Perfect Corp.

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Perfect Earnings Conference Call. At this time, all participants are in a listen-only mode. We will be hosting a question and answer session after management's prepared remarks. Please note that today's event is being recorded. I will now turn the conference over to the first speaker today, Mr. Rick Lee, VP of IR of the company. Please go ahead, sir.

Thank you, Pauline. Hello, everyone, and welcome to Perfect Corp's earnings call. With us today are Ms. Ali Chen, our founder, chairwoman, and CEO, Mr. Louis Chen, our EVP and chief strategy officer, and Ms. Ali Chen, VP of finance and accounting. You can refer to our first quarter 2023 financial results on our IR website at ir.perfectcorp.com. or in the form 6K we furnished to SEC yesterday afternoon. You can also access a replay of this call on our IR website when you become available a few hours after this conclusion. For today's call, management will provide their prepared remarks first, and we will be hosting a question and answer session. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release. which also applies to this call. And this call may contain forward-looking statements regarding Perfect Cope's performance, anticipated plans, operational results, and objectives. Forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied on our call today. Perfect Cope undertakes no obligation to update any forward-looking statement except was required by law after the date of this call. Please note that all numbers are stated in the following measurements prepared remarks are in U.S. dollar terms, and we will discuss non-IFRS measures today, which are most thoroughly explained and reconciled to the most comparable measure reported in our earnings release and Form 6-K furnished to the SEC I will now turn the call to our first speaker today, founder, chairwoman, and CEO of Perfect, Ms. Chen.

Thank you, Rick, and welcome, everyone, to Perfect Corp's first quarter 2023 earnings conference call. We take off 2023 with the U.S. dollar $12.1 million in total revenue for the first quarter, representing quarter-over-quarter growth of 9.7% and year-over-year growth of The nominal growth reflects a strategic shift in prioritizing our new subscription-based cloud business driven by much stronger market demand. Specifically, our AIAR cloud solutions and subscription revenue, which historically accounted for two-thirds of total revenue, grew by 18.7% year-over-year in the first quarter. This is a key area of future growth for Perfect. Although we are still impacted by a longer sales cycle, our value proposition to our clients and our market leadership in AI AR solution continue to be strong. We saw very stable renewals with existing brand customers in the first quarter. We also managed to acquire more new logos from expanded pipeline as we fine-tune our strategy to counter the impact of the prolonged sales cycle. These new clients will need time to grow and make meaningful impact to our top-line revenue. Meanwhile, we continue to invest in AI skincare technology as it is an untapped market with great growth potential. Lastly, our mobile beauty app subscription business powered by AI capabilities such as AIGC continues to experience strong growth momentum, helping to stabilize and balance our revenue streams. During the first quarter of 2023, we continued making strategic adjustments like those we disclosed in last earning calls as we navigated a challenging business environment. We would like to take the opportunity here to provide some business update and share with you our latest industry observation. along with insights on how our technology and partnership with brands have helped shape the industry. First, color cosmetics remain a very resilient and attractive category. We saw more luxury fashion brands offer color cosmetic products to consumers in the town to attract younger shoppers, as well as to diversify their revenue mix. Perfect is the leader in the color cosmetics beauty tech field. and we are well positioned to support this new group of brands. One of the most exciting developments for this quarter is our new partnership with a global top luxury fashion brand from Europe. We will be launching their first-ever makeup virtual try-on on its .com website across multiple countries and also on Taobao, which is China's biggest online shopping platform. This is a very significant milestone for this client as they are relatively new to the makeup category. We expect that virtual try-on feature will drive an enhanced customer engagement and increase sales conversions for the brand. Second, as China reopens its border, brands are coming back and investing in digital solutions to target shoppers in China. In addition, Consumers have resumed their color cosmetics applications and skin care routines since the face mask mandate was lifted. We have seen good recovery momentum for both our WeChat and Taobao solution in China. Third, in the first quarter, we secured several skin care deals, including one of a prestigious affected skin care group in Japan. and another with a US-based healthcare conglomerate to newly launch perfect AI skin analysis. This partnership enabled us to deliver our cutting-edge skin technology of skin diagnosis to a wider range of users, providing personalized recommendations for a diverse range of skin types and skin concerns. As we continue to innovate, We're excited to bring some more AI skincare diagnosis and recommendation services to brands and retailers around the world. Fourth, we saw digitalization has arrived in the jewelry and watch industry. Watches and jewelry brands are finally caught up with virtual try-on technology. Two more notable new wins in this quarter were from Europe-based luxury fashion groups. which officially rolled out of our watch and jewelry VTOs on their website across multiple countries using perfect jewelry VTO technology. As more brands create 3D digital assets, we expect to see wider VTO deployments across all channels, including websites, apps, and WeChat. Fifth, interactive AR advertisements started to become a attractive and a very new way for brands to target more consumers. In a new partnership, Perfect and Teeth have joined forces to deliver the first native virtual try-on AR app format onto Teeth's app platform. These joint solutions enable brands to offer a state-of-the-art DTO experience across makeup, watches, and all other AR video categories in popular media around the globe. We help two global luxury fashion brands feature their watches in AR media campaigns using our AR app. And also, we offer AR apps to several other cosmetic companies Through this type of collaboration, jewelry and beauty brands can reach out to millions of potential consumers through AR ads, which is a brand new form. Another good news to share here, our mobile beauty app business has been growing quite strongly. With the injection of more AI features, we have recently seen a robust surge in growth. Our mobile beauty apps' active subscribers increased by 15% from the previous quarter and increased 50% from the same period last year. These strong goals can be attributed to our efforts in improving digital marketing, developing and monetizing more attractive AI features. One of the examples to share, we recently introduced a new product feature called Magic Extra. by AI to enhance our UCAM mobile beauty apps. This powerful AI tool, through the advanced AI-generated content AIGC technology, and the custom-stable diffusion models can produce fun and realistic digital avatars which app users can use to express themselves in their online social community. This positive user feedback we have received for this feature has helped drive conversions to our mobile app subscriptions. This is just one of our many R&D initiatives that leverage the latest AI technologies for product innovation. We will keep on investing in AI development for both beauty brands and the beauty consumers. And this unique synergy of business models where our core technology is developed once, And it can monetize in both brand business and also consumer beauty apps. It offers perfect, very valuable insights, and a very unique cost advantage. The search in digital commerce pushed transactions far beyond the traditional offline store. Those are increasingly happening online in apps, in social platforms, via content services, and even in search. Brands are rolling out their strategy in omnichannel more than ever. This larger mix of channels is what makes perfect so valuable in any environment and across every sales channel. Our strength is our ability to build all the right tools for commerce to happen in every place. This is why brand customers strategies with perfect. To sum up, despite uncertainty in the macro, We believe that our value proposition to beauty brands and the beauty consumers remain intact. Our dedicated AI, AR innovation and continued investment in the latest AIGC technologies and AI talent and AI skincare technologies will better position Perfect in the competitive landscape. Looking to the rest of 2023, As brands continue to undergo digital transformation, AI and AR technology is a crucial component of creating immersive, personalized omnichannel shopping experience across omnichannels, which provides very good business opportunity for us. In addition, because of our renewed focus on online services, our AIAR cloud solutions and mobile app subscription business will grow more rapidly versus the previous year, and their revenue contribution will be more prominent. As more and more brands live to improve sales efficiency, operate more sustainably, and reduce product waste, we remain committed to driving top-line growth while focusing on profitability. Benefited from this strong signs of growth in each respective area, as I mentioned, and a very healthy market demand, we are very confident to deliver strong growth in 2023. With that, I will now turn the call over to Louis to go over the financial details with you. Louis?