By Lisa Thompson
NYSE:PERF
READ THE FULL PERF RESEARCH REPORT
In Q3 2025, Perfect Corp. (NYSE:PERF) generated record revenues of $18.7 million, up 15.7% from $16.1 million in the same quarter last year. Again, most of the growth was from the consumer B2C app business as ASPs increased. We are particularly excited about Perfect Corp.’s apps as they have features that cannot be duplicated by other app competitors or generic AI Generators like ChatGPT due to the huge database of beauty and fashion products, faces, and the ability to create much more accurate results. This technology and information on 953,000 SKUs flows through to the You Cam AI Agent, which is now conversational. Perfect Corp. allows users to say “put on Nars Morocco lipstick, CHANEL Ombre eyeshadow in Lilas, and show me carrying a Gucci Beatrix large tote in green.” Surely a differentiator.
Mobile subscriber numbers decreased 3% year over year, and also decreased sequentially to 946,000. Despite the decline in subscribers, revenues increased as ASPs rose from between $40-42 last year to about $59-60 this year. Premium pricing had been $39 a year with small price increases each year, but the company now offers a higher pricing tier at $79 annually for those wanting more usage and even higher features. While ASPs could go slightly higher, it all depends on customer usage increases as well as competitors’ pricing.
Revenues from the company’s API are also growing, and many customers are coming from outside the beauty and fashion industry. The API lets customers integrate Perfect Corp.’s proprietary AI, Generative AI, and AR technologies directly into their own products and services. Management has come across many innovative uses. For example, one 24-hour convenience store in Taiwan uses the API to add generative AI to its photobooth/kiosk options, increasing customers’ demand for photos. In Japan, a retailer has added generative AI to its traditional smart mirrors. Even a fortune-telling website has added Perfect Corp.’s skincare API, which we know very accurately can tell a person’s age (among other things), to enhance its capabilities. These customers pay on a per-usage basis.
Apparel try-on (B2B) is now fully integrated into the company’s platform, and shoes and bags are the success story to date. Customers have been slow to add this try-on technology, and a number are still in pilots. It is clear now that generative AI gives much better results than trying to use augmented reality (AR). Being able to see how a piece of clothing actually looks on you before you buy it seems to be such a no-brainer; we are surprised brands and retailers have yet to roll it out. It clearly is the future. The company’s B2B business has stabilized as it added a net of three key customers sequentially. This is the first uptick since 2023. New customers were added in makeup and skincare.
The app revenue growth dragged down gross margin percentage year over year, but on a dollar basis, gross margin rose $1.2 million. Despite a slight increase in expenses primarily from the acquisition of WANNA, the company achieved positive operating income for the quarter and expects to stay there going forward.
Cash and equivalents increased $1.6 million to $170 million or $1.67 per share. As the company intends to stay profitable and cash flow positive, it is considering the possibility of issuing cash dividends in the future. The company maintained its guidance of a year-over-year total revenue growth rate of 13% to 14.5% for 2025 compared to 2024, yielding $69 million in revenues. There is a good chance the company can beat that number, given current trends. As a profitable AI-based SaaS company, we believe it deserves an EV-to-sales multiple of at least 2.8 times 2025 sales and a stock price of $3.60.
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