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 ...

Financial Data and Key Metrics Changes - Total revenue grew by 12.1% year over year to $16,000,000, with net income increasing by 264% to $2,300,000 [7][21] - Adjusted net income rose by 33.3% to $2,000,000 compared to the first quarter of 2024 [8][21] - Operating cash flow generated a net inflow of $4,300,000, with a strong balance sheet holding over $164,600,000 in cash and cash equivalents [8][22] Business Line Data and Key Metrics Changes - AI and AR cloud solution and subscription revenue grew by 13.3% to $14,100,000, representing 88% of total revenue [18] - The mobile app business maintained strong growth with active paying subscribers increasing by 7.9% to 973,000 [10][22] - Licensing revenue increased by 1.5% to $1,600,000, although it is expected to become immaterial as it is phased out [18] Market Data and Key Metrics Changes - The company reported a decrease in the number of key customers from 151 to 148 due to unexpected contract churns [24] - The enterprise customer base increased by 59 brand clients, totaling 801 brand clients with over 891,000 SKUs [23] Company Strategy and Development Direction - The growth strategy for 2025 focuses on expanding B2C revenue through new generative AI functions and higher premium subscription plans [14][26] - The integration of the Wana acquisition is progressing smoothly, aiming to enhance market position and expand the addressable market [11][25] - The company is prioritizing organic growth while remaining selective about future acquisitions, particularly in new verticals [35][56] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite macroeconomic uncertainties, with a revenue growth forecast of 13% to 14.5% for 2025 [26][27] - The company is well-positioned to benefit from evolving client needs due to its strong track record and expertise in the beauty and fashion industry [15][52] Other Important Information - Gross profit for the first quarter grew by 11.4% to $12,500,000, with a gross margin of 77.9% [18][19] - Operating expenses increased by 2% to $12,600,000, primarily due to R&D expenses [19][20] Q&A Session Summary Question: Can you talk about the launch of the new AI chat app? - The app was launched last month on both Apple and Google Play stores, integrating various AI tools into one platform [29][30] Question: How did the Wana acquisition impact customer numbers? - The acquisition added over a dozen key customers, but there were also losses due to financial pressures on medium-sized clients [34][54] Question: What are the future acquisition plans? - The focus is on expanding into new verticals rather than acquiring competitors, particularly in the luxury retail space [35][37] Question: How does the Wana acquisition affect the sales process? - The acquisition has provided a complete solution that simplifies integration efforts for clients, enhancing the sales process [42][43] Question: What are the monetization strategies for B2C? - The company is optimizing pricing, introducing a higher premium subscription plan, and early results show consumer willingness to upgrade [46][47] Question: What is the competitive landscape in the shoe and handbag markets? - There are few competitors in the handbag space, while the shoe market has several leading brands, with Perfect Corp. confident in its technology [51][52]