Perfect Corp. Reports Unaudited Financial Results for the Full Year 2022
Perfect Corp. (NYSE: PERF) reported its 2022 financial results, with total revenues reaching $47.3 million, a 16.0% increase from 2021. Gross profit rose to $40.2 million, representing an 84.9% gross margin. The company experienced a net loss of $161.7 million, slightly worse than the $156.9 million loss in 2021. Adjusted net income was $4.1 million, improving from a $1.8 million loss, driven by effective expense control. Despite challenges in the macro environment, including inflation and elongated sales cycles, Perfect Corp. expanded its customer base to 509 brand clients and remains focused on long-term growth.
- Total revenues increased by 16.0% to $47.3 million.
- Gross profit rose to $40.2 million, maintaining a high gross margin of 84.9%.
- Adjusted net income improved to $4.1 million from a loss of $1.8 million in 2021.
- Positive adjusted EBITDA of $3.1 million, up from a negative $0.9 million in 2021.
- Increased customer base to 509 brand clients, up from 434.
- Net loss increased to $161.7 million from $156.9 million.
- Total operating expenses surged by 177.7% to $111.2 million, significantly due to one-off costs related to the public listing.
Highlights for the Full Year of 2022
-
Total revenues grew to
, up$47.3 million 16.0% year over year, primarily due to an increase in AR/AI cloud solutions and subscription revenues. -
Gross profit increased to
from$40.2 million in 2021.$35.0 million -
Net loss was
, compared to$161.7 million in 2021.$156.9 million -
Adjusted net income (non-IFRS) was
, compared to an adjusted net loss (non-IFRS) of$4.1 million in 20211.$1.8 million -
Adjusted EBITDA (non-IFRS)2 was positive
compared to a negative adjusted EBITDA of$3.1 million in 2021, primarily due to strong revenue growth and efficient expense controls.$0.9 million -
The Company had 152 Key Customers3 as of
December 31, 2022 , compared with 124 Key Customers as ofDecember 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 ofDecember 31, 2021 .
Ms.
Mr.
Full Year 2022 Financial Results
Revenue
Total revenues in the full year of 2022 increased by
-
AR/AI cloud solutions and subscription revenues increased by
25.3% to from$36.9 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.$29.5 million -
Licensing revenues decreased by
4.8% to , or$8.4 million 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 from$1.8 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.$2.4 million
Gross Profit
Gross profit in the full year of 2022 was
Total Operating Expenses
Total operating expenses in the full year of 2022 increased by
-
Sales and marketing (“S&M”) expenses decreased by
2.9% to from$24.5 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.$25.3 million -
Research and development (“R&D”) expenses increased by
6.5% to from$10.5 million in the full year of 2021, primarily due to an increase in R&D headcount and related personnel expenses.$9.8 million -
General and administrative (“G&A”) expenses increased to
from$76.2 million in the full year of 2021, primarily due to the$4.9 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$71.2 million in the full year of 2022.$5.0 million
Net Loss
Net loss in the full year of 2022 was
Adjusted Net Income (Non-IFRS)
Our adjusted net income in 2022 was
Adjusted EBITDA (Non-IFRS)
Adjusted EBITDA in the full year of 2022 was
Liquidity
As of
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
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
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
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
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
(Expressed in thousands of
|
|
|
|
|
|
|
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)
(Expressed in thousands of
|
|
|
|
|
|
|
||
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, |
|
|
- |
10,147 |
||||
Perfect Class B Ordinary Shares, |
- |
|
|
|
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
(Expressed in thousands of
|
|
Years Ended |
||||||
|
|
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
(Expressed in thousands of
|
Years Ended |
|||||||
|
|
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 |
|||||||
|
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 |
||||||
|
|
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
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.
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