- Total Revenue: Increased 12.5% year over year to $60.2 million for the full year 2024.
- Net Income: $5 million for the full year 2024, with an adjusted net income of $8.3 million, up 18.6% from 2023.
- Operating Cash Flow: Generated a net inflow of $13 million for the full year 2024.
- Cash and Cash Equivalents: $165.9 million as of December 31, 2024.
- Gross Profit: $46.9 million for the full year 2024, with a gross margin of 78%.
- Operating Expenses: Total operating expenses for the full year 2024 increased 2.7% to $50.1 million.
- Mobile App Subscribers: Active paying subscribers increased 14.3% to over 1 million by the end of 2024.
- Enterprise Clients: Reached 732 brand clients with over 822,000 skills onboarded.
- 2025 Revenue Growth Guidance: Projected to range from 13% to 14.5% year over year.
- Warning! GuruFocus has detected 4 Warning Signs with PERF.
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Perfect Corp (NYSE:PERF) achieved a double-digit revenue growth of 12.5% year over year, reaching $60.2 million in 2024.
- The company reported a strong net income of $5 million, with an adjusted net income increase of 18.6% to $8.3 million compared to 2023.
- The B2C mobile app business saw significant growth, with active paying subscribers increasing by 14.3% to over 1 million by the end of 2024.
- Perfect Corp (NYSE:PERF) maintains a robust balance sheet with over $165.9 million in cash and cash equivalents.
- The acquisition of Wanna from Farfetch is expected to expand Perfect Corp's market reach in the luxury fashion segment, enhancing its competitive position.
Negative Points
- The B2B market remains challenging, with clients cautious about spending due to potential tariffs and economic uncertainties.
- Licensing revenue decreased significantly by 72.2% in the fourth quarter of 2024, as the company transitions to a subscription-based model.
- Gross margins declined from 81.3% in 2023 to 74.1% in the fourth quarter of 2024, primarily due to increased third-party payment processing fees.
- Operating expenses increased by 2.7% for the full year 2024, driven by higher sales and marketing costs.
- The B2B revenue contribution is expected to decrease, potentially dropping to 30-40% of total revenue in 2025, as B2C growth outpaces B2B.
Q & A Highlights
Q: What is the outlook for Perfect Corp's B2B segment, and how does it factor into the 2025 growth guidance? A: Louis Chen, EVP & Chief Strategy Officer, explained that the B2B market remains challenging due to factors like inflation and potential tariffs. While the pipeline is solid and interest from brands is strong, clients are cautious about spending. The B2B revenue is expected to be 30% to 40% of total revenue in 2025, with B2C growing faster. The guidance reflects current market visibility, and they remain optimistic about future growth.
Q: How did the B2B revenue compare to last year, and what are the expectations for operating expenses? A: Louis Chen noted that B2B revenue was 40% last year, with B2C becoming the larger part of the business. They plan to continue investing in growth, particularly in AI innovation, while maintaining financial discipline to avoid financial pressures.
Q: What is the competitive landscape for Wanna in the fashion sector after its acquisition by Perfect Corp? A: Louis Chen stated that Wanna is a leader in the fashion space with clients like Valentino and Gucci. The acquisition positions Perfect Corp as a powerhouse in AI/AR for fashion and beauty, with limited competition from smaller startups. The merger creates opportunities to serve top luxury brands more effectively.
Q: Why did gross margins decline quarter over quarter, and what are the expectations for 2025? A: Louis Chen attributed the decline to faster-than-expected growth in the B2C segment during the shopping season, which impacted overall gross margins. The B2B segment faced challenges, contributing to the margin drop. They expect margins to improve slightly in 2025 but not return to 2023 levels.
Q: What are the strategic investment priorities for Perfect Corp in 2025, particularly regarding AI? A: Alice Chang, CEO, emphasized that AI, especially generative AI, is a major focus for R&D. They plan to invest in AI model development, server training, and digital marketing to attract app users. The goal is to leverage AI advancements to enhance their offerings and maintain leadership in the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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