Kai Xiao's questions to Tuya (TUYA) leadership • Q2 2025
Question
Kai Xiao from CICC inquired about the key drivers for Tuya's gross margin expansion, particularly the potential impact of AI-related revenue on the overall margin mix. He also asked about the primary growth engines for the SaaS and Smart Device Solutions segments and their future outlook.
Answer
Co-founder, COO, and CFO Alex Yang stated that gross margin reflects the company's technology value proposition. He expressed satisfaction with the current margin levels: PaaS around 48%, SaaS above 70%, and Smart Solutions above 20%. He noted that the SaaS business is growing faster than PaaS. For Smart Solutions, the strategy is to focus on top-tier customers with differentiated offerings, with new AI solutions like AI toys showing positive initial traction.