Tuya (TUYA) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 9, 2022 7:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Tuya's Inc. Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will be hosting a question-and-answer session after management's prepared remarks.

I will now turn the call over to the first speaker today, Mr. Reg Chai, Capital Market Associate Director of Tuya. Please go ahead, sir.

Reg Chai

Thank you. Hello, everyone. Welcome to our third quarter 2022 earnings call. Joining us today are Founder and CEO of Tuya, Mr. Jerry Wang; and our CFO, Ms. Jessie Liu. The third quarter 2022 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.

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 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 Wang

Hello, everyone. Thank you for joining our third quarter 2022 earnings call. I will start today's call with an overview of our financial and operating performance.

Our third quarter results reflect both the challenges we face and the opportunities we're focusing on. In the third quarter, global inflation continued to increase and remained elevated. By the end of September, the U.S. CPI reached 8.2%, while the Europe CPI hit a new record 10% in Europe. Meanwhile, the intensifying Russia-Ukraine war, geopolitical unrest, and the consequent regional turmoil created extensive impacts on the global energy and consumer sectors. As such, the overall business environment is still full of challenges and uncertainties.

As you all know, the consumer discretionary sector is undergoing a severe inventory correction. Major online and offline retail channels, including Walmart, Best Buy, and Amazon are reducing their inventory to appropriate levels, especially in electronics and household products. As the year has progressed, many consumer electronics brands maintained their conservative approach towards their inventory management and procurement strategies in the first three quarters of the year in response to the uncertainties in the markets out. The contraction of the downstream...