Perfect Corp.

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Perfect Corps' second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. 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. Jimmy Shaw, director, IR director of the company, please go ahead.

Thank you. And hello, everyone. Welcome to Perfect Corp's second quarter 2020 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 second quarter 2024 financial results on our IOM website or in the form 6K we filed with SEC earlier. A replay of this call will also be available on our website shortly after its conclusion. For today's call, management will provide our prepared remarks, followed by a Q&A session. Before we continue, I would like to refer you to our safe harbor statement in our earnings press releases. This call may contain forward-looking statements regarding performance, anticipated plans, original results, and our objectives. Forward-looking statements are based on management's expectations and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our call today. Perfect Corp 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 management's prepared remarks are in U.S. dollars, and we will discuss non-IFRS measures today. I will now turn the call over to our CEO, Ms. Alice Chen.

Thank you, Jimmy, and welcome to Perfect Quartz 2024 second quarter earnings call. We have some exciting news to share today. Let's get started. leveraging our advanced AI capabilities. We started the first half of 2024 with a strong growth with our previous provided guidance. Our first half revenue grew by 13.5% year over year to $28.2 million. Our net income grew 185% year over year to a positive $1.4 million. and the adjusted net income increased 26.2% to 2.8 million compared to first half of last year. The double-digit increase in revenue and the positive net income were driven by the strong growth in our AIAR cloud solutions and the subscription services for mobile beauty apps and enterprise business both. Both businesses benefited from our superior AIAR technologies and contributed to increase in the top line and also to the profitability. The first half of 2024 saw our operating cash flow generate a net inflow of $5.5 million. In the second quarter, our continuous improvement in the company bottom line showed a net income 0.8 million compared to net loss of 0.2 million during the same period in 2023. Our operational strength lies in efficient cost management initiatives, improvement in operational efficiency while sustaining our competitive edge, investments in AIAR services, and continuous development in our market footprint. Furthermore, we delivered $1.3 million in adjusted net income for the second quarter of 2024 versus $0.9 million in the same period of 2023, an increase of 43.8%. An essential advantage we possess is leveraging our unified AI engine for both consumer mobile apps and enterprise SaaS solutions, allowing us to maximize innovation across various sectors. Our B2C business, particularly our mobile beauty app, has continued to grow very strong. We witnessed an 18.3% year-over-year increase in our mobile beauty app active subscribers, reaching a historical high of over 919,000. This sustained growth in active subscribers is a testament to the increasing demand for mobile apps that empower users to edit, enhance, and beautify their photos and videos. It also indicates a more promising future for in our user base. Our suite of UKIM apps continues to lead the innovative digital solution. Harness cutting edge technologies like GenAI for photos and videos. Users can now explore and express their unique styles in photos, videos, and artworks, unlocking their creativity through the latest AI capabilities. As mentioned earlier, we have introduced quite a few enhancements driven by GenAI, including AI avatar, AI fashion, AI hairstyle, AI Headshot, AI Studio, AI Color, and AI enhanced photo video editing tools. These tools offer users sophisticated options for beautification and enhancement, setting new standards in digital creativity, and showing kids our commitment to continuous innovation. Time to our B2B operations. This quarter, we focused in the B2B sector centered on enhancing market penetration across various verticals. We made additional inroads in AI-powered skin diagnostics products and the jewelry fashion solutions. Simultaneously, we expanded the adoption of our mega VTO across all brands in the region. We secure multiple new contracts for our beauty skincare, and jewelry solutions within B2B sectors, highlighting strong demand for our comprehensive offers in advanced technology across diverse industries. Additionally, we successfully renewed major licenses with key beauty groups and retailers. This renewal underscores the growing trust in our solution to meet evolving demands and affirm our leadership in VTO virtual try-on services. Furthermore, we leverage this opportunity to cross-sell to affiliated brands and offer expanded services, including broader skill selections and market expansion. The strong revenue growth this quarter reflects the continuous recovery in sales cycles and the expansion of our enterprise business pipeline. Another exciting event took place during the second quarter. We formally announced our generative AI framework for beauty, PerfectGPT, at our sixth annual Global Beauty and Fashion AI Forum in New York City this June. PerfectGPT is a framework that connects all other perfect beauty services, ending at solving customer beauty and fashion pain points through natural language conversation LLM, large language model, and generative AI visual content. Any brand can use this framework to develop its own personalized AI assistance for beauty, skincare, and fashion, and deploy it in conjunction with other digital services for a unified consumer experience. Together, with this perfect GPT framework, we also announced a range of new beauty AI solutions. including the brand new services of beauty GPT with specialized AI makeup transfer, step-by-step tutorials, and the product recommendations. Also, skin care GPT with AI skin analysis and the product recommendations. Down the road, we will develop more generative beauty fashion solutions using GPT technology, such as Hair GPT, Jewelry GPT, Fashion GPT, and more. to enrich consumers' journey. All these services can be integrated into a single touchpoint experience for consumers, all via a simple, intuitive, conversational way of an AI assistant, a brand website, or in our app. Besides the GPT, in Q2, we launched the world's first HD skin analysis solution capable of detecting two times higher precision when doing AI skin analysis on user's face. The improved AI model can now handle more input data from the high-definition smartphone camera, and the upgrade enables brands and the clinics to perform an even more accurate diagnosis for user skin concerns. Plus, the AI skin solution is upgraded with a batch capability to handle a large amount of data images with a new AI skin score validator. Right now, in Brent's lab, Brent can use this new model to efficiently process large amounts of clinical test data and get results faster. The innovation continues also in the AI mega domain. we pioneered the launch of the world's first AI makeup transfer with full-loop creation. This leading technology uses AI to detect and create exactly replicas of any trending makeup loops from social media or from any photo out of a beauty magazine. Our GenAI model can detect the color, texture, and the patterns of a look and transport it seamlessly to the user's personal selfie photo. Consumers can try all kinds of trending looks with just one single photo image. The AI model can further compare look shades and textures with our database of makeup product skills and offer users a recommendation of specific brand products. On the jewelry side, we also launched the Word First real-time multi-category stacking capability virtual tryouts. Consumers can now try pairing several items together, such as wearing multiple rings on different fingers or combining them with bracelets and watches at the same time. The enhanced capability is thanks to our improved tracking and rendering performance architecture to process multiple 3D objects all together directly from smartphone, CPU, GPU. Our company is fully committed to create new AI innovations to help solve both the consumers' and the brands' pain points with our full line of AI services. In closing, we achieved robust business performance in the second quarter and the first half of 2024, marked by strong revenue growth enhanced operational efficiency, and a positive financial outcome. Our B2C segment continues to experience rapid organic growth with the launch of PerfectGPT and all other industry-leading AI technologies. We are confident that PerfectCorp is strategically poised to seize expansion market opportunities for consumers and brands. and to sustain our business growth, both in the near term and the longer term. Driven by the good demand for both of our app subscription and enterprise SaaS renewal solution, we iterate 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 results. With that, I have concluded my remarks and will now pass the call to Louis, who will discuss our financial details with you. Thank you.