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 full year ended December 31, 2022.
Highlights for the Full Year of
2022
- Total revenues grew to $47.3 million, up 16.0% year over
year, primarily due to an increase in AR/AI cloud solutions and
subscription revenues.
- Gross profit increased to $40.2 million from $35.0
million in 2021.
- Net loss was $161.7 million, compared to $156.9 million
in 2021.
- Adjusted net income (non-IFRS) was $4.1 million,
compared to an adjusted net loss (non-IFRS) of $1.8 million in
20211.
- Adjusted EBITDA (non-IFRS)2 was positive
$3.1 million compared to a negative adjusted EBITDA of $0.9 million
in 2021, primarily due to strong revenue growth and efficient
expense controls.
- The Company had 152 Key Customers3 as of December 31, 2022,
compared with 124 Key Customers as of December 31, 2021.
- As of December 31, 2022, our customer base includes 509 brand
clients, with over 550,000 digital stock keeping units (“SKUs”) for
makeup, haircare, skincare, eyewear, and jewelry products, compared
with 434 brand clients and over 439,000 digital SKUs as of December
31, 2021.
Ms. Alice H. Chang, the Founder, Chairwoman, and Chief Executive
Officer of Perfect, commented, “We finished 2022 with steady
revenue growth, an expanded customer base, and positive cash flow,
despite the worsening macro climate and elongated sales cycles in
the second half of the year. Proactively responding to these
challenges, we optimized our expenses, channeled our resources to
boost uptake of our digital solutions, further explored categories
beyond beauty, and invested into promising new geographies. We
remain ideally positioned to seize growth opportunities generated
by the intensifying digitalization of the beauty and fashion
industries, brands’ pivot to online retail, and the rapid growth in
use cases for AR/AI technology. Going forward, we remain committed
to driving top-line growth while focusing on profitability in the
face of an increasingly challenging environment, as we continue
executing on our mission to transform the world with our digital
tech innovations.”
Mr. Pin-Jen (Louis) Chen, Executive Vice President and Chief
Strategy Officer of Perfect, added, “We maintained our growth
momentum during 2022, despite a turbulent macroeconomic
environment. In addition to our solid top line results, we
continued to add new customers, up- and cross-sell to existing
customers, and expand into fresh categories beyond beauty. Facing
elongated sales cycles, we retained our focus on improving
efficiency and profitability while investing responsibly and
prudently for the future. Driven by these successful initiatives,
we generated positive revenue growth for the year. While
uncertainties in the macro environment remain, our strong cash
position and streamlined operations leave us well-positioned to
navigate the challenging times ahead as we deliver on our long-term
growth strategy.”
Full Year 2022 Financial
Results
Revenue
Total revenues in the full year of 2022 increased by 16.0% to
$47.3 million from $40.8 million in the full year of 2021.
- AR/AI cloud solutions and subscription revenues increased by
25.3% to $36.9 million from $29.5 million in the full year 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 decreased by 4.8% to $8.4 million, or 17.8%
of total revenues, primarily caused by our brand customers’ lower
demand for in-store offline solutions while brand customers shift
to investing into online virtual product try-ons.
- Advertisement revenues decreased by 24.1% to $1.8 million from
$2.4 million in the full year of 2021, consistent with the
Company’s strategy of reinforcing its market leadership in
providing AR- and AI-SaaS solutions and allocating less resources
to advertisement services.
Gross Profit
Gross profit in the full year of 2022 was $40.2 million,
representing an 84.9% gross margin, compared to $35.0 million, or
an 85.9% gross margin, in the full year of 2021.
Total Operating Expenses
Total operating expenses in the full year of 2022 increased by
177.7% to $111.2 million from $40.1 million in the full year of
2021, mainly due to the one-off transaction cost in connection with
our U.S. public listing.
- Sales and marketing (“S&M”) expenses decreased by 2.9% to
$24.5 million from $25.3 million in the full year of 2021,
primarily due to the Company’s decreased spending on paid
advertising campaigns in connection with our mobile apps
subscription, because we focused on the improvement of the organic
user acquisition rate and trial-to-paid conversion rate of our
mobile apps in 2022.
- Research and development (“R&D”) expenses increased by 6.5%
to $10.5 million from $9.8 million in the full year of 2021,
primarily due to an increase in R&D headcount and related
personnel expenses.
- General and administrative (“G&A”) expenses increased to
$76.2 million from $4.9 million in the full year of 2021, primarily
due to the $71.2 million one-off transaction cost that the Company
incurred during the course of its de-SPAC transaction and public
listing5. Excluding those expenses that were one-time in nature,
recurring G&A expenses were $5.0 million in the full year of
2022.
Net Loss
Net loss in the full year of 2022 was $161.7 million, compared
to $156.9 million during the full year of 2021.
Adjusted Net Income (Non-IFRS)
Our adjusted net income in 2022 was $4.1 million, compared to an
adjusted net loss (non-IFRS) of $1.8 million in 2021, primarily due
to our strong revenue growth and efficient expense control,
especially in the decrease of paid advertising campaigns.
Furthermore, higher interest rate resulted in a significant
increase of interest income.
Adjusted EBITDA (Non-IFRS)
Adjusted EBITDA in the full year of 2022 was $3.1 million,
compared to negative $0.9 million in the full year of 2021,
primarily due to strong subscription revenue growth, as well as
more efficient expense controls across all functions, especially in
S&M paid advertising expenses.
Liquidity
As of December 31, 2022, the Company held $162.6 million in cash
and cash equivalents (or $192.6m if including the 6-month time
deposits of $30.0 million, which are classified as current
financial assets at amortized cost under IFRS), up from $80.5
million as of December 31, 2021. A significant contributor to this
increase was the completion of the Company’s public listing via a
de-SPAC transaction on October 31, 2022.
Business Outlook
The global consumer discretionary industry and consumer spending
are expected to continue to face a range of challenges during 2023,
such as global high inflation, elongated sales cycles, significant
fluctuations in foreign exchange rates, and geopolitical tensions
and conflict. Despite these challenges, the Company remains
confident in its long-term growth prospects and retains its
commitment to iterating its products and services, further
enhancing its digital solutions, expanding its customer base,
diversifying revenue streams, and further optimizing operating
efficiency.
Conference Call
Information
The Company's management will hold an earnings conference call
at 7 a.m. Eastern Time on March 7, 2023 (8 p.m. Taipei Time on
March 7, 2023) 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 and a unique access PIN, which can be used to join
the conference call.
Registration Link:
https://registrations.events/direct/Q4E61201
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
material 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 (loss)
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 (loss) 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 valuation (gain)/loss of preferred shares,
and foreign exchange (gain)/loss. The majority of these adjustments
relate to items in zero tax jurisdictions. With respect to non-zero
tax jurisdictions, any related deferred tax assets do not qualify
for recognition because of the cumulative losses. Hence, none of
the adjusted net income in each of the two years ended December 31,
2022 was subject to income tax effects. For a reconciliation of
adjusted net income (loss) 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 valuation (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 (loss) and adjusted EBITDA are non-cash
expenses or not driven by core results of operations and render
comparison of IFRS financial measures with prior periods less
meaningful. We believe adjusted net income (loss) 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.
Category: Investor Relations
PERFECT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND
2022 (Expressed in thousands of United States
dollars)
December 31, 2021
December 31, 2022
Assets
Amount
Amount
Current assets
Cash and cash equivalents
$
80,453
$
162,616
Current financial assets at amortized
cost
-
30,000
Current contract assets
-
3,660
Accounts receivables
6,568
7,756
Other receivables
6
314
Current income tax assets
63
77
Inventories
88
45
Other current assets
299
4,705
Total current assets
87,477
209,173
Non-current assets
Property, plant and equipment
407
289
Right-of-use assets
620
323
Intangible assets
100
119
Deferred income tax assets
165
244
Guarantee deposits paid
135
125
Total non-current assets
1,427
1,100
Total assets
$
88,904
$
210,273
PERFECT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued) DECEMBER 31, 2021
AND 2022 (Expressed in thousands of United States
dollars)
December 31, 2021
December 31, 2022
Liabilities and Equity
Amount
Amount
Current liabilities
Current contract liabilities
$
9,021
$
13,024
Other payables
8,706
9,308
Other payables – related parties
73
63
Current tax liabilities
104
155
Current provisions
1,058
1,855
Current lease liabilities
449
251
Other current liabilities
384
261
Total current liabilities
19,795
24,917
Non-current liabilities
Non-current financial liabilities at fair
value through profit or loss
259,230
3,207
Non-current lease liabilities
189
87
Net defined benefit liability,
non-current
104
73
Guarantee deposits received
28
25
Total non-current liabilities
259,551
3,392
Total liabilities
279,346
28,309
Equity
Capital stock
Common stock
30,152
-
Perfect Class A Ordinary Shares, $0.1 par
value
-
10,147
Perfect Class B Ordinary Shares, $0.1 par
value
-
1,679
Capital surplus
Capital surplus
2,871
556,429
Retained earnings
Accumulated deficit
(224,097
)
(385,819
)
Other equity interest
Other equity interest
632
(472
)
Total equity
(190,442
)
181,964
Total liabilities and equity
$
88,904
$
210,273
PERFECT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS
ENDED DECEMBER 31, 2021 AND 2022 (Expressed in thousands of
United States dollars)
Years Ended December
31
2021
2022
Items
Amount
Amount
Revenue
$
40,760
$
47,300
Cost of sales and services
(5,736
)
(7,130
)
Gross profit
35,024
40,170
Operating expenses
Sales and marketing expenses
(25,287
)
(24,544
)
General and administrative expenses
(4,936
)
(76,219
)
Research and development expenses
(9,838
)
(10,481
)
Total operating expenses
(40,061
)
(111,244
)
Operating loss
(5,037
)
(71,074
)
Non-operating income and expenses
Interest income
131
2,029
Other income
118
75
Other gains and losses
(151,638
)
(92,474
)
Finance costs
(9
)
(8
)
Total non-operating income and
expenses
(151,398
)
(90,378
)
Loss before income tax
(156,435
)
(161,452
)
Income tax expense
(417
)
(292
)
Net loss
$
(156,852
)
$
(161,744
)
Other comprehensive income
(loss)
Components of other comprehensive
income (loss) that will not be reclassified to profit or
loss
Actuarial (losses) gains on defined
benefit plans
$
(24
)
$
22
Credit risk changes in financial
instrument
Preferred shares
(58
)
(7
)
Total components of other
comprehensive
income (loss) that will not be
reclassified to profit or loss
(82
)
15
Components of other comprehensive
income that will be reclassified to profit or loss
Exchange differences arising on
translation of foreign operations
123
(1,097
)
Other comprehensive income (loss),
net
$
41
(1,082
)
Total comprehensive loss
$
(156,811
)
$
(162,826
)
Net loss, attributable to:
Shareholders of the parent
$
(156,852
)
$
(161,744
)
Total comprehensive loss attributable
to:
Shareholders of the parent
$
(156,811
)
$
(162,826
)
Loss per share (in dollars)
Basic loss per share of Class A and Class
B Ordinary Shares
$
(2.96
)
$
(2.37
)
Diluted loss per share of Class A and
Class B Ordinary Shares
$
(2.96
)
$
(2.37
)
PERFECT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED
DECEMBER 31, 2021 AND 2022 (Expressed in thousands of United
States dollars)
Years Ended December
31
2021
2022
CASH FLOWS FROM
OPERATING ACTIVITIES
Loss before tax
$
(156,435
)
$
(161,452
)
Adjustments to reconcile profit (loss)
Depreciation expense
598
703
Amortization expense
47
63
Interest income
(131
)
(2,029
)
Interest expense
9
8
Net loss on financial liabilities at fair
value through profit or loss
150,745
93,777
Employees’ stock option cost
1,782
2,117
Directors’ share-based compensation
-
58
Recognition of listing expense
-
65,264
Changes in operating assets and
liabilities
Accounts receivable
(1,059
)
(1,479
)
Current contract assets
-
(3,701
)
Other receivables
7
(3
)
Other receivables – related parties
16
-
Inventories
-
43
Other current assets
(78
)
(4,418
)
Current contract liabilities
4,108
4,783
Accounts payable
-
-
Other payables
1,653
772
Other payables – related parties
(11
)
(2
)
Current provisions
586
897
Other current liabilities
255
(80
)
Net defined benefit liability,
non-current
-
1
Cash inflow (outflow) generated from
operations
2,092
(4,678
)
Interest received
129
1,724
Interest paid
(9
)
(8
)
Income tax paid
(664
)
(343
)
Net cash flows from (used in) operating
activities
1,548
(3,305
)
CASH FLOWS FROM
INVESTING ACTIVITIES
Acquisition of financial assets at
amortized cost
-
(30,000
)
Proceeds from disposal of financial assets
at amortized cost
-
-
Acquisition of property, plant and
equipment
(154
)
(165
)
Acquisition of intangible assets
(32
)
(93
)
Increase in guarantee deposits paid
(27
)
-
Net cash flows from (used in) investing
activities
(213
)
(30,258
)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from financial liabilities
designated at fair value through profit or loss
-
-
Repayment of principal portion of lease
liabilities
(393
)
(457
)
Employee stock options exercised
330
5,592
Recapitalization
-
112,893
Payments to acquire treasury shares
-
-
Net cash flows from (used in) financing
activities
(63
)
118,028
Effects of exchange rates changes on cash
and cash equivalents
163
(2,302
)
Net increase in cash and cash
equivalents
1,435
82,163
Cash and cash equivalents at beginning
of year
79,018
80,453
Cash and cash equivalents at end of
year
$
80,453
$
162,616
Reconciliation of non-IFRS financial
measures– adjusted net income (loss)
calculation
Years ended December
31
2021
2022
Items
Amount
Amount
Net Income (Loss)
$
(156,852
)
$
(161,744
)
One-off Transaction Costs
1,594
71,152
Non-Cash Equity-Based Compensation
1,782
2,175
Non-Cash Valuation (Gain)/Loss of
Financial Liabilities
150,745
93,777
Foreign Exchange (Gain)/Loss
893
(1,303
)
Adjusted Net Income (Loss)
$
(1,838
)
$
4,057
Reconciliation of non-IFRS financial measures – adjusted
EBITDA calculation
Years ended December
31
2021
2022
Items
Amount
Amount
Net Income (Loss)
$
(156,852
)
$
(161,744
)
Depreciation and Amortization Expense
645
766
Income Tax Expense
417
292
Interest Income and Finance costs
(122
)
(2,021
)
One-off Transaction Costs
1,594
71,152
Non-Cash Equity-Based Compensation
1,782
2,175
Non-Cash Valuation (Gain)/Loss of
Financial Liabilities
150,745
93,777
Foreign Exchange (Gain)/Loss
893
(1,303
)
Adjusted EBITDA
$
(898
)
$
3,094
1 Adjusted net income (loss) 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 The one-off
transaction cost in 2022 included non-cash listing expense, which
refers to the excess of the fair value of our Class A Ordinary
Shares issued over the fair value of the identifiable net assets of
Provident Acquisition Corp. (“Provident”), the SPAC involved in the
Company’s de-SPAC transaction, on the closing date of this
transaction, and professional services expenditures that the
Company incurred in connection with the de-SPAC transaction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230306005529/en/
Investor Relations Contact Robin Yang, Partner
ICR, LLC Email: Investor_Relations@PerfectCorp.com Phone: +1 (646)
880 9057
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