Tuya, Inc. · NYSE:TUYA
Tuya — Q2 2023 Earnings Presentation
26 slides from Tuya's earnings presentation, Aug 23, 2023
Slide 1: Presentation Second Quarter 2023
Presentation Second Quarter 2023 August 2022
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying oral presentation (the “Presentation”) have been prepared by Tuya Inc. (the "Company") solely for informational purposes and have not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Com
Slide 3: Key Financial Highlights
Key Financial Highlights $1.5 Million $7.5 Million 46.7% Non-GAAP Net Profits Operating Cash Generated Overall Gross Margin in Q2'23 in Q2'23 in Q2'23 First time achieved Strong cash position Historical High Gross Profit quarterly break-even and balance sheet assures Margin secures profitable on a n
Slide 4: Content
Content 1 Company Introduction 2 Key Updates 3 First-time Achievement of Non-GAAP Quarterly Breakeven 3
Slide 5: Build an IoT Developer Ecosystem
Build an IoT Developer Ecosystem Enable Everything to Be Smart
Slide 6: We Deliver a Cloud-Native Software-Enabled Experience
We Deliver a Cloud-Native Software-Enabled Experience to End Users For Everything 5
Slide 7: Developer-First, Cloud-Agnostic IoT Cloud Platform
Developer-First, Cloud-Agnostic IoT Cloud Platform For Business Customers For All Business Customers and End Users Developing Using Smart Devices Smart Devices IoT PaaS Industry SaaS Value-added Tuya IoT Services Cloud Development Platform TUYA IOT CLOUD IoT Cloud IoT Developer Kits Infrastructure C
Slide 8: Our Unique Products
Our Unique Products Value-added IoT PaaS Industry SaaS Services For Business Customers Cloud-Based Connectivity and Basic IoT Services Smart Smart Building IoT Edge Capabilities Hotel & Rental Smart Voice Data Tuya Assistant Analytics Mall For End Users App Development Smart Commercial Cloud APIs De
Slide 9: Our Ecosystem Participants
Our Ecosystem Participants Value-added Services for End-users Value-added Services App Development Data Analytics IoT Product Planning Finished Co-promotion Smart Devices Brands End Users IoT PaaS Finished Smart Devices Purchase Orders OEMs 8
Slide 10: Recognized by World's Leading Customers
Recognized by World's Leading Customers 9
Slide 11: Key Topline Updates
Key Topline Updates
Slide 12: Total Revenue Increased Sequentially for Three Consecutive Quarters
Total Revenue Increased Sequentially for Three Consecutive Quarters Total Revenue by Quarter (USD'M) Rapid growth propelled by Under headwinds of Ongoing our unique technology, first-mover advantages and developer ecosystem high inflation & inventory backlog destocking cycle +20% QoQ -9% YoY 84.7 85
Slide 13: Quarterly Revenue Update
Quarterly Revenue Update Revenue Breakdown for The Second Quarter (USD'M) Total Revenue IoT PaaS SaaS and Others Smart Device Distribution YoY YoY YoY YoY -9% -14% +30% -16% 78.9% 46.7% 44.2% 74.5% 42.8% 42.5% 62.5 57.0 23.0% 47.6 41.1 11.4% 7.2 9.4 7.8 6.5 Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 Q2'22
Slide 14: Revenue Efficiency Improved to A Historical High Level in Q2
Revenue Efficiency Improved to A Historical High Level in Q2 Average Revenue Supported Average Gross Profit Supported Average Revenue Per Headcount Per Headcount Per Customer (USD'K) (USD'K) (USD'K) 33.3 15.5 16.9 26.5 16.7 24.2 11.7 10.4 15.2 Q2'22 Q1'23 Q2'23 Q2'22 Q1'23 Q2'23 Q2'22 Q1'23 Q2'23 1.
Slide 15: Leverage IoT to Capture Growth Opportunities in New Energy Sector
Leverage IoT to Capture Growth Opportunities in New Energy Sector Energy-Saving Product Revenue New Partnership with Giants YoY 290%+ Achieved 60%+ of total revenue in 2022 Smart Smart Smart Smart Remote Socket Thermostat TRV Controller ··· Smart Energy Management System Multi-Cloud Things Business
Slide 16: Meaningful Software Revenue from High-Value VAS
Meaningful Software Revenue from High-Value VAS Cloud Storage VAS Revenue by Quarter/Year (USD'M) 5.1 • Robust growth driven by a steady increase in the number of activated cloud storage Over 10x 2.5 device base YoY Growth 2.2 0.4 2021 2022 Q1'23 Q2'23 Note: Numbers are rounded for presentation purp
Slide 17: IoT Development Platform to Tackle IoT Fragmentation & Low Penetration Rate
IoT Development Platform to Tackle IoT Fragmentation & Low Penetration Rate 846,000 Developers1 +34.6% Year over Year Product Development App Development Cloud Development 1. “Developer” refers to the registered developer, as of June 30, 2023. 16
Slide 18: First-time Achievement of Non-GAAP Quarterly Breakeven
First-time Achievement of Non-GAAP Quarterly Breakeven
Slide 19: Stably Increased Gross Margin Secures Long-term Profitability
Stably Increased Gross Margin Secures Long-term Profitability Gross Margin Overall gross margin Stably Increased Overall blended GPM 44% 47% 43% 43% 43% 43% 44% Gross Margin 41% 42% 41% • Showcasing our highly recognized 38% 34% customer valuation proposition despite 30% 30% macro headwinds 28% 25%
Slide 20: Operating Expense by Quarters
Operating Expense by Quarters Operating Expense, GAAP and Non-GAAP1 (USD'M) OPEX narrowed by 12.3% YoY mainly due to: 85.6 83.9 • Non-GAAP OPEX narrowed by 32.7% 77.2 78.3 YoY mainly due to the decreases in basic payroll and benefits as a result of 64.7 66.2 headcounts down to ~1,690 as of June 69.0
Slide 21: Operating Loss by Quarters
Operating Loss by Quarters Operating Loss, GAAP and Non-GAAP1 (USD'M) Operating loss in Q2'23 narrowed by 20.4% YoY mainly due to: (6.4) • OPEX decreased significantly YoY (15.3) (15.0) • Partially offset by a one-time credit- related impairment loss of long-term (22.3) investments of US$8.1 Million
Slide 22: First-time Achievement of Non-GAAP Quarterly Breakeven
First-time Achievement of Non-GAAP Quarterly Breakeven Net Profit/(Loss), GAAP and Non-GAAP1 (USD'M) Net loss in Q2'23 narrowed by 34.3% YoY 1.5 mainly due to: • Improvement in operating loss (3.7) (5.2) • US$12.1 million of interest income achieved in Q2'23 due to well- (15.9) implemented treasury
Slide 23: Operating Cash Flow by Quarters
Operating Cash Flow by Quarters Net Cash Generated/(Used) in Operating Activities (USD'M) Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 5.8 7.5 0.4 (2.2) (0.1) US$942 Mn (7.0) (9.0) (13.5) Net cash1 (18.9) as at June 30, 2023 (31.0) (32.7) (46.1) (53.2) (57.4) I
Slide 24: Strong Balance Sheet Assures Long-term Operation
Strong Balance Sheet Assures Long-term Operation Total Liabilities to Assets Ratio (%) No debt or capital 10.4% 10.8% 10.8% commitments 9.5% 9.8% 8.6% 8.9% 8.0% 8.4% Liabilities are mainly operating related, 7.4% such as account payable, salary payable, advance from customers, etc. Q1'21 Q2'21 Q3'21
Slide 25: Appendix
Appendix
Slide 26: Appendix: Q1'23 Reconciliation of Non-GAAP to GAAP
Appendix: Q1'23 Reconciliation of Non-GAAP to GAAP For the Three Months Ended For the Three Months Ended June 30, 2022 June 30, 2023 USD'000 USD'000 Reconciliation of operating expenses to non-GAAP operating expenses Research and development expenses (37,221) (26,474) Add: Share-based compensation 3