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Good morning and good evening ladies and gentlemen. Thank you for standing by and welcome to Tuya Inc's second quarter 2026 earnings conference call. At this time all participants are in listen-only mode. After the speaker's presentation there will be question and answer session. Please be informed that today's conference is being recorded. And 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 second quarter 2026 earnings conference call. Joining us today is our founder and CEO, Mr. Jerry Wang, and our co-founder and CFO, Mr., Alex Yang. Our 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'd like to refer you to our Steve Harper 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, please. Hello everyone and thank you for joining TUYA's earnings conference call for the second quarter of 2026. TUYA maintained solid growth momentum during the quarter despite the continued complexity of the global operating environment. Our total revenue reached 92.9 million USD a year over a three-year increase of 16%, with growth accelerating from the first quarter. Within this, revenue from our core PaaS business increased 16.9% year-over-year. These results reflected ongoing rising smart product penetration, including steady demand across home appliances, increased adoption of differentiated solutions such as smart door locks, and growing demand for emerging AI-enabled product categories, and also underscored the resilience of our platform business across different regions and product categories in terms of strategic execution we continue to advance our ai driven development strategy extending our ai capabilities beyond foundation models and standalone features towards platformization productization and scenario-based deployment in the second quarter shipment volumes of ai companion product solutions continued to expand and consumer acceptance of new forms of AI hardware began to be validated. Meanwhile, we launched the 3i-Computer, which applies wide coding to AI hardware development, enabling developers to cover the core development process, from project concept to physical device validation, using natural language, further shortening AI hardware and development techniques. These developments further reinforce AI's evolution from a mere conversational tool into a technology that operates in real physical environments and participates in sensing understanding and execution looking ahead we will deepen our focus on the following three key areas first we will continue to advance ai native application and product innovation centering on high potential scenarios such as ai home ai energy and ai robot we will drive the large-scale adoption of AI across a broader range of physical devices. Second, we will continue to enhance AI development tools such as live coding, agent orchestration, and cloud-based device collaboration, further shortening the cycle from ideation and development to deployment on physical devices or AI hardware. Third, we'll advance the global expansion of proven solutions while further strengthening our developing ecosystem and industry partnership to jointly explore long-term opportunities in the AI application market. Now let me send a call over to our co-founder and CFO Alexia who will share more details about our financial performance and business progress. Hello everyone this is Alex. I will not provide a brief overview of our second quarter result. Please note that unless otherwise stated, all figures are in U.S. dollars and all contributions are on year-over-year basis. In the second quarter of 2026, we generated total revenue of approximately 92.9 million U. S. dollars, up 16% year- over-year, and accelerating from the 8.3% growth recorded in the first quarter. Our past business maintained strong growth where revenue from the smartphone and robot products segment is also increased by double digits. Of our future revenue, the past business generated revenue of about 67.9 million US dollars, a year-over-year increase of 16.9%, serving as the important growth drivers for the quarter. At the end of the the second quarter, the number of past premium customers for the training 12 months reached 318, contributing approximately 89.5% of the past revenue, with our core customer base remaining stable. The AI application and other segments generated revenue of about $11.5 million, a year-over-year increased of 3.9% primarily driven by growth in cloud-based service revenue such as video cloud storage. We continue to advance to value-added services including video and AI-driven energy saving among others. We enable applications capabilities while gradually strengthening our renew and recurring service capability. Smart home and mobile product revenue was about $13.5 million, a yearly yield increase of 23.2%, primarily driven by growing customer demand from smart security, energy, and other differentiated smart products. We will continue to increase the contribution of high-value-added products and strengthen their integration with software and value-adding services. Looking at the specific driver of past growth, home appliances, smart door locks, electronics, and energy products, and AI-companion product solutions performed relatively well during the quarter. Growth in the home appliances segments was mainly driven by customers' rollout of the smart-enabled models, the expansion of their geographic reach, a higher contribution from smart enable products and the migration of certain overseas brand product projects from our customers legacy solutions into tools growth in smart door locks was primarily driven by increased adoption of audio video and no power Wi-Fi solutions by comparison demand recover in categories such as traditional lighting and IP cameras has been relatively slow reflecting continued divergency in performance across products and regions. In AI companion products, shipment volumes of the devices powered by our solutions continue to expand. During the June 18th shopping festival in China, Fezuzu built-on-2S solutions ranked first in the AI toy category on Tmall, while a number of other ecosystem products also deliver strong ranking and sales performance across major e-commerce platforms. This provided early validation of both consumer acceptance and the commercialization potential of the new form of AI devices. Beyond basic voice interactions, you have building out capabilities in multi-model perception, personnel and memory, content services and user engagement helping customers accelerate the development and mass productions of the ai native consumer hardware in the energy sectors solutions including ev chargers smart power distribution distribution metering and home energy management maintain solid growth we are expanding our ai energy capabilities from electricity consumption analytics abnormal alerts and personalized recommendations towards dynamic electricity tariff management and user-authorized automated device coordination. Within the smartphone ecosystem, customers' adoptions of matter-based solutions continue to increase across categories such as electronic products, lighting, and climate control. In parallel, we enhanced local control, multi-protocol interoperabilities, and third-party ecosystem compatibilities. On the margin side, our blended gross margin for this quarter was 46.3%. By segment, Gross margin for PaaS was 46.8%, gross margin for AI adaption and others were 72%, and gross margin for smart home and robot products were 21.9%. Gross margin fluctuations were mainly driven by the volatilities in upstream semiconductors cost and changes in business mix in line of the expectation. Despite this, gross profit increased by 11.1% year-over-year to approximately $43 million. On expenses, we maintained disciplined expense management while continuing to invest on AR&D and platform capability. Gap of creating expenses for this quarter were approximately $33.7 million U.S. dollars, down 10.4% year-over-year, primarily due to the lower share-based compensation expenses. In terms of profitability, we recorded gap profit from operating agents of approximately $9.3 million U S. dollars with a gap-repeating margin of 10%. Non-GAAP profit from operating was approximately $9.6 million, a year-over-year increase by 11.7%. While non-GAap operating margin remained in the double-digit at 10.3%, while delivering revenue growth, we maintained a relatively stable core operating profitability. Net profit for the quarter was approximately $18.6 million, while non-GAAP net profit was approximately $19.9 million. The year-over-year decline in non-GAP net profits was primarily due to the lower financial income and foreign exchange losses, while core operating profits continued to grow. On cash flow side, net cash generated from operating activities was 6.2 million dollars during the quarter and remained positive. At the end of the second quarter, the company's total liquid assets, including cash and cash cash increment, time deposit, and treasury securities amounted to approximately 976 million U.S. dollars, continually to provide ample resources to support the development of AI capability, global business extension, and our ability to navigate external uncertainties and a long-term strategy investment. Next, I'll briefly walk you through our progress in the AI developer ecosystem. At the end of the second quarter of 2026, the number of registered developers on our platform exceeded 2.09 million. Notched during the second order, 2 AI co-builders served as an AI developer gateway to the 2L developer platform, applying backcoding to AI hardware development. By describing their requirements in natural language, developers can complete product definition, add user interface, embedded firmware, AI agents, and workflow development in one place, and then proceed directly to the device flashing and debugging. This covered the core development process from product concept to physical devices validation and helped shorten the AI hardware development cycles. In just over a month since launch, 2iC Core Builder's AI-powered panel generation capabilities has extended to cover 30 product categories, with an average generation time for a single panel reduced to approximately 190 seconds only. This progress demonstrates that we are advancing our developer tools beyond development assistance towards end-to-end delivery capability, spanning product definition, software generation, and deployment on physical devices. As an application layer, we continue to enhance H2S device task execution capabilities, control reliability, and response efficiency, while exploring subscription-based and value-added services across scenarios such as AI-driven energy saving, pet care, and video understanding. Certain scenarios have already begun to generate early payment and renewals. We'll continue to focus on high-frequency use cases and long-term use value. From a broader perspective, AI capabilities are gradually expanding beyond single model integrations and in compact device sensory. Contextually understanding, memory, agent orchestration, and device side execution will continue to leverage the strength of our platform, device ecosystem, and global developer base to translate AI capability into a scalable commercial value across a broader range of the real-world scenarios. In summary, our revenue growth accelerated in the second quarter of 2026, with the past business continuing to serve as a primary growth engine. Meanwhile, our AI capabilities are being commercialized in parallel across multiple paths, including paths, smart products, and AI applications. Despite the impact on gross margin from semiconductor supply chain price fluctuation and business mix change, we maintain stable operating profitability and amble financial resources. Looking ahead, we'll remain focused on AI-native applications, physical AI scenarios, and developer platform capability, and continue to advance the transformation of AI technologies from two-level capabilities into tangible and scalable commercial value. Thank you, all operators. Right now, we can begin the Q&A. We will now begin the question and answer session. To ask a question now, please press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1- 1 again. One moment for our first question. We will now take our first question from the line of Yang Liu of Morgan Stanley. Please ask your question. Yang, your line is open. Thanks for the opportunity and congratulations on the My question is about the future demand outlook based on your discussion with key customers in current environment. What is the growth or demand outlook going into the second half of 2026? If you can provide a little bit more breakdown by geographic, that will be even better. like what's the demand profile in U.S. or in Europe and ASEAN, et cetera? Thank you. Okay. Thank you, Liu. So right now, we see that the end demand and internal momentum is still within our expectation. So as we see in the beginning of this year, that the entire customers and the consumer side they're looking forward to consume more and transfer more legacy devices and solutions into the new AI one that we provide so this maintain continues so what do we see that we have the accelerating type of rebalancing on the demand side so this will be the overall overview so we We see that the recovery will not come overnight, so it's gradually climbing. What we found here is the momentum still continues, especially based on this kind of very positive sell-through feedback from the end-user side. That's the first one. If I break down into the geographic areas, so there are different type of demand drivers. Europe still show very strong on the demand side, especially for all type of energy related segments. So, including the new AI hand, so home energy management solutions, we provide as a solution or include different type of Energy Efficiency Improvement single device. No matter it's what we provide at the patch or we provide the home and robot products to the solution together that show very strong demand still as a first one. And South East Asia and Latin America, the driving forces majorly come from our strong channels in the telecom carriers. So while trying to establish a strategic partnership along with them around two and a half years ago and we're starting to skip commercialize that part, so through their own channels to to deliver some comprehensive total solutions for their users in the AIoT fields, that's a very strong potential and a very promising one because they're running as a B2B cycle. By the end of the time, it's a B3C, but they're on a really strong B2C cycle rather than a retail cycle. They're campaigning on that. That's for Southeast Asia and Latin America. And the media list is still kind of in a pause right now because of the military conflict going on in the second quarter. So right now we're still kind read and see. The customer is still there and the customer is doing a lot of preparations including the product development and the new concept definitions and the type of stuff. But right now, I think that all the business is not coming back yet. And we're looking forward to have a better scenario. Perhaps maybe end of Q3 or Q4. We're looking to have some agreement for those competing countries. And then we'll be able to catch the demand. And so that's where we'll go. And North America is that the is still there. But some price sensitive, especially no price type of the devices, not to show kind of fluctuations by the pricing rates coming from the supply chain side. And so we structured that type of product mix along with my customers to deliver a better sell-through in the second half of this year. And so I think that will be overall. And for China right now, we will be seeing some really good promising categories, including part of the home appliances. But we can find that recently that the major brands right now they are speeding up the transformations from the legacy type of devices into the smart one, and from first generation IoT type of smart devices into the AI one. So we are catching the transformation trend and helping a lot of China brands to do that. And the second one is that in China, so some AI-native categories are starting to boom, like the AI companion. So our first market we're starting to break through for AI companion categories is from China. So that's why Fuzuzu is really in tune. So we really see that based on a large target consumer scale in China and will we find the right type of applications and come along with a very active customer base and that's what we'll try to find more potentials in the new type of the innovations in China. Thank you. Thank Thank you. We will now take our next question from Timothy Zhao of Goldman Sachs. Please ask your question, Timothy. Your line is open. Great. Good morning, management. Thank you for taking my question, and congrats on the very solid results. My question is on your gross profit margin. I noticed that in the second quarter, the IoT patch margin declined on a year-on-year basis although stabilized sequentially. your smartphone and robotics products margin actually declined sequentially in a young year. Just wondering if you can share more color on what was the margin drivers behind, and what is your margin outlook for these two segments for the third quarter and rest of this year? Thank you. Okay, yeah, so first of all, that everyone knows that the upstream cost fluctuations tend to increase over two quarters on a global basis, and we are the last one to So for the EQ2, what we do is that the major of the properties, we just pass through the cost rate. And so we think that we maintain the gross profit, but we don't speak to the gross market. But here now that will really build a very good buffering on the inventory and cost balance between now and future. And in next two quarter or three, and right now we have the confidence that we'll be able to working for a more stable cost level of my major type of materials we needed. So we didn't go to either to stabilize the gross margin, and we figured out whenever all the possibilities that by offering new capabilities, new technologies, we have to improve the gross margins overall. So that's pretty much it with that. So for the customer side, we really show our kindness, so we just pass through the cost. But in the future, while anything happens, we're looking for the most positive way to help the company to continue to run the business, so it's not stick to the cost, but more stick to the value and the competence that we deliver to the customers to help them get through that. right thank you thank you we will now take our next question from kai shell of cicc please ask your question kai your line is open okay thank you management this is kai i have two questions when to your computer you mentioned in the quarter so i wonder what's the current adoption status of Tuya Co-Builder and what the company's meaning is. Okay, so Co-builder is something we have to do for a couple of quarters. So starting from second half of last year, some departments in to your R&D centers, we're really starting to do the backcoding and to improve our own coding efficiency and also to bring more ROIs on the R&d side. So we start to do that as the major users of backcody. And while we have enough experience, how we'll be able to, you know, manage, how will we be able use that and deliver right ROI and be able know how to manage that. And we start to think about the way we need to, we know, duplicate our experience and open that to our So, at the beginning of this year, we started to build a computer, and we're happy to launch it at the second quarter, and so we believe that will be the new type of default gateway in the future for many developers, even not only device developers, many developers to roll the ball, and including me right now, including my financial department, so many of them they don't know coding at all for their entire lifetime but they're trying to write their own agent to improve their own workflow to improve them own individual efficiencies. I believe some of you did that too. So co-builder will be kind of sure where how I mean how low the bar can reach and how easy those ideal developers will come with some innovative ideas that they can really quickly to testify the innovations and to validate whether those kind of crazy ideas you know make sense is for some of the users and build the demo and and get some pilot users and starting to run including the fund regions and let's get it so co-builder we believe you'll be kind of the in hardware world should be kind of a the momentum and while you have the clock code maybe one year people and we believe that will be defaulted quickly and so continue to bring that to in q2 well after we launch it and then we continue to do a lot of webinar trainings for those developers even while they don't know what is code but what does that coding mean and how they can deal with it and we're trying to train a lot you know developers and also in the same time we'll use this tool to attract those not developers at this moment but they're more considered as a product manager maybe in some and hardware companies and in the past the strength or capability for those type of talents are user insight, product definition and interfacing design and psychological understanding but right now we offer them better tools that they can transfer that part with or without our knowing any of their you know engineers they'll be able to you know stretch that out in itself yeah so that you know that would be the back will be the value of the computer and so we can put a use that in arch the developer entire developer base by building up a a better target, and also be able to improve my customers' R&D efficiencies in the long run. Thank you. We will now take our next question from the line of Matt Ma of Jefferies. Please ask your question, Matt. Your line is open. Hey, hello. Thank you for taking my question. I have a question on the AI application segments. So it seems like in Q2, the revenue growth has been decelerated from 17% in the first quarter. I'm just curious, what is the reason behind that? I calculated it. It seems that Q2 growth is only 3%. And what can get this line back to a double digital growth? And then also on the segment margin, on the Q1 call, you pointed that a seasonal rebound in device usage from Q2 would help you to increase the margin for this segment. but it doesn't seem that have come through. Could you walk us through what could actually happen in this quarter or the coming quarters to help to the margin recovery for this segment? Okay, I'm sorry, I lost the second question. So is the margin for which segment? You mean the home run robot? AI application. Okay, A applications, got it. So the first one is, thank you for bringing the question. And so for A applications right now the growth slowly majorly come from the mix of my offering. So as you might know that in that segment they cover two offers, so one is B2B and especially some of the project based customization services we provide for the key customers. And the second part of that is B2C, so directly services we offer for the consumer, which are the users of the devices. So they activated my web-added services through subscription. So the growth measure is that we gradually are still slowing, and we don't want to handle this kind of B2B projects for a long time. So the B2B project based the revenue and the growth slower. But actually the CN grows good. So my CN services recurring revenue growth in Q2 is 22%. We're happy to see that change because we want to have this segment that B2C will be able to cover more and more portion of this segment because we believe that would be a better value for that. So that's for the first question. And so the second question about the application segment, right? Yes, in the margin form. Yeah. Yeah, so for this one, the thing is that the segment we want to have more is based on the count and based on that AI capability. So that will be a higher valued one. So 7% up is the target margin for the segment. So right now, we've hit it. So in the future, we'd like to be between 75% to 80%. And the driver for that, the first one that I explained, that's the .. We don't want to have those kind of project and customization based services take a larger portion, because that's kind of more neighbor-centric lower margin type of services we try to lower the entire portion of that so by increasing more and more cloud-based one B2C side and on the B2c side not only enlarge the contribution percentage on revenue but also in the same time but we scale the services and be able to improve more and a more efficient architecture on the end technique side so we'll be able to figure out a better way to manage the cost and L&M assumptions in a number so through that we'll able to push the top base the services margin from 70 into 75.8. I wish you a nice day. Thank you. Thank you. There are no further questions at this time. I'll now hand back to the management team for closing remarks. Thank You, and thank you all once again for joining us today. If you have any further questions, please feel free to to contact the IR team of Tuya. Goodbye and see you next quarter. No participation in today's conference. This does conclude the program. You may now disconnect your lines.