On Tuesday, Perfect Corp (NYSE: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.

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