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 three months ended March 31, 2023.
Highlights for the Three Months Ended
March 31, 2023
- Total revenues grew to $12.1 million, up 9.7% quarter
over quarter and up 0.9% year over year, primarily due to strong
growth momentum in AR/AI cloud solutions and subscription
revenues.
- Gross profit was $9.6 million, compared to $10.4 million
in the same period of 2022.
- Net Income was $0.7 million, compared to a net loss of
$0.5 million in the same period of 2022.
- Adjusted net income (non-IFRS)1 was $1.4 million,
compared to adjusted net income (non-IFRS) of $1.2 million in the
same period of 2022.
- The Company had 158 Key Customers2 as of March 31, 2023,
compared with 152 Key Customers as of December 31, 2022.
- As of March 31, 2023, our customer base included 525 brand
clients, with over 590,000 digital stock keeping units (“SKUs”) for
makeup, haircare, skincare, eyewear, and jewelry products, compared
with 509 brand clients and over 550,000 digital SKUs as of December
31, 2022.
Ms. Alice H. Chang, the Founder, Chairwoman, and Chief Executive
Officer of Perfect, commented, “We believe that our value
proposition to beauty brands and customers remains intact. During
the quarter, we offset the impact of the prolonged sales cycle by
finetuning our strategies and expanding our sales pipeline,
bringing in additional brand customers from a variety of regions.
In addition, we shifted our focus to grow our online services as
driven by stronger market demand. At the same time, our mobile
beauty app business continues its strong growth momentum,
stabilizing and balancing our revenue streams. Powered by our
market leadership in AI/AR solutions, a solid customer base,
renewed focus on online services, and an optimized cost structure,
we remain committed to driving top-line growth while focusing on
profitability. As we direct more resources to online business going
forward, we encourage investors to closely follow the future growth
trajectory of our AR/AI cloud solutions and subscription
services.”
Mr. Pin-Jen (Louis) Chen, Executive Vice President and Chief
Strategy Officer of Perfect, added, “Steady demand for our virtual
product try-on solutions, healthy customer renewal rates, and
robust growth in mobile beauty app subscriptions delivered solid
results for the quarter. Facing an uncertain macro environment, we
further optimized our costs and improved and evolved our new
customer acquisition capabilities. With our strong cash position,
stable customer base, and expansion into new categories and
geographies, we are well positioned to capitalize on future growth
opportunities.”
Financial Results for the Three Months
Ended March 31, 2023
Revenue
Total revenue was $12.1 million for the three months ended March
31, 2023, up by 9.7% quarter over quarter from $11.1 million at the
end of 2022, and up by 0.9% from $12.0 million in the same period
of 2022.
- AR/AI cloud solutions and subscription revenue increased by
18.7% from $8.7 million in the same period of 2022 to $10.4
million, representing 85.4% of our total revenue in the first
quarter of 2023, mainly due to stable demand for our online virtual
product try-on solutions from brand customers and strong growth in
our mobile beauty app subscriptions. Our mobile beauty app active
subscribers grew by 53.3% year over year, reaching a historical
high of over 694,000 active subscribers at the end of the first
quarter of 2023. This increase demonstrates the robust growth
momentum of our suite of mobile beauty apps.
- Licensing revenue, which is mostly generated from our more
traditional offline services, was $1.5 million, compared to $2.8
million in the same period of 2022, representing 12.3% of our total
revenue and a change of 47.1%, primarily due to brand customers’
elevated interests in digital e-commerce rather than traditional
physical store deployment, despite the pandemic coming to an
end.
- Advertisement revenue was $0.3 million, compared to $0.5
million in the same period of 2022, consistent with the Company’s
strategy of reinforcing its market leadership in providing AR- and
AI-SaaS solutions to customers and allocating less resources to
advertisement services.
Gross Profit
Gross profit was $9.6 million for the three months ended March
31, 2023, representing a 78.8% gross margin, compared to $10.4
million, or an 86.2% gross margin, in the same period of 2022. This
was due to a change in our cost of goods sold, which was driven by
the growth in mobile beauty app subscriptions which resulted in
higher platform fees paid to third-party digital distribution
platforms (Apple and Google).
Total Operating Expenses
Total operating expenses decreased by 0.9% to $11.1 million for
the three months ended March 31, 2023 from $11.2 million in the
same period of 2022, demonstrating management’s successful efforts
to control costs and enhance productivity.
- Sales and marketing (“S&M”) expenses remained flat at $6.0
million, representing 49.6% of our total revenue, on par with the
same ratio during the same period of last year. This shows
effective cost control from management in this quarter.
- Research and development (“R&D”) expenses decreased by 3.1%
from $2.7 million in the same period of 2022 to $2.6 million,
representing 21.6% of total revenue, compared to 22.5% in the same
period of last year. The decrease was mainly because the majority
of the Company’s R&D expenses incurred in Taiwan and were paid
in New Taiwan Dollar while the Company generated the majority of
revenue in US dollars, which has strengthened relative to the New
Taiwan Dollar.
- General and administrative (“G&A”) expenses decreased by
1.8% from $2.5 million to $2.4 million, or 19.9% of total revenue,
compared to 20.4% in the same period of last year, showing that
there were no significant changes during the quarter.
Net Income
Net income was $0.7 million for the three months ended March 31,
2023, compared to a net loss of $0.5 million during the same period
of 2022, mainly driven by $2.2 million interest income during the
quarter.
Adjusted Net Income (Non-IFRS)
Adjusted net income was $1.4 million for the three months ended
March 31, 2023, compared to adjusted net income of $1.2 million in
the same period of 2022.
Liquidity
As of March 31, 2023, the Company held $95.1 million in cash and
cash equivalents (or $196.1 million when including 6-month and
longer time deposits of $101.0 million, which are classified as
current financial assets at amortized cost under IFRS), compared to
$162.6 million as of December 31, 2022 (or $192.6 million when
including time deposits).
Recent Developments
On March 20, 2023, the Company filed a Form 6-K with the SEC
informing its investors that it does not maintain any accounts or
hold any deposits or securities at Silicon Valley Bank (“SVB”) or
Credit Suisse Group AG (“Credit Suisse”), and it does not otherwise
have any material banking relationship, or a direct or indirect
affiliation, with SVB, any other U.S. regional banks, or Credit
Suisse.
Business Outlook
Looking further into 2023, the strong growth momentum in online
AR/AI cloud solutions and subscriptions in the first quarter of
2023 aligns with management’s expectations and is a result of our
strategies to prioritize AI innovations and online subscription
solutions.
In addition, the robust growth trajectory of our mobile beauty
apps reflects consumers’ subscription preference to unlock premium
features and to add-on the new AIGC features. We will continue to
invest in more premium value-add AI features in our family of
mobile beauty apps to fuel the future growth of our online
services.
As brands and retailers continue to undergo a digital
transformation, AI and AR technology is a crucial component for
bringing immersive and personalized shopping experiences across
omni-channels. To conclude, with the above strong signs of growth
in each respective area and a healthy market demand, the Company is
confident to deliver strong growth in 2023.
Conference Call
Information
The Company's management will hold an earnings conference call
at 7 a.m. Eastern Time on April 26, 2023 (7 p.m. Taipei Time on
April 26, 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/Q4E61159
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, 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 costs3
(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 (loss) 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 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 provides 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, 2022 AND MARCH
31, 2023
(Expressed in thousands of
United States dollars)
December 31, 2022
March 31, 2023
Assets
Amount
Amount
Current assets
Cash and cash equivalents
$
162,616
$
95,117
Current financial assets at amortized
cost
30,000
101,000
Current contract assets
3,660
2,135
Accounts receivables
7,756
9,383
Other receivables
314
384
Current income tax assets
77
97
Inventories
45
38
Other current assets
4,705
4,506
Total current assets
209,173
212,660
Non-current assets
Property, plant and equipment
289
385
Right-of-use assets
323
444
Intangible assets
119
134
Deferred income tax assets
244
242
Guarantee deposits paid
125
125
Total non-current assets
1,100
1,330
Total assets
$
210,273
$
213,990
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE
SHEETS (continued)
DECEMBER 31, 2022 AND MARCH
31, 2023
(Expressed in thousands of
United States dollars)
December 31, 2022
March 31, 2023
Liabilities and Equity
Amount
Amount
Current liabilities
Current contract liabilities
$
13,024
$
17,192
Other payables
9,308
7,455
Other payables – related parties
63
87
Current tax liabilities
155
20
Current provisions
1,855
2,032
Current lease liabilities
251
252
Other current liabilities
261
172
Total current liabilities
24,917
27,210
Non-current liabilities
Non-current financial liabilities at fair
value through profit or loss
3,207
3,155
Non-current lease liabilities
87
215
Net defined benefit liability,
non-current
73
74
Guarantee deposits received
25
25
Total non-current liabilities
3,392
3,469
Total liabilities
28,309
30,679
Equity
Capital stock
Perfect Class A Ordinary Shares, $0.1 (in
dollars) par value
10,147
10,147
Perfect Class B Ordinary Shares, $0.1 (in
dollars) par value
1,679
1,679
Capital surplus
Capital surplus
556,429
557,079
Retained earnings
Accumulated deficit
(385,884)
(385,189)
Other equity interest
Other equity interest
(407)
(405)
Total equity
181,964
183,311
Total liabilities and equity
$
210,273
$
213,990
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED
MARCH 31, 2022 AND 2023
(Expressed in thousands of
United States dollars)
Three months ended March
31
2022
2023
Items
Amount
Amount
Revenue
$
12,040
$
12,145
Cost of sales and services
(1,668)
(2,569)
Gross profit
10,372
9,576
Operating expenses
Sales and marketing expenses
(6,006)
(6,027)
General and administrative expenses
(2,456)
(2,413)
Research and development expenses
(2,712)
(2,629)
Total operating expenses
(11,174)
(11,069)
Operating loss
(802)
(1,493)
Non-operating income and expenses
Interest income
37
2,198
Other income
10
2
Other gains and losses
427
15
Finance costs
(3)
(2)
Total non-operating income and
expenses
471
2,213
Income (loss) before income tax
(331)
720
Income tax expense
(130)
(25)
Net income (loss)
$
(461)
$
695
Other comprehensive income
(loss)
Components of other comprehensive
income that will be reclassified to profit or loss
Exchange differences arising on
translation of foreign operations
(410)
2
Other comprehensive income (loss),
net
$
(410)
$
2
Total comprehensive income
(loss)
$
(871)
$
697
Net income (loss), attributable to:
Shareholders of the parent
$
(461)
$
695
Total comprehensive income (loss)
attributable to:
Shareholders of the parent
$
(871)
$
697
Earnings (loss) per share (in dollars)
Basic earnings (loss) per share of Class A
and Class B Ordinary Shares
$
(0.008)
$
0.006
Diluted earnings (loss) per share of Class
A and Class B Ordinary Shares
$
(0.008)
$
0.006
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES – ADJUSTED NET
INCOME (LOSS) CALCULATION
FOR THE THREE MONTHS ENDED
MARCH 31, 2022 AND 2023
(Expressed in thousands of
United States dollars)
2022
2023
Items
Amount
Amount
Net Income (Loss)
$
(461)
$
695
One-off Transaction Costs
1,600
33
Non-Cash Equity-Based Compensation
454
650
Non-Cash Evaluation (Gain)/Loss of
financial liabilities
0
(52)
Foreign Exchange (Gain)/Loss
(427)
36
Adjusted Net Income (Loss)
$
1,166
$
1,362
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 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. 3 The one-off transaction cost in 2022 and 2023
included professional services expenditures that the Company
incurred in connection with the de-SPAC transaction.
Category: Investor Relations
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230425005797/en/
Investor Relations Contact Robin Yang, Partner
ICR, LLC Email: Investor_Relations@PerfectCorp.com Phone: +1 (646)
880 9057
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