Perfect Corp (PERF) Q1 2025 Earnings Call April 28, 2025 08:00 PM ET Company Participants ​Jamie Shah - Director - Investor RelationsAlice H. Chang - Founder, Chairwoman of the Board & CEOPin-Jen Chen - Executive VP & Chief Strategy Officer Conference Call Participants Lisa Thompson - Senior AnalystPatrick McCann - Equity Research AnalystAashi Shah - Equity Research Analyst Operator Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Perfect Corp. First Quarte ...

Perfect Corp (PERF) Q1 2025 Earnings Call April 28, 2025 08:00 PM ET Company Participants ​Jamie Shah - Director - Investor RelationsAlice H. Chang - Founder, Chairwoman of the Board & CEOPin-Jen Chen - Executive VP & Chief Strategy Officer Conference Call Participants Lisa Thompson - Senior AnalystPatrick McCann - Equity Research AnalystAashi Shah - Equity Research Analyst Operator Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Perfect Corp. First Quarte ...

Core Insights - Successful investing involves finding an edge, exploiting it over multiple trades, and managing risk effectively [1] - Historical indicators can provide insights into potential market bottoms, although past performance does not guarantee future results [2] Zweig Breadth Thrust - The Zweig Breadth Thrust Indicator has been triggered 18 times since World War II, with S&P 500 Index returns never being lower six months or a year after a successful trigger [3][5] - Historical returns following a Zweig Breadth Thrust include an average of 4.8% in one month, 7.8% in three months, 15.3% in six months, and 24.0% in twelve months [3] - The indicator is designed to measure abrupt changes in market breadth after a decline, acting as a significant signal for potential market recovery [6] VIX Spikes - The Volatility Index (VIX) measures short-term volatility expectations and investor fear, with spikes above 50 indicating potential market bottoms [7] - Since 1990, whenever the VIX has spiked above 50, the S&P 500 Index has shown positive performance over the next 1 to 5 years, with 75 instances recorded [8] Stock Selection - Investors are advised to focus on "first mover" stocks that have shown resilience during market downturns, as these are likely to lead in recovery phases [10] - Examples of such stocks include Netflix, Uber Technologies, IonQ, Oklo, and Carvana [10] Conclusion - The historical consistency of the Zweig Breadth Thrust and extreme VIX spikes above 50 provide valuable data for investors to consider when assessing market conditions [11]

Group 1 - Samuel Smith has extensive experience in dividend stock research and investment, having served as lead analyst and Vice President at several firms, and also runs a YouTube channel focused on dividend investing [1] - Samuel holds a B.S. in Civil Engineering & Mathematics from the United States Military Academy and a Master's in Engineering from Texas A&M, specializing in applied mathematics and machine learning [1] - Samuel leads the High Yield Investor investing group, collaborating with Jussi Askola and Paul R. Drake to balance safety, growth, yield, and value in investment strategies [2] Group 2 - High Yield Investor provides real-money core, retirement, and international portfolios, along with regular trade alerts and educational content for investors [2] - The service includes an active chat room for like-minded investors to share insights and strategies [2]

Core Viewpoint - Johnson & Johnson is positioned as a resilient and growth-oriented company, capable of weathering market volatility and benefiting from its strong pipeline and consistent dividend payments [1]. Group 1: Resilience - Johnson & Johnson has a long history of resilience, having thrived through various economic challenges since its founding in 1886, generating nearly $89 billion in sales and over $14 billion in profits last year [2]. - The company's share price has increased by approximately 6% this year, contrasting with a 9% decline in the S&P 500, showcasing its ability to maintain growth despite market conditions [3]. Group 2: Growth Potential - In Q1 2025, Johnson & Johnson's sales grew by 2.4% year over year, with operational growth at 4.2%, indicating a stable growth trajectory [4]. - The company anticipates accelerated growth in the latter half of the decade, supported by six regulatory approvals for drugs this year and expectations for nine additional approvals in 2025 [4][5]. Group 3: Tariff Resistance - Johnson & Johnson is expected to be less affected by tariffs compared to other companies, with a focus on maintaining supply chain stability and investing over $55 billion in U.S. manufacturing and R&D over the next four years [6]. Group 4: Dividend Strength - The company has increased its dividend for 63 consecutive years, with a forward dividend yield of 3.37%, reinforcing its status as a Dividend King and providing investors with returns during turbulent market periods [8].

Group 1 - The article emphasizes a dividend-focused value investment strategy that prioritizes capital preservation and steady income growth [1] - The investment approach involves holding high-quality value stocks that provide meaningful growth and long-term safety [1] Group 2 - The author has a beneficial long position in the shares of specific companies, indicating a personal investment interest [2] - The article is presented as a personal opinion and does not constitute professional investment or tax advice [3][4]

Core Insights - Perfect Corp will present at the 15th Annual LD Micro Invitational on April 10, 2025, at 08:00 ET, represented by Louis Chen [1] - The LD Micro Invitational XV will take place on April 9-10, 2025, at the Westin Grand Central in New York, featuring over 50 companies presenting in half-hour increments [2][3] Company Overview - Perfect Corp, founded in 2015, is a leader in enterprise SaaS solutions, utilizing AI to transform the beauty and fashion industries [4] - The company provides omnichannel shopping experiences through augmented reality (AR) product try-ons and AI-powered skin diagnostics, enhancing customer engagement and sales growth [4] - Perfect Corp also operates YouCam consumer apps, focusing on creativity with AI-driven features for photo, video, and camera users [4] Event Details - Registration for the LD Micro Invitational XV begins at 2:00 PM ET on April 9, followed by keynotes and a happy hour event [2] - Presentations will commence at 8:00 AM ET on April 10, followed by the LD Micro Moneyball Afterparty at the Knickerbocker Hotel [2]

Subscriber Growth - The company reported a significant increase in active subscribers, reaching 1.5 million, representing a 25% year-over-year growth[25] - The number of active subscribers for the B2C business increased from 604 thousand as of December 31, 2022, to over 1 million as of December 31, 2024, at a CAGR of 28.7%[126] - As of December 31, 2024, the company had over 1.1 billion app downloads and active subscribers increased from approximately 604,000 in 2022 to 879,000 in 2023, surpassing one million by the end of 2024[96] Revenue Growth - The annualized Recurring Contract Revenue increased to $120 million, reflecting a 30% increase compared to the previous fiscal year[70] - The company has set a revenue guidance of $200 million for the next fiscal year, representing a 25% growth[1] - Total revenue grew from $22.9 million in 2019 to $60.2 million in 2024, at a CAGR of 21.3%[125] - Revenue grew from $47.3 million in 2022 to $53.5 million in 2023, and further to $60.2 million in 2024, indicating a growth trend despite a slight slowdown[212] Market Expansion - The company plans to launch three new products in the next quarter, targeting a 15% increase in market share[1] - The company is expanding its market presence in Europe, aiming for a 20% revenue growth in that region over the next year[1] - The company plans to expand its operations internationally, requiring considerable management attention and financial resources[137] Product Development and Innovation - A strategic acquisition of a tech startup was completed for $50 million, expected to enhance the company's AI capabilities[1] - The company is focusing on enhancing its SaaS offerings, with a projected increase in subscription revenue by 40% in the upcoming year[1] - The company has invested in developing Generative AI technologies, incorporating a broader range of features such as AI avatar and text-to-photo capabilities in 2024[106] - The company began developing Generative AI technologies in early 2023, integrating them into its product portfolio to enhance consumer photo and video outputs[124] - The company has upgraded its Generative AI solutions in 2024 to include a broader range of features, enhancing its product offerings[161] Customer Retention and Engagement - The net dollar retention rate (NDRR) improved to 110%, indicating strong customer renewals and expansions[51] - The company aims to continuously attract free users to convert them into paying subscribers, focusing on optimizing and enhancing Generative AI solutions to meet evolving user preferences[97] - The company is committed to enhancing user engagement and retention through innovative premium features and continuous improvement of existing offerings[108] Financial Performance - The company recorded net losses of $161.7 million in 2022, but achieved net income of $5.4 million and $5.0 million in 2023 and 2024, respectively[211] - Approximately 52.8% of revenue in 2024 came from the Americas, 27.6% from Europe, 16.8% from Asia-Pacific, and 2.8% from other regions[137] Operational Efficiency - The company achieved a gross margin of 65%, up from 60% in the previous year, indicating improved operational efficiency[1] - Research and development expenses increased by 18% to support new technology initiatives[1] - The company has a team of 169 technology professionals, accounting for 49.4% of total employees, focused on platform improvement and new feature development[124] Risks and Challenges - The company anticipates challenges in user growth and retention due to competition and the rapidly evolving consumer app market[101] - The company faces risks related to the introduction of new products and services, which may not achieve expected returns or could lead to regulatory scrutiny[107] - The company faces challenges in maintaining competitive edge and managing growth effectively in the rapidly evolving AI and AR markets[128] - The company faces challenges in attracting and retaining technical personnel, particularly in AI and machine learning, which could hinder its growth and innovation[157][158] - The company may incur significant costs related to compliance with evolving laws and regulations concerning AI, which could impact its financial performance[164] Third-Party Dependencies - The reliance on third-party digital distribution platforms like Apple App Store and Google Play is critical for the company's app downloads and payment processing[109] - A substantial portion of the company's network infrastructure is provided by third parties like AWS, Alibaba Cloud, and Google Cloud, and disruptions from these providers could significantly harm business operations[182] - The company relies on third-party mobile app distribution channels, and changes in terms or termination of relationships could adversely affect business performance[189] Intellectual Property and Compliance - Effective protection of intellectual property rights is crucial, with significant costs associated with maintaining and defending these rights[198] - The company may incur substantial costs in defending against intellectual property infringement claims, which could disrupt operations and lead to reputational harm[204] - The company is subject to data privacy laws, and violations could result in substantial fines and harm to business operations[176]

Core Insights - The article discusses the importance of making informed long-term investment decisions, particularly in the context of high-yield income stocks and funds [1]. Group 1: Investment Strategy - The focus is on income-oriented investing, specifically seeking high-yield income to support retirement lifestyles [1]. - The investor emphasizes the preference for dividend-paying stocks and funds, including BDCs, REITs, CEFs, and ETFs, to enhance retirement income beyond traditional sources like pensions and Social Security [1]. Group 2: Market Psychology - The article highlights the fascination with the human psychology of markets, suggesting that understanding market behavior is as crucial as the financial aspects of investing [1].

Group 1 - The current economic uncertainty is causing investors to be concerned about where to invest their capital and how to preserve it [1] - The article emphasizes the importance of quality dividend-paying companies for building investment portfolios, particularly for lower and middle-class workers [2] - The author expresses a personal investment strategy focused on buy-and-hold approaches, aiming to supplement retirement income through dividends within the next 5-7 years [2] Group 2 - The article does not provide specific investment recommendations or advice, highlighting that past performance does not guarantee future results [4] - The author has disclosed a beneficial long position in several stocks, indicating a personal investment interest in those companies [3] - The article aims to provide educational insights rather than professional financial advice, encouraging readers to conduct their own due diligence [2][4]