Agora and Tuya Signal AI Maturity with Record Profits and Developer Growth

The fourth quarter of 2025 marked a definitive turning point for the infrastructure layer of the AI and Internet of Things (IoT) sectors. As evidenced by the latest earnings reports from Agora (API) and Tuya (TUYA), the industry is moving past the experimental phase of AI integration and into a period of sustained profitability and operational efficiency. Agora, a leader in real-time engagement APIs, achieved a historic milestone by reporting its first full year of GAAP profitability since its 2018 IPO. Simultaneously, Tuya, the global IoT platform provider, posted record annual net income, driven by a surge in AI-enabled developer activity and a shift toward high-margin recurring services.

Agora’s performance in Q4 2025 was characterized by a 10.7% year-over-year revenue increase to $38.2 million, surpassing the high end of its previous guidance. This growth was largely fueled by its core segment, which saw a 14.4% rise in revenue as verticals like live shopping and social entertainment adopted more sophisticated real-time engagement tools. However, the company’s gross margin faced a slight contraction, dipping 150 basis points to 65.1%. Management attributed this pressure to the early-stage rollout of conversational AI products. These tools, while critical for future growth, are currently operating at a subscale level where the high costs of AI inference and compute have not yet been offset by volume-based efficiencies. This dynamic highlights a broader trend in the AI sector: the cost of intelligence remains a headwind for margins during the initial deployment phase of large language model (LLM) integrations.

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Agora, while smaller, maintains a healthy $374.9 million in cash and has been aggressive in returning value to shareholders, having repurchased over 70% of its $200 million buyback program since 2022.

Tuya’s results mirrored this trend of disciplined growth. The company reported Q4 revenue of $48.5 million, a 3% increase that marked its tenth consecutive quarter of year-over-year growth. More impressively, Tuya’s full-year non-GAAP net income reached a record $80.1 million. The company’s strategic pivot toward AI plus IoT is yielding tangible results in its developer ecosystem, which grew by 37% to over 1,800,000 registered developers. Perhaps the most significant metric for AI analysts is the deployment of approximately 16,000 AI agents on the Tuya platform. These agents represent the next evolution of IoT, moving from simple remote-controlled devices to autonomous systems capable of complex decision-making. Tuya’s SaaS and recurring services revenue, which grew 13.4% for the year, suggests that the market is increasingly willing to pay for the ongoing intelligence layer that AI provides to hardware ecosystems.