Perfect (PERF) Q3 Earnings call transcript Oct 30, 2024

In the recently held Third Quarter 2024 Earnings Conference Call, Perfect Corp. presented a robust financial performance, underscoring the company's strong growth trajectory and strategic business expansion. Led by Founder, Chairwoman, and CEO, Alice Chang, the call highlighted Perfect Corp.'s continued success in both its B2C and B2B operations, revealing significant revenue growth, operational efficiency, and strategic product development.

Financial Highlights

Perfect Corp. reported a 12.5% year-over-year increase in revenue, reaching $44.3 million in the first nine months of 2024. The company's net income also saw a positive surge, reaching $3.9 million, with an adjusted net income of $6 million, marking a 23.2% increase compared to the same period in 2023. This growth is primarily attributed to the company's mobile app subscription business under its AI/AR cloud solution. The strong financial performance is also reflected in Perfect Corp.'s balance sheet, which boasts over $163.2 million in cash and cash equivalents.

B2C Expansion and Innovation

The third quarter of 2024 saw Perfect Corp.'s B2C mobile business achieve significant growth, with over 977,000 active paying subscribers, representing a 17% year-over-year increase. This growth underscores the enduring global demand for AI photo and video editing, creation, enhancement, and beautification features, highlighting the company's strategic focus on expanding its geographic footprint. Notable growth in new markets like Brazil and Italy further underscores the universal appeal of Perfect Corp.'s app offerings.

The company also introduced a new revenue stream through its web-based B2C services, accessible via mobile, laptop, PC, Mac, and iPad. This shift to direct web-based services offers higher margins and taps into a broader consumer base, expanding Perfect Corp.'s total addressable market. The company's suite of AI-driven content creation and editing features continues to receive frequent updates, integrating innovative AI technology for photos and videos, empowering users to express their creativity.

B2B Strategic Expansion

Perfect Corp.'s B2B operations have seen significant progress, particularly in expanding its portfolio with AI-powered skin diagnostics. The company's industry-leading HD skin analysis solution has been upgraded to include up to 15 skin concerns, positioning it strategically in the skincare market, which is projected to grow significantly in the coming years. The introduction of Skincare Pro, an AI-powered aesthetic simulation solution, has been instrumental in establishing a foothold in this growing market, offering visual outcomes for aesthetic practitioners and patients.

The company's Virtual Try-On product continues to perform well, with major renewals of licenses with key beauty conglomerates and retailers, highlighting the essential role Perfect Corp.'s solutions play in enhancing online shopper engagement and driving higher conversion rates for e-commerce. The company's strategic focus on cross-selling to affiliated brands has also extended its offerings and expanded its market reach.

Innovative AI-Driven Services

Perfect Corp. also introduced PerfectGPT, an AI-powered personalized beauty assistant, which has garnered high interest from global beauty and skincare brands. This service is expected to become a standard feature on brand websites, offering 24/7 AI beauty consultation services and tailored recommendations based on consumers' unique needs. PerfectGPT's robust focus on retrieval augmented generation (RAG) framework ensures factually accurate and reliable recommendations, setting a new standard for AI-driven beauty assistance.

Looking Forward

Perfect Corp. expects the commercial POC of PerfectGPT to launch early next year, followed by larger-scale deployment in late 2025. The company's strategic expansion and innovative product development are poised to further drive growth and enhance user engagement across both its B2C and B2B operations. With a strong financial performance and a focus on expanding its geographic footprint and product offerings, Perfect Corp. is well-positioned for continued success in the rapidly evolving AI and AR market.