Sea(US:SE)2025-08-12 12:30Financial Data and Key Metrics Changes - Total GAAP revenue increased by 38% year on year to $5.3 billion in 2025, driven primarily by GMV growth in e-commerce and digital financial services [31] - Total adjusted EBITDA rose to $829 million in 2025 from $448 million in 2024 [31] - Net income for 2025 was $440 million, compared to $80 million in 2024 [34] Business Line Data and Key Metrics Changes E-commerce (Shopee) - Shopee's gross orders grew by 29% year on year to $3.3 billion in 2025, with GMV increasing by 28% year on year to $29.8 billion [31] - GAAP Marketplace revenue was $3.3 billion, up 34% year on year, while core marketplace revenue increased by 46% year on year to $2.6 billion [32] - Adjusted EBITDA for e-commerce was $228 million in 2025, compared to an adjusted EBITDA loss of $9 million in 2024 [31] Digital Financial Services (Money) - Digital Financial Services GAAP revenue increased by 70% year on year to $883 million, with adjusted EBITDA up by 55% year on year to $255 million [31] - The loan book grew over 90% year on year to reach $6.9 billion, with a stable 90-day NPL ratio of 1% [18][31] Digital Entertainment (Garena) - Digital entertainment bookings grew by 23% year on year to $661 million, with GAAP revenue up 28% year on year to $559 million [31] - Adjusted EBITDA for digital entertainment was $368 million, up 22% year on year [31] Market Data and Key Metrics Changes - In Brazil, Shopee's average monthly active buyers rose by over 30% year on year in Q2, significantly outpacing the industry average [14] - The logistics cost per order in Brazil was reduced by 15%, and average delivery time improved by more than two days year on year [15] Company Strategy and Development Direction - The company aims to prioritize growth while improving profitability across all three business lines, with a focus on cost efficiency and cash accumulation [5][6] - The strategy includes expanding the Shopee VIP membership program and enhancing logistics capabilities to improve service quality and customer loyalty [12][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth momentum into Q3, with expectations for full-year growth to exceed initial guidance [38] - The competitive landscape in Brazil remains favorable, with the company maintaining a strong cost structure and price competitiveness despite competitor adjustments [39][41] Other Important Information - The company has successfully integrated AI technologies to enhance advertising revenue and improve operational efficiencies across its platforms [7][84] - The Shopee VIP membership program has shown strong traction, with significant growth in GMV from VIP members in Indonesia [12] Q&A Session Summary Question: Will the strong GMV performance lead to a raised full-year guidance? - Management indicated that Q3 growth is expected to be similar to the first half, suggesting an upward revision of full-year guidance [38] Question: What is the competitive landscape in Brazil? - Management noted that despite competitor adjustments, Shopee's growth in Brazil has remained strong, with a focus on cost structure and logistics efficiency [39][41] Question: What is the potential for the Shopee VIP membership program? - Management sees good potential for the VIP program, especially with user retention and increased spending [46] Question: How will instant delivery impact costs and margins? - Management believes instant delivery will enhance offerings without significantly impacting EBITDA margins, as higher-end users are more willing to pay for faster services [47] Question: What is the outlook for digital financial services in Brazil? - Management is optimistic about growth in Brazil, with significant room for expansion in BNPL penetration and personal loans [68] Question: How is AI being utilized in the gaming business? - AI is being leveraged to enhance game development and user engagement, with a focus on improving productivity and creating more immersive experiences [90][94]