1.4 percentage points year over year (4Q2021: 43.2%). Gross margin of IoT PaaS for the quarter decreased to 41.5%, down 1.0 percentage point year over year (4Q2021: 42.5%).

Operating expenses for the quarter were US$53.0 million, down approximately 36.8% year over year (4Q2021: US$83.9 million). Non-GAAP operating expenses for the quarter were US$35.5 million, down approximately 46.4% year over year (4Q2021: US$66.3 million). Operating margin for the quarter was negative 72.5%, down 3.7 percentage points year over year (4Q2021: negative 68.8%). Non-GAAP operating margin for the quarter was negative 33.8%, up 11.5 percentage points year over year (4Q2021: negative 45.3%).

Net cash used in operating activities for the quarter was US$0.1 million, down approximately 99.7% year over year (4Q2021: US$53.2 million).

Total cash and cash equivalents, and short-term investments were US$954.3 million as of December 31, 2022, compared to US$945.9 million as of September 30, 2022 and US$1.07 billion as of December 31, 2021.

Total shares repurchased in the form of American Depositary Shares ("ADSs") and Class A ordinary shares amounted to approximately 25.8 million for a total consideration of approximately US$112.8 million as of December 31, 2022.

Full Year 2022 Financial Highlights

Total revenue was US$208.2 million, down approximately 31.1% year over year (2021: US$302.1 million).

IoT PaaS revenue was US$152.9 million, down approximately 41.5% year over year (2021: US$261.4 million).

SaaS and others revenue was US$29.8 million, up approximately 60.6% year over year (2021: US$18.6 million).

Overall gross margin for the year increased to 43.0%, up 0.7 percentage point year over year (2021: 42.3%). Gross margin of IoT PaaS for the year decreased to 41.1%, down 1.3 percentage points year over year (2021: 42.4%).

Operating expenses for the year were US$257.6 million, down approximately 17.3% year over year (2021: US$311.4 million). Non-GAAP operating expenses for the year were US$188.6 million, down approximately 23.1% year over year (2021: US$245.3 million). Operating margin for the year was negative 80.8%, down 20.0 percentage points year over year (2021: negative 60.8%). Non-GAAP operating margin for the year was negative 47.6%, down 8.7 percentage points year over year (2021: negative 38.9%).

Net cash used in operating activities for the year was US$70.7 million, down approximately 44.0% year over year (2021: US$126.1 million).

Fourth Quarter and Fiscal Year 2022 Operating Highlights

IoT PaaS customers[1] for the fourth quarter and the fiscal year 2022 were approximately 2,400 and 5,100, respectively (4Q2021 and 2021: approximately 3,300 and 5,500, respectively). Total customers for the fourth quarter and the fiscal year 2022 were approximately 3,400 and 7,600, respectively (4Q2021 and 2021: approximately 4,800 and 8,400, respectively). The Group's implementation of its key-account strategy enabled it to be more focused on serving strategic customers.

Premium IoT PaaS customers[2] for the trailing 12 months ended December 31, 2022 were 263 (4Q2021: 311). In the fourth quarter and the fiscal year 2022, the Group's premium IoT PaaS customers contributed approximately 77.0% and 81.7% of its IoT PaaS revenue, respectively (4Q2021 and 2021: approximately 87.3% and 88.6%, respectively).

Dollar-based net expansion rate ("DBNER")[3] of IoT PaaS for the trailing 12 months ended December 31, 2022 was 51% (4Q2021: 153%).

Registered IoT device and software developers, or registered developers, were over 708,000 as of December 31, 2022, up 38.8% from approximately 510,000 developers as of December 31, 2021.

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...