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 June 30, 2023.
Highlights for the Three Months Ended
June 30, 2023
- Total revenues grew to $12.7 million, up 11.9% year over
year, primarily due to strong growth momentum in AR/AI cloud
solutions and subscription revenues.
- Gross profit was $10.2 million, compared to $9.7 million
in the same period of 2022.
- Net Loss was $0.2 million, compared to a net income of
$27.4 million in the same period of 2022.
- Adjusted net income (non-IFRS)1 was $1.1 million,
compared to adjusted net income (non-IFRS) of $0.6 million in the
same period of 2022.
- The Company had 163 Key Customers2 as of June 30, 2023,
compared with 158 Key Customers as of March 31, 2023.
- As of June 30, 2023, the Company's customer base included 601
brand clients, with over 655,000 digital stock keeping units
(“SKUs”) for makeup, haircare, skincare, eyewear, and jewelry
products, compared with 525 brand clients and over 590,000 digital
SKUs as of March 31, 2023.
Ms. Alice H. Chang, the Founder, Chairwoman, and Chief Executive
Officer of Perfect, commented, “Throughout the previous quarter, we
persistently utilized the latest AI & AR technologies,
including generative AI, to consistently support our three primary
areas of growth, BeautyTech, FashionTech, and SkinTech, to brands
and to end users. Our objective is to enhance and expand our
capabilities in these fields. As a result, we observed encouraging
indications of increased product demand, indicating positive
progress. Our mobile apps also continued to experience significant
growth, maintaining their strong momentum in part thanks to new
generative AI features. Furthermore, our AI skincare turnkey
solution grew in popularity as we expanded our customer base. Our
investments in generative AI, combined with our industry-leading
experience and robust customer base, have positioned us for future
success in the beauty and fashion tech space. We remain committed
to delivering long-term, sustainable growth to our shareholders and
providing our customers with the highest-quality services on the
market.”
Mr. Pin-Jen (Louis) Chen, Executive Vice President and Chief
Strategy Officer of Perfect, added, “In the second quarter, we saw
sound momentum in our top-line growth, which was driven by
continued demand for our online AR/AI cloud solutions and
subscriptions, along with the rapid growth in our mobile beauty app
subscribers. While we grew our revenue, we also managed to control
our spending to ensure profitability. With the stable renewal rate
for existing subscriptions, dedicated cost control, and healthy
cash position, we affirm our unwavering confidence in generating
long-term revenue growth.”
Financial Results for the Three Months
Ended June 30, 2023
Revenue
Total revenue was $12.7 million for the three months ended June
30, 2023, up by 11.9% from $$11.3 million in the same period of
2022.
- AR/AI cloud solutions and subscription revenue increased by
16.3% from $9.5 million in the same period of 2022 to $11.0
million, representing 86.7% of total revenue, mainly due to solid
demand for the Company’s online virtual product try-on solutions
from brand customers and robust growth in its mobile beauty app
subscriptions. The Company’s mobile beauty app active subscribers
grew by 63.3% year over year, reaching a historical high of over
777,000 active subscribers at the end of the second quarter of
2023. This increase demonstrates the strong demand for the
Company’s mobile beauty app services.
- Licensing revenue, which is mostly generated from traditional
offline services, increased by 6.2% from $1.3 million in the same
period of 2022 to $1.4 million, representing 10.9% of our total
revenue, compared with 11.5% of total revenue in the second quarter
of 2022. This reflects relatively low demand for in-store services
compared to online services from brands.
- Advertisement revenue was $0.3 million, compared to $0.5
million in the same period of 2022. This change is consistent with
the Company's strategic focus on delivering AR- and AI-SaaS
solutions to customers while allocating fewer resources to
advertisement services.
Gross Profit
Gross profit increased by 5.2% year-over-year from 9.7 million
in the second quarter of 2022 to $10.2 million in the same period
of 2023, representing a change of gross margins from 85.8% in the
second quarter of 2022 to 80.6% in the same period of 2023. The
change in gross margin was due to an increase in the cost of goods
sold, which was driven by the growth in the Company’s mobile beauty
app subscriptions. This surge in subscriptions led to higher
platform fees paid to third-party digital distribution platforms,
namely Apple and Google.
Total Operating Expenses
Total operating expenses increased by 12.5% to $12.3 million for
the three months ended June 30,2023, from $11.0 million in the same
period of 2022.
- Sales and marketing (“S&M”) expenses were $6.6 million,
representing 51.7% of our total revenue, compared to $6.1 million
and 53.6% of total revenue during the same period last year. The
7.9% year-over-year change was primarily due to increase in
promotion and user acquisition expenses.
- Research and development (“R&D”) expenses were $2.8
million, representing 21.8% of total revenue, compared to $2.6
million and 23.3% of total revenue during the same period last
year. The 4.6% year-over-year change was resulted from an increase
in R&D people cost.
- General and administrative (“G&A”) expenses were $3.0
million, representing 23.8% of total revenue, compared to $2.2
million and 19.8% of total revenue during the same period last
year. The 34.3% year-over-year change was primarily due to an
increase in public company-related costs.
Net Loss
Net Loss was $0.2 million for the three months ended June 30,
2023, compared to a net income of $27.4 million during the same
period of 2022, mainly due to a $28.4 million adjustment in
non-cash valuation gain on financial liabilities at fair value
through profit or loss in the second quarter of 2022.
Adjusted Net Income (Non-IFRS)
Adjusted net income was $1.1 million for the three months ended
June 30, 2023, compared to adjusted net income of $0.6 million in
the same period of 2022.
Liquidity
As of June 30, 2023, the Company held $37.2 million in cash and
cash equivalents (or $198.0 million when including 6-month and
longer time deposits of $160.8 million, which are classified as
current financial assets at amortized cost under IFRS), compared to
$95.1 million as of March 31, 2023 (or $196.1 million when
including time deposits).
Recent Development
Share Repurchase Plan Update
On May 4, 2023, the Company’s board of directors authorized a
share repurchase plan under which the Company may repurchase up to
US$20 million of its Class A ordinary shares over the next 12-month
period.
Business Outlook
Based on the recent progress of the overall business status in
the industry, the stable demand for the Company’s enterprise SaaS
solutions, strong growth in the Company’s mobile beauty app
subscriptions, and ongoing investment in R&D with generative
AI, Perfect Corp. anticipates that for 2023 full year:
- The Company's total revenue year-over-year growth rate is
expected to range from 11.5% to 14.5% compared to 2022.
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 7 a.m. Eastern Time on July 26, 2023 (7 p.m. Taipei Time on July
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/Q4E60334
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,
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 JUNE 30,
2023
(Expressed in thousands of
United States dollars)
December 31,
2022
June 30, 2023
Assets
Amount
Amount
Current assets
Cash and cash equivalents
$
162,616
$
37,168
Current financial assets at amortized
cost
30,000
160,800
Current contract assets
3,660
1,512
Accounts receivable
7,756
7,641
Other receivables
314
587
Current income tax assets
77
124
Inventories
45
34
Other current assets
4,705
4,655
Total current assets
209,173
212,521
Non-current assets
Property, plant and equipment
289
345
Right-of-use assets
323
850
Intangible assets
119
115
Deferred income tax assets
244
222
Guarantee deposits paid
125
124
Total non-current assets
1,100
1,656
Total assets
$
210,273
$
214,177
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE
SHEETS (continued)
DECEMBER 31, 2022 AND JUNE 30,
2023
(Expressed in thousands of
United States dollars)
December 31,
2022
June 30, 2023
Liabilities and Equity
Amount
Amount
Current liabilities
Current contract liabilities
$
13,024
$
15,976
Other payables
9,308
8,095
Other payables – related parties
63
49
Current tax liabilities
155
52
Current provisions
1,855
2,134
Current lease liabilities
251
417
Other current liabilities
261
149
Total current liabilities
24,917
26,872
Non-current liabilities
Non-current financial liabilities at fair
value through profit or loss
3,207
3,451
Non-current lease liabilities
87
457
Net defined benefit liability,
non-current
73
75
Guarantee deposits received
25
25
Total non-current liabilities
3,392
4,008
Total liabilities
28,309
30,880
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
557,870
Retained earnings
Accumulated deficit
(385,884
)
(385,395
)
Other equity interest
Other equity interest
(407
)
(575
)
Treasury shares
—
(429
)
Total equity
181,964
183,297
Total liabilities and equity
$
210,273
$
214,177
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 2022 AND 2023
(Expressed in thousands of
United States dollars)
Three months ended June
30
Six months ended June
30
2022
2023
2022
2023
Items
Amount
Amount
Amount
Amount
Revenue
$
11,339
$
12,687
$
23,379
$
24,832
Cost of sales and services
(1,614
)
(2,455
)
(3,282
)
(5,024
)
Gross profit
9,725
10,232
20,097
19,808
Operating expenses
Sales and marketing expenses
(6,081
)
(6,558
)
(12,087
)
(12,585
)
General and administrative expenses
(2,244
)
(3,014
)
(4,700
)
(5,427
)
Research and development expenses
(2,646
)
(2,767
)
(5,358
)
(5,396
)
Total operating expenses
(10,971
)
(12,339
)
(22,145
)
(23,408
)
Operating loss
(1,246
)
(2,107
)
(2,048
)
(3,600
)
Non-operating income and expenses
Interest income
141
2,411
178
4,609
Other income
1
5
11
7
Other gains and losses
28,550
(474
)
28,977
(459
)
Finance costs
(2
)
(3
)
(5
)
(5
)
Total non-operating income and
expenses
28,690
1,939
29,161
4,152
Income (loss) before income tax
27,444
(168
)
27,113
552
Income tax expense
(31
)
(38
)
(161
)
(63
)
Net income (loss)
$
27,413
$
(206
)
$
26,952
$
489
Other comprehensive loss
Components of other comprehensive loss
that will not be reclassified to profit or loss
Credit risk changes in financial
instrument - Preferred shares
$
(7
)
$
—
$
(7
)
$
—
Components of other comprehensive loss
that will be reclassified to profit or loss
Exchange differences arising on
translation of foreign operations
(591
)
(170
)
(1,001
)
(168
)
Other comprehensive loss, net
$
(598
)
$
(170
)
$
(1,008
)
$
(168
)
Total comprehensive income
(loss)
$
26,815
$
(376
)
$
25,944
$
321
Net income (loss), attributable to:
Shareholders of the parent
$
27,413
$
(206
)
$
26,952
$
489
Total comprehensive income (loss)
attributable to:
Shareholders of the parent
$
26,815
$
(376
)
$
25,944
$
321
Earnings (loss) per share (in dollars)
Basic earnings (loss) per share of Class A
and Class B Ordinary Shares
$
0.477
$
(0.002
)
$
0.469
$
0.004
Diluted earnings (loss) per share of Class
A and Class B Ordinary Shares
$
(0.006
)
$
(0.002
)
$
(0.014
)
$
0.004
PERFECT CORP. AND
SUBSIDIARIES
UNAUDITED RECONCILIATION OF
NON-IFRS FINANCIAL MEASURES – ADJUSTED NET INCOME (LOSS)
CALCULATION
FOR THE THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 2022 AND 2023
(Expressed in thousands of
United States dollars)
Three months ended June
30
Six months ended June
30
2022
2023
2022
2023
Items
Amount
Amount
Amount
Amount
Net Income (Loss)
$
27,413
$
(206
)
$
26,952
$
489
One-off Transaction Costs
1,225
—
2,825
33
Non-Cash Equity-Based Compensation
552
791
1,006
1,441
Non-Cash Evaluation (Gain)/Loss of
financial liabilities
(28,374
)
296
(28,374
)
244
Foreign Exchange (Gain)/Loss
(176
)
179
(603
)
215
Adjusted Net Income
$
640
$
1,060
$
1,806
$
2,422
_________________ 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 the second quarter of 2022 included professional services
expenditures that the Company incurred in connection with the
de-SPAC transaction. No such cost incurred in the same period of
2023.
Category: Investor Relations
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230725100937/en/
Investor Relations Robin Yang, Partner ICR, LLC Email:
Investor_Relations@PerfectCorp.com Phone: +1 (646) 880 9057
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