Tuya delivered a substantial improvement in GAAP profitability during the second quarter of 2026, with operating margin expanding 860 basis points and nearly converging with the company’s non-GAAP operating margin.
Total revenue increased 16% to $92.9 million, led by a 16.9% increase in Platform-as-a-Service revenue to $67.9 million. Smart home and robot product revenue increased 23.2% to $13.5 million, while AI application and other revenue increased 3.9% to $11.5 million.
GAAP operating margin reached 10% compared with 1.4% a year earlier. Non-GAAP operating margin was 10.3%, compared with 10.7% in the prior-year period. The small 30-basis-point gap between GAAP and non-GAAP operating margin is notable given the much wider difference a year earlier.
Operating expenses declined 10.4% to $33.7 million even as revenue increased. Net profit rose to $18.6 million from $12.6 million, while GAAP net margin improved 440 basis points to 20.1%.
The improvement came despite pressure on gross margin. Overall gross margin declined to 46.3% from 48.4%, and PaaS gross margin fell to 46.8% from 48.7%, partly because of product mix and semiconductor supply-chain pricing.
Tuya’s premium PaaS customer base increased to 318 from 285, with those customers contributing approximately 89.5% of PaaS revenue. Registered AI developers exceeded 2.09 million, up 16.2% from the end of 2025.
KEY QUOTES:
“In the second quarter, despite a complex global operating environment, the Company continued to demonstrate solid growth momentum. Total revenue increased by 16.0% year over year to US$92.9 million, with PaaS revenue increasing by 16.9% and remaining the Company’s primary growth driver.”
Xueji (Jerry) Wang, Founder and Chief Executive Officer of Tuya
