Perfect Corp.

standing by and welcome to Perfect Corp's third quarter 2024 earnings conference call. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad and if you would like to withdraw your question press star one again. We advise you to please limit yourself to one question and one follow-up and you are welcome to rejoin the queue if you wish to ask additional questions. We will be hosting a question and answer session after the management prepared remarks and please note that today's event is being recorded. I will now turn the conference over to the first speaker today, Mr. Jamie Shah, IR Director of the company. Please go ahead.

Thank you, and hello, everyone. Welcome to Perfect Corp's third quarter 2024 earnings 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 third quarter 2024 financial results on our IELTS 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 question and answer session. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release. 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 also discuss non-IFRS measures today. I will now turn the call over to our second speaker today, our CEO, Ms. Alice Chang.

Good morning. Good evening. Thank you, Jimmy, and welcome to Perfect Corp 2024 Third Quarter Earnings Conference Call. Let me start by giving you some updates on our financials and then share our view for the remainder of the year, as well as our progress in product and business development around the world. Our first nine months revenue grew by 12.5% year over year to $44.3 million. Our net income for the same period was $3.9 million. and the adjusted net income increase, 23.2% to $6 million compared to the same period of last year. This continuous increase in revenue and the positive net income resulted from strong growth in our mobile app subscription business under the AIAR cloud solution business. The first nine months of 2024, saw our operating cash flow generate a net inflow of $9.8 million, and our balance sheet remains very strong with over $163.2 million in cash and cash equivalents. In the third quarter, our revenue growth and the business efficiency contributed to the company's bottom line with a net income of $2.5 million. This net income bottom line result comes from the continuous efficient cost management initiative, while allowing the management to focus investing in AI and AR services to expand our market footprint in both B2B and B2C. Furthermore, in terms of adjusted net income, we delivered $3.2 million in the third quarter of 2024 versus $2.7 million in the same period of 2023, an increase of 20.6%. Our B2C mobile business has maintained strong quarter-over-quarter growth, with a number of active paying subscribers reaching an all-time high of over 977,000, representing a 17% year-over-year increase. This sustained growth in paying subscribers underscores the enduring global demand for AI photo and video editing, creation, enhancement, and beautification features spanning all age groups and geographies. Notably, our expansion efforts have yielded positive results in addition to North America, Western Europe, and Japan. We also see notable growth in new markets such as Brazil and Italy, further validating the universal appeal of our app offering. This broadening geographic footprint presents a promising outlook for our mobile beauty apps as we continue to focus on growing our user base in new regions. A new revenue stream has emerged through the introduction of our B2C web-based services. accessible via mobile, laptop, PC, Mac, and iPad, providing user options besides iOS in the Android mobile app. This service operates under a credit-based billing model, where consumers pre-purchase credits each month to access a wide range of AI features, including photo and video creation, editing, enhancements, and beautification. This initiative has expanded our total addressable market via mobile apps tapping into a broader consumer base. Additionally, we shift the shift to direct web-based service offers higher margins by avoiding services fee imposed by Apple stores in the Google store. Our suite of AI UCAN mobile apps continues to receive frequent updates and feature enhancements, integrating innovative AI digital solutions powered by cutting-edge AI technology for photos and videos. This update empowers users to explore and express their creativity, offering new ways to showcase personal styles through the latest advancement in AI-driven content creation and editing. Now shifting to our B2B operation in Q3, we have prioritized deepening market penetration across several new verticals. Most notably, we made significant strides in expanding our portfolio with AI-powered skin diagnostics, including updating, upgrading our industry-leading HD skin analysis solution with up to 15 skin concerns ready for consumers to learn all the details about their skin concerns in the visual simulation. This initiative positions us strategically in a skincare market that is projected to grow significantly in the next few years, driven by increasing consumer awareness of skin health and the pursuit for better skin and aesthetic beauty. with particular emphasis on the aesthetic clinic sector, where we introduce our new upgraded SkinCare Pro product, designed with ease of deployment and for small, medium-sized clinic chains. SkinCare Pro has been instrumental in its establishment of foothold in this growing market and newly enhanced the solution with AI aesthetic simulation capabilities. This advanced feature allows both aesthetic practitioners and the patients to visualize the potential outcome in the procedures, thereby reducing the likelihood of misunderstanding prior to making a treatment decision. This represents a pivotal area where AI technology plays a critical role in align with expectations with realistic results. Our core make a virtual triumph Product continues to perform well across all regions, particularly in the brand sectors. We successfully renewed major licenses with key beauty conglomerates and retailers for both this year and the next, highlighting the essential role our solutions play in enhancing online shopper engagement and driving higher conversion rates for e-commerce. This renewal has also enabled us to strategically cross-sell to affiliated brands and extending our offerings, including broader SKU selections and expanding market reach. While the B2B sales cycle continues to present some post-recovery challenges, our pipeline remains robust. Our team is diligently focused on guiding prospective enterprise clients in adopting our online solutions, helping them implement their consumer engagement strategy. And we are pleased to provide an update on our perfect GPT services, which we were announced in June. Since this introduction, the service has garnered high interest from numerous global beauty brands and skincare brands. We anticipate that AI-powered personalized beauty assistance will become a standard feature on all brands' websites in the coming future, enable 24-7 AI beauty consultation services. This AI assistance will offer professionally tailored recommendations that address the unique needs of consumers, including skin types, skin concerns, beauty makeup, preferences, and the fashion style. Perpetuity is distinctly designed with a robust focus on the retrieval augmented generation, we call REC, R-A-G, framework, where the recommendations are all supported by factual information and not merely derived from a standard large language model, LLM. This enables brands to provide factual authoritative documents that train our AI model ensuring that all recommendations are accurate, reliable, and consistent, meeting the highest quality standards. We expect the commercial POC proof of concept will launch early next year and followed by larger scale deployment in late 2025. In conclusion, We achieved consistent business growth in the third quarter of 2024, marked by increased revenue, enhanced operational efficiency, and a strong financial performance, while our B2C segment continues to demonstrate rapid and organic expansion. We are confident that Perfect Corp is strategically positioned to capitalize on expanding market opportunities and sustain long-term growth by diligently developing new AI technologies and leveraging our leadership position in the beauty and fashion space. As a company, we remain deeply committed to driving AI innovation that address both consumer and the brand pinpoints through our comprehensive suite of AI services. A key advantage that we offer is our ability to leverage a unified AI engine that serves both our consumer-facing app and enterprise SaaS solution, enabling us to maximize innovation across diverse sectors. Driven by the positive demand for both our mobile beauty app subscription and enterprise SaaS solution, we look for the full year 2024, such as total revenue growth recognized under IFRS to range from 12% to 14% compared to the full year 2023 results. With that, I have concluded my remarks and will now pass the call over to Louis, who will discuss our financial details with you. Thank you.