Perfect Corp.'s Q1 2025: Unpacking Contradictions in AI Strategy, Customer Churn, and Capital Allocation

AI and B2B client strategy, macroeconomic conditions and customer churn, acquisition strategy and R&D spending, WANNA acquisition impact on customer base, capital allocation strategy are the key contradictions discussed in Perfect Corp.'s latest 2025Q1 earnings call.



Strong Financial Performance:
- Perfect Corp. reported a 12.1% year-over-year increase in total revenue to $16 million for Q1 2025.
- The company's net income rose by 264% year-over-year to $2.3 million, and the adjusted net income increased by 33.3% to $2 million.
- This growth was driven by the strong performance of the mobile app subscription business and the integration of WANNA's client base.

Mobile App Subscription Expansion:
- The number of active paying subscribers for the YouCam mobile app suite reached 973,000, representing a 7.9% year-over-year increase.
- The mobile app subscription revenue grew by 13.3% to $14.1 million, contributing to 88% of total revenue.
- This growth was propelled by increased subscription plans and the introduction of new Generative AI features.

AI Integration and Product Expansion:
- The company launched the YouCam AI Chat app, integrating AI assistance and image editing tools, available in eight languages worldwide.
- The AI and AR cloud solutions segment contributed significantly to revenue growth, driven by new AI integrations and subscription model adoption.
- The expansion into new AI-based features and apps is aimed at increasing revenue per active user and enhancing customer engagement.