Perfect Corp. (NYSE: PERF) (“Perfect” or the “Company”), a
global leader in providing artificial intelligence (“AI”) and
augmented reality (“AR”) Software-as-a-Service (“SaaS”) solutions
to beauty and fashion industries, today announced its unaudited
financial results for the three months ended March 31, 2024.
Highlights for the Three Months Ended
March 31, 2024
- Total revenue was $14.3 million for the three months
ended March 31, 2024, compared to $12.1 million in the same period
of 2023, an increase of 17.7%. The increase was primarily due to
strong growth momentum in the revenue of AI- and AR- cloud
solutions and mobile app subscriptions.
- Gross profit was $11.2 million for the three months
ended March 31, 2024, compared with $9.6 million in the same period
of 2023, an increase of 16.9%.
- Net income was $0.6 million for the three months ended
March 31, 2024, compared to a net income of $0.7 million during the
same period of 2023, a decrease of 9.4%.
- Adjusted net income (non-IFRS)1 was $1.5 million for the
three months ended March 31, 2024, compared to adjusted net income
(non-IFRS) of $1.3 million in the same period of 2023, an increase
of 14.5%.
- Operating cash flow was positive $3.5 million in the
first quarter of 2024, compared to $3.8 million in the same period
of 2023.
- The Company had 152 Key Customers as of March 31, 2024,
compared with 162 Key Customers as of December 31, 2023. The
decrease mainly resulted from non-renewal by some brand clients,
including due to financial pressures.
- As of March 31, 2024, the Company’s customer base included 666
brand clients, with over 745,000 digital stock keeping units
(“SKUs”) for makeup, haircare, skincare, eyewear, and jewelry
products, compared with 645 brand clients and over 704,000 digital
SKUs as of December 31, 2023.
Ms. Alice H. Chang, the Founder, Chairwoman, and Chief Executive
Officer of Perfect, commented, “Our AI strategy, encompassing
Beauty AI, Skin AI, Fashion AI, and Gen AI, continues to drive
robust growth for our business. We kickstarted 2024 with an
outstanding first quarter results, achieving a 17.7% year-over-year
high teen number revenue growth with positive net income. This
performance was driven by strong momentum in our AI- and AR- cloud
solutions and subscription revenue and the rapid development in our
AI technologies. As the enterprise market gradually regains its
momentum, we are well-positioned to deepen our penetration across
diverse verticals, delivering AI-powered skin solutions and driving
increased adoption of our virtual try-on services within the
makeup, jewelry, and fashion industries. With our proven track
record across multiple sectors, we are confident that our advanced
AI capabilities and strong partnership with clients will continue
to fuel our business growth, pushing the boundaries of innovation
and delivering values to our customers and shareholders in 2024 and
beyond.”
Financial Results for the Three Months
Ended March 31, 2024
Revenue
Total revenue was $14.3 million for the three months ended March
31, 2024, compared to $12.1 million in the same period of 2023, an
increase of 17.7%.
- AI- and AR- cloud solutions and subscription revenue was $12.4
million for the three months ended March 31, 2024, compared to
$10.4 million in the same period of 2023, an increase of 19.6%. The
double digit growth was driven by strong demand for the Company’s
online virtual product try-on and skincare solutions from brand
customers, the robust momentum in the growth of YouCam mobile
beauty app subscription, and the growing popularity for its Gen AI
technologies and AI editing features for photos and videos. The
Company’s YouCam mobile beauty app active subscribers grew by 30.0%
year over year, reaching a record high of over 902,000 active
subscribers at the end of the first quarter of 2024. This increase
reflected the continuous demand in the Company’s YouCam mobile
beauty app services from subscribers and users.
- Licensing revenue was $1.6 million for the three months ended
March 31, 2024, compared to $1.5 million in the same period of
2023, an increase of 7.1%. The increase was due to slightly higher
demand from the legacy license product in this quarter.
- Advertisement revenue was $0.3 million for the three months
ended March 31, 2024, which remained flat compared to the same
period of 2023. The Company expects this revenue will gradually
become immaterial as it continues to allocate less resources to
advertisement services and focus on expanding the market leadership
in providing AI- and AR-SaaS solutions to brand customers and
mobile app subscribers.
Gross Profit
Gross profit was $11.2 million (or 78.3% gross margin) for the
three months ended March 31, 2024, compared with $9.6 million (or
78.8% gross margin) in the same period of 2023, an increase of
16.9%. Despite the increase in gross profit, our gross margin
slightly decreased due to the increase in third-party payment
processing fees paid to digital distribution partners such as
Google and Apple related to the growth in our mobile app
subscription revenue.
Total Operating Expenses
Total operating expenses were $12.4 million for the three months
ended March 31, 2024, compared with $11.1 million in the same
period of 2023, an increase of 11.8%. The increase was primarily
due to higher sales and marketing expenses in the first quarter of
2024.
- Sales and marketing expenses were $7.2 million for the
three months ended March 31, 2024, compared to $6.0 million during
the same period of 2023, an increase of 19.0%. This increase was
due to an increase in marketing events and user acquisition
costs.
- Research and development (“R&D”) expenses were $3.0
million for the three months ended March 31, 2024, compared to $2.6
million during the same period of 2023, an increase of 15.4%. The
increase resulted from the increase in R&D headcount.
- General and administrative expenses were $2.2 million
for the three months ended March 31, 2024, compared to $2.4 million
during the same period of 2023, a decrease of 9.9%. The decrease
was due to a lower directors and officers insurance expense in the
first quarter of 2024 due to the lower rate of insurance fees.
Net Income
Net Income was $0.6 million for the three months ended March 31,
2024, compared to a net income of $0.7 million during the same
period of 2023. The positive net income in the first quarter of
2024 was supported by continued revenue growth and effective cost
control.
Adjusted Net Income (Non-IFRS)
Adjusted net income was $1.5 million for the three months ended
March 31, 2024, compared to adjusted net income of $1.3 million in
the same period of 2023, an increase of 14.5%.
Liquidity
As of March 31, 2024, the Company held $122.0 million in cash
and cash equivalents (or $157.3 million when including 6-month time
deposits of $35.3 million, which are classified as current
financial assets at amortized cost under IFRS), compared to $123.9
million as of December 31, 2023 (or $154.2 million when including
time deposits). The increase in cash and cash equivalents,
including 6-month time deposits, resulted from the positive
operating cash flow and the interest income received from the
Company’s bank deposits.
The Company had a positive operating cash flow of $3.5 million
in the first quarter of 2024, compared to $3.8 million in the same
period of 2023. The positive cash flows demonstrated the Company’s
ability to generate sufficient cash flow to support business
operations.
Business Outlook for 2024
Based on the strong momentum in both enterprise SaaS solution
demands and YouCam mobile apps subscriptions, the Company
anticipates a healthy recovery in 2024. Perfect Corp. expects its
year-over-year growth rate of total revenue in 2024 to range from
12% to 16% compared to 2023.
Note that this forecast is based on the Company’s current
assessment of the market and operational conditions, and that these
factors are subject to change.
Conference Call
Information
The Company’s management will hold an earnings conference call
at 8 p.m. Eastern Time on April 24, 2024 (8 a.m. Taipei Time on
April 25, 2024) 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/Q4I2167050350
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 Corp. is a beautiful AI Company and
global leader in enterprise SaaS solutions. As an innovative
powerhouse in using artificial intelligence (AI) to transform the
beauty and fashion industries, Perfect empowers major beauty,
skincare, fashion, jewelry brands and retailers by providing
consumers with omnichannel shopping experiences through augmented
reality (AR) product try-ons and AI-powered skin diagnostics. With
cutting-edge technologies such as Generative AI, real-time facial
and hand 3D AR rendering and cloud solutions, Perfect enables
personalized, enjoyable, and engaging shopping journey. In
addition, Perfect also operates a family of YouCam consumer apps
for photo, video and camera users, centered on unleashing
creativity with AI-driven features for creation, beautification and
enhancement. With the help of technologies, Perfect helps brands
elevate customer engagement, increase conversion rates, and propel
sales growth. Throughout this journey, Perfect maintains its
unwavering commitment to 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 costs2,
non-cash equity-based compensation, and non-cash valuation
(gain)/loss of financial liabilities. Starting from the first
quarter of 2024, we no longer exclude foreign exchange gain (loss)
from adjusted net income (loss). As we transitioned to using the
U.S. dollar as the functional currency for certain subsidiaries in
2023, our foreign exchange gains (losses), which historically have
predominantly been unrealized, have not been material since 2023.
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, 2023 AND MARCH
31, 2024
(Expressed in thousands of
United States dollars)
December 31,
2023
March 31, 2024
Assets
Amount
Amount
Current assets
Cash and cash equivalents
$
123,871
$
121,960
Current financial assets at amortized
cost
30,300
35,300
Current contract assets
2,770
2,251
Accounts receivable
6,992
7,699
Other receivables
343
707
Current income tax assets
311
344
Inventories
33
28
Other current assets
4,042
3,491
Total current assets
168,662
171,780
Non-current assets
Property, plant and equipment
380
420
Right-of-use assets
847
725
Intangible assets
77
64
Deferred income tax assets
257
692
Guarantee deposits paid
140
139
Total non-current assets
1,701
2,040
Total assets
$
170,363
$
173,820
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE
SHEETS (continued)
DECEMBER 31, 2023 AND MARCH
31, 2024
(Expressed in thousands of
United States dollars)
December 31,
2023
March 31, 2024
Liabilities and Equity
Amount
Amount
Current liabilities
Current contract liabilities
$
15,346
$
18,216
Other payables
10,331
9,720
Other payables – related parties
50
49
Current tax liabilities
21
225
Current provisions
2,394
2,179
Current lease liabilities
481
486
Other current liabilities
277
224
Total current liabilities
28,900
31,099
Non-current liabilities
Non-current financial liabilities at fair
value through profit or loss
1,566
1,670
Non-current lease liabilities
387
266
Net defined benefit liability,
non-current
79
80
Guarantee deposits received
25
25
Total non-current liabilities
2,057
2,041
Total liabilities
30,957
33,140
Equity
Capital stock
Perfect Class A Ordinary Shares, $0.1 (in
dollars) par value
8,513
8,506
Perfect Class B Ordinary Shares, $0.1 (in
dollars) par value
1,679
1,679
Capital surplus
Capital surplus
510,399
511,000
Retained earnings
Accumulated deficit
(380,472
)
(379,842
)
Other equity interest
Other equity interest
(523
)
(663
)
Treasury shares
(190
)
—
Total equity
139,406
140,680
Total liabilities and equity
$
170,363
$
173,820
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED
MARCH 31, 2023 AND 2024
(Expressed in thousands of
United States dollars)
Three months ended March
31
2023
2024
Items
Amount
Amount
Revenue
$
12,145
$
14,289
Cost of sales and services
(2,569
)
(3,095
)
Gross profit
9,576
11,194
Operating expenses
Sales and marketing expenses
(6,027
)
(7,170
)
General and administrative expenses
(2,413
)
(2,175
)
Research and development expenses
(2,629
)
(3,035
)
Total operating expenses
(11,069
)
(12,380
)
Operating loss
(1,493
)
(1,186
)
Non-operating income and expenses
Interest income
2,198
1,969
Other income
2
2
Other gains and losses
15
(316
)
Finance costs
(2
)
(5
)
Total non-operating income and
expenses
2,213
1,650
Income before income tax
720
464
Income tax benefit (expense)
(25
)
166
Net income
$
695
$
630
Other comprehensive income
(loss)
Components of other comprehensive
income (loss) that will be reclassified to profit or loss
Exchange differences arising on
translation of foreign operations
$
2
$
(140
)
Other comprehensive income (loss),
net
$
2
$
(140
)
Total comprehensive income
$
697
$
490
Net income, attributable to:
Shareholders of the parent
$
695
$
630
Total comprehensive income attributable
to:
Shareholders of the parent
$
697
$
490
Earnings per share (in dollars)
Basic earnings per share of Class A and
Class B Ordinary Shares
$
0.006
$
0.006
Diluted earnings per share of Class A and
Class B Ordinary Shares
$
0.006
$
0.006
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED RECONCILIATION OF
NON-IFRS FINANCIAL MEASURES – ADJUSTED NET INCOME
CALCULATION
FOR THE THREE MONTHS ENDED
MARCH 31, 2023 AND 2024
(Expressed in thousands of
United States dollars)
Three months ended March
31
2023
2024
Items
Amount
Amount
Net Income (Loss)
$
695
$
630
One-off Transaction Costs
33
—
Non-Cash Equity-Based Compensation
650
784
Non-Cash Valuation (Gain)/Loss of
financial liabilities
(52
)
104
Adjusted Net Income (Loss)1
$
1,326
$
1,518
Note (1):
In accordance with the changed definition of “adjusted net
income (loss)” that is detailed in the “Use of Non-IFRS Financial
Measures” section above, we have made a retrospective adjustment to
our adjusted net income for the three months ended March 31, 2023
not adjusting for “foreign exchange gain (loss)” (which amounted to
a loss of $36,000 for the period, as previously disclosed in our
Form 6-K furnished to the SEC on April 25, 2023).
Category: Investor Relations
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 The one-off transaction cost in the first quarter of 2023
included professional services expenditures that the Company
incurred in connection with the de-SPAC transaction. No such cost
incurred in the same period of 2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424298022/en/
Investor Relations Investor Relations, Perfect Corp.
Email: Investor_Relations@PerfectCorp.com
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