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Tuya Reports Third Quarter 2024 Unaudited Financial Results

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SANTA CLARA, Calif., Nov. 18, 2024 /PRNewswire/ — Tuya Inc. (“Tuya” or the “Company“) (NYSE: TUYA; HKEX: 2391), a global leading cloud platform service provider, today announced its unaudited financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Financial Highlights

Total revenue was US$81.6 million, up approximately 33.6% year over year (3Q2023: US$61.1 million).IoT platform-as-a-service (“PaaS”) revenue was US$57.9 million, up approximately 26.4% year over year (3Q2023: US$45.8 million).Software-as-a-service (“SaaS”) and others revenue was US$9.9 million, up approximately 16.7% year over year (3Q2023: US$8.5 million).Smart solution revenue was US$13.8 million, up approximately 102.9% year over year (3Q2023: US$6.8 million).Overall gross margin was 46.0%, down 0.7 percentage points year over year (3Q2023: 46.7%). Gross margin of IoT PaaS increased to 46.9%, up 2.3 percentage points year over year (3Q2023: 44.6%).Operating margin was negative 21.0%, improved by 9.3 percentage points year over year (3Q2023: negative 30.3%). Non-GAAP operating margin was 9.1%, improved by 14.8 percentage points year over year (3Q2023: negative 5.7%).Net margin was negative 5.4%, improved by 2.6 percentage points year over year (3Q2023: negative 8.0%). Non-GAAP net margin was 24.7%, improved by 8.2 percentage points year over year (3Q2023: 16.5%).Net cash generated from operating activities was US$23.9 million (3Q2023: US$16.1 million).Total cash and cash equivalents, time deposits and treasury securities recorded as short-term and long-term investments were US$1,023.9 million as of September 30, 2024, compared to US$984.3 million as of December 31, 2023.

For further information on the non-GAAP financial measures presented above, see the section headed “Use of Non-GAAP Financial Measures.”

Third Quarter 2024 Operating Highlights

IoT PaaS customers[1] for the third quarter of 2024 were approximately 2,200 (3Q2023: approximately 2,100). Total customers for the third quarter of 2024 were approximately 3,100 (3Q2023: approximately 3,000).Premium IoT PaaS customers[2] for the trailing 12 months ended September 30, 2024 were 286 (3Q2023: 263). In the third quarter of 2024, the Company’s premium IoT PaaS customers contributed approximately 85.6% of its IoT PaaS revenue (3Q2023: approximately 83.5%).Dollar-based net expansion rate (“DBNER”)[3] of IoT PaaS for the trailing 12 months ended September 30, 2024 was 124% (3Q2023: 78%).Registered IoT device and software developers were over 1,260,000 as of September 30, 2024, up 26.9% from approximately 993,000 developers as of December 31, 2023.

1. The Company defines an IoT PaaS customer for a given period as a customer who has directly placed orders for IoT PaaS with the Company during that period.

2. The Company defines a premium IoT PaaS customer as a customer as of a given date that contributed more than US$100,000 of IoT PaaS revenue during the immediately preceding 12-month period.

3. The Company calculates DBNER of IoT PaaS for a trailing 12-month period by first identifying all customers in the prior 12-month period (i.e., those have placed at least one order for IoT PaaS during that period), and then calculating the quotient from dividing the IoT PaaS revenue generated from such customers in the current trailing 12-month period by the IoT PaaS revenue generated from the same group of customers in the prior 12-month period. The Company’s DBNER may change from period to period, due to a combination of various factors, including changes in the customers’ purchase cycles and amounts and the Company’s customer mix, among other things. DBNER indicates the Company’s ability to expand customer use of the Tuya platform over time and generate revenue growth from existing customers.

Mr. Xueji (Jerry) Wang, Founder and Chief Executive Officer of Tuya, commented, “I’m pleased that in the third quarter, we delivered robust financial performance across all our business segments, featuring high growth, stable margins and tight operating budget control. These solid results reaffirm our position as a growing and profitable smart cloud platform leader with a clear strategy and strong execution capabilities. Our performance was driven by robust demand from existing customers, as reflected in a Dollar-Based Net Expansion Rate of 124%. We also strengthened global partnerships, particularly in Europe and emerging markets, and expanded our developer community to 1.26 million registered developers. Looking ahead, we remain focused on empowering developers and delivering innovative solutions to meet the growing demand for smart products.”

Mr. Yi (Alex) Yang, Co-Founder and Chief Financial Officer of Tuya, added, “Third quarter financial results were solid, highlighted by an approximately 34% year-over-year revenue increase, a non-GAAP operating margin of approximately 9%, and a non-GAAP net profit margin of approximately 25%. Importantly, we generated an operating cash flow of $23.9 million, strengthening our net cash balance to further increase to around $1.02 billion. This solid financial position supports our growth initiatives as we continue invest in product innovation, and user experience enhancements to meet evolving market needs. We believe these efforts, combined with strong execution and focus on long-term growth, will unlock meaningful value as we move forward.”

Third Quarter 2024 Unaudited Financial Results

REVENUE

Total revenue in the third quarter of 2024 increased by 33.6% to US$81.6 million from US$61.1 million in the same period of 2023, mainly due to the increase in IoT PaaS revenue and smart solution revenue.

IoT PaaS revenue in the third quarter of 2024 increased by 26.4% to US$57.9 million from US$45.8 million in the same period of 2023, primarily due to increasing demand fueled by global economic recovery compared with the same period of 2023 and the Company’s strategic focus on customer needs and product enhancements. As a result, the Company’s DBNER of IoT PaaS for the trailing 12 months ended September 30, 2024 increased to 124% from 78% for the trailing 12 months ended September 30, 2023.SaaS and others revenue in the third quarter of 2024 increased by 16.7% to US$9.9 million from US$8.5 million in the same period of 2023, primarily due to an increase in revenue from cloud software products. During the quarter, the Company remained committed to offering value-added services and a diverse range of software products with compelling value propositions to its customers.Smart solution revenue in the third quarter of 2024 increased by 102.9% to US$13.8 million from US$6.8 million in the same period of 2023, primarily due to the increasing customer demand for the Company’s differentiated smart device solutions.

COST OF REVENUE

Cost of revenue in the third quarter of 2024 increased by 35.4% to US$44.1 million from US$32.6 million in the same period of 2023, generally in line with the increase in the Company’s total revenue.

GROSS PROFIT AND GROSS MARGIN

Total gross profit in the third quarter of 2024 increased by 31.5% to US$37.5 million from US$28.5 million in the same period of 2023 and gross margin was 46.0% in the third quarter of 2024, compared to 46.7% in the same period of 2023.

IoT PaaS gross margin in the third quarter of 2024 was 46.9%, compared to 44.6% in the same period of 2023, primarily due to increased product value.SaaS and others gross margin in the third quarter of 2024 was 71.6%, remained relatively stable compared to 73.9% in the same period of 2023.Smart solution gross margin in the third quarter of 2024 was 23.5%, compared to 26.9% in the same period of 2023, primarily due to the changes in product solution mix provided to customers during the quarter.

OPERATING EXPENSES

Operating expenses were US$54.6 million in the third quarter of 2024, compared to US$47.0 million in the same period of 2023, primarily due to a one-time increase in share-based compensation expenses resulting from the repricing of options to enhance employee incentives. Non-GAAP operating expenses decreased by 5.9% to US$30.1 million in the third quarter of 2024 from US$32.0 million in the same period of 2023. For further information on the non-GAAP financial measures presented above, see the section headed “Use of Non-GAAP Financial Measures.”

Research and development expenses in the third quarter of 2024 were US$24.9 million, compared to US$24.9 million in the same period of 2023, primarily due to a one-time increase in share-based compensation expenses, partially offset by the decrease in employee-related costs. During this quarter, average salaried employee headcount of the Company’s research and development team was down approximately 6.2% year over year, but remained relatively stable compared to the previous quarter. Non-GAAP adjusted research and development expenses in the third quarter of 2024 were US$19.9 million, compared to US$21.8 million in the same period of 2023.Sales and marketing expenses in the third quarter of 2024 were US$9.7 million, compared to US$9.4 million in the same period of 2023, primarily due to a one-time increase in share-based compensation expenses, partially offset by the decrease in employee-related costs. Non-GAAP adjusted sales and marketing expenses in the third quarter of 2024 were US$8.0 million, compared to US$8.7 million in the same period of 2023.General and administrative expenses in the third quarter of 2024 were US$22.3 million, compared to US$15.8 million in the same period of 2023, primarily due to a one-time increase in share-based compensation expenses, partially offset by the decrease in employee-related costs. Non-GAAP adjusted general and administrative expenses in the third quarter of 2024 were US$4.4 million, compared to US$4.8 million in the same period of 2023.Other operating income, net in the third quarter of 2024 was US$2.2 million, primarily due to the receipt of software value-added tax refunds and various general subsidies for enterprises.

LOSS/PROFIT FROM OPERATIONS AND OPERATING MARGIN

Loss from operations in the third quarter of 2024 narrowed by 7.4% to US$17.1 million from US$18.5 million in the same period of 2023. The Company had a non-GAAP profit from operations of US$7.4 million in the third quarter of 2024, compared to a non-GAAP loss from operations of US$3.5 million in the same period of 2023, consistently achieving operating profitability on a non-GAAP basis.

Operating margin in the third quarter of 2024 was negative 21.0%, improved by 9.3 percentage points from negative 30.3% in the same period of 2023. Non-GAAP operating margin in the third quarter of 2024 was 9.1%, improved by 14.8 percentage points from negative 5.7% in the same period of 2023.

NET LOSS/PROFIT AND NET MARGIN

The Company had a net loss of US$4.4 million in the third quarter of 2024, compared to a net loss of US$4.9 million in the same period of 2023.

The difference between loss from operations and net loss in the third quarter of 2024 was primarily because of a US$13.0 million interest income achieved mainly due to well implemented treasury strategies on the Company’s cash, time deposits and treasury securities recorded as short-term and long-term investments.

The Company had a non-GAAP net profit of US$20.1 million in the third quarter of 2024, up 99.5% compared to US$10.1 million in the same period of 2023, demonstrating the Company’s ability to sustain strong profitability on a non-GAAP basis.

Net margin in the third quarter of 2024 was negative 5.4%, improving by 2.6 percentage points from negative 8.0% in the same period of 2023. Non-GAAP net margin in the third quarter of 2024 was 24.7%, improving by 8.2 percentage points from 16.5% in the same period of 2023.

BASIC AND DILUTED NET LOSS/PROFIT PER ADS

Basic and diluted net loss per ADS was US$0.01 in the third quarter of 2024, compared to basic and diluted net loss of US$0.01 in the same period of 2023. Each ADS represents one Class A ordinary share.

Non-GAAP basic and diluted net profit per ADS was US$0.04 in the third quarter of 2024, compared to non-GAAP basic and diluted net profit of US$0.02 in the same period of 2023.

CASH AND CASH EQUIVALENTS, TIME DEPOSITS AND TREASURY SECURITIES RECORDED AS SHORT-TERM AND LONG-TERM INVESTMENTS

Cash and cash equivalents, time deposits and treasury securities recorded as short-term and long-term investments were US$1,023.9 million as of September 30, 2024, compared to US$984.3 million as of December 31, 2023, which the Company believes is sufficient to meet its current liquidity and working capital needs.

NET CASH GENERATED FROM OPERATING ACTIVITIES

Net cash generated from operating activities in the third quarter of 2024 was US$23.9 million, compared to US$16.1 million in the same period of 2023. The net cash generated from operating activities for the third quarter of 2024 improved mainly due to the increase in the Company’s revenue and improved operating leverage.

For further information on non-GAAP financial measures presented above, see the section headed “Use of Non-GAAP Financial Measures.”

Business Outlook

With the stabilizing macroeconomic environment and normalizing downstream inventory levels, the industry is currently on a positive trajectory. With the effective implementation of the Company’s customer and product strategies, along with the utilization and innovation of emerging technologies like AI, the Company is confident in its business prospects.

The Company will remain committed to continuously iterating and improving its products and services, further enhancing software and hardware capabilities, expanding key customer base, investing in innovations and new opportunities, diversifying revenue streams, and further optimizing operating efficiency. At the same time, the Company understands that future trajectories may encounter challenges, including shifting consumer spending patterns, regional economic disparities, inventory management, foreign exchange rate and interests rate volatility, and broader geopolitical uncertainties.

Conference Call Information

The Company’s management will hold a conference call at 07:30 P.M. Eastern Time on Monday, November 18, 2024 (08:30 A.M. Beijing Time on Tuesday, November 19, 2024) to discuss the financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this conference including a conference access code, a PIN number (personal access code), the dial-in number, and an e-mail with detailed instructions to join the conference call.

Online registration: https://register.vevent.com/register/BI10b2a0be2587453aa3081615bdeaf624 

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.tuya.com, and a replay of the webcast will be available following the session.

About Tuya Inc.

Tuya Inc. (NYSE: TUYA; HKEX: 2391) is a global leading cloud platform service provider with a mission to build a smart solutions developer ecosystem and enable everything to be smart. Tuya has pioneered a purpose-built cloud developer platform with cloud and generative AI capabilities that delivers a full suite of offerings, including Platform-as-a-Service, or PaaS, Software-as-a-Service, or SaaS, and smart solutions for developers of smart device, commercial applications, and industries. Through its cloud developer platform, Tuya has activated a vibrant global developer community of brands, OEMs, AI agents, system integrators and independent software vendors to collectively strive for smart solutions ecosystem embodying the principles of green and low-carbon, security, high efficiency, agility, and openness.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP financial measures, such as non-GAAP operating expenses, non-GAAP (loss)/profit from operations (including non-GAAP operating margin), non-GAAP net profit (including non-GAAP net margin), and non-GAAP basic and diluted net profit per ADS, as supplemental measures to review and assess its operating performance. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company defines non-GAAP financial measures by excluding the impact of share-based compensation expenses, credit-related impairment of long-term investments and litigation costs from the respective GAAP financial measures. The Company presents the non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company also believes that the use of the non-GAAP financial measures facilitates investors’ assessment of its operating performance.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using the aforementioned non-GAAP financial measures is that they do not reflect all items of expenses that affect the Company’s operations. Share-based compensation expenses, credit-related impairment of long-term investments and litigation costs have been and may continue to be incurred in the business and are not reflected in the presentation of non-GAAP measures. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP measures to the most directly comparable U.S. GAAP measures, all of which should be considered when evaluating the Company’s performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

Reconciliations of Tuya’s non-GAAP financial measures to the most comparable U.S. GAAP measures are included at the end of this press release.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”, “continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. The forward-looking statements included in this press release are only made as of the date hereof, and the Company disclaims any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Investor Relations Contact

Tuya Inc.
Investor Relations
Email: ir@tuya.com 

The Blueshirt Group
Gary Dvorchak, CFA
Phone: +1 (323) 240-5796
Email: gary@blueshirtgroup.co 

 

 

TUYA INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
AS OF DECEMBER 31, 2023 AND SEPTEMBER 30, 2024
(All amounts in US$ thousands (“US$”),
except for share and per share data, unless otherwise noted)

As of December 31,
2023

As of September 30,
2024

ASSETS

Current assets:

Cash and cash equivalents

498,688

610,901

Restricted cash

–

154

Short-term investments

291,023

201,114

Accounts receivable, net

9,214

7,628

Notes receivable, net

4,955

10,036

Inventories, net

32,865

28,303

Prepayments and other current assets, net

11,053

17,265

Total current assets

847,798

875,401

Non-current assets:

Property, equipment and software, net

2,589

2,959

Operating lease right-of-use assets, net

7,647

4,866

Long-term investments

207,489

222,830

Other non-current assets, net

877

9,647

Total non-current assets

218,602

240,302

Total assets

1,066,400

1,115,703

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

11,577

18,040

Advances from customers

31,776

29,906

Deferred revenue, current

6,802

7,303

Accruals and other current liabilities

32,807

63,606

Incomes tax payables

689

–

Lease liabilities, current

3,883

3,718

Total current liabilities

87,534

122,573

Non-current liabilities:

Lease liabilities, non-current

3,904

1,251

Deferred revenue, non-current

506

596

Other non-current liabilities

3,891

1,534

Total non-current liabilities

8,301

3,381

Total liabilities

95,835

125,954

TUYA INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) 
AS OF DECEMBER 31, 2023 AND SEPTEMBER 30, 2024
(All amounts in US$ thousands (“US$”),
except for share and per share data, unless otherwise noted)

As of December 31,
2023

As of September 30,
2024

Shareholders’ equity:

Class A ordinary shares

25

25

Class B ordinary shares

4

4

Treasury stock

(53,630)

(29,386)

Additional paid-in capital

1,616,105

1,614,161

Accumulated other comprehensive loss

(17,091)

(15,419)

Accumulated deficit

(574,848)

(579,636)

Total shareholders’ equity

970,565

989,749

Total liabilities and shareholders’ equity

1,066,400

1,115,703

TUYA INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS
(All amounts in US$ thousands (“US$”),
except for share and per share data, unless otherwise noted) 

For the Three Months Ended 

 For the Nine Months Ended

September 30,
2023

September 30,
2024

September 30,
2023

September 30,
2024

Revenue

61,090

81,617

165,579

216,558

Cost of revenue

(32,567)

(44,102)

(89,387)

(114,366)

Gross profit

28,523

37,515

76,192

102,192

Operating expenses:

Research and development expenses

(24,946)

(24,877)

(79,471)

(71,344)

Sales and marketing expenses

(9,418)

(9,663)

(29,503)

(28,033)

General and administrative expenses

(15,843)

(22,301)

(56,909)

(54,636)

Other operating incomes, net

3,197

2,213

7,491

7,997

Total operating expenses

(47,010)

(54,628)

(158,392)

(146,016)

Loss from operations

(18,487)

(17,113)

(82,200)

(43,824)

Other income

Other non-operating incomes, net

779

766

2,335

3,413

Financial income, net

13,066

12,985

31,841

38,244

Foreign exchange (loss)/gain, net

(251)

(638)

652

(1,000)

Loss before income tax expense

(4,893)

(4,000)

(47,372)

(3,167)

Income tax expense

(12)

(373)

(2,127)

(1,621)

Net loss

(4,905)

(4,373)

(49,499)

(4,788)

Net loss attributable to Tuya Inc.

(4,905)

(4,373)

(49,499)

(4,788)

Net loss attribute to ordinary shareholders

(4,905)

(4,373)

(49,499)

(4,788)

Net loss

(4,905)

(4,373)

(49,499)

(4,788)

Other comprehensive (loss)/income

Changes in fair value of long-term investments

(1,417)

–

(2,470)

(139)

Transfer out of fair value changes of long-term investments

–

–

8,050

(65)

Foreign currency translation

760

2,904

(4,494)

1,876

Total comprehensive loss attributable to Tuya Inc.

(5,562)

(1,469)

(48,413)

(3,116)

TUYA INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS (CONTINUED)
(All amounts in US$ thousands (“US$”),
except for share and per share data, unless otherwise noted) 

For the Three Months Ended

For the Nine Months Ended

September 30,
2023

September 30,
2024

September 30,
2023

September 30,
2024

Net loss attributable to Tuya Inc.

(4,905)

(4,373)

(49,499)

(4,788)

Net loss attributable to ordinary shareholders

(4,905)

(4,373)

(49,499)

(4,788)

Weighted average number of ordinary shares used in
   computing net loss per share, basic and diluted

555,782,518

569,821,232

554,914,108

562,913,590

Net loss per share attributable to
   ordinary shareholders, basic and diluted

(0.01)

(0.01)

(0.09)

(0.01)

Share-based compensation expenses were included in:
Research and development expenses

3,165

4,978

11,288

11,860

Sales and marketing expenses

758

1,675

3,984

4,229

General and administrative expenses

11,025

17,663

34,008

39,450

TUYA INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in US$ thousands (“US$”),
except for share and per share data, unless otherwise noted)

For the Three Months Ended  

For the Nine Months Ended

September 30, 2023

September 30, 2024

September 30, 2023

September 30, 2024

Net cash generated from operating activities

16,070

23,851

4,683

50,170

Net cash generated from/(used in) investing activities

55,027

(28,213)

32,692

61,872

Net cash used in financing activities

(318)

(328)

(2,385)

(178)

Effect of exchange rate changes on cash and cash
   equivalents, restricted cash

953

826

(1,877)

503

Net increase/(decrease) in cash and cash equivalents,
   restricted cash

71,732

(3,864)

33,113

112,367

Cash and cash equivalents, restricted cash at the
   beginning of period

94,542

614,919

133,161

498,688

Cash and cash equivalents, restricted cash
   at the end of period

166,274

611,055

166,274

611,055

TUYA INC.
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY 
COMPARABLE FINANCIAL MEASURES
(All amounts in US$ thousands (“US$”),
except for share and per share data, unless otherwise noted) 

For the Three Months Ended  

For the Nine Months Ended

September 30,
2023

September 30,
2024

September 30,
2023

September 30,
2024

Reconciliation of operating expenses to non-GAAP   
   operating expenses

Research and development expenses

(24,946)

(24,877)

(79,471)

(71,344)

Add: Share-based compensation expenses

3,165

4,978

11,288

11,860

Adjusted Research and development expenses

(21,781)

(19,899)

(68,183)

(59,484)

Sales and marketing expenses

(9,418)

(9,663)

(29,503)

(28,033)

Add: Share-based compensation expenses

758

1,675

3,984

4,229

Adjusted Sales and marketing expenses

(8,660)

(7,988)

(25,519)

(23,804)

General and administrative expenses

(15,843)

(22,301)

(56,909)

(54,636)

Add: Share-based compensation expenses

11,025

17,663

34,008

39,450

Add: Credit-related impairment of long-term investments

52

–

8,102

189

Add: Litigation costs

–

200

–

2,300

Adjusted General and administrative expenses

(4,766)

(4,438)

(14,799)

(12,697)

Reconciliation of loss from operations to non-GAAP
   (loss)/profit from operations

Loss from operations

(18,487)

(17,113)

(82,200)

(43,824)

Add: Share-based compensation expenses

14,948

24,316

49,280

55,539

Add: Credit-related impairment of long-term investments

52

–

8,102

189

Add: Litigation costs

–

200

–

2,300

Non-GAAP (loss)/profit from operations

(3,487)

7,403

(24,818)

14,204

Non-GAAP Operating margin

(5.7) %

9.1 %

(15.0) %

6.6 %

For the Three Months Ended

For the Nine Months Ended

September 30,
2023

September 30,
2024

September 30,
2023

September 30,
2024

Reconciliation of net loss to non-GAAP
   net profit

Net loss

(4,905)

(4,373)

(49,499)

(4,788)

Add: Share-based compensation expenses

14,948

24,316

49,280

55,539

Add: Credit-related impairment of long-term investments

52

–

8,102

189

Add: Litigation costs

–

200

–

2,300

Non-GAAP Net profit

10,095

20,143

7,883

53,240

Non-GAAP Net margin

16.5 %

24.7 %

4.8 %

24.6 %

Weighted average number of ordinary shares used in
   computing non-GAAP net profit per share

 – Basic

555,782,518

569,821,232

554,914,108

562,913,590

– Diluted

586,434,725

571,386,571

586,533,052

585,311,819

Non-GAAP net profit per share attributable
   to ordinary shareholders

– Basic

0.02

0.04

0.01

0.09

– Diluted

0.02

0.04

0.01

0.09

 

 

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POMDOCTOR LIMITED Advances Strategic Evolution from Traffic Monetization to Value-Based Healthcare Payment

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Building a Four-Tier Revenue Structure Across B2C Services, AI-Enabled Chronic Disease Management, B2B Healthcare Services, and Pharmaceutical RWS/RWD

GUANGZHOU, China, Nov. 4, 2026 /PRNewswire/ — POMDOCTOR LIMITED (“Pomdoctor” or the “Company”) (NASDAQ: POM), a digital healthcare company focused on advancing AI-enabled healthcare solutions, today provided an overview of its strategic evolution and business model transformation amid the rapid development of China’s digital healthcare industry. Since its establishment in 2010, Pomdoctor has progressively evolved from the industry’s early “traffic monetization” model toward a more diversified and value-oriented healthcare ecosystem, culminating in its current four-tier revenue structure spanning B2C healthcare services, AI-enabled chronic disease management, B2B enterprise and hospital services, and pharmaceutical real-world study (“RWS”) and real-world data (“RWD”) services.

From Traffic Monetization to Diversified Healthcare Services

Pomdoctor was established in 2010, when China’s digital healthcare industry was entering an early stage of transformation. At the time, the prevailing business model centered on “traffic monetization,” with online consultations and pharmaceutical e-commerce generating revenue primarily through user acquisition, engagement, and pharmaceutical sales. As major participants from the e-commerce and pharmaceutical sectors entered the market, competition intensified, placing increasing pressure on the sustainability and differentiation of this model.

Recognizing the structural limitations of relying primarily on user traffic and pharmaceutical transactions, including patients’ limited willingness to pay directly for healthcare services, constrained health insurance coverage, and limitations in advertising-based monetization, Pomdoctor began developing a more diversified business model. The Company expanded beyond a purely service-oriented model and introduced subscription-based offerings supported by more refined operations and specialized healthcare services, establishing an early foundation for recurring and diversified revenue generation.

Expansion into B2B and Hospital Services

As the digital healthcare industry continued to evolve, Pomdoctor further expanded into B2B services, leveraging its healthcare expertise and digital capabilities to provide digital marketing solutions for pharmaceutical companies. Over time, this business evolved from pharmaceutical-focused digital services toward deeper engagement with healthcare institutions, including public hospitals.

This transition enabled Pomdoctor to broaden its role within the healthcare ecosystem, from serving individual users to connecting patients, healthcare providers, pharmaceutical companies, and other enterprise stakeholders. The Company believes this accumulated experience and institutional connectivity have provided an important foundation for its subsequent expansion into higher-value healthcare services.

Leveraging AI and Data to Unlock New Value

With the emergence of artificial intelligence (“AI”) as a transformative force across the healthcare industry, Pomdoctor has continued to build on its existing capabilities by developing and piloting AI-enabled healthcare programs with the objective of converting clinical applications into scalable, revenue-generating services. At the same time, the Company’s accumulated healthcare data assets have created opportunities for higher-value applications in chronic disease management, pharmaceutical research, and other data-driven healthcare services.

By integrating AI technologies, wearable devices, and its existing digital healthcare infrastructure, Pomdoctor is developing a more integrated ecosystem designed to connect patient services, chronic disease management, healthcare institutions, pharmaceutical companies, and data-driven applications. The Company believes this integrated approach can progressively transform data assets from primarily operational resources into sources of incremental commercial value. The Company’s AI-enabled chronic disease subscriptions and pharmaceutical RWS/RWD services are at an early stage of commercialization.

Building a Four-Tier Revenue Structure

Pomdoctor’s current business model is structured around four interconnected revenue tiers:

B2C Basic Healthcare Services — providing an entry point for patients and users through core digital healthcare services;AI-Enabled Chronic Disease Membership Subscriptions — extending user relationships through personalized, technology-enabled chronic disease management and recurring subscription services;B2B Enterprise and Hospital Services — leveraging the Company’s healthcare capabilities and institutional relationships to provide digital solutions and services to enterprises and healthcare institutions; andPharmaceutical RWS/RWD Services — leveraging accumulated healthcare data, clinical experience, and AI capabilities to support pharmaceutical companies in real-world studies (“RWS”) and real-world data (“RWD”) applications.

Together, these four tiers are designed to create a progressive value chain rather than operate as independent revenue streams. B2C services provide the foundation for patient engagement and healthcare data accumulation; AI-enabled chronic disease subscriptions deepen patient relationships and enhance recurring revenue; B2B enterprise and hospital services broaden the Company’s institutional reach and commercial applications; and the resulting data and healthcare infrastructure create a foundation for higher-value pharmaceutical RWS/RWD services.

Pomdoctor believes this interconnected model is designed for longer-term growth opportunities, while creating a potential flywheel effect in which expanding users, healthcare services, institutional relationships, AI applications, and data assets reinforce one another and support the Company’s ongoing transition toward more value-based healthcare monetization.

Management Commentary

Mr. Zhenyang Shi, Chairman and Chief Executive Officer of Pomdoctor, commented: “Since our inception, we have continuously sought distinctive and sustainable ways to create value as the healthcare industry evolves through successive waves of business model and technological change. From our early focus on digital healthcare services, to the development of subscription-based offerings and B2B healthcare services, and now to AI-enabled chronic disease management and data-driven pharmaceutical services, we have consistently endeavored to invest ahead of emerging industry trends while building upon our existing capabilities.

“Today, Pomdoctor is focused on further strengthening our four-tier revenue structure and integrating these businesses into a more comprehensive healthcare ecosystem. We believe the combination of healthcare services, AI, institutional capabilities, and data assets provides a scalable foundation for our next stage of growth. With our experience and capabilities in China, we are also exploring opportunities to replicate and adapt this model in key international markets. We remain committed to continuously improving our business model, expanding our ecosystem, and translating our operational capabilities and innovation into sustainable long-term value for our shareholders.”

About POMDOCTOR LIMITED

POMDOCTOR LIMITED (NASDAQ: POM) is a digital healthcare company focused on advancing AI-enabled healthcare solutions and expanding predictive healthcare capabilities. The Company leverages physician resources, wearable technologies, artificial intelligence, healthcare payment networks and real-world healthcare data to support more personalized, continuous and data-driven healthcare services. Building upon its established healthcare platform and physician network, POM is pursuing the development of a predictive healthcare data and services infrastructure designed to improve healthcare outcomes and create long-term value for patients, healthcare providers and other ecosystem participants. For more information, please visit the Company’s website: http://ir.7shiliu.com.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These statements are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding: the Company’s strategic evolution from a traffic monetization model toward value-based healthcare payment and monetization; the Company’s plans to further strengthen its four-tier revenue structure spanning B2C basic healthcare services, AI-enabled chronic disease membership subscriptions, B2B enterprise and hospital services, and pharmaceutical RWS/RWD services, and to integrate these businesses into a more comprehensive healthcare ecosystem; the Company’s development and piloting of AI-enabled healthcare programs and its ability to convert clinical applications into scalable, revenue-generating services; the Company’s plans to integrate AI technologies, wearable devices and its existing digital healthcare infrastructure, and its belief that such integration can progressively transform data assets into sources of incremental commercial value; the Company’s expectations regarding growth in recurring subscription revenue, the expansion of its institutional reach and relationships with healthcare institutions, including public hospitals, and pharmaceutical companies, and the development of higher-value pharmaceutical RWS/RWD services; the Company’s belief that its interconnected business model is designed to balance near-term revenue generation and cash flow with longer-term growth opportunities and to create a potential flywheel effect; the Company’s exploration of opportunities to replicate and adapt its business model in key international markets; and the anticipated benefits of the Company’s strategy for patients, healthcare providers, pharmaceutical companies, shareholders and other ecosystem participants, including sustainable long-term value creation. Investors can identify many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “aims,” “estimates,” “projects,” “intends,” “plans,” “pursues,” “positions,” “will,” “would,” “should,” “could,” “may” or other similar expressions. These forward-looking statements are based on the Company’s current expectations, assumptions and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs, and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and investors are cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements speak only as of the date of this announcement, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, except as may be required by law.

Actual results may differ materially from those expressed or implied in these forward-looking statements due to a number of factors and uncertainties. Investors are urged to review the section entitled “Item 3. Key Information—D. Risk Factors” in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 14, 2026, and the Company’s other filings with the SEC, which are available on the SEC’s website at www.sec.gov.

For more information, please contact:

POMDOCTOR LIMITED
Investor Relations Department
Email: ir@7lk.com

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

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Prava Expands Its Innovative Senior Living Therapy Model with OneStep Movement Intelligence

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Partnership combines on-site therapy with advanced movement intelligence to help senior living operators identify mobility risks earlier, improve resident outcomes, and gain greater visibility into resident health.

NEW YORK, Nov. 4, 2026 /PRNewswire/ — Prava, a provider of physical, occupational, and speech therapy services powered by its proprietary AI platform, today announced a partnership with OneStep that puts mobility at the center of resident care. By adding OneStep’s AI-powered movement intelligence to the care it delivers, Prava is giving care teams and operators an ongoing, objective view of how each resident moves, and showing what therapy can contribute to a community beyond the treatment session.

The partnership builds on Prava’s proactive clinical model, adding objective movement intelligence to help teams identify changes earlier, guide individualized care, and measure progress over time.

Making Movement a Vital Sign in Senior Living

How a resident walks holds clues about their health. OneStep translates those patterns into actionable data, enabling therapists to assess resident mobility in seconds and monitor progress beyond traditional therapy visits.

Using the OneStep CARE clinician application, Prava therapists can capture objective gait measurements during on-site visits, identify changes in mobility, and use those insights to guide clinical decisions. The technology also supports remote monitoring capabilities, helping extend clinical visibility between scheduled appointments.

The partnership establishes a foundation for integrating movement intelligence more broadly into Prava’s proprietary AI platform, with the goal of giving clinicians and senior living operators a more comprehensive picture of resident mobility and therapy outcomes.

“Senior living operators are increasingly expected to deliver better resident outcomes while managing growing clinical complexity,” said Tim Eby, CEO and Co-Founder of Prava. “We believe therapy should play a much bigger role in helping communities address those challenges. By combining Prava’s clinical teams, proprietary AI platform, and OneStep’s movement intelligence, we’re bringing a more proactive approach to fall prevention and mobility care into senior living, and making the value of therapy more measurable for residents and operators alike.”

A More Proactive Approach to Fall Prevention

What if care teams could see elevated fall risk up to two weeks before a fall happens? With OneStep, Prava therapists can. Falls remain one of the most significant challenges facing senior living communities, affecting resident safety, independence, and quality of life. Yet subtle changes in mobility that may signal increased fall risk can be difficult to identify through traditional assessments alone.

OneStep’s FDA-listed technology analyzes more than 30 gait parameters using only a smartphone, with no wearables or specialized equipment required. Drawing on more than 35 billion steps analyzed, its technology can identify meaningful mobility trends, including the ability to predict the elevated risk of falls up to two weeks before they happen.

By integrating these capabilities into Prava’s therapy programs, clinicians can establish objective mobility baselines, monitor changes over time, and use those insights to personalize treatment and coordinate with community care teams.

Greater Visibility and Value for Senior Living Operators

Unlike traditional therapy providers that rely on disconnected third-party systems, Prava has built and owns its entire AI-powered technology platform, integrating clinical documentation, scheduling, billing, analytics, and operational workflows.

This proprietary infrastructure enables Prava to incorporate innovations like OneStep’s movement intelligence directly into clinical care, creating a more connected therapy experience for residents and greater visibility for senior living operators.

“Therapy doesn’t stop when a patient leaves the clinic, and the data shouldn’t either,” said Tomer Shussman, CEO of OneStep. “A therapist should be able to build a digital practice with powerful clinical insights at their fingertips. Together with Prava, we’re making that possible, turning a resident’s everyday movement into insight that helps therapists guide care from anywhere.”

About Prava

Prava is a provider of physical, occupational, and speech therapy services powered by a proprietary, end-to-end AI platform. By combining exceptional clinical care with purpose-built technology, Prava is redefining how therapy is delivered, managed, and measured across senior living communities and beyond.

About OneStep

OneStep is an AI-powered movement intelligence platform that turns everyday movement into clinically meaningful insight. Using only smartphone sensors, its FDA-listed technology delivers gait and motion analysis in seconds, with no wearables required, helping providers assess, treat, and monitor patients from anywhere.

OneStep serves senior living communities, health systems, rehabilitation providers, and medical device manufacturers, giving care teams the data to improve mobility, reduce falls, and support Remote Therapeutic Monitoring.

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DAVE & BUSTER’S SURRENDERS TO DOOM. INTRODUCING DOOM & BUSTER’S.

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Dave & Buster’s yields to the awesome might of Doctor Doom, surrendering its own name for a nationwide takeover built around Marvel Studios’ Avengers: Doomsday, with Doomsday Zones, Marvel games, exclusive Marvel merchandise, Collectible Power Cards, a villain-worthy drink menu and DOOMHOUR, a surprise hour of double tickets.

DALLAS, Nov. 4, 2026 /PRNewswire/ — Dave & Buster’s is gone. In its place: Doom & Buster’s.

As the world counts down to Marvel Studios’ Avengers: Doomsday, in theaters December 18, the ultimate destination for games, food and drinks has submitted. For a limited-time it surrenders its name, its stores, and its games to Doctor Doom, turning locations nationwide into the one place fans can step inside the world of Doomsday before it ever reaches the big screen. ALL SHALL PLAY.

The submission begins this week. New Marvel-themed games and in-store experiences roll out today, building to the full Doom & Buster’s takeover on November 16: immersive Doomsday Zones, Collectible Power Cards, exclusive Marvel merchandise, themed prizes, a lineup of cocktails and mocktails, and DOOMHOUR, a surprise hour in which D&B Rewards members earn double tickets on green-swipe games. Resistance is pointless. PLAY IS MANDATORY.

“When one of the biggest movies of the year is coming, you don’t put up a poster. You bend the knee,” said Jeremy Tucker, Chief Marketing Officer at Dave & Buster’s. “We gave Doom our name. We gave him the floor. We gave him the bar. Doom & Buster’s is a world fans can only walk into with us, and it’s built for the thing we do better than anyone: bringing people together to play, compete and be part of the action. All shall play. We’re just making it official.”

“We’re always looking for brands who are willing to think bigger, and Dave & Buster’s did exactly that. Rather than creating a traditional promotion, they transformed their entire business into an immersive celebration of Marvel Studios’ Avengers: Doomsday, in theaters December 18. The result is a bold, fan-first experience that extends the story beyond the theater and into the real world in a way only Dave & Buster’s could,” said Lylle Breier, EVP, Partnerships, Promotions and Events, The Walt Disney Studios.

Doom & Buster’s runs November 16, 2026 through January 31, 2027 at Dave & Buster’s locations nationwide. Games, attractions, and prizes vary by location.

ALL SHALL PLAY. Enter the Doomsday Zone.

The heart of the takeover is the Doomsday Zone, opening November 16 in stores nationwide. Themed entry arches mark the point of Doomsday domination. Beyond them, Marvel games, signage and game screens pull guests into the Doomsday Zone, where they can team up, race friends and hunt down themed prizes before and during the film’s run. Doom does not ask. Doom decrees.

The first decrees take effect today, giving guests a head start on the action:

MARVEL Cosmic Invasion: A fast-paced, 4-player, action beat’em up game. Choose two Super Heroes from across the Marvel Universe, switch between their abilities mid-fight, and hold the line against waves of enemies.Avengers: Roller Race & Battle: A 4-player head-to-head race with a villain to take down on the way. Fastest to the finish helps save the day.Human Crane: You are the claw. Strap in, lift off and get lowered into a sea of prizes, including brand-new inflatables.Mystery Crane: The classic claw with a twist. Every mystery pillow box hides a surprise.Thor’s Hammer Strike: Channel the god of thunder. One swing could top the leaderboard and score legendary ticket wins.The Arena: New games and a full immersive takeover bring a whole new world of play to life.Smash N Win: Take your shot and collect all 20 collectible character-themed balls before they’re gone.Avengers Themed Photo Booth: Snap a photo solo or with friends and family, then take home your photo as a keepsake from your visit.

The takeover also brings a themed Avengers Funko pusher stocked with Avengers-only Funko prizes and limited-time Avengers-inspired cotton candy flavors. Additional games and attractions vary by location.

Take the multiverse home. Collectible Power Cards featuring Thor, Doctor Doom, Yelena and more are available at kiosks for a limited time while supplies last, alongside brand-new themed prizes.

“With the scale and variety of experiences as part of Doom & Buster’s, fans can have a completely different experience more than once — with different challenges and games to tackle, more surprises to uncover, and memories to make with friends and family,” said Holly Frank, VP, Partnerships & Promotions.

When DOOMHOUR strikes, the tickets double.

Doctor Doom rewards the loyal and chooses the hour. Beginning November 16, at randomly selected times throughout the campaign, DOOMHOUR strikes: one surprise hour in which D&B Rewards members earn double tickets on green-swipe games at locations nationwide. The crowd finds out when it hits. The loyal find out first.

D&B Rewards members receive advance warning straight from Doctor Doom: a push notification in the D&B Rewards app 24 hours ahead reveals the date of the next DOOMHOUR, and a second notification on the day reveals the hour itself. When it begins, in-store screens and D&B Live radio sound the alarm for everyone else. Loyalty has its privileges. Join D&B Rewards by downloading the app on the Apple App Store and Google Play.

RAISE A GLASS TO THE NEW REGIME

Doctor Doom’s rule extends to the bar, with a limited-time lineup of three cocktails made with Smirnoff, the World’s No. 1 Vodka, and two alcohol-free mocktails, available November 16, 2026 through January 31, 2027.

Cocktails:

Doomsday’s Dominion: Doomsday has taken over. Submit to a powerful mix of Smirnoff No. 21 Vodka, melon liqueur, pineapple and lemon-lime soda, served with a Black Magic sidecar to pour and relinquish to chaos.Multiversal Mule: Enter the multiverse with Smirnoff No. 21 Vodka, blue orange liqueur, dragon fruit and ginger beer, finished with edible luster dust and an LED glow cube. One universe was never enough.Fantastic Flight: Four cocktails. Four powers. One fantastic flight. Smirnoff No. 21 Vodka, orange liqueur and premium citrus sour become four mini cocktails, each with its own super-powered flavor.

Mocktails:

Panther’s Potion: Unleash the power within with a bold mix of cherry, ginger beer and premium citrus sour, served with a blue vibranium shimmer sidecar and a silver sugar rim.Captain Punch: A tropical punch of blue raspberry, coconut, pineapple, lemon-lime soda and premium citrus sour, finished with a blue sugar rim, cherries and a blue sour strip only fit for a captain.

Guests must be 21 or older to consume alcohol. ALL SHALL DRINK RESPONSIBLY.

Doom’s decree follows you home

Unrelenting loyalty continues in the D&B Rewards app with new Rewards Challenges throughout the campaign. Power is good. Exclusive badges and bonus chips are better. Download the app and join loyalty to start earning more. 

Marvel Studios’ Avengers: Doomsday opens in theaters December 18. Doom & Buster’s is available through January 31, 2027. Games, attractions and prizes vary by location. For more on the Doom & Buster’s takeover, including Doomsday Zones, DOOMHOUR and the limited-time menu, visit doomandbusters.com.

About Dave & Buster’s

Founded in 1982 and headquartered in Coppell, Texas, Dave & Buster’s Entertainment, Inc. is the owner and operator of 253 stores in North America that offer premier entertainment and dining experiences to guests through two distinct brands: Dave & Buster’s and Main Event. The Company has 187 Dave & Buster’s branded stores in 43 states, Puerto Rico, and Canada, and offers guests the opportunity to “Eat, Drink, Play, and Watch” all in one location. Each store offers a full menu of entrées and appetizers, a complete selection of alcoholic and non-alcoholic beverages, and an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events. The Company also operates 66 Main Event branded stores in 24 states across the country, and offers state-of-the-art bowling, laser tag, hundreds of arcade games and virtual reality, making it the perfect place for families to connect and make memories. Internationally, the Company is in early-stage growth as a franchisor of its brands with six Dave & Buster’s franchise stores currently open. For more information about each brand, visit daveandbusters.com and mainevent.com.

About Marvel Studios’ “Avengers: Doomsday”: 

In Marvel Studios’ “Avengers: Doomsday,” beloved heroes from three distinct universes will be set on a deadly collision course and face an existential threat unlike anything they’ve ever encountered. The film is directed by Anthony and Joe Russo; produced by Kevin Feige, Louis D’Esposito and Jonathan Schwartz; and stars Robert Downey Jr., Chris Evans, Chris Hemsworth, Pedro Pascal, Paul Rudd, Anthony Mackie, Florence Pugh, Vanessa Kirby, Ebon Moss-Bachrach, Wyatt Russell, Channing Tatum, Simu Liu, Ian McKellen, Hayley Atwell, Tom Hiddleston, James Marsden, Patrick Stewart, Joseph Quinn, Sebastian Stan, David Harbour, Letitia Wright, Lewis Pullman, Kelsey Grammer, Kathryn Newton, Danny Ramirez, Winston Duke, Alan Cumming, Hannah John-Kamen, Rebecca Romijn, Alex Livinalli, Mabel Cadena, with Tenoch Huerta Mejia. “Avengers: Doomsday” releases in theaters December 18, 2026.

Media Contact: Alison Brod Marketing + Communications dandb@abmc-us.com

DOOMHOUR: Earn double tickets on all green swipe games during designated DOOMHOUR 60 minute promotional windows. Must be a D&B Rewards member to participate. Game selection varies by location. Offer is not valid in Canada locations. A Power Card® linked to a D&B Rewards account is required to participate, and guests must use linked Power Card® to redeem offer. Power Card activation fee may apply. Offer cannot be combined with other promotions. Additional restrictions may apply. Offer is subject to change or cancellation at any time. Void where prohibited. See store for details.

 

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