Perfect Corp. Reports Mixed Q3 2024 Results: AI and AR Solutions Drive Growth Amid Challenges

Oppenheimer maintains Perform rating on Perfect Corp. after 3Q24 By Investing.com

On Tuesday, Oppenheimer retained its Perform rating on Perfect Corp. (NYSE: PERF) following the company's third-quarter results for 2024. Perfect Corp. reported a mix of outcomes, including strong year-over-year improvements in operating margins and double-digit growth in top-line revenue. However, the company issued slightly lower guidance for future revenue growth. The growth for the AI and augmented reality (AR) software provider was attributed to its core AI/AR cloud solutions and consumer business. These factors contributed to Perfect Corp. achieving record net income according to International Financial Reporting Standards (IFRS). Despite these positive developments, the company's key customer count remained unchanged, and the current scale of top-line growth did not significantly stir investor interest. Perfect Corp.'s third-quarter performance indicated progress in enhancing its operating efficiency and maintaining robust growth in AR/AI revenue. The company has been recognized as a technology leader within the fashion and beauty industry and is considered to be effectively managing the challenges of a tough operating climate. The analyst from Oppenheimer concluded that while Perfect Corp. is advancing its operating profile and securing stable revenue in its niche market, the current level of growth does not generate significant enthusiasm among investors. As a result, the firm has decided to maintain its Perform rating on the stock. In other recent news, RéVive Skincare and Perfect Corp. have unveiled a novel AI skin simulation technology. This development is part of a partnership aimed at enhancing the shopping experience for potential customers by showcasing the effects of RéVive's skincare line. The technology will generate before-and-after visuals reflecting the results of RéVive's clinical trials across various skin tones and age groups. The initiative is designed to give consumers a clearer understanding of how RéVive products can address specific skin concerns and enhance skin radiance over time. CEO of RéVive Skincare, Elana Drell-Szyfer, highlighted the company's commitment to innovation and meeting consumer needs. Alice Chang, Founder and CEO of Perfect Corp., also expressed enthusiasm for the collaboration, noting the transformative role of AI in skincare retail. Perfect Corp. (NYSE: PERF) presents an intriguing financial profile that complements the recent analyst assessment. According to InvestingPro data, the company boasts impressive gross profit margins of 80.05% for the last twelve months as of Q2 2024, aligning with the "InvestingPro Tip" highlighting its impressive gross profit margins. This robust profitability at the gross level underscores the company's strong position in its niche market, as noted in the article. Despite the analyst's neutral stance, PERF's financials reveal some positive aspects. The company's PEG ratio of 0.31 suggests it may be undervalued relative to its growth prospects, which is reflected in the "InvestingPro Tip" indicating that it's trading at a low P/E ratio relative to near-term earnings growth. This could be of interest to value-oriented investors looking beyond the current investor sentiment described in the article. It's worth noting that PERF has shown revenue growth of 16.64% over the last twelve months, which supports the article's mention of double-digit top-line growth. However, the stock price has underperformed, with a year-to-date total return of -37.74%, possibly explaining the muted investor enthusiasm highlighted by the analyst. For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide deeper insights into Perfect Corp.'s financial health and market position.

Perfect Corp Q3 Earnings: Revenue Growth Fueled by AI, AR Solutions & Record YouCam Subscribers - Perfect (NYSE:PERF)

YouCam mobile beauty app active subscribers grew by 17% YoY, reaching a record high of over 977,000 active subscribers. On Tuesday, Perfect Corp PERF announced third-quarter earnings for the quarter ended September 30, 2024. Total revenue was $16.1 million for the third quarter, marking an increase of 10.8% year-on-year, missing the analyst consensus estimate of $16.8 million. The increase was primarily due to growth in the revenue of AI- and AR-cloud solutions and mobile app subscriptions. Also Read: EXCLUSIVE: Perfect Corp's Q2 Revenue Jumps 9.6%, YouCam App Subscribers Hit Record High AI -- and AR -- cloud solutions and subscription revenue was $13.4 million, up 17.9% year over year. The double-digit growth was driven by robust demand from brand customers for the Company's online virtual product try-on solutions, healthy momentum in the growth of YouCam mobile beauty app subscriptions, and consumer preference for Generative AI technologies and AI editing features for photos and videos. The Company's YouCam mobile beauty app active subscribers grew by 17.0% year over year, reaching a record high of over 977,000 active subscribers. Licensing revenue was $2.4 million, a decrease of 14.5% Y/Y. The Company anticipates that this legacy non-recurring revenue will diminish in significance as it continues to prioritize enhancing its market leadership in offering AI- and AR-based SaaS subscription solutions for brands and customers. Gross profit was $13.0 million, up by 9.6% Y/Y. The gross margin slightly decreased to 80.3%, from 81.2% Y/Y, primarily due to the rise in third-party payment processing fees paid to digital distribution partners such as Google and Apple, related to the growth in its mobile app subscription revenue. Net income of $2.5 million declined from $3.5 million Y/Y. EPS stood at $0.03. Adjusted net income was $3.2 million, an increase of 20.6% Y/Y. Adjusted EPS was $0.027, which marginally missed the analyst consensus estimate of $0.03. Operating cash flow was $4.2 million in the third quarter of 2024, an increase of 6.3% year over year. As of September 30, 2024, the Company held $127.2 million in cash and cash equivalents. The Company had 151 Key Customers as of September 30, 2024, steady Q/Q. As of September 30, 2024, the Company's cumulative customer base included 708 brand clients, with over 806,000 digital stock-keeping units for makeup, haircare, skincare, eyewear, watches, and jewelry products, compared to 686 brand clients and over 774,000 digital SKUs as of June 30, 2024. Business Outlook for 2024: Based on the growth momentum in enterprise SaaS solution demands and YouCam mobile app subscriptions, the Company anticipates a Y/Y total revenue growth rate of 12% %- 14% for 2024. Price Action: PERF stock closed lower by 2.03% at $1.930 at Monday. Also Read: What To Expect From Apple's FQ4 Earnings? Market News and Data brought to you by Benzinga APIs