Perfect Corp.

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to the Perfect Corp's 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, Ms. Jennifer Wu. IR Manager of the company. Please go ahead.

Thank you, and hello everyone, and welcome to Perfect Corp's Earning Call. With us today are Ms. Alice Chen, our Founder, Chairwoman, and Chief Executive Officer, Mr. Louis Chen, our Executive Vice President and Chief Strategy Officer, and Ms. Iris Chen, Vice President of Finance and Accounting. You can refer to our fourth quarter and four-year 2023 financial results on our IR website or in the Form 6-K we filed with ACC earlier. You can later access 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 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. as this call may contain forward-looking statements regarding PreventCode's performance, anticipated plans, operational results, and objectives. Forward-looking statements are based on management expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed and implied on our call today. PreventCode undertakes no obligation to update any forward-looking statements, except as required by law after the date of this call. Please note that all numbers stated in the following management prepared remarks are in U.S. dollar terms, and we will discuss non-average measures today. Without further ado, I will now turn the call to our first speaker today, our CEO, Ms. Alison.

Hi, thank you very much, and welcome to PerfectCourse 2023 fourth quarter earnings call. We have some very good news to share with you today. Let's get started. We ended 2023 with a strong fourth quarter. Our fourth quarter revenue grew by 27.6% year over year to $14.1 million. And our net income was positive at $1.4 million. Our full year results was promising too. As our full year 2023 revenue increased by 13.1% year over year, to 53.5 million in our full year 2023 net income was positive at 5.4 million dollars. The company operating cash flow had a net inflow positive of 13.6 million dollars as a result of our robust business model. The increases were driven by the strong momentum in our AIAR cloud solutions and the subscription services for enterprise business and our mobile beauty app business. Powered by our advanced AI capabilities, both segments have contributed to our top-line expansion, profitability improvements, and the positive operating cash flow. In this quarter, we captured a good demand in our AI Skin Bionautics product, as well as accelerated adoptions of jewelry and fashion virtual tryouts. This new deployment and the use cases further extend our coverage into a larger market. Plus, more innovative features powered by generative AI have been rolled out in our UCAM suite of mobile apps in this past quarter. These new AI features have not only attracted new mobile app installations, but also effectively converted more users into premium subscribers. All of this above achievement was centered on our beautiful AI strategy, which consists of four major pillars, duty AI, team AI, action AI, and gen AI. Four key pillars will play a pivotal part of our core business moving forward. We are committed to keep investing in AI to strengthen our leading position in AI. Now let's shift our focus to operational outcomes of fourth quarter and discuss our most recent advancements. On the B2B side, we secure a major license renewal with beauty, skincare, jewelry brands. These renewals not only reaffirm the growth and reliance of this brand on our solutions to meet their evolving needs, but also show our leadership in the field of virtual triumph. We also see the opportunities to cross-sell to sister brands and upsell more services. such as acknowledging their few offerings and expanding to additional countries to our brand clients. Our strong revenue growth in the fourth quarter of 2023 signaled a recovery in enterprise new business acquisitions from the second half of 2023 compared to the slow and prolonged sales cycle we saw in the first half of 2023. We entered this quarter focused on deepening the penetration in different verticals to provide AI-powered skin care diagnosis products, as well as an increase in adoption of virtual trial solutions for jewelry and the fashion industry. Highlights in fourth quarter was the growing demand for skin and skin care and skin diagnosis products. The demand not only comes from skin to your brain, but also comes from new channels such as Mass Spa, aesthetic clinic, and a dermatologist. We utilize our AI-powered technology to provide users with real-time and the trusted, accurate AI skin diagnosis results, which is verified by dermatologists. A key benefit of our AI skin solution Our clients leverage on our AI skin diagnosis technology to provide patients with a thorough assessment of the skin concerns, including redness, wrinkles, moisture, pore, all skin types, more than 14 skin concerns and skin types. So to recommend tailored treatment plans targeting their unique demands. With the help of AI technology, Clinics can not only do consultation for patients, but also give customized recommendations, thus creating a personalized and science-based experience to boost patient engagement. Furthermore, we have also seen good demand for our new product, InCare Pro, which was launched in the last quarter. This self-service product on iPad attracted mid-sized skincare brands, clinics, and Medspa for its high-quality skin analysis and diagnosis results. With the Skincare Pro, we are able to expand into larger customer base. We also see potential of this product to penetrate into the market of larger brands, clinics, and Medspa. The expanded adoption of our skincare and skin diagnosis solution enables us to engage with a larger potential customer base in the skin-related industry and further diversify our revenue stream. As the need for more advanced skin diagnosis continues to grow, we keep on advancing our AI technology and help brands and the clinics to streamline their customer engagement process through digital transformation. Another highlight was the accelerated market adoption of our watch and the jewelry virtual try-on solution. Marked by several new launches with prestigious and luxury brands, we started to expand into jewelry and watches with virtual try-ons in the beginning of 2023. And we are excited to see our efforts starting to pay off as more jewelry and watch use cases were launched in the market. Specifically, we have partnered with a luxury European jewelry brand to launch virtual try-ons for its residents and the yearlings. Through our advanced technology, the textures and the reflections of the jewelry can be shown vividly through the screen and provide users with true-to-life shopping experiences. The increased adoption of our virtual try-on services reflects that the demand for jewelry, watch, and accessory virtual try-ons is huge, that our technology is trusted by this high-end brand. Moreover, we have worked with some of our existing jewelry brand clients to launch jewelry virtual try-ons with our very unique stacking options, meaning that users can try on multiple pieces of earrings and bracelets at the same time. This unique, stimulating functionality allows users to mix and match different pieces of online and experience the total look in just a few clicks, helping brands to increase the time users spend on brand websites and the deepening engagement with users. Another good progress to share here is our AI tier solution. Continue to drive new innovations. To complement our industry-leading gen AI-based AI hairstyle generation, we now created the industry-first AI wig virtual try-on for users to try on different types of hair wigs with true-to-real simulation results before they buy. Additionally, we also newly developed AI hair extensions, hair band, combined with our AI hair color, we have a complete clear solutions now. By leveraging the latest diffusion generative AI model, our technology enables users to try various styles before choosing a new style as a salon. This total solution for hairstyle, hair wig, hair extension, hair band, and hair color is unique in the market. With our comprehensive offering, Friends and users can virtually try on different styles before they do hairstyling or a bi-week. Now let's shift focus to our B2C mobile beauty app business. We saw another robust quarter of our mobile beauty app business, evidenced by the 45.7% year-over-year increase in our mobile beauty app active subscribers. to a historically high of over 879,000. And this continuous momentum in subscriber growth reflected the increasing demand for editing, enhancing, and beautifying photos and videos using mobile apps. With our suite of UCAM apps, we continue to diversify our product offerings to meet the needs from users in a fully capitalized on the app market expansion frame. The consumer app market represents a big, very big growth opportunity with rising global demand for subscription-based premium mobile features. We are well-positioned to increase the market share in the consumer space, leveraging proprietary AI technology from GenAI. Our team developed a robust roadmap of premium features for app subscribers. We have already implemented multiple GenAI-driven enhancements for our app, including AI Avatar, AI Fashion, AI Hairstyle, AI Selfie, AI Headshot, and AI Studio, and et cetera, which provide users with sophisticated beautification with a simple click and enhancement tools for photo and video. Moreover, we launched our online AI editing tools on our website to enable users to edit, enhance their photos efficiently on the web with the help of AI. For example, users can change or remove background within seconds or replace objects in just a few clicks. Users can also colorize black and white photos or expand pictures easily. We have also offered a series of smart AI photo-video enhancement products that can instantly explore photos, upscale and enhance image resolution, eliminate noises, and brighten low-digit images without compromising quality and details. Our product strategy centers on integrating AI across our entire suite of offerings to transform user experience and solve problems for app users. Most importantly, our unique strength is to use the same AI engine to support both enterprise SaaS business and our mobile app business. By doing so, we can make the most use of our R&D capability to monetize in both sectors. With this special strength and our commitment To ongoing innovation, we are posed to expand our market penetration of the industry by unlocking the transformative power of AI. In summary, our business performs of both the fourth quarter and for full year 2023 were strong, featuring double-digit revenue growth and a positive bottom line. we not only saw recovery in the enterprise business, but also gained success in expanding into new verticals. The momentum in our mobile app business was very robust, too. These factors suggested that we are well-positioned to seize market opportunity and continue to grow our AI business. Based on the strong momentum in both enterprise solution demands and our mobile beauty app subscription business. We observed a very healthy recovery in 2024 with an increase of over 20% in business pipeline. And we expect the growth of our total revenue recognized by under IFRS for full year of 2024 to range from 12% to 16% year over year in comparison to a full year of 2023. With that, I've now concluded my remarks, and I will be handing the call over to Luis, who will discuss our financial details with you. Thank you.