Perfect Corp. Reports Unaudited Financial Results for the Three Months Ended March 31, 2023
Perfect Corp. (NYSE: PERF) reported its financial results for Q1 2023, revealing total revenues of $12.1 million, marking a 9.7% growth quarter-over-quarter and a 0.9% increase year-over-year. This growth was primarily driven by the demand for AR/AI cloud solutions and subscription revenues, which rose by 18.7% to $10.4 million. The company achieved a net income of $0.7 million, a turnaround from a net loss of $0.5 million in Q1 2022. Adjusted net income was $1.4 million, up from $1.2 million in the previous year. With 158 key customers and over 694,000 active mobile beauty app subscribers, Perfect Corp. is optimistic about continued growth in the AR/AI sector throughout 2023.
- Total revenues grew by 9.7% quarter-over-quarter and 0.9% year-over-year to $12.1 million.
- AR/AI cloud solutions and subscription revenues increased by 18.7% to $10.4 million.
- Net income improved to $0.7 million compared to a net loss of $0.5 million in Q1 2022.
- Adjusted net income rose to $1.4 million, from $1.2 million year-over-year.
- Mobile beauty app active subscribers grew by 53.3% year-over-year to over 694,000.
- Gross profit decreased to $9.6 million, down from $10.4 million in the same period of 2022, leading to a decline in gross margin from 86.2% to 78.8%.
- Licensing revenue fell 47.1% to $1.5 million from $2.8 million in Q1 2022.
Highlights for the Three Months Ended
-
Total revenues grew to
, up$12.1 million 9.7% quarter over quarter and up0.9% year over year, primarily due to strong growth momentum in AR/AI cloud solutions and subscription revenues. -
Gross profit was
, compared to$9.6 million in the same period of 2022.$10.4 million -
Net Income was
, compared to a net loss of$0.7 million in the same period of 2022.$0.5 million -
Adjusted net income (non-IFRS)1 was
, compared to adjusted net income (non-IFRS) of$1.4 million in the same period of 2022.$1.2 million -
The Company had 158 Key Customers2 as of
March 31, 2023 , compared with 152 Key Customers as ofDecember 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 ofDecember 31, 2022 .
Ms.
Mr.
Financial Results for the Three Months Ended
Revenue
Total revenue was
-
AR/AI cloud solutions and subscription revenue increased by
18.7% from in the same period of 2022 to$8.7 million , representing$10.4 million 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 by53.3% 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
, compared to$1.5 million in the same period of 2022, representing$2.8 million 12.3% of our total revenue and a change of47.1% , 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
, compared to$0.3 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.$0.5 million
Gross Profit
Gross profit was
Total Operating Expenses
Total operating expenses decreased by
-
Sales and marketing (“S&M”) expenses remained flat at
, representing$6.0 million 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 in the same period of 2022 to$2.7 million , representing$2.6 million 21.6% of total revenue, compared to22.5% in the same period of last year. The decrease was mainly because the majority of the Company’s R&D expenses incurred inTaiwan and were paid in NewTaiwan Dollar while the Company generated the majority of revenue in US dollars, which has strengthened relative to the NewTaiwan Dollar . -
General and administrative (“G&A”) expenses decreased by
1.8% from to$2.5 million , or$2.4 million 19.9% of total revenue, compared to20.4% in the same period of last year, showing that there were no significant changes during the quarter.
Net Income
Net income was
Adjusted Net Income (Non-IFRS)
Adjusted net income was
Liquidity
As of
Recent Developments
On
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
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
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, 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
(Expressed in thousands of |
||||||||
|
|
|
|
|
|
|
|
|
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)
(Expressed in thousands of |
||||||||
|
|
|
|
|
|
|
||
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, |
|
|
|
|
10,147 |
|
|
10,147 |
Perfect Class B Ordinary Shares, |
|
|
|
|
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
(Expressed in thousands of |
|||||||||||
|
|
|
|
|
|
|
Three months ended |
||||
|
|
|
|
|
|
|
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
(Expressed in thousands of |
|||||||||||
|
|
|
|
|
|
|
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
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
Email: Investor_Relations@PerfectCorp.com
Phone: +1 (646) 880 9057
Source:
FAQ
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