Q2 2024 Tuya Inc Earnings Call

August 27, 2024

Only mode. After the speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone you will then hear an automated message advising you. Your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to.

Ill turn the call over to your first speaker for today, Mr. Reg try Investor Relations director of <unk>. Please go ahead Sir.

Mr. Reg: Okay. Thank you.

Speaker Change: Hello, everyone and welcome to <unk> second quarter 2024 earnings call joining us today on solar in New York.

Speaker Change: Well our CFO.

Speaker Change: Okay.

Speaker Change: And incoming CFO Alex yes.

Speaker Change: The second quarter of 2024 financial results webcast conference call are available at IR <unk> Com a replay of this call will also be available on our IR website a few hours.

Speaker Change: Before we continue I refer you to our Safe Harbor statement, our earnings press release.

Speaker Change: Hi.

As we will make forward looking statements with that I will now turn the call open.

Speaker Change: Distributable Gary will deliver his remarks in Chinese which will be followed by Covid body English translation.

Speaker Change: How did that come down.

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Speaker Change: Hello, everyone. Thank you for joining US 2020 forward second quarter earnings Conference call.

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Speaker Change: The second quarter of 2024 with another milestone for Korea, with our revenue continuing to meet expectations and that shifting of robust year over year growth of approximately 29%.

Speaker Change: They may be on the settlements maintained its strong gross margins further reflecting our value proposition and the product advantages.

Speaker Change: Moreover, we achieved our first culturally non-GAAP operational profit in the company's history with an operational profit margin enough around <unk>. This is an extremely encouraging appropriate level, then not only validates the financial of the ability of <unk> business model, but also highlights our strong operational leverage and.

Speaker Change: Our resolute commitment to fulfilling our promises with.

Speaker Change: This we have sequentially it accomplished our short term operational targets and moving forward. We will continue to focus on long term revenue growth and enhancing profit margins.

Speaker Change: The campaign was we are standing by that.

Speaker Change: Konstantinos.

Speaker Change: 500 to the Permian.

Speaker Change: On the occasion of this milestone primarily want to discuss with everyone. Several major effects concerning the company's fundamentals and long term development dossier, so essentially $10 million impact what you understand to Atkins, we sat down with any of the change in Chile to the change in Chile in bulk broken hardware I've seen.

Speaker Change: On TNT and in chocolate in the Super tongue Science 19 discontinued Tina.

Speaker Change: Firstly at the leading global cloud platform service provider <unk> is.

Speaker Change: Is that the new starting point in the smart technology and industrial landscape. This new beginning include about a competitive environment and.

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Speaker Change: In the second quarter, our Lv pass business experienced year over year growth of approximately 32%, partially due to the industrial recovery and bring new consumers through the AGM is taking the robust export data demand or household appliance and other consumer electronics during the quarter.

More importantly throughout the ability to acquire new clients in advance with the existing customers was amplified by more favorable competitive landscape.

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Speaker Change: Yeah, absolutely Jamie.

Nathan: Nathan here.

Nathan: So it sounds like you can handle.

Nathan: <unk> powder and instability.

Speaker Change: For example in Europe, we have collaborated with France, leading imaging integration for ex Tac leveraging our cutting that advantages in AI driven energy saving technology to briefly explore the LNG shipping market, which benefit from substantial policies for the subsidies and even the basic need in People's lives.

Speaker Change: Right.

Speaker Change: And to set the industry benchmarks and jointly promote the implementation of sustainable Smart solutions, we are providing software technologies, including Jim AI strategic algorithm and platform capabilities as well as complete smart device solutions.

Speaker Change: We will conduct Canada pipeline continues for <unk> Pak <unk>.

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Speaker Change: In Latin America with towards strong demand towards smart transformation and are focused on opportunities for Isps collaborations in the past sector servicing operatory clients with Q and a smart device solutions and exploring Smart Street lighting projects and the software think domain based on our extensive cooperation.

Speaker Change: Spirits with a leading telecom operator, we begin replicating benchmark projects with leading service provider clients in countries like Central America, Colombia and Chile.

Speaker Change: Terms of consumer electronics brands, a six year old, Brazil, and smart home brands emerged as one of the largest smartphone brands in Brazil, doubling its gross year over year.

Speaker Change: Our efforts in Latin America directly reflected in the increase the revenue shift from this region.

Speaker Change: Tanker, which we should have the kingdom yantai incentive in Q4.

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Speaker Change: Pacific our operator customer base continued to expand with two additional operators deploying Q in the second quarter, such as one of the largest telecom operators in Vietnam.

Speaker Change: And the other with a previous customer of <unk> public cloud.

Development of Q will help accelerate their smart business and open up opportunities for operations in Smart home solutions and industrial solutions with Korea.

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Speaker Change: Glenn Kimco days total salary cylinder colleague types ebay Amazon has been key to.

Speaker Change: Our global banking the salary incentives and client activity are you seeing <unk> yoplait unparallel producer.

Speaker Change: Each customer collaborations in addition to recognizing <unk> technology and the product capabilities as the basis for the initial partnerships also influenced shifts from other platforms of modes of cooperation throughout this demonstrates that companies are considering both efficiency and quality in their investments under the <unk>.

Speaker Change: Demand for smart solutions in areas, where there are limited choices for partners with Dutch comprehensive technical service capabilities.

Speaker Change: The SaaS is a significant competitive advantage in customer acquisition to Asia and fastest ancillary costs you cannot treat ranking critical answers to that.

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Speaker Change: <unk> impact second at the software technology company with over 80% of its revenues derived from various international regions.

Speaker Change: <unk> remains committed to delivering the fastest smart technology to global customers and consumers through a different product models, ensuring that they received the Baptist marks experience. This particularly includes the integration of <unk> technology, and the duration and the development of a variety of new products.

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Speaker Change: Smart solution with our high Belo into greater intelligence solution that would develop a by combining generating AI embedded operating systems and the cloud software capabilities.

From a link to the product strategy for smart solution in 2023, and the selection of high value software intensive device categories to deliver a complete smart products revenue from smart solution has been growing rapidly achieving approximately 44% year over year growth this quarter.

Speaker Change: While maintaining a gross margin of nearly 27%.

Speaker Change: I believe this gross margin level highlights the value through our software and the products as it is comparable to or even exit the <unk> business gross margin of some leading brand that design produce and sell their products.

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Speaker Change: The it amid heightened service entry.

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Speaker Change: Our past products and the smart solution complements each other meeting the personalized needs of different types of customers and providing <unk> with more substantial revenue.

Speaker Change: This is a highly efficient business model for Korea.

Speaker Change: The two main areas first the complete smart solutions for device gratefully assisted customers extending their product categories, helping them accelerate their go to market process to gain a competitive that at this stage of smart patient reach product matrix and the smart products ecosystem.

Speaker Change: Essential forever, leaving customers business in this regard <unk> has a significant capability advantage and smart solutions will help us better serve customers and enhanced customer loyalty second the corn off of smart solutions licensing generating half.

Speaker Change: Revenue through products was more high value software capabilities and obtain a cross bundling more meaningful gross profit amongst.

Speaker Change: Software capabilities have always been to our strengths and the reasonable and to control R&D investments and complete product solutions, we can achieve more scalable revenue and appropriate for each smart device.

Speaker Change: And I am confident in Coca Cola <unk>, if I'm, saying.

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Speaker Change: At present, most of our new customer collaborations in both smart solutions for devices.

Speaker Change: Example, in the second quarter, we expanded our cooperation with fixed European brands customers with smart solution modest exceeding 500000 units, which is approximately $5 million. When also secured orders from temperature control valves gateways and other devices from Germany's really.

Speaker Change: Leading royalty will change with the total value rich and $1 million.

Speaker Change: Additionally, we signed a multimillion dollar annual smart solutions contract with the Docs company pipeline to ask global developer conference continuing our deep calculation of the European commercial lighting market.

Speaker Change: Among others.

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Speaker Change: First the second quarter, we have continued to invest in device and edge AI aiming to significantly enhance the smart product experience through Jenny <unk>.

Speaker Change: Thereby providing customers with better product competitiveness and the users with more valuable smart experienced and features but believe that the essential intelligence should be the innovation of user experience driven by AI cloud and other technologies and are generally promoting the increase in penetration rates.

Speaker Change: I will give you two products examples.

Speaker Change: First one is a small light street products, we have already showcase to the market.

Speaker Change: Generally bay I will understand consumers personalized emotional needs in different scenarios and have control of the device to present corresponding policy.

Speaker Change: Blinking Animas peers. The other one is Pat camera enhancement with Jenny I capability, which can intelligently capture interesting moments of paths and automatically generates.

Speaker Change: <unk> videos with suitable PGM any thats, giving users a delightful surprise when they open the app we.

Speaker Change: We see that customers are very eager for such products with differentiated and competitiveness.

The other gain we are also introducing Jimmy add capabilities into a smart scenarios, helping users to configure their decided smart scenarios through simple from our patients significantly lowering usage difficulty in a areas and promoting the use and the realization of smart technology.

Speaker Change: Additionally, continuing to build and to develop a platform through <unk> and improving that develop efficiency and experience is also part of our platform competitiveness.

In the second half of 2024 walls succeeds successively launched more new products related to <unk> on our customers and the developments.

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Speaker Change: Okay.

Speaker Change: Finally at the surplus <unk> operating margin and financial leverage structure in the second quarter have fully validated unique value in all three as business model moving forward based on our existing experience and the foundation, we will continue to strive for the financial improvements and ensured we have long term value.

Speaker Change: With all those who support us on our journey.

Speaker Change: Our partners shareholders and employees.

Speaker Change: <unk>, who leases we had a strong quarter.

Speaker Change: Quinn will target that and standby winemaking Toyo suite.

Speaker Change: <unk> salmon in the non-GAAP noncash controlled reduction for iPhone financed.

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Speaker Change: For example, Yadkin loan.

Speaker Change: This special cash dividends Spurs, the distribution totally approximately $33 million in the months roughly equivalent to our non-GAAP net profit for the first half of 2024.

Speaker Change: non-GAAP metric simply put reflects the results of the company's director of business decisions at the operational level, excluding other factors unrelated to the business model based on this tour.

Speaker Change: non-GAAP operating profitability for the first time this quarter and achieved a solid operating margin.

Speaker Change: That's at the same time, considering the company's abundant net cash and that affect the data. We have already have the positive operating cash flow for five consecutive quarters from the second quarter 2023, two this quarter, we believe that.

Speaker Change: Now is an up to a moment with the solid foundation, while Korea is capable of sustaining long term development only songs to start provide a long term rewards to all those who have supported Korea sure into a success.

You won't be able to equip our fiduciary duties.

Speaker Change: <unk>, yes.

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Speaker Change: Authenticated downgraded key quake down they decided to kind of get back with you and United taken so that when that content.

Speaker Change: That's all for the business update Luckily as some of you may have faced in this mornings announcement on our team.

Speaker Change: Current CFO Jesse will be stepping down from her role as CFO and executive director on September 16th due to personal endeavors.

Speaker Change: Over the past five years <unk> expertise in capital markets and finance has been crucial in shaping to us long term development strategy and our growth.

Speaker Change #100: Our efforts in driving operational optimization and efficiency management and made outstanding contributions to improving throughout the business and the financial profitability I would like to take this opportunity. During this court to express our best wishes to Jessie and thank her for her significant contributions to the company over the past.

Jessie: Five years.

Speaker Change #102: Seated capacity of one <unk>.

Speaker Change #103: <unk> will share some additional financial data with everyone.

Jessie: Thank you Jerry for sharing the Companys growth strategy and the long term development philosophy and also thanks for your kind words.

Speaker Change #104: Now I will discuss our financial results and provide more detail on the numbers that I've covered by Terry.

Speaker Change #105: Please note that all figures in U S dollars and all comparisons are on a year over year basis, unless otherwise stated.

Speaker Change #106: In the second quarter of 2024 hour total revenue reached $73 3 million up 28, 6% of yield a year, excluding the adverse impact of exchange rate between the U S dollar and RMB.

Speaker Change #106: Growth would have been 31%.

Speaker Change #106: Most importantly, we achieved non-GAAP operational profitability for the first time this quarter with a solid profit margin of 10%.

Speaker Change #106: This core financial figures demonstrate the triage strategists and efforts are yielding positive results as Jerry mentioned, we are encouraged by the fact that we are in a stronger financial and operational position.

Jerry: <unk> revenue in the second quarter was $54 3 million, representing a year over year growth of 32% regarding product categories. We saw robust demand growth across all product categories with home appliances experiencing the highest year over year growth of about 65.

Jerry: Due to our efforts on delivering high value products to our customers.

Speaker Change #108: The lightning in electrical.

Speaker Change #108: And approximately 30% of year over year growth due to the normalization of downstream inventory compared to the same period last year from.

Speaker Change #109: <unk> original revenue demand perspective.

Speaker Change #109: Europe continues to be our largest market accounting for <unk>.

Speaker Change #109: One third of the total revenue demand.

Speaker Change #109: Asia Pacific Region, and Latin America have seen a continuously accelerated demand growth with contributions from rising clearly compared to last year.

Speaker Change #109: The Asia Pacific region accounted for around one third of the total revenue demand, while Latin America demand contribution increased nearly 10%.

Speaker Change #109: Nearly 10% to 15% in the second quarter.

Speaker Change #109: The structure of original revenue contribution is similar to Q1, which is the state. We are pleased to see an aim to maintain.

Speaker Change #109: On the customer front, we saw.

Speaker Change #109: Approximately 3000 customers in the second quarter of 2024.

Speaker Change #109: Slight decrease from the same period last year.

Speaker Change #109: Fluctuation in the number of customers in a single quarter is partly related to downstream customers order placements and their own operational turnovers.

Speaker Change #109: Overall, however, our key account customer strategy has built a lot of talk here customer pyramid.

Speaker Change #109: With increased customer efficiency.

Speaker Change #109: And at the best evidence.

Speaker Change #109: Q2 hour per capita revenue and per capital gross profit continued to see significant year over year increase.

Speaker Change #109: About 53% and 57% respectively. Additionally, our 12 months.

Speaker Change #110: <unk>, yes.

Speaker Change #110: Sequentially rebounded for three quarters, returning to 197% at the end of this quarter.

Speaker Change #110: The gross margin of Iot path towards 40, 676% this quarter remaining stable and healthy level with an improvement of around three percentage points year over year.

Speaker Change #110: This improvement was driven by a higher proportion of high margin products in our portfolio, such as home appliances, including Mark Hutchens and passive devices.

Speaker Change #110: Our smart solutions segment recorded revenue of <unk>.

$9 4 million in Q2, an increase of approximately 44, 2% year over year during.

During the quarter, we continued to achieve strong results in outdoor central control and energy saving device solutions.

Speaker Change #110: As much temperature control devices.

Speaker Change #110: The foundation of the Smart solution business has served.

Speaker Change #110: As an important tool for us to increase customer stickiness and meet the demand for competitiveness in device intelligence as Jeremy mentioned earlier, so typically smash solution complements our past products by providing customers with multi license they need in the fall.

Speaker Change #111: But as for the retail market or commercial project for two year path leverage our established PBT ecosystem to win with volume once more solutions with pricing through the quantity and the value embedded in our software.

Speaker Change #111: The synergy between the two has driven growth in both revenue and profit.

Speaker Change #111: Improving revenue efficiency.

Speaker Change #111: Our staff and other sector recorded revenue of $9 $6 million in the second quarter of 2024. This was a stable quarter due to adjustments in revenue restructuring structuring revenue of high value software value added services, such as car storage and smart private cloud solution.

Speaker Change #111: <unk> substantial the overall gross margin first half another 71% in Q2, consistent with our expectations based on the mix of services.

Speaker Change #112: Regarding the operating activities and expenses I will provide a detailed below.

Speaker Change #113: On a non-GAAP basis, which excludes certain items to give a clearer picture of our operational efficiency. We continue to present, our operating expenses, primarily our non-GAAP basis.

Speaker Change #113: In Q2, 2024, our non-GAAP total operating expenses decreased.

Speaker Change #113: <unk> 15, 6% to $27 8 million from $33 million a year.

Speaker Change #113: Largely due to reduced employee related costs in R&D and sales and marketing and G&A expenses as we now maintain a more streamlined team compared to the second quarter of last year.

Speaker Change #113: This result achieved not only through internal organization and the team management optimization, but also through our continuous efforts to improve efficiency by embracing new technologies.

Speaker Change #113: Under our comprehensive strategy of embracing generally we're applying AI to improve our internal development operations marketing and the logistic efficiencies. All work for is expected to remain relatively stable. This year regarding sales and marketing activities, we continue to adopt <unk>.

Speaker Change #114: Thank you.

Speaker Change #115: Our property increasing market activities in line with revenue growth and our market activity net flix.

Speaker Change #116: For example in the second quarter, we received significant attention by hosting the global developer conference in June at the end of May one of our next major events, we'll be participating in the IFA in Berlin in early September where we will showcase the new experiences Jenny I can bring to the industry and developers.

Speaker Change #116: On the other hand, I come back to you with customers and hosting.

Exhibitions will help reduce our own cost while also assisting customers in increasing their industry influence.

Speaker Change #116: Given by strong revenue growth.

Efficiency, a stable gross margin supported by our product strong value proposition and excellent control over expenses and the cost the second quarter market. We are the first ever non-GAAP operational profitability.

Speaker Change #116: We are confident in this achievement because this model allows for profit growth at the top line without requiring significant additional expenses.

Speaker Change #116: As a result this profit.

Speaker Change #116: We're largely translates into profit.

Speaker Change #116: <unk> for the company, which is why our non-GAAP operating profit margin directly reached around 10%.

Speaker Change #116: In the second quarter is the first time, achieving a breakeven.

Speaker Change #116: Milestone also indicates that <unk> has entered a new phase of business operations, one that is self sustaining.

Speaker Change #116: Finally in the second quarter, we continued to.

Speaker Change #116: Record approximately $12 5 million in interest income, providing additional capital for our daily operations. We continue to follow our consistent capital strategy prioritizing the protection of our principle maximizing funk supplements.

Speaker Change #116: As a result, our non-GAAP net profit risk.

Speaker Change #116: $98 million setting a new quarterly record operating cash flow continued to exceed $10 million.

Speaker Change #116: And our net cash reached over 1 billion U S. Dollar by the end of the second quarter.

Speaker Change #116: We are thrilled about.

Speaker Change #117: Turning to our financial performance in the second quarter and I believe that two year now has a solid financial and operational foundation.

Speaker Change #117: Us too.

Speaker Change #117: Reward our supporters with cash dividend looking ahead, we are committed to continue driving topline growth.

Speaker Change #117: Leverage healthy cash flow and shareholder return.

Speaker Change #117: So it concludes my presentation on the Companys financial performance.

Speaker Change #119: Over the past five years <unk> has experienced significant growth in <unk>.

Speaker Change #119: Information and I'm proud to say that we are today has become a public company with strong competitive advantages.

Speaker Change #119: Sustainable financial growth healthy profitability and ample capital reserve.

Alex: Our cofounder and a colleague I deeply respect will be succeeding me as CFO, Alex played a kilo new early stage from the raising for two years before I joined and he was also a key member during our IPO Road shows post IPO. Alex also attended unlocking letter communications and <unk>.

Alex: He has a lot of capital market experiences.

Alex: He will join us for the Q&A session.

Alex: Hello, everyone I'm excited to engage in many discussions with you in the future.

Speaker Change #121: With that operator, we are ready to take questions. Thank you.

Speaker Change #122: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change #122: Your question. Please press star one again.

Speaker Change #123: Finally, when asking a question. Please state your questions in Chinese first then immediately translate them into English for the convenience of everyone on the call. Please standby for our first question.

Speaker Change #123: Yes.

Speaker Change #124: And our first question is going to come from the line of Yang Lu with Morgan Stanley. Your line is open. Please go ahead.

Speaker Change #125: Sure she wanted to <unk>.

Speaker Change #125: Let me start and challenging.

Speaker Change #125: Jamie do you in there.

Jamie: <unk> seen in your initial thoughts.

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Jamie: Okay, that's useful to shelter the oncology.

Speaker Change #129: Petrodelta somebody Andrea James finished goods.

Speaker Change #129: Challenging some of Photoshop on the asphalt.

Speaker Change #129: A few quarters, where you show the idea.

Speaker Change #130: So let me translate my question.

Speaker Change #130: My question is about the.

Speaker Change #131: Future demand outlook.

Speaker Change #132: We'll be facing throughout two high base.

Speaker Change #132: Starting from second half last year.

Speaker Change #132: What will be the expected.

Speaker Change #133: Loan growth.

<unk>.

Speaker Change #132: What are the <unk>.

Speaker Change #134: Almost 30% growth in first half can be sustained in second half. Thank you.

Speaker Change #134: Yeah. Thanks for the question. This is Alex so I'd like to address this question from both external and to a specific perspective.

Speaker Change #134: As a company invented within its industry and in this current era to our strategy is to seize opportunities and take actions that align with our capabilities and vision.

Speaker Change #134: So.

Speaker Change #134: The macro economy environment is crucial as it has been demonstrated over the past three years. However.

Speaker Change #134: However, what is even more critical is how the company position itself to capitalize on opportunity and expanding revenue in the face of competition and market dynamics.

Tony: So it's Tony we observe that after a recover in the first half of this year.

Tony: The macro economy environment has stabilized.

Tony: You might have closely follow China export data for the first half and second quarter.

Tony: Which serve as a significant indicator of global demand within the global supply chain.

Tony: For example.

Tony: Driven by factors like inventory replenishment in Europe and in U S. A new demand from emerging market.

Tony: South East Asia.

Tony: The number of household appliances export from China grew by approximately 25% year on year in the first half of this year.

Speaker Change #136: According to Chinese customer data.

Speaker Change #136: So this is a robust result.

Speaker Change #136: Of course smart devices extend beyond just home appliances and.

Speaker Change #137: And we've seen similar trends in other categories, such as strongly cover and growth in the smart lighting and the first half.

With consumer security products also performing solidly.

Chanel.

Speaker Change #138: In observable market, we've noted that some downstream companies in non small sectors.

Speaker Change #138: Consumer electronics have also shown.

Speaker Change #138: Quite good performance.

Speaker Change #138: With our market positioning and value chain stages being similar to this who are customers in consumer electronics sectors.

So of course, you might have.

Speaker Change #138: I've noticed by July data.

Speaker Change #139: Although household appliances extra in July still achieved year on year growth of 16% in value and 23% in volume.

Speaker Change #139: There was slightly slowed down in momentum on a month on month basis.

Speaker Change #139: This is a normal phenomenon due to the seasonal and.

Speaker Change #139: Cyclical nature of the consumer electronics.

Speaker Change #139: With peak and off peak season.

Speaker Change #139: Generally Q3 is a relatively off season.

Speaker Change #140: Well Q4 is our peak season due to the commercial preparation before Christmas and Black Friday.

Speaker Change #140: So taking these factors into account we believe in the industry is in a positive state of development.

Speaker Change #141: The next key question is what <unk> will do and should do.

Gerrish: In this context Gerrish earlier presentation has also outline to your strategy and our folks here, we are quite clearly curran.

Speaker Change #143: Currently <unk> operates a cubic motto comprehensively covering the intelligence needs of the enterprises.

Speaker Change #144: So the X axis represents the diverse needs of customers for.

Speaker Change #144: For instance, some customer pauses strong supply chain capability, but the lack of a cloud and software intelligence.

Speaker Change #144: <unk> past products come into play.

Speaker Change #144: Others needs complete end to end smart device and the business capabilities, which is rare to smart device solutions and cube smart private cloud products meets their needs.

Speaker Change #144: Some other customers required operational functions. So <unk> offers a SaaS software products like the cost storage.

Speaker Change #144: So that's the X and the Y axis represents industry diversity.

Speaker Change #144: Covering everything from single Smart consumer electronics retail retail products to a multiple categories ecosystem of smart homes.

Speaker Change #144: Marshals from nine hours and specific industry attributes like the space saving energy efficiency.

Speaker Change #144: All 40 supported by to our platform.

Speaker Change #144: So the lastly, the Z axis.

Represent Xu.

Speaker Change #144: Geographical diversity.

Speaker Change #145: As a global smart cloud platform service providers, our customers developers and ecosystem partners span the globe.

Speaker Change #145: Providing a solid foundation of our overall business and performers.

Speaker Change #145: To tackle regional challenges and cease opportunities.

Speaker Change #146: You haven't seen that our European business remains steady, but the growth rate in Latin America, and southeast Asia, and even more impressive.

Speaker Change #146: So this has contributed significantly to the 29% year on year revenue growth in the first half and 10% non-GAAP operation margin achieved in Q2.

Speaker Change #146: So looking ahead to the second half of this year.

Speaker Change #146: It's well known that due to the ordering pattern of the downstream smart consumer electronics industries, and a high base of a year on year revenue growth in Q3, and 2023 as comparable period.

Speaker Change #146: It is challenging to provide an accurate to year on year number today.

Speaker Change #146: However, considering all the above correct correct sticks and competitive advantages together, we remain optimistic about continually year on year growth in our core business in the second half of this year.

Speaker Change #146: Thank you.

Speaker Change #146: Okay.

Speaker Change #146: Thank you.

Speaker Change #147: Thank you and one moment as we move on to our next question.

Speaker Change #148: And our next question is going to come from the line of Timothy Zhao with Goldman Sachs. Your line is open. Please go ahead.

Speaker Change #148: Okay.

Speaker Change #148: Yes.

Speaker Change #149: Sorry about that.

Speaker Change #149: Welcome to all.

Speaker Change #149: You bet.

Speaker Change #149: Yes.