Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Tuya Inc.'s Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please be informed that today's conference is being recorded. I'll now turn the call over to your first speaker today, Ms. Regina Wang, Investor Relations Associate Director of Tuya. Please go ahead.

Thank you, operator. Hello, everyone. Welcome to our fourth quarter and fiscal year 2025 earnings call. Joining us today are our Founder and CEO, Mr. Jerry Wang; and our Co-Founder and CFO, Mr. Alex Yang. The fourth quarter and fiscal year 2025 financial results and webcast of the conference call are available at ir.tuya.com. A replay of this call will also be available on our IR website in a few hours. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call as we will make forward-looking statements. With that, I will now turn the call over to our Founder and CEO, Mr. Jerry Wang. Jerry will deliver his remarks in Chinese, which will be followed by a corresponding English translation. Jerry, please?

[Interpreted] Hello, everyone. Thank you for joining Tuya's earnings call for the fourth quarter 2025. In 2025, against the complex and evolving external environment, we maintain stability across our platform business, delivered steady full year revenue growth and achieved a notable improvement in GAAP profitability. At the same time, we made solid progress in building a more systematic AI capability framework. For full year 2025, we generated total revenue of USD 320 million representing a year-over-year increase of approximately 7.8%. Profitability and cash flow quality continues to improve. This result reflects the resilience and stability of our core platform business as well as our ongoing progress in prioritizing resource allocation and execution discipline. On the strategic fronts, we continue to incubate new AI plus IoT application scenarios and accelerated the systematic integration of AI capabilities across our platform and the device ecosystem. AI is moving from a mere overlay of these great features into fully deployable operational applications. As part of our AI strategy, we introduced the AI-powered smart life assistant, Hey Tuya CES. Through a more curated and tangible entry point integrating AI agents with hardware devices, we aim to help users entry a more comfortable and effortless home experience, accelerating the real-world adoption of AI capabilities across a broader range of everyday scenarios. Our understanding of the integration pathway between AI and smart products is becoming increasingly clear. AI is progressing beyond the stage of capability overlay and enduring a face of deep integration with device form factors and industrial specific scenarios. Its value is increasingly reflected in application maturities, improved revenue structures and enhanced operational efficiency. We believe that as AI evolves from a conversational tool into intelligent agents capable of engaging in rural operations, industry expectations for underlying system stability, real-time responsiveness and scalability are increasing significantly. The impact of AI extends beyond enhancing product experiences. It is also reshaping application architecture and transforming modes of ecosystem collaboration. As AI applications continue to mature, their value will increasingly be reflected in their deployment capability and capacity to scale effectively across real world deployments. Looking ahead, we will continue to advance our strategy across 3 key priorities. First, we will further strengthen our AI native platform capabilities, enable them to more effectively support millions of developers in creating a diverse range of next-generation AI devices and applications. Second, we will accelerate the deployment and scalable expansion of AI application service across key scenarios. Third, we will deepen our investment in developer ecosystem growth and enhance our support for developers fostering robust unique growth in innovation and commercial success. Now let me turn the call over to our Co-Founder and CFO, Alex Yang, who will share more details about our financial performance and the business progress.

Hello, everyone. This is Alex. I will now provide more details on our fourth quarter and full year results. Please note that all the figures are in U.S. dollars and all the comparisons are year-over-year unless stated otherwise. So in the fourth quarter of 2025, we generated total revenue of approximately USD 48. 5 Million (sic) [ USD 84.5 million ], representing a year-over-year increase of 3%, against the backdrop of the continuous conscious industry demand and a more conservative customer procurement cycles. We achieved our tenth consecutive quarter of year-over-year growth. In the fourth quarter, our blended gross margin was 47.6%, while non-GAAP operating margin improved to 11.1% compared with 10.3% in the same period last year. Non-GAAP net margin reached 24.4%. Net operating cash flow totaled USD 23.5 million, making the 11th consecutive quarters of positive operating cash flow. Gross margin remained stable underscoring the company's pricing power driven by the product value and technology capabilities as well as the strong competitive positioning of our platform-based business model in a dynamic market environment. From a full year perspective, our stable growth in 2025 became even more pronounced. Our full year revenue reached over USD 322 million, representing a year-over-year increase of 7.8%. Blended gross margin of the full year improved to 48.2%, up 0.8 percentage points from 2024. Non-GAAP operating margin reached to 10.5%, an increase of 2.9 percentage points year-over-year, while non-GAAP net margin rose to 24.9%. Full year non-GAAP net income reached to a record high of USD 80.1 million, up approximately USD 4.7 million compared with 2024. Among our segments, so the PaaS business delivered stable performance, generating revenue of over USD 230 million, representing a year-over-year increase of 6.5%, against the backdrop of extended customer margin cycles. We maintained stable growth in our core…

[Operator Instructions] we will now take our first question from the line of Yang Liu from Morgan Stanley.

Congratulations on the solid results. I have 2 questions. The first one is regarding the recent tax rate change at the U.S. side, whether that will have any impact to our business outlook going forward. And my second question is regarding the recent upstream memory and other chipset supply constraints and whether it will impact Tuya business? Let me translate my question to Chinese. [Foreign Language]

Yes. Thank you, Mr. Liu. So the first question is, yes, that's considered as a positive indicator that about tariff reductions recently. But the demand didn't react immediately yet. But we really see that the customers' confidence levels about the a better environment to do the business, especially global manufacturing trading, so should improve. So people have a more positive and more confidence that macro economy will become more stable and better this year. But the demand and order didn't show up immediately. Two reasons. The first one is that still, people will consider the global situation will be more dynamic. So -- and those type of reason to reductions maybe will not be a sustainable level. So in the near future, maybe in March that maybe new executive order will come up. So we'll just like reset the tone of the tax level, maybe to 15% or a little bit higher. So that's the first one dynamic. So people rather not overreact. And the second one is that this kind of news is happening during the Chinese New Year. So until now, most of the manufacturers, they started back to work today. I mean, today that we did today. So many of the manufacturers didn't start to offer new price and try to take it new orders. So we'll see. But anyhow, we are very positive and directions looking forward to. And while overall costs eventually will bring down somehow. And so the customers will be able to have more confidence to enlarge the demand. That's the first one. And the second one is, yes, since last Q4, we're really starting to notice that the shortage of the production capacity of the semiconductor side. And the first one is that the shortage will not impact us because we're considered as significant buyers in these sectors, so many of our -- I mean all our suppliers will ensure that we will get fulfillment of our orders, no matter what. That's the first one. At the same time, since last Q4, we really starting to prepare how can I say, quite good inventory levels to going against those kind of dynamics in the supplying cycles. So that's the first one. So shortage is not a problem for us. And about the cost rate, we continue to keep a close eye on that. Right now, we didn't meet that immediately increase, like I mentioned that because of the buying process. But if this kind of intensity is starting to increase without limit, we're not sure. So we'll keep closing on that. But anyhow, because of the special value proposition that the company will be doing so far, so that kind of increase on the supply side will not impact our demand or significantly our gross margin side. But we'll keep closing on that. It seems that it will be less for another 1 or 2 quarters. Thank you.

We will now take our next question from the line of Timothy Zhao from Goldman Sachs.

Great. Congrats on the very solid results. I also have 2 questions here. One is, I think, a more broader question about the company's position in the Agentic AI world. Given we have seen continued progress in the Agentic AI capabilities, how should we think about as value proposition to the customers in your path and SaaS business? And will the AI technology advance actually enhance the self-development capabilities of your customers. And how should we think about the long-term relationship between Tuya and your customers? And it's actually, I think you mentioned that -- in the SaaS business, the recurring revenue actually increased quite dramatically last year. Just wondering if you can further elaborate on that. And second question is that also in your remarks, you talked about going forward, you want to accelerate the AI deployment of the key application scenarios. Just wondering if you can also further elaborate on this as well. For example, what scenarios that you see more promising. And just wondering if you can share more details. [Foreign Language]

Thank you, Timothy. So yes, it's a nice question. So first one is that about the macro side, we are happy to see that more customers starting to thinking about how they can create their own differentiation, how they can build their own capabilities in their own R&D side because we're happy to see that. Otherwise, we have to offer that. So I think that AI makes no difference for past 10 years' experience is that we're starting to enable the manufacturing players to embrace the -- and the smart technology is starting with IoT. It's the same stuff. If they cannot do that, but want it, we have to offer it. So for all the time, of the company's history, we continue to offer 2 things. The first thing is that if they don't have the capacity right now, we'll offer them an off-the-shelf solution turnkey. And if they will have some capability, we continue to educate them to do that and then we offer them infrastructure to allow them to do that some extra values, they want to create more freely. So I think that's the what we call ecosystem were to create, so it's not like just keep selling stuff. They don't have to do that now. So we're happy to see that we already have a significant amount of the customers who already have their own kind of in-house capability to create their own differentiation and make their own innovations. We're happy to see that. So the same as that we continue to enable our customers to build their own like the device level, innovations and application network. So I think AI makes no difference. We also continue to do the same thing including 2025, the showcase is that for some new players, they don't know…

We will now take our next question from Mingran Li from CICC.

Congrats on the strong results. My first question concerns the milestone. Given the recent geopolitical risk, how to best assess the potential impact on Tuya's international operation. Looking at the current environment in this year, how do you perceive the recovery in demand across the overseas markets? And my second question, I would like to ask about the shareholder returns. Tuya holds a very healthy cash position and your profitability continues to improve. Could management share if there are any more specific plans or announcements for shareholder returns that have been moved forward to 2026? [Foreign Language]

Yes. So thank you for the questions. The first one is that I already covered part of that from MS, the tariff questions. So the first one is that, yes, the global situation will become more and more dynamic, correct? We're trying to get used to that come along with our customers as well. So right now, we see that we get to be able to see more positive indicators in that direction, either reductions of the tariff on the global side anyhow to any type of pathways, but we really see that people require -- the commerce require a better environment to do the business, and people cannot cut each other off. So we really see that. So the end demand continued to increase because the technology really provides value for the end users and they want it and they use that more and more often. So that's what we see. And this is inevitable. I mean you can never reverse that. So coming out with the end demand increase. And so all the commerce level that people just figure out a way how they'll be able to fulfill the demand. and go through -- navigate through all the dynamic factors, including the tariffs, including the reallocation of the supply chain globally, et cetera. So for us, we just follow the flow is that we come along with the customers to focus on, first one is to provide our offering -- technical offering to help them to build whatever application that makes sense for their end users and be able to scale it. That's the first one, to make them be able to provide the right thing. In the same time that we continue to closely to manage costs to align with a different allocation of our services on…

Our next question comes from Matt Ma from Jefferies.

Congrats on solid results. My question is regarding on the Smart Solutions segment. We noticed that the company showcased multiple AIoT products at CES last year. And which product categories does the company have higher confidence in sales growth in this year? And when we are thinking about product category expansion with our thought process and could we expect a relatively strong growth in the Smart Solutions segment in 2026? [Foreign Language]

Yes. So thanks for the question, Matt. So the first 1 is that I think combined with the previous questions and answers. So for the more promising, that's promising. Maybe I mean we will have more confidence level categories that can achieve a higher growth enabled by AI, so those categories will be those devices that can use more AI capabilities naturally. So including those kind of video and audio interactions and safety stuff. And toy, what we call entertainment stuff and appliances. So those energy and those will be those segments will find that AI can use more. They can use more AI capabilities than ever. And some of the capability will directly deliver as a value that becomes visible for the end users. And so that's the one. And so we have a more confidence level in that segment. At the same time, it continues to reach other segments and what will be the new innovative ideas that combined the AI deeply integrated with the existing device capabilities. We continue to support both as well. And but which we -- what we're looking for, we think that we're going to see in 2026 is that gradually, you'll find more and more new type of devices that didn't exist before, which are starting to emerge because of the AI. So that will be 2, 3 new stuff. Same as a toy, nobody thinks that a companion type of toy will become existing before 2025. So this type of new concept of applications. We're looking for have more because we have more talent coming into the industry. We have more players coming into the industry. The new ideas come across different world will create a very, very interesting chemistries out there. So new categories, which I don't name that, even…

There are no further questions at this time. I will now hand back to the management team for closing remarks.

Thank you, operator, and thank you all once again for joining us today. If you have any further questions, please feel free to contact Tuya's IR team. Good bye and see you next quarter.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]