Perfect Corp.

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to 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. Welcome to Perfect Corp's Earning Call. With us today are Ms. Alice Chang, 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 first quarter 2024 financial results on our IR website or in the Form 6-K we filed with APC earlier. You can later access a replay of this call on our 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 Presidies. It also applies to this call that this call may contain forward-looking statements regarding prepared cost 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 or implied on our call today. The FedCorp 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-IFRS measures today. Without further ado, I will now turn the call to our first speaker today, our CEO, Ms. Alice Chan.

Thank you, Jennifer, and welcome to PerfectCorp's 2024 first quarter earnings conference call. We have some exciting news to share today, so let's get started. Leveraging our advanced AI capabilities, we started 2024 with a robust first quarter. Our first quarter revenue grew by 17.7% year-over-year to $14.3 million, and our net revenue was positive $.6 million. The double-digit increase in revenue and a positive net income were driven by the strong growth of our AI, AR, cloud solutions, and substitution services. for both our mobile business, app business, and our enterprise business. Both business clusters have benefited from our superior AI technology and contributed to our top-line expansion and the profitability improvement. Plus, our operating cash flow has a net inflow of $3.5 million due to our sound business model. In this quarter, we continue to invest in our beauty AI strategy, including beauty AI, skin AI, fashion AI, and the gen AI across both of our consumer and enterprise business. For our consumer app business, we leverage our new gen AI technology to launch more innovative features in Ucam 3.0 mobile app in quarter one. attracting more users to our apps and converting more users into subscribers. For our enterprise business, we have a renewed contrast with many big clients and brought in several new brands for make-up virtual try-on services. We also saw ongoing and strong momentum in our new AI skincare diagnosis product, and we expected this trend will expand and grow. Furthermore, New clients from luxury jewelry and watch industries are integrating our jewelry and fashion BTO offerings into their digital offerings. This new development showed our sustained effort to extend our coverage into different verticals and address some larger markets. They also reflected the various avenues we have got to increase business potential. As we are committed to keep investing resources in AI advancement, we are able to deliver products and services that continuously strengthen our unique position in beauty AI, skincare AI, and fashion AI. Now let's shift our focus to operational outcomes and discuss our most recent advancements. We saw another robust quarter for our B2C mobile beauty app business, evidence by the 30% year-over-year increase in our mobile beauty app active subscribers to a historically high over 902,000. A continuous growth in active subscribers reflected in the rising demand for mobile apps that enable users to edit, enhance, and beautify their photos and videos. As self-expression and creativity become increasingly important, consumers expect more personalized and diverse experiences from mobile apps. Our family of UCAN apps is able to offer unique and high-quality digital outputs. leveraging advanced technology like generative AI for photos and videos. This new set of GenAI features, including AI editing and beautification for photos and videos, empower our users to freely and creatively express themselves on social media and to create high-quality ultra-personalized photos and videos generated or edited by UChem StreetOff app. The key appeal of the UChem Family app is advanced AI and AR technologies to help the users to solve real-life challenges and explore more creative ideas. This offering allows users to beautify, edit, and enhance photos and videos, as well as virtually try on makeup and hairstyle. Users can also experience and create their unique and diverse styles in photos and videos and artworks to release their creativity by leveraging the latest AI technology. As users become satisfied with the quality of our products, our apps, they continue to use our apps making UCAM family apps an integral part of their daily life. Moreover, we offer a complete line of online AI editing tool on our website. And through our UCAM suite of mobile apps that leverage advanced AI capabilities to enhance photos, videos, and generate AI artwork, such as AI enhanced for photo and video, AI colorization, AI color correction, AI lighting, AI figures, and anime characters. Our product strategy centers on integrating AI across our entire offering to edit, beautify, and enhance photo and video in one second and easily. Transform user experience and self-use as a real-time problem and meet evolving needs from a broader user base, while at the same time maximize the return on our R&D investments. A key strength of ours is the ability to leverage the same AI engine to empower both our consumer mobile business and our enterprise business. This allows us to fully monetize innovation across different sectors in our B2C and B2B sectors. Our unique AI-driven approach, combined with a commitment on ongoing innovation, positioned us as significantly expand market penetration by unlocking AI transformative potential. Now, let's shift focus to our B2B business. This quarter, in our B2B sector, we focused on deepening the penetration in new verticals to provide AI interior diagnosis products and during those fashion virtual try-on business, while at the same time expanding the adoption of our makeup BTO to more brands in the region. Specifically, we got several new links for our beauty interior jewelry solutions within our B2B sector. This demonstrates the growth demand from our comprehensive solution and superior technology from clients in different industries and sectors. Moreover, we successfully secured a major license renewal with key beauty, skincare, and jewelry brands and retailers. This renewal underscores the increasing trust this brand placed in our solutions to address their evolving requirements and highlight of our leadership in BTO's offering. We also capitalize on this opportunity by cross-selling to their sister brands and offering additional services, including expanding SKU selections and expanding brand presence into new geographies. Strong momentum in revenue growth in this quarter reflected the recovery in the sales cycle and the pipeline expansion of our enterprise business. Firstly, for our BT.AI, we remained a leader in the industry and we continue to innovate. BT.AI has always been the core of our business. In this quarter, we have renewed contracts with all major existing clients and brought in several new brands for makeup VTO, virtual try-on services. Furthermore, we continue to innovate and expand the capability of our makeup offering. We have added metallic textures to eyeshadow VTO and a shimmer texture to eyebrow VTO. These new textures for makeup not only allows brands to provide more try-on options to their clients, but also further strengthen our market leadership in makeup BTO sector. Secondly, for our skin AI tech, in this first quarter, we saw strong momentum for our skin diagnostics products from both existing and the new customers. As people become increasingly conscious about their skin health, we aim to capitalize on this trend By providing AI solutions, notably, we gain significant traction in new market segments such as med spots, athletic clinics, and dermatology practices. These professional institutions leverage our AI technology to deliver real-time and epidemiologic verified skin diagnosis results in the scores to their clients and patients. A key differentiator for our skin service is our cutting-edge and unique high-definition AI analysis that offers a comprehensive approach to understand individual skin conditions in super high precision, allowing users to visually change their skin after skin treatment with a very easy to see AR overlays precisely positioned on the location of the actual skin concern and with measurable skin scores. Using advanced AI, our skin diagnosis solution can detect and evaluate up to 14 key skin concerns, providing patients with a detailed, data-driven assessment of their unique skin health profile. The first key driver of our skin business success this quarter came from our self-service offering, a new product, Skin Care Pro, which can robust momentum, particularly among aesthetic clinics and medical staff. This is an iPad-based skin diagnosis solution It serves as a consultation tool for clinics to engage with their clients. And with the newly added CRM module, it can improve customer retention, where it keeps track of each individual customer's progress during treatment. Skincare Pro enables this business to deliver personalized, data-driven skin consultation. to their clients and patients in a very cost-efficient and easy way. Furthermore, we recently developed and integrated a comprehensive customer relationship management CRM system with our skin care pros, allowing skin care professionals to better manage customer profiles for skin health reports in cloud-based consoles and compare before-after results. This integration represents a significant shift in how personalized skin care is delivered, ensuring a more personalized and efficient patient experience. By similarly integrating and upgrading our AI-powered skin analysis, analysis, and emulation tools, as well as providing science-based skin care experience that supports data-informed decisions and drives parallel patient engagement and satisfaction. AI and AR adoption among skin care industries is at its very early stage. We believe there is a large market for us to serve and grow. Firstly, for our AI professional jewelry VTO, Another highlight of the quarter was the celebrated market adoption of our VTO solution for watch and jewelry. We saw several newings in the renewal of prestige in the luxury brand, making good progress of our VTO offerings in this category. We first began expanding into jewelry and watch VTO at the start of 2023. And we are thrilled to see our efforts paying off as more deals have been confirmed and more use cases for products that have been launched in the market. In particular, we saw renewals and upsells from luxury jewelry brands this quarter. We believe the superior AI technology and professional service the brand clients experience and working with us made them willing to renew the contract and to purchase more services. In this quarter, we have partnered with an European luxury jewelry group and watch group to provide jewelry and watch BTO for three luxury brands within the group. That region are cutting-edge AI technology, a sophisticated texture, and the radiant reflections of the jewelry can be faithfully portrayed on the screen, providing users an immersive, true-to-real, true-to-life shopping experience. Though the case is still at its stage of a POC, we believe that this new wing not only affirms the trust in our AI technology by this high-end brand, but also unlocks the chances to get more new logos onto our SaaS platform for jewelry, accessories, and watches. The increasing numbers of jewelry and watch brands using our BTO and AI technology indicates that the demand for this interactive shopping experience is on the rise. The unique and living function of our products allow brand clients to increase user engagement time and reduce return rates, given the robust demand for jewelry and watch VTO, we will continue to deepen our penetration in this sector and further grow our business in different and new categories and regions. We have made good progress in our AI-powered hair solution tool in the first quarter. In this quarter, we added a new AI hair type analysis technology that can quickly identify hair texture, thickness, and curl patterns by simply taking a picture of user's hair. This AI technology accurately classified hair into nine distinct distinct types across the 10 categories. From straight, wavy, to extremely curly, can deliver precise and personalized recommendations tailored to each unique hair type. This new innovation on AI hair complements our full range of AI hair solutions, which includes our hair color VTO, AI hairstyle generation, AI week, hair week, generation, and hair extensions. This industry-leading solution enables hair care brands and the retailers to provide customers with a more customized shopping experience. To sum up, we delivered strong business performances in the first quarter of 2024 with double-digit revenue growth and a positive bottom line. Not only did the momentum in our mobile app business remain robust, our enterprise business also gained success in expanding services into new verticals. These positive indicators suggest we are in a position to capitalize on growing market opportunity for AI, beauty, speed, fashion, and generative AI. We'll continue growing our AI AR-powered business. Given by the good demand for both our mobile app subscription and enterprise SaaS solution, we reiterate our outlook for the full year 2024, projecting total revenue growth recognized under IFRS to range from 12% to 16% compared to the full year 2023 resource. With that, I have now concluded my remarks, and I will be handling the call over to Louis, who will discuss our financial details with you. Thank you.