All right, hello everyone. Thanks for continuing to join us throughout the day here at the Lytham Partners Fall 2025 Investor Conference. Again, my name is Robert Blum, Managing Partner here at Liytham. Our next presentation today will come from Perfect Corp, and presenting from the company will be Louis Chen, the company's Executive Vice President and Chief Strategy Officer. As a reminder, Perfect Corp trades under the ticker symbol PERF on the New York Stock Exchange. Lewis, with that, thanks so much for your participation. The floor is all yours.
Thank you, Robert. Hello everyone. It is my honor to be here to present about Perfect Corp, a company that we founded 10 years ago, and we are focusing on the vertical for beauty. I would like to give you some brief about our product, our clients, and as well to wrap up a bit on our latest financials. The company was founded in 2015. It has been public nearly three years now under PERF ticker, and it now employs over 400 employees, where nearly all of them are engineering track. We have a very strong engineering team. We develop most of the products by ourselves. It has been a very strong one company helping the beauty brands and the fashion brands to transform the user consumer shopping journey through AI innovations. You are going to see some of the latest AI innovations in my presentation.
The company is spread worldwide. I'm sitting in the Head Development Center headquartered here in Taipei, Taiwan. We have teams globally across all the different continents. The U.S. has been our biggest market. About 50% of our revenue is derived from the U.S. customers. We have a larger U.S. team, about 20 professionals between New York and the West Coast, followed by France and Tokyo, being our second and the third largest revenue countries. Not surprising there, those are the big countries for luxury and beauty companies. Who we serve, we have two business models. We serve both a direct to end user in the B2C space, but also enterprise business clients. On the B2C space is really the beauty and fashion enthusiasts. They are seeking for instant personalized client experience directly from their mobile phones.
On the enterprise side, our brand or retailers, retailers who are needing AI or AR solutions to boost their online conversions or consumer engagement through their shopping journeys. We own the space for the vertical and the beauty and fashion. These are where we are really strong at. Most recently, we spent it through the generative AI for photo and video creations. Go anything from creating audio/video photos or skin analysis with very deep domain know-how. Across these two different business models, there's one thing very unique here. It shares one common core engine. These two businesses are not operating in two different P&Ls. They are developed once, and we were able to monetize that in two different ways. We were able to build two different platforms to build two different monetization vehicles for that. On the B2C side, it is the biggest part of the revenue.
It contributes about 60%- 70% of our total annual revenue. The B2C is comprised of six mobile apps and one online web service. They're all on freemium models where consumers can download the app for free and enjoy for seven days unlimited enhanced features. At the end of the seven days, consumers have an option to stay with the premium subscription. We range from $39 a year to $79 a year, or they can always go back with the free version. It's going to be more feature limited, or you can use once or twice a day. If you want to use more, the app will ask you to subscribe. These are all subscription-based revenue, recurring-based revenue based. On the B2B side, it's a more traditional enterprise SaaS model where we have solutions, about 15 different solutions across makeup, skincare, hair, and fashion tech.
These are being used in their dot-com website, in shopping carts, in offline kiosks at the beauty counters. The enterprise pays us typically an annual subscription. It's a fixed fee per year, depending on how many SaaS modules they subscribe. You can also scale if they are deploying these across multiple countries. The subscription fee also is related to how many countries they deploy the service to. Jumping into a little bit on the technology, we have been very pioneering in the beauty tech space starting in 2015. We were the very first company to introduce AI machine learning into the beauty segment, creating a tutorial virtual try-on effect that you are going to see in the demo video in a moment.
Across the last decade, you can see here every two years there's a significant update or upgrade to the technology where we are expanding from color cosmetics into foundation finder for shade, finder for foundations, into hair, into skincare, and more recently into fashion and more and more. As the AI acceleration has really been amazing for the last two years that you can see so many AI new models coming out, we were very fast to incorporate, to integrate these different AI models into our solutions. Let me jump into more detail about the product, starting from the B2C consumer apps. We carry the franchise of the YouCam mobile apps, YouCam Makeup and YouCam Perfect, are the two hero apps. Between these two, we generate about 80% of our B2C revenues. Just to give you an idea, last year the total company did about $60 million in top-line revenue.
This year we're looking at reaching somewhere $68 million-$70 million US dollars in revenue. Here is a family of apps. These are multi-function apps. They are doing many things. To give you some examples, what are the key features that consumers use this app for? YouCam Makeup is very designed for women. 90% of the users are female in this product. It gives users instant makeup trends. For example, you can try on all these different products from the latest brand. You can have a very photo retouch selfie, creating a better selfie with flawless skin. You can use generative AI to create different hairstyles to try it on, as you can see here in the examples. More and more faces to shape by tuning the type of features. YouCam Perfect is an all-in-one photo editing app. This product is more gender neutral. About half are female, half are male users.
It's the all-in-one photo editors from anything, creating a better filter on that, removing objects from photobomb, retro filters, and more and more. These are some of the features in the app. More recently, generative AI is driving the conversion, especially for image and video. Making your photo to turn photo into video, creating, for example, you dancing in a short video by just uploading one single photo of yourself, or for example, some photo editing that traditionally you need Photoshop's type of skill to remove like watermarks. Now it's all been done by AI automatically. More and more. There are more than 70 features in this app, in this platform that each consumer will find something right for them. This is a very, very good market with a huge upside.
We can see here from the market data that the generative AI for photo and video is expected to grow 30%- 40% in the next 10 years. Other data that I have seen is not here in the slide, that the photo video category is already the second largest category in the generative AI field. Everyone who's using this either is using AI to create certain text content, or the second category is creating photo and video, around 30% of the usage today of generative AI for multimedia. This represents a very significant upside potential for YouCam , and this is what we're getting big. On enterprise B2B solutions, if you go back in time, think about how we're female shopping for beauty products. They rely heavily on physical trials. It is very important, it was very important for brands to have samplers in the store on the counters.
However, this always often becomes an obstacle preventing users from buying more because when they're testing it physically, it takes a lot of time. There's, of course, sanitary concerns as these testers are never really clean. You don't know who has used it before. If you look at, for example, family shades of lipsticks, typically you don't have samples for every shade. They only are available in certain shades, not in every shade that you want to try. By using AI and AR solutions, we're able to bring this to consumers. You can try before you buy anytime, anywhere. You can try unlimited skin, unlimited color that you want, and it's always clean and efficient and safe. Because of that innovation, you can see here in the chart, these are all our clients. Not all, I couldn't put more logos in there anymore. We started from zero in 2015.
We were very pioneer. The brand wasn't very sure about how to use technology, and we gradually helped them transform the digital transformation through their digital touchpoints. Now over 800 brands are partnering with us on our platforms, and you can see here they range from anything luxury to prestige to mass. Even you start seeing some fashion brands alongside beauty brands. Here are the big logos that are on our platform. Estée Lauder being a big client of us, Dior being a strategic partner of us, Shiseido as well, and more and more. Among all these clients, they're also contributing to enrich our platform. Every season when they have a new assortment of products that comes out, new collection, it's the summer, it's the winter, they will use our format, they will use our technology to digitize those products.
The platform now carries over 914,000 different products for consumers to try, anything from eyeliner to foundation to concealer to lipstick, and you name it. This made us the number one brand in this space. If you look at the growth pattern here on the left-hand side, it's the number of brands that are on our platform. The last reported quarter, quarter two, we have now accumulated 818. On average, if you look at this last four or five years pattern, every quarter we're adding about 20 new brands every quarter. This continues to grow. It is really a great outcome. On the right-hand side, we track the number of SKUs that are available on our platform. This is important as more brands bring on board, they also bring their product on board their platform. Now we have accumulated over 900,000 products ready to try.
The solution is not only for makeup. As I mentioned, it has grown over the past 10 years to cover anything from makeup tutorials, foundation finders, everything around face attributes, and now hair and body and more. Next, let me show you some real-world examples of how the clients are using this solution in the field. Starting from Walmart, one of our key partners in the U.S., we launched with them a little bit over a year ago in the mobile app. If you go to the Walmart app and you go to the makeup section, now it's the try-it-on option as here in the bottom circle. When the consumer goes into the product, it also has this option right there. Within the option, you turn on the camera, and now the consumer is seeing themselves wearing the product virtually on their lip.
Instead of looking at model pictures or photos of the product, which doesn't really tell the consumer if that fits her style, if that fits her skin tone, this technology allows consumers to read much better and much easier to see the product on their face. We have actually added a simulation here. For example, when she's swiping left and right, the color on her lip will actually change. There's an option to turn on the compare mode, where now she can just swipe left and right and see before and after. This is a huge, huge sales conversion tool for the makeup category because once the woman sees the product on their face and they feel confident, they feel beautiful about it, the conversion rate. For another example of how we are using that, with Sephora that we just launched a couple of months ago, this is for skincare.
If you go to the Sephora app and go to the skincare section, you'll find the Smart Skin Scan, which basically allows you to turn on the camera, have a very quick scan of your face, as you see here in the video. The AI technology that is being graded by over 75,000 professionally graded clinical images by dermatologists, and we give you the recommendation for your skin type. Also in this solution, we actually connect in real time with the inventory system at Sephora. The product has been recommended. It actually is in stock. Consumers can anytime add to basket. If you haven't seen this before, give it a try on the Sephora app. You're going to like it. Love it. Here are the examples of how we are doing that for makeup. Not only a single product.
For example, this is a full look where with one touch of a button, she's trying different eye looks, a smokey eye, a cat eye, different lipstick color. Most importantly is how to teach consumers that it's not only what to buy, but once they buy this product, how can they make better use of this product. Here, for example, we have an AR tutorial to give you step by step what kind of tool, kind of pencil or brushes to buy, what kind of product to buy. You can always pause the tutorial, rewind, watch it again. They are professionally created by the makeup artists. In this example, these are our longtime partners from Estée Lauder Companies, M·A·C Cosmetics. Every month, every week, actually, they have new designs from the makeup artists that are available to consumers.
These are also implementations of how to use our technology in different use cases. Here are the examples of how we are partnering with Amazon. This is for hand. This is for virtual manicure. Before a consumer actually shops for different colors or different clip-on nails, she can actually use AR technology and be able to track the position very precisely of your finger, of your nail, and then render the effects there for you. We have other examples of how we are bringing these into ad formats. You are not only watching video ads, now you have try-it-on options where if you like this product, you can just tap it and try it on, and the camera comes up. When the camera comes up, it's the same experience.
You don't need to leave where you are, whether you're browsing a website, but now instead of just watching a pre-recorded video, you have the camera showing the product for you already onto your face. If you like the shop button, you just want to click away, it takes you directly to the shopping cart. Cartier is another example of how we bring this type of technology for watches and the same for nails. These are all our technology, we say, from head to toe. Next, I want to show you something that we are doing more new for fashion. It's a series of generative AI technologies. I recorded this video with our product team, and let me play the video for you.
Welcome to our annual product launch. This year, we've pushed AI to be more personal, human, and transformative. Today, see how AI reshapes fashion shopping, turning imagination into reality for a new dimension. Let's start with clothes. We all know that buying clothes online is exciting, but with limitations. Endless scrolling and endless options, yet the same problem always lingers. What will it look like on me? Photos can be deceiving, and models don't always represent real people. Reviews can only do so much. It's time for a better solution. Now, with just one photo, generative AI takes the guesswork out of trying on outfits. It's not a mannequin or a generic model. It's you. The realism is striking. We're not just stopping at photos. Our GenAI solution allows you to experience live video. You can walk, move, and showcase the look.
Pay attention to how the fabric flows and how light and texture shift with every step. It's the next best thing to being in the outfit itself. We've developed our own AI body detection and scalable fit simulation technology. These features are key differentiators that help perfect our GenAI clothes changer solution. You can see how the fabric drapes naturally and how the fit adjusts precisely to your unique body shape. This represents true realism powered by AI. This solution isn't just about creating a beautiful image. It's about solving the biggest pain points that previous technologies failed to solve. For example, previous attempts often come with these frustrations. Usually, there are steps requiring users to manually enter their height, weight, and other measurements. It's tedious and often inaccurate. Most people don't know their precise up-to-date measurements, leading to guesswork.
These methods add friction and break the flow of shopping, resulting in a generic template that's a poor representation of the user's unique body proportions. Our solution was designed to eliminate this friction entirely. We've replaced tedious data entry, confusing categories, and complex scans with one simple step, a single photo. In addition, our solution supports both single-piece clothing and full model images ready to support our brand partners to use this solution with their existing assets. Want to try more? Just keep browsing. Each time you do, GenAI creates a fresh fashion video. A personalized lookbook unfolds right before your eyes, showcasing every style and even different fabric textures, even for items such as hats and scarves. This is the innovation we've built this year. From seeing it to wearing it to walking in it, with fabric realism and true-to-body fit, generative AI is redefining fashion shopping.
This isn't a glimpse of the future. This is happening now. Solving clothes try-on is really exciting. What about other wearable items such as shoes and handbags? I'll take you through them all and share with you what our R&D has in store. Shopping for shoes can often present the same challenges. Visualizing how they look on you can be difficult, and the in-store experience can often take a lot of your time. Visiting a store involves asking the salesperson to find different styles and wait for inventory to be located. Likewise, shopping online can be tricky since ordering multiple pairs just to try them on isn't practical. Fortunately, AI offers an innovative solution. With Gen AI VTO technology, you can easily explore various pairs instantly. This allows you to see how each pair of shoes looks on you in matching scenarios.
For sneakers, our Gen AI VTO produces multiple versions of you wearing the same pair. The solution is clean, quick, and shows a good visual representation of the product. Every style is just a tap away, eliminating long waits and uncertainty. For brands seeking to offer a more luxurious VTO experience, we've also developed the 3D VTO solution with live camera views. This allows users to see the shoes fit on them from different angles, whether they're trying on sneakers, heels, or anything in between. Perhaps you face the same questions when shopping for bags online. How long is a strap, and what can I actually hold inside? Now, AI not only shows you the look, but also the bag's capacity. Instantly, you can see yourself carrying the bag and moving with it. We go one step further with our 3D viewer.
Not only can you see the outside, you can even open the bag, look inside, and see exactly how much it holds. Now, even jewelry like rings, watches, and bracelets can be transformed from 2D product images into incredible lifelike virtual try-on. Our AI captures every detail from the brilliant shine of metals to the intricate facets of gemstones right on your own hand. From outer beauty to inner practicality to a truly personal fit, AI is redefining every way you experience fashion.
Yeah, so this is really cool, isn't it? This is just a glimpse of what the features are coming out of our lab and how the brands are utilizing our solutions. Other notes that we're noticing here, we completed our first strategic acquisition in January, early this year, of WANNA. WANNA has been the leader, especially serving the top fashion brands, as you can see the big logos in here. By merging together with WANNA, by acquiring WANNA into our Perfect Corp family, now we have the total solution that goes beyond just the makeup or the watches and jewelry. Now we have the complete solutions for fashion shoes, clothing, scarves, bags, and everything else I mentioned to you. Let me go a little bit over the financial highlights. Last year, we did $60 million in revenue, 12.5% in growth year- over- year.
The first half of this year, we did $32 million and 14.8% in growth. The last reported quarter, we did $16 million in revenue, 17.6% in growth year- over- year. The total gross margin, the margin was 78% last year. This year, we are seeing somewhere near this figure, as you see here on the slides, and here are the amounts. One thing we're noticing is a very strong operating cash flow and very strong balance sheet on our financials. The company had a positive inflow of $8 million in the first half of 2025. It demonstrated a strong capability to generate sufficient cash flow to support the business. At the end of quarter two, the company held around $167.8 million in cash and cash equivalent in our balance sheets. It continues to generate more cash and more cash flow and supporting the growth of the business.
From the bottom line perspective, very solid. Last year, we had $8.3 million in net adjusted net income, $7 million the previous year. It's about 13.8% in margin in growth. The first half of the year was about $2.4 million in adjusted net income, about 7.5% in margin. The second quarter of this year was $0.4 million. This is also part of the WANNA acquisition. As we are now through the integration process, there will be some additional operating expenses because we are increasing our team for new products such as fashion. The business outlook for the rest of this year, we are expecting to grow somewhere between 13%- 14.5% in our top line. That would be somewhere between $68- $69 million. So far, we are well on track on this mission. Lastly, where do we go from here? There's still multiple avenues to grow.
Number one is we have seen a very strong momentum in the generative AI features that is driving the new subscription for the YouCam apps. This is an area that we see a very strong growth in the subscriber base for the last two years, and it continues to be even stronger. We want to continue to innovate in these premium features to generate more subscribers through those photo and video editing enhancement beautifications. On the enterprise side, we continue to deepen our penetration within the top 20 beauty groups. We are doing business with a lot of them, but they have a lot of sister brands within the group who are still lagging and who are not using this technology yet. There's an opportunity to cross-sell to sister brands within the group, to upsell more modules, to enable more skills, to expand into more countries.
Other verticals, we see a strong momentum in skincare. This is more of a long-tail market that ranges from the mass spa to aesthetic clinics to people who are just taking more care of the skin and spending more money on clinics. We have solutions where a small clinic or a chain of clinics, they can use an iPad and engage with the customer with an AI skin analysis to really tell the consumer, the patients, objectively what are their skin concerns, and they can track the progress from there. From that, they will drive higher loyalties and higher returns. To penetrate into more fashion and jewelry brands with the solution that we show you in the video, this is a new field, it's an exciting field. We are still new in this area.
As I think with our previous success in the beauty, we are very confident that we can expand into this vertical for fashion. Lastly, continue to pursue some synergistic M&A selectively. To speed up, whether it's the market adoption, it's the market size, the client base, is there opportunity there that technology that we feel is going to be complementary to what we build, we certainly have the capital to go and pursue these avenues to accelerate our growth. With that, I thank you for listening for my presentation. Really try to experience the AI that truly understands beauty consumer personal needs. With that, let me turn it back to Robert.
All right, excuse me. Fantastic, Louis. Great presentation, always very enjoyable watching these. I want to thank everybody as well for watching here. If there are any questions or you'd like to schedule a one-on-one meeting with management here throughout the conference, shoot me an email. That's blum@lythampartners.com. Further, to learn more about Lytham , make sure you visit our website or stay connected with us on LinkedIn in order to be apprised of future events such as the discussion here and the presentation from Perfect Corp. We hope everyone enjoys the rest of the conference. Louis, thanks so much for your time today.