Perfect Corp.

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

All right. Thank you, Ellie. Hello, everyone, and welcome to Perfect Course Earnings Call. With us today are Ms. Alice Chen, our founder, chairwoman, and CEO, Mr. Louis Chen, our EVP and CSO, and Ms. Iris Chen, VP of Finance and Accounting. You can refer to our second quarter 2023 financial results on our IR website or in the form 6K we filed with ACEC earlier. You can later assess a replay of this call on our IR website shortly after the conclusion of this call. For today's call, management will provide their prepared remarks first, and then we will host a Q&A session. Before we continue, I would like to refer you to our Safe Harbor Statement in our earnings press release, which you also applied to this call. This call may contain forward-looking statements regarding perfect COAPS performance, anticipated operational results, and objectives. Forwarding statements are based on management expectations and are subject to a number of risks and uncertainties that could cause potential results to differ materially from those depressed or implied on our call today. Perfect Corp undertakes no obligation to update any forwarding statement except as required by law after the date of this call. Please note that all numbers stated in the following measurement prepare remark are in U.S. dollar terms, and we will discuss non-IFRS measures today. Without further ado, I will now turn the call to our first speaker today, our CEO, Ms. Alice Chen.

Thank you, Ray. Hi, everyone. Welcome to Perfect Corp's 1P23 Second Quarter Earnings Conference call. Today, I'm happy to share with you Our perfect corporate pioneer in AI and AR solutions for the beauty and fashion is driving innovation and shaping the future for beauty tech, skin tech, and fashion tech. For the second quarter of 2023, we generated $12.7 million in total revenue, representing year-over-year growth of 11.9%. The double-digit growth mainly comes from our AI AR cloud solutions, and the mobile beauty app subscription services. In addition, we managed to improve our net income on an adjusted basis to $1.1 million in the second quarter of 2023 from $0.6 million in the same period of 2022, reflecting a margin of improvement of 2.7%. PartyCorp has been an AI pioneer since its inception utilizing AI machine learning in 2015 for real-time makeup virtual trial. With over 50% of our R&D developers specializing in AI, we continuously harness the latest AI advancement to push the boundary of beauty and fashion. Over the years, we have expanded our AI applications, including face shape detection for foundation matching, real-time live hair color virtual trial, advanced selfie skin care diagnosis using AI deep learning models, and the incorporation of AI GAN technology for various visual effects. In the second half of 2022, we introduced alternative AI to beauty tech, such as AI Avatar, which allows each user to create his or her own digital twin. Now, in 2023, we proudly unveil our range of innovative generative AI products, including AI fashion, AI hairs, and more to come. At Perfect, we are committed to utilizing the most advanced AI and AR technologies to provide continuous support to our three key growth pillars, beauty tech, skin tech, and fashion tech. By harnessing this cutting edge technology, We aim to enhance and further develop our capabilities in this domain. Our AI advances are not only leading to more collaborations with brands and also enthusiasts in beauty and fashion, but also positioning us for the future success and the revenue growth. This is especially true with generative AI. With the combination of human creativity and AI, allows us to develop products and experiences that captivate our customers. It sets us apart from competitors and serves as a driving force for substantial financial growth in the long run. Now, let me turn to our operational results for the second quarter and explain how our focus in AI has contributed to our growth. On the brand side, we have observed encouraging signs of improvement in product demand. It is evident through stable renewal, growth in key customers, and an increased interest in innovative projects, particularly in those involving Gen AI. Recently, we participated in the Viva Tech Conference in Paris and hosted our fifth annual Global Beauty Fashion Tech Forum in New York. This event served as a platform for us to unveil and showcase our latest advances in beauty tech, skin tech, fashion tech, and the creative usage model of generative AI across the board. Several brand groups have shown high interest to our pilot programs using GenAI for new collaborations. On the other hand, our mobile beauty apps have sustained their impressive growth momentum since the first quarter. This is due to the introduction of various premium add-on features powered by GenAI, such as AI Avatar and AI Fashion. AI Fashion is our latest innovation, which enables users to explore different fashion styles, outfits, and hairstyles through AI-generated image, which we just introduced in our mobile beauty app with very high engagement rate. On the technological development front, in addition to the new features powered by GenAI, Perfect has also been working on enhancing our virtual try-on for jewelry and watches, especially with multiple product packing capabilities. So now, we can combine rings, bracelets, and watches virtual try-on at the same time, and together with the make-up virtual try-on to create complete virtual try-on look in real time. This would allow consumers to try on different makeup products and accessories together to see how they complement each other, helping them visualize a total look. This is unique in the market. For brands, this powerful tool will allow cross-sell and build customer loyalty. Furthermore, In addition, in order to accelerate the adoption of virtual try-on technology for fashion and the jewelry, Perfe announced in June the world's first 3D VTO open format with the release of a comprehensive white paper on a new open standard .VTO file format. The new format is to establish a standardized and a simplified process for integrating third-party 3D objects into our virtual try-on platform. In addition, we also launched a 2D to 3D view creation tool for jewelry. This tool can convert from one 2D product image into a simplified 3D asset for virtual try-ons. Both initiatives aim to expedite the market adoption for jewelry virtual try-ons. It will greatly reduce the time and cost required for brands to integrate their product into our platform. This breakthrough has the potential to revolutionize the fashion industry by enabling rapid integration of virtual try-on experiences, benefiting both brands and consumers. On the business development front, we have made significant progress expanding our presence in the skincare market. Our diligent business development efforts have resulted in notable progress. Basically, during the second quarter, we acquired over 10 new skincare clients across various business segments, including pharma brands, MSPA, and beauty clinics, beauty clinics, and also in different regions. including United States, Pan-Asia, and the Middle East. This demonstrates our strategies in penetrating key growth markets and establishing partnerships with skincare verticals. At the same pace, we have successfully introduced additional premium add-on features in our mobile beauty apps by incorporating advanced AI technology into our offerings. This initiative has allowed us to attract a great number of engaged mobile app users, resulting in incremental subscription revenue. On the client success front in the second quarter, we have worked with several prestige brands to expand their existing VTO offerings in new cases. For example, Dior recently launched its new online and remote one-to-one consultation service The complement is existing digital beauty footprint. This showcases that virtual try-on experience is multi-channel, and we expect that newer use cases will start adopting virtual try-on as a key experience in digital beauty. Another good example is TresMed, which is a prominent unilever hair care brand. It recently introduced an exciting feature on its U.S. website. an AI hairstyle virtual tryout. This innovative tool empowers consumers to explore and visualize different hairstyles before making a commitment for a hair makeover. By leveraging our AI technology, Transmate aims to provide a more engaging and personalized experience for its customers. This interactive and very user-friendly AI tool enable individuals to make more informed decisions about their desired hair transformation, eliminating any uncertainty that may arise when considering a new hairstyle. In addition, we also help a well-known European luxury fashion brand in launching its first-ever but comprehensive virtual trial services for from makeup to nail polish, nail sticker, bracelets, and watches. At the same time, the largest luxury group in Europe also rolled out its jewelry VTO on its website in the second quarter. Lastly, the world's largest e-commerce company has chosen Perfect to launch its VTO features for its male brand on its shopping app and US web. This innovative collaboration aims to revolutionize away consumer experience in the shop for nail and jewelry products. The introduction of virtual try-on services for beauty and fashion jewelry highlights a significant shift in the industry. It indicates that virtual try-on has now become an essential requirement for cable states or brands to stay relevant in consumers' digital journeys all the time. Consumers increasingly expect the ability to visualize how makeup and accessories will look and fit before making any purchase, and the virtual try-on fulfills that demand. Perfect Corp, as a pioneering force, is leading the market to provide AI-driven virtual try-on solutions across all categories, with a steadfast commitment to innovations and cutting-edge technology. Perfect has been instrumental in revolutionizing the beauty and fashion industry to enhance consumer engagement and the consumer purchasing journey. In summary, we had a good second quarter with a double-digit revenue growth, and as we look forward to the full year 2023, we estimated a year-over-year total revenue growth ranging from 11.5% to 14.5% compared to 2020. Throughout this journey, our team will diligently monitor and access key performance indicators to ensure we stay on track with our objectives. Perfect is the well-positioned to benefit from the megatrend of digital transformation of beauty and fashion. Together with a new wave of innovation created by generative AI technology, we'll continue to propel the growth of both our brand SaaS business as well as our mobile app consumer subscription business. Thank you for listening. And now I'm turning the call over to Louis to go over the financial details with you. Thank you.