How did TUYA's Q4 earnings surprise investors?

Tuya Inc.'s (TUYA) Q4 earnings report exceeded investor expectations in several key areas, reflecting the company's robust financial performance and strategic growth initiatives: 1. **Revenue Growth**: Tuya reported a significant increase in revenue for Q4 2024, with total revenue amounting to $82.1 million, marking a 27.4% year-over-year growth. This outperformance was driven by strong growth across various segments, including IoT platform-as-a-service (PaaS) and smart solution revenues, which saw year-over-year increases of 25.7% and 45.5%, respectively. 2. **Profitability**: The company achieved its first annual GAAP net profit and non-GAAP operating profitability, signaling a substantial improvement in profitability metrics. Net profits for the quarter were reported at $9.8 million, a stark contrast to the $10.8 million net loss in the same quarter of the previous year. Non-GAAP net profits increased by approximately 75.8% year-over-year, reaching $22.1 million. 3. **Market Momentum**: Tuya's PaaS revenue experienced substantial growth, with $59.3 million reported for Q4 2024, up 25.7% year-over-year. The company's smart solution revenue also surged, achieving $11.3 million, a 45.5% increase year-over-year. This growth was underscored by strong demand in energy efficiency solutions and advancements in AI and IoT innovations. 4. **Cash Flow and Liquidity**: Tuya maintained a robust liquidity position, ending Q4 2024 with a net cash balance exceeding $1 billion. The company reported a positive operating cash flow of $80.4 million for the year 2024, indicating efficient cash flow management and financial health. 5. **Strategic Developments**: Tuya's strategic focus on AI and IoT innovations, along with the expansion of its developer ecosystem, has positioned the company for continued growth. The company's commitment to building a global AIoT developer ecosystem and enhancing its competitive edge is evident in its financial performance and market momentum. Overall, Tuya's Q4 earnings report showcased the company's strong financial performance, driven by strategic growth initiatives and operational efficiency. These achievements are likely to have positively surprised investors, reinforcing confidence in Tuya's future prospects.