fool.com: Tuya achieves GAAP profitability as software pivot drives margins
- 6, 2026, marking a 34% decline over the prior year while the underlying business transitions from a loss-making hardware distributor to a profitable software-driven player, fool.com reported.
- fool.com reported that Tuya achieved GAAP profitability in fiscal 2025 with a net profit of $58 million, shifting away from heavy losses incurred during its early expansion phase.
- Revenue reached $92.9 million for the second quarter of 2026, representing a 16% increase year-over-year, according to ainvest.com.
Tuya Inc. shares trade at $1.72 as of Oct. 6, 2026, marking a 34% decline over the prior year while the underlying business transitions from a loss-making hardware distributor to a profitable software-driven player, fool.com reported.
Tuya Achieves Profitability as Operating Margins Climb
fool.com reported that Tuya achieved GAAP profitability in fiscal 2025 with a net profit of $58 million, shifting away from heavy losses incurred during its early expansion phase. Trailing-12-month operating margins climbed to 8.4% as of June 2026, up from 3.6% for the full year 2025. Management slashed research and development and selling, general, and administrative expenses as a percentage of revenue to achieve this financial stability.
Revenue reached $92.9 million for the second quarter of 2026, representing a 16% increase year-over-year, according to ainvest.com. The platform’s Platform-as-a-Service business served as the primary growth engine, generating $67.9 million—a 16.9% increase from the prior year. Blended gross margin for the quarter landed at 46.3%, with the PaaS segment holding at 46.8% and smart home and robot products sitting at 21.9%.
Tuya Launches Low-Code Gateway for AI Developers
The platform supports over 2.09 million registered AI developers as of June 2026, fool.com reported. This developer base forms a self-reinforcing network that attracts enterprise clients and supports physical AI scenarios.
ainvest.com reported that Tuya launched an AI developer gateway called Tuya Co-builders during the second quarter of 2026. This low-code gateway aims to streamline hardware development by reducing panel generation time and lowering the barrier for non-coders to create AI-powered devices. Regional demand for these initiatives varied, with Southeast Asia and Latin America growing through telecom carrier channels, and Europe relying on energy-related segments supported by AI-driven home energy management solutions.
Semiconductor Costs Pressure Margins Amid Voting Risks
ainvest.com noted that upstream semiconductor cost fluctuations put downward pressure on margins during the second quarter. The company operates under a founder-led dual-class voting structure that grants insiders 63% of voting power, limiting minority shareholder influence and creating entrenchment risks during strategic pivots.
Analysts Project 18% Annualized Earnings Growth
Analysts expect earnings to grow at about 18% annualized over the next two years, according to fool.com projections. High-value customers contribute 89% of total PaaS revenue, adding operational resiliency as the company scales its base of 2.1 million developers.