Tuya (NYSE:TUYA) reported second-quarter 2026 revenue of $92.9 million, up 16% from a year earlier and accelerating from 8.3% growth in the first quarter, as its platform-as-a-service business and smart home and robot products posted double-digit gains.
Founder and CEO Jerry Wang said the company maintained growth despite what he described as a complex global operating environment. He attributed the performance to increasing smart-product penetration, steady demand in home appliances, adoption of differentiated products such as smart door locks, and demand for emerging AI-enabled categories.
Segment Performance and Profitability
Co-Founder and CFO Alex Yang said PaaS revenue rose 16.9% year over year to approximately $67.9 million, making it the company’s primary growth driver. Tuya’s trailing-12-month PaaS premium customer count stood at 318 at the end of the quarter, and those customers accounted for about 89.5% of PaaS revenue.
AI application and other revenue increased 3.9% to approximately $11.5 million, driven primarily by cloud-based services including video cloud storage. Smart home and robot products revenue increased 23.2% to approximately $13.5 million, supported by customer demand for smart-security, energy and other differentiated products.
Yang said PaaS growth was led by home appliances, smart door locks, electronics, energy products and AI companion product solutions. Home-appliance growth reflected customer rollouts of smart-enabled models, geographic expansion, a larger contribution from smart-enabled products and the migration of certain overseas brand projects from legacy solutions to Tuya’s platform.
Smart-door-lock demand was supported by adoption of audio-video and low-power Wi-Fi solutions, according to Yang. However, he said demand recovery in traditional lighting and IP cameras remained comparatively slow, demonstrating differing trends across product categories and regions.
Tuya’s blended gross margin was 46.3% in the quarter. Segment gross margins were 46.8% for PaaS, 72% for AI application and other revenue, and 21.9% for smart home and robot products. Gross profit increased 11.1% from a year earlier to approximately $43 million.
Yang said margin changes were driven by semiconductor-cost volatility and changes in business mix. The company generally passed increased costs through to customers during the quarter, prioritizing gross-profit maintenance rather than holding gross-margin percentages steady. He said the company had built inventory and cost buffers and expects to work toward more stable material costs over the next two or three quarters.
GAAP operating expenses declined 10.4% year over year to approximately $33.7 million, primarily because of lower share-based compensation expense. GAAP operating profit totaled about $9.3 million, representing a 10% operating margin, while non-GAAP operating profit was approximately $9.6 million, up 11.7% from a year earlier.
Net profit was approximately $18.6 million, and non-GAAP net profit was approximately $18.9 million. Yang said the year-over-year decline in non-GAAP net profit primarily reflected lower financial income and foreign-exchange losses, while core operating profit continued to grow. Operating cash flow was positive at $6.2 million.
At quarter-end, Tuya had approximately $976 million in liquid assets, including cash and cash equivalents, time deposits and Treasury securities.
AI Hardware and Developer Tools
Management highlighted continued expansion in shipment volumes for AI companion products. During China’s June 18 Shopping Festival, Fuzozo, a product built on Tuya solutions, ranked first in the AI-toy category on Tmall, according to Yang. Other ecosystem products also recorded strong rankings and sales performance on major e-commerce platforms.
Yang said the results offered early validation of consumer acceptance and commercialization potential for AI-device formats. The company has been expanding capabilities in multimodal perception, personalization and memory, content services, and user engagement to help customers develop and mass-produce AI-native consumer hardware.
Tuya also launched Tuya Cobuilder during the quarter, an AI developer gateway that uses live coding for AI hardware development. The tool allows developers to use natural-language prompts to define products, create user interfaces, develop embedded firmware and AI agents, build workflows, and proceed to device flashing and debugging.
The company said its registered developer base exceeded 2.09 million at the end of the quarter. In just over a month after Cobuilder’s launch, its AI-powered panel-generation capability expanded to 30 product categories, with average generation time for a single panel reduced to approximately 190 seconds.
Yang said Tuya views Cobuilder as a way to lower development barriers for both hardware developers and product-focused users who may not have coding experience. The company has begun conducting developer webinars and training sessions around the tool.
Regional Demand and Outlook
Responding to questions about demand in the second half, Yang said end-market demand and internal business momentum remained within management’s expectations, though recovery was gradual rather than immediate.
Europe continued to show strong demand, particularly for energy-related offerings, AI home-management solutions and energy-efficiency products, he said. In Southeast Asia and Latin America, Tuya is seeing potential from telecom-carrier channels as partnerships established about two and a half years ago move toward scaling and commercialization.
Yang said business in the Middle East remained paused amid military conflict during the second quarter, although customers continued product-development and concept-definition work. In North America, the company is seeing fluctuations in price-sensitive, lower-priced devices because of supply-chain price increases, and is working with customers on product mix for the second half.
In China, Yang said major brands are accelerating their transition from legacy devices to smart products and from first-generation IoT devices to AI-enabled products. He also cited AI companion devices as an emerging category in the market.
Looking ahead, Wang said Tuya plans to focus on AI home, AI energy and AI robot applications; improve tools for live coding, agent orchestration and cloud-edge-device collaboration; and expand proven solutions globally while strengthening its developer ecosystem and industry partnerships.
About Tuya (NYSE:TUYA)
Tuya Inc is a global Internet of Things (IoT) platform provider that enables brands, OEMs and developers to create smart products and solutions. The company offers a suite of cloud services, connectivity modules and software development kits designed to support the full lifecycle of IoT devices. Tuya’s platform is built to facilitate rapid prototyping, secure device management and scalable data analytics, with an emphasis on interoperable solutions for smart homes, commercial buildings and industrial applications.
At the core of Tuya’s offering is its IoT operating system, which integrates device hardware, network protocols and application-level services into a unified framework.
