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The Innovative Solution Provider for CREATE, WORK & PLAY of Digital Media, and Facial Recognition AIoT
CyberLink (5203.TW)
2019Q1 Investor Conference
April 24, 2019
2
Safe Harbor Notice
The following pages contain projections & estimates of financial information as well as market
and product developments for future periods. These projections & estimates are based on
information currently available which we believe to be reliable, but they involve risks &
uncertainties. Our actual results of operations & financial condition may differ significantly
from those contained in the projections & estimates. The projections & estimates should not
be interpreted as legally binding commitments, but rather as flexible information subject to
change occasionally.
Agenda
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2019Q1 Financial Results
Business & Products Updates
Q&A
4
Financial Results (Un-audited)
5
Financial Highlights
• Q1’19
• Revenue NT$327.3M, -13.9% Y/Y. Gross Profit NT$293.7M, -13.2% Y/Y
• Operating Income NT$54.4M, -50.7% Y/Y, Operating Margin was 16.6%
• Net Income NT$58.8M, 49.7% Y/Y, Basic EPS reached $0.70, 52.2% Y/Y
• Balance Sheet
• Cash, cash equivalent & short-term investment at NT$2,836.6M as of end of
2019Q1, accounting for 54.5% of total asset. No debt.
• Dividend Policy
• The distribution of NT$3.0 cash dividend was approved by the BOD meeting in
March and will be proposed for approval in the Annual General Shareholders’
meeting in June.
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In NT$K Q1-2019 % Q1-2018 % Y/Y Q4-2018 % Q/Q
Net sales 327,333 100.0% 380,315 100.0% -13.9% 407,098 100.0% -19.6%
Cost of goods Sold (33,592) 10.3% (42,024) 11.0% -20.1% (48,277) 11.9% -30.4%
Gross Profit 293,741 89.7% 338,291 89.0% -13.2% 358,821 88.1% -18.1%
Operating Expense (239,329) 73.1% (227,931) 60.0% 5.0% (252,611) 62.0% -5.3%
R&D (88,190) 26.9% (87,031) 22.9% 1.3% (89,740) 22.0% -1.7%
S&M (125,479) 38.4% (113,267) 29.8% 10.8% (127,612) 31.3% -1.7%
G&A (25,660) 7.8% (27,633) 7.3% -7.1% (35,259) 8.7% -27.2%
Operating Income 54,412 16.6% 110,360 29.0% -50.7% 106,210 26.1% -48.8%
Non Operating Income (Loss) 23,459 7.2% (55,343) -14.5% 142.4% 15,062 3.7% 55.7%
Foreign Exchange Income (Loss) 4,304 1.3% (35,855) -9.4% 112.0% 4,612 1.1% -6.7%
Investment Income (Loss) (24,888) -7.6% (43,270) -11.4% 42.5% (15,788) -3.8% -57.6%
Other Income (Loss) 44,043 13.5% 23,782 6.3% 85.2% 26,238 6.4% 67.9%
Income before Tax 77,871 23.8% 55,017 14.5% 41.5% 121,272 29.8% -35.8%
Net Income 58,783 18.0% 39,257 10.3% 49.7% 80,232 19.7% -26.7%
Basic EPS (in NT$) 0.70 0.46 0.95
Consolidated Income Statement 2019-Q1
Business & Products Updates
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Business Highlights • FaceMe, AI-based Facial Recognition, has ranked among the world’s top 20 vendors in the latest NIST
Face Recognition Test , and is expected to be a new growth driver for CyberLink
• FaceMe, since launched in last September, has attracted high interest from hundreds of potential customers.
• There are tens of use cases utilizing Face Recognition technology. Very high business potential.
• Subscription-based business model on CREATE series of products (PowerDirector, PhotoDirector, Director Suite) continue to have strong performance in Q1.
• 2019Q1 continued performing well after launching in 2018Q4. In Q1’19, over 50% (more precisely, 58%) of new purchasers chose Subscription model.
• Nearly 70% of Subscribers chose Annual plan.
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Business Update – 1: FaceMe®’s Success and Opportunity
NIST Face Recognition Vendor Test (FRVT)
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• NIST (National Institute of Standards and Technology)
• A non-regulatory agency of the United States Department of Commerce. Its mission is to promote innovation and industrial competitiveness.
• FRVT (Face Recognition Vendor Test)
• Conducted by NIST and sponsored by FBI, DHS and NSC. NIST’s FRVT serves as the world’s leading benchmarking authority for facial recognition algorithms with participation from development teams around the world.
• CyberLink’s FaceMe® was ranked 18th out of all participating teams when applied to Visa 1:1 image verification test. This performance, along with ranking 3rd for speed among the top 20 vendors, make FaceMe’s® algorithm not only one of the most accurate but also one of the fastest.
• CyberLink would rank among top 10 vendors if excluding Chinese and Russian teams.
* Speed ranking is only among the top 20 vendors. * NIST Source: https://www.nist.gov/sites/default/files/documents/2019/04/04/frvt_report_2019_04_04.pdf
Top Ranked in NIST Facial Recognition Vendor Test (Visa, FMR 1e-6)
Vendor
Ranking Company
Algorithm
Ranking FNMR
Speed
(ms)
Speed
Ranking Country
1 Shanghai Yitu Technology 1 0.26% 860 18 China
2 Tech5 SA 2, 20 0.63% 780 13 South Africa
3 VisionLabs 3, 16 0.66% 270 2 Netherlands
4 Sensetime Group 4, 5 0.92% 797 14 China
5 Shenzhen Inst. Adv. Integrated Tech. CAS 6, 10 0.99% 670 9 China
6 Imperial College London 7, 13 1.08% 669 8 UK
7 N-Tech Lab 8, 11 1.11% 749 11 Greece
8 Hikvision 9 1.25% 651 7 China
9 Megvii/Face++ 12 1.45% 644 6 China
10 Vocord 14, 19 1.55% 771 12 Russia
11 Ever AI 15, 18 1.56% 701 10 US
12 Dahua Technology Co. Ltd 17 1.57% 628 5 China
13 Cognitec Systems GmbH 21, 24 1.77% 224 1 Germany
14 Panasonic R+D Center Singapore 22 1.80% 888 19 Japan
15 Innovation Systems 23 1.82% 822 17 Russia
16 Gemalto Cogent 25 1.88% 952 20 France
17 Saffe Ltd 26 2.06% 817 16 Germany
18 CyberLink 27 2.10% 425 3 Taiwan
19 Anke Investments 28 2.13% 811 15 China
20 Toshiba 29 2.14% 540 4 Japan
Ranking Name Company Name TAR Country
1 Sogou AIGROUP - SFace Sougou (搜狗) 99.94% China
2 SRC-Beijing-FR Samsung Research Institute China 99.80% China (Korea)
3 SenseTime PureFace SenseTime (商湯) 99.63% HK, China
4 ICARE_FACE_V1 Jian Cheng (程健, 中科院自動化研究所) 99.49% China
5 BingMMLab V1 Microsoft Bing MM Lab 99.49% China (The US)
6 Visual Computing-Alibaba-V1 Alibaba 99.47% China
7 EI Networks 99.29% -
8 Uniview Technology Uniview (浙江宇视科技有限公司) 99.20% China
9 QINIU ATLAB - FaceX V1 QINIU ATLAB (七牛云) 99.16% China
10 iBUG_DeepInsight Jiankang Deng, et al (IBUG @Imperial College UK) 98.95% The UK
11 ATLAB-FACEX (QINIU CLOUD) QINIU ATLAB (七牛云) 98.69% China
12 CyberLink_resnet-v2 CyberLink 98.41% Taiwan
13 CyberLink CyberLink 98.29% Taiwan
14 BingMMLab-v1 Microsoft Bing MM Lab 98.28% China (The US)
15 4paradigm 4paradigm (第四范式) 98.25% China
16 TencentAILab_FaceCNN_v1 腾讯 97.96% China
17 sophon BITMAIN (比特大陆科技控股公司) 97.86% China
18 Fiberhome AI Research Lab V2 Fiberhome technology(烽火科技) 97.58% China
19 MSU_Intsys 97.56% -
20 ULUFace 悠络客的人工智能研究院(ULUFace) 97.49% China
**Source: MegaFace Challenge/ FaceScrub Results/ Verification,November, 2018
Top Ranked in the MegaFace Challenge
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FaceMe® Attracts High Attention in Global Exhibition (US, JP, TW, SG, and KR)
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Las Vegas, USA 1/8 – 11
Singapore 3/27 - 28
Taipei 5/28 – 6/1
Las Vegas, US 3/27-28
Tokyo 4/3 – 4/5
Seoul 4/24-27
Taipei 3/26-29
FaceMe® Attracts High Attention in 2019 CES
14 14
Singapore 3/27 - 28, 2019 Las Vegas, 3/27-28
Taipei, 3/26-29 Tokyo, 4/3-5
AI-based Face Recognition Solution
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Access Control Security System
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Banking Security System
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Smart Retail: Digital Signage & Kiosk
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Detect and extract customers’ facial attributes
Gender/Age/Emotions
Eyes for Robots
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https://tw.finance.appledaily.com/realtime/20190214/1517245/
Facial Recognition Security System
22
Mobile Police (M-Police)
9. VIP and Blocked list detection
10. Digital Signage
11. Smart Retail-Visitors analysis
12. Portrait management for media
13. Age detection for entry
14. Smart Home
15. Video Meeting
16. Robots
23
FaceMe Adoption in Progress
1. Police Station
2. Access Control for corporates
3. Time Attendance and Access Control
4. Access Control for factories
5. Library Access
6. Hospital Medicine room Access
7. Bank ATM
8. Online Banking Services
FaceMe® Engine SDK – Designed for Smart Solutions
Digital Signage Home Robots
Surveillance
SMART RETAIL
SMART CITY
SMART HOME
SMART OFFICE
Door Security Public Kiosk Video Meeting
Systems
Retail CRM Systems
PC, Mobile & Appliances
Mobile Bank SMART BANK
Taking the Market Lead
Service Robots Smart T&A ( Time Attendance and Access Control)
Digital Signage &
AIOT Edge Computing Devices 3D Sensing Camera
Solution
Government Security and more
Business Update -2:
365 Subscription
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365 Subscription
A very successful launch in Q4’18, continue to be very successful in Q1’19
New purchase “Subscription %” gets higher & higher, over 50%
Continue delivering valuable offerings for free, only to subscribers (every month) to attract more subscriptions
Free background music, sound clips,
Free Effect Packs, premium plug-ins, etc.
Free one-month premium phone customer support
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Numbers of DS 365 Monthly Goodies CL Offered
2018. Oct 2018 Nov. 2018 Dec. 2019 Jan. 2019 Feb. 2019 Mar.
3 8 5 7 5 15
Business Update II- 365 Subscription
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57.9%
65.5%
74.7% 72.1%
68.5% 67.5% 67.7% 69.0%
5.6%
26.1% 27.6% 32.3%
25.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
9 10 11 12 1 2 3 TTL
New_Annual % New_Quarterly % New_Monthly %
• For new users, % of choosing subscription is getting higher & higher
Subscription % gets higher & higher
• For new subscribers, nearly 70% choose Annual plan
54.3%
61.6% 59.8%
54.5%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
9 10 11 12 1 2 3 TTL
New Purchase (DS+PDR+PhD): Subscription Rate %
29
21,606
26,265
0
5,000
10,000
15,000
20,000
25,000
30,000
9 10 11 12 1 2 3
TOTAL Active
Total Annual Active Total Q'terly Active
Total Monthly Active Total TOTAL Active
Active subscribers continue growing!
• Active subscribers continue to grow strongly
82.3% active subscribers are Annual!
Summary
• Financial
• 2019Q1 Net Income NT$58.8M, 49.7% Y/Y; Basic EPS reached $0.70, 52.2% Y/Y
• Expected to see continuous significant growth of business of invested Perfect Corp. in 2019
• Turning to Subscription model will have short-term negative impact on revenue for 2019 but it can deliver better results in the long term with recurring revenue
• Business
• AI-based Facial Recognition has huge market potentials
• High market demand and we will double down the investments on both RD and Sales teams
• CREATE series have turned to Subscription-model with good results
• Subscription % gets higher & higher over 50% and CL continue delivering premium value for free for subscribers every month
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Thank You!
For more information about CyberLink: www.CyberLink.com
For IR inquiries, suggestions and comments: