Q4 2024 Perfect Corp Earnings Call
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We will be hosting a question and answer session. After the management's prepared remarks. Please note that today's event is being recorded.
Jimmy: I'll now turn the conference over to first speaker today, Mr. Jimmy <unk> IR director of the company. Please go ahead.
Speaker Change: Thank you Hello, everyone welcome to Perfect Corp, fourth quarter, 2024, and full year 2024 earnings call with US today are Ms. Alice Chang, our founder chairwoman and Chief Executive Officer, Mr. Louis Chen.
Speaker Change: Executive Vice President and Chief strategy Officer, and Mr. <unk>, Chen Vice President of Finance and accounting.
Speaker Change: You can refer to our fourth quarter 2024, and full year 2024 financial results.
Speaker Change: IR website or into link.
Speaker Change: In the form 6K, we filed with SEC earlier, a replay of this call will also be available on our website. Shortly after its conclusion.
Speaker Change: For today's call management will provide our prepared remarks, followed by a question and answer session.
Speaker Change: Before we continue I would like to refer you to our safe Harbor statement in our earnings press release.
Speaker Change: This call may contain forward looking statements regarding performance anticipated client our original result, and our objectives.
Speaker Change: Looking statements are based on management's expectations and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed or implied in our call today.
Speaker Change: Perfect Corp undertakes no obligation to update any forward looking statements, except as required by law. After the date of this call.
Speaker Change: Please note that all numbers stated in management's prepared remarks are in U S. Dollar and we will also discuss non <unk> measures today.
Speaker Change: I will now turn the call over to our CEO Ms Alice Chen.
Speaker Change: Okay.
Speaker Change: Thank you Janine and welcome competitive core plenty plenty for our fourth quarter earnings call. Let me start by giving you some updates our financial and our progress in product development around the world for next year, our view for the year of 10 75.
First of all we completed the full year 2024, with a double digit growth in revenue as anticipated by our guidance.
Speaker Change: Total revenue grew by 12, 5% year over year to $62 million.
Speaker Change: The bottom line net income for the same period was $5 million and the adjusted net income increased 18, 6% to $8 $3 million.
Speaker Change: Compared to 2023.
Speaker Change: This continuous increase in revenue and a positive net income is mainly due to strong growth, leading our mobile app subscription business under AI, our cloud solutions.
Speaker Change: Full year 2024 hour operating cash cash flow generated a net inflow of $13 million and our balance sheet remains very strong with over $165 9 million in cash and cash equivalents.
Speaker Change: Our <unk> mobile App has maintained very strong growth with a number of active paying subscribers continuing to reach all time record with over one <unk> two and <unk> talked before there is a 14, 3% increase compared to $8 870.
Speaker Change: 9000 subscribers at the end of 2023.
Speaker Change: This sustained growth in paying subscribers highlighting the ongoing global demand of AI powered photo and video editing creation enhancing and did you see patient features.
Speaker Change: Appealing to all age groups in the region.
Speaker Change: As the.
Speaker Change: We mentioned, we have seen positive momentum.
Speaker Change: Our north American and the Western Europe markets as well as developing markets in Brazil.
Speaker Change: Alright, you can mobile App suite continue to evolve with frequent updates in the future enhancement powered by cutting edge.
Speaker Change: AI for image and the video creation.
Speaker Change: Among the most popular innovation origin.
Speaker Change: We already.
Speaker Change: Have become a major heat waiting our user community.
Speaker Change: This features including a I hear style youre lengthening here wavy hair volume hair color and more provide artois relocate similar previews transforming how consumers and the retailers. It makes all of this region.
Speaker Change: Yeah, Hey, our transformation, our AI technology extends to other exciting innovation such as the AIC swab I'd say its expression yeah.
Speaker Change: Total enhanced video even hands anymore, delivering next level creativity, and the personalization to our growing user community.
Speaker Change: Our mobile App. We are also expanding our web based Jersey for AI solution with you came online editor comes on line now can enjoy the latest AI innovation not only through their mobile app, but also via a web browser on their laptop and the P C ensuring a similar.
Speaker Change: And the festival series across our platform.
Speaker Change: We are focused on harnessing the power also gin AI to deliver engaging new features from past image audio and video that is becoming an integral part of the premium subscription offering for our b to C. Users on the App and on the web.
Speaker Change: Integrating state of the art model and the algorithm, we aim to create an immersive personalized experience that go beyond traditional functionality driving a deeper user engagement and the loyalty.
Speaker Change: Our strategy in detail, the App and the web evolves.
Speaker Change: Involves a continuous R&D to refine generative AI company.
Speaker Change: Model and enabling features such as AI enhanced when the ink photo and video as well as the AI creation personalize the image and the videos.
Speaker Change: So this relentless innovation, coupled with our robust user feedback and the data and the Olympics.
Speaker Change: Tried to deliver a subscription based service that offer clear tangible value positioning us as a leading provider for cutting edge image and video and AI solutions in consumer market.
Speaker Change: Before I go to our <unk> performance.
Speaker Change: Want to go over the recent acquisition of walnuts Farfetch and its impact on perfect Court.
Speaker Change: Transaction was completed in early January.
We anticipate spending the next six to 12 months minimally integrating <unk> into our team.
Speaker Change: One off core competence is the upsell.
Speaker Change: That's S two new markets and the customers within luxury brands.
Speaker Change: At our first virtual try on services for shoes, handbags scarves and the close at this.
Speaker Change: This acquisition perfectly aligned with our service offering to brand partners and will expand our total addressable market beyond our career reach together with perfect Corp, We will strengthen our competitive position in the beauty in the fashion space leveraging our synergy case.
Speaker Change: Solution in hand.
Speaker Change: Chemical a piece and they experience our team members.
Speaker Change: In our visit it will be business in 2024, we have prioritized deepening market penetration in skincare and makeup that combined with.
Speaker Change: We reached over 732 brand clients with over 822000 Skus on boarded in our platform. We continue to make significant step in expanding our portfolio with AI powered screens agnostic.
Speaker Change: Beyond core beauty and skincare brands, we have actively expanded into new markets in the region.
Speaker Change: <unk> Clini dermatology Clini skincare same tourists mirth, Bob and we're in this thing to.
Speaker Change: Broadening our reach and impact to the industry.
Speaker Change: Continue to see strong demand in the skin diagnosis sector from brain retailer cleanness and med Spa, our AI powered skiing analysis, the tax up to 15 major concerns in H D, providing personalized treatment and pronto recommendation tailor to each.
Speaker Change: Users unique skiing profile.
Speaker Change: Technology enable precise treatment ledger tracking progress with a before and after comparison to showcase improvement.
Speaker Change: Combining advanced diagnostics with data driven insights our solution enhances client engagement trust and a long term loyalty in the evolving world of AI driven skincare.
Speaker Change: Our our makeup virtual try on solution remains as a global leader delivering strong results for brand customers. We helped secure T licenses to read in the wall with top beauty conglomerate and the retailer.
Speaker Change: Proving our impact on boosting our lagging engagement in commerce conversion rate.
Speaker Change: While the B to B sales cycle has its challenges our pipeline remains strong and we remain focused on healthy enterprise clients adopt AI driven solutions to elevate customer engagement and the digital experience.
Speaker Change: On the fashion fashion Tech side of our business we.
Speaker Change: We continue to make strong progress in luxury fashion task with luxury brands, particularly in watches and the jewelry. That's V. T. O. In January 2025, we acquire while now from farfetched to accelerate <unk> growth with fashion brands and the retailer this strategic move.
Speaker Change: <unk> expense or three D V T O solution two shoes back close the scarf.
Speaker Change: And in digital shopping experience and are reshaping how brands engage with customers in the era of AI power fashion retail.
Speaker Change: Additionally, our new web based AI. Some of it you came online editor stopped API integrate Jimmy I technology for advanced imaging. The video entity. While initially we designed for beauty and fashion professionals. It has gained traction across diverse.
<unk>.
Speaker Change: They can also currently expanding our total addressable market.
Speaker Change: The API is simplify web and mobile App development, and known and complex processing without requiring suburb maintenance founder clients.
Speaker Change: It's flexibility makes it suitable for visions of all sizes with new claims spending like a convenience store chain telecom Cambria in the mobile phone company.
Speaker Change: In conclusion, we achieved solid business growth two out turnkey twenty-four highlighted highlighted by increased revenue enhanced operational efficiency and the strong financial performance.
Speaker Change: We're confident that perfect core or is this is a position. So I think just because of all the to capitalize our expanding market opportunities and sustain long term growth by continuously developing new technologies and are leveraging our leadership position in beauty and fashion space for all come through.
Speaker Change: <unk> from our App web as well as our B to B enterprise clients.
Speaker Change: Our strategy for long term growth of English on people on the fire to be our focus is on deepening our presence in the beauty fashion and the skiing settlement and expanding into new segments exploring cross sale opportunities broadening our product and service offering training.
<unk> of leadership are celebrating revenue growth and maximizing long term shareholder value.
Speaker Change: Driven by a positive demand for both our mobile beauty App subscriptions and enterprise SaaS solutions.
Speaker Change: All of them for the full year tonnage on the fly projects total revenue growth recognized under ifr it to range from 13% to 14, 5% compared to the full years 'twenty 'twenty four it runs off.
Speaker Change: With that I have concluded my remarks, and I will now pass the call over to Luis who will discuss our financial details with you. Thank you.
Luis: Thank you Ali.
Luis: Please note that all financial comparisons are on a year over year basis, and the reporting periods is the fourth quarter of 2024 versus the comparable periods in 2023 and that on top of international financial reporting standard measures.
Luis: We will also discuss non Florida.
Luis: If measures to provide greater clarity on the trends in our operations.
Luis: In the fourth quarter of 2024 total revenue increased to $15 9 million from $14 1 million for the same period in 2023.
Luis: Representing a year over year increase of 12, 4%.
Luis: Full year revenue increased 12, 5% to $52 million in 2024 from $53 5 million in 2023.
Luis: Growth theme from the continued growth of our AI and our cloud solutions and mobile subscription business.
Luis: Our cloud solution and subscription revenue grew 25, 4% to $15 1 million compared to $12 million from the year ago period.
Luis: Which represent 95% of total revenue in this quarter.
Luis: The growth is attributed to the continued expansion of our mobile beauty tuition and the positive momentum from the skin diagnosis solutions as well as our virtual try on business.
Luis: Licensing revenue decreased by 72, 2% in the fourth quarter of 2024 to <unk> 5 million compared to $1 8 million during the same period of 2023.
Luis: The licensing revenue gradually become immaterial as it continued to be phased out and replaced by a better business model of recurring subscription revenue model.
Luis: The gross profit for the fourth quarter of 2024 grew by two 5% to $11 $8 million with gross margin of 74, 1% compared to $11 5 million and gross margin of 81, 3% for the same period in 2023.
Full year gross profit was $46 9 million in 2024, and gross margin of 78% compared to $43 1 million in 2023 with gross margin of 86%. The decrease in gross margin was.
Luis: Primarily due to the increase in third party payment processing fee paid to digital distribution partners, such as Google and Apple are due to the increase in our mobile app subscription revenue.
Luis: The total operating expense for the fourth quarter of 'twenty four decreased by three 6% to $12 2 million compared to $12 7 million for the same period last year. The decrease was primarily due to the lower R&D expenses and G&A expenses in the fourth quarter of 2004.
Luis: Operating expense increased two point something percent to $50 1 million and 24 compared to $48 8 million in 2023.
Luis: This increase was mainly due to the increase in sales and marketing expenses R&D expenses and also offset by a decrease of G&A expenses.
Luis: Going into more detail on operating expenses, the sales and marketing expense for the full quarter of $24 9 million compared to $6 7 million. During the same period of 2023, an increase of three 6% the full year sales and marketing expense increased nine 7% to $98 2 million and 24.
Luis: Compared to $25 7 million in 2023. These increases were largely due to increase in marketing events advertising costs related to our mobile apps and cloud computing called.
Luis: Research and development expenses were $2 8 million for the fourth quarter of 'twenty 'twenty four compared to $3 million. During the same period of 2023, a decrease of eight 3%.
Luis: Kris away from the streamlining certain R&D process and benefiting from its been saving.
Luis: Full year R&D expense increased four points are important to $12 million for 2024 compared to $11 5 million in 2023. This increase without his point increase in R&D headcount and related personnel costs.
Luis: General and administrative expenses decreased by 41% to $1 8 million for the fourth quarter of 2024 compared to $3 million during the same period of 2023.
Luis: G&A expenses decreased by 26, 6% to $8 $5 million.
Luis: Compared to 11, 6% in 2023.
The decrease was mainly due to the increased operational efficiency.
Luis: As we March into the third year Mark of the listing on NYSE.
Luis: Net income was $1 1 million for the fourth quarter of things you can do four compared to the net income of $1 4 million during the same period of 2023.
Luis: Full year net income was $5 million for 2024 compared to $5 4 million in 2023. The positive net income was supported by continued revenue growth and effective cost control. This resolve it within an end margin net income margin of eight 3% for the full year 2024.
Luis: Excluding noncash share based compensation noncash valuation gain and loss of financial liabilities. Adjusted net income was $2 3 million for the fourth quarter, often do the new four compared to adjusted net income of $2 1 million in the same period in 2023, an increase of eight 2%.
Luis: Full year adjusted net income was $8 3 million and 274 compared to $7 million in 2073, an increase of 18, 6%. These represent an adjusted net margin of 13, 8% for the full year 2024.
Luis: As of December 31 of 2024, the company held $165 9 million in cash and cash equivalents and this month's deposits compared to $163 2 million as of December 30, <unk> 2024.
Luis: We had a positive operating cash flow of $3 3 million in the fourth quarter of 2024 compared to $3 1 million. During the same period of 2023 for the full year.
Luis: <unk> cash flow was $13 million in 2024 compared to $13 6 million in 2023, the positive cash flow demonstrate the company continuing ability to generate continuous cash flow to support his business operation and growth strategy.
Luis: Yeah.
Luis: On the mobile App side and business metrics now mobile subscription business was growing in the active subscriber increased to 14, 3% year over year, reaching an all time high of over $1 million by end of 2024.
Luis: You can see the beauty app has demonstrated its ability to provide both enjoyment and value to users.
Luis: It's really converting them into paying subscribers.
Luis: Enterprise customer base had a net increase of 24 brands clients since the end of last quarter, achieving a total of 730 to bring clients with over 822000 Skus for makeup skincare eyewear watches and jewelry product.
Luis: At the end of last year.
Luis: The further expansion of these metrics highlight the ongoing growth in the customer penetration and SKU expansion.
Luis: In the fourth quarter Perfect Corp.
The 151 key customers the same at the end of the previous quarters, demonstrating the stability of our enterprise business in this quarter.
Luis: In summary in the fourth quarter of 2024.
Luis: AI and cloud solution and mobile App subscription business continued to drive our growth.
Luis: Throughout the year, we remain focused on operational efficiencies and financial discipline, resulting in an 18, 6% year over year and full year adjusted net income and adjusted net margin rate of 13, 8% of.
Luis: As mentioned by Alice we will continue to invest in the growth of our business through the development of AI technologies, both organically and through M&A opportunities to strengthen our core competencies our commitment to advancing <unk> in AI position.
Luis: As the industry leader empowering our consumers and enterprise point with tool the outperform current solutions and redefine what's possible in user engagement and personalized services.
Luis: Our purchase of one up on Farfetch significantly enhanced perfect core market reach allowing us to tap into new customer segments and geographies that were previously out of scope by integrating one established customer base product offerings and distribution channels, we can rapidly expand our footprint and drive growth across untapped market. Additionally.
Luis: These transactions strengthen our competitive positioning by broadening our product portfolio increased brand visibility and position us to better serve a wider range of industries. We are excited about the opportunities that are ahead of our b to C and b to B business line, but continue to invest in AI innovations depending on market prices.
Building on our strong foundation, we are confident that we have sustained growth well into the future.
Finally opened 75 guidance for total revenue year over year growth will range from 13 to 14, 5%. This forecast is based on company current assessment of the market and operational conditions.
Luis: In the human will closely monitor business progress and provide updates in order to better offer transparency to the market.
Luis: That concludes my prepared remarks, operator, please open up the call for questions.
Luis: Thank you we will now begin the question and answer session if you'd like to ask a question. During this time she the press star followed by the number one on your telephone keypad.
Luis: I'd like to withdraw your question Press Star one again and again, please limit yourself to one question and one follow up.
Announcer: And your first question comes from the line of Pat Mccann with novel. Please go ahead.
Pat McCann: Hey, Thanks for taking my question I was wondering you know I noticed you certainly you highlighted the.
Pat McCann: The growth in the brand clients and my question had to do.
Pat McCann: With the B to B side of the house I'm wondering what the situation is with your enterprise clients as far as.
Pat McCann: Their ability to potentially start to spend more money on services such as yours, what's the situation with the b to b, especially given that it has the higher margins and will that you would do you anticipate a return to growth there in 2025, what should we look for there and then I guess sort of the follow up to that would be.
How does the b to B revenue play into your.
Pat McCann: 13, and a half to four.
Pat McCann: 13% to 14, 5%.
Pat McCann: Growth guidance for 2025.
Pat McCann: Thank you Pat.
Pat McCann: The <unk> market I would say it still remains challenging.
Pat McCann: Last year it didn't really on the previous year, we have challenge for inflation and cost.
Pat McCann: Most recently when you start hearing clients.
Pat McCann: We worry about potential tariff.
Pat McCann: Comes.
Pat McCann: Later in the year. So they are fairly cautious to understand what exactly will be the impact to their financial dominate turn.
Pat McCann: Their spending plans.
Pat McCann: So the pipeline remains very solid the interest from the B to B brands or a few there.
Pat McCann: They are investing they want to be more digital this is where we play the role. However, we understand that they are not yet ready to write a big check.
Pat McCann: We see that the renewal rate for the business continues to be healthy. So they will continue to use what they already using but the expansion to be more agile as we grow I think it still remains to be proven and are we moving vigilant about the market and how the economy will play and they're selling they may affect their cost.
Pat McCann: From that perspective.
Pat McCann: But the good news is we are spending at him right into newer markets. So our total addressable.
Pat McCann: These client groups or its market youll repeat the spending.
Pat McCann: Again, partially because of the Warner acquisition as we are extending into newer categories that we were not previously present or only 32.
Pat McCann: Getting to the market and.
Pat McCann: And that potentially could contribute in to grow the guidance that we have provided suddenly is based on current visibility we.
Pat McCann: You don't want to just have a big talk and have an overly optimistic we've all seen in the market is moving so we are cautiously optimistic about that since there is no really real competition in the segment that we are we remain a solid leader in this space. So I believe that once they bought market open in pulp.
Pat McCann: The belief bounce stronger.
Pat McCann: Consumption you may drive more revenue in there.
Pat McCann: The total guidance for 2025.
Pat McCann: Baghdad, the BTC revenue is growing faster than the b to b continuously for the last year or.
Pat McCann: So we expect that the <unk> revenue, maybe somewhere between 30% to 40% of the total revenue in D C or pursuant to our guidance model.
Pat McCann: Great. Thank you.
Speaker Change: And your next question comes from the line of Lisa Thompson with Zacks investment Research Lisa. Please go ahead.
Lisa Thompson: Oh, Hi, let me just follow up on your last answer if you thinking that next year would be to be in the 30% to 40% what was it last year.
Speaker Change: So last year if he was.
Lisa Thompson: 40% ish.
Speaker Change: We are finishing our auditing.
Speaker Change: Service. So you saw the.
Speaker Change: B to C. Par has become the bigger part of the zoro business in 2024.
Speaker Change: And in looking at what your.
Speaker Change: Kind of earnings plan is for the year.
Speaker Change: Do you think that you're going to be able to reduce operating expenses to keep in line with the reduction in gross margin because of that and then come out kind of the same as you did last year.
Speaker Change: I think we are still investing and I think with you and all the rest with smaller scale too.
Speaker Change: To stop investing so I. So I think the opportunity is quite big there.
Speaker Change: The expenses in the net income is positive.
Speaker Change: Operating income is virtually almost breakeven so theres nobody all key concerns, especially we use the capital that we have to invest in the growth I think now we expansion into newer categories are coming out with new products, especially in the AI innovation, we will continue to invest nothing that.
Speaker Change: Will you increase.
Speaker Change: Any significant differences between what our expense model has been in the previous two years. So in a nutshell I think we will try to run the model with financial discipline to make sure that you're not creating a financial pressures.
Speaker Change: At the same time, continuing to invest in AI development research and growing the R&D team.
Speaker Change: Can I just have one question on Wanna can you talk about that landscape as far as competition I know you dominate beauty what does it look like in the fashion landscape.
Speaker Change: Yeah. So one of them is steadily being the leader in the space that has a more than two dozen big logos big names such as Valentin No Balenciaga, Louis Vuitton, Gucci and more so I think there is no really much competition. After we acquired Warner So after the integration.
Speaker Change: We've really become the AIA, a powerhouse for fashion and beauty virtual try on market.
Speaker Change: They may be you know a few other smaller start up that are in.
Speaker Change: The shoes market only doing you know sit and watch this market, but not in the scale and reach that can compete with us. So I think the strategic merger really created the opportunity to become the one shop for the luxury brands, especially for the top luxury brands they rely on global team.
Speaker Change: On bigger and more established organization to provide services to them and I think well enough was part of the Farfetch, which is again, it's a great company a great group and now part of appropriate Corp. A more established global leader in technology. We are confident that we can keep extra runway for this business to grow and really.
Speaker Change: Become a dominant player across both beauty and fashion.
Speaker Change: Great. Thank you for those answers.
Speaker Change: Again, if you'd like to ask a question in the press star followed by the number one on your telephone keypad.
Speaker Change: And your next question comes from the line of Ash Asia with Sidoti Ashy. Please go ahead.
Speaker Change: Alright, great. Thank you so much for taking my question and congrats on a very solid fourth quarter results I have one of the questions regarding gross margin gross margin declined six percentage quarter over quarter and I understand that you are aware declined because the b to C.
Speaker Change: This is high at about like the <unk> business is more but why did we see a 6% decline quarter over quarter and like if you can just give us what the key drivers behind this compression joy.
Speaker Change: Hi, Ashwin.
Speaker Change: Uh huh.
Speaker Change: So so I think the full quarter.
Speaker Change: The good news is the BTC was growing at a faster pace than we expected. So the overall revenue contribution from B to C versus <unk> in the fourth quarter was much higher than we expected and that how the overall gross margin has a bigger deep I think is not.
Speaker Change: It affected was not affected but I think it's really more maybe a onetime thing because the fourth quarter the shopping season.
Speaker Change: Waving in of goods sale.
Speaker Change: People getting new smartphones, they are downloading new apps or they are subscribing new apps.
Speaker Change: And indeed, we have seen this pattern typically seasonality.
Speaker Change: Seasonality pattern for quarter four.
Speaker Change: Have that impact because the BTC is bigger the theory was a lot more bigger and growing faster than we expected on the other hand b to b continues to be challenging in quarter four so the.
Speaker Change: The revenue contribution from <unk> was slightly lower than we expected that also contributed to the drop in the gross margin.
Speaker Change: For the 2025 full year I think we expect that that may gradually come up.
Speaker Change: Slightly.
Speaker Change: Okay, but it does not go back to 2023 11.
Speaker Change: Correct correct, Yeah, I think <unk> was about a half of the total business I think for this year.
Speaker Change: Said earlier.
Speaker Change: We expect it to be business to be more challenging and if the BTC continue to grow really quick and.
Speaker Change: And the B to B contribution may drop to lets say, 30% or will it be over 30%.
Speaker Change: Right, Okay, and just another question relating to the acquisition like if you can give us the timeline for the full integration and also regarding the revenue split like.
Speaker Change: You said that revenue growth like they're going to have a new guidance for is 13 to 14, 5%. If you can just break down how much of that growth is expected to come from the acquisition and how much is the organic growth.
Speaker Change: So the deal just closed like 40 to 45 days ago. So team is going through our extensive integration work across all different departments. So we expect that will continue to happen in the first half of the year, meaning that the the go to market together as one team as one platform all happened.
Speaker Change: Later in the year.
Speaker Change: And we've got again, we've tried to do as we know we can from a sales marketing perspective from product development and customer service customer that debt.
Speaker Change: So if we are able to move very quickly on this the revenue maybe the contribution of that new acquisition might come in earlier or in more meaningful.
Speaker Change: Meaningful way in this year the guidance that we're giving them we started with a quite conservative look into what the business or is and how that contribute again, one is a smaller startup right. They are about 30 employees. They have good grain clients like 2020, plus in countries with whom we have like saving hundreds right. So they'll give you up.
Speaker Change: Perspective about the size of the acquisitions, though is not going to have a tremendous change overnight, but it is much more the new value that we can unlock after the integration is done and then gradually as these process March tour, and we may adjust our guidance depending on the market.
Speaker Change: Great and just one more if we have the time.
Speaker Change: Like strategically where do you see increasing your investment going into the new year like to take advantage of that option of AI like where do you where are you on but our top investment priorities from an incremental dollar perspective.
Speaker Change: Oh yeah.
Speaker Change: We can generally say I, it's all our focus right now from R&D site.
Speaker Change: You can see that evolving offer do AI model every months excited.
Speaker Change: And recently the.
Speaker Change: The old model to the to the well. So I think this is a great opportunity for you know the application services on top of that.
Speaker Change: Big models.
Speaker Change: So by saying that R&D no matter, it's a head count or some of the server training.
Speaker Change: GPU Oddest things are the main focus of course, our digital marketing still important, especially for PTC is not buying up then oh the a F.
Speaker Change: We could I think digital marketing to attract the right app users to come to us. So AI is a home focused alpha R&D this year and.
Speaker Change: I think for the next five to 10 years.
Speaker Change: The speed of our investment.
Speaker Change: I can see is fast and because the whole ecosystem evolves so fast.
Speaker Change: Very high attention to the market.
Speaker Change: In a.
Speaker Change: Recent development of the market I think there's a very very CRO to service providers like us.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Yeah.
Lisa Thompson: And our next question again from Lisa Thompson with Zacks investment Research Lisa. Please go ahead.
Lisa Thompson: Hi, I just wanted to ask again about whatever happened to AI assistant and if you think that's going to be a big driver.
Lisa Thompson: For your mobile apps talk about where you are with that.
Lisa Thompson: Thank you Yeah AI assistant is the one we are developing a thing.
Lisa Thompson: A powerful at Mina <unk> lost the second half of last year and we try to.
Lisa Thompson: Breached.
Lisa Thompson: French them into our B to B for the brand to use and the PTC for me to see that you know AI assistant H N co pilots, we will launch that in our App before before our second quarter of this year to try the market I think that's the future.
Lisa Thompson: But he needs it.
Lisa Thompson: And it's a pay by service.
Lisa Thompson: Kind of a this is a model for each of the brands. We have you know we have a perfect DVT and now ready for a POC.
Lisa Thompson: We did have brands doing a POC trying to doing plc with us and again brand their movement to this new AI, especially generative AI.
Lisa Thompson: It is not as fast so we sell POC Lee take off May take me a start before end of this year.
Lisa Thompson: On Wednesday, our testing.
Lisa Thompson: In validation piece.
Lisa Thompson: <unk> will be factor well make the same region be the agents are getting agents to our app before.
Lisa Thompson: Second half of this year.
Great I look forward to that thank you so much.
Lisa Thompson: Thank you.
Jimmy I: As there are no further questions at this time I'd like to hand, the conference back over to Mr. Jamie Sure Jimmy.
Jimmy I: Thank you once again for joining the call today.
Jimmy I: Do you have any further questions. Please feel free to contact us directly or through our IR website.
Jimmy I: We look forward to speaking to everyone again in our next call Goodbye.
Jimmy I: This concludes today's conference call. Thank you all for joining you may now disconnect.