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Tuya Inc.

Tuya Inc.TUYA财报

NYSE · 信息技术 · 服务-预包装软件

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 — 2023 vs 2024

Top changes in Tuya Inc.'s 2024 20-F

1274 paragraphs added · 1282 removed · 318 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

142 edited+29 added−508 removed365 unchanged
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 IoT 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 IoT PaaS and SaaS markets are at a relatively early stage of development and are constantly evolving.
Moreover, the IoT cloud industry, including the IoT PaaS market and the IoT SaaS market, is subject to rapid technological change, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.
Moreover, the IoT cloud industry, including the IoT PaaS market and the SaaS market, is subject to rapid technological change, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.
We have experienced lower growth in revenues in the first quarter as a result the reduced capacity of OEM customers located in China due to the Lunar New Year.
We have experienced lower growth in revenues in the first quarter as a result of the reduced capacity of OEM customers located in China due to the Lunar New Year.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future. Tuya Inc. is a holding company and we rely on dividends paid by our wholly foreign-owned enterprise in China for our cash needs.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future. Tuya Inc. is a holding company and we rely mainly on dividends paid by our wholly foreign-owned enterprise in China for our cash needs.
Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue an adverse report if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. 42 Table of Contents If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue an adverse report if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. 43 Table of Contents If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
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.
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.
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.
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.
We expect to continue to devote significant resources to research and development activities. We also expect to continue to incur substantial sales and marketing expenses in acquiring and retaining customers and enhancing our brand awareness, and incur substantial general and administrative expenses including those associated with operating as a public company.
We expect to continue to devote significant resources to research and development activities and expect to continue to incur substantial sales and marketing expenses in acquiring and retaining customers and enhancing our brand awareness, and incur substantial general and administrative expenses including those associated with operating as a public company.
In addition, we or certain of our directors or officers may, from time to time, be a target for lawsuits in the future, including putative class action lawsuits brought by shareholders and lawsuits against our directors and officers as a result of their position in other public companies.
We or certain of our directors or officers may, from time to time, be a target for lawsuits in the future, including putative class action lawsuits brought by shareholders and lawsuits against our directors and officers as a result of their position in other public companies.
For example, foreign investors are generally not allowed to own more than 50% of the equity interests in an information service provider or other value-added telecommunication service provider (other than operating e-commerce, domestic multiparty communication, storage and forwarding and call center) and the major foreign investor in a value-added telecommunication service provider in China must have experience in providing value-added telecommunication services overseas and maintain a good track record in accordance with the Encouraged Industries Catalog for Foreign Investment (2022 version), the Special Administrative Measures for Foreign Investment Access (Negative List (2021), or the Negative List (2021), and other applicable laws and regulations.
For example, foreign investors are generally not allowed to own more than 50% of the equity interests in an information service provider or other value-added telecommunication service provider (other than operating e-commerce, domestic multiparty communication, storage and forwarding and call center) and the major foreign investor in a value-added telecommunication service provider in China must have experience in providing value-added telecommunication services overseas and maintain a good track record in accordance with the Encouraged Industries Catalog for Foreign Investment (2022 version), the Special Administrative Measures for Foreign Investment Access (Negative List (2024), or the Negative List (2024), and other applicable laws and regulations.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, scale our infrastructure, develop product enhancements and to respond to business challenges could be significantly impaired, and our business, operating results and financial condition may be adversely affected. 39 Table of Contents We are subject to the uncertainties associated with the regulations on listing and securities offerings conducted overseas by China-based companies proposed and/or enacted in China and the United States.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, scale our infrastructure, develop product enhancements and to respond to business challenges could be significantly impaired, and our business, operating results and financial condition may be adversely affected. 40 Table of Contents We are subject to the uncertainties associated with the regulations on listing and securities offerings conducted overseas by China-based companies proposed and/or enacted in China and the United States.
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.
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.
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.
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.
For details, see the risk factor with the same heading on page 44 of this annual report. ● We rely on contractual arrangements with the VIE and its registered shareholders to use, or otherwise benefit from, certain licenses and approvals we may need in the future, which may not be as effective as direct ownership in providing operational control and could adversely affect our business, operating results and financial condition.
For details, see the risk factor with the same heading on page 45 of this annual report. ● We rely on contractual arrangements with the VIE and its registered shareholders to use, or otherwise benefit from, certain licenses and approvals we may need in the future, which may not be as effective as direct ownership in providing operational control and could adversely affect our business, operating results and financial condition.
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.
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.
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.
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.
To the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the generative AI tools used in our business, or if we experience cybersecurity breaches or incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, publicity, contractual or other rights.
To the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the AI tools or capabilities used in our business, or if we experience cybersecurity breaches or incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, publicity, contractual or other rights.
For details, see the risk factor with the same heading on page 54 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 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.
See “—We and certain of our current and former directors and officers have been 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.” We face inventory obsolescence, shortage or excess risks.
Business Overview—Insurance.” Furthermore, lack of any insurance coverage, or any failure of any insurance policy providing adequate coverage to cover any potential claims under such policy could leave us exposed to uninsured risk and could have a material adverse effect on our business or financial results. 43 Table of Contents We have granted, and may continue to grant, share-based awards, which may increase our share-based compensation and may have an adverse effect on our results of operations.
Business Overview — Insurance. ” Furthermore, lack of any insurance coverage, or any failure of any insurance policy providing adequate coverage to cover any potential claims under such policy could leave us exposed to uninsured risk and could have a material adverse effect on our business or financial results. 44 Table of Contents We have granted, and may continue to grant, share-based awards, which may increase our share-based compensation and may have an adverse effect on our results of operations.
For details, see the risk factor with the same heading on page 46 of this annual report. 9 Table of Contents ● Contractual arrangements we have entered into with the VIE may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment.
For details, see the risk factor with the same heading on page 47 of this annual report. 9 Table of Contents ● Contractual arrangements we have entered into with the VIE may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment.
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.
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 example, the output produced by generative AI tools may include information subject to certain rights of publicity or privacy laws or constitute an unauthorized derivative work of the copyrighted material used in training the underlying AI model, any of which could also create a risk of liability for us, or adversely affect our business or operations.
For example, the output produced by AI tools or capabilities may include information subject to certain rights of publicity or privacy laws or constitute an unauthorized derivative work of the copyrighted material used in training the underlying AI model, any of which could also create a risk of liability for us, or adversely affect our business or operations.
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. ​ 38 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. ​ 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.
For details, see the risk factor with the same heading on page 61 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 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.
If the fair value of our short-term investments and long-term investments measured at fair value were to fluctuate, our business, financial condition and results of operations could be materially adversely affected. 41 Table of Contents We are subject to credit risk related to defaults of customers, and any significant default on our accounts receivable could materially and adversely affect our liquidity, financial condition and results of operations.
If the fair value of our short-term investments and long-term investments measured at fair value were to fluctuate, our business, financial condition and results of operations could be materially adversely affected. 42 Table of Contents We are subject to credit risk related to defaults of customers, and any significant default on our accounts receivable could materially and adversely affect our liquidity, financial condition and results of operations.
For details, see the risk factor with the same heading on page 47 of this annual report. ● We may lose the ability to use and benefit from assets held by the VIE that are supplementary to the operation of our business if the VIE goes bankrupt or becomes subject to dissolution or liquidation proceeding.
For details, see the risk factor with the same heading on page 48 of this annual report. ● We may lose the ability to use and benefit from assets held by the VIE that are supplementary to the operation of our business if the VIE goes bankrupt or becomes subject to dissolution or liquidation proceeding.
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.
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.
In the course of preparing and auditing our consolidated financial statements for the year ended December 31, 2023, we and our independent registered public accounting firm did not identify a material weakness in our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2023. See “Item 15.
In the course of preparing and auditing our consolidated financial statements for the year ended December 31, 2024, we and our independent registered public accounting firm did not identify a material weakness in our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2024. See “Item 15.
For details, see the risk factor with the same heading on page 47 of this annual report. ● Substantial uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and the recently amended PRC Company Law and how they may impact the viability of our current corporate structure, corporate governance and operations.
For details, see the risk factor with the same heading on page 48 of this annual report. ● Substantial uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and the recently amended PRC Company Law and how they may impact the viability of our current corporate structure, corporate governance and operations.
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.
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.
For details, see the risk factor with the same heading on page 51 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 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.
Consolidated Statements and Other Financial Information—Legal and Administrative Proceedings,” we are not a party to any other material legal or administrative proceedings. However, we or our directors, management, employees and shareholders have been, and may from time to time in the future be, subject to or involved in various claims, controversies, lawsuits, other legal and administrative proceedings and fines.
Consolidated Statements and Other Financial Information—Legal and Administrative Proceedings,” we are not a party to any other material legal or administrative proceedings. However, we or our directors, management, employees and shareholders have been, and may from time to time in the future be, subject to or involved in various claims, disputes, lawsuits, other legal and administrative proceedings and fines.
For details, see the risk factor with the same heading on page 49 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 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 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 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.
We provide an advanced platform and suite of software development tools, products, and services designed to enable developers to create innovative smart devices. While we strive to foster innovation and support the development of high-quality smart devices, there is a risk that developers might use our platform, tools, products, or services improperly.
We provide an advanced platform and suite of software development tools, products, services and AI capabilities designed to enable developers to create innovative smart devices. While we strive to foster innovation and support the development of high-quality smart devices, there is a risk that developers might use our platform, tools, products, services, or AI capabilities improperly.
Our use of such third-party suppliers who manufacture the modules and smart devices involves a number of risks, including: ● insufficient capacity or delays in meeting our demand; ● inadequate manufacturing yields, inferior quality and excessive costs; ● failure by our suppliers to manufacture products that meet the agreed-upon specifications; ● failure by our suppliers to procure raw materials and components on commercially reasonable terms, or at all, or to provide or allocate adequate, or any, manufacturing or other capacity for our products; ● failure by our suppliers to comply with the relevant regulatory requirements, including those relating to the manufacturing process; ● limited warranties on products supplied to us; ● potential increases in prices; ● a lack of direct control over delivery schedules or product quantity and quality; ● delays in product shipment, shortages, a decrease in product quality and/or higher expenses; ● increased exposure to potential misappropriation of our intellectual property; and ● disruptions to supply chain, manufacturing process and business operation including those following the outbreak of the COVID-19 pandemic.
Our use of such third-party suppliers who manufacture the modules and smart devices involves a number of risks, including: ● insufficient capacity or delays in meeting our demand; ● inadequate manufacturing yields, inferior quality and excessive costs; ● failure by our suppliers to manufacture products that meet the agreed-upon specifications; ● failure by our suppliers to procure raw materials and components on commercially reasonable terms, or at all, or to provide or allocate adequate, or any, manufacturing or other capacity for our products; ● failure by our suppliers to comply with the relevant regulatory requirements, including those relating to the manufacturing process; ● limited warranties on products supplied to us; ● potential increases in prices; ● a lack of direct control over delivery schedules or product quantity and quality; ● delays in product shipment, shortages, a decrease in product quality and/or higher expenses; ● increased exposure to potential misappropriation of our intellectual property; and ● disruptions to supply chain, manufacturing process and business operation.
For details, see the risk factor with the same heading on page 45 of this annual report. ● Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have an adverse effect on part of our business.
For details, see the risk factor with the same heading on page 46 of this annual report. ● Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have an adverse effect on part of our business.
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.
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.
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.
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.
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.
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.
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.
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.
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; 25 Table of Contents ● 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 the fees that we pay cloud infrastructure 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 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; 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.
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 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.
However, as of the date of this annual report, the criteria for determining the circumstances that “affect or may affect national security” for the purpose of the Draft Cyber Data Security Regulation remain unclear and are subject to further clarification by the CAC.
However, as of the date of this annual report, the criteria for determining the circumstances that “affect or may affect national security” for the purpose of the Regulation on Cyber Data Security remain unclear and are subject to further clarification by the CAC.
For details, see the risk factor with the same heading on page 46 of this annual report. ● The registered shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect part of our business.
For details, see the risk factor with the same heading on page 47 of this annual report. ● The registered shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect part of our business.
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 68 of this annual report. ● Techniques employed by short sellers may drive down the market price of our ADSs or Class A ordinary shares.
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.
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.
In addition, our inability to obtain certain licenses or other rights might require us to engage in litigation regarding these matters, which could have a material adverse effect on our business, results of operations, prospects and financial condition. ​ 37 Table of Contents We and certain of our current and former directors and officers have been 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.
In addition, our inability to obtain certain licenses or other rights might require us to engage in litigation regarding these matters, which could have a material adverse effect on our business, results of operations, prospects and financial condition. ​ 38 Table of Contents 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.
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.
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.
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 effect of differing governmental responses to the COVID-19 pandemic or other epidemics and any continuing impact of the pandemic on individuals, businesses and economies in various foreign jurisdictions; ● 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; 22 Table of Contents ● 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; ● 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.
Additionally, any content created by us using generative AI tools may not be subject to copyright protection which may adversely affect our intellectual property rights in, or ability to commercialize or use, any such content.
Additionally, any content created by us using AI tools or capabilities may not be subject to copyright protection which may adversely affect our intellectual property rights in, or ability to commercialize or use, any such content.
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 65 of this annual report. ● The concentration of our shares’ voting power limited our shareholders’ ability to influence corporate matters.
We might also face additional difficulties associated with providing customer support and warranties to our smart device distribution and smart solution customers as we may not be able to control customer service terms of third-party suppliers, such as outsourcing manufacturing suppliers or OEMs who manufacture smart devices for our smart solutions business.
We might also face additional difficulties associated with providing customer support and warranties to our customers as we may not be able to control customer service terms of third-party suppliers, such as outsourcing manufacturing suppliers or OEMs who manufacture smart devices for our smart solutions business.
For details, see the risk factor with the same heading on page 48 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 49 of this annual report. ● There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.
Any uninsured damage to our facilities or technology infrastructures or disruption of our business operations could require us to incur substantial costs and divert our resources, which could have an adverse effect on our business, financial condition and results of operations. For more information, see “Item 4. Information on the Company—4.B.
Any uninsured damage to our facilities or technology infrastructures or disruption of our business operations could require us to incur substantial costs and divert our resources, which could have an adverse effect on our business, financial condition and results of operations. For more information, see “ Item 4. Information on the Company — 4.B.
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 2023 and there is a significant risk that we will be a PFIC for 2024 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 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.
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 IoT PaaS are embedded have fluctuated in the past and is likely to continue to fluctuate in the future.
Furthermore, certain lessors of our leased properties have not provided us with valid property ownership certificates or any other documentation proving their right to lease those properties to us.
Furthermore, the lessors of certain of our leased properties have not provided us with valid property ownership certificates or other documentation proving their right to lease those properties to us.
We use third-party suppliers to manufacture the modules where edge capabilities of IoT PaaS are embedded, and in some circumstances (such as our smart device distribution business) finished smart devices. we are dependent on third-party suppliers to manufacture the modules and smart devices using their equipment and technology.
We use third-party suppliers to manufacture the modules where edge capabilities of IoT PaaS are embedded, and in some circumstances (such as our Smart Solution business) finished smart devices. We are dependent on third-party suppliers to manufacture the modules and smart devices using their equipment and technology.
If enacted in this form or a similar form, this regulatory framework is expected to have a material impact on the way AI is regulated in the EU, and together with developing regulatory guidance and judicial decisions in this area, may affect our use of AI and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us and could adversely affect our business, financial condition and results of operations.
This regulatory framework is expected to have a material impact on the way AI is regulated in the EU, and together with developing regulatory guidance and judicial decisions in this area, may affect our use of AI and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us and could adversely affect our business, financial condition and results of operations.
For example, we may introduce new SaaS products for new industry verticals such as the home energy management system and mini-programs for the energy-saving sector, with which we have little or no prior experience. Such efforts may require us to contribute a substantial amount of additional human capital and financial resources.
For example, we may introduce new AI capabilities for smart devices and SaaS products for new industry verticals such as the home energy management system and mini-programs for the energy-saving sector, with which we have little or no prior experience. Such efforts may require us to contribute a substantial amount of additional human capital and financial resources.
The inventory write-downs, net, increased US$1.8 million thousand and US$4.1 million in 2021 and 2022, decreased US$0.01 million in 2023, 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, 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.
However, we cannot assure you that we can accurately predict these trends and events and avoid under-stocking or overstocking inventory, or that our inventory management measures will be implemented effectively so that we will not have significant levels of inventory obsolescence, shortage or excess.
However, we cannot assure you that we can accurately predict these trends and events and avoid understocking or overstocking inventory, or that our inventory management measures will be implemented effectively so that we will not have significant levels of inventory obsolescence, shortage or excess.
For details, see the risk factor with the same heading on page 12 of this annual report. 8 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.
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.
However, it is difficult to predict the end users’ usage levels of smart devices accurately and the loss of customers or reductions in the end users’ usage levels may have a negative impact on our business, results of operations and financial condition.
However, it is difficult to predict the end users ’ usage levels of smart devices accurately and the loss of customers or reductions in the end users ’ usage levels may have a negative impact on our business, results of operations and financial condition.
GAAP. 44 Table of Contents In the opinion of Jia Yuan Law Offices, our PRC legal counsel, (i) the ownership structures of our wholly foreign-owned enterprise and the VIE in China are not in violation of provisions of applicable PRC laws and regulations currently in effect; and (ii) the contractual arrangements between our wholly foreign-owned enterprise, the VIE and its shareholders governed by PRC law are not in violation of provisions of applicable PRC laws or regulations currently in effect, and valid and binding upon each party to such arrangements and, save as disclosed in “Item 4.
GAAP. 45 Table of Contents In the opinion of Jia Yuan Law Offices, our PRC legal counsel, (i) the ownership structures of our wholly foreign-owned enterprise and the VIE in China are not in violation of provisions of applicable PRC laws and regulations currently in effect; and (ii) the contractual arrangements between our wholly foreign-owned enterprise, the VIE and its shareholders governed by PRC law are not in violation of provisions of applicable PRC laws or regulations currently in effect, and valid and binding upon each party to such arrangements and, save as disclosed in “
For details, see the risk factor with the same heading on page 11 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 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.
These challenges may be more pronounced in the future if the demand, downstream inventory patterns and prices of chips continue to fluctuate.
These challenges may be more pronounced in the future if the demand, downstream inventory patterns and prices of chips fluctuate.
In addition, if our business partners choose not to partner with us, or choose to form collaborations with our competitors’ platforms, our business, financial condition and results of operations could be harmed.
In addition, if our business partners choose not to partner with us, or choose to form collaborations with our competitors ’ platforms, our business, financial condition and results of operations could be harmed.
For details, see the risk factor with the same heading on page 47 of this annual report.
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 59 of this annual report.
For details, see the risk factor with the same heading on page 64 of this annual report.
We recorded other comprehensive income from foreign currency translation of US$1.5 million in 2021, other comprehensive loss from foreign currency translation of US$14.9 million in 2022 and US$2.7 million in 2023. 40 Table of Contents The value of the Renminbi against the U.S. dollar and other currencies has in the past fluctuated significantly, and may in the future continue to do so, affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government.
We recorded other comprehensive loss from foreign currency translation of US$14.9 million in 2022, US$2.7 million in 2023 and US$2.6 million in 2024. 41 Table of Contents The value of the Renminbi against the U.S. dollar and other currencies has in the past fluctuated significantly, and may in the future continue to do so, affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government.
We also use various third-party cloud-hosting providers such as AWS, Microsoft Azure and Tencent Cloud to provide cloud infrastructure for our platform. Our IoT PaaS and Industry SaaS products and value-added services 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 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.
Our five largest customers in the aggregate accounted for approximately 17.2%, 11.7% and 13.1% of our total revenue in 2021, 2022 and 2023, respectively. Our ability to maintain close relationships with major customers is essential to the success of our business.
Our five largest customers in the aggregate accounted for approximately 11.7%, 13.1% and 13.0% of our total revenue in 2022, 2023 and 2024, respectively. Our ability to maintain close relationships with major customers is essential to the success of our business.
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. 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. 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.
For details of related risks, see “Item 3. Key Information—3.D. Risk Factors—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.” 3.A. [Reserved] 3.B. Capitalization and Indebtedness Not applicable. 3.C.
Item 3. Key Information — 3.D. Risk Factors — 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. ” 3.A. [Reserved] 3.B. Capitalization and Indebtedness Not applicable. 3.C.
Our results may fluctuate from period to period, and if we fail to meet securities analysts’ and investors’ expectations, the trading price of our ADSs and Class A ordinary shares and the value of your investment could decline substantially.
Our results may fluctuate from period to period, and if we fail to meet securities analysts ’ and investors ’ expectations, the trading price of our ADSs and Class A ordinary shares and the value of your investment could decline substantially.
For details, see the risk factor with the same heading on page 63 of this annual report. ● Because we do not expect to pay dividends in the foreseeable 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 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.
In addition, any ordinary shares that we issue under our 2015 Plan would dilute the percentage ownership held by public investors.
In addition, any ordinary shares that we issue under our 2015 Plan and the 2024 Share Scheme would dilute the percentage ownership held by public investors.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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If an issuer meets both of the following criteria, the overseas securities offering and listing conducted by such issuer shall be deemed to be an indirect overseas offering subject to the filing procedures set forth under the New Overseas Listing Rules: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year are derived from PRC domestic companies; and (ii) the issuer’s business activities are substantially conducted in mainland China, or its principal place(s) of business are located in mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in mainland China.
If an issuer meets both of the following criteria, the overseas securities offering and listing conducted by such issuer shall be deemed as an indirect overseas offering subject to the filing procedures set forth under the New Overseas Listing Rules: (i) 50% or more of the issuer ’ s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year are derived from PRC domestic companies; and (ii) the issuer ’ s business activities are substantially conducted in mainland China, or its principal place(s) of business are located in mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in mainland China.
These self-reinforcing network effects further increase our brand awareness and generate word-of-mouth referrals, helping us build an extensive, vibrant and increasingly interconnected IoT ecosystem. Our offerings enable customers across a broad range of industry verticals, such as smart home, smart business, renewable energy, education, agriculture, outdoors and sport, and entertainment.
These self-reinforcing network effects further increase our brand awareness and generate word-of-mouth referrals, helping us build an extensive, vibrant and increasingly interconnected AIoT ecosystem. ​ Our offerings enable customers across a broad range of industry verticals, such as smart home, smart business, renewable energy, education, agriculture, outdoors and sport, and entertainment.
In March 2021, our ADSs commenced trading on the NYSE under the symbol “TUYA.” We raised, from our initial public offering and from the underwriters’ exercise of option to purchase additional ADSs, approximately US$904.7 million in net proceeds after deducting underwriting commissions and the offering expenses paid by us.
In March 2021, our ADSs commenced trading on the NYSE under the symbol “ TUYA. ” We raised, from our initial public offering and from the underwriters ’ exercise of option to purchase additional ADSs, approximately US$904.7 million in net proceeds after deducting underwriting commissions and the offering expenses paid by us.
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. 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. 75 Table of Contents 4.B.
Pursuant to the New Overseas Listing Rules, an issuer listed in an overseas market that intends to effect any follow-on offering in the same overseas market where it has previously offered and listed securities should, through its major operating entity incorporated in the PRC, file relevant materials with the CSRC within three business days after the completion of any such follow-on offering.
Pursuant to the New Overseas Listing Rules, an issuer listed in an overseas market that contemplates any follow-on offering in the same overseas market where it has previously offered and listed securities should, through its major operating entity incorporated in the PRC, file the required materials with the CSRC within three business days after the completion of such follow-on offering.
In September 2014, Tuya (HK) Limited, currently a wholly owned subsidiary of Tuya Inc., was incorporated under the laws of Hong Kong. In December 2014, Hangzhou Tuya Information Technology Co., Ltd. (formerly known as Hangzhou Aixiangji Technology Co., Ltd.) (“Tuya Information”) was incorporated in the PRC. Tuya Information is currently a wholly owned subsidiary of Tuya (HK) Limited.
In September 2014, Tuya (HK) Limited, currently a wholly owned subsidiary of Tuya Inc., was incorporated under the laws of Hong Kong. In December 2014, Hangzhou Tuya Information Technology Co., Ltd. (formerly known as Hangzhou Aixiangji Technology Co., Ltd.) ( “ Tuya Information ” ) was incorporated in the PRC.
As a result, we believe that as our platform continues to grow, more brands and OEMs want to join our platform to integrate their devices onto the single user interface through which devices from other brands are connected.
As a result, we believe that as our platform continues to grow, more brands and OEMs want to join our platform to integrate their devices onto the single user interface using the same “ brain ” , through which devices from other brands are connected.
We also offer businesses, developers and end users a diverse range of other cloud-based value-added services to improve their ability to develop and manage IoT experiences. Additionally, we offer smart solutions for IoT devices in which we provide customers with smart devices that integrated intelligent software capabilities beyond IoT.
We also offer businesses, developers and end users a diverse range of other cloud-based value-added services to improve their ability to develop and manage IoT experiences. Additionally, we offer smart solutions for smart devices in which we provide customers with smart devices that integrated AI and intelligent software capabilities beyond IoT. Our business model is both unique and innovative.
Our SaaS offering includes Industry SaaS that enables businesses to deploy, connect, and manage large numbers and different types of smart devices in different vertical scenarios, Cloud-based Software Value-added Services that provide end users with additional smart scenario features such as cloud storage, and Cube Smart Private Cloud Solution that enables large-scale conglomerates to build their own autonomous and controllable IoT platforms.
Our SaaS offering for those who use smart devices includes industry SaaS that enables businesses to deploy, connect, and manage large numbers and different types of smart devices in different vertical scenarios for spatial intelligence, cloud-based software value-added services that provide end users with additional smart scenario features such as cloud storage, AI audio and video interaction, and Cube Smart Private Cloud Solution that enables large-scale conglomerates to build their own autonomous and controllable smart business platforms.
Furthermore, according to New Overseas Listing Rules, after an issuer has completed its offering and listed its securities on an overseas stock exchange, the issuer shall submit a report to the CSRC within three business days after the occurrence and public disclosure of any material events, including: (i) a change of control; (ii) investigations of or sanctions imposed on the issuer by overseas securities regulatory agencies or other relevant competent authorities; (iii) changes of listing status or transfers of the listing segment; and (iv) a voluntary or mandatory delisting.
Furthermore, according to the New Overseas Listing Rules, after an issuer has completed its offering and listed its securities on an overseas stock exchange, the issuer shall submit a report to the CSRC within three business days after the occurrence and public disclosure of certain material events, including (i) a change of control, (ii) investigations of or sanctions imposed on the issuer by overseas securities regulatory agencies or other relevant competent authorities, (iii) changes of listing status or transfers of the listing segment, (iv) a voluntary or mandatory delisting and (v) a material change in its main business operation, as a result of which that issuer is no longer subject to the filing requirements under the New Overseas Listing Rules.
In June 2018, we effected a 10-for-1 share subdivision, following which each of our issued and unissued ordinary shares and preferred shares was subdivided into 10 ordinary shares and preferred shares, respectively.
Tuya Information is currently a wholly owned subsidiary of Tuya (HK) Limited. In June 2018, we effected a 10-for-1 share subdivision, following which each of our issued and unissued ordinary shares and preferred shares was subdivided into 10 ordinary shares and preferred shares, respectively.
End users of smart devices demand a single interface to interact with various types of devices from different brands—an experience similar to using different apps on one smartphone. Our platform provides an open architecture to connect any device from any brand, while enabling users to manage all devices across brands through a single portal.
Our platform provides an open architecture to connect any device from any brand, while enabling users to manage all devices across brands through a single portal.
The M&A Rules, among other things, further prescribed that a special purpose vehicle, formed for overseas listing purposes and controlled directly or indirectly by PRC companies or individuals, shall be approved by MOFCOM prior to its establishment and obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
The M&A Rules include, among other things, provisions that purport to require that an offshore special purpose vehicle (the “ SPV ” ) that is controlled by PRC domestic companies or individuals and that has been formed for the purpose of an overseas listing of securities through acquisitions of PRC domestic companies or assets to obtain the approval of the CSRC prior to the listing and trading of such SPV ’ s securities on an overseas stock exchange.
Fines and warnings will be imposed on persons-in-charge and other persons who are directly liable. In addition, fines will also be imposed on controlling shareholders and actual controllers of the domestic company who initiate or cause the noncompliance activities described above. ​ 105 Table of Contents 4.C.
Fines and warnings will be imposed on persons-in-charge and other persons who are directly liable. In addition, fines will also be imposed on controlling shareholders and actual controllers of the domestic company who initiate or cause the aforesaid non-compliance activities. As these measures and rules are relatively new, it remains uncertain as to their implementation.
The latest amendment 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 provides new requirements for the time limit for contribution of capital, the company ’ s organizational structure, corporate governance, and the rights and obligations of shareholders, which also apply to foreign investment enterprises in the PRC.
In addition, pursuant to the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or the SAFE Circular 7, which was issued by the SAFE on February 15, 2012, employees, directors, supervisors, and other senior management participating in any equity incentive plan of an overseas publicly listed company who are PRC citizens or who are non-PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic agency as regulated in SAFE Circular 7.
Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries of such overseas-listed company, and complete certain other procedures.
In 2023, we served approximately 6,100 customers and our IoT 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 and Haier NAHUI. Our IoT PaaS currently enables businesses and developers across over 200 countries and regions globally to develop smart devices in approximately 2,900 categories.
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.
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. ​ 104 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.
As a follow-up, on February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (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 on March 31, 2023.
Moving forward, we remain committed to our mission of “building an IoT developer ecosystem and enabling everything to be smart.” OVERVIEW We have pioneered a purpose-built IoT cloud development platform that delivers a full suite of offerings, including Platform-as-a-Service (“PaaS”), Software-as-a-Service (“Saas”) and smart solutions for IoT devices. Through our IoT cloud development platform, we deliver a variety of offerings.
We have pioneered a purpose-built AI cloud developer platform that delivers a full suite of offerings, including Platform-as-a-Service ( “ PaaS ” ), Software-as-a-Service ( “ SaaS ” ) and Smart Solutions to developers of smart device, commercial applications, and industries.
Regulations Relating to Employee Equity Incentive Plan Pursuant to the SAFE Circular 37, PRC residents who participate in equity incentive plan in overseas non-publicly listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies.
In addition, SAFE Circular 37 stipulates that PRC residents who participate in a share incentive plan of an overseas non-publicly listed special purpose company may register with SAFE or its local branches before they obtain the incentive shares or exercise the share options.
On December 26, 2019, the State Council issued the Regulations on Implementing the Foreign Investment Law of the PRC, or the Implementation Rules, which took effect on January 1, 2020 and replaced the Regulations on Implementing the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture Enterprise Law, the Regulations on Implementing the Wholly Foreign-Invested Enterprise Law of the PRC and the Regulations on Implementing the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC.
On March 15, 2019, the National People ’ s Congress promulgated the Foreign Investment Law, which became effective on January 1, 2020, replaced the Sino-Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-Owned Enterprise Law and became the legal foundation for foreign investment in the PRC.
Regulation Relating to M&A and Overseas Listing The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”) was promulgated by six PRC ministries, including MOFCOM, the State-owned Assets Supervision and Administration Commission of the State Council, the SAT, the SAMR, the CSRC, and the SAFE, on August 8, 2006, and was amended and became effective on June 22, 2009.
On August 8, 2006, six PRC regulatory agencies jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009.
We have established a large and active community of approximately 993,000 registered IoT device and software developers as of December 31, 2023. In the past, our business has scaled rapidly by leveraging our strong software and robust platform-based delivery capabilities.
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.
Under these laws, regulations and rules, both domestic companies and foreign-invested companies in the PRC are required to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount of their reserves reaches 50% of their registered capital.
In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable as cash dividends.
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Business Overview A REVIEW OF 2023 2023 marked a key year for Tuya with significant strategic adjustments and transformations. We confirmed the success of our strategies focused on key customers and product enhancement. The close integration of these strategies significantly improved our business and operational performance.
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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.
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After a severe industry downturn, our revenue grew by 10.5% year-over-year to US$230 million, with a remarkable increase of approximately 35.7% and 42.2% in the third and fourth quarters, respectively.
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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.
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In the meantime, the competitive landscape has shifted, with many competitors exiting after two years of macroeconomic and industry downturns, particularly some major companies’ IoT businesses were disconnected due to low competitiveness and efficiency. More leading brands are now willing to use third-party IoT platforms to enhance efficiency, profitability, and cost-effectiveness.
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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.
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This shift presents us with an opportunity, as we now have stronger global influence and competitiveness than two years ago, leading to new collaborations with top-tier customers. Additionally, our overall gross margin steadily improved, reaching a historic quarterly high of 47.3% in the fourth quarter of 2023.
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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.
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This year, we achieved our first annual non-GAAP breakeven, with profits of approximately US$20.4 million and operational net cash flow of about $36.4 million.
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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.
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The turnaround in non-GAAP net profit and the increase in net operating cash flow indicate stronger daily operations and improved operational efficiency due to our strategies. 70 Table of Contents Recognizing the need to deliver greater value to our customers, we implemented a product enhancement strategy, offering more valuable and competitive software and smart device products.
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For details, please see “—Risks Related to Our Corporate Structure—Substantial uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and operations.” If occurrences of any of these events result in our inability to direct the activities of the VIE in China that most significantly impact its economic performance and/or our failure to receive the economic benefits and residual returns from the VIE, and we are unable to restructure our ownership structure and operations in a satisfactory manner, we may not be able to consolidate the financial results of the VIE in our consolidated financial statements in accordance with U.S.
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For selected smart device categories with complex and high-value potential, we have developed capabilities beyond the scope of IoT, such as advanced algorithms related to navigation, streaming capabilities, and gateway software protocols, integrating them into smart devices as comprehensive products. Our complete smart solutions help enterprise customers quickly deploy tailored devices to competitively expand their market share.
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GAAP. We rely on contractual arrangements with the VIE and its registered shareholders to use, or otherwise benefit from, certain licenses and approvals we may need in the future, which may not be as effective as direct ownership in providing operational control and could adversely affect our business, operating results and financial condition.
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For example, cross-sector international conglomerates, SaaS services providers or system integrators use these smart solutions for easier and faster market entry, which drives ongoing software revenue growth. Consequently, our smart device distribution segment’s gross margin effectively grew from 11.6% in 2022 to 25.5% in 2023, thanks to contributions from smart solutions.
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We have relied and expect to continue to rely on contractual arrangements with the VIE and its registered shareholders to conduct a portion of our operations in China. These contractual arrangements, however, may not be as effective as direct ownership in providing us with control over the VIE.
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Our Cube smart private cloud product has gained strong acceptance among global giants, helping them build their own intelligent business. In 2023, we completed several benchmark projects that were well-received by customers, generating substantial software revenue.
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For example, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct the operations of the VIE in an acceptable manner or taking other actions that are detrimental to our interests.
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Starting in the Southeast Asia region, Cube has helped large conglomerates establish their own smart businesses, solidifying our customer base and influence among influential local groups, such as large integrated conglomerates, telecommunications operators, and leading real estate groups.
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If we had direct ownership of the VIE in China, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level.
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Cube has also started to make progress in Europe and Latin America, fostering further cooperation in smart business between these major groups, professional giants, and Tuya, and enhancing our public cloud-based IoT developer business ecosystem.
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However, under the current contractual arrangements, we rely on the performance by the VIE and its registered shareholders of their obligations under the contracts to exercise control over the VIE.
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These achievements are the result of our resolute and effective adjustments in business and operational strategies over the past two years, coupled with our team’s hard work.
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If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system.
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Throughout our development journey, from device intelligence in the early stages, to spatial intelligence around 2020, and now providing complete smart business solutions to global giants, we have refined our offerings, as evidenced by our successful 2023 financial results.
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See “— Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have an adverse effect on part of our business. ” 46 Table of Contents Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have an adverse effect on part of our business.
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Through our IoT cloud development platform, we have enabled developers to activate a vibrant IoT ecosystem of brands, OEMs, partners and end users to engage and communicate through a broad range of smart devices. 71 Table of Contents Our platform benefits from network effects driven by our ecosystem of developers, businesses, partners and end users.
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If the VIE or its shareholders fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements.
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However, in the second half of 2021, the global consumer electronics sector started to experience a significant and growing supply-demand mismatch, a situation where the supply of the products available exceeds the demand, resulting in a high level of inventory of manufacturers and distributors.
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We may also have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and contractual remedies, which we cannot assure you will be sufficient or effective under PRC law.
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As a result, our customers, who are mostly consumer electronics brands and OEMs, were negatively impacted, as were our own business operations. Since 2022, the ongoing inflationary pressures and global events such as the Russia-Ukraine conflict and the energy shortage have further aggravated these issues.
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For example, if the registered shareholders were to refuse to transfer their equity interests in the VIE to us or our designee when we exercise the purchase option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations.
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We, for the first time since our inception, experienced a decrease in our annual revenue in 2022. Amid the high global inflation, the entire industry has entered a destocking cycle. In 2023, we continued to observe a moderately declining yet persisting overall inflation, and we expect that it will continue affecting the discretionary consumer electronics spending.
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All the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures.
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In addition, we have seen industry-wide efforts to normalize downstream inventory, and implemented strategic initiatives that align with these efforts. As a result, we restored annual revenue growth in 2023. See “Item 5. Operating and Financial Review and Prospects—5.A. Operating Results—Discussion of Results of Operations.
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As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements.
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Looking ahead, on the supply chain front, we expect downstream inventory levels to be normalizing ongoingly, providing downstream smart device manufacturers, brands, and retail channels with greater flexibility and resilience to adapt their operational and procurement plans as necessary. This, in turn, will revitalize their investment in smart business.
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See “—Risks Related to Doing Business in China—The uncertainties in the PRC legal system could materially and adversely affect us.” Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC law.
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Overall, discretionary consumer electronic spending alongside enterprise procurement is expected to prioritize cost-effectiveness, reflecting a balanced approach widely adopted in the current economic climate. Challenges in the IoT Era By transforming the way people interact with the physical world, IoT is also changing how brands and OEMs develop products.
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There remain significant uncertainties regarding the ultimate outcome of such arbitration if legal action becomes necessary.
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With favorable technology drivers, consumers are increasingly demanding a software-like experience—in addition to the traditional physical interfaces—when interacting with devices. As a result, brands and OEMs are seeking to build software capabilities in order to offer IoT-enabled smart devices.
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In addition, under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay.
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However, for brands and OEMs, building software capabilities from scratch is both costly and time-consuming, causing many of their IoT ventures to be unsuccessful.
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In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective control over the VIE, and our business, financial condition and results of operations may be negatively affected.
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While a limited number of leading brands have built their own IoT solutions, these solutions often are restricted to their own products, or products of their selected business partners, and the vast majority of brands and OEMs globally simply do not have the capital and technology expertise necessary to develop and deploy software across millions of devices, according to CIC.
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The registered shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect part of our business. The registered shareholders of the VIE may have potential conflicts of interest with us.
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Brands, OEMs and developers face a number of challenges in delivering software-enabled IoT offerings, such as (i) lack of development talent and capabilities, (ii) high cost and complexity to develop platforms, tools and applications, (iii) long development cycles, (iv) lack of standardized, easy-to-use software infrastructure and tools for developers and (v) inconsistent user experience caused by the fragmented market due to the variety of IoT device categories and products across the brands and regions.
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These shareholders may breach, or cause the VIE to breach, or refuse to renew, the existing contractual arrangements we have with them and the VIE, which would have a material adverse effect on our ability to effectively receive economic benefits from the VIE.
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These significant challenges can affect the end user experience and create the need for a third-party IoT platform that takes care of the complexities of developing, launching, supporting and growing IoT software and unifying the IoT standards among fragmentation, so businesses and developers can leverage full-stack infrastructure and tools to develop devices and software applications with ease. ​ 72 Table of Contents Tuya Solution—an IoT Cloud Development Platform Tuya was founded to solve exactly these challenges.
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For example, the shareholders may be able to cause our agreements with the VIE to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis.
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We offer what we call an “IoT cloud development platform”—a platform that is open to all types of brands, OEMs and developers from across the world where they can access a common infrastructure and all the ready-to-use software, development tools and services needed to develop and manage smart devices.
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We cannot assure you that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved in our favor.
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According to CIC, we offered the world’s first IoT cloud development platform, giving us significant first-mover advantages in attracting and building long-term relationships with brands and OEMs globally.
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For individuals who are also our directors and officers, we rely on them to abide by the laws of the Cayman Islands, which provide that directors and officers owe a fiduciary duty to the company that requires them to act in good faith and in what they believe to be the best interests of the company and not to use their position for personal gain.
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Our IoT cloud development platform is one-stop and cloud-agnostic and allows our brands and OEMs to digitalize their businesses and transform the experience of their end users across a diverse range of use cases.
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The registered shareholders of the VIE have executed powers of attorney to appoint our wholly foreign-owned enterprise or a person designated by our wholly foreign-owned enterprise to vote on their behalf and exercise voting rights as shareholders of the VIE.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

92 edited+456 added−17 removed64 unchanged
We believe that the benefits offered by our platform put us in a strong position to capture significant market opportunities ahead. Since 2022, the global IoT platform market has also been facing headwind.
We believe that the benefits offered by our platform put us in a strong position to capture significant market opportunities ahead. Since 2022, the global IoT platform market has also been facing a headwind.
Net Cash (Used in)/Generated from Financing Activities Net cash used in financing activities in 2023 was US$2.2 million, which was due to payment for repurchase and cancellation of ordinary shares of US$3.3 million, partially offset by proceeds from exercise of share options of US$1.2 million.
Net cash used in financing activities in 2023 was US$2.2 million, which was due to payment for repurchase and cancellation of ordinary shares of US$3.3 million, partially offset by proceeds from exercise of share options of US$1.2 million.
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, 2023 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, 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.
Share-based compensation expenses and credit-related impairment of long-term investments 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 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.
We operate internationally with local offices in the United States, Europe, Singapore, India, Japan and Colombia, among other locations, and expect that our international activities will continue to grow over the foreseeable future as we pursue opportunities in existing and new markets. Our reporting and functional currency is the U.S. dollar.
We operate internationally with local offices in Europe, Singapore, India, Japan and Colombia, among other locations, and expect that our international activities will continue to grow over the foreseeable future as we pursue opportunities in existing and new markets. Our reporting and functional currency is the U.S. dollar.
There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution, brought within the jurisdiction of the Cayman Islands. In table, the Cayman Islands does not impose withholding tax on dividend payments.
There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution, brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.
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 and credit-related impairment of long-term investments 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 of long-term investments and litigation costs from the respective GAAP measures.
We believe that these efforts will have a long-term, positive impact on our business and results of operations. 110 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. 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 have experienced lower growth in revenue in the first quarter as a result the reduced output of OEM customers located in China due to the Lunar New Year holidays. We expect the historical seasonality trends to continue to impact our results of operations and financial condition.
For example, we have experienced lower growth in revenue in the first quarter as a result the reduced output of OEM customers located in China due to the Lunar New Year holidays. We expect the historical seasonality trends to continue to impact our results of operations and financial condition.
However, the dollar-based expansion rate for IoT PaaS experienced a decline in 2022 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 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.
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. 113 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.
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.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements about our business and operations.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements about our business and operations.
Tuya Information, our wholly owned PRC subsidiary, is eligible to enjoy a preferential tax rate of 15% in 2021, 2022 and 2023, 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 2022, 2023 and 2024, to the extent it has taxable income under the EIT Law.
Other than the capital expenditures, services purchase commitments and operating lease commitments, as discussed below, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023.
Other than the capital expenditures, services purchase commitments and operating lease commitments, as discussed below, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024.
Share-based compensation expenses relate to the share-based awards that we grant to employees and directors. We exclude share-based compensation expenses and credit-related impairment of long-term investments. The credit-related impairment of long-term investments arose from our equity investments in private companies, for which we have recognized as credt losses on a prudent basis.
Share-based compensation expenses relate to the share-based awards that we grant to employees and directors. We exclude share-based compensation expenses, credit-related impairment of long-term investments and litigation costs. The credit-related impairment of long-term investments arose from our equity investments in private companies, for which we have recognized as credit losses on a prudent basis.
We see growing demand for our platform because we are in a unique position to deliver a one-stop, developer-first, cloud-agnostic IoT platform with broad use cases that allows our customers to digitalize their businesses and transform the experience of their end users.
We see growing demand for our platform because we are in a unique position to deliver a one-stop, developer-first, all-agnostic AI cloud platform with broad use cases that allows our customers to digitalize their businesses and transform the experience of their end users.
See “Item 11. Quantitative and Qualitative Disclosure about Market Risk—Foreign exchange risk.” KEY OPERATING METRICS We manage our business using the following key operating metrics. We use these metrics to assess the progress of our business, make decisions on how to allocate capital, time and technology investments.
See “Item 11. Quantitative and Qualitative Disclosure about Market Risk—Foreign exchange risk.” 124 Table of Contents KEY OPERATING METRICS We manage our business using the following key operating metrics. We use these metrics to assess the progress of our business, make decisions on how to allocate capital, time and technology investments.
An important way for us to track our performance in this area is by measuring dollar-based net expansion rate for our IoT PaaS. To calculate the dollar-based net expansion rate for IoT PaaS for the current period, we first specify a measurement period consisting of the trailing two years from the current period end.
An important way for us to track our performance in this area is by measuring dollar-based net expansion rate for our IoT PaaS. 125 Table of Contents To calculate the dollar-based net expansion rate for IoT PaaS for the current period, we first specify a measurement period consisting of the trailing two years from the current period end.
Year Ended December 31, 2022 Compared with Year Ended December 31, 2021 For a detailed description of the comparison of our operating results for the year ended December 31, 2022 to the year ended December 31, 2021, see “Item 5. Operating and Financial Review and Prospects—5.A.
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.
MATERIAL CASH REQUIREMENTS Our material cash requirements as of December 31, 2023 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, 2024 and any subsequent interim period include primarily our working capital and operating expenditure needs, capital expenditures, services purchase commitments and operating lease commitments.
Research and Development, Patents and Licenses, etc. Our IoT cloud development platform and proprietary cutting-edge IoT technologies have been primarily developed in-house. See “Item 4. Information on the Company—4.B. Business Overview—Research & Development.” 123 Table of Contents 5.D.
Research and Development, Patents and Licenses, etc. Our AI cloud platform and proprietary cutting-edge IoT technologies have been primarily developed in-house. See “Item 4. Information on the Company—4.B. Business Overview—Research & Development.” 135 Table of Contents 5.D.
We continuously monitor our revenue mix and seek to increase revenue contribution from products and use cases with attractive margin profiles. 111 Table of Contents Effective Cost and Expense Control Our results of operations are affected by our ability to control our costs and operating expenses.
We continuously monitor our revenue mix and seek to increase revenue contribution from products and use cases with attractive margin profiles. Effective Cost and Expense Control Our results of operations are affected by our ability to control our costs and operating expenses.
We continue to invest in our sales and marketing efforts and developer community outreach, which are critical to driving customer acquisition. We have built a developer and partner network through effective marketing efforts which continuously raise awareness of our IoT cloud development platform.
We continue to invest in our sales and marketing efforts and developer community outreach, which are critical to driving customer acquisition. We have built a developer and partner network through effective marketing efforts which continuously raise awareness of our AI cloud platform.
Market Adoption of IoT Cloud Development Platform Our future success depends in large part on the market adoption of IoT cloud development platforms which, in turn, is driven by the proliferation of smart devices. As technologies advance, businesses and end users increasingly demand superior software experience, driving IoT adoption to an inflection point.
Market Adoption of AI Cloud Platform Our future success depends in large part on the market adoption of AI cloud platforms which, in turn, is driven by the proliferation of smart devices. As technologies advance, businesses and end users increasingly demand superior AI and software experience, driving AIoT adoption to an inflection point.
We then calculate the dollar-based net expansion rate as the quotient obtained by dividing the IoT PaaS revenues from this cohort in the second year of the measurement period by the IoT PaaS revenues from the same cohort in the first year of such measurement period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the trailing 12-month period ended ​ December 31, March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, ​ ​ 2021 ​ 2022 ​ 2022 ​ 2022 ​ 2022 ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ Dollar-based net expansion rate for IoT PaaS ​ 153 % 122 % 84 % 63 % 51 % 49 % 58 % 78 % 103 % ​ The dollar-based net expansion rate for our IoT PaaS is affected by customers’ purchase cycles, which could fluctuate from time to time within a year, as well as a number of other factors, including new product introductions, customer mix, promotional activities, and the variable timing and amount of customer purchases.
We then calculate the dollar-based net expansion rate as the quotient obtained by dividing the IoT PaaS revenues from this cohort in the second year of the measurement period by the IoT PaaS revenues from the same cohort in the first year of such measurement period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the trailing 12-month period ended ​ December 31, March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, ​ ​ 2022 ​ 2023 ​ 2023 ​ 2023 ​ 2023 ​ 2024 ​ 2024 ​ 2024 ​ 2024 ​ Dollar-based net expansion rate for IoT PaaS ​ 51 % 49 % 58 % 78 % 103 % 116 % 127 % 124 % 122 % ​ The dollar-based net expansion rate for our IoT PaaS is affected by customers’ purchase cycles, which could fluctuate from time to time within a year, as well as a number of other factors, including new product introductions, customer mix, promotional activities, and the variable timing and amount of customer purchases.
As our platform is built to be product- and brand-agnostic, many customers using our IoT cloud development platform for one product category expand to more brands, categories and use cases in order to maximize the benefits of our platform and ensure consistent, high quality IoT experience for their end users.
As our platform is built to be product- and brand-agnostic, many customers using our AI cloud platform for one product category expand to more brands, categories and use cases in order to maximize the benefits of our platform and ensure consistent, high quality AIoT experience for their end users.
The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. 116 Table of Contents We are subject to VAT on the products sold and services provided. We are also subject to surcharges on VAT payments in accordance with PRC law.
The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. We are subject to VAT on the products sold and services provided. We are also subject to surcharges on VAT payments in accordance with PRC law.
Our cash and cash equivalents and short-term investments primarily include cash in bank, time deposits placed with banks or other financial institutions, structured deposits and wealth management products issued by banks.
Our cash and cash equivalents and short-term investments primarily include cash in bank, time deposits placed with banks or other financial institutions, treasury securities and wealth management products issued by banks.
Non-GAAP adjusted loss for the year represents net loss for the year excluding share-based compensation expenses and credit-related impairment of long-term investments. The table below sets forth a reconciliation of our net loss for the year to non-GAAP adjusted loss for the year for the years indicated.
Non-GAAP adjusted (loss)/profit for the year represents net (loss)/profit for the year excluding share-based compensation expenses, credit-related impairment of long-term investments and litigation costs. The table below sets forth a reconciliation of our net (loss)/profit for the year to non-GAAP adjusted (loss)/profit for the year indicated.
KEY COMPONENTS OF CONSOLIDATED STATEMENTS OF LOSS Revenue We generate revenue from three sources, namely (i) IoT PaaS; (ii) smart device distribution; and (iii) SaaS and others.
KEY COMPONENTS OF CONSOLIDATED STATEMENTS OF LOSS Revenue We generate revenue from three sources, namely (i) IoT PaaS; (ii) Smart Solution; and (iii) SaaS and others.
Key Information—3.D. Risk Factors—Risk Related to Our Business and Industry—We may require additional capital to support our business and response to business opportunities, and this capital might not be available on favorable terms, if at all.” Historically, we have not been profitable on a GAAP basis, and, before 2023, we have not generated positive operating cash flows.
Key Information—3.D. Risk Factors—Risk Related to Our Business and Industry—We may require additional capital to support our business and response to business opportunities, and this capital might not be available on favorable terms, if at all.” Historically, prior to 2024, we had not been profitable on a GAAP basis, and until 2023, we had not generated positive operating cash flows.
Operating Results—Discussion of Results of Operations—Year Ended December 31, 2022 Compared with Year Ended December 31, 2021” beginning on page 112 of our annual report on Form 20-F for the fiscal year ended December 31, 2022 filed with the SEC on April 26, 2023 (File No. 001-40210). 119 Table of Contents NON-GAAP FINANCIAL MEASURE In evaluating the business, we consider and use non-GAAP measures, such as non-GAAP operating expenses, non-GAAP loss from operations (including non-GAAP operating margin), non-GAAP net (loss)/profit (including non-GAAP net margin), and non-GAAP basic and diluted net (loss)/profit per ADS, as supplemental measures to review and assess ouroperating performance.
Operating Results—Discussion of Results of Operations—Year Ended December 31, 2023 Compared with Year Ended December 31, 2022” beginning on page 112 of our annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with the SEC on April 24, 2024 (File No. 001-40210). 131 Table of Contents NON-GAAP FINANCIAL MEASURE In evaluating the business, we consider and use non-GAAP measures, such as non-GAAP operating expenses, non-GAAP loss from operations (including non-GAAP operating margin), non-GAAP net (loss)/profit (including non-GAAP net margin), and non-GAAP basic and diluted net (loss)/profit per ADS, as supplemental measures to review and assess our operating performance.
However, brands and developers still face certain challenges, such as cost and complexity associated with developing an integrated IoT cloud development platform.
However, brands and developers still face certain challenges, such as cost and complexity associated with developing an integrated AI cloud platform.
We have been more focused enhancing our IoT cloud development platform and products to provide a higher value propsition, growing our customer base with key accounts, fostering our developer community, and prioritizing our business and operating efficiency, in order to lay a solid foundation for our long-term growth. 120 Table of Contents 5.B.
We have been more focused enhancing our AI cloud platform and products to provide a higher value proposition, growing our customer base with key accounts, fostering our developer community, and prioritizing our business and operating efficiency, in order to lay a solid foundation for our long-term growth. 132 Table of Contents 5.B.
Liquidity and Capital Resources CASH FLOWS AND WORKING CAPITAL Our principal sources of liquidity have been cash generated from private sales and public offerings of equity securities, as well as cash from our business operations. As of December 31, 2023, we had US$789.7 million in cash and cash equivalents and short-term investments.
Liquidity and Capital Resources CASH FLOWS AND WORKING CAPITAL Our principal sources of liquidity have been cash generated from private sales and public offerings of equity securities, as well as cash from our business operations. As of December 31, 2024, we had US$847.9 million in cash and cash equivalents and short-term investments.
Seasonality and macroeconomic environment We have in the past experienced, and expect in the future to continue to experience, seasonal fluctuations in our revenue from time to time, with the fourth quarter historically being our strongest quarter for sales to new and existing customers, as a result of the holiday season and customers’ buying patterns.
Seasonality and macroeconomic environment We have in the past experienced, and expect in the future to continue to experience, seasonal fluctuations in our revenue from time to time, with the fourth quarter historically being our strongest quarter for sales to new and existing customers, as a result of the holiday season, customers’ buying patterns, and changes in the business and economic environment that are outside our and our customers’ control.
However, certain unique events may cause the historical seasonal trends and patterns to temporarily no longer apply, such as high global inflation weakening consumption sentiment and dampening enterprises’ confidence in doing business, downstream inventory backlog disrupting enterprises’ business and operating plans, and supply chain disruption interfering with the delivery of goods.
However, certain unique events may cause the historical seasonal trends and patterns to temporarily no longer apply, such as high global inflation weakening consumption sentiment and dampening enterprises’ confidence in doing business, downstream inventory backlog disrupting enterprises’ business and operating plans, supply chain disruption interfering with delivery of goods, and the imposition of new tariffs or adjustments in existing tariffs or trade barriers.
Services Purchase Commitments As of December 31, 2023, our services purchase commitments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Less Than 1 year 1-3 years 3-5 years ​ ​ (US$ in thousands) Purchase obligations (1) 15,667 5,042 10,625 — Note: Purchase obligations represent US$15,667 thousand of remaining non-cancellable contractual commitments as of December 31, 2023, related to one of our third-party cloud infrastructure agreements, under which we committed to spend an aggregate of at least US$37,500 thousand between June 1, 2021 and May 31, 2026 with minimum purchase commitment.
Services Purchase Commitments As of December 31, 2024, our services purchase commitments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Less Than 1 year 1-3 years 3-5 years ​ ​ (US$ in thousands) Purchase obligations (1) 6,705 3,580 3,125 — Note: Purchase obligations represent US$6,705 thousand of remaining non-cancellable contractual commitments as of December 31, 2024, related to one of our third-party cloud infrastructure agreements, under which we committed to spend an aggregate of at least US$37,500 thousand between June 1, 2021 and May 31, 2026 with minimum purchase commitment.
Net Cash Generated from /(Used In) Investing Activities Net cash generated from investing activities was US$332.5 million in 2023, which was primarily attributable to (i) proceeds from disposal of short-term investments of US$853.7 million, and partially offset by (ii) payment for short-term investments of US$327.2 million and (iii) payment for long-term investments of US$193.0 million.
Our short-term investments mainly include time deposits and treasury securities. Net cash generated from investing activities was US$332.5 million in 2023, which was primarily attributable to (i) proceeds from disposal of short-term investments of US$853.7 million, and partially offset by (ii) payment for short-term investments of US$327.2 million and (iii) payment for long-term investments of US$193.0 million.
While we serve both brands and OEMs, it is typically the OEMs, instead of brands, who directly place orders with us for IoT PaaS. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 Number of IoT PaaS customers (1) 5,527 5,108 3,966 ​ Note: (1) The decrease in the number of IoT PaaS customers from 2022 to 2023 was primarily due to the reduction in the volume of their orders under macroeconomic headwinds, as well as our enhanced focus on high-quality customers.
While we serve both brands and OEMs, it is typically the OEMs, instead of brands, who directly place orders with us for IoT PaaS. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 Number of IoT PaaS customers (1) 5,108 3,966 3,710 ​ Note: (1) The decrease in the number of IoT PaaS customers from 2022 to 2023 was primarily due to macroeconomic headwinds, which led to a reduction in order volumes, as well as our enhanced focus on high-quality customers.
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 improved to 78% as of September 30, 2023 and further improved to 103% as of December 31, 2023.
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.
Risk Factors—Risks Related to Our Business and Our Industry—We have a history of net loss and net cash operating outflow and may not be able to achieve or sustain profitability in the future.” The following table presents our consolidated cash flow data for the years presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2021 2022 2023 ​ ​ (US$ in thousands) Net cash (used in)/generated from operating activities ​ (126,103) (70,654) 36,443 Net cash (used in)/generated from investing activities ​ (112,957) (714,225) 332,455 Net cash generated from/(used in) financing activities ​ 1,041,802 (38,582) (2,223) Effect of exchange rate changes on cash and cash equivalents, restricted cash (1) ​ 2,879 (7,954) (1,148) Net increase/(decrease) in cash and cash equivalents, restricted cash (1) ​ 805,621 (831,415) 366,527 Cash and cash equivalents, restricted cash (1) at the beginning of the year ​ 158,955 964,576 133,161 Cash and cash equivalents, restricted cash (1) at the end of the year ​ 964,576 133,161 498,688 Note: (1) Restricted cash represents cash that cannot be withdrawn without the permission of third parties.
Risk Factors—Risks Related to Our Business and Our Industry—We have a history of net loss and net cash operating outflow and may not be able to achieve or sustain profitability in the future.” The following table presents our consolidated cash flow data for the years presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2022 2023 2024 ​ ​ (US$ in thousands) Net cash (used in)/generated from operating activities ​ (70,654) 36,443 80,352 Net cash (used in)/generated from investing activities ​ (714,225) 332,455 107,428 Net cash used in financing activities ​ (38,582) (2,223) (33,200) Effect of exchange rate changes on cash and cash equivalents, restricted cash (1) ​ (7,954) (1,148) 116 Net (decrease)/increase in cash and cash equivalents, restricted cash (1) ​ (831,415) 366,527 154,696 Cash and cash equivalents, restricted cash (1) at the beginning of the year ​ 964,576 133,161 498,688 Cash and cash equivalents, restricted cash (1) at the end of the year ​ 133,161 498,688 653,384 Note: (1) Restricted cash represents cash that cannot be withdrawn without the permission of third parties.
Our management believes that these exclusions facilitate the ability of investors to compare our operating results with those of other companies in the industry in which we operate, many of which also exclude share-based compensation expenses and credit-related impairment of long-term investments in determining their non-GAAP financial measures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2021 2022 2023 ​ ​ (US$ in thousands) ​ ​ ​ ​ ​ ​ ​ Net loss for the year (175,424) (146,175) (60,315) Adjustment: ​ ​ ​ Share-based compensation expenses 66,089 69,019 65,216 Credit-related impairment of long-term investments ​ — ​ — ​ 15,537 Non-GAAP adjusted (loss)/profit for the year (109,335) (77,156) 20,438 ​ We recorded non-GAAP adjusted loss of US$109.3 million and US$77.2 million in 2021 and 2022.
Our management believes that these exclusions facilitate the ability of investors to compare our operating results with those of other companies in the industry in which we operate, many of which also exclude share-based compensation expenses, credit-related impairment of long-term investments and litigation costs in determining their non-GAAP financial measures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2022 2023 2024 ​ ​ (US$ in thousands) ​ ​ ​ ​ ​ ​ ​ Net (loss)/profit for the year (146,175) (60,315) 4,997 Adjustment: ​ ​ ​ Share-based compensation expenses 69,019 65,216 67,750 Credit-related impairment of long-term investments ​ — ​ 15,537 ​ 261 Litigation costs ​ — ​ — ​ 2,300 Non-GAAP adjusted (loss)/profit for the year (77,156) 20,438 75,308 ​ We recorded non-GAAP adjusted loss of US$77.2 million in 2022 and adjusted profit of US$20.4 million 2023.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of (i) employee-related costs, including salaries, bonuses and benefits, for our employees responsible for business development, branding and marketing; (ii) share-based compensation; (iii) marketing costs related to our developer conferences and events; and (iv) other sales and marketing expenses, including those spent on content and social media marketing. 115 Table of Contents 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.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of (i) employee-related costs, including salaries, bonuses and benefits, for our employees responsible for business development, branding and marketing; (ii) share-based compensation; (iii) marketing costs related to our developer conferences and events; and (iv) other sales and marketing expenses, including those spent on content and social media marketing.
The difference between our net loss of US$60.3 million and the net cash generated from operating activities was mainly due to (i) share-based compensation of US$65.2 million and (ii) an increase in credit loss of US$15.5 million of long-term investments. 121 Table of Contents Net cash used in operating activities was US$70.7 million in 2022.
Net cash generated from operating activities was US$36.4 million in 2023. The difference between our net loss of US$60.3 million and the net cash generated from operating activities was mainly due to (i) share-based compensation of US$65.2 million and (ii) an increase in credit loss of US$15.5 million of long-term investments.
We did not have future minimum capital commitments as of December 31, 2023. 122 Table of Contents Capital Expenditures Our capital expenditures are incurred primarily in connection with purchase of property, equipment and software. Our capital expenditures were US$6.2 million, US$0.7 million and US$1.5 million in 2021, 2022 and 2023, respectively.
We did not have future minimum capital commitments as of December 31, 2024. 134 Table of Contents Capital Expenditures Our capital expenditures are incurred primarily in connection with purchase of property, equipment, software and land use rights. Our capital expenditures were US$0.7 million, US$1.5 million and US$13.1 million in 2022, 2023 and 2024, respectively.
The following table sets forth a breakdown of our costs of revenue, in absolute amounts and as percentages of revenue, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2021 2022 2023 ​ ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ % of ​ ​ US$ ​ revenue ​ US$ ​ revenue ​ US$ ​ revenue ​ (in thousands, except for percentages) Cost of revenue ​ IoT PaaS 150,486 49.8 89,998 43.2 94,349 41.0 Smart device distribution 18,849 6.3 22,491 10.8 19,744 8.6 SaaS and others 4,874 1.6 6,260 3.0 9,242 4.0 Total 174,209 57.7 118,749 57.0 123,335 53.6 ​ Our cost of revenue has been and will continue to be affected by a number of factors, including economies of scale, improved efficiency achieved through effective R&D, and product mix, among other things.
The following table sets forth a breakdown of our costs of revenue, in absolute amounts and as percentages of revenue, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2022 2023 2024 ​ ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ % of ​ ​ US$ ​ revenue ​ US$ ​ revenue ​ US$ revenue ​ (in thousands, except for percentages) Cost of revenue ​ ​ IoT PaaS 89,998 43.2 94,349 41.0 114,812 38.4 Smart Solution 22,491 10.8 19,744 8.6 31,262 10.5 SaaS and others 6,260 3.0 9,242 4.0 11,113 3.7 Total 118,749 57.0 123,335 53.6 157,187 52.6 ​ Our cost of revenue has been and will continue to be affected by a number of factors, including economies of scale, improved efficiency achieved through effective R&D, and product mix, among other things.
Of our cash and cash equivalents, US$64.6 million were held by our subsidiaries in the PRC; US$408.6 million, mainly denominated in U.S. dollars, were held by our subsidiaries in Hong Kong; and US$25.5 million, mainly denominated in U.S. dollars, EUR, and Japanese Yen, were held by Tuya Inc. and our other overseas subsidiaries.
Of our cash and cash equivalents, US$113.2 million were held by our subsidiaries in the PRC; US$537.7 million, mainly denominated in U.S. dollars, were held by our subsidiaries in Hong Kong; and US$2.5 million, mainly denominated in U.S. dollars, EUR, and Japanese Yen, were held by Tuya Inc. and our other overseas subsidiaries.
We had made payments of US$27,023 thousand in total under this agreement as of December 31, 2023. Operating lease commitments We had outstanding commitments on several non-cancellable operating lease agreements. Operating lease commitment within one year or less lease term as of December 31, 2023 was US$19 thousand.
We had made payments of US$36,735 thousand in total under this agreement as of December 31, 2024. Operating lease commitments We had outstanding commitments on several non-cancellable operating lease agreements. Operating lease commitment within one year or less lease term as of December 31, 2024 was US$26.0 thousand.
As a result, the number of premium IoT PaaS customers increased slightly in 2023. ​ Dollar-based Net Expansion Rate for IoT PaaS Our ability to maintain long-term revenue growth depends on our ability to increase customers’ usage of our platform over time and grow revenues generated from existing customers.
As a result, the number of premium IoT PaaS customers increased notably in 2024, reflecting the success of our product enhancement efforts and our focus on high-value, long-term partnerships. ​ Dollar-based Net Expansion Rate for IoT PaaS Our ability to maintain long-term revenue growth depends on our ability to increase customers’ usage of our platform over time and grow revenues generated from existing customers.
We generate our SaaS and others revenue mainly from (i) the subscription fees charged to customers of SaaS, including Industry SaaS we offer to enterprises and Cloud-based Software Value -added Services we offer directly to end users of Tuya-powered smart devices, and (ii) the fees that we receive for other value-added services we offer to brands and OEMs, such as AI-powered virtual assistants and OEM APP, and for projects such as the deployment of the Cube and other technical developments. 114 Table of Contents Cost of Revenue Our cost of revenue consists of the costs directly related to providing our products to our customers.
We generate our SaaS and others revenue mainly from (i) the subscription fees charged to customers of SaaS, including industry SaaS we offer to enterprises and cloud-based software value-added services we offer enterprises or end users of Tuya-powered smart devices, and (ii) the fees that we receive for other value-added services we offer to brands and OEMs, such as APP customization, and for projects such as the deployment of the Cube and other technical developments.
Our revenue generated from SaaS and others increased by 20.0% from US$29.8 for 2022 to US$35.8 million for 2023, primarily due to an increase in revenue from cloud software products. We remain committed to offering value-added services and a diverse range of software products with compelling value propositions for our customers.
Our revenue generated from SaaS and others increased by 10.6% from US$35.8 for 2023 to US$39.6 million for 2024, primarily due to an increase in revenue from cloud software products. During the year of 2024, we remained committed to offering value-added services and a diverse range of software products with compelling value propositions to our customers.
The following table sets forth a breakdown of our revenue, in absolute amounts and as percentages of total revenue, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2021 2022 2023 ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except for percentages) Revenue IoT PaaS 261,360 86.5 152,914 73.5 167,694 72.9 Smart device distribution 22,153 7.3 25,446 12.2 26,517 11.5 SaaS and others 18,563 6.2 29,812 14.3 35,779 15.6 Total 302,076 100.0 208,172 100.0 229,990 100.0 ​ IoT PaaS .
The following table sets forth a breakdown of our revenue, in absolute amounts and as percentages of total revenue, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2022 2023 2024 ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except for percentages) Revenue IoT PaaS 152,914 73.5 167,694 72.9 217,069 72.7 Smart Solution 25,446 12.2 26,517 11.5 41,965 14.0 SaaS and others 29,812 14.3 35,779 15.6 39,583 13.3 Total 208,172 100.0 229,990 100.0 298,617 100.0 ​ IoT PaaS .
Other income We generated other income of US$23.9 million and US$48.8 million, respectively, for 2022 and 2023.
Other income We generated other income of US$48.8 million and US$54.8 million, respectively, for 2023 and 2024.
Additionally, a cornerstone of our approach is the key customer focus strategy, which has increased our personnel efficiency and enabled us to dedicate sufficient resources to securing and better serving large and strategically important customers with significant long - term potential.
Additionally, a cornerstone of our approach is the key customer focus strategy, which has increased our personnel efficiency and enabled us to dedicate sufficient resources to securing and better serving large and strategically important customers with significant long - term potential. We are committed to delivering industry-leading products to continue building and maintaining credibility with the global IoT community.
Cost of revenue Our cost of revenue increased by 3.9% from US$118.7 million for 2022 to US$123.3 million for 2023, in line with the increase in our revenue. Gross profit and gross margin As a result of the foregoing, our gross profit increased by 19.3% from US$89.4 million for 2022 to US$106.7 million for 2023.
Cost of revenue Our cost of revenue increased by 27.4% from US$123.3 million for 2023 to US$157.2 million for 2024, in line with the increase in our revenue. Gross profit and gross margin As a result of the foregoing, our gross profit increased by 32.6% from US$106.7 million for 2023 to US$141.4 million for 2024.
If we are unable to achieve and sustain profitability, or if we fail to maintain our net cash operating inflows and continue to experience net cash operating outflows in the future, our business, liquidity, financial condition and results of operations may be materially and adversely affected. See “Item 3. Key Information—3.D.
However, if we are unable to sustain profitability or maintain positive operating cash flow, our business, liquidity, financial condition and results of operations may be materially and adversely affected. See “Item 3. Key Information—3.D.
Other Operating (Expenses)/Incomes, Net Other operating (expenses)/incomes, net primarily consist of software VAT tax refund and various general subsidies for enterprises. Other Income/(Loss) Other income/(loss) primarily consists of other non-operating incomes, net, financial income, net and foreign exchange loss, net. TAXATION Cayman Islands We are incorporated in the Cayman Islands.
Other Income/(Loss) Other income/(loss) primarily consists of other non-operating incomes, net, financial income, net and foreign exchange loss, net. TAXATION Cayman Islands We are incorporated in the Cayman Islands.
Tuya Information qualifies as a high and new technology enterprise (the "HNTE") and was entitled to the 15% beneficial tax rate for the year ended December 31, 2023. As of the date of this annual report, Tuya Information is applying for the renewal of the HNTE qualification.
Tuya Information qualifies as a high and new technology enterprise (the “HNTE”) and was entitled to the 15% beneficial tax rate for the year ended December 31, 2024.
Gross Profit and Gross margin The following table sets forth a breakdown of our gross profit and gross margin for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ Gross Gross Gross Gross Gross Gross ​ ​ profit ​ margin ​ profit ​ margin ​ profit ​ margin ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except for percentages) Gross profit and gross margin IoT PaaS 110,874 42.4 62,916 41.1 73,345 43.7 Smart device distribution 3,304 14.9 2,955 11.6 6,773 25.5 SaaS and others 13,689 73.7 23,552 79.0 26,537 74.2 Total 127,867 42.3 89,423 43.0 106,655 46.4 ​ Our gross margin has been and will continue to be affected by a number of factors, including economies of scale, improved efficiency achieved through effective R&D, product mix, and the success of higher-value products and services that we provide to our customer, among others.
Gross Profit and Gross margin The following table sets forth a breakdown of our gross profit and gross margin for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ Gross Gross Gross Gross Gross Gross ​ ​ profit ​ margin ​ profit ​ margin ​ profit ​ margin ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except for percentages) Gross profit and gross margin IoT PaaS 62,916 41.1 73,345 43.7 102,257 47.1 Smart Solution 2,955 11.6 6,773 25.5 10,703 25.5 SaaS and others 23,552 79.0 26,537 74.2 28,470 71.9 Total 89,423 43.0 106,655 46.4 141,430 47.4 ​ Our gross margin has been and will continue to be affected by a number of factors, including economies of scale, improved efficiency achieved through effective R&D, product mix, and the success of higher-value products and services that we provide to our customer, among others. 127 Table of Contents Research and Development Expenses Research and development expenses consist primarily of (i) employee-related costs, including salaries, benefits and bonuses, for our research and development personnel; (ii) share-based compensation; (iii) cloud infrastructure cost; (iv) rental and utilities; and (v) other expenses associated with our research and development activities.
As a result, our revenue declined for the first time in 2022 despite our stable relationship with our core customers. The dollar-based net expansion rate of IoT PaaS declined from 122% as of March 31, 2022, to 84% as of June 30, 2022, then to 63% as of September 30, 2022 and further to 51% as of December 31, 2022.
As a result, our revenue declined for the first time in 2022 despite our stable relationship with our core customers, and the dollar-based net expansion rate of IoT PaaS declined in 2022 and early 2023.
The restricted cash balance for the year ended December 31, 2022 and December 31, 2023 was nil. Net Cash Generated from/(Used in) Operating Activities Net cash generated from operating activities was US$36.4 million in 2023.
The restricted cash balance for the year ended December 31, 2024 was US$0.05 million. 133 Table of Contents Net Cash (Used in)/Generated from Operating Activities Net cash generated from operating activities was US$80.4 million in 2024.
In addition, our PRC subsidiaries are also required to withhold a 10% (or 7% if paid to a Hong Kong resident who qualifies for the benefits of the tax treaty between China and Hong Kong) tax on interest paid under any cross-border shareholder loan.
If our holding company in the Cayman Islands or any of our subsidiaries outside China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. 129 Table of Contents In addition, our PRC subsidiaries are also required to withhold a 10% (or 7% if paid to a Hong Kong resident who qualifies for the benefits of the tax treaty between China and Hong Kong) tax on interest paid under any cross-border shareholder loan.
Net cash used in operating activities was US$126.1 million in 2021.
Net cash used in operating activities was US$70.7 million in 2022.
We define a premium IoT PaaS customer as a customer as of a given date that contributed more than US$100,000 of revenues during the immediately preceding 12-month period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the trailing 12-month period ended ​ ​ December 31, ​ ​ 2021 ​ 2022 ​ 2023 Number of premium IoT PaaS customers (1) 311 263 265 ​ Note: (1) Since the end of 2021, we have been strategically optimizing our customer base, shifting our focus to key account customers.
We define a premium IoT PaaS customer as a customer as of a given date that contributed more than US$100,000 of revenues during the immediately preceding 12-month period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the trailing 12-month period ended ​ ​ December 31, ​ ​ 2022 ​ 2023 ​ 2024 Number of premium IoT PaaS customers (1) 263 265 298 ​ Note: (1) In 2024, as the economic environment stabilized and downstream consumer electronics demand increased, we continued to execute our key-account and product enhancement strategies effectively.
Effect of Currency Translation We currently derive the majority of our revenue from IoT PaaS generated primarily through our contracts with OEMs located in the PRC. Such revenue is predominantly denominated in RMB.
Additionally, we achieved our first-ever net profit of US$5.0 million on GAAP basis, marking a historic milestone in the Company’s financial performance. Effect of Currency Translation We currently derive the majority of our revenue from IoT PaaS generated primarily through our contracts with OEMs located in the PRC. Such revenue is predominantly denominated in RMB.
PRC Our subsidiaries and consolidated VIE in China are companies incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
During 2022, 2023 and 2024, no provision for Hong Kong profits tax was made as we had no estimated taxable income that was subject to the Hong Kong profits tax. 128 Table of Contents PRC Our subsidiaries and consolidated VIE in China are companies incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
Investment for Growth We are committed to delivering industry-leading products to continue building and maintaining credibility with the global IoT community. We believe that the comprehensive product offerings and our continued efforts to introduce new features and capabilities on our platform provide us with a significant competitive advantage.
We believe that the comprehensive product offerings and our continued efforts to introduce new features and capabilities, particularly AI capabilities, on our platform provide us with a significant competitive advantage.
We provide finished smart devices that integrate more extensive and comprehensive software capabilities, which enable these customers to efficiently build their smart business product portfolios. SaaS and others .
We generate Smart Solution revenue mainly from providing finished devices that integrate more extensive and comprehensive software capabilities, such as AI, embedded operating systems and cloud software capabilities, enabling these customers to efficiently build their smart business product portfolios. SaaS and others .
For example, an increase in the revenue contribution from SaaS, which typically has a higher margin than IoT PaaS or smart device distribution, 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 IoT PaaS or Smart Solution, generally leads to an increase in our overall profit margin.
The increase in other income was mainly due to (i) an increase in financial income, net, of US$26.4 million, primarily arising from time deposits recorded as short-term and long-term investments and (ii) a decrease of US$1.8 million of net foreign exchange gain due to the fluctuation in foreign exchange rates in 2023.
The increase in other income was mainly because of (i) an increase in financial income, net, of US$5.7 million, primarily due to well implemented treasury strategies on our cash, time deposits and treasury securities recorded as short-term and long-term investments, (ii) an increase in other non-operating incomes, net, of US$1.1 million, primarily due to payment from depository bank according to depository revenue sharing program, and (iii) a decrease of US$0.8 million of net foreign exchange gain due to the fluctuation in foreign exchange rates in 2024.
See “Item 4.B. Business Overview—Overview” and “Item 4.B. Business Overview—Our Customers.” 112 Table of Contents Number of Premium IoT PaaS Customers While we continue to grow IoT PaaS customers across all sizes, over time, we focus on growing the number of our premium customers to scale our business.
Business Overview—Our Customers.” Number of Premium IoT PaaS Customers While we continue to improve our IoT PaaS customer base over time, we focus on growing the number of our premium customers to scale our business.
Our gross margin increased from 43.0% for 2022 to 46.4% for 2023. ● IoT PaaS. The gross profit of IoT PaaS increased by 16.6% from US$62.9 million for 2022 to US$73.3 million for 2023.
Our gross margin increased from 46.4% for 2023 to 47.4% for 2024. ● IoT PaaS. The gross profit of IoT PaaS increased by 39.4% from US$73.3 million for 2023 to US$102.3 million for 2024. The gross margin of IoT PaaS was 47.1% for 2024, compared to 43.7% for 2023. ● Smart Solution.
As a result of these factors, our DBNER for IoT PaaS for the trailing 12 months ended December 31, 2023 increased to 103% from 51% for the trailing 12 months ended December 31, 2022. ● Smart device distribution.
As a result of these factors, our dollar-based net expansion rate of IoT PaaS for the 12 months ended December 31, 2024 increased to 122% from 103% for the same period in 2023. ● Smart Solution.
Net cash used in investing activities was US$113.0 million in 2021, which was primarily attributable to (i) payment for short-term investments of US$468.7 million, and (ii) payment for long-term investments of US$21.3 million, (iii) purchase of property, equipment and software of US$6.2 million and (iv) provision of bridge loans of US$2.9 million, partially offset by proceeds from disposal of short-term investments of US$385.5 million.
Net Cash (Used in)/Generated from Investing Activities Net cash generated from investing activities was US$107.4 million in 2024, which was primarily attributable to (i) proceeds from disposal of short-term investments of US$354.5 million and (ii) proceeds from disposal of long-term investments of US$43.2 million and partially offset by payment for short-term investments of US$264.7 million.
General and administrative expenses Our general and administrative expenses increased by 19.5% from US$67.5 million for 2022 to US$80.7 million for 2023, primarily because of the credit loss of US$15.5 million of long-term investments (nil in 2022), partially offset by the decrease in salary related expenses due to the Group’s strategic streamlining of its general and administrative team.
General and administrative expenses Our general and administrative expenses decreased by 15.4% from US$80.7 million for 2023 to US$68.3 million for 2024, primarily because of (i) the decline in credit-related impairment of long-term investments, and (ii) our strategic streamlining of general and administrative team.
The gross profit of SaaS and others increased by 12.7% from US$23.6 million for 2022 to US$26.5 million for 2023.
The gross profit of Smart Solution increased by 58.0% from US$6.8 million for 2023 to US$10.7 million for 2024. The gross margin of Smart Solution was 25.5% for 2024, compared to 25.5% for 2023. ● SaaS and others. The gross profit of SaaS and others increased by 7.3% from US$26.5 million for 2023 to US$28.5 million for 2024.
Our short-term investments mainly include time deposits and wealth management products offered by banks or other financial institutions in the PRC.
Our short-term investments mainly include time deposits and wealth management products offered by banks or other financial institutions in the PRC. Net Cash Used in Financing Activities Net cash used in financing activities in 2024 was US$33.2 million, which was due to the payment for dividend of US$33.0 million.
Research and Development Expenses Research and development expenses consist primarily of (i) employee-related costs, including salaries, benefits and bonuses, for our research and development personnel; (ii) share-based compensation; (iii) cloud infrastructure cost; (iv) rental and utilities; and (v) other expenses associated with our research and development activities.
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.
Our restricted cash is substantially cash balance on deposit required by our business partners and commercial banks. The restricted cash balance for the year ended December 31, 2021 related to deposits for foreign currency forward contracts, which were subsequently released from the restriction in January 2022.
Our restricted cash is substantially cash balance on deposit required by our business partners and commercial banks during our ordinary course of business. The restricted cash balance for the year ended December 31, 2022 and December 31, 2023 was nil.

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Item 6. [Reserved]

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

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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; 130 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; ● 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 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. 132 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. 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.
Wang received a bachelor’s degree in information and technology 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 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.
Chen received a bachelor’s degree in information and computing science from Zhejiang Sci-Tech University in the PRC in June 2005, and received a master’s degree in computer applied technology from Zhejiang Sci-Tech University in the PRC in July 2010. Yi (Alex) Yang co-founded Tuya in 2014 and currently serves a director and our chief operation officer. Mr.
Chen received a bachelor’s degree in information and computing science from Zhejiang Sci-Tech University in the PRC in June 2005, and received a master’s degree in computer applied technology from Zhejiang Sci-Tech University in the PRC in July 2010. Yi (Alex) Yang co- founded Tuya in 2014 and currently serves a director, chief financial officer and chief operation officer. Mr.
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. 131 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 ● reviewing and recommending any incentive-compensation plan, equity-based plans and employee stock ownership plans. 144 Table of Contents Nomination Committee .
A director is not required to hold any shares in our company to qualify to serve as a director. 129 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 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.
Each Class A ordinary share shall be entitled to one vote on all matters subject to the vote at general meetings of our company, and each Class B ordinary share shall be entitled to ten (10) votes on all matters subject to the vote at general meetings of our company (except as required by applicable law, rules and regulations and in relation to certain reserved matters set out in our MAA). † The address of our directors and executive officers (except Sidney Xuande Huang, Changheng Qiu, Meng Xiong Kuok and Pak Tung Jason Yip) is Huace Center, Building A, 10/F, Xihu District, Hangzhou City Zhejiang, 310000, People’s Republic of China.
Each Class A ordinary share shall be entitled to one vote on all matters subject to the vote at general meetings of our company, and each Class B ordinary share shall be entitled to ten (10) votes on all matters subject to the vote at general meetings of our company (except as required by applicable law, rules and regulations and in relation to certain reserved matters set out in our MAA). † The address of our directors and executive officers (except Sidney Xuande Huang, Changheng Qiu, Meng Xiong Kuok and Pak Tung Jason Yip) is Huace Center, Building A, 10/F, Xihu District, Hangzhou City Zhejiang, 310000, People ’ s Republic of China.
Huang is responsible for providing independent professional opinion and judgment to our board of directors. Mr. Huang has over 19 years of experience in the technology and internet industry. He is currently a senior advisor of JD.com, Inc.
Huang is responsible for providing independent professional opinion and judgment to our board of directors. Mr. Huang has over 20 years of experience in the technology and internet industry. He is currently a senior advisor of JD.com, Inc.
(8) 1,427,050 8,572,950 10,000,000 1.7 7.2 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) 1,427,050 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.
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.
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.
We may also terminate an executive officer’s employment without cause upon three-month advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as may be agreed between the executive officer and us. The executive officer may resign at any time with a three-month advance written notice.
We may also terminate an executive officer ’ s employment without cause upon three-month advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as may be agreed between the executive officer and us. The executive officer may resign at any time with a three-month advance written notice.
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.
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.
The total number of Class A ordinary shares to be issued upon exercise of all outstanding options under the 2015 Plan and all other schemes of our company granted and yet to be exercised shall not exceed 30% of all the Class A ordinary shares in issue from time to time. 127 Table of Contents Plan Administration .
The total number of Class A ordinary shares to be issued upon exercise of all outstanding options under the 2015 Plan and all other schemes of our company granted and yet to be exercised shall not exceed 30% of all the Class A ordinary shares in issue from time to time. Plan Administration .
Compensation For the fiscal year ended December 31, 2023, the aggregate cash compensation paid or payable to our directors and executive officers was approximately US$1.3 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, 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.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer’s employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer ’ s employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of April 10, 2024 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 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.
Kellogg School of Management at Northwestern University in the United States in June 2002 and a bachelor’s degree in accounting from Bernard M. Baruch College of The City University of New York in the United States in February 1997. Changheng Qiu has served as our director since July 2022. Mr.
Kellogg School of Management at Northwestern University in the United States in June 2002 and a bachelor ’ s degree in accounting from Bernard M. Baruch College of The City University of New York in the United States in February 1997. Changheng Qiu has served as our director since July 2022. Mr.
Yip received a bachelor’s degree of commerce from the University of British Columbia in Canada in May 2005. Mr. Yip qualified as a Chartered Accountant in Canada in January 2007 and has been a member of the Hong Kong Institute of Certified Public Accountants since September 2016. 6.B.
Yip received a bachelor ’ s degree of commerce from the University of British Columbia in Canada in May 2005. Mr. Yip qualified as a Chartered Accountant in Canada in January 2007 and has been a member of the Hong Kong Institute of Certified Public Accountants since September 2016. 6.B.
Huang is currently a Foundation Fellow at St Anthony’s College of the University of Oxford where he was an Academic Visitor focusing on geo-economics from October 2021 to September 2022. He received an MBA degree from the J.L.
Huang is currently a Foundation Fellow at St Anthony ’ s College of the University of Oxford where he was an Academic Visitor focusing on geo-economics from October 2021 to September 2022. He received an MBA degree from the J.L.
Employees We had 3,470, 1,835 and 1,465 salaried full-time employees as of December 31, 2021, 2022 and 2023, respectively. As of December 31, 2023, 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 1,835, 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.
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. ​ 126 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 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.
Both Tencent Mobility Limited and Image Frame Investment (HK) Limited are incorporated in Hong Kong and wholly owned subsidiaries of Tencent. The registered address of Tencent Mobility Limited is Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong.
Both Tencent Mobility Limited and Image Frame Investment (HK) Limited are incorporated in Hong Kong and wholly owned subsidiaries of Tencent. The registered address of Tencent Mobility Limited is Three Pacific Place, 1 Queen ’ s Road East, Wanchai, Hong Kong.
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 .
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 .
Both of Tenet Group Limited and Tenet Vision Limited are ultimately wholly owned by the trustee of a trust constituted under the laws of the Cayman Islands, of which the settlor is Xueji (Jerry) Wang and the beneficiaries are Mr. Wang and Tuya Group Inc.
Tenet Group Limited is ultimately wholly owned by the trustee of a trust constituted under the laws of the Cayman Islands, of which the settlor is Mr. Wang and the beneficiaries are Mr. Wang and Tuya Group Inc.
Mr. Wang is responsible for the overall strategies, management, corporate culture, and commercial suitability and sustainability of products of Tuya. Mr. Wang has over nine years of experience in IoT industry and about 20 years of experience focusing on software technology, including over 13 years of experience in elastic cloud computing technologies. Prior to founding Tuya, Mr.
Mr. Wang is responsible for the overall strategies, management, corporate culture, and commercial suitability and sustainability of products of Tuya. Mr. Wang has over 10 years of experience in IoT industry and about 21 years of experience focusing on software technology, including over 14 years of experience in elastic cloud computing technologies. Prior to founding Tuya, Mr.
(4) Represents 68,793,080 Class A 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) 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.
(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 Unileo Limited is Craigmuir Chambers, Road Town, Tortola. VG 1110, British Virgin Islands.
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.
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 41 Co-chairman, Founder, Chief Executive Officer Liaohan (Leo) Chen 41 Co-chairman, Founder, President Yi (Alex) Yang 42 Director, Co-founder, Chief Operation Officer Yao (Jessie) Liu 48 Director, Senior Vice President, Chief Financial Officer Sidney Xuande Huang ​ 58 ​ Independent Non-executive Director Changheng Qiu ​ 48 ​ Independent Non-executive Director Meng Xiong Kuok (alias GUO Mengxiong) ​ 42 ​ Independent Non-executive Director Pak Tung Jason Yip ​ 41 ​ Independent Non-executive Director ​ 124 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 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.
As the individual managers of NEA 15 GP, each of the Dual Managers (defined below) also may be deemed to own beneficially the NEA 15-OF Shares.
As the individual managers of NEA 15 GP, each of the Dual Managers (defined below) and Mohamad H. Makhzoumi also may be deemed to own beneficially the NEA 15-OF Shares.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​ 150 Table of Contents
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. 133 Table of Contents The following table sets forth the breakdowns of our employees by function as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ Percentage ​ Function of Employees of Total Research and development ​ 1,047 ​ 71.5 % Sales and marketing 310 21.1 % General and administrative, and others 108 7.4 % Total 1,465 100.0 % ​ 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. 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.
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. Mr.
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.
As the sole general partner of NEA 15-OF, NEA Partners 15-OF, L.P. (“NEA Partners 15-OF”) may be deemed to own beneficially the NEA 15-OF Shares. As the sole general partner of NEA Partners 15-OF, NEA 15 GP, LLC (“NEA 15 GP”) likewise may be deemed to own beneficially the NEA 15-OF Shares.
( “ NEA Partners 15-OF ” ) may be deemed to own beneficially the NEA 15-OF Shares. As the sole general partner of NEA Partners 15-OF, NEA 15 GP, LLC ( “ NEA 15 GP ” ) likewise may be deemed to own beneficially the NEA 15-OF Shares.
As the sole general partner of NEA Partners 14, NEA 14 GP, LTD (“NEA 14 GP”) likewise may be deemed to own beneficially the NEA 14 Shares. As the individual directors of NEA 14 GP, each of the Dual Managers (as defined below) and Patrick J. Kerins also may be deemed to own beneficially the NEA 14 Shares.
As the individual directors of NEA 14 GP, each of the Dual Managers (as defined below) and Patrick J. Kerins also may be deemed to own beneficially the NEA 14 Shares.
Kuok has been the Chief Executive Officer of K3 Venture Partners Pte. Ltd. since January 2020. He worked as Vice President (Projects) at Shangri-La International Hotel Management Ltd from October 2012 to February 2017. Mr.
Kuok is responsible for providing independent professional opinion and judgment to our board of directors. Mr. Kuok has been the Chief Executive Officer of K3 Venture Partners Pte. Ltd. since January 2020. He worked as Vice President (Projects) at Shangri-La International Hotel Management Ltd from October 2012 to February 2017. Mr.
He held various positions, including audit manager at KPMG LLP from January 1997 to August 2000 and qualified as a Certified Public Accountant in the State of New York in October 1999. Mr.
He was an investment banker at Citigroup Global Markets Inc. in New York from August 2002 to July 2004. He held various positions, including audit manager at KPMG LLP from January 1997 to August 2000 and qualified as a Certified Public Accountant in the State of New York in October 1999. Mr.
Yang is responsible for human resources, government relations and daily operations of Tuya. Prior to co-founding Tuya, Mr. Yang worked as a business development senior expert at Alibaba Group from April 2011 to May 2015, where he was responsible for developing business opportunities for multiple projects, including mobile payment at Alibaba’s O2O business and Alibaba Cloud. Mr.
Yang worked as a business development senior expert at Alibaba Group from April 2011 to May 2015, where he was responsible for developing business opportunities for multiple projects, including mobile payment at Alibaba’s O2O business and Alibaba Cloud. Mr.
The address of Sidney Xuande Huang is 80 Holland Park, London W11 3SG, United Kingdom. The address of Changheng Qiu is Shangshangting 8-2201, Tangping Road, Hangzhou, China. The address of Meng Xiong Kuok is 93 Grange Road, #07-08 Grange Residences, Singapore 249614.
The address of Sidney Xuande Huang is 80 Holland Park, London W11 3SG, United Kingdom. The address of Changheng Qiu is Shangshangting 8-2201, Tangping Road, Hangzhou, China. The address of Meng Xiong Kuok is 93 Grange Road, #07-08 Grange Residences, Singapore 249614. The address of Pak Tung Jason Yip is Flat 902, Block G, Kornhill, Quarry Bay, Hong Kong.
He has been an independent non-executive director of Kuaishou Technology (a company listed on the Stock Exchange, stock code: 1024) since February 2021 and an independent director of Yatsen Holding Limited (a company listed on the NYSE, symbol: YSG) since November 2020. Prior to joining JD.com, Inc. in September 2013, Mr.
He has been an independent non-executive director of Kuaishou Technology (a company listed on the Stock Exchange, stock code: 1024) since February 2021, an independent director of Yatsen Holding Limited (a company listed on the NYSE, symbol: YSG) since November 2020, and an independent non-executive director of MIXUE Group (a company listed on the Stock Exchange, stock code: 2097).
Kuok has been an independent non-executive director of TVS Motor Company Limited (a company listed on the National Stock Exchange of India Ltd., symbol: TVSMOTOR) since March 2021. Mr. Kuok received his bachelor’s degree in science from Cornell University in the United States in January 2007. Pak Tung Jason Yip has served as our director since July 2022. Mr.
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.
By virtue of their relationship as affiliated entities, whose controlling entities have substantially overlapping individual controlling persons, each of NEA 14, NEA 15-OF, the Control Entities and the Dual Managers may be deemed to share the power to direct the disposition and vote of the NEA 14 Shares and NEF 15-OF Shares.The address of the principal business office for the above referenced NEA entities is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.
By virtue of their relationship as affiliated entities, whose controlling entities have substantially overlapping individual controlling persons, each of NEA 14, NEA 15-OF, the Control Entities and the Dual Managers may be deemed to share the power to direct the disposition and vote of the NEA 14 Shares and NEF 15-OF Shares.
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) 74,045,130 43,379,870 117,425,000 20.3 42.0 Liaohan (Leo) Chen (2) 1,974,570 26,825,430 28,800,000 5.0 22.4 Yi (Alex) Yang * — * * * Yao (Jessie) Liu * — * * * Sidney Xuande Huang ​ * ​ — ​ * ​ * ​ * Changheng Qiu ​ * ​ — ​ * ​ * ​ * Meng Xiong Kuok ​ — ​ — ​ — ​ — ​ — Pak Tung Jason Yip ​ — ​ — ​ — ​ — ​ — All directors and executive officers as a group 84,841,700 70,205,300 155,047,000 26.4 64.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: NEA entities (3) 119,019,273 — 119,019,273 20.7 9.9 Tenet Group Limited (4) 68,793,080 — 68,793,080 12.0 5.7 Tencent entities (5) 58,299,749 — 58,299,749 10.1 4.8 Tenet Vision Limited (6) — 34,806,920 34,806,920 6.1 28.9 Unileo Limited (7) 1,974,570 26,825,430 28,800,000 5.0 22.4 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) 75,320,130 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.
NEA Partners 15-OF and NEA Partners 14 are collectively referred to as “GPLPs.” NEA 15 GP, GPLPs and NEA 14 GP are collectively referred to as the “Control Entities.” Each of Forest Baskett, Anthony A. Florence, Jr., Patrick J. Kerins, Scott D. Sandell (a former director of us) and Peter W.
NEA Partners 15-OF and NEA Partners 14 are collectively referred to as “ GPLPs. ” NEA 15 GP, GPLPs and NEA 14 GP are collectively referred to as the “ Control Entities. ” Each of Forest Baskett, Anthony A. Florence, Jr. and Scott D.
Qiu received a bachelor’s degree in physics from Zhejiang University in the PRC in June 1997 and a MBA degree from Peking University in the PRC in June 2004. Meng Xiong Kuok (alias GUO Mengxiong) has served as our director since July 2022. Mr. Kuok is responsible for providing independent professional opinion and judgment to our board of directors. Mr.
Qiu received a bachelor ’ s degree in physics from Zhejiang University in the PRC in June 1997 and a MBA degree from Peking University in the PRC in June 2004. Meng Xiong Kuok (alias GUO Mengxiong) has served as our director since July 2022. Mr.
The calculations in the table below are based on 574,592,599 ordinary shares outstanding as of April 10, 2024, consisting of 504,387,299 Class A ordinary shares (including 5,433,895 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 2015 Plan and 9,578,811 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. 134 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 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.
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.
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.
As of April 10, 2024, (i) options to purchase a total of 51,372,755 ordinary shares were outstanding under the 2015 Plan, and 42,399,005 of such options had vested and become exercisable; and (ii) restricted share units to receive a total of 7,679,000 ordinary shares were outstanding under the 2015 Plan.
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.
(“NEA 15-OF”), as of December 31, 2022, based on the Schedule 13G/A jointly filed by NEA 14 and NEA 15-OF, among others, with the SEC on February 3, 2023. As the sole general partner of NEA 14, NEA Partners 14, L.P. (“NEA Partners 14”) may be deemed to own beneficially the NEA 14 Shares.
( “ NEA 15-OF ” ), as of December 31, 2024, based on the Schedule 13G/A jointly filed by NEA 14 and NEA 15-OF, among others, with the SEC on February 14, 2025. As the sole general partner of NEA 14, NEA Partners 14, L.P.
As of the same date, 56,571,052 Class A ordinary shares are available for issue and/or transfer upon vesting or exercise of awards that may be granted under the 2015 Plan. 128 Table of Contents The following table summarizes, as of April 10, 2024, 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 ​ * ​ 0.20 ​ February 21, 2021 ​ February 20, 2031 Liaohan (Leo) Chen ​ — ​ — ​ — ​ — Yi (Alex) Yang 6,500,000 0.20 from August 6, 2015 to January 5, 2021 from August 5, 2025 to January 4, 2031 Yao (Jessie) Liu * 0.20 from May 15, 2019 to September 16, 2021 from May 14, 2029 to September 15, 2031 Sidney Xuande Huang ​ * (1) ​ — ​ July 5, 2022 ​ July 4, 2029 Changheng Qiu ​ — ​ — ​ — ​ — Meng Xiong Kuok (alias GUO Mengxiong) ​ — ​ — ​ — ​ — Pak Tung Jason Yip ​ — ​ — ​ — ​ — Other grantees ​ 34,772,755 ​ 0.04135 to 0.79 ​ from March 5, 2015 to May 6, 2022 ​ from March 4, 2025 to May 5, 2032 ​ ​ 7,379,000 (1) ​ — ​ from June 16, 2021 to April 9, 2024 ​ from June 15, 2028 to April 8, 2034 * Less than 1% of our total outstanding shares.
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.
Huang had served multiple top management roles for VanceInfo Technologies Inc., including its co-president, chief operating officer and chief financial officer as well as the chief financial officer of its successor company, Pactera Technology International Ltd., after the merger. He was an investment banker at Citigroup Global Markets Inc. in New York from August 2002 to July 2004.
Prior to joining JD.com, Inc. in September 2013, Mr. Huang had served multiple top management roles for VanceInfo Technologies Inc., including its co-president, chief operating officer and chief financial officer as well as the chief financial officer of its successor company, Pactera Technology International Ltd., after the merger.
(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 1,974,570 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.
Yang received a bachelor’s degree in international business and economics from Guangdong University of Foreign Studies in the PRC in July 2004. Yao (Jessie) Liu has served as our senior vice president and chief financial officer since May 2019 and has served as our director since March 2021. Ms.
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.
The address of Pak Tung Jason Yip is Flat 902, Block G, Kornhill, Quarry Bay, Hong Kong. 135 Table of Contents (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 held of record by Tenet Group Limited a British Virgin Islands company, (iii) 34,806,920 Class B ordinary shares held of record by Tenet Vision Limited, a limited liability company incorporated under the laws of BVI, and (iv) 3,825,000 Class A ordinary shares that Xueji (Jerry) Wang may purchase upon exercise of options within 60 days after April 10, 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.
Liu received a bachelor’s degree in materials chemistry from Xiamen University in the PRC in July 1996, and a master’s degree in business administration from the University of Pennsylvania in the United States in May 2007. 125 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. 137 Table of Contents Sidney Xuande Huang has served as our director since July 2022. Mr.
(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. 136 Table of Contents To our knowledge, as of April 10, 2024, a total of 2,992,010 Class A ordinary shares outstanding were held by two record holders in the United States, representing 0.5% of our total issued and outstanding ordinary shares on an as-converted basis as of such date.
(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.
(3) Represents 108,051,445 Class A ordinary shares (the “NEA 14 Shares”) held of record by New Enterprise Associates 14, L.P. (“NEA 14”) and 10,967,828 Class A ordinary shares (the “NEF 15-OF Shares”) held of record by NEA 15 Opportunity Fund L.P.
( “ NEA 14 ” ) and 3,636,018 Class A ordinary shares (the “ NEF 15-OF Shares ” ) held of record by NEA 15 Opportunity Fund L.P.
Sonsini is a director of NEA 14 GP and manager of NEA 15 GP (the “Dual Managers”). Patrick J. Kerins is a director of NEA 14 GP.
Sandell (a former director of us) is a director of NEA 14 GP and manager of NEA 15 GP (the “ Dual Managers ” ). Patrick J. Kerins is a director of NEA 14 GP. Anthony A. Florence, Mohamad H. Makhzoumi and Scott D.
Tencent Mobility Limited is wholly owned by Tencent Holdings Limited, a company listed on the Hong Kong Stock Exchange (Stock code: 00700). (6) Represents 34,806,920 Class B ordinary shares held of record by Tenet Vision Limited, a limited liability company incorporated under the laws of BVI wholly owned by Tenet Global Limited and ultimately controlled by Xueji (Jerry) Wang.
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.
Liu is responsible for capital market, investment, finance, legal and internal controls, strategy analysis and planning of Tuya. Prior to joining Tuya, Ms. Liu worked at Deutsche Bank Group from July 2007 to December 2009, where her last position was associate in the global banking division. Ms.
Zhang is responsible for the finance of the Group. Prior to joining the Company, Ms. Zhang worked at Ernst & Young Hua Ming LLP from December 2009 to January 2021, where her last position was senior audit manager. Ms.
Removed
Liu worked at UBS AG from December 2009 to May 2014, where her last position was executive director in the investment bank division. Prior to May 2016, Ms. Liu worked at Red Capital Group Limited. From May 2016 to July 2018, Ms. Liu was the founding partner of RJ Capital Group. Ms.
Added
Yang is responsible for capital market, investment, finance, legal and internal controls, human resources, government relations and daily operations of Tuya. Prior to co-founding Tuya, Mr.
Removed
Liu had been an independent non-executive director at Zhengzhou Coal Mining Machinery Group Co., Ltd. (a company listed on the Hong Kong Stock Exchange, stock code: 564; a company listed on Shanghai Stock Exchange, stock code: 601717) from June 2014 to June 2020. Ms.
Added
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.
Removed
The registered address of each of Tuya Group Inc. and Tenet Group Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The registered address of Tenet Vision Limited is Coastal Building, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.
Added
The purpose of the 2024 Share Scheme is to align the interests of our employees and service providers with us and to encourage and retain them to make contributions to the long-term development of our business. The following paragraphs summarize the terms of the 2024 Share Scheme. Eligibility.
Added
The eligible persons who may be selected to become a participant of the 2024 Share Scheme are any individuals, or corporate entities (as the case may be), being any of (i) an Employee Participant, being any person who is an employee or a director of any member of the Group and (ii) a Service Provider, who the board of directors or the scheme administrator considers, in its sole discretion, to have contributed or will contribute to the Group.
Added
A Service Provider is any person or corporate entity (other than an employee or a director of any member of the Group) who provides services to the Group on a continuing or recurring basis in its ordinary and usual course of business which are in the interests of the long-term development of the Group. Duration.
Added
The 2024 Share Scheme shall be valid and effective for the period of ten years from June 20, 2024 (the “ Adoption Date ” ), and thereafter for so long as there are any unvested award granted under the 2024 Share Scheme prior to the expiration of the 2024 Share Scheme, in order to give effect to the vesting of such award or otherwise as may be required in accordance with the provisions of the Scheme Rules.
Added
The maximum number of Class A ordinary shares and/or ADSs which may be issued pursuant to the awards granted and to be granted under the 2024 Share Scheme, when aggregated with the number of Class A ordinary shares and/or ADSs which may be issued pursuant to other awards schemes of the Company, shall not exceed 10% of the total number of ordinary 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 57,459,259 Class A Ordinary Shares.
Added
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.
Added
The total number of Class A ordinary shares and/or ADSs issued and to be issued upon the vesting or exercise of awards granted and to be granted under the 2024 Share Scheme and other awards schemes of the Company to each individual (excluding Awards lapsed in accordance with the 2024 Share Scheme) in any 12-month period up to (and including) the date of the latest grant shall not exceed 1.0% of the total number of shares in issue as at the Adoption Date, being 5,745,925 Class A Ordinary Shares.
Added
Plan Administration. The 2024 Share Scheme shall be administrated by our board or person(s) to which our board of directors has delegated its authority (as applicable) to administer the 2024 Share Scheme. Vesting Period.
Added
The scheme administrator may from time to time while the 2024 Share Scheme is in force and subject to all applicable laws, rules and regulations, determine the applicable vesting dates and any other criteria and conditions for vesting of the awards in its sole and absolute discretion.
Added
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 .
Added
The 2024 Share Scheme shall terminate on the earlier of (i) the end of the period of ten years after the Adoption Date, except otherwise as may be required in accordance with the provisions of the 2024 Share Scheme; and (ii) such date of early termination as determined by the board of directors.
Added
The registered address of Unileo Limited is Craigmuir Chambers, Road Town, Tortola. VG 1110, British Virgin Islands. (3) Represents 74,626,900 Class A ordinary shares held of record by Anchor V Pte. Ltd based on the Schedule 13G/A jointly filed by Anchor V Pte. Ltd and other 65 Equity Partners Entities with the SEC on December 4, 2024. Anchor V Pte.
Added
Ltd is wholly owned by Anchor @ 65 Pte. Ltd. which is in turn wholly owned by Anchor Fund @ 65 Limited Partnership through its general partner, Anchor GP Pte. Ltd. Anchor GP Pte. Ltd. is a wholly-owned subsidiary of 65EP Investment IV Pte. Ltd., which is in turn a wholly-owned subsidiary of 65EP Investments Pte. Ltd. Anchor GP Pte.
Added
Ltd. has appointed 65 Equity Partners Management (Singapore) Pte. Ltd. to serve as investment manager to each of Anchor Fund @ 65 Limited Partnership and Anchor @ 65 Pte. Ltd. 65 Equity Partners Management (Singapore) Pte. Ltd. is a wholly-owned subsidiary of 65 Equity Partners Management Pte. Ltd. Each of 65EP Investments Pte. Ltd. and 65 Equity Partners Management Pte.
Added
Ltd. is wholly owned by 65 Equity Partners Group Pte. Ltd., which is in turn wholly owned by 65 Equity Partners Pte. Ltd. 65 Equity Partners Pte. Ltd. is indirectly and ultimately owned by Temasek Holdings (Private) Limited. There are internal barriers and procedures in place between Temasek Holdings (Private) Limited and Anchor V Pte.
Added
Ltd and other 65 Equity Partners Entities such that voting and investment power over the shares held by Anchor V Pte. Ltd and other 65 Equity Partners Entities is exercised independently of Temasek Holdings (Private) Limited, and accordingly, beneficial ownership of the shares reported herein is not attributed to Temasek Holdings (Private) Limited.

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Item 7. Management's Discussion & Analysis

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

1 edited+1 added−6 removed2 unchanged
Directors, Senior Management and Employees—6.B. Compensation—Share Incentive Plan.” Shareholders Agreement Other than provisions with respect to registration rights, the description of which is set forth below, all provisions and rights under our shareholders agreement dated September 11, 2019 terminated upon consummation of our initial public offering. Demand Registration Rights.
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.
Removed
At any time or from time to time after the earlier of (i) the third (3rd) anniversary of the date of the consummation of the purchase and sale of the Series D Preferred Shares or (ii) the date that is six (6) months after the closing of the IPO, upon a written request from the holders of at least 20% of the registrable securities then outstanding, we shall promptly give written notice of the proposed registration to all other Holders and shall, use our reasonable best efforts to effect as soon as practicable, the registration under the Securities Act of all registrable securities which the holders request to be registered within 15 days after the mailing of such notice by us; provided, however, that the Company shall not be obligated to effect more than two such demand registrations. ​ 137 Table of Contents Piggyback Registration Rights.
Added
Interests of Experts and Counsel Not applicable. ​ 151 Table of Contents
Removed
If we propose to file a registration statement for a public offering of our securities, we must offer holders of our registrable securities an opportunity to include in the registration the registrable securities that the holders have requested to be registered.
Removed
There shall be no limit on the number of times the holders may request registration of registrable securities pursuant to such piggyback registration rights.
Removed
If the underwriter advises the holders initiating the registration request pursuant to the piggyback registration rights in writing that marketing factors require a limitation on the number of shares to be underwritten, then the underwriter may (i) in the event the offering is the Company’s IPO, exclude all of the registrable securities (so long as the only securities included in such offering are those sold for the account of the Company and no securities of other selling shareholders are included), or (ii) otherwise exclude the registrable securities requested to be registered, provided that (A) no registrable securities shall be excluded unless all other equity securities (except for securities sold for the account of the Company) are excluded from the registration and underwriting and so long as the number of registrable securities to be included in such registration is allocated among all holders in proportion, as nearly as practicable, to the respective amounts of registrable securities requested by such Holders to be included and (B) the amount of registrable securities to be included in such registration shall not be reduced below twenty-five percent (25%) of the total amount of securities included in such registration.
Removed
In case we receive from any holders of registrable securities then outstanding written requests that we effect a registration on Form F-3 or Form S-3, as the case may be, we shall, subject to certain limitations, file a registration statement on Form F-3 or Form S-3 covering the registrable securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the holders.
Removed
Expenses of Registration. We will bear all registration expenses incurred in connection with any demand, piggyback or F-3 registration, subject to certain limitations. Other Material Related Party Transactions There were no other material related party transactions during year ended December 31, 2023. 7.C. Interests of Experts and Counsel Not applicable.

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