Perfect(PERF) - 2022 Q4 - Annual Report

Revenue Growth - Total revenue increased from $29.9 million in 2020 to $47.3 million in 2022, representing a CAGR of 25.8%[257] - Total revenue increased by $6.5 million, or 16.0%, from $40.8 million in 2021 to $47.3 million in 2022, driven by a 25.3% increase in AR/AI cloud solutions and subscription revenue[391] - Total revenue increased by $10.9 million, or 36.4%, from $29.9 million in 2020 to $40.8 million in 2021[402] Customer Base and Retention - The number of Key Customers grew from 99 in 2020 to 152 in 2022, at a CAGR of 23.9%[257] - Key Customers accounted for approximately 43.5% of total revenue in 2022[263] - The average Net Dollar Retention Rate (NDRR) was 122% from 2020 to 2022, with a 94% average retention rate among Key Customers[263] - Revenue from Key Customers accounted for 43.5% of total revenue in 2022, down from 65.3% in 2020[358] - Revenue from non-Key Customers increased from 34.7% in 2020 to 56.5% in 2022[360] Geographic Revenue Distribution - Approximately 51% of revenue in 2022 came from the United States, followed by 10% from Japan and 7% from France[253] - Revenue from the United States increased by 20.4% from $20.2 million in 2021 to $24.3 million in 2022[392] - Revenue from the United States increased by 35% from $15.0 million in 2020 to $20.2 million in 2021[403] Technology and Innovation - The company has developed proprietary AR- and AI-technologies with over 200 points of real-time facial landmarks and supports over 89,969 skin tones[266] - The AI foundation shade finder utilizes a deep learning database with over 10 million sample models to provide accurate foundation matching[289] - The AI skin analysis solution, launched in 2017, analyzes skin conditions using over 70,000 medical-grade images, ensuring high accuracy[290] - The AR- and AI-makeup solution has become one of the most popular offerings since its launch in 2015, enhancing consumer experiences with virtual makeup try-ons[287] - The company has invested significantly in R&D, employing 165 AR- and AI-specialists and holding 25 patents as of December 31, 2022[319] Market Presence and Partnerships - The company has established long-term relationships with major beauty brands, covering 90% of the top 20 global beauty groups[250] - The company currently covers 103 brands within the top 20 beauty groups, with approximately 406,000 SKUs dedicated to these groups[271] - 100% of the top 20 beauty groups have integrated AR- and AI-technologies into their business models, with 18 of them as customers[283] - The company formed strategic partnerships with major tech platforms, including Alibaba, Google, and Snap, to enhance its virtual try-on solutions[312][313] User Engagement - The average monthly active users (MAUs) across all apps were approximately 17.8 million in 2022, with the two flagship apps having around 17.3 million MAUs[252] - In 2022, the YouCam platform achieved over one billion downloads globally and approximately 17.8 million average monthly active users (MAUs) for its apps[308] - The company launched virtual try-ons for nails and men's grooming products in 2021, enhancing the shopping experience for consumers[294] Financial Performance - The net loss increased from $156.9 million in 2021 to $161.7 million in 2022, primarily due to one-off transaction costs and non-cash fair value adjustments[257] - Adjusted net income improved to $4.1 million in 2022 from an adjusted net loss of $1.8 million in 2021[400] - Adjusted EBITDA turned positive at $3.1 million in 2022, compared to negative $0.9 million in 2021[401] - General and administrative expenses increased significantly by $71.3 million, or 1444.1%, from $4.9 million in 2021 to $76.2 million in 2022, mainly due to one-off transaction costs[396] Operational Challenges and Future Outlook - The company anticipates challenges in 2023 due to high inflation, elongated sales cycles, and geopolitical tensions, but remains confident in long-term growth prospects[433] - The company expects continued growth in revenue and operating expenses as it scales operations and invests in technology[380] - The company is committed to enhancing digital solutions, expanding the customer base, and optimizing operating efficiency despite macroeconomic challenges[433] Workforce and Diversity - As of December 31, 2022, the company employed 134 technology staff, representing 45.1% of its workforce, focused on platform improvement and new feature development[268] - The company employs a global team of 297 employees, with 134 in R&D, and 90% of the R&D team holding a master's degree or higher[340] - The company has a diverse workforce, with 53% men and 47% women, and 44% of managers and executives identifying as female[341]