Financial Data and Key Metrics Changes - Total revenue for 2024 grew by 12.5% year-over-year to $60.2 million, with net income at $5 million and adjusted net income increasing by 18.6% to $8.3 million compared to 2023 [8][10][32] - Operating cash flow generated a net inflow of $13 million for the full year 2024, with cash and cash equivalents exceeding $165.9 million [10][34] - Gross profit for Q4 2024 increased by 2.5% to $11.8 million, with a gross margin of 74.1%, down from 81.3% in Q4 2023 [27] Business Line Data and Key Metrics Changes - The B2C mobile app business saw a 14.3% increase in active paying subscribers, reaching over 1 million by the end of 2024 [10][35] - AI/AR cloud solutions and subscription revenue grew by 25.4% to $15.1 million, representing 95% of total revenue in Q4 2024 [25] - Licensing revenue decreased by 72.2% in Q4 2024 to $0.5 million, indicating a shift towards a recurring subscription revenue model [26] Market Data and Key Metrics Changes - Positive momentum was noted in North America, Western Europe, and developing markets like Brazil, with strong demand for AI-powered features [11] - The enterprise customer base increased by 24 brand clients, totaling 732 brand clients with over 822,000 SKUs onboarded [36] Company Strategy and Development Direction - The company aims to deepen its presence in the beauty, fashion, and skin segments while exploring cross-sell opportunities and broadening product offerings [22] - The acquisition of Wanna from Farfetch is expected to enhance market reach and expand the total addressable market, particularly in luxury brands [15][39] - The focus remains on continuous R&D in generative AI to drive user engagement and loyalty [14][76] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the B2B market, noting challenges from inflation and potential tariffs affecting client spending [44][46] - The guidance for 2025 projects total revenue growth of 13% to 14.5%, with B2C revenue expected to grow faster than B2B [23][49] Other Important Information - The company reported a decrease in operating expenses by 3.6% in Q4 2024, attributed to lower R&D and G&A expenses [28] - The adjusted net margin for the full year 2024 was 13.8%, reflecting effective cost control alongside revenue growth [33][37] Q&A Session Summary Question: What is the situation with enterprise clients regarding spending on services? - Management noted that while the B2B market remains challenging, there is still interest from brands to invest in digital solutions, although they are cautious about spending [44][46] Question: What was the B2B revenue contribution last year? - The B2B revenue contribution was approximately 40% last year, with expectations for it to drop to 30% to 40% in 2025 [52][53] Question: How will operating expenses be managed in light of reduced gross margins? - Management indicated that they will continue to invest in growth while maintaining financial discipline, ensuring that expenses do not create financial pressures [55][56] Question: What is the competitive landscape for the fashion segment post-acquisition of Wanna? - Management stated that Wanna is a leader in the fashion space with significant brand partnerships, and the acquisition strengthens their position in the market [58][60] Question: What is the timeline for the full integration of Wanna? - Integration is expected to continue through the first half of the year, with a go-to-market strategy planned for later in the year [72] Question: Where will the company focus its investments in the coming year? - The primary focus will be on R&D for generative AI, alongside digital marketing efforts to attract app users [76]
Perfect(PERF) - 2024 Q4 - Earnings Call Transcript