What happened
Shares of Tuya (TUYA -2.42%) were moving lower Thursday after the Chinese Internet of Things (IoT) company posted disappointing fourth-quarter results.
As of 2:14 p.m. ET, the stock was down 14.2%.
So what
Tuya, which offers a cloud platform that helps brands and manufacturers build and launch smart devices, said that its Q4 revenue fell 39.6% to $45.3 million. That was better than the analysts' consensus forecast of $44.6 million. However, investors still seemed to be disappointed with the sharp top-line decline as its core IoT platform-as-a-service business saw revenue fall by 47.4% to $32.6 million.
Its smaller software-as-a-service segment posted 8.7% revenue growth to $7.9 million, which seemed to drive gross margin up by 140 basis points to 44.6%.
The company also cut back on spending, and its adjusted operating margin improved from negative 45.3% to negative 33.8%.
On an adjusted basis, the company posted a loss of $0.01 per share, an improvement from its loss of $0.06 per share in the prior-year quarter.
Now what
Tuya didn't offer guidance, but the stock has been struggling for the last year and a half. In November, the company received a letter from the New York Stock Exchange saying it was out of compliance with listing requirements because its stock price had fallen below $1.
The stock has since recovered to trade above the $1 per share level as investors appear encouraged in part by China's economic reopening as it moves away from its "zero COVID" policies. However, the company's sharp Q4 decline in revenue shows that any meaningful comeback from it will take time, despite its cost-cutting efforts.
