Good morning, and welcome everyone. This is Jae-ha Shin, Executive Vice-President of APR. Thank you for joining our fourth quarter 2025 earnings call. We sincerely appreciate the continued interest and support from our shareholders and the investors. Today we will start with a performance review, followed by a Q&A session. Please note that our results are preliminary and subject to change during the audit process. Furthermore, any forward-looking statements reflect our current outlook and may be impacted by market volatility. With that, let's review our results for the fourth quarter of 2025. Please turn to page three, overall revenue trends. In Q4 2025, consolidated revenue reached KRW 548 billion, marking another historic milestone. Notably, just one year after reaching KRW 200 billion in late 2024, we have now surpassed the KRW 500 billion mark for the first time.
This growth was driven by strong Black Friday performance and successful SKU expansion. Furthermore, our rapid penetration in the U.S., Japan, and Europe is creating a powerful spillover effect, driving record demand across our entire global footprint. Please turn to page four. For our fourth quarter results in Q4 2025, we once again achieved all-time highs for both revenue and operating profit. Consolidated revenue surged 124% year-over-year to KRW 548 billion, while operating profit grew 228% to KRW 130 billion. This resulted in an operating margin of 23.8%, representing a significant 7.5 percentage point expansion compared to the same period last year. Next, please turn to page five, overall annual revenue trends. 2025 was a record year for APR, with annual revenue more than doubling to KRW 1.5 trillion, driven by our unrivaled product competitiveness and aggressive global expansion.
We are proud to mark our 11th consecutive year of growth. Please turn to page six, 2025 annual results. 2025 was a defining year as we achieved exceptional top-line expansion while significantly enhancing profitability. Annual revenue more than doubled year-over-year to KRW 1.5 trillion, while operating profit nearly tripled to KRW 365 billion, both record-breaking figures. This resulted in a robust annual operating margin of 24%, a 6.9 percentage point increase from the previous year. Next, our fourth quarter results by division. Our cosmetic and beauty division surged 255% year-over-year to KRW 413 billion. Since Q2, we have maintained 200% range growth, and this marks the first time cosmetic revenue has surpassed the KRW 400 billion milestone. Importantly, we are successfully mitigating revenue concentration.
Instead of relying on a single hero product, a broader lineup of core products ensures balanced performance, building a more resilient and sustainable business model. Moving to home beauty devices, revenue grew 19% to KRW 123 billion. We maintain stable demand in core regions while capturing new markets. In Q4, we also introduced new products with enhanced functionalities, leveraging our in-house R&D and manufacturing capabilities. Finally, others revenue decreased 51% to KRW 12 billion. This reflects our strategic decision to downsize non-core businesses and sharpen our focus on our primary growth drivers. Please turn to page eight for annual results by division. Our cosmetic division reached KRW 1.1 trillion, establishing a self-sustaining cycle where rising brand awareness drives continuous demand.
Meanwhile, our home beauty devices division grew 30% to KRW 407 billion, reflecting steady global momentum. Notably, as of January 2026, we surpassed the 6 million unit milestone in cumulative sales volume. Next is our fourth quarter sales by regions. Q4 overseas revenue surged 203% year-over-year to KRW 475 billion. Following our KRW 300 billion milestone in Q3, we maintained incredible momentum to break the KRW 450 billion mark this quarter. The global portion of our total revenue mix has shifted dramatically, jumping from 58% to 87% this year. The U.S. market continues to lead this expansion, now accounting for 47% of total revenue, while other regions have grown to 22% as our brand scales globally. I will provide more specific details on each region in the following page. Now, please refer to page 10 for a detailed regional breakdown.
Q4 was characterized by robust growth across nearly all global markets. In Korea, revenue was KRW 73 billion, reflecting a year-over-year decline due to our strategic downsizing of non-core business. In the U.S., we achieved a record-breaking KRW 255 billion, a 270% increase year-over-year. This is the first time a single country has surpassed the KRW 250 billion threshold in a single quarter. We have maintained consistent quarter-over-quarter growth for seven consecutive quarters since Q2 2024. During Black Friday, a wide range of products, not just our best sellers, saw exceptional demand across both online and offline channels. In Japan, revenue grew 289% to KRW 69 billion, driven by the synergy between our online and offline presence. Greater China reached KRW 32 billion, up 11%. Finally, our other regions delivered breakout performance, surging 192% to KRW 119 billion.
This is the first time quarterly revenue from emerging markets has topped KRW 100 billion, driven by rapid penetration and increasing demand in new regions. Please turn to page 11, annual sales breakdown by regions. In 2025, overseas revenue surged 207% to KRW 1.2 trillion. Our overseas sales contribution jumped sharply from 55% - 80%, driven by explosive U.S. momentum spreading globally. This record performance cements our KRW 1.2 trillion milestone in the global markets. Also, there is one more achievement from 2025 I would like to mention, something you will not find in the presentation material, and that is the incredible growth of our Medicube brand. In 2025 alone, Medicube's revenue hit KRW 1.4 trillion. That is a massive 145% jump from the previous years of KRW 578 billion. We are still waiting for final industry data to come out.
Based on what we are seeing, we believe Medicube's KRW 1.4 trillion performance makes it the number one beauty brand in Korea for 2025. It is a huge milestone that really proves our brand power. Please refer to page 12 for our summarized consolidated financial statement. This financial summary is provided for reference purposes only. Next, I would like to discuss our business outlook for 2026. For the full year, we project revenue of KRW 2.1 trillion, a 40% year-over-year increase with a 25% range of operating margin. Medicube's global momentum remains strong, and we are confident these targets are well within reach, especially when considering our strategic initiatives and recent sales performance. Geographically, we anticipate robust growth in the U.S., Japan, and Europe as we expand our channel presence. In Europe specifically, we are scaling our online presence while expanding offline through B2B distribution.
This dual approach will establish a strategic foothold for long-term growth in the region. This is the end of our fourth quarter earnings call. We will wait for a while till our Korean earnings call end.
Now, we would like to take questions and answer. If you have any questions, please press star and one. If you want to cancel your question, press star and two. The first question will be presented by Inijin of Cape Investment & Securities. Please go ahead with your question.
Hello. Congratulations on your good performance. I have two questions. For the 2026 guidance, U.S., Europe, Japan will be your primary market. What is the respective ratio by each country, online and offline? For the fourth quarter, not only the U.S., you had strong growth in Europe. Can you share your growth in Europe?
For the financial year 2026 guidance, we do not have a specific number for this conference call for U.S., Europe, and Japan. We are going to have higher guidance, but we do not have any regional guidances. However, if we can mention online and offline by region, U.S., the offline revenue will increase compared to this year. As you can see from the news, we have good results from Ulta Beauty. From the end of the first half, we are going to enter big retailers in the next conference call or with other calls, once we confirm our entrance into other retailers, we are going to share the results with you.
For Japan, new device and Japan-specific distribution and EBD will have a better result in Japan. The Japanese revenue last year was about KRW 180 billion. I think we will see an increase of KRW 100 billion. In case of Europe, I could not specify the Europe number because we have a lot of sales from cross-border revenues, and we have diversified channels for the sales. We have not fully initiated our operation in Europe. We have started setting up the subsidiary and opening the malls, but we do not have enough inventories, and it takes about two to three months to send the inventories to Europe. I think we can start the operation in full-fledged manner from March.
We started our operation in the U.K., and the reaction is really good. So if we include other regions in Europe, I think if we start the marketing in full-fledged manner, then we can increase the offline sales and that will increase the online sales as well. We will take the next question.
Next question is from Samsung Securities, Lee Ga-y oung.
Well, hello. Thank you for the opportunity and congratulations on your good performance. I have two questions. First, across all regions, you recorded significant growth. First, I would like to mention about the U.S. and in Amazon, and I have read various articles, you made significant growth from Ulta Beauty and TikTok as well. Throughout various channels, you may have different performances. So can you give me some detailed data? Second, in Europe, you mentioned that you already entered the U.K. market and the growth is being materialized. What kind of products are being popular in the U.K. and in Q3? What regions are the target in the whole entire European region?
Also in Japan, you have been focusing on online growth, and I think the amount of vendor and deals for offline channel is increasing, and the growth is being materialized in the offline channel as well. So, can you give me the percentage of the growth in offline channel in Japan also?
This is Heo Ju-young from APR Communication. I would like to double-check your question. Are you talking about channels in the U.K. or growth?
I am asking about portions. I would like to know about the shares of sales from cosmetic products and device segment as well.
Let me check this part and give you an answer. Let me answer the question. First, in on and offline in the U.S., the online market is very strong, and the offline market only remained one-digit number in terms of growth rate. However, both channels are growing really fast. About the U.K. market, the growth is on the rise, and best-selling products are very similar to those in the U.S. market. The best-selling items in the U.S. can spread across the global market and can be selling very well in the U.K. That is our logic. The products are selling very well similarly in the U.K. and in the European region.
We cannot enter all regions at the same time. Starting from the U.K., we are targeting France and Germany, and we will be starting with online markets. It is pretty much similar in Japan as well. In Q3, 80% of the revenue was coming from online and the rest was coming from offline, and not only one channel was very significant. Across all regions, on and offline channels showed a significant growth. Next question, please.
The next question is provided by Han Yu-jung from Hanwha Investment & Securities. Please go ahead with your question.
Congratulations on your good performance, and thank you for the opportunity for the question. I have some questions. First is the color about the quarter one revenue and operating profit. The revenue growth for the device has reduced a little bit. Can you provide a logic for that? Is there any data we can think about the inventory?
For the quarter one colors, I think we can get the exact figures if we look at the numbers by March. The season promotion for quarter one has ended, and for quarter four has ended, and compared to quarter four of 2025, we have reduced effect from the marketing for Q1, and the revenue is consistent. However, as of now, we cannot specifically say expected color for quarter one. Internally, we are seeing that there will be a further step up. We are expecting the revenue of KRW 500 billion. For the operating profit, it is hard for us to estimate the number.
For the device, reduced growth for the device quarter-on-quarter. If you look at the sales number only, we have sold 290 million. It is twice the number. Our priority region was Europe and U.S. for Q4. However, the sales of device in that region is not high yet. That is why we see the higher growth in beauty. From quarter one , our second generation lineup will be detailed. Booster Pro, the new device for that will be released, and we are going to promote globally, and the effect from the promotion can take effect. In Korea and Japan, we started with beauty product and followed by the popularity in device.
Same for U.S. and Europe, the device growth, the sales in beauty can lead up to device growth. For the inventory, once we finalize our audit, we can provide the results. We have a high stock of inventory because we have a supply management issue. We have to provide the inventory in a timely manner. If you look at the inventory provision status, compared to revenue, we have low stock of inventory. We are working with the partners to make the inventory more sufficient. We take the next question.
Next question is from Goldman Sachs, Jae-hyun Bang .
Thank you for the opportunity. Congratulations. First off, my question is about online portions, and if you say there are no significant changes, then I expect that there are promotional events in Q4, and there might be a lot of marketing expenses. Your earnings reported very well. What was the driver?
In 2026, there will be changes in top five or top 10 selling products. I would like to get more details about your item categories in different events. Ask you as well. The reason that gross profit increased is that, there are similar reasons for that. The portion in offline channel remains solid, and when it comes to discounts, we did not offer big discounts during promotional events. Top five, top 10 products, it has been a month passed, we still have to look at the trend. In Q4, top 10 Medicube products account for more than half and there are diversified hero products which are driving the growth. Next question, please.
The next question will be provided by Sangho Yoon of NH Investment & Securities. Please go ahead with your question.
I have two questions. First, in terms of SG&A, how much marketing expense did you spend, and how did you allocate by country? The second question is U.S. revenue is better than our expectation, and what is the portion of Amazon and TikTok?
For 4Q, the marketing was 18.3%. It is a bit of an increase compared to the last quarter because of the promotion and because we were focusing on the U.S., that is why we have increased the marketing expense of one percentage point. However, we cannot share the numbers for each region. Overall, our SG&A is about 400-500 ROAS. In case of U.S. sales, if we divide by Amazon and TikTok, we should say that we have higher contribution from Amazon. It is almost twice the TikTok. We are seeing the increase in TikTok sales. However, TikTok is used as a sales channel as well as the promotional sales. We have a higher sales proportion from Amazon. We will take the next question.
Next question is from Shinhan Securities. Park Hyun-jin.
Hello. Thank you for the opportunity. I think this is pretty much a similar question, but I want detailed information. You mentioned that SG&A expense as 18.3%, which was slightly increased QoQ, and your OP is very significant. Aside from marketing, you may have commissions as well. Is there any items that record a cost effectiveness in your expense? Also, you have great OP growth. You may have a lot of cash reserves. How are you going to use this cash reserve in the future?
In Q4 alone, advertisement and sales commission did not have a lot of savings effect because those expenses are pretty much similar or extra. Stable sales or operating income are the good reason for the cost effectiveness. We have really great growth momentum, and also we have good fixed cost leverage effect.
That is the reason. Since we have good growth momentum, we have a lot of PS and PI for our employees. According to our accounting policy, we pre-recognize this PS and PI in our balance sheet. So there is no substantial increase in our balance sheet. We have improvement in sales mix in our revenue, and we did not offer big discounts, and we are trying to improve costs continuously. So those are the reasons. When it comes to sales mix, revenue or sales from fashion segment reduced because it was eroding the overall revenue as well. So reduced fashion segment improved costs and overall revenue, and fixed cost leverage effect is immaterialized because we only maintain 6% of fixed cost. So, rather than variable cost, these leverages are cost effectiveness.
About cash reserve, we are maintaining our shareholder return policy, and we are preparing for cash dividends for our shareholders. We are thinking about twice a year. So regular and interim cash dividends will be planned in March this year. Since we provided big amount of cash dividend last year, so there will be no big amount of cash dividend this year. About the exact amount, there will be public announcement. Since we are expanding globally, we still need working capital. For stable sales in the global market, we need enough inventory and warehouse. So for that reason, we still need working capital. Even so, we still expect improved cash flow. After shareholder return policy and consuming working capital, if there is any synergy area for our business, then we will think about reinvestment. However, aggressive investment or M&A are not in our plan currently. Thank you. Next question, please.
The next question will be provided by Son Min-young from KB Securities and Investment. Please go ahead with your question.
Hello. Thank you for the opportunity for the question. The first question is, in the U.S., what's the revenue from the Ulta sales? In last quarter, you have provided a guidance on Ulta for the sales, KRW 300 billion. Did you revise this? Secondly, for the EBD device, what's the progress for reaching the performance? When can we see the actual profit from EBD devices?
In Q4, the sale in B2B recognition sales was KRW 16 billion. For the guidance for Ulta, KRW 100 billion, I think we can maintain that guidance because, we might see the increase in Ulta sales, but if we combine all the sales, I think the sales can be distributed to Ulta. The offline sales overall for the U.S., we are seeing that possibly. However, we are not going to revise the guidance of KRW 100 billion for Ulta. For the EBD sales progress,
We are progressing with getting the certificate for two devices for EBD. If it's fast, then in the latter half of this year, we are going to release two products. As we make sales, we can recognize the sales. However, we can invest some amount for the promotion. The reflection of that sales will happen after the sales occur. However, if we want to see the meaningful reflection, I think it will be next year. The reason why we are doing the EBD division is because we're expecting the long-term effects and the anti-aging. Advancing into that market early is very important, and we are doing the home beauty device for our portfolio and beauty. I think the EBD division will have a positive effect for both divisions. We'll take the next question.
There is no one requesting for questions. If you have any questions, please press star and one. Next question from Kyobo Securities , Kwon Woo-jung. Kwon Woo-jung, p lease go ahead with your question.
Well, thank you for the opportunity. About Ulta in Q4, you recorded 16 billion KRW, and I think the number is better right now. I wonder the current status quo. Even across Ulta, there are various major brands. Medicube's SKU, sales progress and your scalability plan are my question. You also mentioned about inventory earlier. Is there any possibility for inventory shortage or bottleneck? Do you have any plan for that?
About market share in Ulta, I do not really know specifically right now, we do not have any data. It is varied by category. We have prestige skincare. That is how we are recognized in Ulta Beauty. I think we are ranked number two in Q4. About display, we are working very well with Ulta right now. Although we are expanding, when it comes to trend and ranks, we have different timing. There are competitors and other brands, but our shelf is a little bit smaller than our competitors. Currently we are expanding our products on the shelf. When it comes to SKU, we have about 10 offline SKUs, and it will be increased to 20 approximately. In the future, we will have substantial expansion in Ulta Beauty malls as well.
When it comes to inventory, we have promotional event in Q4. In order to have enough volume in inventory, we prepared a lot in Q3 and that worked very well in Q4. After selling products, we experienced some inventory shortage. The trend remained solid, and they did not have enough stocks in inventory. Sales were not recorded at the right time. Right now we are working with OEM and ODM in order to increase the CAPA. In the first half of this year, in order to achieve our business targets and increase capacity, we already are planning for supply, and I think we can meet the demands.
We cannot handle supply shortage with maritime transportation, so we were going to use airplane transportation as well. That will also be included in our SG&A expense. Although the amount will not be very big, that will be included in our SG&A expense. Next question, please.
The next question will be provided by Ken Yan of Morgan Stanley. Please go ahead with your question.
I have a question regarding EBD. You said you are going to release new products by the end of this year. In your third quarter earnings call, you said one for EBD and one for PDRN. If you are talking about PDRN, it is going to be injectables. Are you releasing injectables product or EBD product? In the third quarter, you said you are adding your resources, and I think 50 people will be enough for the sales force. What do you think?
I said, we are going to release about two products, and that is all EBD products. For the PDRN injectables, we are not able to release that. We already have the factory and we are getting the certificate, and we have to get the fourth rating certificate, so it will take some time for the injectables. I think we are going to release them by end 2027 or early 2028. Because we are getting a new certificate, so it will take some time until we release injectables. For the sales team, we are increasing the resources. We have hired some experienced sales personnel. The number of people for the sales, we have not got the finalist number, but it is going to be lesser than 50 people. Next question, please.
Next question is from Samsung Securities, Lee Ga-young . Please go ahead with your question.
Back again, thank you very much. I still have two questions. First, you mentioned about maritime transportation, and with this channel alone, you are thinking about airline transportation. How much do you expect in terms of the share of airline in the transportation? When it comes to Ulta Beauty, you are going to enter into the European market with major retailers in Europe. Do you have any specific malls? Can you share details, for example, in the U.K. market?
Airline transportation, I can give you in terms of volume or in terms of amount. In terms of volume, it might be around 10%, but the amount of money is substantial. I believe that the amount of payment for airline transportation is substantial amount, so I will double-check and give you detail. Deals with retailers in Europe is still underway. Boots or Superdrug already rolled out our brands, but the number of SKUs is not very big and the number of locations is not very big. We are going to expand in terms of the number of locations and in terms of the number of SKUs. Next question, please.
The next question will be provided by Ken Yan by Morgan Stanley. Please go ahead with your question.
Regarding the PDRN injectables, are you thinking about how you are going to secure salmon? Because securing the salmon will be the bottleneck.
We have already secured some locations for the salmon, and we have secured some partners for the long-term contract. It is usually from overseas. We have a lot of locations that we partnered with in Europe, U.S., and Canada. We do not think securing the raw material will be difficult. We have talked with a lot of providers, and high quality raw material can be secured. Recently, Canada and Alaska, U.S. is the place that we are securing our raw materials from. However, because we have some time until we release PDRN injectables, we are creating samples after we get the certificate. The amount is not too much. We are not selling them. Securing the raw material will start from the end of next year when we are going to secure the certificate. We will take the next question.
Next question is from Kyobo Securities, Kwon Woo-jung. Please go ahead with your question.
Well, thank you. I am back again. You told about Prestige cosmetic line in the U.S., and you mentioned 10 Ulta SKUs. When you mentioned about number one, what was the comparison? You also mentioned that the number of SKUs will be increased to 20, and you told me it will be within 2026. Can you also increase the number within Q1 or Q2 in 2026?
I double-checked it, and major brands' SKUs are more. They have more than 50, and some have 60 - 80 SKUs in the store. However, our brand has about 15 SKUs, and Medicube will have 20+ SKUs in the future. For online channel, we already have 47 SKUs, and there is still potential for further scalability. Next question, please.
We do not have any questions. If you have any questions, please press star and one on your phone.
Because of the time limit, we will take one question. If you do not have any questions, we will conclude the session. If you do not have any questions, we will conclude the session. Thank you for participating in our earnings call. We are going to put our effort for the further growth. Please continue to send your support for this year, and we will conclude the Q4 earnings call. Thank you very much.