Tuya Inc (TUYA) 2023 Q4 法說會逐字稿

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Tuya Inc.'s fourth quarter 2023 earnings conference call. (Operator Instructions)

早安，晚上好，女士們先生們。感謝您的耐心等待，歡迎參加塗鴉公司 2023 年第四季財報電話會議。（操作員說明）

I'll now turn the call over to the first speaker today, Mr. Reg Chai, Investor Relations Director of Tuya. Please go ahead, sir.

我現在將電話轉給今天第一位發言者，塗鴉投資者關係總監 Reg Chai 先生。請繼續，先生。

Thank you. Hello, everyone. Welcome to our fourth quarter 2023 earnings call. Joining us today, are Founder and CEO of Tuya, Mr. Jerry Wang and our CFO Ms. Jessie Liu. The fourth quarter 2023 financial results and webcast of this conference call are available at ir.tuya.com. A replay of this call will also be available on our website in a few hours.

謝謝。大家好。歡迎參加我們的 2023 年第四季財報電話會議。今天加入我們的有塗鴉創辦人兼執行長王傑瑞先生和財務長劉潔西女士。2023 年第四季財務業績和本次電話會議的網路直播可在 ir.tuya.com 上取得。本次電話會議的重播也將在幾個小時後在我們的網站上提供。

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.

在我們繼續之前，我請您參閱我們的收益新聞稿中的安全港聲明，該聲明適用於本次電話會議，因為我們將做出前瞻性聲明。

With that, I will now turn the call to our Founder and CEO Mr. Jerry Wang. Jerry will deliver his remarks in Chinese which will be followed by corresponding English translation.

現在我將把電話轉給我們的創辦人兼執行長王傑瑞先生。Jerry將以中文發表講話，隨後將提供相應的英文翻譯。

Hello everyone. Thank you for joining Tuya's fourth quarter 2023 earnings conference call. The fourth quarter of 2023 marked an exceptional period of progress, building upon momentum of third quarter, as we executed our strategic plan and thoroughly reviewed our operations. This approach led to significant advances across all business and performance indicators. Specifically, we reported total revenue of approximately $64.4 million for the quarter, representing a robust year-over-year increase of 42.2%, which underscores our positive trajectory.

大家好。感謝您參加塗鴉2023年第四季財報電話會議。2023 年第四季是一個特殊的進展時期，我們在第三季度的勢頭基礎上，執行了戰略計劃並徹底審查了我們的營運情況。這種方法使所有業務和績效指標都取得了顯著進展。具體來說，我們報告本季的總營收約為 6,440 萬美元，年比強勁成長 42.2%，這凸顯了我們的積極發展軌跡。

The gross margins of our three business segments have steadily increased, driving our blended gross margin to a new high of 47.3%, which is a testament to the strong value that our platform, products, and services deliver to our customers. From an operational and profitability standpoint in the fourth quarter, our non-GAAP net profit climbed to around $12.6 million, a quarter-over-quarter increase of about 25%. Our financial strength is further evidenced by our net cash from operating activities, which reached approximately $31.8 million in net inflows for the quarter enabling our net cash participation to rise to $984 million by the end of the fourth quarter.

我們的三個業務部門的毛利率穩定成長，推動我們的綜合毛利率達到47.3%的新高，證明了我們的平台、產品和服務為客戶帶來的強大價值。從第四季的營運和獲利角度來看，我們的非 GAAP 淨利潤攀升至 1,260 萬美元左右，較上季成長約 25%。我們的經營活動淨現金進一步證明了我們的財務實力，本季淨流入達到約 3,180 萬美元，使我們的淨現金參與度到第四季末增至 9.84 億美元。

In summary, the fourth quarter results reinforced our confidence that we are emerging from the clinical downturn in our industry. Looking back on the year, we returned to year-over-year growth and achieved full-year non-GAAP profit for the first time. Throughout 2023, we implemented strategic adjustments and transformations for validating the operational and commercial benefits of combining our key account focus and product enrichment strategies. This strategy yielded significantly better results.

總之，第四季度的業績增強了我們的信心，我們正在擺脫該行業的臨床低迷。回顧這一年，我們恢復了同比增長，並首次實現了全年非公認會計原則利潤。2023年全年，我們實施了策略調整和轉型，以驗證將重點客戶和產品豐富策略結合的營運和商業效益。這一策略取得了明顯更好的結果。

In 2023, our impact on B2B customers and end-users around the world grew even stronger, solidifying our market share. As we have mentioned before, since the latter half of 2022, a number of large IoT platforms have ceased operations due to challenges in maintaining efficiency. Last November, a well-known cloud computing service provider in China discontinued its IoT service. Many of their IoT customers are gradually seeking to switch to the Tuya platform.

2023 年，我們對全球 B2B 客戶和最終用戶的影響力更加強勁，鞏固了我們的市場份額。正如我們之前提到的，自2022年下半年以來，一些大型物聯網平台因維持效率面臨挑戰而停止營運。去年11月，中國一家知名雲端運算服務供應商停止了其物聯網服務。他們的許多物聯網客戶正在逐漸尋求轉向塗鴉平台。

Now, the smart consumer electronics industry is now embarking on a significant growth phase which will be a period of cultivation and expansion built upon a solid foundation. During this crucial period, our strategy will focus on engaging with high-quality customers, elevating our product offerings, and enhancing cost efficiency. We are committed to driving revenue growth by optimizing both the volume and the pricing of our products, while also expanding into new smart domains beyond consumer electronics.

目前，智慧消費電子產業正處於一個顯著的成長期，是個夯實基礎的培育期與擴張期。在這個關鍵時期，我們的策略將專注於吸引優質客戶、提升產品供應、提高成本效率。我們致力於透過優化產品的數量和定價來推動收入成長，同時擴展到消費性電子產品以外的新智慧領域。

A cornerstone of our approach is the key account strategy, which has increased our personnel efficiency and enabled us to dedicate resources to securing and better serving large and strategically significant customers with substantial long-term potential. This strategy is pivotal in driving the growth of our powered by Tuya device shipments. For example, our recent collaboration with Vivo, one of Brazil's leading telecom operators, aims to develop their brand's smart home ecosystem using the Tuya IoT Core and the development tools.

我們方法的基石是大客戶策略，它提高了我們的人員效率，使我們能夠投入資源來保護和更好地服務具有巨大長期潛力的大型且具有戰略意義的客戶。這項策略對於推動塗鴉設備出貨量的成長至關重要。例如，我們最近與巴西領先的電信營運商之一 Vivo 合作，旨在使用 Tuya IoT Core 和開發工具開發其品牌的智慧家庭生態系統。

Similarly, we are making strides in the net zero energy saving project, with Choppies one of Latin America's largest supermarket chains. Moreover, our Cube smart private cloud products have also opened the doors to significant opportunities, enabling us to engage with large-scale groups and high-quality customers. This includes a new partnership with Malaysia's premium telecom group, a long-standing German shipbuilding company, and others for edge cloud orders.

同樣，我們在淨零節能項目方面也取得了長足進步，Choppies 是拉丁美洲最大的連鎖超市之一。此外，我們的Cube智慧私有雲產品也為我們開啟了重要機會之門，使我們能夠接觸到大型集團和優質客戶。這包括與馬來西亞優質電信集團、一家歷史悠久的德國造船公司以及其他公司就邊緣雲訂單建立新的合作夥伴關係。

Furthermore, we are fueling expansion by adapting and replicating successful customer cases and strategies across different regions. In Latin America, for example, we have broadened our downstream channel customer base that distributes powered by Tuya devices, moving from initial retail channels to include operators and professional installer systems. This diversification is a new catalyst for routing growth and enhances the penetration of smart devices in the region. In Europe, we have established deeper collaboration with Sharp Europe through our two-wheeled vehicle outdoor solution. Using smart device solutions to create the ultimate smart user experience, we are capturing significant share in the retail markets of the Europe's leading brands.

此外，我們透過在不同地區調整和複製成功的客戶案例和策略來推動擴張。例如，在拉丁美洲，我們擴大了由塗鴉設備提供支援的下游通路客戶群，從最初的零售通路轉向包括營運商和專業安裝系統。這種多元化是路由成長的新催化劑，並提高了智慧型設備在該地區的滲透率。在歐洲，我們透過兩輪車戶外解決方案與夏普歐洲建立了更深入的合作。利用智慧型設備解決方案打造終極智慧用戶體驗，我們正在歐洲領先品牌的零售市場中佔據重要份額。

Next, we are focused on enhancing our products. In the fourth quarter alone, our prioritized smart voice central control product line grew by 1.5 times year-over-year. And for the fourth year, sales doubled compared to the previous year.

接下來，我們的重點是增強我們的產品。僅第四季度，我們優先的智慧語音中控產品線年增1.5倍。第四年，銷售額比前一年翻了一番。

After more than a year of dedicated product development, we have created the industry's most comprehensive product metrics. This includes a variety of software tailored to different panel sizes and a complete range of multi-model solutions, including handheld models to meet the diverse needs of our brand channel customers, both domestically and internationally. Our 5-inch smart central control screen solution powered by Tuya OS and featuring robust control capabilities, multi-mode gateway functions, and built-in Alexa voice capability has become a cornerstone product in the North American, Latin American, Japanese retail markets, and the Asia-Pacific industry SaaS market.

經過一年多的專注產品開發，我們創造了業界最全面的產品指標。這包括針對不同面板尺寸客製化的各種軟體以及全套多型號解決方案，包括手持型號，以滿足我們國內外品牌通路客戶的多樣化需求。我們的5吋智慧中控螢幕解決方案基於塗鴉作業系統，具有強大的控制能力、多模閘道功能和內建Alexa語音功能，已成為北美、拉丁美洲、日本零售市場和全球零售市場的基石產品。亞太產業SaaS市場。

In terms of the customer engagement, our IoT PaaS core customers and the industry SaaS customers represent mature segments initially inclined towards our smart device solution. We assist them in diversifying their product lines by tapping into emerging and potential markets. Importantly, this expansion into new customer segments incurs minimal additional effort and cost for us in terms of customer acquisition.

在客戶參與度方面，我們的物聯網PaaS核心客戶和產業SaaS客戶代表了最初傾向於我們的智慧型裝置解決方案的成熟細分市場。我們幫助他們開拓新興市場和潛在市場，實現產品線多元化。重要的是，這種向新客戶群的擴張在客戶獲取方面給我們帶來了最少的額外努力和成本。

In the fourth quarter, in line with the global push towards energy conservation and carbon reduction, we further enhanced our energy-saving mini program alongside our smart temperature control valve solution set by integrating energy-saving algorithms in heating applications with Tuya's advanced cloud algorithm capabilities and pairing them with more intelligent, precise temperature control devices. We achieved significant strides in smart heating and ventilation temperature control use cases. At the final leg of the 2023 Tuya Developers Conference in Suzhou in November, together with industrial leaders like Enerlution and Yienergy, we showcased our strategy in the energy-saving area, marking a confident step beyond the realm of pure consumer electronics.

第四季度，順應全球節能減碳的號召，我們進一步強化了節能小程序以及智能溫控閥解決方案，將供熱應用中的節能算法與塗鴉先進的雲算法能力相結合併將它們與更智能、更精確的溫度控制裝置配對。我們在智慧暖氣和通風溫度控制用例方面取得了重大進展。11月，在蘇州2023塗鴉開發者大會的最後一站上，我們與Enerlution、Yienergy等行業領導者一起，展示了我們在節能領域的策略，標誌著我們自信地邁出了純粹消費電子領域的一步。

Leveraging cloud technology and the mature software hardware capabilities of certain smart device categories in the fourth quarter, cloud software value added services revenue, such as cloud storage services, maintained a robust sequential growth of approximately 27%, and an impressive year-over-year surge of nearly 78%. This growth has significantly contributed to the sales and other segments, accelerating our internal structural adjustment towards higher-quality revenue, returning to a quarter-over-quarter growth trend of about 11%, and a year-over-year growth of about 19%.

借助雲端技術和部分智慧設備品類成熟的軟體硬體能力，第四季雲端儲存服務等雲端軟體加值服務收入維持了約27%的強勁環比成長，年比表現出色暴漲近78%。這一增長對銷售和其他板塊的貢獻顯著，加快了我們向更高質量收入邁進的內部結構調整，恢復了環比約11%的增長趨勢，同比增長約19% 。

Over the past year, we have witnessed a global trend. An increasing number of influential companies worldwide are entering the smart technology area, driven by competitive forces, industrial opportunities, and their own strategic needs. This trend is especially pronounced in emerging markets, such as Latin America and the Asia-Pacific region, where the awareness and the adoption of smart technology are on a noticeable rise. Looking ahead, as market penetration deepens, the developer community will become the backbone of the future IoT ecosystem.

過去一年，我們見證了全球趨勢。全球越來越多有影響力的企業在競爭力、產業機會和自身戰略需求的推動下，紛紛進入智慧科技領域。這一趨勢在拉丁美洲和亞太地區等新興市場尤其明顯，這些地區對智慧技術的認識和採用率顯著上升。展望未來，隨著市場滲透的加深，開發者社群將成為未來物聯網生態系統的中堅力量。

In terms of our efforts to nurture this ecosystem, our developer community building initiatives are advancing steadily. As of the fourth quarter, our registered developer base has grown to approximately 993,000 and we now collaborate with 12 pilot developer service providers. For example, a leading Korean developer service provider has been instrumental in serving several of Korea's top door lock manufacturers, including the top three, contributing more to Tuya's revenue in the fourth quarter of 2023 than in the entire year after 2022.

在培育這個生態方面，我們的開發者社區建設措施正在穩步推進。截至第四季度，我們的註冊開發者群體已增至約 993,000 人，目前我們與 12 家試點開發者服務提供者合作。例如，一家領先的韓國開發者服務提供商在服務韓國幾家頂級門鎖製造商（包括前三名）方面發揮了重要作用，2023年第四季度對塗鴉的收入貢獻超過了2022年之後的全年。

Our Tuya OS local development framework now supports over 280 types encompassing all protocols and categories within the Tuya platform. We have also compiled nearly 1,000 development documents and our developer forum has accumulated over 8,500 posts of technical support content. Moreover, our development tools have evolved to support more self-service operations further popularizing, introducing, and laying the groundwork for the expansion of the developer community.

我們的塗鴉作業系統本機開發框架現已支援 280 多種類型，涵蓋塗鴉平台內的所有協定和類別。我們也整理了近1000份開發文檔，我們的開發者論壇累積了超過8500個技術支援內容的貼文。此外，我們的開發工具已發展到支援更多的自助操作，進一步普及、引入，為開發者社群的擴展奠定了基礎。

Before I conclude, I'd like to offer a summary of the year. 2023 was a year of period of gradual recovery, global inflation growth rapidly in the first half of the year and a slightly stubborn level in the second half. But we can feel that the global smart consumer electronics device and expanding this naturally building a new equipment in this environment. At the same time, manufacturers, brands, and channels have essentially returned to normal purchase pattern with normalized inventory level, overcoming the toughest valley in business turnover, and beginning to show a more optimistic attitude in business planning and product deployment, with many new year's joint promotions, product plans, and other collaborations already underway.

在結束之前，我想對這一年進行總結。 2023年是逐步復甦期的一年，全球通膨上半年快速成長，下半年略顯頑固。但我們可以感覺到，全球智慧消費電子設備的不斷擴展和擴展，自然而然地在這種環境下建構了新的設備。同時，製造商、品牌商和通路商基本上回歸正常採購模式，庫存水平趨於正常，克服了營業額最艱難的低谷，在業務規劃和產品部署上開始表現出更加樂觀的態度，許多新年的聯合促銷、產品計劃和其他合作已經在進行中。

With that, I will now hand over to our CFO, Jessie, who will share additional financial details with you.

現在，我將把工作交給我們的財務長傑西 (Jessie)，她將與您分享更多的財務詳細資料。

That concludes the remarks by Jerry. As I discuss our financial results and provide more colors on the numbers, please note that all figures are in US dollars and all comparisons are on a year-over-year basis, unless otherwise stated.

傑瑞的發言到此結束。當我討論我們的財務表現並提供更多數字顏色時，請注意，除非另有說明，所有數字均以美元為單位，所有比較均以同比為基礎。

In the fourth quarter of 2023, our total revenue reached $64.4 million, up 42.2% year-over-year, a higher growth rate compared to that of the third quarter of 2023, and led to a sequential improvement for the fifth consecutive quarter. Our IoT PaaS revenue in the fourth quarter was $47.2 million representing a year-over-year increase of 44.6%. This was driven by the normalization of downstream inventory and our commitment to delivering high-value products to our customers. As the smart devices sector encompasses a broad and diverse range of products, we concentrated our R&D as well as sales and marketing efforts towards fostering stable, balanced, and efficient growth for the company.

2023年第四季，我們的總營收達到6,440萬美元，年增42.2%，成長率高於2023年第三季度，並連續第五個季度實現環比改善。第四季我們的物聯網PaaS營收為4,720萬美元，較去年同期成長44.6%。這是由下游庫存正常化以及我們向客戶提供高價值產品的承諾所推動的。由於智慧型設備領域涉及產品廣泛、種類繁多，我們集中研發、銷售和行銷工作，促進公司穩定、平衡、高效的成長。

I will offer a breakdown by product categories. Two years ago, smart lighting and electrical products comprised nearly half of our total revenue. Meanwhile, smart safety and guardship and home appliances products known for their potential to drive higher revenue efficiency and increase our influence in the industry contributed nearly 20% and 15% respectively. Now in 2023, our strategic emphasis on product focus and enhancement has equalized this category's revenue contribution to roughly 25% to 30% from each segment, achieving a more balanced category structure.

我將按產品類別進行細分。兩年前，智慧照明和電氣產品占我們總收入的近一半。同時，以提升收入效率、提升產業影響力著稱的智慧安防和家電產品分別貢獻了近20%和15%。現在到了 2023 年，我們對產品聚焦和增強的策略重點已使該品類的收入貢獻均等於每個細分市場的 25% 至 30% 左右，實現了更平衡的品類結構。

Geographically, our business has also evolved as desired in 2023, attaining more balanced distribution. We're channeling our efforts primarily into the mature European market and Southeast Asia region that are full of professional channel opportunities, and Latin America, where both retail and operator channels hold substantial potential. At the same time, we have tailored strategies to further boost our business in China, including helping high-quality cross-border e-commerce brands in their international ventures.

從地理來看，我們的業務在2023年也如預期發展，實現了更均衡的分佈。我們的努力主要集中在成熟的歐洲市場和充滿專業通路機會的東南亞地區，以及零售和營運商通路都擁有巨大潛力的拉丁美洲。同時，我們制定了進一步發展中國業務的策略，包括幫助優質跨境電商品牌開展國際業務。

In terms of customers, we served a total of approximately 3,200 customers in the fourth quarter of 2023, a decrease of about 200 from the same period last year. However, both our revenue and gross profit per headcount have surged from Q3's high underscoring the success of our strategic emphasis on high-quality customers. Jerry highlighted our refined focus earlier, which not only attracted valuable new clients but also enhanced service for existing ones on our platform, boosting our 12-month DBNER to over 100% by year's end, a rebound from earlier declines starting in the first half of 2023.

客戶方面，2023年第四季我們共服務了約3,200名客戶，較去年同期減少約200名。然而，我們的營收和人均毛利均較第三季的高點大幅成長，突顯了我們對優質客戶的策略重點的成功。Jerry 早些時候強調了我們的精細化重點，這不僅吸引了有價值的新客戶，還增強了我們平台上現有客戶的服務，到年底將我們的12 個月DBNER 提高到100% 以上，從上半年開始的早期下降中反彈。2023 年。

Our smart device distribution business segment generated revenue of approximately $7.8 million in the fourth quarter of 2023 achieving a year-over-year growth of 64.6%, largely driven by our Smart Solutions. This shift towards our Smart Solution model and the decrease in our legacy smart device supply chain services for some clients led to a gross margin increase in this segment to nearly 30%, further validating our product enhancement strategy. In 2023, our Smart Solution model flourished across several major categories, we've been focusing on leading to a further diversification of the SKUs we cover. Beyond wearable and outdoor devices such as tech and smart watches, smart gateways and smart control screens featuring Tuya's specialized solutions also made meaningful contributions.

我們的智慧設備分銷業務部門在 2023 年第四季創造了約 780 萬美元的收入，年增 64.6%，這主要是由我們的智慧解決方案推動的。向智慧解決方案模式的轉變以及為一些客戶提供的傳統智慧設備供應鏈服務的減少導致該細分市場的毛利率增長至近30%，進一步驗證了我們的產品增強策略。2023年，我們的智慧解決方案模式在幾個主要品類中蓬勃發展，我們一直致力於使我們覆蓋的SKU進一步多樣化。除了科技和智慧手錶等穿戴式和戶外裝置之外，採用塗鴉專業解決方案的智慧網關和智慧控制螢幕也做出了有意義的貢獻。

Our SaaS and other sectors recorded a revenue of $9.5 million in the fourth quarter of 2023, reflecting a 19.3% year-over-year increase. This growth reflects our strategic adjustments in business planning for software products and technical services alongside a positive trend in high-quality revenue including a growing share of recurring income.

我們的 SaaS 和其他部門在 2023 年第四季錄得營收 950 萬美元，年增 19.3%。這一成長反映了我們對軟體產品和技術服務業務規劃的策略調整，以及高品質收入的正面趨勢，包括經常性收入份額的不斷增長。

Now, moving on to gross margin, our fourth quarter blended gross margin remained at an all-time high of 47.3%, consistent with the previous quarter, as each business segment demonstrated robust margin profiles. Specifically, the smart device distribution segment recorded a gross margin of 29.7% in Q4, sustaining a level above 20% throughout 2023. This performance reflects the effective results of our product focus and enrichment strategy.

現在，轉向毛利率，我們第四季的綜合毛利率保持在 47.3% 的歷史高位，與上一季一致，因為每個業務部門都表現出了強勁的利潤率。具體而言，智慧型設備分銷領域第四季毛利率為29.7%，2023年全年維持在20%以上的水準。這項業績反映了我們以產品為中心和豐富策略的有效成果。

For operating activities and expenses, I will provide a detailed view on a non-GAAP basis which excludes certain items for a clearer picture of our operational efficiency. In Q4, we undertook a conservative reassessment of some early preferred stock equity investments resulting a one-time USD7.4 million impairment loss within our GAAP G&A expenses. This impairment, however, doesn't materially affect our current operations on cash flow and we continue to present our operating expenses primarily on a non-GAAP basis, omitting share-based compensation expenses and credit-related impairment loss from our GAAP figures.

對於營運活動和費用，我將提供基於非公認會計原則的詳細視圖，其中不包括某些項目，以便更清楚地了解我們的營運效率。第四季度，我們對一些早期優先股股權投資進行了保守的重新評估，導致我們的 GAAP G&A 費用中出現了 740 萬美元的一次性減損損失。然而，這種減損不會對我們目前的現金流量營運產生重大影響，我們繼續主要以非公認會計原則為基礎列報我們的營運費用，從我們的公認會計原則數據中忽略基於股份的補償費用和與信用相關的減損損失。

Now, having completed our internal restructuring for optimal organization, structure, and team collaboration, our operating expenses have generally stabilized. In Q4 2023, our non-GAAP total operating expenses decreased by 13.5% to $30.7 million from $35.5 million a year ago. Largely due to reduced employee-related costs as we continue to streamline our team. By the close of December 2023, our workforce number just over 1,450, in line with our anticipated stable headcount.

目前，公司內部重組已基本完成，組織架構、團隊協作更優化，營業費用已基本穩定。2023 年第四季度，我們的非 GAAP 總營運支出從一年前的 3,550 萬美元下降了 13.5% 至 3,070 萬美元。很大程度上是由於我們不斷精簡團隊，從而減少了與員工相關的成本。截至 2023 年 12 月，我們的員工人數略高於 1,450 人，與我們預期的穩定員工人數相符。

Regarding sales and marketing, we upped our market and promotional investments as the industry normalized in the latter half of 2023 and our revenue returned to a solid growth trajectory. This contrasted with our strategy during the peak periods of downstream inventory and industry inflation pressure in late 2022 through early 2023, when we consciously curtailed spending to avoid ineffective marketing investments.

在銷售和行銷方面，隨著行業在 2023 年下半年恢復正常，我們加大了市場和促銷投資，我們的收入恢復了穩健的成長軌跡。這與我們在2022年底至2023年初下游庫存和行業通膨壓力高峰期的策略形成鮮明對比，當時我們有意識地削減支出，以避免無效的營銷投資。

In a similar fashion, we have also stabilized our G&A expenses in the quarter. The past year has fully reflected the cost savings from streamlining our team. Meanwhile, as we navigate new operational developments such as ESG investments and adherence to stringent compliance standards as a dual primary listed company in the US and Hong Kong, we anticipate a potential increase in professional service expenses which we will manage effectively.

以類似的方式，我們在本季也穩定了一般管理費用。過去的一年充分體現了我們精簡團隊所節省的成本。同時，隨著我們引導新的營運發展，例如 ESG 投資以及作為美國和香港雙重主要上市公司遵守嚴格的合規標準，我們預計專業服務費用可能會增加，我們將對此進行有效管理。

Finally, regarding interest income and cash, we earned approximately $13.1 million in interest income in Q4 as extra supplement capital to our daily businesses, a testament to our adept cash management. We have always prioritized security of our principal as we do not view earnings and interest income as our business target. By the end of 2023, our net cash position, which includes cash and cash equivalents, bank time deposits, and US treasuries, totaled about $984.3 million. In addition, we generated approximately $31.8 million in operating cash flow in Q4. Despite some cash flow fluctuations due to accounting practices and seasonal variations, such as the timing of annual bonuses, the overarching trend for the year was clear as we recorded strong and positive cash flow in 2023.

最後，關於利息收入和現金，第四季度我們獲得了約1,310萬美元的利息收入，作為我們日常業務的額外補充資本，證明了我們熟練的現金管理。我們始終將本金安全放在首位，不以獲利和利息收入作為業務目標。截至 2023 年底，我們的淨現金部位（包括現金和現金等價物、銀行定期存款和美國國債）總計約為 9.843 億美元。此外，我們在第四季度產生了約 3,180 萬美元的營運現金流。儘管由於會計慣例和季節性變化（例如年度獎金的發放時間）而導致現金流出現一些波動，但今年的總體趨勢很明顯，因為我們在 2023 年錄得強勁且正的現金流。

Looking ahead, we are committed to driving top-line growth sustaining strong gross margins and optimizing operating expenses. We are confident in our ability to deliver strong financial performance in 2024.

展望未來，我們致力於推動營收成長，維持強勁的毛利率並優化營運支出。我們對 2024 年實現強勁財務業績的能力充滿信心。

With that operator, we are now ready to take questions. Thank you.

有了這位接線員，我們現在就可以回答問題了。謝謝。

(Operator Instructions) Yang Liu, Morgan Stanley.

（操作員指示） Yang Liu，摩根士丹利。

I would translate my question into English. The first one is about the 2024 revenue growth outlook. I would like to ask the management expectation based on the communication with key customers. And the second question is about the growth margin because the fourth quarter 2023 growth margin sequentially increased to 47.3% due to some mix change in the Smart Solution. Is that due to seasonality or does that represent a new norm for the future?

我會把我的問題翻譯成英文。第一個是關於2024年營收成長前景。我想問一下管理層基於與主要客戶的溝通的期望。第二個問題是關於成長率，因為由於智慧解決方案中的一些組合變化，2023 年第四季的成長率連續增加至 47.3%。這是由於季節性還是代表了未來的新常態？

And the third question is regarding the impairment loss because that also happened in the second quarter of last year. And I would like to ask whether the related item on the balance sheet is clean or not. What is the future outlook for that impairment item? Thank you.

第三季是關於減損損失，因為這也發生在去年第二季。我想問一下資產負債表上的相關項目是否乾淨。該減損項目的未來前景如何？謝謝。

Okay, thanks Liu Yang. Let's come to the first question about the 2024 forward looking. So from the downstream end user's perspective, based on our constant discussion and communication with our customers, our perception of 2024 is similar to last quarter's expectation which is the global discretionary smart device spending maintained a moderate growth from Q4 to the beginning of this year.

好的，謝謝劉洋。我們先來說第一個問題，關於2024年的展望。所以從下游終端用戶的角度來看，基於我們與客戶不斷的討論和溝通，我們對2024年的看法與上季度的預期類似，即全球可自由支配的智能設備支出從第四季度到今年年初保持了溫和的成長。

Among these regions such as Southeast Asia and Latin America have shown stronger growth momentum than Europe and America. In terms of categories since January, the end consumer spending of smart lighting categories has been relatively weak due to lack effect of inflationary pressures and its highly discretionary nature.

其中東南亞、拉丁美洲等地區表現出比歐美更強勁的成長動能。從品類來看，1月以來，智慧照明品類受通膨壓力影響較小，且自由支配性較強，終端消費相對疲軟。

However, electrical products because of its usage have related to energy saving in many cases, have recovered better than the lighting products, and such as smart breakers switches, those products. And the appliances segment remains the main focus of growth among which typical categories like robotic vacuum cleaners, which are a focus of our growth strategy for enterprise and expansion. Our smart pet appliances, it is a new category in the last few years that meets strong emotional needs of global consumers and have a relatively high resistance to inflation pressure.

然而，電氣產品由於其用途在許多情況下都與節能相關，比照明產品恢復得更好，例如智慧斷路器開關等產品。家電領域仍是成長的主要重點，其中機器人吸塵器等典型類別是我們企業和擴張成長策略的重點。我們的智慧寵物電器，是近幾年的新品類，滿足了全球消費者強烈的情感需求，並且對通膨壓力有比較高的抵抗力。

Other products like temperature controls, heaters in the appliance segment, which also involve energy usage and saving can bring cost benefit to users with addition of smarter capabilities and so on. And at the end, demand for most product segments remained robust due to those characteristics. Safety and sensing products because it satisfies global consumers' fundamental needs for protection and family safety have continued to show steady growth momentum through the turbulent down cycles. And currently in the recovery period it also shows a good growth trajectory.

其他產品，如家電領域的溫度控制器、加熱器，也涉及能源使用和節約，可以透過增加更智慧的功能等為用戶帶來成本效益。最終，由於這些特徵，大多數產品領域的需求仍然強勁。安全及感測產品因其滿足了全球消費者對防護和家庭安全的基本需求，在動盪的下行週期中繼續呈現出穩定的成長勢頭。而目前正處於恢復期也呈現出良好的成長軌跡。

So above all, our product focus and investment strategies are based on the assessment of the major demand logic for the above layout I just discussed. Regarding downstream customers, inventory normalization began in Q3 last year, so we have seen pretty good restocking activities in the retail channels and the brand and also OEMs. We currently, we expect the inventory level to remain at a total four to five months for all the downstream channels adding together by the end of Q4, which is a quite healthy level. So the downstream enterprises have normalized replenishment for categories and we feel the destocking is completed and coupled with our joint efforts with customers in planning the categories, promotions and the market strategies, our revenue in Q3 and Q4 achieved both more than 40% year-over-year growth so it majorly benefited from downstream restocking.

所以最重要的是，我們的產品重點和投資策略是基於對我剛才討論的上述佈局的主要需求邏輯的評估。對於下游客戶來說，去年第三季庫存開始正常化，所以我們看到零售通路和品牌以及整車廠的補貨活動都不錯。目前，我們預計到第四季末所有下游管道的庫存水準將保持在四到五個月的水平，這是一個相當健康的水平。所以下游企業補貨已常態化，我們覺得去庫存已經完成了，再加上我們和客戶共同規劃品類、促銷和市場策略，我們三季度和第四季度的收入都實現了同比40%以上的增長。年比成長，主要受惠於下游補貨。

So currently, the OEM's brands and retail channels are generally optimistic about the outlook for their smart business in 2024 and their operating and business turnover is no longer as severe as before. As such, everyone is starting to be more positive. In addition, we have also found that in 2023 many new professional channel opportunities, such as, the professional telecom operators in various regions, like the Middle East, Latin America, Brazil, et cetera, have significantly increased their attention and participation in the smart business.

所以目前整車廠品牌和零售通路普遍看好2024年智慧業務的前景，經營和業務週轉不再像以前那麼嚴峻。因此，每個人都開始變得更加積極。另外，我們也發現，2023年許多新的專業通路機會，例如中東、拉丁美洲、巴西等各地區的專業電信業者對於智慧型手機的關注度和參與度明顯增加。商業。

But we want to bring attention to all the investors, because Q3 and Q4 it has greatly benefited from the restocking efforts of downstream and the restocking efforts are probably coming to an end in Q1, it's just normalized. So we are optimistic about the growth of 2024. But it may not be as strong as Q3 and Q4, which has the temporary restocking effect.

但我們想引起所有投資者的注意，因為第三季和第四季極大地受益於下游的補貨力度，而補貨力度可能會在第一季結束，只是正常化。所以我們對2024年的成長持樂觀態度。但可能不如Q3、Q4那麼強，有暫時的補貨效應。

And for the second question about the growth margin. So, in 2024, we have observed and delivered continuous growth of our gross margin. It has come to a few effects. First, our IoT PaaS business has a steady growth of the gross margin. And that reflects the continuous change in our product strategy and structure in the beneficial direction.

關於第二個問題，關於成長率。因此，在 2024 年，我們觀察到並實現了毛利率的持續成長。它已經產生了一些影響。首先，物聯網PaaS業務毛利率穩定成長。這反映了我們的產品策略和結構不斷朝著有利的方向變化。

As a company that substantially has built a broad IoT ecosystem, the revenue and the growth margin of IoT PaaS business results from a mix of categories and solutions. For different categories, such as smart vacuum cleaners, switches, Bluetooth, headsets, or bulb products, the depth and complexity of their basic IoT and cloud capabilities differ, thus have different prices and growth margins. Similarly, for different protocol solutions, such as Wi-Fi, Bluetooth, ZigBee, or NB-IoT, their pricing and gross margin solutions also vary.

作為一家已基本建構了廣泛的物聯網生態系統的公司，物聯網PaaS業務的收入和成長率來自品類和解決方案的組合。對於不同的品類，例如智慧吸塵器、開關、藍牙、耳機或燈泡產品，其基礎物聯網和雲端能力的深度和複雜性不同，因此具有不同的價格和成長空間。同樣，對於不同的協議解決方案，例如Wi-Fi、藍牙、ZigBee或NB-IoT，其定價和毛利率解決方案也有所不同。

However, considering consumers' price sensitivity towards smart products, we have always been committed to reducing the cost of smartification, allowing consumers to enjoy good value with affordable price. Therefore, we continue to manage the gross margin of IoT PaaS from both aspects. We look forward to maintaining a stable gross margin of IoT PaaS business. And also, we delivered a higher percentage in terms of revenue contribution of the SaaS and value-added service segment, which enjoys a 75% gross margin.

但考慮到消費者對智慧產品的價格敏感度，我們一直致力於降低智慧化成本，讓消費者以實惠的價格享受到好的價值。因此，我們繼續從兩個方面來管理物聯網PaaS的毛利率。我們期待物聯網PaaS業務維持穩定的毛利率。此外，我們的SaaS和加值服務業務的收入貢獻比例較高，毛利率為75%。

We expect the SaaS and value-added service business contribute a similar percentage of business as Q4 in 2024. And for smart device distribution business, which now majorly contributing from the Smart Solution business, basically, Tuya delivers an integrated software and hardware as one product, finish the product to the downstream customers. That business now achieved a 30% growth margin in Q4.

我們預期 SaaS 和加值服務業務貢獻的業務比例與 2024 年第四季相似。而對於智慧型設備分銷業務，目前主要來自智慧解決方案業務，塗鴉基本上將軟體和硬體集成為一個產品，將產品完成給下游客戶。該業務目前在第四季度實現了 30% 的成長率。

We expect this gross margin remain relatively stable in 2024 and the portion of this segment will increase their revenue contribution in 2024, as it will grow at a higher speed than the other two segments. So overall, we look forward to maintaining a stable overall gross margin in 2024 versus 2023.

我們預計該毛利率在 2024 年將保持相對穩定，並且該細分市場的部分將在 2024 年增加其收入貢獻，因為其成長速度將高於其他兩個細分市場。因此總體而言，我們期望 2024 年與 2023 年相比保持穩定的整體毛利率。

So the third question is regarding the credit loss. So between 2028 (sic - 2018) and early 2022, we made a modest amount of strategic investments, approximately around USD30 million in total. Primarily in some of our downstream and upstream strategic partners. It could be our suppliers or potential suppliers, customers or potential customers. It's about around 10 companies in total. So several of them didn't perform well in 2022 and 2023, in these two severe downstream of the entire consumer electronics industry, so leading to an investment impairment due to strict accounting practices.

所以第三個問題是關於信用損失的。因此，在 2028 年（原文如此 - 2018）和 2022 年初之間，我們進行了少量的策略投資，總計約 3,000 萬美元左右。主要是我們的一些下游和上游的策略夥伴。它可以是我們的供應商或潛在供應商、客戶或潛在客戶。總共約有10家公司。所以其中幾家在2022年和2023年這兩個整個消費電子產業的嚴重下游表現不佳，因此導致由於嚴格的會計做法而導致投資減損。

So according to the latest expected credit loss -- sorry, the rules of the accounting policy was issued in 2020, we have made the credit loss based on accounting policies. So in total, in 2023, the total credit loss was around USD15.5 million. So it was named as credit loss based on the accounting rule, but in principle, it's actually the equity investment loss. So we believe currently that we still remain around USD11 million value on our balance sheet based on our strategic investment from 2018 to 2021 and we believe the credit loss impairment has pretty much down. So in the future, if there's any credit loss impairment it will be much less than what happened in 2023.

所以根據最新的預期信用損失——抱歉，2020年會計政策的規定是發布的，我們根據會計政策做了信用損失。因此，2023 年的信貸損失總額約為 1,550 萬美元。因此，根據會計準則，它被命名為信用損失，但原則上，它實際上是股權投資損失。因此，我們認為，基於 2018 年至 2021 年的策略投資，目前我們的資產負債表價值仍維持在 1,100 萬美元左右，我們認為信用損失減損已大幅下降。因此，未來如果出現任何信用損失減值，也會比2023年少很多。

So again, this is majorly due to the industry down cycle. And all those companies actually are still operating, although we have largely made the impairment on almost all the investment on these two, three companies that experienced the difficulties. But they're still under-operating and if their operation improved in the next few years, we might add back the credit loss.

再說一遍，這主要是由於行業下行週期造成的。所有這些公司實際上仍在運營，儘管我們對這兩三家經歷困難的公司的幾乎所有投資進行了很大程度上的減值。但他們仍然經營不善，如果他們的經營在未來幾年有所改善，我們可能會增加信用損失。

So that's the answer to Liu Yang's question for the three questions. Operator, you can go to the next question

這就是劉洋提出的三個問題的答案。接線員，您可以進入下一個問題

Timothy Zhao, Goldman Sachs.

提摩西·趙，高盛。

Thank you, management for taking my question and congratulations on the strong fourth quarter results. I have two questions here. One is regarding the 2024 revenue outlook. I think you already mentioned quite a lot about the past revenue outlook. I think on the SaaS part, just wondering what is your outlook here and specifically on the key customers' progress, what does their revenue look like in 2024?

感謝管理層回答我的問題，並祝賀第四季度的強勁業績。我在這裡有兩個問題。一是關於 2024 年的收入前景。我想你已經提到了很多關於過去收入前景的內容。我認為在 SaaS 部分，只是想知道您對這裡的前景有何看法，特別是對關鍵客戶的進展，他們 2024 年的收入會是什麼樣子？

And secondly, I think given 2023 is a year of very good OpEx control, I'm just wondering what is your OpEx plan and headcount plan for 2024 and how that will impact your OP margin or net margin, if any. Thank you.

其次，我認為鑑於2023 年是營運支出控制非常好的一年，我只是想知道您2024 年的營運支出計畫和人員計畫是什麼，以及這將如何影響您的營運利潤率或淨利潤率（如果有）。謝謝。

Okay. Thanks for Timothy's question. So first, about the SaaS and value-added services segment. So our software services and other revenue sectors are still reflecting the adjustments in revenue structure within which high-quality revenue maintains good momentum. So, for example, first, our cloud software services such as cloud storage, which is a recurring SaaS revenue in principle with a pretty high gross margin have achieved year-over-year revenue growth for five consecutive quarters. While consumer payments have increased, number of enterprise customers using our cloud storage technology has also steadily increased to nearly 80 of them globally.

好的。感謝蒂莫西的提問。首先，關於 SaaS 和增值服務領域。所以我們的軟體服務等收入板塊仍然體現著收入結構的調整，其中優質收入保持了良好的勢頭。那麼比如說，第一，我們的雲端儲存等雲端軟體服務，原則上是一個經常性的SaaS收入，毛利率相當高，已經連續五個季度實現收入年增。在消費者支付增加的同時，使用我們的雲端儲存技術的企業客戶數量也穩定增加，在全球達到近80家。

Secondly, our Cube smart private cloud products has also already helped us secure over a dozen strategic large clients, such as several industry or telecom giants in Southeast Asia, well-known major channels in Australia or better serving the expansion needs of existing large clients, like Philips' new Asia-Pacific projects. We have several clients whose projects are steadily progressing and we will share more with everyone when we have the clients' content or PR or as we approach project completion and deployment.

其次，我們的Cube智慧私有雲產品也已經幫助我們鎖定了十幾家戰略大客戶，例如東南亞的幾個行業或電信巨頭，澳大利亞的知名主要渠道或者更好地服務現有大客戶的擴展需求，例如飛利浦的新亞太計畫。我們有幾個客戶的專案正在穩步推進，當我們有客戶的內容或公關，或者當我們接近專案完成和部署時，我們會與大家分享更多。

Thirdly, in terms of industry SaaS products, although the domestic real estate and community industry in China faced significant challenges in 2023, posing the pressures to our community SaaS solutions, we still achieved nearly 30% annual year-over-year growth in other sectors such as smart hotels.

第三，在行業SaaS產品方面，儘管2023年國內房地產和社區行業面臨重大挑戰，對我們的社區SaaS解決方案造成壓力，但我們在其他領域仍然實現了近30%的同比增長比如智慧酒店。

Additionally, our Cube products and industry SaaS products have generated a good synergy with several typical Cube customers' acquisitions in regions such as Southeast Asia, like some leading real estate group clients in Thailand serving as benchmark cases of win-win projects for us and for the customers.

此外，我們的Cube產品和行業SaaS產品與東南亞等地區的一些典型Cube客戶的收購產生了良好的協同效應，如泰國一些領先的房地產集團客戶，為我們和客戶提供了雙贏項目的標竿案例。顧客們。

On the other hand, in SaaS and value-added services segment, our customized development technology services and some other one-time value-added services, like OEM app are still undergoing structural adjustments. So we have successfully kept the number of related clients and projects at a limited and non-expanding level, while trying to increase the average order value to enhance the benefits of this client project. In the future, this segment will be retained at a level for specific strategies and customer service, rather than the main source of revenue for the company.

另一方面，在SaaS和加值服務領域，我們的客製化開發技術服務和其他一些一次性加值服務（例如OEM應用程式）仍在進行結構調整。因此，我們成功地將相關客戶和專案的數量控制在有限且不擴張的水平，同時努力提高平均訂單價值，以增強該客戶專案的效益。未來，該部門將保留在特定策略和客戶服務層面，而不是公司的主要收入來源。

So, in summary, since SaaS and others comprises a diverse mix of services and software technical products, it may still face overall revenue fluctuations in the upcoming few quarters. However, the proportion of our high-quality recurring income is continuously and steadily increasing.

因此，綜上所述，由於 SaaS 等由多種服務和軟體技術產品組成，因此未來幾季仍可能面臨整體收入波動。然而，我們的高品質經常性收入的比例正在持續穩定地增加。

For the second question about our big customers. So the key customers, the high-quality key accounts are an important strategic direction for our development in the last two years. The opportunities of key accounts can bring multi-dimensional revenue for us including revenue from Cube private cloud software, ongoing operation and iteration fees and also they can bring subsequent revenue for us on IoT PaaS business. Also the revenue for Smart Solution business and also the opportunity of recurring SaaS and value-added services revenue in the coming years.

關於第二個問題，關於我們的大客戶。所以大客戶、優質大客戶是我們這兩年發展的重要策略方向。大客戶的機會可以為我們帶來多維度的收入，包括Cube私有雲軟體的收入、持續營運和迭代費用，也可以為我們的IT PaaS業務帶來後續收入。還有智慧解決方案業務的收入以及未來幾年經常性 SaaS 和增值服務收入的機會。

Additionally, our key accounts have advantages of large scale, high market share and also high resistance to economic down cycles. So we have already shared some cases that customers have allowed us to disclose covering Southeast Asia, Latin America, and also in Europe. We also have some promising key account cases in emerging markets, like the Middle East. But we are currently unable to disclose names yet. Of course, acquiring key accounts is a tough battle, securing 10 or fewer key or high-quality customers each quarter is already a significant result of our efforts, and the entire company will continue this strategy to focus our best technology resources and sales marketing efforts on the key accounts.

此外，我們的大客戶具有規模大、市佔率高、抗經濟下行能力強的優勢。所以我們已經分享了一些客戶允許我們揭露的案例，涵蓋東南亞、拉丁美洲，還有歐洲。我們在中東等新興市場也有一些有前景的大客戶案例。但我們目前還無法透露姓名。當然，獲取大客戶是一場硬仗，每季爭取10個或更少的關鍵或優質客戶已經是我們努力的顯著成果，整個公司將繼續這個策略，集中我們最好的技術資源和銷售行銷工作關於關鍵客戶。

Regarding the third question about the expenses and the profits. So our expenses have a relatively clear structure. On a non-GAAP basis, about 70% of our net operating expenses related to salaries and the benefit cost of employees as we are a light asset business model. Therefore, the future trend of this part of expenses especially based on the size of the total number of employees. Essentially we have already completed adjustments to our team size. So we expect to maintain the current team size in 2024

關於第三個問題，關於費用和利潤。所以我們的支出結構比較清晰。在非公認會計原則的基礎上，我們約 70% 的淨營運費用與員工的薪資和福利成本有關，因為我們是輕資產業務模式。因此，這部分費用的未來趨勢尤其要根據員工總數的規模來決定。基本上我們已經完成了團隊規模的調整。所以我們預計2024年維持目前的團隊規模

The remaining 30% of the expenses cover daily activities including cloud costs accounted as expenses, professional promotional marketing activities, travel activities, and rents, et cetera. So aside from technical and marketing expenses, which will be moderately invested in accordance with the growth of the revenue, the rest of the expenses are also mainly linked to the number of headcounts.

其餘30%的費用用於日常活動，包括計入費用的雲端成本、專業促銷行銷活動、差旅活動和租金等。所以除了技術和行銷費用會根據收入的成長適度投入外，其餘的費用也主要與員工人數掛鉤。

Overall, considering factors leading to expense reduction and preserving some space for basic expense increases, we expect this year's total operating expenses remain relatively stable. So our profit margins also linked to revenue scale. So we will continue to focus on growing revenue based on the current team size.

總體而言，考慮到費用下降的因素以及為基本費用成長保留一定空間的因素，我們預計今年的營業費用總額將保持相對穩定。所以我們的利潤率也與營收規模掛鉤。因此，我們將繼續專注於根據當前團隊規模增加收入。

So operator, you can move to the next question

那麼接線員，您可以轉到下一個問題

Mingran Li, CICC.

李明然，中金公司。

Thank you, management, for taking my questions. First, congratulations on your robust performance. As previous discussions have already covered much about the outlook for demand in 2024. I have one quick follow-up, because we have to wait longer for the Federal Reserve's rate cut. So how does this change of expectations influence the demand based on your recent observations? That's the first question.

謝謝管理層回答我的問題。首先，恭喜您的出色表現。正如先前的討論已經討論了很多關於 2024 年需求前景的內容。我有一個快速跟進，因為我們必須等待更長的時間才能看到聯準會降息。那麼根據您最近的觀察，這種期望的改變如何影響需求呢？這是第一個問題。

And for future development, could you elaborate more on the strategic plans and investment priorities for PaaS, SaaS, and smart device distribution over the next two to three years? Thank you.

對於未來的發展，您能否詳細介紹一下未來兩到三年在PaaS、SaaS、智慧型裝置分銷等方面的策略規劃和投資重點？謝謝。

Thanks for question. So, first, let's come to the first question. So interest rate cuts themselves are beneficial for releasing capital to promote consumer spending. However, considering that inflation is still present, the market currently feels that the pace of interest rate cuts is slower than originally expected. Furthermore, if inflation rebounds quickly after a rate cut. The consumption such as food and the gasoline prices will rise which could suppress discretionary electronic consumer devices spending to a certain extent. So we think the extent of the problem still comes back to inflation itself. So we feel that our customers like the brands on the retail channels are less sensitive to the interest rate but more react quickly to inflation itself.

謝謝提問。那麼，首先我們來回答第一個問題。所以降息本身就有利於釋放資金促進消費支出。但考慮到通膨依然存在，目前市場感覺降息步伐慢於原本預期。此外，如果降息後通膨迅速反彈。食品和汽油等消費價格將上漲，這可能會在一定程度上抑制非必需電子消費設備支出。因此我們認為問題的嚴重程度仍然回到了通貨膨脹本身。因此，我們認為我們的客戶（例如零售通路的品牌）對利率的敏感度較低，但對通膨本身的反應更快。

So as we mentioned before, players in the market are spontaneously reaching a new equilibrium point for discretionary consumption. And if inflation and prices maintain at current level, then we estimate the downstream demand is likely continue at current performance.

正如我們之前提到的，市場參與者自發性地達到了可自由支配消費的新平衡點。如果通膨和價格維持在當前水平，那麼我們估計下游需求可能會持續目前的表現。

For the second question, if we divide the company's development into early, middle, and long-term stages, Tuya, with its unique IoT cloud software technology and products scalable business strategy and neutral cloud agnostic positioning, has captured a significant market share and influenced by seizing the tremendous opportunity for rapid growth in IoT penetration rate and the market from nearly 0 to 1 during the first stage from 2014 to 2021. Now, as the industry enters the second phase from 1 to 10 and also experiencing downturn cycles over the past two years, the enormous TAM for IoT smart devices requires an increase in further penetration rate to be unlocked.

對於第二個問題，如果我們將公司的發展分為早期、中期和長期階段，塗鴉憑藉其獨特的物聯網雲軟體技術和產品、可擴展的業務策略以及中立的雲不可知定位，佔據了相當大的市場份額並產生了影響力。抓住2014年至2021年第一階段物聯網滲透率和市場從近0到1快速增長的巨大機會。如今，隨著產業進入從1到10的第二階段，也經歷了過去兩年的低迷週期，物聯網智慧設備龐大的TAM需要進一步提升滲透率才能釋放。

Therefore, following our CEO Jerry's earlier remarks. Our current main direction is to drive efficient revenue growth on both quantity and price aspects of our product offering. Therefore, enhancing companies' revenue while further assisting customers in promoting smart penetration and usage. In the long term as the penetration rate of smart devices continues to increase and with developers tackling the issue of fragmentation. The widespread adoption of smart applications is anticipated to further expand. And we are looking forward to this with great expectation.

因此，按照我們執行長傑瑞之前的言論。我們目前的主要方向是在我們產品的數量和價格方面推動收入的有效成長。因此，在提升企業營收的同時，進一步協助客戶推動智慧滲透和使用。從長遠來看，隨著智慧型裝置的滲透率不斷提高，並且開發人員正在解決碎片化問題。智慧應用的廣泛採用預計將進一步擴大。我們對此充滿期待。

So returning to the present, our focus for development in the next two to three years will revolve around centering on key accounts, creating efficient and higher potential revenue through comprehensive solutions composed of high-value products. Under this approach, the IoT PaaS Smart Solutions and SaaS software will complement each other in a collaborative manner to meet the needs of various types of major clients. For example, for local retail brand groups overseas it enhanced Smart Solutions, which is supported by IoT PaaS technology will together serve as the key to acquiring such customers.

那麼回到現在，我們未來兩到三年的發展重點將是圍繞大客戶，透過高價值產品組成的綜合解決方案創造高效、更高的潛在收入。在此模式下，物聯網PaaS智慧解決方案與SaaS軟體將協同互補，滿足各類大客戶的需求。例如，針對海外本土零售品牌集團，增強的智慧解決方案，加上物聯網PaaS技術的支持，將共同成為獲取此類客戶的關鍵。

And for overseas, telecom operator groups from Asia Pacific to Latin America, Cube and Smart Solution will join force to serve their customer's needs. And once they adopted our Smart Solutions and Cube to deliver the IoT services to their own customers like millions of families in their region, we will use SaaS offering to help them to generate further recurring revenue which we can usually split a good chunk of it. For industry clients or multinational corporations with industry needs, a lot of times they can mix match all three types of products as needed.

而在海外，從亞太地區到拉丁美洲的電信業者集團，Cube 和 Smart Solution 將聯手滿足客戶的需求。一旦他們採用我們的智慧解決方案和Cube 向自己的客戶（例如他們所在地區的數百萬家庭）提供物聯網服務，我們將使用SaaS 產品幫助他們產生進一步的經常性收入，我們通常可以從中分得很大一部分。對於產業客戶或有產業需求的跨國企業來說，很多時候他們可以根據需要混合搭配這三種類型的產品。

So that concludes the call today. Thank you for joining our call. If you have any further questions, please feel free to contact us or request through our IR website. We look forward to speaking with everyone in our next earnings call. Have a good day

今天的電話會議到此結束。感謝您加入我們的通話。如果您還有任何疑問，請隨時聯絡我們或透過我們的 IR 網站提出請求。我們期待在下次財報電話會議上與大家交談。祝你有美好的一天

This concludes today's conference. Thank you for joining. You may now disconnect your line.

今天的會議到此結束。感謝您的加入。現在您可以斷開線路。