Earnings call transcript Q4 2022

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Operator

Good morning and good evening. Welcome to the Sea Limited Fourth Quarter and Full Year 2022 Results Conference Call. All participants will be in listen-only mode [Operator Instructions]. Please note this event is being recorded.

I would now like to turn the conference over to Ms. Song. Ju Min ahead. Please go

Min Ju Song

and full welcome Ju fourth everyone, office. Sea's from to earnings conference and Officer's year Corporate Min Group quarter call. Sea's Hello, Chief XXXX I Song am

would we statements, press reasons and as for forward-looking inherently may like Before be are I to you in may which and that risks to our various realized stated release. remind subject not in make we uncertainties future continue, the

as certain this of We adjusted to call of such includes when financial Also, complement enhance the understanding as GAAP businesses used flows EBITDA. of these investors' non-GAAP can discussion cash measures our believe major disclosures. our a measures, a our actual

measures, measures of on discussion the use please financial in a to GAAP of non-GAAP non-GAAP release. the our section and reconciliation press financial measures For refer with closest the

I Officer, me Hou; Yanjun Executive and Forrest Officer, Group Group Li; Wang. Chief have Chief Tony Sea's Financial Officer, Corporate and Chief with Chairman Group

highlights business Q&A session of Our XXXX. have. a be by management we year will followed for operating This full and share will updates, in fourth and and performance strategy any quarter you questions welcome the which financial

let over call With turn to Forrest. me that, the

Forrest Li

another joining decisively macro thank year and XXXX profitability. to and given last Hello, everyone, of focus us, today's year uncertainties, call. for you late for evolution pivoted was the we on efficiency

meaningful the line. bottom in to improvements a result, we see began As

both turned operations we For the Moreover, in EBITDA fourth quarter, and positive. quarter. adjusted our net $XXX total cash the million income generated of from the

the our demonstrated. we a determination to a believe Sea but of the time strong path shift and and We collective make the success. part, of significant period such We an achieve very resilience within a journey. easy has hard because our whole short has is that long-term team efforts this of been right team took could not It as only this

doing the sustainable less, approach continue we adopted going have we but this this of As growth better. forward, doing transition and manage

First, operations businesses. of on with downsized deprioritized project pipeline areas greatest we focus non-core and the across streamlined in and potential our sharpened or closures investments initiatives. non-core our exited markets, our We with

brought measures immediate improvements. These cost

More better. the focused focus better across to we operational on on things for importantly, core us our our and financial Meanwhile, doing our doing resources ecosystem. they allowed digital users managerial,

Shoppe, improve At continue accessibility to seller content worked management At quality we we of to optimize the logistics. game. core services, and customer our Garena, and

market. discussions. the to We have under also addressed with been in serve will during the detail I segment ecosystem our more better SeaMoney's leveraging rest our the the synergies strong elaborate in needs of financial

Given fine-tune the the macro operations uncertainty and to adjust monitor continue our we our our and environment and recent strong accordingly. EBIT, market closely

results there As a fluctuations performance. in and may be near-term result, our

these we focused and capturing long-term of highly However, our markets on growth remain highly in potential confident the opportunities.

towards to More our execute determination footing. importantly, on stronger ability to us profitability enable start much XXXX and a

discuss segment in now business each Let's detail.

key factors Starting achieved with The quarter e-commerce. time operating marketplace costs fourth in driving to fourth Shopee's the XXXX. fourth turned core revenue for were positive that of quarter adjusted pleased the improvement EBITDA I'm in and we profitability. share

up was revenue. marketplace the quarter, in growth XX% $X.X revenue GAAP strong was core billion, In to due This fourth mainly year-on-year.

and transaction-based on revenue, buyers fees saw advertising Within as revenue better. platform and deepened we serve investments both marketplace to increased the core monetization our sellers by greater

from the generally quarter fourth growing Full GAAP year performance of XXXX. XX% with mirrored revenue the trend

There expenses. and XX% and in were improvements in by incentives for operating GAAP improvements quarter. sequential terms we improved and more costs, targeted fourth XX% also across and marketing brand by expenses the quarter-on-quarter expenses made each G&A R&D investments driven year-on-year In major shipping of sales of the marketing.

improvement loss from fourth adjusted markets, million. $XXX decreased each positive looking In adjusted EBITDA adjusted million the of quarter, a EBITDA other $XXX had previous million. a quarter. in reported Now we the the $XXX to significant which our also at of Asia quarter-on-quarter market, more our EBITDA by XX% This region. an In loss represents than

strong to we unit in enjoy Brazil, improvement economics. continued In

order by Our margin to quarter per the XX% from loss $X.XX. previous decreased contribution

During to area XXXX, improvements focus costs we remain will ecosystem. forward. able going drive have our meaningful an been in logistics This important to of

believe to user markets. serve growth to that large We key our long-term unlocking underserved lowering be across the will cost segments our by

for improvement. seen While there from results still greater early already we efforts, have is these room

remain In user highly we improving experience. addition focused on to cost management,

systematically experience, management targets of and process and on optimizing on our only cases. We certain general for not example, For key been also we user but have for focus metrics reviewing management customer proactive services. more

on our On minimizing experience working market. logistics. consumption and time, efficient users. a have This losses, to wait sellers more reliable impact provide been The logistics, macro to experience reducing includes delivery our still more and seamless are and headwind to we buyers and remains in providing managing there a uncertain in both environment

showing first we for recent With are time. positive pivot, a line our the bottom

such, continue markets. structure our our the focus year As will to across solidify and efficiency the be optimize cost gains this to

this our output largely an Asian In market. near the to we profitability. GMV the our towards focus will Brazil, position new us remain we work In will for market, capture on business driving profitability in leading to further will strengthen significant opportunity term. the and in

view, focus low to relative long-term growth to Shopee. off-line retail. penetration on to e-commerce full for market compared our as In our potential It our reemphasize is to its important remains sustainable

demographical large enjoys highly their terms population. digital favorable in Our market also of growing and trend

answer users. our our capture. able our be supported ecosystem cost to to excellence creativity, needs an address? sustainably underserved will the we this This structure further how to the these consumption believe technology, continue improve and our profitable the is growth [ph] to to economic TAM is a of through most of much online the part importantly We ability commitment large size we lies of question in operational unwavering presented of serve the determines can at for potential across This key stage long-term by markets. us The

we the doing is everything now achieve to our the to position growth, best run. believe and visible profitability long are We ecosystem defensibility of us in

as digital engagement XXXX, In trends. the was monetization, to ongoing game impacted online by entertainment. in turn broadly similar and and let's Now experience our user game moderation market

During $XXX bookings The users ratio user quarter, average per million. Quarterly revenue Garena fourth relatively revenue with and remains the paying users. million XXX were million active $XXX paying guest quarter-on-quarter. million reached stable was XX quarterly and user

in $X.X of revenue billion. For and current focused $X.X on game. by offering XXXX, the GAAP full We engagement ongoing experiences games. user we our billion, Despite remain better bookings prioritize moderation, more with year at sustaining highly was core our enjoyable

existing users. targeted initiatives for and have returning We

been improve diverse all and line markets. to content streaming also gameplay have game We for accessibility users across

line In efficiency, and with managing comprehensively staff pipeline but our development publishing principle less, it our doing of better. have we in doing cost reviewed

potential a about direct result, have and certain to our As we divested resources. high projects remain and better closed selective projects

focus on our as we core games will to and to year, long-term continuing This growth solidifying they in opportunities communities while ourselves arise. strength pursue position

and digital by fourth The for sales SeaMoney's in and XXXX, improvement of up GAAP financial $XXX in was the the million driven also both $XX business. the Adjusted positive at services Lastly, revenue XX% for growth fourth million optimization fourth turned marketing EBITDA time quarter. was top our line year-on-year. profitability spends. strong quarter of

million. growing year year-on-year, XXX% the loss was full $XXX For $X.X and XXXX adjusted was of billion, GAAP EBITDA revenue

loans on net the balance of $X.X was the end of of credit quarter, of the losses $XXX allowance As receivable our sheet million. total fourth for billion,

business is digital Our ecosystem. of part SeaMoney a synergistic highly our

and Shopee. stimulus For transaction example, transaction experience lower our on costs mobile wallet more has resulted in

business grow wealth is to a wallet efficiently. mobile the and base, insights user more with highly its underwriting. allowed captive relevant to has the able use case for build user leverage effective more habits Shopee our user and of Shopee, large scale credit user base significant a With

benefit At enjoy options, the greater more successful and flexible Shopee as payment affordability. same credit time, consumers

enjoy wealth expect best and to synergies our a digital We market. in platform community e-commerce to underserved our insurance serve our large with similar the management businesses

We see SeaMoney an growth us. engine as long-term important for

ecosystem efficiency continue this with and pursuing opportunity strategy significant prioritize the will We profitability. in to

on our the demonstration results. capability our and ability performance fourth the business was This strength profitability and our conclude, of team. underlying and to a meaningful execution important deliver is the resilience of To an our to testament in of model the focus quarter

to to in potential Although these remains the over opportunities delivering while and the and cloud the of returns we time. to macro horizon long-term our market the expect strong near shareholder term, businesses continue sustained fast. capture uncertainty We plan

With that, I financials. discuss will our invite to Tony

Hou Tony

Forrest, and call. to you, the joining Thank thanks everyone for

release financial with comments have corresponding and Forrest schedules in We included I other highlights, our some focus my press so today's discussed financial has metrics. relevant on of detailed management the will analysis the together

This digital year-on-year for was fourth digital to monetization offset X% total For to the businesses, in financial year-on-year year increased driven of partially full e-commerce GAAP XXXX. GAAP in and and Sea the business. $X.X quarter by overall, services billion entertainment revenue our $XX.X XX% improved billion in primarily the by lower our revenue

our of XX% e-commerce, GAAP revenue fourth product billion, included and On GAAP quarter up marketplace billion. year-on-year billion $X.X of $X.X revenue of $X.X revenue GAAP

XXXX, year $X.X and up billion GAAP marketplace $X.X of XX% product revenue of billion, billion. For GAAP the $X.X revenue of GAAP full included year-on-year, revenue of

million. in E-commerce other quarter of and positive at structure. marketing our investments targeted and the were the mainly first adjusted spending, fourth The optimization time in for more deepened $XXX from cost monetization EBITDA stands sales improvements

of accrual also $XX cost from positively Adjusted reversal management of approximately in changes on efficiency. fourth we focus estimations to was quarter certain clear expenses EBITDA a exit as for strong the impacted the made decision by previous resulting million

XX% Digital billion the XXXX. quarter were in EBITDA year $X.X in revenue loss was adjusted million fourth year full $XXX GAAP XXXX the improved million XXXX. $X.X the billion. full for of $XXX $X.X entertainment billion and quarter to year bookings the of and full fourth The for year-on-year by

recognized in adjusted of XXXX. entertainment and million for business. historical the for entertainment the full billion $XXX Digital of quarter pertaining digital charge In $XXX to of was XXXX, impairment EBITDA we fourth investments an $X.X year also of certain million the goodwill quarter fourth the

underlying Impairment of from our of calculation operating quarter it goodwill in as are reflected not performance. adjusted the trends current excluded EBITDA is segment

Financial credit to and million revenue XXXX. in was $X.X billion year-on-year fourth This for businesses. Digital driven XXX% our by by to GAAP the quarter year by XX% Services of year-over-year up the $XXX was up the full in growth mainly

year time for bottom XXXX. optimization turned in first in the $XX full line EBITDA growth of line strong both positive $XXX Improvements and was the adjusted and loss by sales million was the fourth of at spend. EBITDA million marketing quarter top for Adjusted driven and the

loans end of total quarter, was credit losses of million. the of of $X.X As billion, net fourth receivable for $XXX allowance

days XXX by less shortening in in our mainly due X%, the based XXX the market in more period total third losses. quarter than to past loan than to gross historical XX on a than to days receivable less loans a our declined assessment write-off certain loans as from Nonperforming from percentage fourth due days X% the of credit of quarter of

consolidated X%. in change the write-off Without XXXX would loss fourth our a be million income the of this nonoperating net period, quarter XXXX. Returning around numbers. of of $XX net a recognized $XX million We in in of quarter to ratio fourth nonoperating compared the to

income losses in recognized amidst was to convertible $XXX for net due XXXX nonoperating primarily markets. offset bond quarter repurchase, lower from valuations a broader the investment Our gain the partially fourth million by

of the net loss $XX full loss million to year of million year, full XXXX. for For was our compared nonoperating the $XXX

primarily certain e-commerce business, was Entertainment of by carried tax in had quarter recognition expense from XXXX. income of of XXXX to by $XX million tax due income income our forward tax incurred of business. offset credit of credit $XXX tax We Digital losses compared partially tax quarter fourth income from The million a to the in net assets net tax our deferred fourth the

be tax the the taxable assets that than assets deferred it to more future tax income as will sufficient assess is deferred to recognized We our likely be we that not allow utilized.

our full of compared $XXX was income for million the $XXX net expense million For XXXX. year full tax year, the to

in to was XXXX. loss $XXX quarter result, As the of the of of $XXX in a million million XXXX net net compared fourth income fourth as quarter

in Digital certain $XXX historical million million This on impact impact well for $XXX positive of debt goodwill net of accrual approximately the of to Entertainment million investments impact as positive reversal. business includes of gain and extinguishment the as $XXX impairment related negative

full the was loss net $X.X For billion. year,

let that, Ju. the With Min call turn me to

Min Ju Song

that, Tony. you for Thank

call to We are for ready the questions. open now

call. Group this our Officer, Wang, Operator? Chief usual, As lead Corporate will Yanjun

Operator

[Operator from Pang Sachs. go comes from ahead. Goldman Vitt Instructions] question Our first Please

Pang Vitt

really and fast drivers Shopee. the this? quarter? opportunity solid major us the on this Thank you, to team turnaround. and achieve much very earnings very explain questions a for quarter manage to on did Shopee Congratulations led that Two Number can me, from on this you please, management you about one, please strong How to on in

a the Or this? GMV of way number is to That's by order cutting? deliberate in and increase question cost it cut achieve there unprofitable attempt rate off take to Is one.

forward, the commerce there market going maintain sure you any us as growth your turnaround player? profitability? line, new soft do comes current How social And already competitive plan that will achieved X, between when feel especially from balance you you number in is to back? view have solid we it landscape, bottom direct can color do come guidance that how you provide make share? Question to growth? And and or how Will that confident you growth you do

Yanjun Wang

Pang. you, Thank

on that think we for of shared Shopee, terms earnings in fronts. as In it's for on, turnaround Forrest the drivers I the and our earlier all messaged quick

to monetization rate we sellers margin various relatively types take platform grow other increase revenue, in including invest which with terms as our more across marketplace our are top In revenue as revenue, high of us. types managed of the the the line, and as well of core to

And also expense we sales front front, the reduced and marketing on expense. cost

transition and a to for excellence more XX% the this dropped sustained than positive over ecosystem leadership and so If Shopee constant currency our basis team X% sustain and managing on and fast of the platform year-on-year, the GMV around sales of while a shows our still line, grew few you noticed, strong while strong time that of resilience marketing year-on-year, execution months' leadership platform. turn bottom in the our the into a

time, the our and At quarter-on-quarter. savings in we also G&A R&D same enjoyed expenses

we been And on in deliver that with our quickly uncertainties our execute fronts, turn well and we and teams. always So own target improving ability previous our our what market the as has decisively on what also to we've see all is aligned to to been -- and macro markets. to promised we

We not shared, is we and what to walked work, initiatives deprioritize. and we we As downsized prioritize what these we markets, has sacrifices. there we of to which is easy core, hard we quarter. which need need There's operations, make core, all an been a lot the exited decide to through less

navigate our way with might much future. With few time Sea therefore, challenges a that in of and better condensed confidence achieve a entire a effort I to gives work team, months' lot we this. And think tremendous the managed us by also the to whatever this come in

Now and balancing of profitability. in growth outlook terms and

the vis-à-vis shared our the for we digital in rolling remains outlook Because also, retail the population, of long penetration growth run of as region. strong. So markets and very its young offline our economic also demographic deepened features, potential

Asian a further larger for a in we dual same reducing all is market that pie our capture long are ecosystem, strengthen run with experience of ability role to to of markets. allow cost have the believe addition us will better in our user making these time, which profitability leadership to share the and our the efforts our structure in our serve strengthening we the At we users and

in macro we period accordingly. pace uncertainty, manner, a from to and our fine-tuning adjusting headwinds period to not the course, our a our the we potential business of shift see be view growth operations markets term, and this In carefully near will adjust about there to highly long-term and opportunity. capture of focus consumption, So to our is dynamic so continue and observe in

also ability both performance have we share and clearly near fluctuations may results growth hand, think to we period. But our demonstrated from other that and I the to expect therefore, the And period execute in on our profitability. term in we

sustainable solidifying further we and defending run, our very long focused the and in growth ecosystem. on are So

build the is in that investment a online is in system to marketplace. ecosystem terms capabilities, Now operational run, operational long not investment shape landscape, competitive of we terms but that our important, the importantly, for in the our these is in need still This retail more capabilities. solely but is heavy just local of investment, view of in financial operational

requires especially in underdeveloped, will But to e-commerce need set and of diverse built individual and comprehensive with over infrastructure are and the period time, a different different that of always markets that into advantages, market long there the cetera. markets entrants our Southeast capabilities different or positioning, angles, competitors beauty other are is it skills especially Therefore, of et in very a Asia, many -- where their relatively where individual be the still markets. become

are requirements. strong many achieve setting, by Southeast large own these we're environment, able by it's we so to markets sense Collectively, And in to that Asia. but market unique have opportunities, its own one we're you market every across market believe own conquer Therefore, test leadership them its in market the one.

same of our that and that on and not competition, gives more ecosystem have profitability, turnaround to at any and against defend managerially but And competition. financially, just we'll also us capability time, and we and the vigilant humble operationally future quick confidence resources remain remain

Operator

Citigroup. Our Yap next Alicia ahead. go question comes from Please from

Alicia Yap

Hi, you. and have evening, question. I taking also questions. thanks Good my the results management. two strong for on Congrats thank

on improvement on previous margin balance the to example, faster profitability? growth? First maintain follow reinvest then I business to for incremental your would the any short-term hope to the between is can already Shopee any and would For wanted those the you there DFS. drive how if should versus segments? both, there's margin target to you Because each up back the for that business we growth Is that regarding turned incremental profitable of example, you management achieve,

and that business reinvest any faster you a the is growth? drive wondering, you maintain So target incremental I'm that can short-term to to margin there back just wanted then to

the affect you. out will rolling is trend Second for initiatives you that on services, EBITDA profitability given finance Thank your digibank digital will XXXX? be your soon,

Yanjun Wang

Alicia. you, Thank

short-term different. different In targets, units business margin so of are terms

user to is Garena, providing our our the better and now time, for our base continue our continue users core our stabilize improve Of profit games at margins. to experience on focus to same course,

at that margin, and our closely very improve we XX% shown are still we'll average. ability the be to our mean I business industry -- the we believe achieve to margin to margin compared continue EBITDA before, very for high than very And watching we efficiency. more high have to

-- I our turned very offerings quarter, We the continue to of full early broader the overall profit that users digital so in a first the the a on services, building still our and is we'll quality expand we terms think just stage. on to financial In service and -- user services focus and trust but long-term business with more more can the and reach diversified that we offer base users. and it's sustainability

not It's with us is foundation, leveraging has this ecosystem to being solid with manages synergies a Shopee, We thing business. the building the a in most important particular, the stage of speed-driven ecosystem advantages a strong at this Sea believe it stage. part at

our for markets be Asian market-by-market And to it's dynamic currently going Shopee, All are assessment. a EBITDA-positive.

which our improvement market, is relatively significant to Brazil markets. Asia stronger profitability continue to while see seen Now new, we there -- growth compared relatively we've growth

in and to in the would process assess growth in operational it's a any versus So condition market each time, going market, landscape, we'll the profit I period of be we our the user dynamic could think achieve at for be a to then the growth reasonable want what cost rates, market. market achieve highly that we the natural that competitive margin structure assess market we'll

while testament and And cut itself by sales GMV our by business necessarily investment than the that strong in more capability. before, sales said sustaining the it's already If want As the a business XX% marketing, a with. able marketing not we begin -- not of fact is be to a we're to good to in the driven it's growth I is ecosystem only trade-off.

the and the our experience improvement, be that against that each logistics make of We such other. consumer into So will services improve to as think we we any necessarily we better and improvement, well profitability investment better structure that it growth. cost efficiency on measures and go improve necessarily as of trade-off. seller think management, all are our don't a profitability doesn't also need while We do as ecosystem buyer growth some focused

fine-tuned have it depends of and be and of natural Shopee We time lot a single at the assessment. growth, environment, number to a but a landscape macro competitive bottom-up lot for stage dynamic operations. a market-by-market our on of it's operational going don't So any period views whole, assessment in and as a and

in our still growth we trick think business, also the long and of in I of course, development business, see of which profitable a believe strong this sustainable in means growth, I our diversified that's the for strength the highly markets with strategies, overall, think also, but engine. operating So -- different as we and growth run, range we

Operator

Choudhary next HSBC. Our Please go question from ahead. from comes Piyush

Piyush Choudhary

a on management results. questions. set strong the of Two to Congratulations

can outlook Shopee, better? Firstly, color quarter-on-quarter How XX% And terms. that on customer trends growth increased local any is currency, you doing discuss has your subsidy? reducing local observe with by for shaping GMV promotions currency markets in around on behaviour 'XX? in I and which are Shopee shipping the AOV

is what that? So, driving

investing? Secondly, segments in you to And we investments of expect should can insights be for kind you Thank your would strengthen ecosystem? your XXXX give you. some what XXXX, CapEx on which

Yanjun Wang

you, Piyush. Thank

GMV we it on road. In would experienced. the not to as It's shared terms and GMV continue the generally We efficiency naturally previously remains growth our as for profitability as think tightening of us. we KPI output down focus that come key trends, we

and Asian demand different speaking, consumption a And relatively terms QX strong of expectations. in in generally our market patterns. by market performed the our And within markets, buyers of the remains our terms

COVID, aware before, previously are particular, by in as some the tough during and the we also these during online comparison, to year-on-year course, markets also the we some -- but physical particularly weakness across of continued they so shared of strongest weakness remain this comparison. that spectacular -- like various markets most in users happen in saw, of However, COVID, relatively remains of terms consumptions and growth Malaysia, of enjoy probably markets previously the

affecting not this some remains. see focus and macro something on the growth I -- are And that the a we'll from see think market hand, too many leader face. on 'XX, uncertainty we there is that consumption natural we'll factors other hopefully. generally the But starting that underlying pattern as we some will

we And not therefore, a that on. focus target it's

our move with the and global GMV And to annual remains same: any disclosure operating discontinue quarter-on-quarter So an message orders stays then peers. and of will metrics disclosure line like GMV we output. in we'll

of of for the are most ticket center of XXXX, the in then machines, machineries as terms some sorting related CapEx of servers CapEx followed terms In and leases, biggest by office items logistics cetera. then the et data such and and

as we Now we our investments. pivot also CapEx been to significantly a strong have efficiency, focus on and tightening reducing

still some QX and be this shouldn't in the saw in But continue overall of expect, earlier going see immediate spending forward, may you So future, at part to CapEx a CapEx least expenses. spending in our QX significant year. we

timetable in and some The commitments, might not that arrive QX as and entirely commitments QX within previous because quarter's we QX we reason earnings, number and affect still the higher shared or our might that QX financials. a that is might of our in the have at the is control, earlier some earlier

So it's a timing factor.

Operator

The Chong Thomas Please next comes from Jefferies. go question ahead. from

Thomas Chong

the in And hiring? on would XXXX? think this for total my the I XXXX, headcount. we a should business? management year about some good should is want we and Hi, how about near-term thanks Can you we of we that headcounts year? the do the for full comment the gaming get question to second Can outlook have just my anticipating management trend about games if about have the And be taking evening question new I and question. about comment Garena. number whether color any for

Yanjun Wang

you, Thank Thomas.

games game we tested you're that on. previously we publicly have been And of year. this might and the as games that with games we then are In as are being always And is focused pipeline, terms not pipeline now there us, mentioned familiar don't in some launched. have released we also, discuss get such

importantly, the But the that Free turn core evergreen more in and we to focus still franchise. a strong into near games the also Fire on key in want particular, term,

that weakening a trends continue in user COVID do a we it see user it the is in franchise. core some achieved to Although and can we comparison is defensible times, believe during growth to base achieve, we significant long-lasting the there

things our have lot the with of more experience, even on of game some focusing downloading of are accessible there deliver package, and them, more talent top that to and best despite are content a more of the creative for more team the people years in So doing we the currently better users user playing terms their experience many to game. efficient suitable this interesting is of and and also

and So focus competency of core the continue At experience have that think to that in any continue that way. the we the across my core we skills in advice the market new observe to our time, in same the and form immediate some still up genres future. pick we the new strong opportunities and trends along

a saw weak immediately. some we from trends is financial game while perspective, So

of with on whole a to closest very its the and Free the already highly game very in as user recent platform. despite and of spending Fire, lot because one big perspective generations, large team, organizational we and an base long focused is strong and from we game are run a time us. daily the -- in world are it have a the We the still weakening, very largest mobile with active it's younger

And engage new road. and the we also can do a and of things and down better them lot them much content to them more with deliver

this we something focused not are give is much will that and So up on. on very

of target we such any in percentage as headcount number market deprioritizing are teams. particular the of X some relation to these In changes et of we exits, a wide made, had exercises, cut operational initiatives, before, to didn't shared headcount a we terms closures, of as have for project management, cetera. We

That's not how we exercises. do headcount

major we any completion changes few the believe of and our think believe undertook major in foreseeable and more are changes year in the successful absent major under current I conditions, that the do the changes environment, in months, the that completed, shifts also we major external in we this major changes that future. our So past foresee -- with we not

Operator

ahead. go comes question next Barclays. from Our Jiong from Pease Shao

Jiong Shao

very for as taking much you, well. question. have Thank two I my

Will Brazil? any like that? year the is quarter-over-quarter Brazil? you about The growth cut about And two a And able pretty have or the in year-over-year talk from first Brazil. to be bucks great is expectation for breakeven you drivers about talk also, for do which drastically, you ago to Could $X.XX. you the than behind less loss now

question quarter a single for few shows My you you, you rate. made every is about is this rate like take improvement over calculation in very I have for last second continued target take much. have Thank take progress my do the now And above a wondering, take year? rate Again, XX%. the was rate years.

Yanjun Wang

you, Thank Jiong.

the Brazil result that our efficiency partly naturally of efficiency and from gain market, in also to managed in there's In of scale. scaling make our operations a from we -- significant terms gain as

the Asian that drivers line other order growth in operationally The as fast are coming cost behind similar reducing users. loss to improvement, we order, markets, per in costs as from top particular, focused our for well reduction our logistics both on very

and down the under can we road. addressed profitability that serve sustainably So segment's more

can also also another any significant capture. our opportunity focus term. able the will breakeven Brazil our we in be projection guidance or profitably long be run, we give do will grow think to And that near while the should This don't market over time, in we be

a of the market expand our a as by trying buyers having who a is, having the or on focus allow TAM particular, differentiated logistics, underserved better target pie significant player before, players us whole more reason very by existing and and thing profitable structure, to share in in is for a to we another be on capturing the focused unaddressed in And the view. because as we market market, the mass structure, are addressing shared cost the sellers are are we

take Now of rate. the in terms

still Brazil other at and time than with The more our and as take -- take we as like in every for same know, room on growing is our there the higher many about to as with do overall invest And a platform as we paced way our we'll while grow obviously and materially strong So in sellers us believe rate business. you grows just probably communication market, markets. their platform, sellers it our measured on expansion view and rate. do market,

to buyers the differences do And of the that and of market. is we sellers strong of being market. some this focus Therefore, on believe more a course, in we provided there are, the view growing and in Brazilian market, services infrastructure

Operator

Varun from go Crédit comes Ahuja question from Please ahead. Suisse. next The

Varun Ahuja

on turning few got a I've profitable. questions. Congrats

gaming First, side. on the

If you the look look adjusted at above XX%. your revenues for if it's right you user level. pre-pandemic at is around now, And base the just bookings, X%

now on pandemic we gaming waned fourth how you Or headwind more Do seeing from in benefits front most are side? by more the seems you So of should there's still to like the that? the stabilization out the think have quarter. see of

game the Second, split side? sticking gaming new between side give to side, on many How some R&D people the can color on you Fire? team R&D development versus there strength and on if are on Free

I Because or commentary some cost giving give this And color, some quarter-on-quarter? you. the the e-commerce, to during thirdly, we first there's coming have so any this want update that the trended quarter? Lastly, for see historically on Tencent some isn't while again, you you on the just that have on cost refusal qualitative this e-commerce, numbers thank much if how of gaming, with commentary, on HQ quarter, cost right in on year? has been HQ

Yanjun Wang

you, Thank Varun.

And people's to it's power therefore, still seeing. is has us from I to together discretionary also to for on trend project terms Obviously, further event. such In are tell too that the with is trends. reopening headwinds Nobody unprecedented the an of COVID double had any And premature also gaming, effects event. early think game where going it. compounding data consumption we inflation it's that the

are have But right and have life when at they release seen content also received long revival right the users. shelf the with games and seen we have time well mobile by

can that what So focused course, lot with be on. are of and that's of and achieved, creativity efforts, we a

won't give trends guidance able this to short-term on point at We be any yet.

and R&D of Tencent. terms In relationship with

and projects the while time, concentrating less non, divesting and deprioritizing, our at same Our R&D, focusing resources shared the earlier on have initiatives. pharmacy we and been

projects a same road. there down the shifts But team. we we overall, ones are the and the staffing. on more moving promising very the maintain R&D At more strong people time, core focus Therefore, in towards are

relationship. in also, has with any relationship of change Tencent, been there not terms In the

we in cost the trends, had costs. downwards efficiency in the trended managing HQ On of gain terms also HQ

Q-on-Q well. So there's improvements on that as

Operator

go Ranjan ahead. Sharma The JPMorgan. Please from comes next question from

Ranjan Sharma

you for and side. thank questions evening, Two question. taking my from Good

Firstly, there XXXX? and R&D accounted versus of period? for G&A this EBITDA, should optimization how in initiatives in costs cost costs the have we and adjusted XXXX the on severance cost have side any been And with that think you done,

from outlook, of which third and your Thank forward? loan the book around macro book -- side, we is loan to quarter, on headwinds the quarter should how considering the fintech going down comments you. fourth cloud's growth Secondly, think

Yanjun Wang

Ranjan. you, Thank

the be impact Now in been severance, and seem the I to material. it think, significant. it's of to comparable terms we not previous quarter, has And don't very

So separate XXXX any also disclosure. there We impact think don't material financials. on was have it no our will

this relative tightening In we size our make our of and the terms improvements that platform and focus efficiency of to businesses. are continue on in costs also R&D sure year, and efficient to and G&A costs our

growth as book In the drive business expect that be we're not rapid -- a growth, invest and don't stage I mentioned to this and for SeaMoney land terms the loan to -- as as going we significantly at we before, of at grabbing. business least credit whole, to the

and long-term on strong focused to sustainable more them serves -- solid time growth. a and business with build our well sustainable offerings building business over diversify We're strong user long-term sources funding underwriting our base diversify also a with also and a

of team business. book is with we quality loan the our current the the of KPI of that's not think do for the -- So profitability KPI given synergistic in Shopee, that, terms and macro is more of and loan book, more uncertainty something the terms that our in play a growth

Operator

This conference Ju session. Song turn Min would over like concludes our to to back closing question-and-answer the I remarks. any for

Min Ju Song

quarter. Thank We you call. all very speaking and look you forward you, much to all you. joining again to Thank thank operator, next of for today's

Operator

now presentation. has conference attending concluded. for The you today's Thank

now disconnect. may You

Sea Limited (SE) 7 Mar 232022 Q4 Earnings call transcript