Matt Ma's questions to Tuya (TUYA) leadership • Q2 2025
Question
Matt Ma of Jefferies asked if Tuya is observing a supply chain shift out of China due to U.S. tariffs and the potential impact on the company, such as incremental costs. He also questioned the reason for the relatively lower gross margin in the Smart Solutions segment in Q2 and inquired about the company's expected margin profile over the next three to five years.
Answer
Co-founder, COO, and CFO Alex Yang explained that supply chain shifts have been ongoing for years, and Tuya adapts by delivering modules to customers' chosen manufacturing locations. He noted short-term uncertainty is high as tariffs affect multiple countries. Regarding the Smart Solutions margin, Mr. Yang attributed the slight Q2 dip to 22.5% to the initial rollout of new products like AI toys, which start with lower margins that are expected to improve with scale.