Financial Data and Key Metrics Changes - Total GAAP revenue increased by 30% year on year to $4.8 billion in Q1 2025, driven primarily by GMV growth in e-commerce and digital financial services [31] - Total adjusted EBITDA was $947 million, compared to $401 million in the same period last year [31] - Net income was $411 million in Q1 2025, compared to a net loss of $23 million in Q1 2024 [33] Business Line Performance Changes E-commerce (Shopee) - Gross orders grew by 20% year on year to $3.1 billion, while GMV increased by 22% year on year to $28.6 billion in Q1 2025 [31] - Ad revenue grew by more than 50% year on year in Q1 2025 [9] - Adjusted EBITDA for e-commerce was $264 million in Q1 2025, compared to an adjusted EBITDA loss of $22 million in Q1 2024 [31] Digital Financial Services (Money) - Revenue grew by 58% year on year to $787 million, with adjusted EBITDA up by 62% year on year to $241 million [31] - Loan book grew by over 75% year on year to reach $5.8 billion, driven by the expansion of the user base [16] - Active users for consumer and SME loan products exceeded 28 million, representing more than 50% growth year on year [17] Digital Entertainment (Garena) - Total bookings grew by 51% year on year, with adjusted EBITDA growing by 57% [24] - Free Fire's average daily active users in Q1 were close to peak levels during the pandemic [26] Market Data and Key Metrics Changes - Shopee maintained market leadership with improved profitability across Asia and Brazil [8] - In Brazil, the loan book surpassed $1 billion, driven by higher penetration of S Pay Later on Shopee [18] - The overall portfolio quality for Money remained healthy, with a 90-day NPL ratio of 1.1% [17] Company Strategy and Development Direction - The company rebranded its digital financial services business from SEA Money to Money, aiming to create a seamless connection with Shopee [6] - The focus remains on enhancing price competitiveness, improving service quality, and strengthening the content ecosystem [9] - The company is committed to capturing long-term opportunities in underserved markets, particularly in Brazil [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, citing strong growth and improving profitability across all businesses [5] - The macroeconomic environment has not materially impacted Shopee's growth, as the company operates primarily as a local marketplace [40] - Management emphasized the importance of risk management and maintaining asset quality in the financial services segment [22] Other Important Information - The company celebrated its 16th anniversary and highlighted the importance of technology in enabling financial inclusion [5][6] - The Shopee VIP membership program has seen encouraging adoption, with members purchasing more frequently and spending significantly more than regular buyers [12] Q&A Session Summary Question: What drives the improvement in Shopee's profitability and outlook for GMV growth? - Management attributed the growth to seasonality, improved take rates, and cost optimization, while maintaining confidence in the 20% GMV growth outlook despite macro uncertainties [36][39] Question: Can you elaborate on the strong performance of Money? - Growth was driven by higher penetration of S Pay Later on Shopee and strong performance in non-Shopee products, with a focus on prudent risk management [44] Question: What is the outlook for gaming bookings and potential volatility? - Management acknowledged strong Q1 performance but cautioned about potential quarterly volatility due to seasonality and specific collaborations [52] Question: How does the competitive landscape in Brazil affect margin expansion? - The competitive landscape remains stable, with margin improvements driven by better cost structure and operations, while monitoring the impact of new entrants like TikTok Shop [70] Question: What are the differences in asset quality management between Brazil and ASEAN markets? - Brazil presents a higher interest rate environment, requiring different risk assessment approaches, but the company has integrated more data to manage risks effectively [75]