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Tuya Inc.

Tuya Inc.TUYAEarnings & Financial Report

NYSE · Information Technology · Services-Prepackaged Software

Tuya Inc. is a Chinese artificial intelligence and Internet of things (IoT) platform as a service (PaaS) provider founded in 2014.

What changed in Tuya Inc.'s 20-F — 2024 vs 2025

Top changes in Tuya Inc.'s 2025 20-F

588 paragraphs added · 633 removed · 483 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

124 edited+20 added−26 removed386 unchanged
Some factors that may cause our operating results to fluctuate from period to period include: ● our ability to attract, retain and increase revenue from customers and end users; ● market acceptance of our products and services and our ability to introduce new products and services and enhance existing products and services; ● competition and the actions of our competitors, including pricing changes, the introduction of new products and services, and expansion into new geographies; 26 Table of Contents ● our ability to control costs and operating expenses, including but not limited to the fees that we pay cloud infrastructure and AI large language model providers, chip and module suppliers, outsourcing manufacturing suppliers or OEMs who manufacture smart devices for our smart solutions business; ● changes in our pricing as a result of our negotiations with our larger customers or our optimization efforts or otherwise; ● the rate of expansion and productivity of our sales force; ● change in the mix of products and services that our customers and end users use; ● changes in end user and customer demand as end users increase or decrease their demand for smart home products, or other products and services, due to the imposition or easing of stay-at-home, travel and other government mandates in response to disease outbreaks, such as the Covid-19 pandemic or future epidemics and public health crisis; ● the expansion of our business, particularly in international markets; ● changes in foreign currency exchange rates and interest rates, particularly the U.S. federal funds rate; ● changes in laws, regulations or regulatory enforcement, in China, the United States or other countries and regions, that impact our ability to market, sell or deliver our products; ● significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and services on our platform; ● allegations, even if not supported by fact or based on isolated incidents, relating to cybersecurity events relating to our business operations or our unauthorized use, misuse or disclosure of personal information or other sensitive information; ● general economic and political conditions and imposition of new tariffs or adjustments in existing tariffs or trade barriers that may adversely affect a prospective customer’s ability or willingness to adopt our products and services, delay a prospective customer’s adoption decision, reduce the revenue that we generate from their use of our products and services, or impact customer retention; ● extraordinary expenses such as litigation or other dispute-related settlement payments; ● sales tax and other tax determinations by authorities in jurisdictions where we conduct business; ● the impact of new accounting pronouncements; ● expenses incurred in connection with mergers, acquisitions or other strategic transactions and integrating acquired business, technologies, services, products and other assets; and ● fluctuations in share-based compensation expenses.
Some factors that may cause our operating results to fluctuate from period to period include: ● our ability to attract, retain and increase revenue from customers and end users; ● market acceptance of our products and services and our ability to introduce new products and services and enhance existing products and services; ● competition and the actions of our competitors, including pricing changes, the introduction of new products and services, and expansion into new geographies; ● our ability to control costs and operating expenses, including but not limited to the fees that we pay cloud infrastructure and AI large language model providers, chip and module suppliers, outsourcing manufacturing suppliers or OEMs who manufacture smart devices for our smart solutions business; ● changes in our pricing as a result of our negotiations with our larger customers or our optimization efforts or otherwise; ● the rate of expansion and productivity of our sales force; ● change in the mix of products and services that our customers and end users use; 25 Table of Contents ● changes in end user and customer demand as end users increase or decrease their demand for smart home products, or other products and services, due to the imposition or easing of stay-at-home, travel and other government mandates in response to disease outbreaks, such as the Covid-19 pandemic or future epidemics and public health crisis; ● the expansion of our business, particularly in international markets; ● changes in foreign currency exchange rates and interest rates, particularly the U.S. federal funds rate; ● changes in laws, regulations or regulatory enforcement, in China, the United States or other countries and regions, that impact our ability to market, sell or deliver our products; ● significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and services on our platform; ● allegations, even if not supported by fact or based on isolated incidents, relating to cybersecurity events relating to our business operations or our unauthorized use, misuse or disclosure of personal information or other sensitive information; ● general economic and political conditions and imposition of new tariffs or adjustments in existing tariffs or trade barriers that may adversely affect a prospective customer’s ability or willingness to adopt our products and services, delay a prospective customer’s adoption decision, reduce the revenue that we generate from their use of our products and services, or impact customer retention; ● extraordinary expenses such as litigation or other dispute-related settlement payments; ● sales tax and other tax determinations by authorities in jurisdictions where we conduct business; ● the impact of new accounting pronouncements; ● expenses incurred in connection with mergers, acquisitions or other strategic transactions and integrating acquired business, technologies, services, products and other assets; and ● fluctuations in share-based compensation expenses.
In addition, we will face risks in doing business internationally that could adversely affect our business, including: ● difficulties in managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations; ● challenges to our corporate culture resulting from a dispersed workforce; ● our ability to effectively price our products in competitive international markets; ● foreign ownership restrictions; ● potentially greater difficulty in collecting accounts receivable and longer payment cycles; ● the need to adapt and localize our products and services for specific countries; ● difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions, including those governing competition, pricing, internet activities, cybersecurity and data protection, employment and labor laws, privacy, collection, use, processing, or sharing of personal information, intellectual property, and other activities important to our business; ● difficulties with differing technical and environmental standards, privacy, cybersecurity, data protection and telecommunications regulations and certification requirements across multiple jurisdictions, which could prevent customers from deploying our products and services or limit their usage; ● difficulties in understanding, and adapting our products and services to, local end users’ habits and preferences; ● the complexities of complying with current and future export controls and economic sanctions administered by the Department of Commerce Bureau of Industry and Security and the Treasury Department’s Office of Foreign Assets Control and other relevant sanctions authorities; ● uncertainties arising from sanctions and regulations from United States, the European Union or other foreign jurisdictions. ● tariffs and other non-tariff trade barriers, such as quotas and local content rules; 22 Table of Contents ● more limited protection for intellectual property rights in some countries; ● adverse tax consequences; ● fluctuations in currency exchange rates, which could increase the price of our products and services in certain markets, increase the purchase price of raw materials and inventories, increase the cost of components and services used in our operations, including cloud infrastructure services, and increase the expenses of our international operations and expose us to foreign currency exchange rate risk or the cost and risk of hedging transactions if we choose to enter into such transactions in the future; ● currency control regulations, which might restrict or prohibit our conversion of other currencies into RMB and/or U.S. dollars; and ● restrictions on the transfer of funds across borders.
In addition, we will face risks in doing business internationally that could adversely affect our business, including: ● difficulties in managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations; ● challenges to our corporate culture resulting from a dispersed workforce; ● our ability to effectively price our products in competitive international markets; ● foreign ownership restrictions; ● potentially greater difficulty in collecting accounts receivable and longer payment cycles; ● the need to adapt and localize our products and services for specific countries; ● difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions, including those governing competition, pricing, internet activities, cybersecurity and data protection, employment and labor laws, privacy, collection, use, processing, or sharing of personal information, intellectual property, and other activities important to our business; 21 Table of Contents ● difficulties with differing technical and environmental standards, privacy, cybersecurity, data protection and telecommunications regulations and certification requirements across multiple jurisdictions, which could prevent customers from deploying our products and services or limit their usage; ● difficulties in understanding, and adapting our products and services to, local end users’ habits and preferences; ● the complexities of complying with current and future export controls and economic sanctions administered by the Department of Commerce Bureau of Industry and Security and the Treasury Department’s Office of Foreign Assets Control and other relevant sanctions authorities; ● uncertainties arising from sanctions and regulations from United States, the European Union or other foreign jurisdictions. ● tariffs and other non-tariff trade barriers, such as quotas and local content rules; ● more limited protection for intellectual property rights in some countries; ● adverse tax consequences; ● fluctuations in currency exchange rates, which could increase the price of our products and services in certain markets, increase the purchase price of raw materials and inventories, increase the cost of components and services used in our operations, including cloud infrastructure services, and increase the expenses of our international operations and expose us to foreign currency exchange rate risk or the cost and risk of hedging transactions if we choose to enter into such transactions in the future; ● currency control regulations, which might restrict or prohibit our conversion of other currencies into RMB and/or U.S. dollars; and ● restrictions on the transfer of funds across borders.
Our customers may cease, or reduce their usage of our products and services due to a variety of reasons, such as progress in technology that renders our products and services obsolete, declining product quality, unfounded health and other concerns about technologies like 5G, national security issues, rising raw material costs, or semiconductor shortages, imposition of new tariffs or adjustments in existing tariffs or trade barriers, many of which are outside our or our customers ’ control.
Our customers may cease, or reduce their usage of our products and services due to a variety of reasons, such as progress in technology that renders our products and services obsolete, declining product quality, unfounded health and other concerns about technologies like AI, 5G, national security issues, rising raw material costs, or semiconductor shortages, imposition of new tariffs or adjustments in existing tariffs or trade barriers, many of which are outside our or our customers ’ control.
We also use various third-party cloud-hosting providers such as AWS, Microsoft Azure, Google Cloud Platform, Tencent Cloud and Alibaba Cloud to provide cloud infrastructure for our platform. Our IoT PaaS and SaaS rely on the operations of this infrastructure. We do not control, or in some cases have limited control over, the operation of the data center facilities we use.
We also use various third-party cloud-hosting providers such as AWS, Microsoft Azure, Google Cloud Platform, Tencent Cloud and Alibaba Cloud to provide cloud infrastructure for our platform. Our PaaS and SaaS rely on the operations of this infrastructure. We do not control, or in some cases have limited control over, the operation of the data center facilities we use.
Any disruption in the operations of these third-party providers, limitations on capacity or interference with our use, due to geopolitical tensions or business competition could adversely affect our business, financial condition and results of operations. We currently serve our customers and end users from data centers in China, the United States, Europe and India.
Any disruption in the operations of these third-party providers, limitations on capacity or interference with our use, due to geopolitical tensions or business competition could adversely affect our business, financial condition and results of operations. We currently serve our customers and end users from data centers in China, the United States, Europe, India and Singapore.
In addition, new tariffs, such as those announced by the U.S. government in the first half of 2025 may also negatively impact customers ’ demand and further disrupt their business cycles and purchasing patterns. In estimating demand, we make multiple assumptions, any of which may prove to be incorrect.
In addition, new tariffs, such as those announced by the U.S. government in 2025 and the first half of 2026 may also negatively impact customers ’ demand and further disrupt their business cycles and purchasing patterns. In estimating demand, we make multiple assumptions, any of which may prove to be incorrect.
Our results of operations could be materially harmed if we are unable to optimally manage our inventories to meet our operational needs. Our inventories consist mainly of (i) modules and chips relating to our IoT PaaS, and (ii) finished smart devices purchased from manufacturers or manufactured by manufacturing suppliers as part of our Smart Solution business.
Our results of operations could be materially harmed if we are unable to optimally manage our inventories to meet our operational needs. Our inventories consist mainly of (i) modules and chips relating to our PaaS, and (ii) finished smart devices purchased from manufacturers or manufactured by manufacturing suppliers as part of our Smart Solution business.
If our market does not grow as we expect, or if we cannot expand our products and services to meet the demands of this market, our revenue may decline, or fail to grow, and we may continue to incur operating losses. The IoT PaaS and SaaS markets are at a relatively early stage of development and are constantly evolving.
If our market does not grow as we expect, or if we cannot expand our products and services to meet the demands of this market, our revenue may decline, or fail to grow, and we may continue to incur operating losses. The PaaS and SaaS markets are at a relatively early stage of development and are constantly evolving.
The markets in which we operate are competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed. The market of IoT PaaS, SaaS (including, among others, industry SaaS and cloud-based software value-added services), and smart devices are competitive and rapidly evolving.
The markets in which we operate are competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed. The market of PaaS, SaaS (including, among others, industry SaaS and cloud-based software value-added services), and smart devices are competitive and rapidly evolving.
These factors are often outside our and our customers ’ control and their impact are difficult to predict. For example, the demand and use of the chips as part of the modules where the edge capabilities of IoT PaaS are embedded have fluctuated in the past and is likely to continue to fluctuate in the future.
These factors are often outside our and our customers ’ control and their impact are difficult to predict. For example, the demand and use of the chips as part of the modules where the edge capabilities of PaaS are embedded have fluctuated in the past and is likely to continue to fluctuate in the future.
Additionally, our customers or partners who distribute and sell their smart products using our offerings such as IoT PaaS and smart solutions for smart devices through various sales channels, are often required to follow strict sales policies covering areas including marketing, pricing, and customer interaction.
Additionally, our customers or partners who distribute and sell their smart products using our offerings such as PaaS and smart solutions for smart devices through various sales channels, are often required to follow strict sales policies covering areas including marketing, pricing, and customer interaction.
Risk Factors—Risks Related to Our Business and Industry—Compliance with the rapidly evolving landscape of global data privacy and data security laws may be challenging, and any failure or perceived failure to comply with such laws, or other concerns about our practices or policies with respect to the processing of personal information, could damage our reputation and deter current and potential customers and end users from using our platform and products and services or subject us to significant compliance costs or penalties, which could materially and adversely affect our business, financial condition and results of operations.” 29 Table of Contents Our business depends on our strong reputation and the value of “ Tuya ” brand.
Risk Factors—Risks Related to Our Business and Industry—Compliance with the rapidly evolving landscape of global data privacy and data security laws may be challenging, and any failure or perceived failure to comply with such laws, or other concerns about our practices or policies with respect to the processing of personal information, could damage our reputation and deter current and potential customers and end users from using our platform and products and services or subject us to significant compliance costs or penalties, which could materially and adversely affect our business, financial condition and results of operations.” 28 Table of Contents Our business depends on our strong reputation and the value of “ Tuya ” brand.
In addition, our proprietary methods and technologies that are regarded as trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors and in these cases we would not be able to assert any trade secret rights against those parties.
In addition, our proprietary methods and technologies that are regarded as trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors and in these cases, we may not be able to assert any trade secret rights against those parties.
See “—Compliance with the rapidly evolving landscape of global data privacy and data security laws may be challenging, and any failure or perceived failure to comply with such laws, or other concerns about our practices or policies with respect to the processing of personal information, could damage our reputation and deter current and potential customers and end users from using our platform and products and services or subject us to significant compliance costs or penalties, which could materially and adversely affect our business, financial condition and results of operations.” 32 Table of Contents Any failure to maintain necessary permits and licenses to operate our business operations under applicable laws and regulations could materially and adversely affect our business and results of operations.
See “—Compliance with the rapidly evolving landscape of global data privacy and data security laws may be challenging, and any failure or perceived failure to comply with such laws, or other concerns about our practices or policies with respect to the processing of personal information, could damage our reputation and deter current and potential customers and end users from using our platform and products and services or subject us to significant compliance costs or penalties, which could materially and adversely affect our business, financial condition and results of operations.” 31 Table of Contents Any failure to maintain necessary permits and licenses to operate our business operations under applicable laws and regulations could materially and adversely affect our business and results of operations.
There can be no assurance that our particular ways and means of protecting our intellectual property and proprietary rights, including business decisions about when to file patent applications and trademark applications, will be adequate to protect our business or that our competitors will not independently develop similar technology.
There can be no assurance that our ways and means of protecting our intellectual property and proprietary rights, including business decisions about when to file patent applications and trademark applications, will be adequate to protect our business or that our competitors will not independently develop similar technology.
Because the vulnerabilities and techniques used by such individuals or entities to access, disrupt or sabotage devices, systems and networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques, and we may not become aware in a timely manner of such a security breach, which could exacerbate any damage we experience. 31 Table of Contents While we take reasonable measures to protect the security of, and against unauthorized access to, our systems, as well as the security of personal information and proprietary information, it is possible that our security controls and other security practices we follow may not prevent the improper access to or disclosure of personal information or proprietary information.
Because the vulnerabilities and techniques used by such individuals or entities to access, disrupt or sabotage devices, systems and networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques, and we may not become aware in a timely manner of such a security breach, which could exacerbate any damage we experience. 30 Table of Contents While we take reasonable measures to protect the security of, and against unauthorized access to, our systems, as well as the security of personal information and proprietary information, it is possible that our security controls and other security practices we follow may not prevent the improper access to or disclosure of personal information or proprietary information.
In the event that our service agreements relating to our data centers or cloud infrastructure are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform, as well as significant delays and additional expense in arranging or creating new facilities and services or rebuilding our platform for deployment on a different data center provider or cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations. 16 Table of Contents We benefit from integration of our products and services with those of our business partners.
In the event that our service agreements relating to our data centers or cloud infrastructure are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our platform, as well as significant delays and additional expense in arranging or creating new facilities and services or rebuilding our platform for deployment on a different data center provider or cloud infrastructure service provider, which could adversely affect our business, financial condition and results of operations. 15 Table of Contents We benefit from integration of our products and services with those of our business partners.
Furthermore, to the extent we build inventory anticipating growth in customer demand, our business, results of operations and financial condition may be negatively affected if such growth does not materialize as expected. 14 Table of Contents Our use of third-party suppliers involves certain risks that may result in, among others, increased costs, disruption of supply or shortage of raw materials or inventories such as finished smart devices, quality or compliance issues, or failure by our suppliers to timely manufacture the modules and finished smart devices, any of which could materially harm our business.
Furthermore, to the extent we build inventory anticipating growth in customer demand, our business, results of operations and financial condition may be negatively affected if such growth does not materialize as expected. 13 Table of Contents Our use of third-party suppliers involves certain risks that may result in, among others, increased costs, disruption of supply or shortage of raw materials or inventories such as finished smart devices, quality or compliance issues, or failure by our suppliers to timely manufacture the modules and finished smart devices, any of which could materially harm our business.
Any failure to complete the required cybersecurity review may result in regulatory sanctions including, among others, government enforcement actions and investigations, fines, penalties, and suspension of our non-compliant operations, as well as reputational damage or legal proceedings or actions against us, any of which may have material adverse effects on our business, financial condition and results of operations. 18 Table of Contents In addition, on November 14, 2021, the CAC released the Regulations on the Administration of Cyber Security Management (Draft for Comments) (the “ Draft Cyber Data Security Regulation ”).
Any failure to complete the required cybersecurity review may result in regulatory sanctions including, among others, government enforcement actions and investigations, fines, penalties, and suspension of our non-compliant operations, as well as reputational damage or legal proceedings or actions against us, any of which may have material adverse effects on our business, financial condition and results of operations. 17 Table of Contents In addition, on November 14, 2021, the CAC released the Regulations on the Administration of Cyber Security Management (Draft for Comments) (the “ Draft Cyber Data Security Regulation ”).
We face certain risks relating to the real properties that we lease. We lease office spaces from third parties for our operations in China, the United States, Europe, Australia, India, Japan and Colombia, among other locations.
We face certain risks relating to the real properties that we lease. We lease office spaces from third parties for our operations in China, the United States, Europe, Australia, India, Japan, Colombia and Singapore, among other locations.
For details, see the risk factor with the same heading on page 62 of this annual report. ● Trading in our securities will be prohibited under the HFCAA if the PCAOB determines that it is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor as an independent registered public accounting firm, and as a result, U.S. national securities exchanges, such as the NYSE, may determine to delist our securities.
For details, see the risk factor with the same heading on page 57 of this annual report. ● Trading in our securities will be prohibited under the HFCAA if the PCAOB determines that it is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, including our auditor as an independent registered public accounting firm, and as a result, U.S. national securities exchanges, such as the NYSE, may determine to delist our securities.
In addition, some of our customers may choose to use our products and services and our competitors’ products and services at the same time, or choose to switch to other IoT platforms. As we expand the scope of our platform, products and services, we may face additional competition.
In addition, some of our customers may choose to use our products and services and our competitors’ products and services at the same time, or choose to switch to other IoT or AIoT platforms. As we expand the scope of our platform, products and services, we may face additional competition.
Any disruptions, outages, defects, and other performance and quality problems with our platform or with our products and services and internet infrastructure on which they rely, or any material change in our contractual and other business relationships with our cloud infrastructure providers, could result in reduced use of our platform, increased expenses, including service credit obligations, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations. 24 Table of Contents Defects, errors or any other problems associated with our products and services could diminish demand for our products or services, harm our business and results of operations and subject us to liability.
Any disruptions, outages, defects, and other performance and quality problems with our platform or with our products and services and internet infrastructure on which they rely, or any material change in our contractual and other business relationships with our cloud infrastructure providers, could result in reduced use of our platform, increased expenses, including service credit obligations, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition and results of operations. 23 Table of Contents Defects, errors or any other problems associated with our products and services could diminish demand for our products or services, harm our business and results of operations and subject us to liability.
For details, see the risk factor with the same heading on page 14 of this annual report. ● Our use of third-party suppliers involves certain risks that may result in, among others, increased costs, disruption of supply or shortage of raw materials or inventories such as finished smart devices, quality or compliance issues, or failure by our suppliers to timely manufacture the modules and finished smart devices, any of which could materially harm our business.
For details, see the risk factor with the same heading on page 13 of this annual report. ● Our use of third-party suppliers involves certain risks that may result in, among others, increased costs, disruption of supply or shortage of raw materials or inventories such as finished smart devices, quality or compliance issues, or failure by our suppliers to timely manufacture the modules and finished smart devices, any of which could materially harm our business.
In addition, even if our products and services or platform and underlying technology do not infringe upon any intellectual property rights of others, we cannot avoid the harm of malicious or frivolous intellectual property litigations that any third party may bring against us, such as costs we may incur in defending ourselves in these litigations. 33 Table of Contents If we are unable to hire, retain and motivate qualified personnel, our business will suffer.
In addition, even if our products and services or platform and underlying technology do not infringe upon any intellectual property rights of others, we cannot avoid the harm of malicious or frivolous intellectual property litigations that any third party may bring against us, such as costs we may incur in defending ourselves in these litigations. 32 Table of Contents If we are unable to hire, retain and motivate qualified personnel, our business will suffer.
If we fail to identify additional channel partners in a timely and cost-effective manner, or at all, or are unable to assist our current and future channel partners in independently selling and deploying our products and services, then our business, operating results and financial condition could be adversely affected. 28 Table of Contents Any failure to offer high-quality developer and customer support may adversely affect our relationships with our developers and customers.
If we fail to identify additional channel partners in a timely and cost-effective manner, or at all, or are unable to assist our current and future channel partners in independently selling and deploying our products and services, then our business, operating results and financial condition could be adversely affected. 27 Table of Contents Any failure to offer high-quality developer and customer support may adversely affect our relationships with our developers and customers.
We may even be subject to government or regulatory investigation as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to defend ourselves against such third-party conduct, and we may not be able to conclusively refute each of the allegations within a reasonable period of time, or at all. 34 Table of Contents We may receive complaints from our customers and end users on our products and services, pricing and customer support.
We may even be subject to government or regulatory investigation as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to defend ourselves against such third-party conduct, and we may not be able to conclusively refute each of the allegations within a reasonable period of time, or at all. 33 Table of Contents We may receive complaints from our customers and end users on our products and services, pricing and customer support.
Moreover, the edge capabilities of IoT PaaS are embedded in modules manufactured by certain third-party suppliers. Our smart solutions for smart devices are delivered to our customers in the form of finished smart devices that are manufactured by third-party suppliers.
Moreover, the edge capabilities of PaaS are embedded in modules manufactured by certain third-party suppliers. Our smart solutions for smart devices are delivered to our customers in the form of finished smart devices that are manufactured by third-party suppliers.
For details, see the risk factor with the same heading on page 58 of this annual report. ● We may rely on dividends and other distributions on equity paid by our subsidiaries in mainland China and Hong Kong to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
For details, see the risk factor with the same heading on page 53 of this annual report. ● We may rely on dividends and other distributions on equity paid by our subsidiaries in mainland China and Hong Kong to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
If new technologies emerge that are able to deliver competitive products and services at lower prices or more efficiently or securely, such technologies could adversely impact our ability to compete effectively. 11 Table of Contents Our products, services and platform must also integrate with a variety of network, hardware, software and technologies, and we need to continuously modify and enhance our products, services and platform to adapt to changes and innovation.
If new technologies emerge that are able to deliver competitive products and services at lower prices or more efficiently or securely, such technologies could adversely impact our ability to compete effectively. 10 Table of Contents Our products, services and platform must also integrate with a variety of network, hardware, software and technologies, and we need to continuously modify and enhance our products, services and platform to adapt to changes and innovation.
To the extent the chip shortage deteriorates or becomes longer-term in nature, we may experience significant delays in our delivery to customers and our business operations and prospects may be negatively impacted. 15 Table of Contents If we are not able to introduce new features or products successfully or to make enhancements to our existing products and services, our business and results of operations could be adversely affected.
To the extent the chip shortage deteriorates or becomes longer-term in nature, we may experience significant delays in our delivery to customers and our business operations and prospects may be negatively impacted. 14 Table of Contents If we are not able to introduce new features or products successfully or to make enhancements to our existing products and services, our business and results of operations could be adversely affected.
For details, see the risk factor with the same heading on page 67 of this annual report. ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our securities, the market price and trading volume for our ADSs and Class A ordinary shares could decline.
For details, see the risk factor with the same heading on page 62 of this annual report. ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our securities, the market price and trading volume for our ADSs and Class A ordinary shares could decline.
We are classified as a foreign enterprise under the PRC laws and regulations, and Tuya Information, our wholly owned subsidiary in the PRC, is a foreign-invested enterprise. In light of the restrictions described above, we have determined that it was not viable for us to hold Hangzhou Tuya Technology, or the VIE, directly through equity ownership.
We are classified as a foreign enterprise under the PRC laws and regulations, and Tuya Information, our wholly owned subsidiary in the PRC, is a foreign-invested enterprise. In light of the restrictions described above, we determined that it was not viable for us to hold Hangzhou Tuya Technology, or the former VIE, directly through equity ownership.
For details, see the risk factor with the same heading on page 67 of this annual report. ● Our dual-class voting structure may render our securities ineligible for inclusion in certain stock market indices, and thus adversely affect the trading price and liquidity of our ADSs or Class A ordinary shares.
For details, see the risk factor with the same heading on page 62 of this annual report. ● Our dual-class voting structure may render our securities ineligible for inclusion in certain stock market indices, and thus adversely affect the trading price and liquidity of our ADSs or Class A ordinary shares.
If our assumptions regarding these risks and uncertainties and our future revenue growth are incorrect, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer. 12 Table of Contents Our recent growth may not be indicative of our future growth, and we may not be able to sustain our revenue growth rate in the future.
If our assumptions regarding these risks and uncertainties and our future revenue growth are incorrect, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, and our business could suffer. 11 Table of Contents Our recent growth may not be indicative of our future growth, and we may not be able to sustain our revenue growth rate in the future.
If we fail to meet or exceed the expectations of investors or securities analysts, then the trading price of our ADSs and Class A ordinary shares could fall substantially, and we could face costly lawsuits, including securities class action suits. 27 Table of Contents We are subject to potential misuse of our platform, tools, and services.
If we fail to meet or exceed the expectations of investors or securities analysts, then the trading price of our ADSs and Class A ordinary shares could fall substantially, and we could face costly lawsuits, including securities class action suits. 26 Table of Contents We are subject to potential misuse of our platform, tools, and services.
For details, see the risk factor with the same heading on page 15 of this annual report. ● If we are not able to introduce new features or products successfully or to make enhancements to our existing products and services, our business and results of operations could be adversely affected.
For details, see the risk factor with the same heading on page 14 of this annual report. ● If we are not able to introduce new features or products successfully or to make enhancements to our existing products and services, our business and results of operations could be adversely affected.
For details, see the risk factor with the same heading on page 16 of this annual report. ● We benefit from integration of our products and services with those of our business partners. If these business partners choose not to partner with us in the future, our business and results of operations may be harmed.
For details, see the risk factor with the same heading on page 15 of this annual report. ● We benefit from integration of our products and services with those of our business partners. If these business partners choose not to partner with us in the future, our business and results of operations may be harmed.
For details, see the risk factor with the same heading on page 55 of this annual report. ● If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
For details, see the risk factor with the same heading on page 49 of this annual report. ● If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
If one or more of our competitors were to merge or partner with another of our competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively. 13 Table of Contents Failure to maintain, expand and optimize our customer base or strengthen customer engagement may adversely affect our business and results of operations.
If one or more of our competitors were to merge or partner with another of our competitors, the change in the competitive landscape could also adversely affect our ability to compete effectively. 12 Table of Contents Failure to maintain, expand and optimize our customer base or strengthen customer engagement may adversely affect our business and results of operations.
Business Overview—Regulation—Regulation Relating to M&A and Overseas Listing.” To the extent we are required to obtain any approvals, complete any filings and/or other administrative procedures or satisfy any other regulatory requirements under the above-mentioned proposed laws and regulations or any new regulatory requirements in the PRC in order to maintain the listing status of the ADSs or conduct listing or offering of our securities overseas, we cannot assure you that we will be able to meet these requirements in a timely manner, or at all.
Business Overview—Regulation—Regulation Relating to M&A and Overseas Listing.” 39 Table of Contents To the extent we are required to obtain any approvals, complete any filings and/or other administrative procedures or satisfy any other regulatory requirements under the above-mentioned proposed laws and regulations or any new regulatory requirements in the PRC in order to maintain the listing status of the ADSs or conduct listing or offering of our securities overseas, we cannot assure you that we will be able to meet these requirements in a timely manner, or at all.
For details, see the risk factor with the same heading on page 52 of this annual report. ● The filing, approval or other administration requirements of the CSRC, the CAC or other PRC government authorities may be required to maintain our listing status or conduct future offshore securities offerings.
For details, see the risk factor with the same heading on page 48 of this annual report. ● The filing, approval or other administration requirements of the CSRC, the CAC or other PRC government authorities may be required to maintain our listing status or conduct future offshore securities offerings.
For details, see the risk factor with the same heading on page 74 of this annual report. Risks Related to Our Business and Industry We operate in an emerging and evolving market, which may develop differently from or more slowly than we expect.
For details, see the risk factor with the same heading on page 69 of this annual report. Risks Related to Our Business and Industry We operate in an emerging and evolving market, which may develop differently from or more slowly than we expect.
For details, see the risk factor with the same heading on page 68 of this annual report. ● Because we may not pay dividends in the future, you must rely on a price appreciation of our ADSs or Class A ordinary shares for a return on your investment.
For details, see the risk factor with the same heading on page 63 of this annual report. ● Because we may not pay dividends in the future, you must rely on a price appreciation of our ADSs or Class A ordinary shares for a return on your investment.
For details, see the risk factor with the same heading on page 13 of this annual report. ● The markets in which we operate are competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed.
For details, see the risk factor with the same heading on page 12 of this annual report. ● The markets in which we operate are competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed.
In addition, the internet infrastructure in the countries in which we operate may not support the demands associated with continued growth in internet usage. 35 Table of Contents Changes in these laws or regulations could require us to modify our products and services in order to comply with these changes.
In addition, the internet infrastructure in the countries in which we operate may not support the demands associated with continued growth in internet usage. 34 Table of Contents Changes in these laws or regulations could require us to modify our products and services in order to comply with these changes.
As a result, our reputation and our brand could be harmed, and our business, results of operations and financial condition may be adversely affected. ​ 36 Table of Contents Our use and provision of AI could lead to operational or reputational damage, competitive harm, legal and regulatory risk and additional costs.
As a result, our reputation and our brand could be harmed, and our business, results of operations and financial condition may be adversely affected. ​ 35 Table of Contents Our use and provision of AI could lead to operational or reputational damage, competitive harm, legal and regulatory risk and additional costs.
To the extent we expand our international activities, our exposure to unauthorized copying, transfer and use of our proprietary technology or information may increase. 30 Table of Contents Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent the misappropriation of our intellectual property.
To the extent we expand our international activities, our exposure to unauthorized copying, transfer and use of our proprietary technology or information may increase. 29 Table of Contents Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent the misappropriation of our intellectual property.
For details of related regulations, see “Regulation—Regulation Relating to Cybersecurity, Data Security and Privacy Protection.” 20 Table of Contents In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time.
For details of related regulations, see “Regulation—Regulation Relating to Cybersecurity, Data Security and Privacy Protection.” 19 Table of Contents In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time.
Our ability to further increase our customer base and achieve broader market acceptance of our platform will significantly depend on our ability to expand our marketing and sales operations. We plan to maintain an appropriate number of sales people both domestically and internationally. We also plan to dedicate appropriate resources to sales and marketing programs.
Our ability to further increase our customer base and achieve broader market acceptance of our platform will significantly depend on our ability to expand our marketing and sales operations. We plan to maintain an appropriate number of sales personnel both domestically and internationally. We also plan to dedicate appropriate resources to sales and marketing programs.
See “—We and certain of our current and former directors and officers were named as defendants in a putative shareholder class action lawsuit, and may, from time to time, be the subject of shareholder class action lawsuits, which could have a material adverse impact on our business, financial condition, results of operations, cash flows and reputation.” We face inventory obsolescence, shortage or excess risks.
See “—We and certain of our current and former directors and officers were named as defendants in a putative shareholder class action lawsuit, and may, from time to time, be the subject of shareholder class action lawsuits, which could have a material adverse impact on our business, financial condition, results of operations, cash flows and reputation.” 38 Table of Contents We face inventory obsolescence, shortage or excess risks.
For details, see the risk factor with the same heading on page 68 of this annual report. ● Substantial future sales or perceived sales of our ADSs or Class A ordinary shares could materially and adversely affect their market price.
For details, see the risk factor with the same heading on page 63 of this annual report. ● Substantial future sales or perceived sales of our ADSs or Class A ordinary shares could materially and adversely affect their market price.
For details, see the risk factor with the same heading on page 13 of this annual report. ● Failure to maintain, expand and optimize our customer base or strengthen customer engagement may adversely affect our business and results of operations.
For details, see the risk factor with the same heading on page 12 of this annual report. ● Failure to maintain, expand and optimize our customer base or strengthen customer engagement may adversely affect our business and results of operations.
Due to the complexity involved in our international business expansion, we cannot assure you that we are or will be in compliance with all local laws. 23 Table of Contents The COVID-19 pandemic has disrupted our and our business partners ’ operations and it, or any future health epidemic or other adverse public health developments, may continue to do so.
Due to the complexity involved in our international business expansion, we cannot assure you that we are or will be in compliance with all local laws. 22 Table of Contents The COVID-19 pandemic has, in the past, disrupted our and our business partners ’ operations and it, or any future health epidemic or other adverse public health developments, may continue to do so.
For details, see the risk factor with the same heading on page 68 of this annual report. ● Techniques employed by short sellers may drive down the market price of our ADSs or Class A ordinary shares.
For details, see the risk factor with the same heading on page 63 of this annual report. ● Techniques employed by short sellers may drive down the market price of our ADSs or Class A ordinary shares.
For details, see the risk factor with the same heading on page 12 of this annual report. ● Our recent growth may not be indicative of our future growth, and we may not be able to sustain our revenue growth rate in the future.
For details, see the risk factor with the same heading on page 11 of this annual report. ● Our recent growth may not be indicative of our future growth, and we may not be able to sustain our revenue growth rate in the future.
As a result, the challenges presented with our use of AI could adversely affect our business, financial condition and results of operations. ​ 37 Table of Contents Regulatory and legislative developments related to the use of AI could adversely affect our use and provision of AI in our products, services and business.
As a result, the challenges presented with our use of AI could adversely affect our business, financial condition and results of operations. ​ 36 Table of Contents Regulatory and legislative developments related to the use of AI could adversely affect our use and provision of AI in our products, services and business.
Furthermore, if the local government authorities in our target markets require real-name registration for users of our platform, the growth of our customer and end-user bases may slow down and our business, financial condition and results of operations may be adversely affected. 21 Table of Contents The expansion of our international operations exposes us to significant regulatory, economic and political risks.
Furthermore, if the local government authorities in our target markets require real-name registration for users of our platform, the growth of our customer and end-user bases may slow down and our business, financial condition and results of operations may be adversely affected. The expansion of our international operations exposes us to significant regulatory, economic and political risks.
For details, see the risk factor with the same heading on page 14 of this annual report. ● If we fail to estimate customer demand properly, our financial results could be harmed.
For details, see the risk factor with the same heading on page 13 of this annual report. ● If we fail to estimate customer demand properly, our financial results could be harmed.
For details, see the risk factor with the same heading on page 69 of this annual report. ● It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
For details, see the risk factor with the same heading on page 64 of this annual report. ● It may be difficult for overseas regulators to conduct investigations or collect evidence within China.
There may also be negative publicity associated with litigation that could decrease customer acceptance of our product offerings, regardless of whether the allegations are valid or whether we are ultimately found liable. ​ 39 Table of Contents We have been, and may, from time to time, be involved in class action lawsuits in the United States in the future.
There may also be negative publicity associated with litigation that could decrease customer acceptance of our product offerings, regardless of whether the allegations are valid or whether we are ultimately found liable. ​ We have been, and may, from time to time, be involved in class action lawsuits in the United States in the future.
These contractual arrangements have enabled us to (i) exercise effective control over the VIE, (ii) receive substantially all of the economic benefits of the VIE, (iii) have the pledge right over the equity interests in the VIE as the pledgee and (iv) have an exclusive option to purchase all or part of the equity interests in the VIE when and to the extent permitted by PRC law.
These historical contractual arrangements had enabled us to (i) exercise effective control over the former VIE, (ii) receive substantially all of the economic benefits of the former VIE, (iii) have the pledge right over the equity interests in the former VIE as the pledgee and (iv) have an exclusive option to purchase all or part of the equity interests in the former VIE when and to the extent permitted by PRC law.
For details, see the risk factor with the same heading on page 16 of this annual report. ● We rely upon third-party providers of cloud-based infrastructure to host our platform.
For details, see the risk factor with the same heading on page 15 of this annual report. ● We rely upon third-party providers of cloud-based infrastructure to host our platform.
For details, see the risk factor with the same heading on page 65 of this annual report. ● The concentration of our shares’ voting power limited our shareholders’ ability to influence corporate matters.
For details, see the risk factor with the same heading on page 60 of this annual report. ● The concentration of our shares’ voting power limited our shareholders’ ability to influence corporate matters.
For details, see the risk factor with the same heading on page 49 of this annual report. ● There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.
For details, see the risk factor with the same heading on page 45 of this annual report. ● There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.
For details, see the risk factor with the same heading on page 69 of this annual report. ● We were likely a passive foreign investment company (a “PFIC”) for 2024 and there is a significant risk that we will be a PFIC for 2025 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
For details, see the risk factor with the same heading on page 64 of this annual report. ● We were likely a passive foreign investment company (a “PFIC”) for 2025 and there is a significant risk that we will be a PFIC for 2026 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
Therefore, we may only conduct the business operations currently conducted by the VIE through a series of contractual arrangements between our PRC subsidiary on one hand, and the VIE and its registered shareholders on the other hand, to comply with PRC laws and regulations.
Therefore, historically, we may only conduct the business operations conducted by the former VIE through a series of contractual arrangements between our PRC subsidiary on one hand, and the former VIE and its registered shareholders on the other hand, to comply with PRC laws and regulations.
For details, see the risk factor with the same heading on page 66 of this annual report. 10 Table of Contents ● Holders of the ADSs may not have the same voting rights as the holders of our Class A ordinary shares and may not be able to exercise their right to direct how our Class A ordinary shares represented by the ADSs are voted.
For details, see the risk factor with the same heading on page 61 of this annual report. 9 Table of Contents ● Holders of the ADSs may not have the same voting rights as the holders of our Class A ordinary shares and may not be able to exercise their right to direct how our Class A ordinary shares represented by the ADSs are voted.
Risks Related to Our Corporate Structure If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIE.
Risks Related to Our Corporate Structure If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties.
Risks and uncertainties related to our corporate structure and the contractual arrangements include, but are not limited to, the following: ● If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIE.
Risks and uncertainties related to our corporate structure and the historical contractual arrangements include, but are not limited to, the following: ● If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties.
Reason for the Offer and Use of Proceeds Not applicable. 3.D. Risk Factors Below please find a summary of the principal risks we face, organized under relevant headings.
Reason for the Offer and Use of Proceeds Not applicable. 7 Table of Contents 3.D. Risk Factors Below please find a summary of the principal risks we face, organized under relevant headings.
In 2022, 2023 and 2024, our fair value change on level 3 investments was in loss of US$9.5 million, US$7.8 million and US$0.2 million, respectively. A range of factors, many of which are beyond our control, may influence and cause adverse changes to the estimates we use and thereby affect the fair value of these assets and liabilities.
In 2023, 2024 and 2025, our fair value change on level 3 investments was in loss of US$7.8 million, US$0.2 million and gains of US$0.3 million, respectively. A range of factors, many of which are beyond our control, may influence and cause adverse changes to the estimates we use and thereby affect the fair value of these assets and liabilities.
The loss of any major customer, or a significant decrease in the volume of customer demand or the price at which we sell our products to customers, could materially adversely affect our financial condition and results of operations. 25 Table of Contents We recorded net loss and net cash operating outflow in the past and may not be able to achieve or sustain profitability in the future.
The loss of any major customer, or a significant decrease in the volume of customer demand or the price at which we sell our products to customers, could materially adversely affect our financial condition and results of operations. 24 Table of Contents We recorded net loss in the past and may not be able to achieve or sustain profitability in the future.
The inventory write-downs, net, increased US$4.1 million in 2022, decreased US$0.01 million in 2023, and decreased US$1.0 million in 2024 as a result of the net impact of current year provision and sales or uses of inventories with reserve. We regularly track our inventory to keep it at a level sufficient to fulfill customers’ orders.
The inventory write-downs, net, decreased US$0.01 million in 2023, decreased US$1.0 million in 2024, and decreased US$1.9 million in 2025 as a result of the net impact of current year provision and sales or uses of inventories with reserve. We regularly track our inventory to keep it at a level sufficient to fulfill customers’ orders.
For details, see the risk factor with the same heading on page 48 of this annual report.
For details, see the risk factor with the same heading on page 45 of this annual report.
For details, see the risk factor with the same heading on page 64 of this annual report.
For details, see the risk factor with the same heading on page 59 of this annual report.
As of December 31, 2023 and 2024, we had inventories, net, of US$32.9 million and US$23.8 million respectively. Maintaining an optimal level of inventory is important for the success of our business.
As of December 31, 2024 and 2025, we had inventories, net, of US$23.8 million and US$30.9 million respectively. Maintaining an optimal level of inventory is important for the success of our business.
For details, see the risk factor with the same heading on page 11 of this annual report. 8 Table of Contents ● We have a limited operating history, making it difficult to forecast our future results of operations.
For details, see the risk factor with the same heading on page 10 of this annual report. ● We have a limited operating history, making it difficult to forecast our future results of operations.
For details, see the risk factor with the same heading on page 17 of this annual report. Risks Related to Our Corporate Structure Having a corporate structure being based primarily in China poses risks to investors.
For details, see the risk factor with the same heading on page 16 of this annual report. 8 Table of Contents Risks Related to Our Corporate Structure Having a corporate structure being based primarily in China poses risks to investors.
As a result of these contractual arrangements, we have control over and are the primary beneficiary of the VIE for accounting purposes and hence consolidate its financial results under U.S.
As a result of these historical contractual arrangements, we had control over and are the primary beneficiary of the former VIE for accounting purposes and hence consolidate its financial results under U.S. GAAP.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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We believe these subsidiaries are each qualifying majority-owned subsidiaries for purposes of the test described in clause (b) in the preceding paragraph, because such subsidiaries are primarily engaged in the business of providing internet-of-things products and services, and are either (i) not investment companies under the 40% test described in clause (b) in the preceding paragraph, because each such subsidiary does not hold securities (other than U.S. government securities, securities issued by employees’ securities companies and securities issued by qualifying majority owned subsidiaries of such entity) having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis or (ii) not investment companies under exemptions under the Investment Company Act, such as for companies that are not primarily engaged in investing in securities. 73 Table of Contents The need to comply with Section 3(a)(1), or exemptions, under the Investment Company Act may cause us to restrict our business and subsidiaries with respect to how we invest excess cash pending use in our business, a substantial portion of which is held in short- and long-term bank time deposits which may be deemed investment securities for purposes of the 40% test described in clause (b) above.
We believe these subsidiaries are each qualifying majority-owned subsidiaries for purposes of the test described in clause (b) in the preceding paragraph, because such subsidiaries are primarily engaged in the business of providing internet-of-things products and services, and are either (i) not investment companies under the 40% test described in clause (b) in the preceding paragraph, because each such subsidiary does not hold securities (other than U.S. government securities, securities issued by employees’ securities companies and securities issued by qualifying majority owned subsidiaries of such entity) having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis or (ii) not investment companies under exemptions under the Investment Company Act, such as for companies that are not primarily engaged in investing in securities. 68 Table of Contents The need to comply with Section 3(a)(1), or exemptions, under the Investment Company Act may cause us to restrict our business and subsidiaries with respect to how we invest excess cash pending use in our business, a substantial portion of which is held in short- and long-term bank time deposits which may be deemed investment securities for purposes of the 40% test described in clause (b) above.
In addition to market and industry factors, the price and trading volume of our ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings or cash flow; ● fluctuations in operating metrics; ● announcements of new investments, acquisitions, strategic partnerships, capital raisings or capital commitments or joint ventures by us or our competitors; ● announcements of new solutions and services and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental negative publicity about us, our competitors or our industry; ● announcements of new regulations, rules or policies relevant to our business; ● additions or departures of key personnel; ● allegations of a lack of effective internal control over financial reporting, inadequate corporate governance policies or fraud, among other things, involving China-based issuers; ● our major shareholders’ business performance and reputation; 65 Table of Contents ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● regulatory developments affecting us or our industry; ● political or trade tensions between the United States and China, including but not limited to the imposition of new tariffs or adjustments in existing tariffs or trade barriers; ● potential litigation or regulatory investigations; ● fluctuations of exchange rates among Renminbi, the U.S. dollar and the Hong Kong dollar; and ● sales or perceived potential sales of additional ADSs or Class A ordinary shares.
In addition to market and industry factors, the price and trading volume of our ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings or cash flow; ● fluctuations in operating metrics; ● announcements of new investments, acquisitions, strategic partnerships, capital raisings or capital commitments or joint ventures by us or our competitors; ● announcements of new solutions and services and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental negative publicity about us, our competitors or our industry; ● announcements of new regulations, rules or policies relevant to our business; ● additions or departures of key personnel; ● allegations of a lack of effective internal control over financial reporting, inadequate corporate governance policies or fraud, among other things, involving China-based issuers; ● our major shareholders’ business performance and reputation; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● regulatory developments affecting us or our industry; ● political or trade tensions between the United States and China, including but not limited to the imposition of new tariffs or adjustments in existing tariffs or trade barriers; ● potential litigation or regulatory investigations; ● fluctuations of exchange rates among Renminbi, the U.S. dollar and the Hong Kong dollar; and ● sales or perceived potential sales of additional ADSs or Class A ordinary shares.
To the extent cash or assets in the business are in the PRC, including Hong Kong, or a PRC (including Hong Kong) entity, the funds or assets may not be available to fund operations or for other use outside of the PRC, including Hong Kong, due to interventions in or the impositions of restrictions and limitations on the availability of Tuya Inc., its subsidiaries or the VIE by the PRC government to transfer cash or assets.
To the extent cash or assets in the business are in the PRC, including Hong Kong, or a PRC (including Hong Kong) entity, the funds or assets may not be available to fund operations or for other use outside of the PRC, including Hong Kong, due to interventions in or the impositions of restrictions and limitations on the availability of Tuya Inc. or its subsidiaries by the PRC government to transfer cash or assets.
There is no assurance that the PRC government will not intervene in or impose restrictions on the ability of Tuya Inc., its subsidiaries or the VIE to transfer cash or assets. Our PRC subsidiaries ’ ability to distribute dividends is based upon their distributable earnings.
There is no assurance that the PRC government will not intervene in or impose restrictions on the ability of Tuya Inc. or its subsidiaries to transfer cash or assets. Our PRC subsidiaries ’ ability to distribute dividends is based upon their distributable earnings.
However, there can be no assurance that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel. 58 Table of Contents On July 6, 2021, the relevant PRC governments promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities (the “ Opinions ” ), which among others provide that the administration and supervision of overseas-listed China-based companies will be strengthened, and the special provisions of the State Council on overseas issuance and listing of shares by such companies will be revised, clarifying the responsibilities of domestic industry competent authorities and regulatory authorities.
However, there can be no assurance that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel. 53 Table of Contents On July 6, 2021, the relevant PRC governments promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities (the “ Opinions ” ), which among others provide that the administration and supervision of overseas-listed China-based companies will be strengthened, and the special provisions of the State Council on overseas issuance and listing of shares by such companies will be revised, clarifying the responsibilities of domestic industry competent authorities and regulatory authorities.
A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the VIE for PRC tax purposes, which could in turn increase their tax liabilities without reducing our PRC subsidiaries ’ tax expenses.
A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the former VIE for PRC tax purposes, which could in turn increase their tax liabilities without reducing our PRC subsidiaries ’ tax expenses.
This concentrated control could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial, and may also discourage, delay, or prevent a change of control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our ADSs or Class A ordinary shares. ​ 66 Table of Contents Holders of the ADSs may not have the same voting rights as the holders of our Class A ordinary shares and may not be able to exercise their right to direct how our Class A ordinary shares represented by the ADSs are voted.
This concentrated control could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial, and may also discourage, delay, or prevent a change of control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our ADSs or Class A ordinary shares. ​ 61 Table of Contents Holders of the ADSs may not have the same voting rights as the holders of our Class A ordinary shares and may not be able to exercise their right to direct how our Class A ordinary shares represented by the ADSs are voted.
In addition, several shareholder advisory firms have announced their opposition to the use of the multiple class structure and our dual-class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance, in which case the market price and liquidity of our ADSs and Class A ordinary shares could be adversely affected. ​ 67 Table of Contents If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our securities, the market price and trading volume for our ADSs and Class A ordinary shares could decline.
In addition, several shareholder advisory firms have announced their opposition to the use of the multiple class structure and our dual-class structure may cause shareholder advisory firms to publish negative commentary about our corporate governance, in which case the market price and liquidity of our ADSs and Class A ordinary shares could be adversely affected. ​ 62 Table of Contents If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our securities, the market price and trading volume for our ADSs and Class A ordinary shares could decline.
Furthermore, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. 72 Table of Contents As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NYSE corporate governance listing standards.
Furthermore, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. 67 Table of Contents As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NYSE corporate governance listing standards.
Therefore, recognition and enforcement in mainland China or Hong Kong of judgments of a court in any of foreign jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. ​ 53 Table of Contents On July 14, 2006, the Supreme People ’ s Court of the PRC and Hong Kong entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned (the “ 2006 Arrangement ” ).
Therefore, recognition and enforcement in mainland China or Hong Kong of judgments of a court in any of foreign jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. ​ 48 Table of Contents On July 14, 2006, the Supreme People ’ s Court of the PRC and Hong Kong entered into the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned (the “ 2006 Arrangement ” ).
In the absence of a mutual and practical cooperation mechanism, there has not been efficient regulatory cooperation between the local authorities in China and the securities regulatory authorities in the United States to implement cross-border supervision and administration so far. ​ 69 Table of Contents Furthermore, according to Article 177 of the PRC Securities Law (the “ Article 177 ” ), which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC.
In the absence of a mutual and practical cooperation mechanism, there has not been efficient regulatory cooperation between the local authorities in China and the securities regulatory authorities in the United States to implement cross-border supervision and administration so far. ​ 64 Table of Contents Furthermore, according to Article 177 of the PRC Securities Law (the “ Article 177 ” ), which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC.
Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations, and any investment in our ADSs or Class A ordinary shares could be greatly reduced or even rendered worthless. 68 Table of Contents Because we may not pay dividends in the future, you must rely on a price appreciation of our ADSs or Class A ordinary shares for a return on your investment.
Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations, and any investment in our ADSs or Class A ordinary shares could be greatly reduced or even rendered worthless. 63 Table of Contents Because we may not pay dividends in the future, you must rely on a price appreciation of our ADSs or Class A ordinary shares for a return on your investment.
We could face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements in relation to the VIE were not entered into on an arm ’ s-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust income of the VIE in the form of a transfer pricing adjustment.
We could face material and adverse tax consequences if the PRC tax authorities determine that the historical contractual arrangements in relation to the former VIE were not entered into on an arm ’ s-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust income of the former VIE in the form of a transfer pricing adjustment.
More recently, specifically, on January 20, 2025, President Trump issued a national security presidential memorandum, titled “ America First Trade Policy ” , which, among other things, directs the Secretary of Treasury and several other executive departments and offices of the U.S. government to review the outbound investment controls focused on China, including Hong Kong and Macau, to determine if it includes “ sufficient controls to address national security threats ” and to determine whether the executive order implementing such program “ should be modified or rescinded and replaced. ” For more information about such program, see “ – If we became subject to the U.S.
Additionally, on January 20, 2025, President Trump issued a national security presidential memorandum, titled “ America First Trade Policy ” , which, among other things, directs the Secretary of Treasury and several other executive departments and offices of the U.S. government to review the outbound investment controls focused on China, including Hong Kong and Macau, to determine if it includes “ sufficient controls to address national security threats ” and to determine whether the executive order implementing such program “ should be modified or rescinded and replaced. ” For more information about such program, see “ – If we became subject to the U.S.
No condition, stipulation or provision of the deposit agreement or the ADSs serves as a waiver by any owners or holders of the ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder. ​ 70 Table of Contents Holders of the ADSs may experience dilution of their holdings due to the inability to participate in rights offerings.
No condition, stipulation or provision of the deposit agreement or the ADSs serves as a waiver by any owners or holders of the ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder. ​ 65 Table of Contents Holders of the ADSs may experience dilution of their holdings due to the inability to participate in rights offerings.
We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law. 61 Table of Contents If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law. 56 Table of Contents If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
See also “— Risks Related to Our ADSs — You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. or Hong Kong courts may be limited, because we are incorporated under Cayman Islands law. ” ​ 54 Table of Contents We may rely on dividends and other distributions on equity paid by our subsidiaries in mainland China and Hong Kong to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
See also “— Risks Related to Our ADSs — You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. or Hong Kong courts may be limited, because we are incorporated under Cayman Islands law. ” ​ We may rely on dividends and other distributions on equity paid by our subsidiaries in mainland China and Hong Kong to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
SAFE Circular No. 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 60 Table of Contents SAFE Circular No. 37 requires registration with, and approval from, Chinese government authorities in connection with direct or indirect control of an offshore entity by PRC residents.
SAFE Circular No. 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 55 Table of Contents SAFE Circular No. 37 requires registration with, and approval from, Chinese government authorities in connection with direct or indirect control of an offshore entity by PRC residents.
We may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from our operations. ​ 56 Table of Contents If the preferential tax treatments and government subsidies granted by the PRC government become unavailable, our results of operations and financial condition may be adversely affected.
We may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from our operations. ​ 51 Table of Contents If the preferential tax treatments and government subsidies granted by the PRC government become unavailable, our results of operations and financial condition may be adversely affected.
As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries and the VIE to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.
As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.
Any such tax may reduce the returns on your investment in our ADSs or Class A ordinary shares. ​ 62 Table of Contents We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC resident companies.
Any such tax may reduce the returns on your investment in our ADSs or Class A ordinary shares. ​ 57 Table of Contents We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC resident companies.
We were likely a passive foreign investment company (a “ PFIC ” ) for 2024 and there is a significant risk that we will be a PFIC for 2025 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
We were likely a passive foreign investment company (a “ PFIC ” ) for 2025 and there is a significant risk that we will be a PFIC for 2026 and possibly subsequent taxable years, in which case U.S. investors will generally be subject to adverse U.S. federal income tax consequences.
These features collectively contribute to the network effects typical of internet-based business models, and together, they form our core competitive advantages and barriers to entry. 79 Table of Contents Our platform benefits from network effects driven by our ecosystem of developers, businesses, partners and end users.
These features collectively contribute to the network effects typical of internet-based business models, and together, they form our core competitive advantages and barriers to entry. ​ 74 Table of Contents Our platform benefits from network effects driven by our ecosystem of developers, businesses, partners and end users.
Any uncertainties or negative publicity regarding such approval requirements could materially and adversely affect the trading price of our ADSs and Class A ordinary shares. 59 Table of Contents Certain PRC regulations may affect our ability to pursue growth through acquisitions.
Any uncertainties or negative publicity regarding such approval requirements could materially and adversely affect the trading price of our ADSs and Class A ordinary shares. 54 Table of Contents Certain PRC regulations may affect our ability to pursue growth through acquisitions.
For these reasons, we cannot express an expectation as to our PFIC status for 2025 or any future taxable year. U.S. holders of our ADSs or Class A ordinary shares should consult their tax advisers regarding our PFIC status for 2024 and any other taxable year.
For these reasons, we cannot express an expectation as to our PFIC status for 2026 or any future taxable year. U.S. holders of our ADSs or Class A ordinary shares should consult their tax advisers regarding our PFIC status for 2025 and any other taxable year.
Tuya Inc. is an offshore holding company and we conduct our operations in China through our PRC subsidiaries and the VIE. We may make loans to our PRC subsidiaries and the VIE, subject to the approval from government authorities and limitation of amount, or we may make additional capital contributions to our PRC subsidiaries in China.
Tuya Inc. is an offshore holding company and we conduct our operations in China through our PRC subsidiaries and, historically, through the former VIE. We may make loans to our PRC subsidiaries, subject to the approval from government authorities and limitation of amount, or we may make additional capital contributions to our PRC subsidiaries in China.
Federal Income Tax Considerations — Passive Foreign Investment Company Rules. ” ​ 74 Table of Contents Your investment in our ADSs or Class A ordinary shares may be impacted if we are encouraged to issue CDRs in the future.
Federal Income Tax Considerations — Passive Foreign Investment Company Rules. ” ​ 69 Table of Contents Your investment in our ADSs or Class A ordinary shares may be impacted if we are encouraged to issue CDRs in the future.
Our PRC subsidiaries are subject to the PRC corporate income tax at a standard rate of 25% on their taxable income, while in 2022, 2023 and 2024, preferential tax treatment was available to Tuya Information, one of our PRC subsidiaries.
Our PRC subsidiaries are subject to the PRC corporate income tax at a standard rate of 25% on their taxable income, while in 2023, 2024 and 2025, preferential tax treatment was available to Tuya Information, one of our PRC subsidiaries.
In such case, the value of the ADSs may significantly decline, or in extreme cases, become worthless. There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value.
In such case, the value of the ADSs may significantly decline, or in extreme cases, become worthless. 47 Table of Contents There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value.
Such action could significantly limit or hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline. 52 Table of Contents You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in mainland China and Hong Kong against us or our management based on foreign laws.
Such action could significantly limit or hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline. You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in mainland China and Hong Kong against us or our management based on foreign laws.
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may restrict or delay us from using the proceeds of our offshore securities offerings to make loans or additional capital contributions to our PRC subsidiaries and making loans to the VIE or its subsidiaries, which could adversely affect our liquidity and our ability to fund and expand our business.
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may restrict or delay us from using the proceeds of our offshore securities offerings to make loans or additional capital contributions to our PRC subsidiaries, which could adversely affect our liquidity and our ability to fund and expand our business.
Tuya Information was qualified as a “ High-tech Enterprise ” and was entitled to enjoy a 15% beneficial tax rate for the year ended December 31, 2024.
Tuya Information was qualified as a “ High-tech Enterprise ” and was entitled to enjoy a 15% beneficial tax rate for the year ended December 31, 2025.
Although we have declared dividends in the past, including in August 2024 and February 2025, we cannot guarantee that we will continue to do so in the future.
Although we have declared dividends in the past, including in August 2024, February 2025, August 2025 and March 2026, we cannot guarantee that we will continue to do so in the future.
In the past, our business has scaled rapidly by leveraging our strong software and robust platform-based delivery capabilities. However, from the second half of 2021 to the first half of 2023, the global consumer electronics industry went through a headwind cycle, primarily due to global high inflation and supply-chain-wide destocking.
In the past, our business has scaled rapidly by leveraging our strong software and robust platform-based delivery capabilities. However, prior to the second half of 2023, the global consumer electronics industry went through a headwind cycle, primarily due to global high inflation and supply-chain-wide destocking.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; ● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; ● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; 66 Table of Contents ● the sections of the Exchange Act requiring beneficial owners of more than 10% of a public company’s securities to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
For example, if third-party cloud-hosting providers of our data centers in the United States, such as AWS, or our U.S. subsidiaries or U.S. personnel, were to be restricted from providing access to the relevant U.S. data in accordance with such regulations, it may negatively affect our businesses.
For example, if third-party cloud-hosting providers of our data centers in the United States, such as AWS, or our U.S. subsidiaries or U.S. personnel, were to be restricted from providing access to the relevant U.S. data in accordance with such regulations, it may negatively affect our businesses. On December 26, 2024, the U.S.
On July 5, 2022, Hong Kong time, our Class A ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “ 2391. ” We raised from our global offering in connection with the listing in Hong Kong approximately HK$70.0 million in net proceeds after deducting underwriting commissions, fees and the offering expenses. 75 Table of Contents 4.B.
On July 5, 2022, Hong Kong time, our Class A ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “ 2391. ” We raised from our global offering in connection with the listing in Hong Kong approximately HK$70.0 million in net proceeds after deducting underwriting commissions, fees and the offering expenses.
Department of Treasury’s final rule on outbound investment in the future, investments in our securities by U.S. persons and our ability to raise capital from U.S. persons could be subject to restrictions.
If we became subject to the U.S. Department of Treasury’s final rule on outbound investment in the future, investments in our securities by U.S. persons and our ability to raise capital from U.S. persons could be subject to restrictions.
In 2024, we served approximately 5,800 customers and our AI cloud platform empowered approximately 3,700 brands to develop their smart devices, including leading brands and enterprises such as Calex, Philips, Schneider Electric, Sharp, ABB, SCG, Panasonic, Changhong, TCL, Midea, etc.
In 2025, we served approximately 5,900 customers and our AI cloud platform empowered approximately 3,800 brands to develop their smart devices, including leading brands and enterprises such as Calex, Philips, Schneider Electric, Sharp, ABB, SCG, Panasonic, Changhong, TCL, Midea, etc.
The increasing variety of smart devices is fostering a more comprehensive approach to Spatial Intelligence, enhancing user convenience and comfort, ultimately progressing toward the vision of an interconnected and interactable intelligent ecosystem. Our Smart Solution business continued to gain traction, particularly among top-tier customers, achieving approximately 58% year-over-year growth in 2024.
The increasing variety of smart devices is fostering a more comprehensive approach to Spatial Intelligence, enhancing user convenience and comfort, ultimately progressing toward the vision of an interconnected and interactable intelligent ecosystem. Our Smart Solution business continued to gain traction, particularly among top-tier customers, achieving approximately 8.9% year-over-year growth in 2025.
Item 4. Information on the Company — Contractual Arrangements with the VIE and the VIE ’ s Registered Shareholders, ” enforceable against each party thereto in accordance with their terms and applicable PRC laws and regulations currently in effect.
Item 4. Information on the Company — Historical Contractual Arrangements with the former VIE and the former VIE ’ s Registered Shareholders, ” enforceable against each party thereto in accordance with their terms and applicable PRC laws and regulations then in effect.
Our IoT PaaS offering enables businesses, including original equipment manufacturers (“OEMs”) and brands, and developers to develop, launch, manage and monetize software-enabled smart devices and services.
Our PaaS offering enables businesses, including original equipment manufacturers ( “ OEMs ” ) and brands, and developers to develop, launch, manage and monetize software-enabled smart devices and services.
As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries or the VIE when needed.
As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries when needed.
Moreover, it is not entirely clear how the contractual arrangements between us and the VIE will be treated for purposes of the PFIC rules, and we may be a PFIC for any taxable year if the VIE is not treated as owned by us for these purposes.
Moreover, it is not entirely clear how the contractual arrangements between us and the former VIE are treated for purposes of the PFIC rules, and we may be a PFIC for the 2025 taxable year or any prior year if the former VIE is not treated as owned by us for these purposes.
In September 2021, three United States senators and other commentators expressed concern about our alleged failure to protect U.S. consumers ’ data, and some have urged the U.S. government to take actions against us, including adding us to the Non-SDN Chinese Military-Industrial Complex Company List, or the NS-CMIC List.
In September 2021, three U.S. senators and certain commentators expressed concerns regarding our alleged failure to protect U.S. consumers ’ data, and some have urged the U.S. government to take actions against us, including adding us to the Non-SDN Chinese Military-Industrial Complex Company List, or the NS-CMIC List.
Furthermore, the stock exchanges on which our ADSs and Class A ordinary shares are traded in general experience price and volume fluctuations that are often unrelated or disproportionate to the operating performance of companies like us. These broad market and industry fluctuations may adversely affect the market price of our ADSs or Class A ordinary shares.
Furthermore, the stock exchanges on which our ADSs and Class A ordinary shares are traded in general experience price and volume fluctuations that are often unrelated or disproportionate to the operating performance of companies like us.
We are the largest third-party AI cloud platform offering IoT PaaS in the global market of IoT PaaS in terms of the volume of smart devices powered in 2023, according to CIC. We deliver a variety of offerings.
We are the largest third-party AI cloud platform offering PaaS in the global market of PaaS in terms of the volume of smart devices powered in 2025, according to CIC. ​ 73 Table of Contents We deliver a variety of offerings.
Our IoT PaaS currently enables businesses and developers across over 200 countries and regions globally to develop smart devices in approximately 3,000 categories. We have established a large and active community of approximately 1,316,000 registered IoT device and software developers as of December 31, 2024.
Our PaaS currently enables businesses and developers across over 200 countries and regions globally to develop smart devices in approximately 3,200 categories. We have established a large and active community of over 1.8 million registered AIoT device and software developers as of December 31, 2025.
Liaohan Chen beneficially owned 77,294,700 Class A ordinary shares and 70,205,300 Class B ordinary shares, representing approximately 62.9% of the voting rights in our company with respect to shareholder resolutions relating to matters other than certain reserved matters, on the basis that Class A ordinary shares entitle shareholders to one vote per share and Class B ordinary shares entitle shareholders to 10 votes per share.
Liaohan Chen beneficially owned 77,336,747 Class A ordinary shares and 70,163,253 Class B ordinary shares, representing approximately 62.63% of the voting rights in our company with respect to shareholder resolutions relating to matters other than certain reserved matters, on the basis that Class A ordinary shares entitle shareholders to one vote per share and Class B ordinary shares entitle shareholders to 10 votes per share.
However, we have been further advised by our PRC legal counsel that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Thus, the PRC government authorities may take a view contrary to the opinion of our PRC legal counsel.
However, we were further advised by our PRC legal counsel that there were substantial uncertainties regarding the interpretation and application of then-current and future PRC laws, regulations and rules. Thus, the PRC government authorities might have taken a view contrary to the opinion of our PRC legal counsel.
If we or the VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals to operate our business, the relevant PRC government authorities would have broad discretion to take action in dealing with such violations or failures, including: ● revoking the business licenses and/or operating licenses of such entities; ● imposing fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations; ● discontinuing or placing restrictions or onerous conditions on the operations of the VIE; ● placing restrictions on our right to collect revenue; ● shutting down our servers or blocking our app or websites; or ● requiring us to restructure our ownership structure or operations.
If we or the former VIE have been found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals to operate our business, the relevant PRC government authorities would had broad discretion to take action in dealing with such violations or failures, including: ● revoking the business licenses and/or operating licenses of such entities; ● imposing fines on us; ● confiscating any of our income that they deem to be obtained through illegal operations; or ● shutting down our servers or blocking our app or websites.
Passive income generally includes dividends, interest, rents, royalties and certain gains. Cash is generally a passive asset for these purposes. Goodwill and other intangible assets are active under the PFIC rules to the extent attributable to activities that produce active income.
Passive income generally includes dividends, interest, rents, royalties (other than certain rents or royalties derived in an active conduct of a trade or business) and certain gains. Cash is generally a passive asset for these purposes. Goodwill and other intangible assets are active under the PFIC rules to the extent attributable to activities that produce active income.
Accordingly, there is no assurance that the reduced 5% withholding tax rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries.
Accordingly, there is no assurance that the reduced 5% withholding tax rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries.
It is uncertain whether any new PRC laws or regulations relating to variable interest entity structure will be adopted or if adopted, what they would provide.
It was uncertain whether any new PRC laws or regulations relating to variable interest entity structure would be adopted or if adopted, what they would have provided.
However, the value of our goodwill and other intangible assets for any taxable year may be determined, in large part, by reference to our average market capitalization, which has declined substantially since our initial public offering.
However, the value of our goodwill and other intangible assets for any taxable year may be determined, in large part, by reference to our average market capitalization.
In light of our declined market capitalization, there is a significant risk that we will also be a PFIC for 2025, and possibly future taxable years, if the value of our assets were to be determined by reference to our market capitalization.
If the value of our goodwill is determined by reference to our average market capitalization, then we were likely a PFIC for our 2025 taxable year, and there is a significant risk that we will also be a PFIC for 2026, and possibly future taxable years.
The trading price of the ADSs could continue to fluctuate widely due to factors beyond our control. The trading price of our Class A ordinary shares, likewise, can be volatile for similar or different reasons.
The trading price of the ADSs has been volatile since the ADSs started to trade on the NYSE on March 18, 2021. The trading price of the ADSs could continue to fluctuate widely due to factors beyond our control. The trading price of our Class A ordinary shares, likewise, can be volatile for similar or different reasons.
The Final Rule imposes investment prohibition and notification requirements on U.S. persons for certain investments in entities associated with China (including Hong Kong and Macau) that are engaged in certain activities relating to three sectors: (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence systems, collectively defined as “Covered Foreign Persons.” U.S. persons subject to the Final Rule are in some instances prohibited altogether from making, and in other instances required to report, certain investments in Covered Foreign Persons, which are defined as “Covered Transactions.” “Covered Transactions” include acquisitions of equity interests, certain debt financing, joint ventures, and certain investments as a limited partner in a non-U.S. person pooled investment fund.
The Final Rule imposes investment prohibition and notification requirements on U.S. persons for certain investments in entities associated with China (including Hong Kong and Macau) that are engaged in certain activities relating to three sectors: (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence systems, collectively defined as “Covered Foreign Persons.” U.S. persons subject to the Final Rule are in some instances prohibited altogether from making, and in other instances required to report, certain investments in Covered Foreign Persons, which are defined as “Covered Transactions.” On December 18, 2025, President Donald J.
Following the dividend declared in August and paid in October last year, we ended the year with a net cash balance exceeding US$1.0 billion, maintaining a strong liquidity position. For IoT PaaS business, we witnessed a more diversified and dynamic developer base, contributing to solid year-over-year growth across all categories.
Following the dividend declared in February and in August, both of which have been fully paid, we ended the year with a net cash balance exceeding US$1,017.3 million, maintaining a strong liquidity position. For PaaS business, we witnessed a more diversified and dynamic developer base, contributing to solid year-over-year growth across all categories.
In particular, ongoing tensions between the U.S. and China have been characterized by frequent tariff actions, retaliatory measures, and abrupt policy changes that have disrupted global trade flows and supply chains.
In particular, trade tensions between the United States and China have been marked by tariff actions, retaliatory measures and abrupt policy changes, which have disrupted global trade flows and supply chains. In February 2026, the U.S.
With the effective execution of our customer and product strategies, coupled with the utilization and innovation of emerging technologies, our revenue increased by 29.8% to US$298.6 million in 2024 from US$230.0 million in 2023.
With the effective execution of our customer and product strategies, coupled with the utilization and innovation of emerging technologies, our revenue increased by 7.8% to US$321.8 million in 2025 from US$298.6 million in 2024. Our net profit increased from US$5.0 million in 2024 to US$57.9 million in 2025. See “
However, our exercise of any such power that may limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions under the Articles is subject to our overriding obligations to comply with all applicable Hong Kong laws and regulations, the Hong Kong Listing Rules, and the Codes on Takeovers and Mergers and Share Buy-backs. 71 Table of Contents We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.
However, our exercise of any such power that may limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions under the Articles is subject to our overriding obligations to comply with all applicable Hong Kong laws and regulations, the Hong Kong Listing Rules, and the Codes on Takeovers and Mergers and Share Buy-backs.
To address the persistent capital outflow and the RMB ’ s depreciation against the U.S. dollar in the fourth quarter of 2016, the People ’ s Bank of China and the State Administration of Foreign Exchange ( “ SAFE ” ) implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments.
If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. 49 Table of Contents To address the persistent capital outflow and the RMB ’ s depreciation against the U.S. dollar in the fourth quarter of 2016, the People ’ s Bank of China and the State Administration of Foreign Exchange ( “ SAFE ” ) implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments.
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. ​ 55 Table of Contents In addition, the Enterprise Income Tax Law (the “ EIT Law ” ) and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are tax residents.
In addition, the Enterprise Income Tax Law (the “ EIT Law ” ) and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are tax residents.
As of the end of 2024, the number of registered developers on our platform reached around 1.32 million, with over 1.07 million SKUs of smart devices developed on Tuya ’ s platform, spanning more than 3,000 product categories.
We remain committed to building a robust developer ecosystem. As of the end of 2025, the number of registered developers on our platform reached around 1.8 million, with over 1.2 million SKUs of smart devices developed on Tuya ’ s platform, spanning more than 3,200 product categories.
Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. ​ 63 Table of Contents We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments.
We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments.
As a result, we do not expect to be identified as a “ Commission-Identified Issuer ” under the HFCAA for the fiscal year ended December 31, 2024 after we file this annual report. ​ 64 Table of Contents However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor ’ s, control, including positions taken by authorities of the PRC.
However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor ’ s, control, including positions taken by authorities of the PRC.
This achievement enhances our flexibility at the statutory shareholders ’ equity level and enables us to pursue further strategic initiatives for long-term growth. On the cash flow side, we generated around US$80.4 million in positive operating cash flow in 2024.
Additionally, we achieved net profit of US$57.9 million on GAAP basis, with a year-over-year growth of over ten times. This achievement enhances our flexibility at the statutory shareholders ’ equity level and enables us to pursue further strategic initiatives for long-term growth. On the cash flow side, we generated around US$81.0 million in positive operating cash flow in 2025.
The custodians or authorized users of our controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.
This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries. 50 Table of Contents The custodians or authorized users of our controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.
Any unfavorable government policies, including those on investment restrictions or international trade, such as capital and data controls, tariffs or international payment and settlement system, updated or expanded sanctions and export control regulations, or any new or escalation of geopolitical confrontation and conflicts, may affect the demand for our products, impact the competitive position of our products, or prevent us from selling products in certain countries, or even our participation in international capital markets or the international payment and settlement system, any of which would materially and adversely affect our international operations, results of operations and financial condition. 49 Table of Contents On February 28, 2024, President Biden signed Executive Order 14117, which seeks to restrict access to bulk sensitive personal data and U.S. government-related data by “ countries of concern. ” It creates uncertainties and complications in our efforts to stay compliant with such regulations when it becomes effective.
Any unfavorable government policies, including those on investment restrictions or international trade, such as capital and data controls, tariffs or international payment and settlement system, updated or expanded sanctions and export control regulations, or any new or escalation of geopolitical confrontation and conflicts, may affect the demand for our products, impact the competitive position of our products, or prevent us from selling products in certain countries, or even our participation in international capital markets or the international payment and settlement system, any of which would materially and adversely affect our international operations, results of operations and financial condition. 45 Table of Contents Recent U.S. policy and regulatory developments have further increased these risks and the related uncertainty.
In addition, the PRC tax authorities may impose late payment fees and other administrative sanctions on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIE ’ s tax liabilities increase or if it is required to pay late payment fees and other penalties.
Our financial position could be materially and adversely affected if the former VIE ’ s tax liabilities increase or if it is required to pay late payment fees and other penalties.
As of April 15, 2025, there were 609,721,949 issued and outstanding ordinary shares, consisting of 539,516,649 Class A ordinary shares (including 2,085,143 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our 2024 Share Scheme and 223,773 Class A ordinary shares represented by ADSs that have been repurchased by us from the open market) and 70,205,300 Class B ordinary shares.
As of March 31, 2026, there were 613,286,104 issued and outstanding ordinary shares, consisting of 543,122,851 Class A ordinary shares (including 253,461 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our 2024 Share Scheme and 5,400 Class A ordinary shares that have been repurchased by us from the open market) and 70,163,253 Class B ordinary shares.
These developments have increased the costs of importing and/or exporting products, technology, services, and/or software to or from any major markets in which many of our customers, suppliers, brands, OEMs and developers operate.
These developments, together with actual or threatened tariffs, trade restrictions, sanctions, export controls and other policy measures, have increased, and may continue to increase, the costs and uncertainties associated with importing and exporting products, technology, services and software in the major markets in which many of our customers, suppliers, brands, OEMs and developers operate.
As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important. Our Articles give us power to take certain actions that could discourage a third party from acquiring us, which could limit your opportunity to sell your shares, including ADSs, at a premium.
Our Articles give us power to take certain actions that could discourage a third party from acquiring us, which could limit your opportunity to sell your shares, including ADSs, at a premium.
Any of these events could cause significant disruption to our business operations and severely damage our reputation, which would in turn have a material adverse effect on our financial condition and results of operations. Furthermore, new PRC laws, rules and regulations may be introduced to impose additional requirements that may be applicable to our corporate structure and the VIE.
Any of these events could cause significant disruption to our business operations and severely damage our reputation, which would in turn have a material adverse effect on our financial condition and results of operations. In order to streamline our corporate structure and considering the changing regulatory environment, we deregistered our former VIE in November 2025.
A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment. Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities.
Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities.
Among others, SAFE Circular 28 relaxes prior restrictions and allows foreign-invested enterprises that do not have equity investments in their approved business scope to use their capital obtained from foreign exchange settlement to make domestic equity investments as long as the investments are real and in compliance with the foreign investment-related laws and regulations. 57 Table of Contents In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or the VIE or future capital contributions by us to our PRC subsidiaries in China.
In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions by us to our PRC subsidiaries in China.
In the past, shareholders of public companies have often brought securities class action suits against companies following periods of instability in the market price of their securities.
These broad market and industry fluctuations may adversely affect the market price of our ADSs or Class A ordinary shares. 60 Table of Contents In the past, shareholders of public companies have often brought securities class action suits against companies following periods of instability in the market price of their securities.
In this regard, Tuya possesses a significant advantage over the market with its expansive developer ecosystem, and Smart Solution further enhances our ability to support customers, strengthen engagement, and boost their market competitiveness. 76 Table of Contents We remain committed to building a robust developer ecosystem.
At this stage of smart technology development, whether in consumer electronics or industry-specific applications, a rich ecosystem of smart devices is essential for top-tier customers. In this regard, Tuya possesses a significant advantage over the market with its expansive developer ecosystem, and Smart Solution further enhances our ability to support customers, strengthen engagement, and boost their market competitiveness.
If any employee obtains, misuses or misappropriates our chops and seals or other controlling non-tangible assets for whatever reason, we could experience disruption to our normal business operations.
There is a risk that our employees could abuse their authority, for example, by entering into a contract not approved by us or seeking to gain control of one of our subsidiaries. If any employee obtains, misuses or misappropriates our chops and seals or other controlling non-tangible assets for whatever reason, we could experience disruption to our normal business operations.

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IoT PaaS provides brands and OEMs with a common software infrastructure and ready-to-use software and development tools that they need to develop, manage and upgrade smart devices. IoT PaaS combines cloud-based connectivity and basic IoT services, edge capabilities, app development and device optimization solutions, which we believe are the most fundamental elements of enabling a product with IoT.
PaaS provides brands and OEMs with a common software infrastructure and ready-to-use software and development tools that they need to develop, manage and upgrade smart devices. PaaS combines cloud-based connectivity and basic IoT services, edge capabilities, app development and device optimization solutions, which we believe are the most fundamental elements of enabling a product with IoT.
Our IoT PaaS transforms traditional products into IoT-enabled products with computing, storage and networking capabilities on the “edge,” laying the foundation for a low code or no code development environment.
Our PaaS transforms traditional products into IoT-enabled products with computing, storage and networking capabilities on the “edge,” laying the foundation for a low code or no code development environment.
For Business Customers Developing Smart Devices IoT PaaS Our IoT PaaS is an integrated, all-in-one product for brands and OEMs to build and manage smart devices. Our IoT PaaS combines cloud-based connectivity and basic IoT services, edge capabilities, app development, and device optimization solutions which we believe are the most fundamental elements of IoT capabilities.
For Business Customers Developing Smart Devices PaaS Our PaaS is an integrated, all-in-one product for brands and OEMs to build and manage smart devices. Our PaaS combines cloud-based connectivity and basic IoT services, edge capabilities, app development, and device optimization solutions which we believe are the most fundamental elements of IoT capabilities.
Our IoT PaaS offers developers, many of whom work for brands and OEMs, a portal through which they can access a variety of software and development tools, as illustrated in the screenshots below. ​ ​ ​ ● IoT edge capabilities.
Our PaaS offers developers, many of whom work for brands and OEMs, a portal through which they can access a variety of software and development tools, as illustrated in the screenshots below. ​ ​ ​ ● IoT edge capabilities.
Our IoT PaaS offers an all-agnostic development environment across diverse cloud services, IaaS, device categories, edge capabilities and hardware architectures, allowing customers to simultaneously work with multiple public or private cloud infrastructure and with the flexibility to switch among them if needed, develop their product portfolios with different communication protocols and IoT chips, and leverage the differentiated capabilities and advantages of various LLMs to better suite their smart devices.
Our PaaS offers an all-agnostic development environment across diverse cloud services, IaaS, device categories, edge capabilities and hardware architectures, allowing customers to simultaneously work with multiple public or private cloud infrastructure and with the flexibility to switch among them if needed, develop their product portfolios with different communication protocols and IoT chips, and leverage the differentiated capabilities and advantages of various LLMs to better suite their smart devices.
In addition, according to CIC, we are the world’s first IoT cloud development platform at scale that is cloud-agnostic. ​ The following flow chart illustrates how we connect and empower key stakeholders surrounding our IoT PaaS, i.e., chip vendors, brands (including retailers offering private-label smart devices) and their contracted OEMs, distribution channels, as well as end users.
In addition, according to CIC, we are the world’s first IoT cloud development platform at scale that is cloud-agnostic. ​ The following flow chart illustrates how we connect and empower key stakeholders surrounding our PaaS, i.e., chip vendors, brands (including retailers offering private-label smart devices) and their contracted OEMs, distribution channels, as well as end users.
AEP includes Tuya Platform Applications and Developer Kits that allow us to deliver IoT PaaS, SaaS and other value-added services. o Developer Kits allow developers to integrate tailored-made AI and IoT capabilities through a variety of APIs, SDKs and low-code development accelerators that allow developers to add, customize, or integrate systems and functionality based on specific requirements and needs. o Tuya Platform Applications combine a no-code development platform, an IoT data analysis platform and an IoT industry solution studio to provide full platform-based business service capabilities. ● Business Technology Platform (BTP) is the competency center that provides the technology foundation to the upper layer of our Tuya IoT cloud infrastructure in the form of modular micro-services.
AEP includes Tuya Platform Applications and Developer Kits that allow us to deliver PaaS, SaaS and other value-added services. o Developer Kits allow developers to integrate tailored-made AI and IoT capabilities through a variety of APIs, SDKs and low-code development accelerators that allow developers to add, customize, or integrate systems and functionality based on specific requirements and needs. o Tuya Platform Applications combine a no-code development platform, an IoT data analysis platform and an IoT industry solution studio to provide full platform-based business service capabilities. ● Business Technology Platform (BTP) is the competency center that provides the technology foundation to the upper layer of our Tuya IoT cloud infrastructure in the form of modular micro-services.
Our research and development team primarily consists of technology and platform development engineers responsible for (i) developing and iterating proprietary IoT technologies (e.g., TTP and AEP) and implementing enhancements and upgrades to our AI cloud platform; (ii) building AI engineering capabilities by developing AI agents and integrating key AI functions into our platform; (iii) developing and upgrading our products, including IoT PaaS, Cube and SaaS; and (iv) optimizing our internal operational systems and technologies.
Our research and development team primarily consists of technology and platform development engineers responsible for (i) developing and iterating proprietary IoT technologies (e.g., TTP and AEP) and implementing enhancements and upgrades to our AI cloud platform; (ii) building AI engineering capabilities by developing AI agents and integrating key AI functions into our platform; (iii) developing and upgrading our products, including PaaS, Cube and SaaS; and (iv) optimizing our internal operational systems and technologies.
IoT devices can spend less time communicating with the cloud, react more quickly to local changes and operate more securely and reliably; o IoT Core is the core ability to connect, authorize, authenticate and manage digital twins devices; o Things Model creates virtual representations of physical smart devices that enable analysis of data and monitoring of systems to prevent downtime, test new devices by using simulations and troubleshoot problems even before they occur; 90 Table of Contents o Event Hubs provides a unified streaming platform with time retention buffer, decoupling event producers from event consumers; o Over-the-air Engine, or OTA Engine, provides unified OTA strategy and data analysis, predicts when devices need upgrades, reduces device OTA risks, and optimizes device usage activities; and o Virtualized Device Computing enhances a smart device’s hardware capabilities from the cloud platform by managing device access and scenes control through the edge of the network. ● Application Enabling Platform (“AEP”) provides brands, OEMs and developers with a one-stop shop of AI and IoT cloud capabilities that they can use to add, customize or integrate functionality in a development environment that is “low-code” or even “no-code,” meaning that those IoT cloud capabilities are ready-to-use by developers so that they do not have to write the codes from scratch.
IoT devices can spend less time communicating with the cloud, react more quickly to local changes and operate more securely and reliably; o IoT Core is the core ability to connect, authorize, authenticate and manage digital twins devices; 85 Table of Contents o Things Model creates virtual representations of physical smart devices that enable analysis of data and monitoring of systems to prevent downtime, test new devices by using simulations and troubleshoot problems even before they occur; o Event Hubs provides a unified streaming platform with time retention buffer, decoupling event producers from event consumers; o Over-the-air Engine, or OTA Engine, provides unified OTA strategy and data analysis, predicts when devices need upgrades, reduces device OTA risks, and optimizes device usage activities; and o Virtualized Device Computing enhances a smart device’s hardware capabilities from the cloud platform by managing device access and scenes control through the edge of the network. ● Application Enabling Platform (“AEP”) provides brands, OEMs and developers with a one-stop shop of AI and IoT cloud capabilities that they can use to add, customize or integrate functionality in a development environment that is “low-code” or even “no-code,” meaning that those IoT cloud capabilities are ready-to-use by developers so that they do not have to write the codes from scratch.
The Telecommunications Regulations categorize telecommunications businesses into basic telecommunications businesses and value-added telecommunications businesses, according to the Catalog of Telecommunications Business, attached to the Telecommunications Regulations and last amended by the Ministry of Industry and Information Technology (the “MIIT”) on June 6, 2019. 103 Table of Contents Regulation Relating to Cybersecurity, Data Security and Privacy Protection PRC Cybersecurity On December 28, 2000, the SCNPC enacted the Decision on the Protection of Internet Security, as amended on August 27, 2009, which provides that the following activities conducted through the internet are subject to criminal liabilities: (i) gaining improper entry into any of the computer information networks relating to state affairs, national defensive affairs, or cutting-edge science and technology; (ii) violation of relevant provisions of the state in the form of unauthorized interruption of any computer network or communication service, as a result of which the computer network or communication system cannot function normally; (iii) spreading rumor, slander or other harmful information via the internet for the purpose of inciting subversion of the state political power; (iv) stealing or divulging state secrets, intelligence or military secrets via internet; (v) spreading false or inappropriate commercial information; or (vi) infringing on the intellectual property.
The Telecommunications Regulations categorize telecommunications businesses into basic telecommunications businesses and value-added telecommunications businesses, according to the Catalog of Telecommunications Business, attached to the Telecommunications Regulations and last amended by the Ministry of Industry and Information Technology (the “MIIT”) on June 6, 2019. 98 Table of Contents Regulation Relating to Cybersecurity, Data Security and Privacy Protection PRC Cybersecurity On December 28, 2000, the SCNPC enacted the Decision on the Protection of Internet Security, as amended on August 27, 2009, which provides that the following activities conducted through the internet are subject to criminal liabilities: (i) gaining improper entry into any of the computer information networks relating to state affairs, national defensive affairs, or cutting-edge science and technology; (ii) violation of relevant provisions of the state in the form of unauthorized interruption of any computer network or communication service, as a result of which the computer network or communication system cannot function normally; (iii) spreading rumor, slander or other harmful information via the internet for the purpose of inciting subversion of the state political power; (iv) stealing or divulging state secrets, intelligence or military secrets via internet; (v) spreading false or inappropriate commercial information; or (vi) infringing on the intellectual property.
To become “smart,” a device must have key capabilities such as connectivity, storage and data processing, which we call “edge” capabilities, embedded in modules installed on the device. Our IoT PaaS offers a library of edge capabilities for customers to choose from, as well as visualized, simple tools and dashboards for them to quickly find what they need.
To become “smart,” a device must have key capabilities such as connectivity, storage and data processing, which we call “edge” capabilities, embedded in modules installed on the device. Our PaaS offers a library of edge capabilities for customers to choose from, as well as visualized, simple tools and dashboards for them to quickly find what they need.
For example, key account customers can leverage the IoT PaaS model, which incorporates the operating system, cloud, and app SDK, in accordance with their business needs, facilitating a more autonomous business development environment. Cross-sector multinational corporations, SaaS service providers, and integrators may choose the smart solutions model to achieve a streamlined and expedited market entry.
For example, key account customers can leverage the PaaS model, which incorporates the operating system, cloud, and app SDK, in accordance with their business needs, facilitating a more autonomous business development environment. Cross-sector multinational corporations, SaaS service providers, and integrators may choose the smart solutions model to achieve a streamlined and expedited market entry.
Driven by increasing demand amid the global economic recovery and supply chain normalization in 2024, and our strategic focus on customer needs and product enhancements, the dollar-based net expansion rate for IoT PaaS improved to 116% as of March 31, 2024, 127% as of June 30, 2024, 124% as of September 30, 2024, and 122% as of December 31, 2024, compared to the same period in 2023.
Driven by increasing demand amid the global economic recovery and supply chain normalization in 2024, and our strategic focus on customer needs and product enhancements, the dollar-based net expansion rate for PaaS improved to 116% as of March 31, 2024, 127% as of June 30, 2024, 124% as of September 30, 2024, and 122% as of December 31, 2024, compared to the same period in 2023.
If our market does not grow as we expect, or if we cannot expand our products and services to meet the demands of this market, our revenue may decline, or fail to grow, and we may continue to incur operating losses.” For a detailed discussion of the dollar-based net expansion rate for IoT PaaS and certain other key operating metrics, see “Item 5.
If our market does not grow as we expect, or if we cannot expand our products and services to meet the demands of this market, our revenue may decline, or fail to grow, and we may continue to incur operating losses.” For a detailed discussion of the dollar-based net expansion rate for PaaS and certain other key operating metrics, see “Item 5.
Share-based compensation expenses, credit-related impairment of long-term investments and litigation costs have been and may continue to be incurred in the business and are not reflected in the presentation of non-GAAP financial measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.
Share-based compensation expenses, credit-related impairment/(reversal) of long-term investments and litigation costs have been and may continue to be incurred in the business and are not reflected in the presentation of non-GAAP financial measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.
Our customers may choose to engage us to design tailor-made apps or, in many more cases, customize the apps themselves or through third-party developers with development tools that we offer. ​ The below screenshot showcases our “one-app-for-all” approach that enables end users to manage various functions and different categories of devices using a single app, as well as our “Smart Scene” functions, which allow users to configure and manage present scenes and recommend smart scenes according to connected devices and user behaviors. ​ ​ 85 Table of Contents ● AI Capabilities: AI agents are at the core of AI device, as they define the AI capabilities such device can deliver—such as interacting with devices through natural conversation, performing multimodal data analysis and processing, and executing AI control strategies.
Our customers may choose to engage us to design tailor-made apps or, in many more cases, customize the apps themselves or through third-party developers with development tools that we offer. ​ The below screenshot showcases our “one-app-for-all” approach that enables end users to manage various functions and different categories of devices using a single app, as well as our “Smart Scene” functions, which allow users to configure and manage present scenes and recommend smart scenes according to connected devices and user behaviors. ​ ​ 80 Table of Contents ● AI Capabilities: AI agents are at the core of AI device, as they define the AI capabilities such device can deliver—such as interacting with devices through natural conversation, performing multimodal data analysis and processing, and executing AI control strategies.
Pursuant to the Notice of the Foreign Investment Administration of the MOFCOM on Distributing the Manual of Guidance on Administration for Foreign Investment Access, which was issued and became effective on December 18, 2008 by MOFCOM, notwithstanding the fact that (i) the domestic shareholder is connected with the foreign investor or not, or (ii) the foreign investor is the existing shareholder or the new investor, the M&A Rules shall not apply to the transfer of an equity interest in an incorporated foreign-invested enterprise from the domestic shareholder to the foreign investor. ​ 116 Table of Contents On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and relevant supporting guidelines, collectively, the New Overseas Listing Rules, setting out new filing procedures for China-based companies seeking direct or indirect listings and offerings in overseas markets, which came into force since March 31, 2023.
Pursuant to the Notice of the Foreign Investment Administration of the MOFCOM on Distributing the Manual of Guidance on Administration for Foreign Investment Access, which was issued and became effective on December 18, 2008 by MOFCOM, notwithstanding the fact that (i) the domestic shareholder is connected with the foreign investor or not, or (ii) the foreign investor is the existing shareholder or the new investor, the M&A Rules shall not apply to the transfer of an equity interest in an incorporated foreign-invested enterprise from the domestic shareholder to the foreign investor. ​ 111 Table of Contents On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and relevant supporting guidelines, collectively, the New Overseas Listing Rules, setting out new filing procedures for China-based companies seeking direct or indirect listings and offerings in overseas markets, which came into force since March 31, 2023.
Our results of operations are affected by our product mix, as different products have a range of different margins and profitability profiles. For example, an increase in the revenue contribution from SaaS, which typically has a higher margin than IoT PaaS or Smart Solution, generally leads to an increase in our overall profit margin.
Our results of operations are affected by our product mix, as different products have a range of different margins and profitability profiles. For example, an increase in the revenue contribution from SaaS, which typically has a higher margin than PaaS or Smart Solution, generally leads to an increase in our overall profit margin.
To this end, we strategically offer some of our customers, mainly brands and system integrators, who prefer not to deal with a multiple OEMs option to purchase directly from us finished smart devices deployed with IoT PaaS sourced from qualified OEMs. These customers typically place purchase orders directly with us by specifying the type of smart devices.
To this end, we strategically offer some of our customers, mainly brands and system integrators, who prefer not to deal with a multiple OEMs option to purchase directly from us finished smart devices deployed with PaaS sourced from qualified OEMs. These customers typically place purchase orders directly with us by specifying the type of smart devices.
The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for U.S. GAAP measures. We define non-GAAP measures by excluding the impact of share-based compensation expenses, credit-related impairment of long-term investments and litigation costs from the respective GAAP measures.
The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for U.S. GAAP measures. We define non-GAAP measures by excluding the impact of share-based compensation expenses, credit-related impairment/(reversal) of long-term investments and litigation costs from the respective GAAP measures.
We provide online customer support services and tools for our customers to submit customer complaints and service requests anytime and anywhere. We use the dollar-based net expansion rate for IoT PaaS as a useful indicator of our customers’ loyalty and tendency to expand their usage of our platform over time.
We provide online customer support services and tools for our customers to submit customer complaints and service requests anytime and anywhere. We use the dollar-based net expansion rate for PaaS as a useful indicator of our customers’ loyalty and tendency to expand their usage of our platform over time.
The financial statements of our subsidiaries and the VIE using functional currencies other than the U.S. dollar, such as RMB, are translated to the U.S. dollar. As a result, as RMB or other currencies in which we generate revenue depreciate or appreciate against the U.S. dollar, our revenue presented in U.S. dollars will be negatively or positively affected.
The financial statements of our subsidiaries and the former VIE using functional currencies other than the U.S. dollar, such as RMB, are translated to the U.S. dollar. As a result, as RMB or other currencies in which we generate revenue depreciate or appreciate against the U.S. dollar, our revenue presented in U.S. dollars will be negatively or positively affected.
In the second half of 2023, with the easing of the downstream inventory backlog and the gradual recovery of the global economy, coupled with the effective customer-focus and product enhancement strategies we adopted to navigate through the macroeconomic headwinds, the dollar-based net expansion rate for IoT PaaS rebounded and improved.
In the second half of 2023, with the easing of the downstream inventory backlog and the gradual recovery of the global economy, coupled with the effective customer-focus and product enhancement strategies we adopted to navigate through the macroeconomic headwinds, the dollar-based net expansion rate for PaaS rebounded and improved.
We present the non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. We also believe that the use of the non-GAAP measures facilitates investors’ assessment of its operating performance. Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP.
We present non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. We also believe that the use of the non-GAAP measures facilitates investors’ assessment of our operating performance. Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP.
In accordance with the Company Law, the VIE in China must make appropriations from its after-tax profit to non-distributable reserve funds, including (i) the statutory surplus fund and (ii) the discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP.
In accordance with the Company Law, the former VIE in China must make appropriations from its after-tax profit to non-distributable reserve funds, including (i) the statutory surplus fund and (ii) the discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP.
Regarded as the fundamental law in the area of cybersecurity in China, the Cybersecurity Law regulates network operators and others from the following perspectives: the principle of cyberspace sovereignty, security obligations of network operators and providers of network products and services, protection of personal information, protection of critical information infrastructure, data use and cross-border transfer, network interoperability and standardization.
Regarded as the fundamental law in the area of cybersecurity in China, the amended Cybersecurity Law regulates network operators and others from the following perspectives: the principle of cyberspace sovereignty, security obligations of network operators and providers of network products and services, protection of personal information, protection of critical information infrastructure, data use and cross-border transfer, network interoperability and standardization.
We believe that none of our competitors currently competes directly with us across all of our offerings, and we compete favorably on the basis of the factors below: ● ability to support multiple use cases on a single platform; ● ease of deployment, implementation and use; ● platform performance, interoperability, scalability and reliability; ● ability to help customers achieve global IoT deployment; ● ability to build a supply chain ecosystem; ● customer support and platform maintenance; ● brand awareness and reputation; ● sales and marketing efforts; and ● ability to ensure data security and privacy. 100 Table of Contents INSURANCE We maintain the statutory social insurance as required by the relevant local laws and regulations.
We believe that none of our competitors currently competes directly with us across all of our offerings, and we compete favorably on the basis of the factors below: ● ability to support multiple use cases on a single platform; ● ease of deployment, implementation and use; ● platform performance, interoperability, scalability and reliability; ● ability to help customers achieve global IoT deployment; ● ability to build a supply chain ecosystem; ● customer support and platform maintenance; ● brand awareness and reputation; ● sales and marketing efforts; and ● ability to ensure data security and privacy. 95 Table of Contents INSURANCE We maintain the statutory social insurance as required by the relevant local laws and regulations.
We also provide developers with a suite of analytics and debugging tools to help them independently identify root causes and troubleshoot problems. Our IoT PaaS also includes the following ancillary business related or technical related value-added services: ● Tuya Mall.
We also provide developers with a suite of analytics and debugging tools to help them independently identify root causes and troubleshoot problems. Our PaaS also includes the following ancillary business related or technical related value-added services: ● Tuya Mall.
Pursuant to the Notice of the SAFE on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment, or the SAFE Circular 13, which was promulgated on February 13, 2015, became effective on June 1, 2015 and was further amended on December 30, 2019, the foreign exchange registration under domestic direct investment and the foreign exchange registration under overseas direct investment is directly reviewed and handled by banks in accordance with the SAFE Circular 13, and the SAFE and its branches shall perform indirect regulation over the foreign exchange registration via banks. 115 Table of Contents Regulation Relating to Dividend Distribution The Company Law is the principal law that governs the dividends distribution by companies in the PRC and it applies to both PRC domestic companies and foreign-invested companies.
Pursuant to the Notice of the SAFE on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment, or the SAFE Circular 13, which was promulgated on February 13, 2015, became effective on June 1, 2015 and was further amended on December 30, 2019, the foreign exchange registration under domestic direct investment and the foreign exchange registration under overseas direct investment is directly reviewed and handled by banks in accordance with the SAFE Circular 13, and the SAFE and its branches shall perform indirect regulation over the foreign exchange registration via banks. 110 Table of Contents Regulation Relating to Dividend Distribution The Company Law is the principal law that governs the dividends distribution by companies in the PRC and it applies to both PRC domestic companies and foreign-invested companies.
Regulation on Domain Name In accordance with the Measures for the Administration of Internet Domain Names, which was promulgated by the MIIT on August 24, 2017 and took effect on November 1, 2017, whoever engages in internet domain name services and its operation and maintenance, supervision and administration and other related activities within the territory of the People’s Republic of China shall abide by these Measures. 112 Table of Contents In accordance with the Notice of the MIIT on Regulating the Use of Domain Names in Internet Information Services, which was promulgated by the MIIT of the PRC on November 27, 2017 and took effect on January 1, 2018, internet access service providers shall verify the identity of each internet information service provider, and shall not provide services to any internet information service provider who fails to provide real identity information.
Regulation on Domain Name In accordance with the Measures for the Administration of Internet Domain Names, which was promulgated by the MIIT on August 24, 2017 and took effect on November 1, 2017, whoever engages in internet domain name services and its operation and maintenance, supervision and administration and other related activities within the territory of the People’s Republic of China shall abide by these Measures. 107 Table of Contents In accordance with the Notice of the MIIT on Regulating the Use of Domain Names in Internet Information Services, which was promulgated by the MIIT of the PRC on November 27, 2017 and took effect on January 1, 2018, internet access service providers shall verify the identity of each internet information service provider, and shall not provide services to any internet information service provider who fails to provide real identity information.
Tuya Information completed its renewal application for the HNTE qualification on December 6, 2024, and it will continue to qualify as an HNTE, which entitles it to enjoy the 15% beneficial tax rate for the years ending December 31, 2025, 2026 and 2027.
Tuya Information completed its renewal application for the HNTE qualification on December 6, 2024, and it will continue to qualify as an HNTE, which entitles it to enjoy the 15% beneficial tax rate for the years ending December 31, 2026 and 2027.
According to the Negative List (2024), the foreign equity interest ownership of entities that engage in value-added telecommunications business (except for e-commerce, domestic multiparty communication, storage and forwarding and call center) must not exceed 50%. 102 Table of Contents On March 15, 2019, the National People’s Congress approved the Foreign Investment Law of the PRC (the “Foreign Investment Law”), which took effect on January 1, 2020 and replaced the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Wholly Foreign-Invested Enterprise Law of the PRC and became the legal foundation for foreign investment in the PRC.
According to the Negative List (2024), the foreign equity interest ownership of entities that engage in value-added telecommunications business (except for e-commerce, domestic multiparty communication, storage and forwarding and call center) must not exceed 50%. 97 Table of Contents On March 15, 2019, the National People’s Congress approved the Foreign Investment Law of the PRC (the “Foreign Investment Law”), which took effect on January 1, 2020 and replaced the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Wholly Foreign-Invested Enterprise Law of the PRC and became the legal foundation for foreign investment in the PRC.
Each exclusive purchase option agreement shall remain in effect until all of the equity interests in Hangzhou Tuya Technology have been acquired by Tuya Information. 120 Table of Contents Power of Attorney Pursuant to a series of powers of attorney issued by each of Xueji (Jerry) Wang, Liaohan (Leo) Chen, Yaona Lin, Ruixin Zhou and Peihong Chen and accepted by Tuya Information on January 19, 2022, each of Xueji (Jerry) Wang, Liaohan (Leo) Chen, Yaona Lin, Ruixin Zhou and Peihong Chen irrevocably appointed Tuya Information or any designated person as their exclusive agent and attorney to act on their behalf on all shareholder matters of Hangzhou Tuya Technology and exercise all rights as shareholders of Hangzhou Tuya Technology.
Each exclusive purchase option agreement shall remain in effect until all of the equity interests in Hangzhou Tuya Technology have been acquired by Tuya Information. 115 Table of Contents Power of Attorney Pursuant to a series of powers of attorney issued by each of Xueji (Jerry) Wang, Liaohan (Leo) Chen, Yaona Lin, Ruixin Zhou and Peihong Chen and accepted by Tuya Information on January 19, 2022, each of Xueji (Jerry) Wang, Liaohan (Leo) Chen, Yaona Lin, Ruixin Zhou and Peihong Chen irrevocably appointed Tuya Information or any designated person as their exclusive agent and attorney to act on their behalf on all shareholder matters of Hangzhou Tuya Technology and exercise all rights as shareholders of Hangzhou Tuya Technology.
We have also worked with top privacy compliance and cybersecurity firms, such as TrustArc, ioXt Alliance and Palo Alto Networks, for privacy management and penetration testing. 96 Table of Contents As of the date of this annual report, we have not received any material claim from any third party against us on the ground of infringement of such party’s right to data protection as provided by the Civil Code of the PRC or any applicable laws and regulations in other jurisdictions, and we have not experienced any material data loss or breach incidents.
We have also worked with top privacy compliance and cybersecurity firms, such as TrustArc, ioXt Alliance and Palo Alto Networks, for privacy management and penetration testing. 91 Table of Contents As of the date of this annual report, we have not received any material claim from any third party against us on the ground of infringement of such party’s right to data protection as provided by the Civil Code of the PRC or any applicable laws and regulations in other jurisdictions, and we have not experienced any material data loss or breach incidents.
The consignees and consignors for import or export of goods and the customs brokers engaged in customs declaration shall file with the Customs in accordance with the laws. 110 Table of Contents Pursuant to the Administrative Provisions of the Customs of the People’s Republic of China on the Record Filings of Customs Declaration Entities promulgated by the General Administration of Customs on November 19, 2021, where the consignee or consignor of imported or exported goods or a customs declaration enterprise applies for recordation, it shall obtain the qualification of market entities; particularly where the consignee or consignor of imported or exported goods applies for recordation, it shall be filed as a foreign trade business.
The consignees and consignors for import or export of goods and the customs brokers engaged in customs declaration shall file with the Customs in accordance with the laws. 105 Table of Contents Pursuant to the Administrative Provisions of the Customs of the People’s Republic of China on the Record Filings of Customs Declaration Entities promulgated by the General Administration of Customs on November 19, 2021, where the consignee or consignor of imported or exported goods or a customs declaration enterprise applies for recordation, it shall obtain the qualification of market entities; particularly where the consignee or consignor of imported or exported goods applies for recordation, it shall be filed as a foreign trade business.
Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder. 111 Table of Contents Regulation on Copyright In accordance with the Copyright Law of the PRC which was promulgated by the SCNPC on September 7, 1990 and last amended on November 11, 2020, and took effect on June 1, 2021.
Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder. 106 Table of Contents Regulation on Copyright In accordance with the Copyright Law of the PRC which was promulgated by the SCNPC on September 7, 1990 and last amended on November 11, 2020, and took effect on June 1, 2021.
Business Overview—Data Security and Privacy.” 108 Table of Contents The GDPR, which applies to the collection, use, storage, retention, transfer, disclosure and other processing of personal data obtained from individuals located in the EU or by businesses operating within the EU, became effective on May 25, 2018 and has resulted, and will continue to result, in significantly greater compliance burdens and costs for companies with customers, end users, or operations in the EU.
Business Overview—Data Security and Privacy.” 103 Table of Contents The GDPR, which applies to the collection, use, storage, retention, transfer, disclosure and other processing of personal data obtained from individuals located in the EU or by businesses operating within the EU, became effective on May 25, 2018 and has resulted, and will continue to result, in significantly greater compliance burdens and costs for companies with customers, end users, or operations in the EU.
Next, we define as our “cohort” the population of IoT PaaS customers for the first year of the measurement period (i.e., those who have placed at least one order for IoT PaaS during that year).
Next, we define as our “cohort” the population of PaaS customers for the first year of the measurement period (i.e., those who have placed at least one order for PaaS during that year).
Key Information—3.D.Risk Factors—Risks Related to our Business and Industry—Compliance with the rapidly evolving landscape of global data privacy and data security laws may be challenging, and any failure or perceived failure to comply with such laws, or other concerns about our practices or policies with respect to the processing of personal information, could damage our reputation and deter current and potential customers and end users from using our platform and products and services or subject us to significant compliance costs or penalties, which could materially and adversely affect our business, financial condition and results of operations.” 104 Table of Contents Data Security On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC, or the Data Security Law, which took effect on September 1, 2021.
Key Information—3.D.Risk Factors—Risks Related to our Business and Industry—Compliance with the rapidly evolving landscape of global data privacy and data security laws may be challenging, and any failure or perceived failure to comply with such laws, or other concerns about our practices or policies with respect to the processing of personal information, could damage our reputation and deter current and potential customers and end users from using our platform and products and services or subject us to significant compliance costs or penalties, which could materially and adversely affect our business, financial condition and results of operations.” Data Security On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC, or the Data Security Law, which took effect on September 1, 2021.
As the status of the device changes, the digital twin synchronizes with it and “closes the loop” by interacting with the device to enable different functions and use cases. ​ 83 Table of Contents Digital twin and the cloud-based connectivity it enables offer many features hard to imagine in the pre-IoT era, such as using a smartphone to control multiple devices remotely and predicting failure based on patterns learned from vast amounts of IoT data.
As the status of the device changes, the digital twin synchronizes with it and “closes the loop” by interacting with the device to enable different functions and use cases. ​ 78 Table of Contents Digital twin and the cloud-based connectivity it enables offer many features hard to imagine in the pre-IoT era, such as using a smartphone to control multiple devices remotely and predicting failure based on patterns learned from vast amounts of IoT data.
Hangzhou Tuya Technology has agreed to pay services fees to Tuya Information on a regular basis in discretion of Hangzhou Tuya Technology after considering certain factors as specified in the exclusive business cooperation agreement.
Hangzhou Tuya Technology agreed to pay services fees to Tuya Information on a regular basis in discretion of Hangzhou Tuya Technology after considering certain factors as specified in the exclusive business cooperation agreement.
Based on the understanding of the relevant PRC laws and regulations, our PRC legal counsel has also advised us that, to the best of their knowledge, there should be no material legal impediment for us to renew these licenses, permissions and approvals as long as we comply with the relevant legal requirements and we take all necessary steps and submit the relevant applications in accordance with the requirements and schedules prescribed by the applicable PRC laws and regulations. 101 Table of Contents For the consequences to us and investors if we do not receive or maintain requisite licenses, permissions and approvals necessary to conduct operations in China, or if applicable laws, regulations or interpretations change and we are required to obtain additional permissions or approvals in the future, see Item 3.
Based on its understanding of the relevant PRC laws and regulations, our PRC legal counsel has also advised us that, to the best of their knowledge, there should be no material legal impediment for us to renew these licenses, permissions and approvals as long as we comply with the relevant legal requirements and we take all necessary steps and submit the relevant applications in accordance with the requirements and schedules prescribed by the applicable PRC laws and regulations. 96 Table of Contents For the consequences to us and investors if we do not receive or maintain requisite licenses, permissions and approvals necessary to conduct operations in China, or if applicable laws, regulations or interpretations change and we are required to obtain additional permissions or approvals in the future, see Item 3.
However, certain unique events may cause the historical seasonal trends and patterns to temporarily no longer apply, such as high global inflation weakening consumption sentiment and dampening enterprises’ confidence in doing business, downstream inventory backlog disrupting enterprises’ business and operating plans, supply chain disruption interfering with the delivery of goods, and the imposition of new tariffs or adjustments in existing tariffs or trade barriers. 123 Table of Contents Revenue Mix Our products and services primarily consist of IoT PaaS, Smart Solution for smart devices, and SaaS including industry SaaS and cloud-based software value-added services, etc.
However, certain unique events may cause the historical seasonal trends and patterns to temporarily no longer apply, such as high global inflation weakening consumption sentiment and dampening enterprises’ confidence in doing business, downstream inventory backlog disrupting enterprises’ business and operating plans, supply chain disruption interfering with the delivery of goods, and the imposition of new tariffs or adjustments in existing tariffs or trade barriers. 118 Table of Contents Revenue Mix Our products and services primarily consist of PaaS, Smart Solution for smart devices, and SaaS including industry SaaS and cloud-based software value-added services, etc.
We set out to offer IoT PaaS to customers developing smart devices, including brands and their contracted OEMs. Over time, we have extended our offerings to those who use smart devices.
We set out to offer PaaS to customers developing smart devices, including brands and their contracted OEMs. Over time, we have extended our offerings to those who use smart devices.
For a detailed discussion of the risks and uncertainties related to these contractual arrangements and our corporate structure, please see “ Item 3. Key Information – 3.D.
For a detailed discussion of the risks and uncertainties related to these historical contractual arrangements and our corporate structure, please see “ Item 3. Key Information – 3.D.
Furthermore, this uncertainty, and its eventual resolution, may increase our costs of compliance, impede our ability to transfer data and conduct our business, and harm our business or results of operations. 109 Table of Contents Additionally, the withdrawal of the United Kingdom (“U.K.”) from the EU (commonly known as “Brexit”) has created uncertainty with regard to the regulation of privacy and data protection in the U.K.
Furthermore, this uncertainty, and its eventual resolution, may increase our costs of compliance, impede our ability to transfer data and conduct our business, and harm our business or results of operations. 104 Table of Contents Additionally, the withdrawal of the United Kingdom (“U.K.”) from the EU (commonly known as “Brexit”) has created uncertainty with regard to the regulation of privacy and data protection in the U.K.
In 2024 and up to the date of this annual report, we have not been subject to any fines or other penalties due to non-compliance in relation to health, workplace safety or environmental regulations, and have not had any accident or claim for personal or property damage made by our employees which had materially and adversely affected our financial condition or business operations.
In 2025 and up to the date of this annual report, we have not been subject to any fines or other penalties due to non-compliance in relation to health, workplace safety or environmental regulations, and have not had any accident or claim for personal or property damage made by our employees which had materially and adversely affected our financial condition or business operations.
Our development tools have also evolved to support more self-service operations, further solidifying the foundation for expanding the developer community. 94 Table of Contents INTELLECTUAL PROPERTY We rely on a combination of patent, copyright, trade secret and trademark laws as well as contractual restrictions such as confidentiality agreements, licenses and intellectual property assignment agreements.
Our development tools have also evolved to support more self-service operations, further solidifying the foundation for expanding the developer community. 89 Table of Contents INTELLECTUAL PROPERTY We rely on a combination of patent, copyright, trade secret and trademark laws as well as contractual restrictions such as confidentiality agreements, licenses and intellectual property assignment agreements.
Instead, we decided that, in line with common practice in the PRC for industries subject to foreign investment restrictions, we would gain effective control over, and receive all the economic benefits generated by the businesses currently operated by the VIE through the contractual arrangements between Tuya Information, on the one hand, and the VIE and the registered shareholders, on the other hand.
Instead, we decided that, in line with common practice in the PRC for industries subject to foreign investment restrictions, we would gain effective control over, and receive all the economic benefits generated by the businesses currently operated by the former VIE through the historical contractual arrangements between Tuya Information, on the one hand, and the former VIE and the registered shareholders, on the other hand.
Other Income/(Loss) Other income/(loss) primarily consists of other non-operating incomes, net, financial income, net and foreign exchange loss, net. TAXATION Cayman Islands We are incorporated in the Cayman Islands.
Other Income Other income primarily consists of other non-operating incomes, net, financial income, net and foreign exchange gain/(loss), net. TAXATION Cayman Islands We are incorporated in the Cayman Islands.
Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the VIE. Appropriation to discretionary surplus fund is made at the discretion of the VIE.
Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the former VIE. Appropriation to discretionary surplus fund is made at the discretion of the former VIE.
In any event, it is the users who retain the ownership of the personal information contained in the data. 95 Table of Contents We have designed strict data protection policies to ensure that the collection, use, storage, transmission and dissemination of such data are in compliance with applicable laws and with prevalent industry practice.
In any event, it is the users who retain the ownership of the personal information contained in the data. 90 Table of Contents We have designed strict data protection policies to ensure that the collection, use, storage, transmission and dissemination of such data are in compliance with applicable laws and with prevalent industry practice.
Enterprises are also required to pay and deposit housing funds on behalf of their employees in full and in a timely manner. ​ 113 Table of Contents Regulation Relating to Tax Enterprise Income Tax According to the Enterprise Income Tax Law of the PRC, or the EIT Law, and its relevant implementation regulations, taxpayers consist of resident enterprises and non-resident enterprises.
Enterprises are also required to pay and deposit housing funds on behalf of their employees in full and in a timely manner. ​ 108 Table of Contents Regulation Relating to Tax Enterprise Income Tax According to the Enterprise Income Tax Law of the PRC, or the EIT Law, and its relevant implementation regulations, taxpayers consist of resident enterprises and non-resident enterprises.
We believe that these efforts will have a long-term, positive impact on our business and results of operations. 122 Table of Contents New Customer Acquisition Our operating results and growth prospects will also depend on our ability to attract new customers. We are intensely focused on growing our customer base.
We believe that these efforts will have a long-term, positive impact on our business and results of operations. 117 Table of Contents New Customer Acquisition Our operating results and growth prospects will also depend on our ability to attract new customers. We are intensely focused on growing our customer base.
The dollar-based expansion rate for IoT PaaS experienced a decline in 2022 and early 2023 due to significant events that had adversely affected the global economy, including (i) shipping disruptions in late 2021 that delayed product deliveries and affected holiday sales; (ii) persistent inflation that dampened consumer sentiment; and (iii) supply-demand mismatch that led to an excess of inventory for downstream enterprises.
The dollar-based expansion rate for PaaS experienced a decline prior to early 2023 due to significant events that had adversely affected the global economy, including (i) shipping disruptions in late 2021 that delayed product deliveries and affected holiday sales; (ii) persistent inflation that dampened consumer sentiment; and (iii) supply-demand mismatch that led to an excess of inventory for downstream enterprises.
Risk Factors — Risks Related to Our Corporate Structure. ” Exclusive Business Cooperation Agreement Under this exclusive business cooperation agreement, Tuya Information has agreed to provide the following services to Hangzhou Tuya Technology: ● the licensing of software legally owned by Tuya Information; ● the development, maintenance and update of software involved in Hangzhou Tuya Technology ’ s business; ● the design, installation, daily management, maintenance and updating of network system, hardware and databased design; ● the technical support and training for employees of Hangzhou Tuya Technology; ● the assistance in consultancy, collection and research of technology and market information (excluding market research business that wholly foreign-owned enterprises are prohibited from conducting under PRC law); ● the provision of business management consultation; ● the provision of marketing and promotion services; ● the leasing of equipment or properties; and 119 Table of Contents ● other services requested by Hangzhou Tuya Technology from time to time to the extent permitted under PRC law.
Risk Factors — Risks Related to Our Corporate Structure. ” Exclusive Business Cooperation Agreement Under this exclusive business cooperation agreement, Tuya Information agreed to provide the following services to Hangzhou Tuya Technology: ● the licensing of software legally owned by Tuya Information; ● the development, maintenance and update of software involved in Hangzhou Tuya Technology ’ s business; ● the design, installation, daily management, maintenance and updating of network system, hardware and database design; ● the technical support and training for employees of Hangzhou Tuya Technology; ● the assistance in consultancy, collection and research of technology and market information (excluding market research business that wholly foreign-owned enterprises are prohibited from conducting under PRC law); ● the provision of business management consultation; ● the provision of marketing and promotion services; 114 Table of Contents ● the leasing of equipment or properties; and ● other services requested by Hangzhou Tuya Technology from time to time to the extent permitted under PRC law.
The following table sets forth details of licenses, permissions and approvals held by our PRC subsidiaries that are material to current business operations in China, and the VIE currently does not hold any such material licenses, permissions or approvals. ​ License Holder Issuing Authority Grant Dates Expiration Date Registration and Filing of Foreign Trade Operator ​ Tuya Information ​ Hangzhou City Xihu District Commission of Commerce ​ February 15, 2022 ​ N/A ​ Registration of Consignee or Consignor of Imported or Exported Goods ​ Tuya Information ​ Hangzhou Customs ​ May 11, 2018 ​ Long-term ​ Registration and Filing of Foreign Trade Operator ​ Zhejiang Tuya ​ Hangzhou City Xihu District Commission of Commerce ​ November 12, 2021 ​ N/A ​ Registration of Consignee or Consignor of Imported or Exported Goods ​ Zhejiang Tuya ​ Qianjiang Customs ​ May 27, 2020 ​ Long-term ​ ​ In the view of Jia Yuan Law Offices, our PRC legal counsel, we had complied with the relevant applicable PRC laws relating to the required licenses, permissions and approvals to business operations in China in all material respects in 2024 and up to the date of this annual report.
The following table sets forth details of licenses, permissions and approvals held by our PRC subsidiaries that are material to current business operations in China, and the former VIE did not hold any such material licenses, permissions or approvals. ​ License ​ ​ ​ Holder ​ ​ ​ Issuing Authority ​ ​ ​ Grant Dates ​ ​ ​ Expiration Date Registration and Filing of Foreign Trade Operator ​ Tuya Information ​ Hangzhou City Xihu District Commission of Commerce ​ February 15, 2022 ​ N/A ​ Registration of Consignee or Consignor of Imported or Exported Goods ​ Tuya Information ​ Hangzhou Customs ​ May 11, 2018 ​ Long-term ​ Registration and Filing of Foreign Trade Operator ​ Zhejiang Tuya ​ Hangzhou City Xihu District Commission of Commerce ​ November 12, 2021 ​ N/A ​ Registration of Consignee or Consignor of Imported or Exported Goods ​ Zhejiang Tuya ​ Qianjiang Customs ​ May 27, 2020 ​ Long-term ​ ​ In the view of Jia Yuan Law Offices, our PRC legal counsel, we had complied with the relevant applicable PRC laws relating to the required licenses, permissions and approvals to business operations in China in all material respects in 2025 and up to the date of this annual report.
Hotels are also able to save on utilities bills by taking advantage of human activity detection-based lighting and air conditioning in public areas and guest rooms. o The resident experience – residents can monitor energy and utilities usage, create simple one-click actions to streamline routines or create access credentials for all guests.
Hotels are also able to save on utilities bills by taking advantage of human activity detection-based lighting and air conditioning in public areas and guest rooms. 83 Table of Contents o The resident experience – residents can monitor energy and utilities usage, create simple one-click actions to streamline routines or create access credentials for all guests.
See “Item 3. Key Information—3.D.Risk Factors—Risks Related to Our Business and Industry—Seasonality may cause fluctuations in our sales and operating results.” COMPETITION The global IoT platform market is rapidly evolving.
See “Item 3. Key Information—3.D.Risk Factors—Risks Related to Our Business and Industry—Seasonality may cause fluctuations in our sales and operating results.” COMPETITION The global AIoT platform market is rapidly evolving.
These offices are leased, and we do not own any real property. We believe that our current facilities are adequate to meet our current needs. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable. ​ 121 Table of Contents ITEM 5.
These offices are leased, and we do not own any real property. We believe that our current facilities are adequate to meet our current needs. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable. ​ 116 Table of Contents ITEM 5.
Tuya Information, our wholly owned PRC subsidiary, is eligible to enjoy a preferential tax rate of 15% in 2022, 2023 and 2024, to the extent it has taxable income under the EIT Law.
Tuya Information, our wholly owned PRC subsidiary, is eligible to enjoy a preferential tax rate of 15% in 2023, 2024 and 2025, to the extent it has taxable income under the EIT Law.
In 2024 and up to the date of this annual report, our business, results of operations and financial condition have not been materially and adversely impacted by any climate-related incidents. 99 Table of Contents SEASONALITY We have in the past experienced, and expect in the future to continue to experience, seasonal fluctuations in our revenue and sales from time to time, as a result of the holiday season, customers’ buying patterns, and changes in the business and economic environment that are outside our and our customers’ control.
In 2025 and up to the date of this annual report, our business, results of operations and financial condition have not been materially and adversely impacted by any climate-related incidents. 94 Table of Contents SEASONALITY We have in the past experienced, and expect in the future to continue to experience, seasonal fluctuations in our revenue and sales from time to time, as a result of the holiday season, customers’ buying patterns, and changes in the business and economic environment that are outside our and our customers’ control.
The service fee shall be equivalent to the total income of Hangzhou Tuya Technology of each financial year, deducting the costs, expenses, taxes (excluding corporate income tax) and other statutory fees reserved or withdrawn.
The service fee were to be equivalent to the total income of Hangzhou Tuya Technology of each financial year, deducting the costs, expenses, taxes (excluding corporate income tax) and other statutory fees reserved or withdrawn.
It brings together a suite of service modules, such as big data computing, AI algorithm service and IoT device management, that work together to optimize customer experience. We have deployed six data centers hosted worldwide, including in China, the United States, Europe and India.
It brings together a suite of service modules, such as big data computing, AI algorithm service and IoT device management, that work together to optimize customer experience. We have deployed seven data centers hosted worldwide, including in China, the United States, Europe, India and Singapore.
General and Administrative Expenses Our general and administrative expenses consist of (i) employee-related costs, including salaries, bonuses, and benefits paid to general and administrative personnel, (ii) share-based compensation, and (iii) other expenses associated with our general and administrative activities. Other Operating (Expenses)/Incomes, Net Other operating (expenses)/incomes, net primarily consist of software VAT tax refund and various general subsidies for enterprises.
General and Administrative Expenses Our general and administrative expenses consist of (i) employee-related costs, including salaries, bonuses, and benefits paid to general and administrative personnel, (ii) share-based compensation, and (iii) other expenses associated with our general and administrative activities. 122 Table of Contents Other Operating Incomes, Net Other operating incomes, net primarily consist of software VAT tax refund and various general subsidies for enterprises.
In 2024, our research and development initiatives on AI yielded advancements in following technological innovation and product development: ● AI Agent Development Platform: we launched the Tuya AI Agent development platform, a significant enhancement to our AI capabilities.
In 2025, our research and development initiatives on AI yielded advancements in following technological innovation and product development: ● AI Agent Development Platform: we launched the Tuya AI Agent development platform, a significant enhancement to our AI capabilities.
Developers are empowered to select the most appropriate LLMs for their specific business and market requirements, and can accelerate product development through Tuya’s pre-built templates and customizable solutions. ● Spatial LLM: we introduced Spatial LLM, a generative AI solution that integrates large language models with real-time spatial data and smart device context within the Tuya ecosystem.
Developers are empowered to select the most appropriate LLMs for their specific business and market requirements, and can accelerate product development through Tuya’s pre-built templates and customizable solutions. 87 Table of Contents ● Spatial LLM: we introduced Spatial LLM, a generative AI solution that integrates large language models with real-time spatial data and smart device context within the Tuya ecosystem.
We have completed information security, privacy and compliance certifications/validations with the consultation of various global agencies, and now serve as a reliable IoT platform with comprehensive certificates.
We have completed information security, privacy and compliance certifications/validations with the consultation of various global agencies, and now serve as a reliable AIoT platform with comprehensive certificates.
We compete in the ordinary course of business with technology companies providing IoT services and solutions, internet-related services and products for IoT, and IoT-enabling platforms, and e-commerce companies offering IoT-related cloud products and services.
We compete in the ordinary course of business with technology companies providing AIoT services and solutions, internet-related services and products for AIoT, and AIoT-enabling platforms, and e-commerce companies offering AIoT-related cloud products and services.
Cross-border transferring of such working papers shall go through the examination and approval formalities in accordance with the relevant national regulations. ​ 117 Table of Contents 4.C.
Cross-border transferring of such working papers shall go through the examination and approval formalities in accordance with the relevant national regulations. ​ 112 Table of Contents 4.C.
Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 For a detailed description of the comparison of our operating results for the year ended December 31, 2023 to the year ended December 31, 2022, see “Item 5. Operating and Financial Review and Prospects—5.A.
Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 For a detailed description of the comparison of our operating results for the year ended December 31, 2024 to the year ended December 31, 2023, see “Item 5. Operating and Financial Review and Prospects—5.A.
MATERIAL CASH REQUIREMENTS Our material cash requirements as of December 31, 2024 and any subsequent interim period include primarily our working capital and operating expenditure needs, capital expenditures, services purchase commitments and operating lease commitments.
MATERIAL CASH REQUIREMENTS Our material cash requirements as of December 31, 2025 and any subsequent interim period include primarily our working capital and operating expenditure needs, capital expenditures, services purchase commitments and operating lease commitments.
In addition, we are integrating more AI capabilities into our platform and offering them to developers in the form of PaaS, enabling more intelligent and versatile application development. ● SaaS. We offer industry SaaS, vertical-focused software solutions for spatial intelligence in different industry verticals.
In addition, we are integrating more AI capabilities into our platform and offering them to developers in the form of PaaS, enabling more intelligent and versatile application development. 77 Table of Contents ● SaaS . We offer industry SaaS, vertical-focused software solutions for spatial intelligence in different industry verticals.
Tuya Information qualifies as a high and new technology enterprise (the “HNTE”) and was entitled to the 15% beneficial tax rate for the year ended December 31, 2024.
Tuya Information qualifies as a high and new technology enterprise (the “HNTE”) and was entitled to the 15% beneficial tax rate for the year ended December 31, 2025.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 130 Table of Contents 5.E.
Pursuant to this announcement, the generally applicable VAT rates are simplified as 13%, 9%, 6%, and 0%, which became effective on April 1, 2019, and the VAT rate applicable to the small-scale taxpayers is 3%. As a Cayman Islands holding company, Tuya Inc. may receive dividends from our PRC subsidiaries through Tuya (HK) Limited.
Pursuant to this announcement, the generally applicable VAT rates are simplified as 13%, 9%, 6%, and 0%, which became effective on April 1, 2019, and the VAT rate applicable to the small-scale taxpayers is 3%. 123 Table of Contents As a Cayman Islands holding company, Tuya Inc. may receive dividends from our PRC subsidiaries through Tuya (HK) Limited.
These agents possess abilities such as intent recognition, contextual reasoning, memory persistence, and scenario-specific response generation—driving intelligent decision-making within devices. 91 Table of Contents ● The system also includes a Multi-Agent Runtime (MAR) that enables multiple agents to work concurrently on a single device, coordinating tasks such as perception, inference, and control.
These agents possess abilities such as intent recognition, contextual reasoning, memory persistence, and scenario-specific response generation—driving intelligent decision-making within devices. ● The system also includes a Multi-Agent Runtime (MAR) that enables multiple agents to work concurrently on a single device, coordinating tasks such as perception, inference, and control.
The Company Law also involve aspects of the company’s organizational structure, corporate governance, and the rights and obligations of shareholders, which also apply to foreign investment enterprises in the PRC.
The Company Law also involves aspects of the company’s organizational structure, corporate governance, and the rights and obligations of shareholders, which also apply to foreign investment enterprises in the PRC.
As a result, the dollar-based net expansion rate for our IoT PaaS for the trailing 12-month period ended the last day of each quarter is an inherently volatile metric. Maintaining a high dollar-based net expansion rate demonstrates our strong ability to continue to expand customer usage of our platform over time and grow revenue from existing customers.
As a result, the dollar-based net expansion rate for our PaaS for the trailing 12-month period ended the last day of each quarter is an inherently volatile metric. 120 Table of Contents Maintaining a high dollar-based net expansion rate demonstrates our strong ability to continue to expand customer usage of our platform over time and grow revenue from existing customers.
Unless otherwise required by applicable laws, Hangzhou Tuya Technology shall not have any right to terminate this exclusive business cooperation agreement in any event.
Unless otherwise required by applicable laws, Hangzhou Tuya Technology did not have any right to terminate this exclusive business cooperation agreement in any event.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Mr. Yip worked in Alibaba Group Holding Limited (a company listed on the NYSE, symbol: BABA, and secondarily listed on the Stock Exchange, stock code: 9988) from June 2010 to May 2022, where he served as a senior director of finance, primarily responsible for the group ’ s financial reporting and technical accounting and share-based compensation administration and management. Mr.
Yip worked in Alibaba Group Holding Limited (a company listed on the NYSE, symbol: BABA, and secondarily listed on the Stock Exchange, stock code: 9988) from June 2010 to May 2022, where he served as a senior director of finance, primarily responsible for the group ’ s financial reporting and technical accounting and share-based compensation administration and management. Mr.
Our audit committee is primarily responsible for, among other things: ● selecting the independent auditor; ● pre-approving auditing and non-auditing services permitted to be performed by the independent auditor; ● annually reviewing the independent auditor ’ s report describing the auditing firm ’ s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditor and our company; ● setting hiring policies for employees and former employees of the independent auditors; ● reviewing with the independent auditor any audit problems or difficulties and management ’ s response; ● reviewing and, if material, approving all related party transactions on an ongoing basis; ● reviewing and discussing the annual audited financial statements with management and the independent auditor; 143 Table of Contents ● reviewing and discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations; ● reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments; ● discussing earnings press releases with management, as well as financial information and earnings guidance provided to analysts and rating agencies; ● reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on our financial statements; ● discussing policies with respect to risk assessment and risk management with management, internal auditors and the independent auditor; ● timely reviewing reports from the independent auditor regarding all critical accounting policies and practices to be used by our company, major judgmental areas, significant adjustments resulting from audit, the going concern assumptions and qualifications, and compliance with applicable accounting standards; ● establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● such other matters that are specifically delegated to our audit committee by our board of directors from time to time; ● meeting separately, periodically, with management, internal auditors and the independent auditor; and ● reporting regularly to the full board of directors.
Our audit committee is primarily responsible for, among other things: ● selecting the independent auditor; ● pre-approving auditing and non-auditing services permitted to be performed by the independent auditor; ● annually reviewing the independent auditor ’ s report describing the auditing firm ’ s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditor and our company; 137 Table of Contents ● setting hiring policies for employees and former employees of the independent auditors; ● reviewing with the independent auditor any audit problems or difficulties and management ’ s response; ● reviewing and, if material, approving all related party transactions on an ongoing basis; ● reviewing and discussing the annual audited financial statements with management and the independent auditor; ● reviewing and discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations; ● reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments; ● discussing earnings press releases with management, as well as financial information and earnings guidance provided to analysts and rating agencies; ● reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on our financial statements; ● discussing policies with respect to risk assessment and risk management with management, internal auditors and the independent auditor; ● timely reviewing reports from the independent auditor regarding all critical accounting policies and practices to be used by our company, major judgmental areas, significant adjustments resulting from audit, the going concern assumptions and qualifications, and compliance with applicable accounting standards; ● establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● such other matters that are specifically delegated to our audit committee by our board of directors from time to time; ● meeting separately, periodically, with management, internal auditors and the independent auditor; and ● reporting regularly to the full board of directors.
Our corporate governance committee is primarily responsible for, among other things: ● developing and reviewing our company’s policies and practices on corporate governance and making recommendations to the board; ● reviewing and monitoring the training and continuous professional development of directors and senior management; ● reviewing and monitoring our company’s policies and practices on compliance with legal and regulatory requirements; ● developing, reviewing and monitoring the code of conduct and compliance manual (if any) applicable to employees and directors; ● reviewing our company’s compliance with certain Hong Kong Listing Rules; ● reviewing and monitoring whether our company is operated and managed for the benefit of all of its shareholders; ● reviewing and monitoring the management of conflicts of interests and make a recommendation to the board on any matter where there is a potential conflict of interest; ● reviewing and monitoring all risks related to our company’s multiple class voting structure; and ● reporting on the work of the corporate governance committee on at least a semi-annual and annual basis covering all areas of its terms of reference. 145 Table of Contents Duties and Functions of Directors Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests.
Our corporate governance committee is primarily responsible for, among other things: ● developing and reviewing our company’s policies and practices on corporate governance and making recommendations to the board; ● reviewing and monitoring the training and continuous professional development of directors and senior management; ● reviewing and monitoring our company’s policies and practices on compliance with legal and regulatory requirements; ● developing, reviewing and monitoring the code of conduct and compliance manual (if any) applicable to employees and directors; ● reviewing our company’s compliance with certain Hong Kong Listing Rules; ● reviewing and monitoring whether our company is operated and managed for the benefit of all of its shareholders; ● reviewing and monitoring the management of conflicts of interests and make a recommendation to the board on any matter where there is a potential conflict of interest; ● reviewing and monitoring all risks related to our company’s multiple class voting structure; and ● reporting on the work of the corporate governance committee on at least a semi-annual and annual basis covering all areas of its terms of reference. 139 Table of Contents Duties and Functions of Directors Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests.
Yang received a bachelor’s degree in international business and economics from Guangdong University of Foreign Studies in the PRC in July 2004. Yan Zhang has served as our director since November 2024. Ms. Zhang has been serving as the vice president of finance of the Company and several major subsidiaries since January 2021. Ms.
Yang received a bachelor’s degree in international business and economics from Guangdong University of Foreign Studies in the PRC in October 2004. Yan Zhang has served as our director since November 2024. Ms. Zhang has been serving as the vice president of finance of the Company and several major subsidiaries since January 2021. Ms.
Tencent Mobility Limited is wholly owned by Tencent Holdings Limited, a company listed on the Hong Kong Stock Exchange (Stock code: 00700). ​ 149 Table of Contents (6) Represents 35,821,715 Class A ordinary shares (the “ NEA 14 Shares ” ) held of record by New Enterprise Associates 14, L.P.
Tencent Mobility Limited is wholly owned by Tencent Holdings Limited, a company listed on the Hong Kong Stock Exchange (Stock code: 00700). ​ 143 Table of Contents (6) Represents 35,821,715 Class A ordinary shares (the “ NEA 14 Shares ” ) held of record by New Enterprise Associates 14, L.P.
Compensation For the fiscal year ended December 31, 2024, the aggregate cash compensation paid or payable to our directors and executive officers was approximately US$1.2 million. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers, except to the extent required by applicable laws and regulations.
Compensation For the fiscal year ended December 31, 2025, the aggregate cash compensation paid or payable to our directors and executive officers was approximately US$1.1 million. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers, except to the extent required by applicable laws and regulations.
The total number of Class A ordinary shares and/or ADSs which may be issued pursuant to the awards granted and to be granted to Service Providers under the 2024 Share Scheme shall not exceed 1.0% of the total number of shares in issue as at the Adoption Date unless shareholders approve a further refreshment of the scheme Limit or shareholders ’ approval is obtained in compliance with the Hong Kong Listing Rules, being 5,745,925 Class A ordinary shares.
The total number of Class A ordinary shares and/or ADSs which may be issued pursuant to the awards granted and to be granted to Service Providers under the 2024 Share Scheme shall not exceed 1.0% of the total number of shares in issue as at the Adoption Date unless shareholders approve a further refreshment of the scheme Limit or shareholders ’ approval is obtained in compliance with the Hong Kong Listing Rules, being 5,745,925 Class A ordinary shares. 135 Table of Contents Individual Limit.
The compensation committee is primarily responsible for, among other things: ● reviewing, evaluating and, if necessary, revising our overall compensation policies; ● reviewing and evaluating the performance of our directors and senior officers and determining the compensation of our executive officers; and ● reviewing and recommending any incentive-compensation plan, equity-based plans and employee stock ownership plans. 144 Table of Contents Nomination Committee .
The compensation committee is primarily responsible for, among other things: ● reviewing, evaluating and, if necessary, revising our overall compensation policies; ● reviewing and evaluating the performance of our directors and senior officers and determining the compensation of our executive officers; and 138 Table of Contents ● reviewing and recommending any incentive-compensation plan, equity-based plans and employee stock ownership plans.
Our PRC subsidiaries and the VIE are required by law to make contributions equal to certain percentages of each employee ’ s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. ​ 138 Table of Contents Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Our PRC subsidiaries and the former VIE are required by law to make contributions equal to certain percentages of each employee ’ s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Zhang received a bachelor’s degree in management from Shanxi University of Finance and Economics in the PRC in July 2006, and a master’s degree in management from Dongbei University of Finance and Economics in the PRC in January 2009. 137 Table of Contents Sidney Xuande Huang has served as our director since July 2022. Mr.
Zhang received a bachelor’s degree in management from Shanxi University of Finance and Economics in the PRC in July 2006, and a master’s degree in management from Dongbei University of Finance and Economics in the PRC in January 2009. Sidney Xuande Huang has served as our director since July 2022. Mr.
The vesting period in respect of any award shall not be less than 12 months from the grant date, except that with respect to an Employee Participant, a shorter vesting period may be permitted in certain circumstances. 141 Table of Contents Termination .
The vesting period in respect of any award shall not be less than 12 months from the grant date, except that with respect to an Employee Participant, a shorter vesting period may be permitted in certain circumstances. Termination .
There is no additional amount payable on application or acceptance of the share option. Vesting Schedule . In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Maximum Entitlement of a Grantee .
There is no additional amount payable on application or acceptance of the share option. Vesting Schedule . In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. 134 Table of Contents Maximum Entitlement of a Grantee .
(5) Represents (i) 55,924,749 Class A ordinary shares held of record by Tencent Mobility Limited, and (ii) 2,375,000 Class A ordinary shares represented by ADSs held of record by Image Frame Investment (HK) Limited, based on the Schedule 13G/A jointly filed by Tencent Mobility Limited and Image Frame Investment (HK) Limited, among others, with the SEC on March 29, 2021.
(5) Represents (i) 35,924,749 Class A ordinary shares held of record by Tencent Mobility Limited, and (ii) 22,375,000 Class A ordinary shares represented by ADSs held of record by Image Frame Investment (HK) Limited, based on the Schedule 13G/A jointly filed by Tencent Mobility Limited and Image Frame Investment (HK) Limited, among others, with the SEC on March 29, 2021.
Directors and Senior Management The following table sets forth the name, age and position of each of our directors and executive officers as of the date of this annual report. ​ ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Xueji (Jerry) Wang 42 Co-chairman, Founder, Chief Executive Officer Liaohan (Leo) Chen 42 Co-chairman, Founder, President Yi (Alex) Yang 43 Director, Co-founder, Chief Financial Officer, Chief Operation Officer Yan Zhang 41 Director Sidney Xuande Huang ​ 59 ​ Independent Non-executive Director Changheng Qiu ​ 49 ​ Independent Non-executive Director Meng Xiong Kuok (alias GUO Mengxiong) ​ 43 ​ Independent Non-executive Director Pak Tung Jason Yip ​ 42 ​ Independent Non-executive Director ​ 136 Table of Contents Xueji (Jerry) Wang founded Tuya in 2014 and currently serves as the co-chairman of our board of directors and our chief executive officer.
Directors and Senior Management The following table sets forth the name, age and position of each of our directors and executive officers as of the date of this annual report. ​ ​ ​ ​ ​ ​ Directors and Executive Officers ​ ​ ​ Age ​ ​ ​ Position/Title Xueji (Jerry) Wang 43 Co-chairman, Founder, Chief Executive Officer Liaohan (Leo) Chen 43 Co-chairman, Founder, President Yi (Alex) Yang 44 Director, Co-founder, Chief Financial Officer, Chief Operation Officer Yan Zhang 42 Director Sidney Xuande Huang ​ 60 ​ Independent Non-executive Director Changheng Qiu ​ 50 ​ Independent Non-executive Director Meng Xiong Kuok (alias GUO Mengxiong) ​ 44 ​ Independent Non-executive Director Pak Tung Jason Yip ​ 43 ​ Independent Non-executive Director ​ Xueji (Jerry) Wang founded Tuya in 2014 and currently serves as the co-chairman of our board of directors and our chief executive officer.
Employees We had 1,835, 1,465 and 1,435 salaried full-time employees as of December 31, 2022, 2023 and 2024, respectively. As of December 31, 2024, a substantial majority of our full-time employees were based in China, while the remaining of them were based in the United States, Europe, Singapore, India, Japan and Colombia, among other locations.
Employees We had 1,465, 1,435 and 1,441 salaried full-time employees as of December 31, 2023, 2024 and 2025, respectively. As of December 31, 2025, a substantial majority of our full-time employees were based in China, while the remaining of them were based in the United States, Europe, Singapore, India and Colombia, among other locations.
The 2015 Plan permits the awards of options, restricted shares and restricted share units as the plan administrator may determine. 139 Table of Contents Maximum Number of Class A Ordinary Shares .
The 2015 Plan permits the awards of options, restricted shares and restricted share units as the plan administrator may determine. Maximum Number of Class A Ordinary Shares .
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​ 150 Table of Contents
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​ 144 Table of Contents
Our nomination committee consists of Changheng Qiu, Meng Xiong Kuok and Liaohan (Leo) Chen, and is chaired by Changheng Qiu. We have determined that each of Changheng Qiu and Meng Xiong Kuok satisfies the requirements for an “independent director” within the meaning of Section 303A of the NYSE Listed Company Manual.
Nomination Committee . Our nomination committee consists of Changheng Qiu, Meng Xiong Kuok and Yan Zhang, and is chaired by Changheng Qiu. We have determined that each of Changheng Qiu and Meng Xiong Kuok satisfies the requirements for an “independent director” within the meaning of Section 303A of the NYSE Listed Company Manual.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of April 15, 2025 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5% of our ordinary shares. We have adopted a dual class voting structure.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 31, 2026 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5% of our ordinary shares. We have adopted a dual class voting structure.
The address of the principal business office for the above referenced NEA entities is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093. (7) Represents 1,974,570 Class A ordinary shares and 26,825,430 Class B ordinary shares held of record by Unileo Limited. Unileo Limited is wholly owned by Liaohan (Leo) Chen.
The address of the principal business office for the above referenced NEA entities is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093. (7) Represents 1,989,100 Class A ordinary shares and 26,810,900 Class B ordinary shares held of record by Unileo Limited. Unileo Limited is wholly owned by Liaohan (Leo) Chen.
The registered address of each of Tuya Group Inc. and Tenet Group Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. ​ 148 Table of Contents (2) Represents 1,974,570 Class A ordinary shares and 26,825,430 Class B ordinary shares held of record by Unileo Limited, a limited liability company incorporated under the laws of BVI wholly owned by Liaohan (Leo) Chen.
The registered address of each of Tuya Group Inc. and Tenet Group Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. ​ 142 Table of Contents (2) Represents 1,989,100 Class A ordinary shares and 26,810,900 Class B ordinary shares held of record by Unileo Limited, a limited liability company incorporated under the laws of BVI wholly owned by Liaohan (Leo) Chen.
Chen served as the management at Hangzhou Detian Information Technology Co., Ltd. from 2006 to May 2008. Mr. Chen served as an operations director at Alibaba Group, where he worked on Alibaba Cloud and Alibaba’s O2O business, leading the application of technology and business operation, from May 2008 to May 2014. Mr.
Chen served as an operations director at Alibaba Group, where he worked on Alibaba Cloud and Alibaba’s O2O business, leading the application of technology and business operation, from May 2008 to May 2014. Mr.
(1) Restricted share units. 6.C. Board Practices Board of Directors Our board of directors consists of eight directors, including four independent directors within the meaning of Section 303A of the NYSE Listed Company Manual, namely Sidney Xuande Huang, Changheng Qiu, Meng Xiong Kuok and Pak Tung Jason Yip.
(2) Options. ​ 136 Table of Contents 6.C. Board Practices Board of Directors Our board of directors consists of eight directors, including four independent directors within the meaning of Section 303A of the NYSE Listed Company Manual, namely Sidney Xuande Huang, Changheng Qiu, Meng Xiong Kuok and Pak Tung Jason Yip.
(8) Represents 1,427,050 Class A ordinary shares and 8,572,950 Class B ordinary shares held of record by Tuya Group Inc., a business company with limited liability incorporated under the laws of BVI wholly owned by Xueji (Jerry) Wang.
(8) Represents 1,432,150 Class A ordinary shares and 8,567,850 Class B ordinary shares held of record by Tuya Group Inc., a business company with limited liability incorporated under the laws of BVI wholly owned by Xueji (Jerry) Wang.
(4) Represents (i) 68,793,080 Class A ordinary shares and (ii) 34,806,920 Class B ordinary shares held of record by Tenet Group Limited, a limited liability company incorporated under the laws of BVI, which is wholly owned by Tenet Global Limited and ultimately controlled by Xueji (Jerry) Wang.
(4) Represents (i) 73,915,497 Class A ordinary shares and (ii) 34,784,503 Class B ordinary shares held of record by Tenet Group Limited, a limited liability company incorporated under the laws of BVI, which is wholly owned by Tenet Global Limited and ultimately controlled by Xueji (Jerry) Wang.
We or agents engaged by us are required under PRC laws and regulations to contribute to employee social security plans at specified percentages of the salaries, bonuses and certain allowances of our employees. 146 Table of Contents The following table sets forth the breakdowns of our employees by function as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Percentage ​ Function of Employees of Total Research and development ​ 1,040 ​ 72.5 % Sales and marketing 284 19.8 % General and administrative, and others 111 7.7 % Total 1,435 100 % ​ We are subject to, and comply with, applicable labor law requirements, which may automatically make our employees subject to industry-wide collective bargaining agreements.
We or agents engaged by us are required under PRC laws and regulations to contribute to employee social security plans at specified percentages of the salaries, bonuses and certain allowances of our employees. 140 Table of Contents The following table sets forth the breakdowns of our employees by function as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Percentage ​ Function ​ ​ ​ of Employees ​ ​ ​ of Total Research and development ​ 1,026 ​ 71.2 % Sales and marketing 288 20.0 % General and administrative, and others 127 8.8 % Total 1,441 100 % ​ We are subject to, and comply with, applicable labor law requirements, which may automatically make our employees subject to industry-wide collective bargaining agreements.
A director is not required to hold any shares in our company to qualify to serve as a director. 142 Table of Contents A director who to his or her knowledge is in any way, whether directly or indirectly, interested in a contract or proposed contract with our company is required to declare the nature of his or her interest at a meeting of our directors.
A director who to his or her knowledge is in any way, whether directly or indirectly, interested in a contract or proposed contract with our company is required to declare the nature of his or her interest at a meeting of our directors.
The following table summarizes, as of April 15, 2025, the number of ordinary shares underlying outstanding options or restricted share units that we granted to each of our directors and executive officers and to other individuals as a group. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ ​ ​ ​ ​ Options / ​ ​ ​ ​ ​ ​ ​ ​ Restricted Share ​ Exercise Price ​ ​ ​ ​ ​ Units (US$/Share) Date of Grant Date of Expiration Xueji (Jerry) Wang ​ — ​ — ​ — ​ — Liaohan (Leo) Chen ​ — ​ — ​ — ​ — Yi (Alex) Yang * 0.00005 January 5, 2021 January 4, 2031 Yan Zhang * (1) 0.00005 from February 21, 2021 to June 27, 2023 from February 20, 2031 to June 26, 2033 Sidney Xuande Huang ​ * (1) ​ 0.00005 ​ July 5, 2022 ​ July 4, 2029 Changheng Qiu ​ — ​ — ​ — ​ — Meng Xiong Kuok (alias GUO Mengxiong) ​ — ​ — ​ — ​ — Pak Tung Jason Yip ​ — ​ — ​ — ​ — Other grantees ​ 5,145,167 ​ 0.00005 ​ from May 12, 2017 to May 6, 2022 ​ from May 11, 2027 to May 5, 2032 ​ ​ 4,151,000 (1) ​ — ​ from June 16, 2021 to October 18, 2024 ​ from June 15, 2028 to October 17, 2034 * Less than 1% of our total outstanding shares.
The following table summarizes, as of March 31, 2026, the number of ordinary shares underlying outstanding options or restricted share units that we granted to each of our directors and executive officers and to other individuals as a group. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ ​ ​ ​ ​ Options / ​ ​ ​ ​ ​ ​ ​ ​ Restricted Share ​ Exercise Price ​ ​ ​ ​ ​ ​ ​ ​ Units ​ ​ ​ (US$/Share) ​ ​ ​ Date of Grant ​ ​ ​ Date of Expiration Xueji (Jerry) Wang ​ — ​ — ​ — ​ — Liaohan (Leo) Chen ​ — ​ — ​ — ​ — Yi (Alex) Yang — — — — Yan Zhang 59,550 (1)(2) nil to 0.0005 from February 21, 2022 to June 27, 2023 from December 14, 2032 to June 27, 2033 Sidney Xuande Huang ​ 10,000 (1) ​ — ​ July 5, 2022 ​ July 4, 2029 Changheng Qiu ​ — ​ — ​ — ​ — Meng Xiong Kuok (alias GUO Mengxiong) ​ — ​ — ​ — ​ — Pak Tung Jason Yip ​ — ​ — ​ — ​ — Other grantees ​ 2,611,182 (2) ​ 0.00005 ​ from May 12, 2017 to May 6, 2022 ​ from May 11, 2027 to May 5, 2032 ​ ​ 1,826,750 (1) ​ — ​ from June 16, 2021 to March 27, 2026 ​ from June 15, 2028 to March 26, 2036 (1) Restricted share units.
(8) 1,427,050 8,572,950 10,000,000 1.6 7.0 Notes: * Less than 1% of our total issued and outstanding shares on an as-converted basis. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class.
(8) 1,432,150 8,567,850 10,000,000 1.6 7.0 Notes: * For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class.
Kuok served as an independent non-executive director of TVS Motor Company Limited (a company listed on the National Stock Exchange of India Ltd., symbol: TVSMOTOR) from March 2021 to August 2024. Mr. Kuok received his bachelor ’ s degree in science from Cornell University in the United States in January 2007.
Kuok served as an independent non-executive director of TVS Motor Company Limited (a company listed on the National Stock Exchange of India Ltd., symbol: TVSMOTOR) from March 2021 to August 2024. Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ Number of ​ Number of ​ ​ ​ ​ ​ % of ​ ​ Class A ​ Class B ​ Total Number ​ % of ​ Aggregate ​ Ordinary Ordinary of Ordinary Beneficial Voting ​ ​ Shares ​ Shares ​ shares ​ Ownership ​ Power ** Directors and Executive Officers: † ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Xueji (Jerry) Wang (1) 75,320,130 43,379,870 118,700,000 19.5 41.0 Liaohan (Leo) Chen (2) 1,974,570 26,825,430 28,800,000 4.7 21.8 Yi (Alex) Yang 6,500,000 — 6,500,000 1.1 0.5 Yan Zhang * — * * * Sidney Xuande Huang ​ * ​ — ​ * ​ * ​ * Changheng Qiu ​ * ​ — ​ * ​ * ​ * Meng Xiong Kuok ​ — ​ — ​ — ​ — ​ — Pak Tung Jason Yip ​ — ​ — ​ — ​ — ​ — All directors and executive officers as a group 87,675,733 70,205,300 157,881,033 25.7 63.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: 65 Equity Partners Entities (3) 74,626,900 — 74,626,900 12.2 6.0 Tenet Group Limited (4) 68,793,080 34,806,920 103,600,000 17.0 33.6 Tencent entities (5) 58,299,749 — 58,299,749 9.6 4.7 NEA entities (6) 39,457,733 — 39,457,733 6.5 3.2 Unileo Limited (7) 1,974,570 26,825,430 28,800,000 4.7 21.8 Tuya Group Inc.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ Number of ​ Number of ​ ​ ​ ​ ​ % of ​ ​ Class A ​ Class B ​ Total Number ​ % of ​ Aggregate ​ ​ ​ ​ Ordinary ​ ​ ​ Ordinary ​ ​ ​ of Ordinary ​ ​ ​ Beneficial ​ ​ ​ Voting ​ ​ Shares ​ Shares ​ shares ​ Ownership ​ Power * Directors and Executive Officers: † ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Xueji (Jerry) Wang (1) 75,347,647 43,352,353 118,700,000 19.4 40.9 Liaohan (Leo) Chen (2) 1,989,100 26,810,900 28,800,000 4.7 21.7 Yi (Alex) Yang 6,500,000 — 6,500,000 1.1 0.5 Yan Zhang 126,536 — 126,536 0.0 0.0 Sidney Xuande Huang ​ 177,500 ​ — ​ 177,500 ​ 0.0 ​ 0.0 Changheng Qiu ​ 9,438 ​ — ​ 9,438 ​ 0.0 ​ 0.0 Meng Xiong Kuok ​ — ​ — ​ — ​ — ​ — Pak Tung Jason Yip ​ — ​ — ​ — ​ — ​ — All directors and executive officers as a group 84,255,221 70,163,253 154,313,474 25.2 63.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ 65 Equity Partners Entities (3) 74,626,900 — 74,626,900 12.2 6.0 Tenet Group Limited (4) 73,915,497 34,784,503 108,700,000 17.7 33.9 Tencent entities (5) 58,299,749 — 58,299,749 9.5 4.7 NEA entities (6) 39,457,733 — 39,457,733 6.4 3.2 Unileo Limited (7) 1,989,100 26,810,900 28,800,000 4.7 21.7 Tuya Group Inc.
The calculations in the table below are based on 609,721,949 ordinary shares outstanding as of April 15, 2025, consisting of 539,516,649 Class A ordinary shares (including 2,085,143 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our 2024 Share Scheme and 223,773 Class A ordinary shares represented by ADSs that have been repurchased by us from the open market) and 70,205,300 Class B ordinary shares. 147 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 613,286,104 ordinary shares outstanding as of March 31, 2026, consisting of 543,122,851 Class A ordinary shares (including 253,461 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our 2024 Share Scheme and 5,400 Class A ordinary shares that have been repurchased by us from the open market) and 70,163,253 Class B ordinary shares. 141 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
With the approval of the board of directors of any plan amendment to the extent necessary or desirable to comply with applicable law, the plan administrator may at any time amend, alter, suspend, or terminate the 2015 Plan; no amendment, alteration, suspension, or termination of the 2015 Plan shall materially and adversely affect any award previously granted pursuant to the 2015 Plan unless mutually agreed between the participant and the administrator, which agreement must be in writing and signed by the participant and the company. 140 Table of Contents As of the termination of the 2015 Plan in June 2024, (i) the number of underlying Shares pursuant to the outstanding options (including both vested and unvested) granted under the 2015 Plan amounted to 51,304,005 Class A Ordinary Shares, and (ii) the number of underlying Shares pursuant to the outstanding awards granted under the 2015 Plan amounted to 7,532,250 Class A Ordinary Shares.
With the approval of the board of directors of any plan amendment to the extent necessary or desirable to comply with applicable law, the plan administrator may at any time amend, alter, suspend, or terminate the 2015 Plan; no amendment, alteration, suspension, or termination of the 2015 Plan shall materially and adversely affect any award previously granted pursuant to the 2015 Plan unless mutually agreed between the participant and the administrator, which agreement must be in writing and signed by the participant and the company.
As of April 15, 2025, (i) options to purchase a total of nil ordinary shares were outstanding under the 2024 Share Scheme, and nil of such options had vested and become exercisable; and (ii) restricted share units to receive a total of 160,000 ordinary shares were outstanding under the 2024 Share Scheme.
As of March 31, 2026, (i) options to purchase a total of 56,980,259 ordinary shares were outstanding under the 2024 Share Scheme, and none of such options had vested and become exercisable; and there were restricted share units to receive a total of 439,000 ordinary shares outstanding under the 2024 Share Scheme.
As of April 15, 2025, (i) remaining options granted based on 2015 Plan to purchase a total of 5,885,967 ordinary shares were outstanding; and (ii) remaining restricted share units granted based on 2015 Plan to receive a total of 4,224,750 ordinary shares were outstanding. 2024 Share Scheme We adopted a share scheme, or the 2024 Share Scheme, on June 20, 2024.
As of March 31, 2026, (i) remaining options granted based on 2015 Plan to purchase a total of 2,651,982 ordinary shares were outstanding; and (ii) remaining restricted share units granted based on 2015 Plan to receive a total of 1,506,500 ordinary shares were outstanding. 2024 Share Scheme We adopted a share scheme, or the 2024 Share Scheme, on June 20, 2024.
(1) Represents (i) 1,427,050 Class A ordinary shares and 8,572,950 Class B ordinary shares held of record by Tuya Group Inc., a business company with limited liability incorporated under the laws of BVI wholly owned by Xueji (Jerry) Wang, (ii) 68,793,080 Class A ordinary shares and 34,806,920 Class B ordinary shares held of record by Tenet Group Limited a British Virgin Islands company, and (iii) 5,100,000 Class A ordinary shares held of record by Xueji (Jerry) Wang.
(1) Represents (i) 1,432,150 Class A ordinary shares and 8,567,850 Class B ordinary shares held of record by Tuya Group Inc., a business company with limited liability incorporated under the laws of BVI wholly owned by Xueji (Jerry) Wang, and (ii) 73,915,497 Class A ordinary shares and 34,784,503 Class B ordinary shares held of record by Tenet Group Limited, a British Virgin Islands company.
To our knowledge, as of April 15, 2025, a total of 63,776,857 Class A ordinary shares outstanding were held by two record holders in the United States, representing 10.5% of our total issued and outstanding ordinary shares on an as-converted basis as of such date.
To our knowledge, as of April 13, 2026, a total of 98,870,448 Class A ordinary shares outstanding were held by one record holder in the United States, representing 16.1% of our total issued and outstanding ordinary shares on an as-converted basis as of such date.
Each of Xueji (Jerry) Wang and Liaohan (Leo) Chen serves as the co-chairman of our board of directors.
Each of Xueji (Jerry) Wang and Liaohan (Leo) Chen serves as the co-chairman of our board of directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Pak Tung Jason Yip has served as our director since July 2022. Mr. Yip is responsible for providing independent professional opinion and judgment to our board of directors. Mr. Yip worked in the audit division of PricewaterhouseCoopers in Canada from May 2003 to May 2007. He was a manager at PricewaterhouseCoopers in Hong Kong from June 2007 to June 2010.
Yip worked in the audit division of PricewaterhouseCoopers in Canada from May 2003 to May 2007. He was a manager at PricewaterhouseCoopers in Hong Kong from June 2007 to June 2010. Mr.
Liaohan (Leo) Chen co- founded Tuya in 2014 and currently serves as the co-chairman of our board of directors and our president. Mr. Chen is responsible for the overall strategies, management, business development and overall customer relationship of Tuya. Prior to co-founding Tuya, Mr. Chen co-founded PHPWind. Mr.
Mr. Chen is responsible for the overall strategies, management, business development and overall customer relationship of Tuya. Prior to co-founding Tuya, Mr. Chen co-founded PHPWind. Mr. Chen served as the management at Hangzhou Detian Information Technology Co., Ltd. from 2006 to May 2008. Mr.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. 133 Table of Contents Share Incentive Plan 2015 Equity Incentive Plan We adopted an employee equity incentive plan, or the 2015 Plan, on December 23, 2014, which was amended in July 2020, February 2021 and June 2022 and was terminated in June 2024.
Wang received a bachelor’s degree in information and computing science from Zhejiang Sci-Tech University in the PRC in June 2005. Mr. Wang was recognized by Forbes as a member of China’s Thirty Entrepreneurs under 30 in February 2012, and was named by Fortune China as one of China’s Forty Business Elites under 40 in April 2021.
Wang was recognized by Forbes as a member of China’s Thirty Entrepreneurs under 30 in February 2012, and was named by Fortune China as one of China’s Forty Business Elites under 40 in April 2021. 131 Table of Contents Liaohan (Leo) Chen co- founded Tuya in 2014 and currently serves as the co-chairman of our board of directors and our president.
Removed
Share Incentive Plan 2015 Equity Incentive Plan We adopted an employee equity incentive plan, or the 2015 Plan, on December 23, 2014, which was amended in July 2020, February 2021 and June 2022 and was terminated in June 2024.
Added
Wang received a bachelor’s degree in information and computing science from Zhejiang Sci-Tech University in the PRC in June 2005. Mr.
Added
Kuok received his bachelor ’ s degree in science from Cornell University in the United States in January 2007. 132 Table of Contents Pak Tung Jason Yip has served as our director since July 2022. Mr. Yip is responsible for providing independent professional opinion and judgment to our board of directors. Mr.
Added
We have also entered into indemnification agreements with each of our directors and executive officers.
Added
As of the termination of the 2015 Plan in June 2024, (i) the number of underlying Shares pursuant to the outstanding options (including both vested and unvested) granted under the 2015 Plan amounted to 51,304,005 Class A Ordinary Shares, and (ii) the number of underlying Shares pursuant to the outstanding awards granted under the 2015 Plan amounted to 7,532,250 Class A Ordinary Shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—6.E. Share Ownership.” 7.B. Related Party Transactions Contractual Arrangements See “Item 4. Information on the Company—4.C.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—6.E. Share Ownership.” 7.B. Related Party Transactions Historical Contractual Arrangements See “Item 4. Information on the Company—4.C.
Organizational Structure—Contractual Arrangements with The VIE and The VIE’s Registered Shareholders” for a description of the contractual arrangements by and among our PRC subsidiary, the VIE and the shareholders of the VIE. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—6.B. Compensation—Employment Agreements and Indemnification Agreements.” Share Incentive Plan See “Item 6.
Organizational Structure—Historical Contractual Arrangements with the Former VIE and the Former VIE’s Registered Shareholders” for a description of the historical contractual arrangements by and among our PRC subsidiary, the former VIE and the shareholders of the former VIE. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—6.B.
Directors, Senior Management and Employees—6.B. Compensation—Share Incentive Plan.” Shareholders Agreement As of the date of this annual report, all provisions and rights under our shareholders agreement dated September 11, 2019 have been terminated. Other Material Related Party Transactions There were no other material related party transactions during year ended December 31, 2024. 7.C.
Compensation—Employment Agreements and Indemnification Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—6.B. Compensation—Share Incentive Plan.” Shareholders Agreement As of the date of this annual report, all provisions and rights under our shareholders agreement dated September 11, 2019 have been terminated.
Removed
Interests of Experts and Counsel Not applicable. ​ 151 Table of Contents
Added
Other Material Related Party Transactions There were no other material related party transactions during year ended December 31, 2025. 7.C. Interests of Experts and Counsel Not applicable. ​ 145 Table of Contents

Other TUYA 10-K year-over-year comparisons