Perfect Corp. (NYSE: PERF) ("Perfect" or the "Company"), a
global leader in providing augmented reality (“AR”) and artificial
intelligence (“AI”) Software-as-a-Service (“SaaS”) solutions to
beauty and fashion industries, today announced its unaudited
financial results for the nine months ended September 30, 2022.
Highlights for the Nine Months Ended
September 30, 2022
- Total revenues grew to $36.2 million, up 22.1% year over
year, primarily due to an increase in AR/AI cloud solutions and
subscription revenues.
- Gross profit increased to $31.1 million from $25.6
million during the comparable periods.
- Net income was $28.5 million, compared to a net loss of
$3.1 million a year ago.
- Adjusted net income (non-IFRS)1 was $4.1 million,
compared to an adjusted net loss of $0.6 million a year ago.
- Adjusted EBITDA (non-IFRS)2 was $4.2
million compared to an adjusted EBITDA loss of $0.03 million a year
ago, primarily due to strong revenue growth and efficient expense
controls.
- The Company had 151 Key Customers3 as of September 30, 2022,
compared with 137 Key Customers as of September 30, 2021.
- As of September 30, 2022, our customer base includes 483 brand
clients, with over 510,000 digital stock keeping units (“SKUs”) for
makeup, haircare, skincare, eyewear, and jewelry products, compared
with over 450 brand clients and over 500,000 digital SKUs as of
June 30, 2022.
Ms. Alice H. Chang, the Founder, Chairwoman, and Chief Executive
Officer of Perfect, commented, “We maintained stable revenue growth
and positive adjusted EBITDA during the first nine months of 2022,
thanks to the high contract renewal rate, low client churn rate,
and strong cross-selling and upselling momentum within our existing
client base. Despite the prolonged sales cycles in new business
expansion driven by macroeconomic uncertainties and foreign
exchange volatilities, we believe that first-time buyer hesitation
is only temporary and mostly driven by the lack of clarity in
near-term macroeconomic outlook. As we take proactive steps to
adjust our operational tactics and adapt to changing market
dynamics, we remain optimistic about our long-term business
outlook. The successful completion of our de-SPAC transaction and
NYSE listing on October 31, 2022 brought us $119 million in gross
proceeds. With abundant cash reserves, loyal client base,
diversified geographic coverage, strong research and development
prowess, and solid value proposition, we believe that we are well
positioned to continue our new market expansion and capitalize on
emerging opportunities created by recent market dislocation.”
Mr. Pin-Jen (Louis) Chen, Executive Vice President and Chief
Strategy Officer of Perfect, added, “As a new public company, we
seek to strike a balance between growth and profitability. While we
keep driving revenue growth momentum through cross-selling and
upselling to existing clients, we are also managing our
expenditures with a strong return-on-investment focus to pave our
way towards sustainable profitability. Having taken the prolonged
sales cycles into consideration, we are improving our efficiency in
sales and marketing, increasing our investment in research and
development, and adopting a prudent approach in general and
administrative expenses. Although we cannot predict the near-term
business performance due to macroeconomic uncertainties, we
reiterate our long-term confidence in generating revenue growth and
positive cash flow through a combination of organic development and
synergistic acquisitions.”
Financial Results for the Nine Months
Ended September 30, 2022
Revenue
Total revenues increased by 22.1% to $36.2 million for the nine
months ended September 30, 2022 from $29.7 million for the nine
months ended September 30, 2021.
- AR/AI cloud solutions and subscription revenues increased by
31.0% to $27.3 million from $20.9 million in the same period of
2021, mostly driven by the continued strong demand for the
Company’s online virtual product try-on solutions from its brand
customers as well as an increase in its monthly active
subscribers4.
- Licensing revenues increased by 6.0% to $7.4 million from $7.0
million in the same period of 2021, primarily due to higher demand
for the Company’s software development kit (SDK) solutions.
- Advertisement revenues decreased by 22.2% to $1.4 million from
$1.8 million in the same period of 2021, consistent with the
Company’s strategy of reinforcing its market leadership in
providing AR- and AI-SaaS solutions to brand customers and
allocating less resources to its mobile apps subscription and
advertisement services.
Gross Profit
Gross profit was $31.1 million for the nine months ended
September 30, 2022, representing an 85.7% gross margin, compared to
$25.6 million, or an 86.3% gross margin, during the same period of
2021.
Total Operating Expenses
Total operating expenses increased by 24.3% to $33.3 million for
the nine months ended September 30, 2022 from $26.8 million for the
nine months ended September 30, 2021.
- Sales and marketing (“S&M”) expenses increased by 2.2% to
$18.2 million from $17.8 million in the same period of 2021,
primarily due to an increase in S&M headcount and related
personnel expenses.
- General and administrative (“G&A”) expenses increased by
173.0% to $7.2 million from $2.6 million in the same period of
2021, primarily due to the professional service fees incurred
during the course of the company’s de-SPAC transaction and public
listing. Excluding those expenses that were one-time in nature,
recurring G&A expenses was $2.9 million during the first nine
months of 2022.
- Research and development (“R&D”) expenses increased by
24.7% to $7.9 million from $6.3 million in the same period of 2021,
primarily due to an increase in R&D headcount and related
personnel expenses.
Net Income
Net income was $28.5 million for the nine months ended September
30, 2022, compared to a net loss of $3.1 million during the same
period of 2021.
Adjusted Net Income (Non-IFRS)
Adjusted net income for the nine months ended September 30, 2022
was $4.1 million, compared to a net loss of $0.6 million during the
same period of 2021.
Adjusted EBITDA (Non-IFRS)
Adjusted EBITDA improved to positive $4.2 million for the nine
months ended September 30, 2022 from negative $0.03 million during
the same period of 2021, primarily due to strong revenue growth and
efficient expense controls.
Liquidity
As of September 30, 2022, the Company held $84.0 million in cash
and cash equivalents, up from $80.5 million as of December 31,
2021. Subsequently on October 31, 2022, the Company completed its
public listing through a de-SPAC transaction, which added $113
million in net proceeds to its balance sheet.
Update on Business Combination
Projections
Taking into consideration the Company’s unaudited financial
results for the nine months ended September 30, 2022, the Company’s
revenue for the year ended December 31, 2022 is likely to be lower
than the revenue for the same year presented in the Business
Combination Projections,5 primarily because: (i) the Company has
been facing an increasingly challenging macroeconomic environment,
including growing inflation, shrinking central bank balance sheet,
rising interest rates, and declining consumer spending; (ii) the
Company’s prospective brand customers have become more cautious
with their expenditures, and are taking longer time to evaluate our
proposals and sign contracts; (iii) the Company’s planned business
expansions into new segments such as jewelry and fashion have taken
longer time to materialize ; and (iv) the recent strength of the
U.S. dollar against all other currencies has resulted in additional
headwinds for the Company’s revenue growth.
The Company further cautions that investors, when making any
investment decisions, shall only refer to the Company’s actual
financials results disclosed in the Company’s filings with the
Securities and Exchange Commission and press releases, and shall
not place any reliance on any piece of the Business Combination
Projections.
Conference Call
Information
The Company's management will hold an earnings conference call
at 7 a.m. Eastern Time on November 30, 2022 (8 p.m. Taipei Time on
November 30, 2022) to discuss the financial results. For
participants who wish to join the call, please complete online
registration using the link provided below in advance of the
conference call. Upon registering, each participant will receive a
participant dial-in number, a direct event passcode, and a unique
access PIN, which can be used to join the conference call.
Registration Link:
https://registrations.events/direct/Q4E60155
A live and archived webcast of the conference call will also be
available at the Company's investor relations website at
https://ir.perfectcorp.com.
About Perfect Corp.
Founded in 2015, Perfect is a global leader in providing AR and
AI SaaS solutions to beauty and fashion industries. Utilizing
facial 3D modeling, and AI deep learning technologies, Perfect
empowers beauty brands with product try-on, facial diagnostics, and
digital consultation solutions to provide consumers with an
enjoyable, personalized, and convenient omnichannel shopping
experience. Today, Perfect has the leading market share in helping
the world’s top beauty brands execute digital transformation,
improve customer engagement, increase purchase conversion, and
drive sales growth while maintaining environmental sustainability
and fulfilling social responsibilities. For more information, visit
https://ir.perfectcorp.com/.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the U.S.
Securities Exchange Act of 1934, as amended, or the Exchange Act,
that are based on beliefs and assumptions and on information
currently available to Perfect. In some cases, you can identify
forward-looking statements by the following words: “may,” “will,”
“could,” “would,” “should,” “expect,” “intend,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue,” “ongoing,” “target,” “seek” or the
negative or plural of these words, or other similar expressions
that are predictions or indicate future events or prospects,
although not all forward-looking statements contain these words.
Any statements that refer to expectations, projections or other
characterizations of future events or circumstances, including
strategies or plans, are also forward-looking statements. These
statements involve risks, uncertainties and other factors that may
cause actual results, levels of activity, performance or
achievements to be materially different from those expressed or
implied by these forward-looking statements. These statements are
based on Perfect’s reasonable expectations and beliefs concerning
future events and involve risks and uncertainties that may cause
actual results to differ materially from current expectations.
These factors are difficult to predict accurately and may be beyond
Perfect’s control. Forward-looking statements in this communication
or elsewhere speak only as of the date made. New uncertainties and
risks arise from time to time, and it is impossible for Perfect to
predict these events or how they may affect Perfect. In addition,
risks and uncertainties are described in Perfect’s filings with the
Securities and Exchange Commission. These filings may identify and
address other important risks and uncertainties that could cause
actual events and results to differ materially from those contained
in the forward-looking statements. Perfect cannot assure you that
the forward-looking statements in this communication will prove to
be accurate. There may be additional risks that Perfect presently
does not know or that Perfect currently does not believe are
immaterial that could also cause actual results to differ from those
contained in the forward-looking statements. In light of the
significant uncertainties in these forward-looking statements, you
should not regard these statements as a representation or warranty
by Perfect, its directors, officers or employees or any other
person that Perfect will achieve its objectives and plans in any
specified time frame, or at all. Except as required by applicable
law, Perfect does not have any duty to, and does not intend to,
update or revise the forward-looking statements in this
communication or elsewhere after the date of this communication.
You should, therefore, not rely on these forward-looking statements
as representing the views of Perfect as of any date subsequent to
the date of this communication.
Use of Non-IFRS Financial Measures
This press release and accompanying tables contain certain
non-IFRS financial measures, including adjusted net income and
adjusted EBITDA, as supplemental metrics in reviewing and assessing
Perfect’s operating performance and formulating its business plan.
Perfect defined these non-IFRS financial measures as follows:
Adjusted net income is defined as
net income (loss) excluding one-off transaction costs (e.g. costs
related to de-SPAC transaction), non-cash equity-based
compensation, non-cash evaluation (gain)/loss of preferred shares,
and foreign exchange (gain)/loss. For a reconciliation of adjusted
net income to net income (loss), see the reconciliation table
included elsewhere in this press release.
Adjusted EBITDA is defined as net
income (loss) excluding depreciation and amortization expense,
income tax expense, interest and finance costs, one-off transaction
costs (e.g. costs related to de-SPAC transaction), non-cash
equity-based compensation, non-cash evaluation (gain)/loss of
preferred shares, and foreign exchange (gain)/loss. For a
reconciliation of adjusted EBITDA to net income (loss), see the
reconciliation table included elsewhere in this press release.
Non-IFRS financial measures are not defined under IFRS and are
not presented in accordance with IFRS. Non-IFRS financial measures
have limitations as analytical tools, which possibly do not reflect
all items of expense that affect our operations. Share-based
compensation expenses have been and may continue to be incurred in
our business and are not reflected in the presentation of the
non-IFRS financial measures. In addition, the non-IFRS financial
measures Perfect uses may differ from the non-IFRS measures used by
other companies, including peer companies, and therefore their
comparability may be limited. The presentation of these non-IFRS
financial measures is not intended to be considered in isolation
from or as a substitute for the financial information prepared and
presented in accordance with IFRS. The items excluded from our
adjusted net income and adjusted EBITDA are not driven by core
results of operations and render comparison of IFRS financial
measures with prior periods less meaningful. We believe adjusted
net income and adjusted EBITDA provide useful information to
investors and others in understanding and evaluating our results of
operations, as well as providing a useful measure for
period-to-period comparisons of our business performance. Moreover,
such non-IFRS measures are used by our management internally to
make operating decisions, including those related to operating
expenses, evaluate performance, and perform strategic planning and
annual budgeting.
PERFECT
CORP. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED BALANCE SHEETS
DECEMBER
31, 2021 AND SEPTEMBER 30, 2022
(Expressed
in thousands of United States dollars)
December 31, 2021
September 30, 2022
Assets
AMOUNT
AMOUNT
Current assets
Cash and cash equivalents
$
80,453
$
84,014
Accounts receivable, net
6,568
7,431
Current contract assets
-
3,404
Other receivables
6
95
Other receivables - related parties
-
14
Current income tax assets
63
69
Inventories
88
50
Other current assets
299
414
Total current assets
87,477
95,491
Non-current assets
Property, plant and equipment
407
316
Right-of-use assets
620
422
Intangible assets
100
100
Deferred income tax assets
165
132
Guarantee deposits paid
135
123
Total non-current assets
1,427
1,093
Total assets
$
88,904
$
96,584
PERFECT
CORP. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED BALANCE SHEETS
DECEMBER
31, 2021 AND SEPTEMBER 30, 2022
(Expressed
in thousands of United States dollars)
December 31, 2021
September 30, 2022
Liabilities and Equity
AMOUNT
AMOUNT
Current liabilities
Current contract liabilities
$
9,021
$
11,346
Other payables
8,706
8,639
Other payables - related parties
73
49
Current tax liabilities
104
98
Current provisions
1,058
1,649
Current lease liabilities
449
295
Other current liabilities
384
121
Total current liabilities
19,795
22,197
Non-current liabilities
Non-current financial liabilities at fair
value through profit or loss
259,230
230,863
Non-current lease liabilities
189
131
Net defined benefit liability,
non-current
104
91
Guarantee deposits received
28
24
Total non-current liabilities
259,551
231,109
Total liabilities
279,346
253,306
Equity
Common stock
30,152
32,815
Capital surplus
2,871
7,380
Accumulated deficit
(
224,097
)
(
195,589
)
Other equity interest
632
(
1,328
)
Total equity
(
190,442
)
(
156,722
)
Total liabilities and equity
$
88,904
$
96,584
PERFECT
CORP. AND SUBSIDIARIES
UNAUDTIED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2022
(Expressed
in thousands of United States dollars)
Nine months ended September
30
2021
2022
Items
AMOUNT
AMOUNT
Revenue
$
29,681
$
36,229
Costs of sales and services
(
4,054
)
(
5,168
)
Gross profit
25,627
31,061
Operating expenses
Sales and marketing expenses
(
17,829
)
(
18,228
)
General and administrative expenses
(
2,628
)
(
7,177
)
Research and development expenses
(
6,343
)
(
7,910
)
Total operating expenses
(
26,800
)
(
33,315
)
Operating profit (loss)
(
1,173
)
(
2,254
)
Non-operating income and expenses
Interest income
98
620
Other income
12
12
Other gains and losses
(
1,794
)
30,337
Finance costs
(
6
)
(
6
)
Total non-operating income and
expenses
(
1,690
)
30,963
Income (loss) before income tax
(
2,863
)
28,709
Income tax expense
(
215
)
(
201
)
Net income (loss)
($
3,078
)
$
28,508
Other comprehensive income
Components of other comprehensive
income that will not be reclassified to profit or loss
Credit risk changes in financial
instrument-Preference shares
$
-
($
7
)
Components of other comprehensive
income that will be reclassified to profit or loss
Exchange differences arising on
translation of foreign operations
92
(
1,953
)
Other comprehensive income, net
$
92
($
1,960
)
Total comprehensive income
(loss)
($
2,986
)
$
26,548
Net income (loss), attributable to:
Shareholders of the parent
($
3,078
)
$
28,508
Total comprehensive income (loss)
attributable to:
Shareholders of the parent
($
2,986
)
$
26,548
PERFECT
CORP. AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES – ADJUSTED NET INCOME
(LOSS) CALCULATION
FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2022
(Expressed
in thousands of United States dollars)
Nine months ended September
30
2021
2022
Items
AMOUNT
AMOUNT
Net Income (Loss)
($
3,078
)
$
28,508
One-off Transaction Costs
521
4,316
Non-Cash Equity-Based Compensation
139
1,580
Non-Cash Evaluation (Gain)/Loss of
Preferred Shares
1,129
(
28,375
)
Foreign Exchange (Gain)/Loss
665
(
1,962
)
Adjusted Net Income (Loss)
($
624
)
$
4,067
PERFECT
CORP. AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES – ADJUSTED EBITDA
CALCULATION
FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2022
(Expressed
in thousands of United States dollars)
Nine months ended September
30
2021
2022
Items
AMOUNT
AMOUNT
Net Income (Loss)
($
3,078
)
$
28,508
Depreciation and Amortization Expense
473
582
Income Tax Expense
215
201
Interest and Finance costs
(
91
)
(
614
)
One-off Transaction Costs
521
4,316
Non-Cash Equity-Based Compensation
139
1,580
Non-Cash Evaluation (Gain)/Loss of
Preferred Shares
1,129
(
28,375
)
Foreign Exchange (Gain)/Loss
665
(
1,962
)
Adjusted EBITDA
($
27
)
$
4,236
_____________________________ 1 Adjusted net income is a
non-IFRS financial measure. See the “Use of Non-IFRS Financial
Measures” section of this communication for the definition of such
non-IFRS measure. 2 Adjusted EBITDA is a non-IFRS financial
measure. See the “Use of Non-IFRS Financial Measures” section of
this communication for the definition of such non-IFRS measure. 3
Key Customers refers to the Company’s brand customers who
contributed revenue of more than $50,000 in the trailing 12 months
ended on the measurement date. 4 Monthly active subscribers refer
to paying users who subscribes to the Company’s mobile apps’
premium functions and maintain an active subscription at the end of
the measured month. 5 “Business Combination Projections” refer to
the projections under the section titled “Certain Projected
Financial Information” in Amendment No. 6 to the Company’s
registration statement on Form F-4, as filed with the Securities
and Exchange Commission on September 29, 2022, which had been
provided to Provident’s board of directors in February 2022 for the
purpose of its evaluation of the business combination between the
Company and Provident.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221130005427/en/
Investor Relations
Robin Yang, Partner ICR, LLC Email:
Investor_Relations@PerfectCorp.com Phone: +1 (646) 880 9057
Category: Investor Relations
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