Q3 2021 Tuya Inc Earnings Call

Good morning, and good evening, ladies and gentlemen, thank you for standing by and welcome to Julia Inc's third quarter 2021 earnings conference call.

Speaker 1: Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to TUYA, Inc.'s 3rd Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. We'll be hosting question and answer session after management's prepared remarks. I will now turn the call over to the first speaker today, Mr. Reg Chai, Investor Relations Associate Director of TUYA. Please go ahead, sir.

This time all participants are in listen only mode, we'll be hosting question and answer session. After management's prepared remarks.

I'll now turn the call over to your first speaker today, Mr. Red Chai Investor Relations Associate Director Rescue Yeah. Please go ahead Sir.

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Thank you Hello, everyone welcome to our historical data to sell it in 'twenty, one earnings call joining us to stay on foreigners and achievable.

Speaker 2: Thank you. Hello everyone. Welcome to our third quarter 2021 earnings call. Joining us today are founders and CEO of Tuya, Mr. Jerry Wang, co-chairman and president of Tuya, Mr. Leo Chen, and our CFO , Ms. Jessie Liu. You can refer to our third quarter of 2021 financial results on our company's IR website at ir.tuya.com.

Mr. Gerry Wang co chairman and President of two young Mr. Leo Chen and our Sinfulness Jesse Lynn you can't read for a child with the closure of 2021 financial result, our company's IR website at IR <unk> com.

Speaker 2: You can also access a replay of this call when it becomes available in a few hours on our IR website. Before we start, please note that this call may contain forward-looking statements that may present to the Safe Harbor Provision for the Private Securities Litigation Reform Act of 1995.

Also access a replay of this call when it becomes available in a few hours on our IR website, you've always thought. Please note that this call may contain forward looking statements can be presented to the safe Harbor provisions for the private Securities Litigation Reform Act of 1995.

These forward looking statements are based on our management's current expectations and observations that involve known and unknown risks uncertainties and other factors not under the company's control, which may cause actual results performance or achievements of the company to be materially different from the results performance.

Speaker 2: These forward-looking statements are based on the management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements.

Expectations implied by these forward looking statements all forward looking statements are expressly qualified in their entirety by the cautionary statements risk factors and details of the Companys filing with D. C. The company undertakes no duty to revise or update any forward looking statements for selected events or.

Speaker 2: All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors, and details of the company's filing with the SEC. The company undertakes no duty to revise or update any forward-looking statements for selected events or circumstances after the date of this conference call.

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Speaker 3: I will now turn the call to our first speaker today, founder and the CEO of Tuya, Mr. Jerry Wang. Hello, everyone. Thank you for attending Tuya's 3rd Anniversary Event, which will be held in 2021.

I will now turn the call to our first speaker today founder and the CEO of two young Mr. Jerry Law.

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Hello, everyone and thank you for joining us on our third quarter of 2021 earnings conference call.

Speaker 1: Hello, everyone, and thank you for joining us on our third quarter of 2021 Earnings Conference Call.

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Speaker 3: The third quarter of 2021 will be a challenging one for the industry. Although the global pandemic has brought various impacts, disrupting the growth rate of the quarter, and adding problems such as Amazon shutdowns and maritime difficulties, Q3's total revenue has increased by about 45% to $8,558 million, which is in line with our expectations.

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Speaker 3: Q3 relies on its world-leading position in the industry competition to help the main customer groups to deal with unfair factors such as lack of core and supply chain problems to maintain a strong competitive attitude.

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The third quarter of 2021 was a challenging quarter for the industry.

Speaker 1: The third quarter of 2021 was a challenging quarter for the industry. Despite the impacts of the global pandemic, which caused volatile sequential growth, Amazon's store closures, shipping difficulties, and other global events, we still achieved roughly 45% year-over-year growth in our total revenues, which reached US$85.6 million, in line with our expectations and guidance.

The impact of the global pandemic, which caused volatile sequential gross Amazon store closures shipping difficulties and other global events, we still achieved roughly 45% year over year growth in our total revenues.

Which reached $85 6 million U S dollars in line with our expectations and guidance.

Speaker 1: Our SaaS and other business segments, which are mainly to-be services, were less affected by the systemic risk factors and achieved strong year-over-year growth of over 210%.

Our SaaS and other business segment, which are mainly to be services were less affected by the systemic risk factors and achieved strong year over year growth of over 210%.

Speaker 1: Our overall gross margin remained stable, increasing slightly on a sequential basis to reach 42.6% for the quarter. During the quarter, we leveraged our industry leadership position and empowered our main customer groups to remain competitive amid macro adverse factors such as chip shortage and supply chain constraints.

Our overall gross margin remain stable, increasing slightly on a sequential basis to reach 42, 6% for the quarter.

During the quarter, we leverage our industry leadership position and empowers our main customer groups to remain competitive and make macro adverse factors such as cheap shortage and supply chain constraints.

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Speaker 3: Next, I would like to share with you the progress and situation of Q3 from the three levels of IoT PaaS, SaaS, and developers.

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Next we'll like to share our quarterly progress in Iot Paas SaaS and developing.

Speaker 1: Next, we'd like to share our quarterly progress in IoT PaaS, SaaS, and DevOps.

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Speaker 3: In the past 12 months since September 30, 2021, the income of our IoT PaaS business has increased by 179%. It has maintained a high position in the cloud PaaS platform industry for the eighth consecutive quarter.

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Speaker 3: Premium customers, i.e. IoT customers who contribute more than 100,000 U.S. dollars in 12 months, have increased from 285 in the second quarter of 2021 to 306 in the third quarter.

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Speaker 3: Q3, our IoT Park CEO acquired more than 1,000 new customers. The total number of customers we serve has increased by 46%. At the same time, the number of brand customers who applied for full-fledged services has increased from more than 3,300 last season to more than 3,800.

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For the trailing 12 months ended September 30th 2021 the dollar based net expansion rates for our Iot Paas business was 117, 9% as we continue to maintain one of the leading rates for this metric in the industry for the eighth consecutive quarter. Since we began tracking this metric.

Speaker 1: For the trailing 12 months ended September the 30th, 2021, the dollar-based net expansion rate for our IoT PaaS business was 179%, as we continued to maintain one of the leading rates for this metric in the industry for the 8th consecutive quarter since we began tracking this metric.

Speaker 1: Our number of premium customers, which are defined as customers contributing to over $100,000 in ILT Pass revenue during the trailing 12-month period, grew to 306 as of September 30, 2021, from 289 as of June 30, 2021.

Our number of premium customers, which are defined as customers contributing to over $100000 in Iot Paas revenue during the trailing 12 month period grew to 306 as of September 30th 'twenty 'twenty. One from 289 as of June 30th 2021.

During the third quarter, we acquired over 1000, new Iot Paas customers growing all Iot paas customer count by 46% year over year. Meanwhile, the number of brands on our platform grew to over 3800 from 3300 at the end of last quarter.

Speaker 1: During the third quarter, we acquired over 1,000 new IoT PaaS customers, growing our IoT PaaS customer count by 46% year-over-year. Meanwhile, the number of brands on our platform grew to over 3,800 from 3,300 at the end of last quarter.

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Speaker 3: This brand is one of the top three brands in Europe . Through the development of smart cameras on the ground, a Greek-based giant chose to build a smart product brand on the ground, an Indian-based brand used the ground platform to complete the interconnection of various appliances and heaters, as well as Korea's leading e-commerce channels. China's leading brands have chosen to build a set of free-brand IoT products on the ground platform, etc.

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Some of these customers includes one of the top three wetter station specialists in Europe, which developed a smart wetter clock going to chew up laugh when a leading Greek listed company chose to yeah, its ability to smart product friends. Additionally, a leading Indian basing our bopping Brent Shelleyan use the trulia platform.

Speaker 1: Some of these customers include one of the top three weather station specialists in Europe , which developed a smart weather clock through the Tuya platform. A leading Greek-listed company chose Tuya to build its smart product brand. Additionally, a leading Indian bathing brand giant used the Tuya platform to assess interfaces for various electrical and water heating products.

U S S interfaces for various electrical and water heating products finally, South Korea topped electric electronic goods sales channel and China's home furnishing a leader in particle board have both chosen to built a full set of private label Iot product onto Chugai platform, notably we're also.

Speaker 1: Finally, South Korea's top electronic goods sales channel and China's home furnishing leader in particle boards have both chosen to build a full set of private-label IoT products on the QR platform.

Speaker 1: Notably, we're also seeing great growth potential in several emerging categories.

Seen great growth potential in several emerging categories. For example, during the quarter, our initial delivery to a world renowned retail Giants private label brands in electric and gardening tools exceeded two exceeding 200000 set of Iot paas.

Speaker 1: For example, during the quarter, our initial delivery to a world-renowned retail giant's private label brand in electric and gardening tools exceeded 200,000 sets of IoT pads.

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Speaker 3: In this year's lack of new background, we want to ensure the continuous expansion of IoT PaaS customers and the scale effect of the main platform. For example, we analyze and layout the chip supply chain capacity and lock the capacity in advance. On the product side, we help customers to upgrade and switch for the main categories such as lighting, power supply, etc. Effectively respond to the shortcomings of the chip and boost the price of the chip. We will continue to dig into a cooperative method of supporting and supplying on the entire IoT supply chain.

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In the context of this year's keeps shortage the scale effect of tea. Our platform is indispensable to ensure the continuous expansion of Iot Paas customers. For example, we analyze the production capacity of the industrial chain and secure production capacity and events in terms of our record.

Speaker 1: In the context of this year's cheap shortage, the scale effect of 2R platform is indispensable to ensure the continuous expansion of IoT PaaS customers.

Speaker 1: For example, we analyze the production capacity of the industrial chain and secure production capacity and events.

Speaker 1: In terms of our regular product lines, such as electrical engineering and lighting, in response to the chip shortage, we helped customers switch and upgrade their manufacturing processes to effectively hedge against increasing chip prices. Looking ahead, we'll continue to pursue an additional win-win partnership throughout the IoT ecosystem.

The product lines, such as electrical engineering and lighting in response to the chip shortage, we helped customers switch and upgrade their manufacturing processes.

Actively hedge against increasing cheap prices looking ahead, we'll continue to pursue an additional win win partnerships throughout the Iot ecosystem.

Speaker 3: In order to strengthen Tuyang's unique and leading Internet of Things competitive advantage, we will continue to bring in new products from overseas.

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Speaker 3: Through the Tuya Link SDK software capability, we can open up more industries, stimulate ecosystem modules and a connection with Tuya Cloud Platform, expand the ecosystem map, and launch more types of outdoor devices, device capabilities and app solutions. For example, HID near-automatic unlocking, the ability to easily install the app's Gmouse development, adapt to outdoor, RV, mobile, van and other mobile smart scenes, etc.

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To strengthen our unique and leading competitive barriers and cross device category connectivity, we continue to iterate, our outdoor product lines by leveraging our tea all link SDK software capabilities, we can make that many of the forging ecological modules for various indices on all clouds plot.

Speaker 1: To strengthen our unique and leading competitive barriers in cross-device category connectivity, we continue to iterate our outdoor product lines. By leveraging our 2YA Link SDK software capabilities, we connected many of the 4G ecological modules for various industries on our cloud platform, enabling us to further expand our product reach.

One enabling us to further expand our product reach we also expanded into more outdoor product subcategories and developed more Iot device capabilities and absolution, such as H O I D. S. S control more July development capabilities, enabling users to develop apps at will and adapt.

Speaker 1: We also expanded into more outdoor product subcategories and developed more IOT device capabilities and app solutions, such as HID-SS control, modularized development capabilities, enabling users to develop apps at will, and adaptability for smart mobile applications for outdoor RVs and mobile vending trucks.

Ability for smart mobile applications for outdoor rvs and mobile vending trucks.

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Speaker 3: Combined with the open strategy of PaaS, developers can implement personalized, differentiated, and diversified product development on the basis of parameters. Therefore, the SKU that we can't support has increased from 410,000 in the second quarter to 500,000 in the third quarter, maintaining a good growth system. The expansion of SKU means that the hardware ecology on the main IoT platform is further enriched.

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Speaker 3: Ability to serve a variety of anxieties

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As part of our strategy to create an open paas platform developers can develop personalized differentiated and diversified product utilizing the above mentioned features as such we sustained our growth momentum in the number of Skus empowered by junior leaching roughly 500000 by the end of it.

Speaker 1: As part of our strategy to create an open path platform, developers can develop personalized, differentiated, and diversified products utilizing the above-mentioned features.

Speaker 1: As such, we sustained our growth momentum in the number of SKUs empowered by Chuya, reaching roughly 500,000 by the end of the third quarter, compared to 410,000 at the end of the second quarter.

The third quarter compared to 410000 at the end of the second quarter.

Speaker 1: The solid growth signifies our continued diversification of the IoT hardware ecosystem on the platform, as we continue to expand the solid foundation towards our long-term vision of building an IoT developer ecosystem to enable everything to be smart.

The solid growth signifies our continued diversification of the Iot hardware ecosystem on our platform.

As we continue to expand the solid foundation towards our long term vision of building, an Iot developer ecosystem to enable everything to be smart.

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Speaker 3: Next, I will introduce you to some of the progress of Shansheng Alice's business.

Next I would like to hear all progress in the SaaS and other segment.

Speaker 1: Next, I would like to share our progress in the SAS and other segment.

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Speaker 3: In Q3, our 3S SaaS business has maintained steady growth. For example, one of the largest telecommunications cloud 3s in Russia has adopted a smart home development strategy based on soil-seed eco-systems and has placed an order for a flagship cloud service. One of the largest insurance companies in Europe believes that risk prediction based on IoT devices is the main competitive way for future insurance companies.

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Speaker 3: And Tuya's SaaS capability can only meet this demand and layout very well. And in China, Tuya's hotel SaaS KA version helps a Chinese telecommunications industry The best brand, the company accurately revealed the smart hotel project.

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During the third quarter, our commercial with SaaS and maintained steady growth for example, one of Russia's largest telecom operators and now it's smart home development strategy based on U S ecosystem and placed an order for our flagship cloud services. In addition, one of Europe's largest insurance groups.

Speaker 1: During the third quarter, our commercial SaaS maintained steady growth. For example, one of Russia's largest telecom operators announced a smart home development strategy based on Churas ecosystem and placed an order for our flagship cloud service.

Speaker 1: In addition, one of Europe's largest insurance groups believes that conducting risk predictions based on IoT devices is a core capability for remaining competitive in the future, and that our SaaS capabilities are fully capable of enabling and serving such capacity. In China, the Chuya Hotel SaaS KA version helped China's best brand power enterprise in the mattress field secure a smart hotel project.

Believes that conducting risk predictions based on Iot devices is a core capability for remaining competitive in the future and that all SaaS capabilities are fully capable of enabling and serving such capacity in China that you Y'all Hotel Softkey, a version health of China's best brand power Enterprise.

Mattress field secure a smart hotel project.

Apartments are a problem in Sars, providing unified equipment management module ambitious management data analytics dashboard and powerful third party system integration capability for the first innovative residential housing project for talent in China. Meanwhile, a well known public company in.

Speaker 1: Huya's apartment stars provided unified equipment management, modular business management, data analytics dashboard, and powerful third-party system integration capability for the first innovative residential housing project for talent in China.

China the leader in the commercial lighting industry used all commercial lighting soft services to implement intelligent lighting solution in fields, such as office rail transit industrial and retail, notably over 900 kilometers away from the American continent in Bermuda, We also welcome.

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As for our value added services. We currently offer over 60 value added services supporting customers with an all around it in huntsman of their Iot products. For example, our tea. We are mall is gaining widespread market popularity through enabling brands to quickly embed e-commerce systems with base.

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Speaker 3: The main development strategy is also the key to the breakthrough of the IoT market in China. For example, a comprehensive property management and service operation group led by Yijia China, and the main development platform to build its real estate, community property, industrial operation and living environment.

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Speaker 3: A smart shared office built with a management area of more than 1 million square meters in China's leading office space has now reached the stage of scale duplication, etc.

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Speaker 1: The industry barriers formed by our developer strategy have also become the key to our development breakthrough in China's IoT market during the quarter. For example, one of China's leading comprehensive property management and services group, which built its real estate community property management, commercial operations, and live services application software on our developer platform.

The industry barriers for and by our developer strategy have also become the key to all of the development breakthrough in China's Iot market. During the quarter. For example, one of China's leading comprehensive property management and services group, which built its real estate community property management commercial operation and life Sciences.

It's application software on our developer platform. Another example is a leading office space to service provider in China, managing more than 1 million square meters use our platform to scale the expansion of its smart co working office space business.

Speaker 1: Another example is a leading office space service provider in China, managing more than one million square meters, used our platform to scale the expansion of its smart co-working office space business.

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Speaker 3: In terms of developer products, Q3 focuses on hardware product development and edge-to-edge products. In the development of Apple, like China,

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Speaker 3: market IoT, WeChat app SDK, and IoT Core in cloud-development product services. Overall, Q3 2021 is a year-on-year strategy to achieve high-speed growth in the face of multiple environmental factors. At the same time, we believe that

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Speaker 3: As long as we face the consumption of dry goods and create value for customers and society, and constantly build unique competitive barriers for enterprises, we are confident in our long-term vision.

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In terms of developer product during the third quarter, we focused on and iterate at the edge gateway products seen heartworm product development. The Iot Wechat mini program SDK for the domestic market in App development and the Iot caught in cloud development services product.

Speaker 1: In terms of developer products, during the third quarter, we focused on and iterated the Edge Gateway products in hardware product development, the IoT WeChat Mini Program SDK for the domestic market in app development, and the IoT Core in cloud development services products.

Overall, we remain determined and committed to all the studies in the third quarter as we have done so for many years and achieved a rapid growth in the face of multiple macro environmental factors.

Speaker 1: Overall, we remained determined and committed to our strategies in the third quarter, as we have done so for many years, and achieved rapid growth in the face of multiple macro environmental factors. Moreover, as we continue to create value for customers and society in response to their rigid demands and constantly elevate our unique competitive barriers, we are confident in our long-term prospects.

As we continue to create value for customers and society in a response to their original demands and constantly elevate our unique competitive barriers. We're confident you know our long term prospects.

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Speaker 3: Lastly, I would like to mention that we have been implementing two new product layouts in the last four quarters. Tuya's Private Cloud solution and IoT advanced features.

Speaker 1: Finally, I would like to share some updates on new products that we have been implementing since the fourth quarter, i.e., our private cloud solution and advanced IoT features.

Finally, I would like to share some updates on new products that we have been implemented and implementing since the fourth quarter I E. Our private cloud solution and events Iot features.

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Speaker 3: to provide a unified set of IoT standards for global customers including cloud-covered, app-covered, and edge-covered.

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Speaker 3: so that all the devices developed based on the Tuya platform can achieve a truly excellent inter-network experience in the long-term future.

Speaker 3: The main approach of the private cloud solution is similar to that of various ERP systems. It is a new product that deploys the standard IoT business cloud code on the private cloud of the customer. The private cloud of the customer is based on the IaaS cloud infrastructure purchased by the customer.

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Speaker 3: After the trial and error of customers from leading companies in several different fields, we are now formally proposing to the global market a plan to satisfy a more diversified demand of customers.

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We provide global customers with one set of unified Iot standards covering to cloud.

Speaker 1: We provide global customers with one set of unified IoT standards covering the cloud, app, and edge modules so that all devices developed on QIR platform can experience excellent interconnection in the long term. Our private cloud solution is similar to the implementation of various ERP systems. This new product deploys the standard IoT business source on the customer's private cloud, which is a cloud infrastructure owned by the customer.

And edge modules, so that all devices developed onto our platform can experience excellent interconnection in a long term a private cloud solution is similar to the implementation of various ERP system. This new product deploys the standard Iot business source code on the customers' private cloud which is.

And is a cloud infrastructure are owned by the customer utilizing the same standards as our public cloud system. All private cloud product is capable of interconnecting with all other smart devices and seen to under two y'all Iot standards via the cloud after the trial and lending of several leading enterprise.

Speaker 1: Utilizing the same standards as our public cloud system, our private cloud product is capable of interconnecting with all other smart devices and scenes under QIoT standards via the cloud.

Speaker 1: After the trial and landing of several leading enterprise customers in different fields, we are now officially launching QIA Private Cloud solutions in the global market, further diversifying our solutions to meet customer demand worldwide.

The mers in different fields, we are now officially launching to our private cloud solutions in the global market further diversifying our solutions to meet customer demand worldwide.

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Speaker 3: Secondly, in terms of the value of the post-production path, we have strategically launched more than 100 advanced IoT functions. In the development period, customers can choose these capabilities on the spot when developing their own smart products, such as artificial lighting of lighting products, power management and statistics in the power industry, BMS power management, smart irrigation of agricultural products, map capability of robot equipment, cloud-type capability in the small power industry, etc. In the development period, we have strategically launched more than 100 advanced IoT functions. In the development period, we have strategically launched more than 100 advanced IoT functions.

The tweets that you buy a Jewish under I don't get skeptical on them, because they're kind of Archie statutes and in time. He is nimble and fusions are hitting them no needle sometimes it doesn't he told me he doesn't help I know that you don't cheat BMS at the.

One need only.

And we have time here. So we won't guide just yet so but each one of them.

Typing them either country.

Speaker 3: App or third-party voice-to-speech connection control devices are the basic functions of IoT, and the advanced functions of IoT that are constantly being passed on can not only help customers realize the competitiveness of product development, but can also help customers to meet the demand and achieve a reputation-building purchase demand through the re-creation of service value from functional products to smart products.

Oh, he Samsung, India, Kwanza, SEBI Iot, that's you've been calling them.

So I'll pass on that I don't get Gotcha, calling them, which include Pan to Cook, who spent time in Taiwan that seemed to me I'm pleased to welcome them to attempting to alternate time enough with Jonathan Fair triangle, and Luca who treat them.

So you can call basins in the country.

In terms of enriching the value of Paas layer, we strategically upgraded our standard Iot Paas and began to deliver over 100 events Iot features for our customers to select as needed when developing their own smart devices. These features include human centric lighting.

Speaker 1: In terms of enriching the value of path layer, we strategically upgraded our standard IoT path and began to deliver over 100 advanced IoT features for our customers to select as needed when developing their own smart devices.

Speaker 1: These features include human-centric lighting for lighting products, energy management, and statistics in the electrical field, BMS charging and discharging management, smart irrigation for agricultural products, localization and mapping capabilities for robot devices, cloud recipe capabilities for home appliances, and many more.

For lighting products energy management and statistics in the electric electrical field, BMS charging and discharging management smart irrigation for agricultural product localization and mapping capabilities for a robot devices cloud recipe capabilities for home appliances and 90 more.

Speaker 1: Compared with the basic IoT function of connecting and controlling devices through an app or third-party voice and audio devices, constantly refining and improving the advanced IoT features in past can not only help customers enhance their product's differentiated competitiveness, but also help them to hedge against inflation and meet the richer demand for word-of-mouth products through regenerating service value from functional products to smart products.

Compared with the basic Iot function of connecting and controlling devices through an app or third party voice and audio devices constantly refining and improving the advanced Iot features in Paas cannot only help customers enhance their product differentiated competitiveness, but also help them to hedge against.

Inflation and meet the major demand for word of mouth product the regenerating surface value from functional products to smart products.

Is that sort of thing can I assume the sample GSE like yourself.

Speaker 1: This concludes my sharing for today. I will now turn the call over to Jesse, our CFO , to review the financial details.

This concludes my sharing for today I will now turn the call over to Jesse I'll as CFO to review the financial details.

Thank you Gerry before I begin. Please note that all amounts are in U S dollars and all comparisons on a year over year basis, unless otherwise stated, we navigated a challenging third quarter to deliver approximately $85 6 million in total revenue approaching two.

Speaker 4: Thank you, Jerry. Before I begin, please note that all amounts are in U.S. dollars and all comparisons are on a year-over-year basis unless otherwise stated. We navigated a challenging third quarter to deliver approximately $85.6 million in total revenue, approaching to the high end of the guidance range that we previously provided.

The high end of the guidance range that we previously provided.

Iot Paas revenue.

Reached seven to $2 6 million achieving year over year growth of 37, 4% compared with the first half of 2021 is a relatively slow year over year growth with third quarter. Iot Paas revenue was mainly due the range of challenges Gerry mentioned earlier, because we are in the sector.

Speaker 4: reached $72.6 million, achieving year-over-year growth of

Speaker 4: 37.4% compared with the first half of 2021 is a relatively slow year-over-year growth for third-quarter IoT path revenue, which mainly due to the range of challenges Jerry mentioned earlier. Because we are in a sector of IoT that involved real physical devices, the majority of which are consumer-level devices.

Iot that's involved real physical devices, the majority of which are consumer level devices Oh sure.

Speaker 4: Our short-term revenue may be impacted by the downstream fluctuations of the entire consumer electronics industry. We believe that looking at our performance for a longer period of time

Short term revenue may be impacted by the downstream fluctuations of the entire consumer electronics industry really we believe that looking at all the performance for a longer period of time.

So just to sum up the first three quarters of 2021 will provide a better picture of all actual.

Speaker 4: such as the sum of the first three quarters of 2021 will provide a better picture of our actual...

Conditional longterm growth total revenue for the first three quarters of 2021 was $227 1 million up 94% year over year and Iot Paas revenue was $199 3 million up 105% year over year, we totaled 306 Premier Iot paas customers for the trailing 12 months.

Speaker 4: conditional long-term growth. Total revenue for the first three quarters of 2021 was $227.1 million, up 94% year-over-year, and IoT PaaS revenue was $199.3 million, up 105% year-over-year. We totaled 306 premium IoT PaaS customers for the trillion-twelve months, ended September 30, 2021.

And at September 32021 up.

87, 7% from 163 for the same period ended September 32020.

Speaker 4: up 87.7% from 163 for the same period ended September 30, 2020.

During the third quarter of 2021.

Premium customers accounted for approximately 89, 2% of our Iot Paas revenue.

Speaker 4: premium customers accounted for approximately 89.2% of our IoT PaaS revenue.

Number of Iot Paas customers and new customers we served during.

Speaker 4: Number of IoT PaaS customers and new customers we served during each quarter grow sequentially this year. This expanding customer matrix demonstrates our healthy customer structure and potential for future organic business growth.

Each quarter sequentially. This year, this expanding customer matrix demonstrate a healthy customer structure and the potential for future organic business growth.

Speaker 4: Our dollar-based net expansion rate for IoT PaaS segment was 179%.

Our dollar based net expansion rates for Iot Paas segment was 117, 9%.

For the trailing 12 months ended September 32021 flat year over year, we have maintained 160% or higher which is an excellent performance for eight consecutive quarters. Since we began to track this metric.

Speaker 4: for the trailing 12 months ended September 30, 2021, flat year-over-year. We have maintained 160% or higher, which is an excellent performance for eight consecutive quarters since we began to track this metric.

Speaker 4: This reflects our ability to expand our platform usage over time and grow revenues from existing customers.

This reflects our ability to expand our platform usage over time and grow revenues from existing customers and revenue from us and others increased to $5 6 million, representing 214, 2% year over year growth.

Speaker 4: Our revenue from FAFSA and others increased to $5.6 million, representing 214.2% year-over-year growth.

We saw increasing demand from service providers to provide the various innovative software enabled services for their customers.

Speaker 4: We saw increasing demand from service providers to provide various innovative software-enabled services for their customers by leveraging the combination of Tuya IoT SaaS and connected by Tuya devices.

Leveraging the combination of two young Iot sauce, and a connected by two young devices.

We also saw a strong need from Brent and other players in the industry to largely boost their own lots of devices applications and Iot business relate to the capabilities.

Speaker 4: We also saw a strong need from brands and other players in the industry to largely boost their own smart devices applications and IoT business related capabilities.

Speaker 4: Meanwhile, revenue from our non-core smart device distribution business increased by 66% to $7.4 million, primarily due to the increased demand from customers for the specific smart devices directly sourced from OEMs by the customers.

Meanwhile, revenue from our noncore MX device distribution business increased by 66% to $7 4 million, primarily due to the increased demand from customers for the specific smart devices directly sourced from Oems by the customer.

Speaker 4: Our gross profit increased by 79.2%.

Our gross profit increased by 17 nine 2%.

230, 614 million, while gross margin improved to 42, 6% from 34, 4% Iot Paas gross margin continued its increase.

Speaker 4: to $36.4 million, while growth margin improved to 42.6% from 34.4%. IoT PaaS growth margin continued its increase.

242, 9% from 34, 9% a year ago, which represents our strong value in the industry train.

Speaker 4: to 42.9% from 34.9% a year ago, which represents our strong value in the industry chain, primarily due to our increased economies of scale.

Finally, due to our increased economies of scale.

Improved efficiency for Iot Paas deployment.

Speaker 4: improved efficiency for IoT PaaS deployment achieved through effective R&D and expansion into higher margin IoT PaaS product line.

Chips through effective R&D and expansion into higher margin Iot Paas product line.

Now turning to our operating expenses. Please note that we are excluding share based compensation expenses from our non-GAAP numbers to provide greater clarity on the trends of our actual operating expenses.

Expenses. So that you can review performance in the same way that our management.

Speaker 4: expenses so that you can review performance in the same way as our manager.

Speaker 4: During the quarter, our non-GAAP total operating expenses were $69 million, up 120.8% year-over-year compared to the previous quarter.

During the culture of our non-GAAP total operating expenses were 69 million up 128% year over year comparison.

Non-GAAP R&D expenses up 144, 8% to $47 1 million non-GAAP sales and marketing expenses of 114, 6% to $19 7 million non-GAAP G&A expenses of 124, 6% to $6 7 million and other operating income net.

Speaker 4: of non-GAAP R&D expenses up 144.8% to $47.1 million, non-GAAP sales and marketing expenses up 114.6% to $19.7 million, non-GAAP G&A expenses up 124.6% to $6.7 million, and other operating income net of $4.5 million compared to $6.7 million.

$4 5 million compared to.

0.1 million in the third quarter of 2020, the increase in the non-GAAP total operating expenses were mainly due to increased employee related costs as of September 32021, we had.

Speaker 4: 0.1 million in the third quarter of 2020. The increase in the non-GAAP total operating expenses were mainly due to the increase in employee-related cost. As of September 30, 2021, we had 3,700 employees, representing a year-over-year increase of around 80 percent and a slight quarter-over-quarter increase of 4 percent. The sufficient reserve of talent is part of our long-term sustainable development strategy.

3700 employees, representing a year over year increase of around 80%.

And a slight quarter over quarter increase of 4% there's sufficient reserve of talent is part of our long term sustainable development strategy.

During the recruiting.

Speaker 4: peak season in the second quarter, we strategically attracted a large number of new employees to join us and support our business growth. And most of the new hires were onboarded and in place during the second quarter to the third quarter.

Peak season in the second quarter, we strategically attracted a large number of new employees to join us and to support our business growth and the most of the new hires onboard at an in place during the second quarter to the third quarter.

Building the large pool of qualified talent has positioned us well to check who tackled challenges of a challenging external economy environment and its current and future impact all worked for us in the long term sustainable growth going forward, we expect to maintain our workforce size studies proper.

Speaker 4: Building the large pool of qualified talents has positioned us well to tackle challenges of a challenging external economy environment and its current and future impact on workforce and long-term sustainable growth. Going forward, we expect to maintain a workforce size that is appropriate to our business scale and long-term growth strategy and will evaluate changes as necessary.

Appropriate toll business scale and long term growth strategy I know you will you evaluate triangle that's necessary.

Speaker 4: We believe maintaining a healthy personnel structure is critical to an enterprise business development operating efficiency. To continue to support and extend our ability to develop IoT solutions and to support our customers' IoT growth, we must continue to invest in R&D, sales, marketing, and G&A.

We believe maintaining a healthy personnel structure is critical to and enterprise business development operating efficiency to continue to support and extend our ability to develop Iot solutions and to support our customer's Iot growth.

Must continue to invest in R&D sales marketing and G&A.

As of September 32021, our R&D personnel accounted for over 72%.

Speaker 4: As of September 30th, 2021, our R&D personnel accounted for over 72%.

Yeah.

Speaker 4: total employees, which is generally consistent with previous periods. With the rapid growth in the company's business scale, the corresponding growth of R&D personnel provides long-term support for various businesses.

Totally employees, which is generally consistent with previous periods, where the rapid growth in the company's business skill the corresponding growth of R&D personnel provides long term support for various business.

Speaker 4: and product updates and iterations going forward. Likewise, the number of sales and marketing personnel

And the product updates and iterations going forward like what's the number of sales and marketing personnel need to match our growth and scaling all those lost to deliver sufficient marketing capacity and to carry all the effective promotions.

Speaker 4: need to match our growth in scale in order for us to deliver sufficient marketing capacity and carry out effective promotions. Meanwhile, G&A personnel also need to expand accordingly to ensure high operating efficiency of the company as a whole. Our current personnel structure has been tried and proven throughout the rapid growth and expansion of our business and products over the past few years.

While G&A personnel also need to expand accordingly to ensure high operating efficiency at the company as a whole all current personnel structure has been tried and proven throughout their rapid growth and expansion of our business and the products over the past few years.

Speaker 4: As we have grown our personnel within each of these functions, our non-GAAP R&D, sales, marketing and G&A expenses have also increased on a dollar basis.

We have grown our personnel within each of the functions of our non-GAAP R&D sales marketing and G&A expenses have also increased on a dollar basis.

In addition to the employee related factors the increasing in non-GAAP sales and marketing expenses in this quarter was mainly due to our.

Speaker 4: In addition to the employee-related factors, the increase in non-GAAP sales and marketing expenses in this quarter was mainly due to our participation in a series of worldwide marketing events such as the US ISC West in July and the Guangzhou International Lighting Exhibition in August this session. The increase in non-GAAP G&A expenses was mainly due to an increase in a series of professional service fees incurred.

Participation in a series of worldwide marketing events, such as the U S. ISC West in July and Guangzhou International lighting exhibition in August et cetera, So increasing non-GAAP G&A expenses was mainly due to an increase in our secrets of professional services fees incurred due.

Due to being a public company such as audit fees legal counsel fees and they trust services fees painful establishing all of talents reserve during the quarter. Our other operating income while U S. Dollar $4 5 million, primarily due to the recipient of the software value added tax refund.

Speaker 4: due to being a public company, such as audit fees, legal counsel fees and HR services fees paid for establishing our talent.

Speaker 4: reserve. During the quarter, our other operating incomes were US$4.5 million, primarily due to the receipt of the software value-added tax refund. In the third quarter, our non-GAAP loss from operations was US$32.5 million and our non-GAAP net loss was US$31.2 million.

In the third quarter, our non-GAAP loss from operations was $32 5 million and our non-GAAP net loss was $31 2 million.

Our non-GAAP operating margin was negative 38% down 19.5% percentage points from negative 18, 5% in the same period of 2020.

Speaker 4: Our non-gap operating margin was negative 38 percent down 19.5 percentage points from negative 18.5 percent in the same period of 2020 and the non-gap net margin was negative 36.5 percent down 19.1 percentage points from negative 17 percent in the same period of 2020.

And our non-GAAP net margin was negative 36, 5%.

19.1 percentage points from negative 17 point.

We're sending in the same period 2020.

Net cash used in operating activities for the third quarter of 2021.

Speaker 4: net cash use in operating activities for the third quarter of 2021.

It was $46 1 million or 53, 8% of total revenue compared to $2 2 million net cash used also three 6% of revenue in the third quarter of 2020. The increase in net cash used was mainly due to the increase in employee related expenses and working capital changes to support the audio.

Speaker 4: was $46.1 million, or 53.8% of total revenue, compared to $2.2 million net cash used, or 3.6% of revenue in the third quarter of 2020. The increase in net cash used was mainly due to the increase in employee-related expenses and working capital changes to support ordinary costs of business. As compared with net cash used in operating

Coastal business as compared with net cash used in operating cost.

Activities, excluding one off cash inflow from our IPO day, possibly bank related to all the eye appeal for the second quarter, the increasing cash outflow for this quarter was mainly due to the net increase in accounts receivables.

Speaker 4: activities excluding a one-off cash inflow from our IPO depository bank related to our IPO for the second quarter. The increase in cash outflow for this quarter was mainly due to the net increase in accounts receivables.

Speaker 4: after an offset by advance from customers, mainly as a result of the more favorable credit limits and payment terms that we offered to certain customers with good credit history to help them cope with the adverse impacts of the challenging external environment.

After an offset by the events from customers, mainly as a result of the more favorable credit limits and the payment terms that we offered to certain customers with good credit history to help them cope with the adverse impact of the challenging external environment.

Speaker 4: this year and the decrease in accounts payables primarily due to in-time cash payment of our purchases just before the end of quarter according to the payment terms stipulated

And the decrease in accounts payable primarily due to in time Pischke cash payment of our purchases just before the end of quarter. According to the payment terms are.

The polluted and contract this.

This would ordinary working capital trend instead were well controlled and our strict management of cash flow and liquidity risk.

Speaker 4: This was ordinary working capital changes that were well controlled under our strict management of cash flow and credit rate.

Speaker 4: Moving on to the balance sheet as of September 30th, 2021.

Moving on to the balance sheet as of September 32021.

Our cash cash equivalents and short term investments increased to $1179 6 million. We believe this balance is sufficient to meet our current liquidity in the working capital needs finally, turning to the share repurchase during the quarter ended September 32021, we repurchased approximately two.

Speaker 4: Our cash equivalents and short-term investments increased to $1,179.6 million. We believe this balance is sufficient to meet our current liquidity and working capital.

Speaker 4: Finally, turning to the share repurchase, during the quarter ended September 30, 2021, we repurchased approximately 2.8 million ADS from the open market for total consideration of approximately US$28.6 million that went to the share repurchase program, representing around 14.3% of the 200 million authorization announced.

One 8 million from the open market for total consideration of approximately U S dollar to $28 6 million pursuant to the share repurchase program, representing around 14, 3% off the 200 million authorization announced pursuant to the share repurchase program.

Speaker 4: went to the share repurchase program. The average repurchase in price was over $10 per ADS. This shows our strong confidence in the company's long-term growth prospect.

Average repurchase price was over 10 U S. Dollar previous this shows our strong confidence in the company's long term growth prospect.

Now turning to outlook for the fourth quarter of 2021, we expect total revenue to be in the range of 72 million to $77 million. This forecast only reflects the company's preliminary view on our current.

Speaker 4: Now turning to Outlook, for the fourth quarter of 2021, we expect total revenue to be in the range of $72 million to $77 million. This forecast only reflects the company's preliminary view on our current

Speaker 4: market and operational conditions, which are subject to change due to various uncertainties, including, among other things, those related to changes in the global economy, inflations affecting the purchase power of end-users, supply chain constraints and disruption due to chip shortage and the limited safe rate capacity, and the recovery of customers impacted by selling policies on online retailers.

Market and operational <unk>.

Conditions, which are subject to change due to various uncertainties, including among other things those related to changes in the global economy inflation affecting the purchase power of end uses so pine train constraints and the disruption due to chip shortage and the limited state grid capacity and the recovery of customers.

By studying policies online retailers this.

Speaker 4: This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you.

This concludes our prepared remarks for today operator, we are now ready to take questions. Thank you.

Okay.

Thank you to ask a question you can lean to press star one on your telephone and to withdraw your question press the pound key.

Speaker 5: Thank you. To ask a question, you're going to press a star 1 on your telephone. And to withdraw your question, press the pound key. As a reminder, when asking the question, please state your question in Chinese first, then immediately repeat your question in English for the convenience of everyone in the call. Please stand by while we compile the Q&A roster.

A reminder, when asking a question. Please state your question in Chinese first then immediately repeat your question in English for the convenience of everyone in the call. Please standby, while we compile the Q&A roster.

Speaker 5: Your first question comes from the line of Hong Ji Lee with CICC. Your line is open.

Your first question comes from the line apology Lea, we'd see ICC. Your line is open.

Hi, This is al and Jesse about Shanghai, I was just I'm going to answer that.

Speaker 6: Good morning, Mr. Jesse. First of all, congratulations on your strong growth in such a challenging environment. I have two questions. The first one is about SaaS business. We see that the growth rate of 3G is still very strong. I also hope that the management team will share a development plan on SaaS. What are the key areas to be expanded in the future? What adjustments will be made to the organizational structure?

No I think that when shiga like toxin that then John I know, what you're building out Glenn Chico's shoe why are your SaaS.

And kind of Los Angeles as well how did you feel that now you're still long, but any signs on Tac I think somebody else asked it then they go fight that fight.

I'll just ask one that you said you only get go towards that.

Well just that goes I'll nail Polish down the child, you ideas I shouldn't why wouldn't you just start off with a gun team for their failure to Oh, well, maybe to ask Michel who found it worthwhile it seems with education, Oh, Pennsylvania and stuff.

Speaker 6: The second question is about domestic business. What are the further development plans? Will there be further increases in the income ratio? Let me translate it quickly. Thanks, management. Congratulations on the continuous strong growth of SaaS business.

Management congratulations on the continued strong growth.

Speaker 6: Could you give us more color on development plans for SaaS business? Which areas are your top priorities to expand next? Whether they will be organizational, structural, just

Could you give us more color on the development plans for our SaaS business, which address our top priorities to expand next whether there will be an organizational structure adjustment.

Speaker 6: Our second question is, could you share some latest stories and plans on domestic business?

My second question is could you share some latest thoughts and plans on domestic business showing that the increase on the proportion of the domestic revenue in the future.

Speaker 6: So we expect an increase on the proportion of the domestic revenue in the future. Thank you for your time.

He said items.

Thank you Holger, yes.

Speaker 4: Yes, the overall SaaS and other segment is growing strongly, and we saw a huge demand for IoT upgrades in various business scenarios other than home.

Yes, the overall fast and other segment is growing strongly and we saw huge demand while tea upgrades in various business scenarios other than home with a gradual improvement in the maturity of our staff in India to develop a product we can better serve and to meet the needs of different business scenarios for Iot providing business scenarios operators.

Speaker 4: With the gradual improvement and maturity of our SaaS and industry developer products, we can better serve and meet the needs of different business scenarios for IoT, providing business scenarios operators with high efficiency, energy-saving, safe, better end-user experiences, and et cetera. In the third quarter, we delivered SaaS and industry developer products to over 400 customers.

With high efficiency energy savings safe and youth.

Their experiences and especially in the first quarter, we delivered sauce and industry developer products to over 400 customers next I will give a update and development directions. After segment hotel and a common stocks. We have currently covered over 40000 hotel not common roof in China.

Speaker 4: Next, I will give an update and the development directions of the segment. Hotel and apartment staff, we have currently covered over 40,000 hotel and apartment rooms.

Speaker 4: in China, connecting approximately 500,000 connected-by-two-yard consumer electronics devices in daily use.

Connecting approximately 500000.

Conducted by TUI or consumer electronics devices in daily use.

Speaker 4: And a substantial majority of the revenue in this segment was generated in China. With the improvement of our software products and the enrichment of power connected by 2YAR's hardware ecology for hotel and apartments, we foresee that there is still a considerable room for growth in the future.

And a substantial majority of the revenue in this segment, which generated in China with improvement of our software products and enrichment of pulp are connected by tweets hardware ecology for hotel and apartments, we foresee that there is considerable room for growth in the future.

And also.

He's off the Covid situation, we received more hotel common SASSA request from oversea customers in the future, we will work with our OEM and brand customers together to grow the oversea hotel and apartments segment.

Speaker 4: Ease of the COVID situation, we received more hotel and apartment sales requests from overseas customers. In the future, we will work with our OEM and brand customers together to grow the overseas hotel and apartment segment.

For real estate and community stuff, we delivered a good result in this segment. This year and also in third quarter, many very well known Chinese real estate developers and the property management firms.

Speaker 4: For real estate and community SaaS, we delivered a good result in this segment this year and also in third quarter. Many very well-known Chinese real estate developers and property management firms purchased real estate and community SaaS from Tuya in third quarter, including New Hope Service and Excellence Group, both the top real estate groups and property management firms in China.

Just a real estate and community stocked from two yeah.

In the quarter, including New Hope service and excellence group, although the top.

Real estate group.

And property management firms are in China.

Speaker 4: They further applied 2YardSaaS to residential communities, for example, Wanke, which started cooperating with us since last year, has applied 2Yard's real estate SaaS to their residential properties across six cities, including Wuhan, Changsha, Xi'an, etc.

Afford it applied to your sauce to residential communities for example, one cool, which started cooperating with us since last year.

It's applied to your real estate stuff to their residential properties in cross 60 cities, including Wuhan Changsha Xian obsession.

It will further contribute to the growth of Iot.

Speaker 4: It will further contribute to the growth of IoT path business as the top consumer electronic brands who have been cooperating with these real estate groups for a long time would deploy to IoT.

Iot Pos business.

The top.

Consumer electronic brands, who have been cooperating with this real estate groups for a long time.

Would deploy Toyota Iot Pos.

Dusty electronic devices can be controlled by to yourself and provide the bedroom Iot experiences well real estate groups or property management firms.

Speaker 4: Thus, the electronic devices can be controlled by 2R South and provide a better IoT experiences for real estate groups or property management firms.

In the future.

Speaker 4: Except for obtaining more SAAS contracts from renowned real estate groups and property management firms, we will also cooperate with various channels in different cities which own the capability of installing. They can implement residential community SAAS directly to the huge existing residential communities in China.

Except for obtaining more soft contract from Reno to real estate groups and the property management firms. We will also come up with worse channels in different cities, which own capability of installing they can't simply meant residential community soft directly to the huge existing residents.

Youll communities in China.

Speaker 4: And also we will expand from the residential community to industry parks, school campuses.

And also we will expand from the residential communities two industrial parks school campuses.

Takes pox.

Those places have similar demand that's the residential community.

Speaker 4: Those places have similar demands as residential communities.

Our soft product for nonresidential Pax is under development.

Speaker 4: Our soft product for non-residential parks is under development.

Speaker 4: And we will continue to focus this SAS business on the broad market.

And we will continue focus this fast business.

On the broad market in China.

And as commercial lighting soft. This is if this is also one of our fast growing south product this year and its energy saving group control functions and very cool lighting experience has created a very popular among our customers.

Speaker 4: And as a commercial lighting SaaS business, this is also one of our fast-growing SaaS products this year. And it's energy-saving group control functions and very cool lighting experiences created are very popular among our customers.

Currently more than 1000 classrooms in China, having implemented our commercial lighting stuff.

Speaker 4: protecting the eyesight of tens of thousands of students.

Protecting the eyesight of tens of thousands of students.

Speaker 4: In the third quarter, another flagship project was an advanced manufacturing factory in China achieved significant energy saving by using more than 500 sets of lighting fixtures connected by Tuya in conjunction with Tuya Commercial Lighting SaaS.

In the third quarter.

Another flagship projects with an event manufacturing factory in China.

Shift a significant energy savings by using more than 500 sets of lighting fixtures connected it by two yeah in conjunction wage to your commercial lighting fast.

Our National Air Pack inspection center in China also equipped with two of our commercial 19th sauce.

Speaker 4: A national airbag inspection center in China also equipped with Tuya commercial lighting stars.

Speaker 4: Meanwhile, this product is also well-received by overseas customers, with approximately 15% of Tuya Commercial Lighting SaaS revenue generated from the overseas market in the third quarter. For example, one of the largest sport clubs in the Netherlands with 120 years' history has also deployed Tuya Commercial Lighting SaaS in the third quarter and equipped with over 100 sets of floodlights connected by Tuya.

Meanwhile, this product also well received by oversea customers with approximately 15% of commercial lighting SaaS revenue generating from overseas market in the third quarter. For example, one of the largest sports clubs in the Netherlands.

120 years history has also deployed a two year commercial lighting sauce in third quarter and equipped with over 100 sets of floodlights connected by two yet.

Our commercial lighting soft product, it's relatively comprehensive now and our team extending it into building stuff, which can connect HIV system with Iot and cloud platform.

Speaker 4: Our Commercial Lighting SAS product is relatively comprehensive now, and our team is extending it into Building SAS, which can connect HAV system with IoT Cloud Platform, connecting those powered by Tuya.

Connecting those part of a two year AR devices.

Through industry.

At Gateway to make HIV systems matter and achieve a better energy efficiency currently a number of well known HIV system companies have expressed their interest.

Speaker 4: Edge Gateway to make HIV systems smarter and achieve a better energy efficiency. Currently a number of well-known HIV system companies have expressed their interest and are discussing the cooperation with us. Energy saving and carbon reduction is a rigid global demand and a major trend. Therefore commercial lighting and building SAS is embracing a big

We are discussing the cooperation with us.

Energy savings and carbon reductions.

Richard Global demand and a major trend there for a commercial lighting into building stocks.

Embracing a big global market.

Speaker 4: Our residential security SaaS and the self-service SaaS also has good application scenarios. Due to the limited time available, I'm not going to go through them one by one.

Residential security soft in a self service stuff also has good application scenarios due to the limited time available I not going to go through them one by one.

Speaker 4: At last, regarding to the business of industry cloud developers, which has some similarities with SAS, is also addressing the IoT demands of various commercial and other scenarios apart from home. The differences is that we provide pedestrian products such as IoT Core and the upper software application layer is developed by the ISVs themselves.

Regarding to the business of industry called the developers, which has some similarities with stuff is are also addressing the Iot demands of various commercial and auto scenarios apart from home. The differences is that we provide so that to a product such as Iot caught and the opera software application Lille.

It's developed by the ISC East themselves you know.

Speaker 4: In our exploration this year, we found that there's a great demand for IoT spaces in China, such as shared offices and all kinds of retail stores. For example, our ISV, MyDreamPlus, in Chinese name, Mengxiangjia, has used our Tuya IoT Core, which is our industry cloud developer product.

All exploration does here, we've found that there's a great demand for Iot spaces in China, such as shared offices and all kind of retail stores. For example, our ISC My Dream Pos in Chinese named Michelle Jock has used our Iot Iot called <unk>, which is our industry called to develop a product to implement.

Speaker 4: to implement over 150 Smart Shared Offices areas in Beijing and Shenzhen this year.

Over 100, Fifty's marks should offices arris in Beijing, and Shenzhen to see it.

Meanwhile, a number of industrial scenario operators, such as waste water treatment company.

Speaker 4: Meanwhile, a number of industrial scenario operators such as a wastewater treatment company

Is cooperating with us in using Twilio Iot caught to connect our cost off of wastewater treatment facilities two in their Iot platform on their own cloud.

Speaker 4: is cooperating with us and using 2YA IoT Core to connect a cluster of wastewater treatment facilities to their IoT platform on their own cloud.

Speaker 4: We believe there is a huge existing spaces that require IoT upgrades. We will continue to optimize our industry cloud developer products to help operators in different scenarios obtain IoT upgrades easily. In terms of organizational structure improvement, since the industry cloud developer business and SAS have many similarities, an underlying IoT core is the same. We have recently merged two teams to attain higher efficiency

We believe there is a huge existing spaces that require Iot upgrades, where we're continuing to optimize our industry cloud developer product to help operators different scenarios, obtaining Iot upgrades easily in terms of organizational structure improvement since the industry called the divider purposes.

And in fact have many similarities in the underlying Iot called it's the same we have recently merged two teams to attain a higher efficiency in production.

Speaker 4: in the research because of the huge connected by two hardware ecology

And the research because of the huge connected by two young hardware ecology.

Speaker 4: accumulated in last seven years. There are thousands of excellent OEMs and brands we can cooperate with for long term, which makes our IoT SaaS business well positioned and is able to meet the needs of customers for IoT devices and IoT upgrades in different kind of scenarios around the world.

Cumulated in like seven years, there are thousands of excellent Oem's and Brian.

We can cooperate with for a long time, which makes it all Iot SaaS business, we're positioned and it's able to meet the needs of customers for Iot devices, and Iot upgrades in different kinds of scenarios around the world.

Speaker 4: And regarding the second question, we'll ask our president and co-chairman Liu to answer.

And then regarding the second question well ask our president.

President and co chairman do you to answer.

Speaker 3: We started with the overseas market to develop IoT business. In the first half of 2019, we launched IoT business in the Chinese market. In the past three years, we have made very good progress. Now, our business distribution in the global areas is getting more and more balanced. We will continue to improve the market share in China.

Okay.

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Now, we first established our Iot business in the overseas market and we started our Iot business in China in the first half of 2019, we've made very good progress in the past three years and right now the distribution of all this is across the global region is becoming more balanced and we will continue to increase the proportion of our business in China.

Speaker 1: Now, we first established our IOT business in the overseas market. And we started our IOT business in China in the first half of 2019. We've made very good progress in the past three years. Right now, the distribution of our business across the global region is becoming more balanced and will continue to increase the proportion of our business in China.

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Speaker 3: Due year woman 't? U I her to Mo P V T to survey aging sdo Don she also should feel that don't go occur again something that's Y So talk P V T to curar the shel eighteagainst time.

We now have very active cooperations with different brands, so devices and powered by two young husbands penetrated into many distribution channels. For example, consumer electronics products that power. That's powered by two yeah. It can be found on all major e-commerce platforms in China.

Speaker 1: We now have very active cooperations with different brands, so devices powered by Tuya have been penetrated into many distribution channels. For example, consumer electronics products that's powered by Tuya can be found on all major e-commerce platforms in China.

She said.

Speaker 3: Secondly, we have cooperated with channels, for example, we have cooperated with many channels in the home and post-market, and with telecommunications operators, so that they can sell PBT's smart devices.

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We also cooperate with channels such as the poll to him in person markets telecom operators, except job. So they can sell smart devices that are powered by two young.

Speaker 1: We also cooperate with channels such as the post-home improvement market, telecom operators, etc., so they can sell smart devices that are powered by QYAP.

Besides sources.

Speaker 3: Third, SAAS and Huang Yiyun's development business has opened up a new world in China. These scenarios, because they use the original IoT SAAS or the original IoT Core, they will use a lot of PPT products. These scenarios, many of them are very well-known and powerful companies that will require the leading brands they cooperate with to deploy the original IoT PaaS. This will have a better effect than if we talk to the brand ourselves.

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That's an industry cloud developer business have also carved out a niche market in China and these scenarios used to be all Iot SaaS or Iot Court do also adopt a large number of products empowered by two yards as the all the operators of these scenarios many of which are extremely well known enterprises was very strong.

Speaker 1: South Korean industry cloud developer business have also coughed out a niche market in China. As these scenarios use Kuya IoT SaaS or IoT Core, they will also adopt a large number of products empowered by Kuya.

Speaker 1: and the operators of these scenarios, many of which are extremely well-known enterprises with very strong negotiation power in the market. So they can require top tier brands that they work with to deploy to our IoT path, which is very beneficial for us because this coming in effect will be more powerful when dealing with brands by ourselves in terms of customer acquisition.

Negotiation power in the market. So they can require top tier brands that they work with to deploy to Iot you pass, which is very beneficial for us because this coming in in fact, it will be more powerful when dealing with friends by ourselves in terms of customer acquisition.

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Speaker 7: Or my chane, should you RA, let don't go E the sciongit way. So Ally like sheasons, don't go years, also the time.

We will continue to focus on business opportunities in China and consistently increase the percentage of revenue generated in China.

Speaker 1: will continue to focus on business opportunities in China and consistently increase the percentage of revenue generated in China.

Oh sure.

Thank you.

And how does it suggest that Neal.

Yeah.

Speaker 5: Thank you. Your next question comes from the line of Yang Liu with Morgan Stanley . Your line is open.

Thank you. Your next question comes from the line of young Li with Morgan Stanley. Your line is open.

Yeah.

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Speaker 8: Thank you for the opportunity to ask questions. I have two questions. First, I would like to ask how to consider the contribution of our newly released private cloud-deployed PaaS to finance. Will this part of the income replace some of our previous IOT PaaS business or is this an opportunity to open up a new market?

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Thiago once you know Joshua.

Speaker 8: The second question is that it's almost the end of the year, I want to know what Tuya's thoughts are on communicating the demand for next year with big customers.

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Sure.

I will do the translation.

Speaker 8: I will do the translation, the first question is, could management share about the financial contribution from the newly released IoT PaaS on private cloud? Is it a substitute of existing IoT PaaS addressable market or is it a completely new addressable market for Tuya?

The first one the first question is could imagine when the ship also.

Financial contribution from the newly released.

I O T paas probably called.

Is it a substitute of existing Iot paas addressable market or is it a completely new.

The addressable market for trio.

The second question is as it.

Speaker 8: The second question is, as it is approaching the year-end, when we are...

It is approaching the year end.

Once we are hum.

Discuss with a premium customer or big customer about the next year's demand what do you see our outlook.

Speaker 8: Discuss with the premium customer or big customer about the next year's demand. What is their outlook? Could you please share about their shipment plan or demand plan? Thank you.

Could you please share about their shipments there or the mountain Paas central.

Yes.

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Speaker 7: We also see that many big customers are very interested in typical, such as large telecommunications operators and large retail channels, including well-known leading brands, such as a global top 10 brand of electric tools. Some large telecommunications operators in Southeast Asia and Southeast Asia are communicating with us in the early stages.

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Speaker 7: We will have the cost of deploying, maintaining and deploying IoT PaaS devices. Because the deployment of PaaS business has just begun, the expected product pricing model will be more and more comprehensive.

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Let me take the first question now all private Paas is still in an early developmental stage. Many large accounts are showing interest such as large telecom operators lots of retail channels and some well know leading brands and a lot of them are in be preliminary communication process with us for example, a global top 10 brand of electric.

Speaker 1: Let me take the first question. Now, our private path is still in an early developmental stage. Many large accounts are showing interest, such as large telecom operators, large retail channels, and some well-known leading brands. And a lot of them are in the preliminary communication process with us, for example, a global top 10 brand of electric power tools and some large telecom operators in the South and Southeast Asia. And there will be some private cloud deployment maintenance costs and IoT path charges upon deployment of the devices. As we are still in the initial stage of the development of the business, we are going to continue to improve our potential products and pricing models, et cetera. Thank you.

Power tools, and some large telecom operators in the south and South East Asia, and there will be some a part of it cloud deployment costs maintain the maintenance cost and Iot paas charges upon deployment off the devices as we are still in the initial stage of the development of the business, we are going to continue to improve.

Our potential products and pricing models et cetera. Thank you.

I just want to have at all one last point for this question. So our private cloud Paas is they are in addition to our major product the public cloud.

Speaker 4: I just want to add on one last point for this question. So our private cloud.

Speaker 4: In addition to our major product, the public cloud, this is not going to replace the existing market. This is to open a new market because there are certain customers, especially some large customers, just have strong requirements.

It is not going to replace the existing market. This is to open a new market because there are certain customers are especially with some large customers just have strong requirement.

Speaker 4: need to place all their data on their own private cloud, which the public cloud product cannot serve. So we believe we offer a private cloud product which still enables all the devices deployed on the private cloud able to connect to all other brands.

I need to place all their data on their own private cloud, which do you probably called product cannot serve so we believe.

We offer a private call product, a product, which still enable all the devices deployed on a private call to able to connect with our other brands.

Speaker 4: on our public cloud is able to open a new market for us.

On a product called <unk>.

Able to open a new market for us.

Our next question, which really don't ask I'll, let me take on it.

Speaker 4: For the next question, which Liu Yang asked, let me take on it. Usually we communicate with our major customers about their plan for next year at the end of December .

Usually we communicate with our major customers about their plans for next year at the end of December.

Speaker 4: At present, customers are closely observing the holiday season sales, shipping prices and a chance in raw material prices. They are generally now more cautious compared to the same time last year.

At present.

Our clothing.

Closely observing the holiday season sales shipping prices.

And a chance in raw material prices there.

Yeah, generally now more cautious compared to the same time last year.

Brian the customers Okay.

Speaker 4: are concerned about the impact of high inflation on purchase power, the chip shortage.

Concerned about the impact of high inflation on purchase power the chip shortage.

Shipping delays and the currently still high a secret to prices.

Speaker 4: shipping delays, and currently still high safe rate prices.

Speaker 4: which are all happened in parallel. So generally speaking, it is currently a stage of weakness in global consumption.

Which are all happen in Peru.

So generally speaking it is.

Currently our stage of weakness in global consumption.

However, a relatively good situation as debt from our communications with brands. They have exercised the caution. So most of friends inventories are in a healthy condition.

Speaker 4: However, a relatively good situation is that from our communications with brands, they have exercised the caution so most of brands' inventories are in a healthy condition.

Although there are many uncertainties in the macro situation major accounts have a generally expressed.

Speaker 4: Although there are many uncertainties in the macro situation, major accounts have generally expressed

Speaker 4: the interest to grow and continue to expand new product categories next year.

The interest to grow and continue to expand new product categories next year.

This is also a major advantage, what we our Iot call platform.

Speaker 4: This is also a major advantage for Tuya IoT Cloud Platform. On our Cloud Platform, we are constantly launching new products, support capabilities, allowing reputable customers with channel advantages to easily expand their IoT products.

I'll I'll cut Pup called platform, we are constantly launching new product support capabilities, allowing reputable customers with channel advantages to easily expand their Iot products.

For example, SD academics gradually eases outdoor Iot devices.

Speaker 4: For example, as the epidemic gradually eases, outdoor IoT devices will embrace strong demand.

Embraced strong demand.

Speaker 9: Many of our large accounts have expressed interest in working on outdoor IoT devices. So we will continue to help customers to expand by creating more valuable IoT devices.

Many of our large accounts have expressed interest in working on.

Although Iot devices. So we will continue to help customers to expend by creating more valuable Iot devices.

Okay.

Thank you Jesse and thank you.

Okay.

Okay.

I think that's.

Go ahead.

Speaker 5: Thank you. This is the end of the Q&A session due to time constraints. I'd like to hand the conference back to our management for closing remarks.

Thank you. This is the end of the Q&A session due to the time constraints I'd like to hand, the conference back to management for closing remarks.

Okay Yep, so before we end the call I want to make one last clarification with notice. This morning, there's a news, saying that to you I missed the.

Speaker 4: Okay, yeah, so before we end the call. I want to make one last clarification. We noticed this morning. There's news Saying that we are missing

Speaker 4: the market consensus for the loss. We just want to clarify, we are contacting the new source to correct. I think the new source matched the non-GAAP loss from the market consensus, which is $0.06 per share, compared to the GAAP loss. Our non-GAAP loss is also $0.06 per share, so it does match the market consensus.

Market consensus for the last we just want to clarify are we are contacting the news talk to correct I think the news for me.

Most of the non-GAAP loss from the market consensus, which is six cents per share compared to the the GAAP loss. A non-GAAP loss is also six cents per share. So it does matter the market consensus.

Speaker 4: So, thank you again for joining our call. If you have any further questions, please feel free to contact us. Our request through the IR website. We look forward to speaking with everyone in our next earning calls. Hope you have a good day.

So thank you again for joining our call. If you have any further questions. Please feel free to contact us.

Our request through the website our website, we look forward to speaking with everyone next earning calls we have a good day.

Yeah.

This.

Speaker 5: This concludes today's conference call. Thank you for participating. You may now disconnect.

Today's conference call. Thank you for participating you may now disconnect.

Okay.

Speaker 10: The.

Uh huh.

Yeah.

Yeah.

Yeah.

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