Global X Millennial Consumer ETF TodayMILNGlobal X Millennial Consumer ETF$49.85 +0.17 (+0.34%) 52-Week Range$36.87▼$50.86Dividend Yield0.20%Assets Under Management$128.67 millionAdd to WatchlistMillennials have been assigned a lot of blame, from spurring the downfall of paper napkins and bars of soap to turning their backs on mothballs and canned tuna fish. As a millennial myself, I shoulder some of that blame. While I still use napkins and bars of Dial soap, I haven’t opened a can of tuna fish since I le ...

Core Insights - Sea Limited (NYSE: SE) is a Singaporean tech conglomerate primarily engaged in digital entertainment (Garena), e-commerce (Shopee), and digital financial services (Monee) in Southeast Asia [1] Group 1 - The company has been part of a personal investment portfolio since mid-2020, during the pandemic [1] - The author has a background in engineering and a strong interest in tech stocks, which influences investment choices [1] - The company is recognized for its significant operations in Southeast Asia, indicating a strategic focus on this growing market [1]

Core Viewpoint - Sea, the Southeast Asian e-commerce giant, reported a record high revenue of $5.3 billion for Q2 2025, marking a significant year-on-year growth of 38.2%, surpassing market expectations of $5.12 billion. This is the strongest revenue growth for Sea in the past 12 quarters, driven by the synergy of its three main business segments: e-commerce, digital finance, and digital entertainment [1][3]. Financial Performance - Gross profit increased by 52.1% to $2.4 billion, with a gross margin improvement to 45.3% from 39.8% in the same period last year [3]. - Net profit soared to $414 million, a 418% increase from $79.9 million year-on-year, achieving the best quarterly profit in history. Diluted earnings per share rose to $0.65, a 364% increase, but fell short of analyst expectations of $0.99 [3]. - Adjusted EBITDA reached $760 million, up 71% year-on-year, with an adjusted EBITDA margin of 15.3%, a historical high [3]. Main Business Segments - E-commerce segment Shopee generated $3.8 billion in revenue, a 33.7% year-on-year increase, with adjusted EBITDA of $227.7 million, marking a historic turnaround from a loss of $9.2 million in the same period last year [4]. - Digital finance service Monee became the fastest-growing segment, with total revenue of $882.8 million, a 70% increase year-on-year. Adjusted EBITDA reached $255.3 million, up 55% [7]. - Digital entertainment segment Garena reported revenue of $559.1 million, a 28.4% increase year-on-year, with adjusted EBITDA of $368.2 million, up 21.6% [9]. Strategic Direction - Sea's management announced a strategic shift to prioritize growth while maintaining profitability, indicating the company has successfully transitioned from a restructuring phase to a new stage of growth and profitability [10]. - The company plans to establish 10 automated sorting centers in Southeast Asia by the end of 2025, aiming to increase the proportion of two-day delivery orders from 45% to 60% and reduce logistics costs by 10% [11]. Market Outlook - Following the earnings report, several analysts raised their target prices for Sea, with Macquarie initiating coverage with a "Buy" rating and a target price of $219.9, while Citigroup raised its target price to $206 [12]. - Despite short-term challenges such as competition from TikTok Shop and currency fluctuations, the long-term growth potential remains strong, with e-commerce penetration in Southeast Asia at only 6.5% compared to 27% in China [13].

Core Viewpoint - Sea Limited is experiencing significant momentum in its business, with a stock increase of 66% in 2025, outperforming the S&P 500 index, which is up by 10% year to date [1][2]. Business Segments - Sea Limited operates in three main segments: e-commerce (Shopee), digital financial services (Monee), and digital entertainment (Garena) [1][4]. - Shopee is the largest e-commerce platform in Southeast Asia, processing 3.3 billion orders valued at $29.8 billion in Q2 2025, representing a 28% year-over-year increase [4]. - The Monee platform, which provides loans to merchants and consumers, saw its loan book grow by 90% to $6.9 billion in Q2, driven by 30 million active users [5]. - The digital entertainment segment reported 664.8 million active users in Q2, marking the third consecutive quarter of growth, indicating a potential recovery from previous declines [6][7]. Financial Performance - Sea generated $5.3 billion in total revenue during Q2, a 38.2% increase from the previous year, accelerating from 29.6% growth in Q1 [8]. - Revenue breakdown for Q2 includes: - E-commerce (Shopee): $3.8 billion, 33.7% growth - Digital Financial Services (Monee): $882.8 million, 70% growth - Digital Entertainment (Garena): $559.1 million, 28.4% growth [9]. - The total adjusted EBITDA surged by 85% year-over-year to $829.2 million, with the digital financial services and digital entertainment segments contributing significantly to profitability [10][11]. Valuation and Future Outlook - Sea's stock is currently trading 51% below its 2021 peak, with a price-to-sales (P/S) ratio of 5.4, which is more reasonable compared to its historical average of 9 [12]. - Wall Street estimates suggest Sea's annual revenue could reach $26.4 billion by 2026, implying a forward P/S ratio of 3.6, indicating potential for a 104% stock price increase over the next 18 months [14]. - The company holds $10.6 billion in cash and equivalents, providing financial flexibility for further investments and growth [15].

Group 1: Meta Platforms - Meta Platforms is highlighted as a strong buy due to its impressive earnings report and long-term potential in the digital advertising space [4][5] - The company reported an 11% year-over-year increase in ad impressions and a 9% rise in ad pricing, with daily active users reaching 3.48 billion, a 6% increase [5] - Meta's net income surged by 36% in the second quarter, maintaining positive cash flow despite significant investments in AI infrastructure [5][6] - The company is investing tens of billions into AI without incurring substantial debt, primarily using cash and cash flow for its data center expansions [7] - Meta's stock has risen over 340% in the past three years, currently trading at a price-to-earnings ratio of 28, which is considered attractive given the anticipated 17% annualized earnings growth [9] Group 2: Sea Limited - Sea Limited is recognized as a tech conglomerate with significant growth potential, operating in gaming, e-commerce, and fintech primarily in Southeast Asia and Brazil [10][12] - The company has seen a 35% revenue growth to $10 billion in the first half of 2025 compared to the same period in 2024, with net income attributable to shareholders reaching $809 million [14] - Despite a high P/E ratio of 123, the forward P/E ratio of 41 is viewed as attractive due to the company's substantial growth prospects [15] Group 3: Reddit - Reddit is experiencing explosive growth, with a 78% year-over-year revenue increase to $500 million and ad revenue growing by 84% [16][17] - The company achieved its highest quarterly profit with net income climbing to $89 million, alongside a 21% increase in daily average unique users [17] - Reddit is leveraging its content library for AI development, having signed a licensing deal with Alphabet, which enhances site traffic and user engagement [18] - The company has a gross margin of 91% and potential for increased profitability through operational efficiencies and new revenue streams [19][20]

Core Viewpoint - Sea Limited has successfully turned around its business, showing significant growth and profitability across all segments, leading to a substantial increase in stock value. Group 1: Company Performance - At the end of 2022, Sea Limited faced challenges with only 7% revenue growth and a net loss of $1.7 billion, primarily due to struggles in its digital entertainment segment [2] - In 2024, Sea reported a 28% increase in overall revenue and a profit of $448 million, indicating a strong recovery [3] - The second quarter of 2025 showed even better results, with gross profit up 50% year over year and net income rising from $79.9 million to $414.2 million [5] Group 2: Business Segments - Sea's e-commerce platform, Shopee, achieved 34% year-over-year revenue growth, while the Monee financial service business saw loan principal balances increase by 94% [6] - The Garena digital entertainment platform experienced a 23% growth in bookings, with management forecasting a 30% growth for the full year [6] Group 3: Financial Health - Sea's adjusted EBITDA grew by 85%, and the company now holds $10.6 billion in cash on its balance sheet, reflecting improved financial health [5] - The non-performing loan ratio for the Monee platform is at a low 1%, indicating effective risk management [6] Group 4: Market Position and Valuation - Sea Limited's stock trades at about 45 times forward earnings expectations, which may be justified given the nearly 40% revenue growth and expanding margins [7] - As the leading e-commerce platform in Southeast Asia, Shopee has significant potential for customer relationship development, similar to Amazon's evolution [8] - The company has become more efficient, growing rapidly without excessive capital burn, suggesting continued upside potential [9]

Core Insights - Sea Limited (SE) reported adjusted earnings of 85 cents per share in Q2 2025, missing the Zacks Consensus Estimate by 14.14% and showing an increase from 46 cents per share in the same quarter last year [1] - Revenues reached $5.3 billion, a 38.2% year-over-year increase, driven by growth in e-commerce and digital financial services, surpassing the Zacks Consensus Estimate by 4.67% [1] Revenue Breakdown - Digital Entertainment (Garena) revenues were $559.1 million, up 28.4% year-over-year, supported by an increase in active users and paying user penetration [2] - Quarterly active users reached 664.8 million, a 2.6% increase year-over-year, while paying users increased by 17.8% to 61.8 million, raising the paying user ratio to 9.3% from 8.1% [2] - E-commerce (Shopee) service revenues totaled $3.8 billion, a 33.7% year-over-year increase, including GAAP marketplace revenues of $3.3 billion and GAAP product revenues of $0.5 billion [3] - Gross Merchandise Value (GMV) increased by 28.2% year-over-year to $29.8 billion, with gross orders reaching 3.3 billion, a 28.6% increase [4] - Digital Financial Services revenues surged 70% year-over-year to $882.8 million, driven by a loan book growth of 94% to $6.9 billion [5] Profitability Metrics - Gross profit increased by 52.1% year-over-year to $2.41 billion, with gross margin expanding by 420 basis points to 45.8% [7] - Adjusted EBITDA rose 84.9% year-over-year to $829.2 million, with an adjusted EBITDA margin of 15.8%, expanding by 400 basis points [9] - Digital Entertainment's adjusted EBITDA increased by 21.6% to $368.2 million, while E-commerce adjusted EBITDA reached $227.7 million, a significant turnaround from a loss of $9.2 million in the prior year [9] Cash Flow and Balance Sheet - As of June 30, 2025, Sea Limited had cash and cash equivalents of $2.17 billion, slightly down from $2.18 billion as of March 31, 2025 [11] - The company generated $1.62 billion in cash from operating activities in the reported quarter, compared to $756.9 million in the previous quarter [11]

Group 1 - Sea's soaring sales are positioning it to reclaim the title of Southeast Asia's most valuable company, with a market valuation nearing $103 billion, just behind DBS Group's $113 billion [1] - The company's recent performance alleviated market concerns regarding its core e-commerce business, Shopee, as Southeast Asian consumers increasingly shift to online shopping [1][2] - Sea's revenue for the quarter ending June grew by 38% to a record $5.26 billion, surpassing analyst expectations of $5 billion, marking the largest stock price increase in over two years [2] Group 2 - Sea's logistics network, SPX Express, has significantly improved customer experience, contributing to nearly 30% growth in total e-commerce orders and gross merchandise value [2] - The company has raised merchant commission rates by approximately one-third in core markets since early last year, indicating confidence in attracting and retaining merchants due to its large user base and mature logistics services [2][3] - Sea's financial services segment, Monee, saw a 70% increase in sales to $882.8 million, while its gaming division, Garena, experienced a 23% revenue growth [3] Group 3 - Analysts expect that the growth across Sea's three main business segments will lead to a quadrupling of net profit by 2025, driven by strong momentum in the first half of the year and continued growth in the third quarter [3] - Improvements in advertising technology are anticipated to increase merchant spending and the number of advertisements, further enhancing monetization rates [3] - The scale effects, particularly in Brazil, are expected to lower average costs and enhance overall e-commerce profitability, with self-operated logistics remaining a key competitive advantage [3]

Summary of Sea Ltd. (SE) Earnings Call Company Overview - **Company**: Sea Ltd. (SE) - **Market Cap**: $92.8 billion - **Enterprise Value**: $87.9 billion - **Industry**: E-commerce, Gaming, Fintech Key Highlights E-commerce (Shopee) - **Strong Performance**: Shopee's growth in 2Q25 exceeded expectations, with a 25% year-over-year GMV growth in 1H25 expected to continue into 3Q25, suggesting potential upside to the existing 20% guidance for FY25 [1][16] - **Service Quality Initiatives**: Management emphasized a focus on service quality, including VIP subscriptions and faster deliveries, which are expected to enhance customer loyalty and market leadership [1][17] - **Logistics Improvement**: Logistics costs in Brazil decreased by 16% year-over-year, with average delivery times reduced by over 2 days [16] - **Competitive Positioning**: Despite increased competition, Shopee's growth in Brazil remains robust, with management confident in maintaining market share [16][18] Gaming - **Revenue Growth**: Management raised FY guidance for gaming bookings to grow over 30% year-over-year in 2025, driven by successful IP collaborations [2][22] - **Strong User Engagement**: Positive reception of collaborations, such as with Netflix's Squid Game and Naruto, indicates strong user engagement and potential for further growth [22] Fintech - **Loanbook Expansion**: The fintech segment's loanbook grew from $5.8 billion in 1Q25 to $6.9 billion, with significant growth in consumer and SME loans [2][27] - **Market Penetration**: On-Shopee BNPL penetration is in the mid-teens, with Malaysia surpassing $1 billion in loans, indicating strong market presence [27] Financial Performance - **Revenue Estimates**: Revenue projections for 2025 increased from $21.1 billion to $22.0 billion, reflecting a 4% increase [28] - **EBITDA Growth**: Adjusted EBITDA for 2025 is projected at $3.8 billion, up from previous estimates, indicating improved profitability across segments [28] - **Earnings Per Share (EPS)**: EPS estimates for 2025 increased to $2.70, reflecting strong earnings growth [28] Valuation and Price Target - **Target Price**: The 12-month target price is raised from $193 to $206, reflecting a positive outlook based on strong performance and growth potential [3][26] - **Valuation Methodology**: The target price is based on a sum-of-the-parts (SOTP) analysis, incorporating DCF and EV/Sales metrics [32] Risks and Considerations - **Competitive Landscape**: Risks include heightened competition, macroeconomic factors, and execution challenges in new markets like Brazil [33] - **Market Dynamics**: The company acknowledges potential volatility due to the evolving e-commerce competitive landscape [31] Conclusion - **Investment Thesis**: Sea Ltd. is positioned as a market leader in gaming, e-commerce, and fintech in Southeast Asia and Brazil, with strong growth prospects and a focus on service quality and customer loyalty [30]

Core Insights - Southeast Asian internet giant Sea reported strong performance in its Q2 financial results, with overall revenue increasing by 38% year-on-year, surpassing market expectations, primarily driven by robust e-commerce and financial services [1] E-commerce Performance - The core e-commerce segment, Shopee, saw its GMV (Gross Merchandise Volume) grow by 28% year-on-year, with a noticeable acceleration compared to the previous quarter, driven mainly by an increase in order volume, indicating a healthy growth momentum [1] - Shopee's revenue increased by 34% year-on-year, significantly exceeding market expectations [1] Financial Services Growth - The financial services segment, Monee, experienced a revenue increase of 79% year-on-year, with a net increase in loan balances of $1 billion [1] Gaming Sector Update - The gaming segment, Garena, reported a year-on-year revenue increase of 23%, although this represented a slight slowdown compared to the previous quarter, it still marginally exceeded conservative market expectations [1]