SE - Earnings call transcript Q2 2024

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Operator

Good morning, and good evening to all, and welcome to the Sea Limited Second Quarter 2024 Results Conference Call. [Operator Instructions] And finally, I would like to advise all participants that the call is being recorded. Thank you. I'd now like to welcome Mr. M. C. conference. the begin to Koh Please go ahead.

Miang Chuen Koh

make welcome Hello, the press and Earnings On uncertainties XXXX are future may Quarter and our may realized various Sea's Call. everyone, this subject I in risks we Director. for and in Conference Relations am Second Investor reasons release. which stated be to M.C. to statements, forward-looking not call, inherently Sea's as

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

For release. Chief Executive to Financial non-GAAP me section discussion measures on Officer, and the GAAP I financial Sea's measures Hou. Chairman to non-GAAP and the our in and have the a financial reconciliations President Chief Tony with press use measures, of Officer of closest please Li; Forrest refer

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

that, to let over Forrest. me With turn it

Forrest Li

strong a thank and with continuing that today's to joining you it All growth and X for QX. our into have quarter call. happy both has higher businesses I'm everyone, Hello, strong shown for momentum QX been solid us report from our of profitability.

be business. wanted a of micro observations with many to dive healthy the sets for consumer very some continuing have our in I driver I economic markets. Asia our business foundation consumption retail share region results, domestic main in market. and trends e-commerce strong Before This to spending into each performance Southeast of Generally, a remained

in share in We are our peers sizable Asia Southeast lead region. with our over Shopee's the and happy market

We we believe consolidation profitability this sustainability, trend. will take more We and and market and welcome industry this increase. seeing the share industry-wide rate the move towards are

EBITDA half first the in year, third delivered that of results the expect strong and from the we rest adjusted for quarter. our the With positive become the outlook will Shopee

revising also more mid-XXs. me With XXXX for Starting Shopee's each performance in year with rate are let We guidance take e-commerce. GMV up you to business growth detail. our through the that, full

shared content priorities quality are to is enhancing ecosystem. have our strategy shopping on competitive competitiveness, customers service before, X we This mode As and our operational price our strengthening deepen paying improving to off. fronts,

the sustainable One take improving is past our Shopee are profit on healthy also quarters, focus profile. growth greater Over improving rate. ad been area X able has its post to we while placing

the good our rate ad observed to lower us, take this To more is e-commerce opportunity represents than Currently, in monetization. a our industry mature improve average we markets.

more Over we and the for platform. sellers have easier quarter, attractive ad our made join to it

our achieve on team algorithms sellers help returns We improving ad spend. to dedicated from working also higher a tech their advertising have bidding

So far, the results have been encouraging.

sellers this this ads to for plenty of XX% by pay believe upside, continue has increased number front. who The push still is quarter. than We of we'll on there and more year-on-year

and merchants across We markets, been Shopee This ad live streaming paid has X increasing allowing ads our lives. helps have economics. June, In our improving enhancing streamers in while boost received. streamers feature and feature take live ecosystem sales live in This both ads. well including content efficiency for to X creators, also active our our unique Asian their rate, ads Indonesia launched insert streamers, into very

faster Java Indonesia customers, our of cited buyers logistics service improving delivery [indiscernible], continue capabilities reason differentiate On quality our for choosing in the as In us. Shopee. to XX% to

widen in also its coverage packages speed our managed We faster. costs. while logistics have continued reducing our with Express, deliver to XPS delivery to closely many more has to particular, integrate improve and partners

X within of XPS XX% were order delivered second placement cost declining than X% with the quarter, order In year-on-year. orders Asia days more of express per in

quality Another response service enhance the has buyer process. to return customer improving been initiative

Earlier this days. data-driven initiate paired a mind predictive process make return point launched and questions in tax in within Account year, change overall refund no pain with we We our e-commerce. asked improvements this efficient. highly market. Asian XX of return returns to the Light buyers feature

in more As Asia the X a result, return than resolved second cases our half of refund within were in quarter, and day.

how more stickiness process more average size this I approach increase demonstrate in fast in quarter. return buyers we requests driving our repurchase user share we will who consistently launched. compared was free our feature purchase, saw examples on makes the mind up priorities these market In change raised term. and strengthen Meeting buyers long basket before willing execute to among every operational believe a to complete the We to than Malaysia, leadership frequency. of this XX%

to Next, financial services. turning digital

Consumer SeaMoney the and be to has on prudent SME of management. SeaMoney's continues adjusted remaining continued business growing loan revenue growth. and its its year-on-year. well risk credit EBITDA primary strong and very revenue momentum book while profit have grown in profit driver Both and

off shopping good We progress both shopping. product our credit are making on and penetration, deepening on

is unique new efficiently the right right promoting cost enables right Our by users. to products the time at user It base very large advantage. customers a shopping the acquire us to

a to million of In first-time registered quarter, X the than compared year more doubled second that ago. has our products, we figure borrowers X over credit

with Shopee customer We in sales. off player cases. Indonesia, for scale. to credit the were X,XXX this over loans approval also category provide mobile to SPayLater In our mind partnered phone the market we expanded first stores credit have at electronic instant for We introduce use

cases We in markets. will continue more to explore use credit our

the year-on-year. the loan nonperforming June, at loans have steady we up billion of XX% efforts, book Notably, held size these metric the quarter. at all end almost of our end to $X.X our grown With

now users, and up fact, In slightly it from previous active consumers million quarter. XX% We improved the SME loans almost year-on-year. have XX

user of introduce for more opportunities. especially offering. will we efficiently markets and growth presents our large base as are base a as and will invest we A effectively cornerstone to product in Looking forward, under-penetrated SeaMoney, growing continue user our be still sizable future

to Finally, business. turning digital our entertainment

Garena's a X approach user-centric work years hard paying of off. undertaking are

Free growth bookings, a of largest mainly our update, more anniversary in contributed We event Fire strong the seventh version released XX% Free delivered than have by Fire. June, in-game a of quarter At Fire We year-on-year end with a The game. on was successful. history and back a classic very users the year. the experiences weapons, war, Free share hosted made past commentary where story brought could their campaign with

memories the players revisiting early really years. enjoyed fond Our of their game's

more highly Free evergreen Fire large, Free active loyal strength an single proud franchise. conviction its share very throughout players. has gamer This unique XXX million is that that day Fire's is to daily Fire our I'm base. than reinforces Free QX, every engaged

the be also thanks effect downloaded the large According Fire growing, our managed keep Free strong to the try user Tower, to base. Free word-of-mouth game organic Fire social can second new from Free was content to highly download in where and quarter. pool costly. valuable, we getting Sensor mobile is users most today's and globally to especially Fire's see in are hard world,

Mobile excited Tencent are Taiwan, in Need this Macau for later and Kong Arts. Speed about We Hong in also with and launching year Electronic partnership

Thank always, businesses We community. support. as to happy a this strong game the are half. have with are X in achieved conclude, gamer To for first high-quality able to pleased your you, with the to we our classic results IP bring be

AI, shaping Jessica [indiscernible] new Before directors independent future. is that Ms. in is will Board. I over highly expert call, a are Zibi in Sea's Jessica leading Hugo have the pleased Dr. joined a I'm and hand I'm accomplished be areas, to X glad Tan on and in their financial us leader lend our services. expertise critical waiting that which guidance and deep X to these announce

Tony to down In will serve our from our addition, be Board and CFO. will stepping as continue

With X-member these much. you Board the directors. has Thank changes, of our very independent majority

our I Tony discuss to financials. invite With that,

Hou Tianyu

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

overall, XXXX. by in second Sea to revenue business XX% increased GMV growth For financial our e-commerce business. year-on-year our driven $X.X and GAAP digital This the of of of was total quarter growth the services billion primarily

Our in was EBITDA second million of EBITDA to adjusted million the an of XXXX, second compared $XXX quarter quarter of in total XXXX. adjusted the $XXX

GMV XX% On by increased XX% orders year-on-year. e-commerce, gross Shopee's and grew

up revenue GAAP year-on-year. in billion of million an the the transaction-based $X.X services, revenue, billion, marketplace with marketplace $X.X related EBITDA was billion, up EBITDA revenues revenue, services was quarter million improved year-on-year. loss of $X billion, an $XX and and fees of adjusted of revenue second XXXX XXXX the in XX% E-commerce $XXX consisting mainly quarter-on-quarter revenue, a mainly quarter second of revenue compared losses to XXXX. product of Value-added quarter included second $X.X marketplace quarter up in XX% Our logistic million adjusted XX% year-on-year EBITDA advertising core first adjusted of narrowing to and of to of Within billion. revenues of GAAP GAAP $X.X $X.X consisting

million achieve results, we when million $X $XX compared losses markets, of adjusted our second adjusted of the other first in quarter XXXX. $XXX Asia quarter our For of was following continued from during last to EBITDA the were narrowing year loss $XX an million, In to positive quarter the million. XXXX meaningfully our EBITDA markets, adjusted EBITDA recording

the XX% to improve loss unit year-on-year services $X.XX achieved we revenue to $XXX $XXX up the second a by Brazil, XX% order contribution to Digital per was margin a as Adjusted compared in of financial million. to million. of GAAP for In economics continue up of EBITDA was as quarter positive quarter XXXX. by $X.XX year-on-year

million, was at EBITDA $XXX SME and $X.X reached end loans consumer almost million. bookings days of consumer the June, $XXX billion, $XXX GAAP a year-on-year Nonperforming year-on-year were end million. quarter-on-quarter. XX% total of quarter-on-quarter. percentage due and the quarter. principal loans as X% was the and outstanding XX% more loans of past and Adjusted of As revenue by Digital was X% X.X% than entertainment XX our SME up

nonoperating numbers. $XX income of XXXX income of XXXX, to quarter nonoperating the XXXX. We tax income a second $XX Returning million We net quarter of tax second XXXX. compared in recognized net had a $XX to quarter compared quarter of second in the $XXX to of our million expense net of a million second of the in net the income million consolidated of in expense

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

With turn call M.C. the to that, me let

Miang Chuen Koh

Thank questions. Operator? you, call to Forrest and Tony. We're ready open now the to

Operator

question with Vittayaamnuaykoon Pang Sachs. Beta [Operator from comes of Instructions] line first the Goldman Your

Pang Vittayaamnuaykoon

landscape you Two both questions observed. please e-commerce. on from have latest you the competitive Number comment my could on one, side,

are what on and into We for results you another including include players, word, especially your push this should yourself, the further into your third In updated How revised rationalization do specifically near- merchant margin long-term on guidance? type plan all front. factors seeing expectation your question translate quarter, and we Shopee #X. medium-term of to do guidance? to Any well? how on as deliver? What margins update expect margins. you And can Question that? That's #X in achieve

Hou Tianyu

Yes.

the in few more we mentioned the Forrest environment months. in do see competitive opening, the a On I past landscape, competitive think as stable

you welcome unchanged positive I of shared As to target we stable market. terms rate in view environment from as think of in mentioned, before. the longer-term EBITDA stay X% on are as that competition movement And And we for perspective. the more as various players our X% the signal our profitability take we of

we there's profit still businesses believe we the like the can quite will, But we of were, near as in in like potential focusing than as we as [indiscernible] well We #X, the the at shared dynamic. the grow the the we term, still is the businesses. short profitable term market our time, make Shopee in market that However, QX, will sure good as profitability as short same would the guidance And market term. in also outgrow be to to maximizing rather in. businesses. the the in operate We the we on in a

bit compared we the where to into the If will we evolve rational little medium now, are our improve. stage continue more market expect landscape content continue to and a we which to overall right look overall to drive the a do in profitability to term, industry come to

of have value We larger to things the you gain supply the we there still with -- competitors, if more there help can to -- stable at the better us like dynamic Together right to ultimately The scale would want things to better market, But We as things be better the on competitive will environment. compared we always to the economics, focusing overall we are have it's we things rather unit with are deliver better and which to well. look are can positioned content opening. experience. translate all those we we mentioned, things over control rather for the will -- control as to shared to have consumers user in market the our time will better industries. better were share our now We to would we where a We control. cannot that like pricing. have

like in and that's think I terms. midterm how long kind near we market see the term, the of the probably

Operator

Your Choudhary next question comes with from the line of HSBC. Piyush

Piyush Choudhary

the results. again, questions good to Congrats e-commerce. team both on Two management on

has As able edge. earlier, have the been you to you industry increasing increase take to Is it And rates? also you possible first X the subsidies? shipping take increased That's mentioned rates rates and during reduce are question. further take the

the Secondly, can you streaming turned stream is business? live it segment? unit talk profitable of for now the about economics some countries? Has in live contribution margin How

Hou Tianyu

rate, take to opportunity believe do the we take further are For rate. the there increase

from commissions part that of fees. I comes think and

few As quarters. probably the observed, in we do increase past meaningfully

that the see magnitude opportunity there are of increase further year. still early the think that, I probably in the in part although to we not

We search. the we to infrastructure recommendation standard for that we we built part side. There's shared efforts in on on ads a having we ad and for that our another which as take platform ad Like opportunity, focus the a also side. on few of side the example, quarters. opening, spent the think the a past is building sizable lot rate, in is do

We improvement traffic to able the a agile those [indiscernible] algorithm coming ad to us are platform in more in which at next traffic ad be organic help allocate ad and and better standard rate quarters. enable out getting on few seller offer more will us the all to help also will those product well, built and system flexible the as We to we believe take us quarters. all efforts allocations, the

trend [indiscernible] on at for improving. the think, our possible, for I see look improvement live -- the we we of And generally, improvement all businesses. some markets The terms in live markets do you quarter-on-quarter. continue are stream, are believe actually, UE markets, But stream some if will the still

Operator

with next question the comes Your UBS. from Marisa line Putri of

Unknown Analyst

questions. I X have

Firstly, on e-commerce.

your I you the first plan your do of And So in kind you achieving with reported correctly. Should kind think still Brazil, to ambitions just make as profitability we number of sure just improved get think How sustainable? #X guidance X the and is [indiscernible] that of be to in from market. this? I

So EBITDA QX? the adjusted but EBITDA be not QX positive in just for overall EBITDA, will standalone positive X months

Hou Tianyu

in about Brazil on the the businesses, the we happy are For improvement market. very margins the

for is one, also The in logic see the through the market in we our positive Brazil a is, in cost network. is already. earnings, are shared reduce we As potential number And think, our the contribution Brazil market good there margin able to Brazil in the we consistently us market. core own I shipping for

experience Number quarters. past X the is market over in improving also the user the we're finally

economics in think to combination, better I also retention market. drives better our user it and

believe We categories. our us we the that that's to over thing besides basket share to for is then market important increase user economic experience our increase other market sizable do potential category further penetration of The to time. ability higher the those a the for Brazil and the penetration improvement have

Traditionally, to not as in some strong we compared are players other market. the as

us So potential we a all further have, with we that the Brazil grow and do there's levers. that, see working meaningful we those to market, are that on feel and levers in can for we

think quarter of third guidance, I part EBITDA referred there. to we the the terms In EBITDA

that. on correct understanding think I is the

Operator

line Your question next Yap with comes Alicia Citigroup. of from the

Alicis a Yap

questions. Two

transactions update including, the from for open DFS under partners? of the the online those So like growth with be Or progress work user move non-shopping question. partners, travel the non-shopping First, Sea for Will to the is agents? can this management actually example, for the for restaurant share platform. this the DFS on GTV online any offline is acquiring platform and retailers, the offline will

Second question to is related Shopee Express.

improve So to the the optimize the coming for we further logistics structure further how efficiency in business operation going are the cost and also quarters?

Hou Tianyu

of a that. first there the few On are you components portfolio, credit loan look at question, if our

very SPayLater, flow we related top have cash as SPayLater. a loan have the It's payment offline the a We have we as that, can much it. that, Shopee which not Shopee, which call from And is connected that's used it. Shopee through flow, Shopee. take pay Anyone cash on also Besides to buy transactions. later, is quite to we of

be be SPaylater same can cases can different online Pay the used usage. network. Shopee through offline acquiring that Besides are used use that, And also developing also of a for offline we kind

of well deployed For we're specialized example, services [indiscernible] be purchase the similar shared handphone type home And be It online we purchase, in as the that as on working appliance offline. the can potential well. opening. can as

example, [indiscernible]. For other of type the

whether to of it's the is I think it's question I probably offline as online the answer -- mainly both. well, combination of think the a So or

In of solutions to Indonesia, pay for market, already. fact, travel if our Later, the you are in Pay user in an can online example, Shopee SPaylater some website use

So we SpayLater offline the online for do work And expect transactions. the for both partners with offline. and grow over and we various, time will both partner online to enable

it be So offline. only wouldn't

we actually SPX. the have For of regarding question further the SPX, probably to efficiency second improve

For example, to the and which still space is for number scale. reduce one our us There scale sizable further, is cost room grow in efficiencies. still the the can our

density more and is coverage. of X Number the more coverage

hubs. For example, more

we subs network. doing with the automation and cost. the actually site our also deploying mobile our hubs way is XXX more you with be mobile add X about hubs through innovative Number operations. And of in low can look of [indiscernible] hubs if low-cost hubs hubs traditional at Some through QX QX, we're

productivity. adding in improve there sorting machines, smaller more further when a a SoCs, it's for or which For it's automatic automation hybrid we ASM, is solution are our will our example, SoCs, either solutions,

SoCs, supporting businesses. to enable scale it. and only first mile And hubs also mile but is better number of not last our our the X solution technology similar adding some when We're to

last drivers. for a mile better example, sorting For our

solution suggest we a that's in easy deploying rallying are Brazil. can not sequencing to in in of we Asian some the and have for the of complexity markets, done that the example, markets, We maps. the of because some also But do

We in solution customize our of because different for more are to solution out our and markets. countries more need we rolling different

actually And off to centers for to last picking from the And which sorting many the mile important choices seller the so when first starting the many to And the center. there you to the example, have mile whether so side -- we but quite it's Like sell us. way. to the last clock, there are pick you through hub the from because is the clock haul over and just line a secondary thing sorting when to off the send directly share delivery. or up up, send to are do it's half to along is do complex the very make. for you [indiscernible], you simple,

So mean, working off in optimizing enable our clock sharing general. other to And side. but I some examples of opportunity of the the further will we logistic just the us thing on the for have course, efficiencies improve we're on, improvement

Operator

line Your comes Jiang the Ellie of Macquarie. from question next with

Ellie Jiang

is of the ramp about ahead. we players. next if wanted of timeline just years, market what get ad up Number that's kind to take we rate several natural But anticipate I a in and really revenue the level about the to potentially to this to similar X. kind do ask have the commented. I a [indiscernible]. talked opportunities follow-up on X the We possible look management

from it gaming it Would on to coming stimulate So for efficient more the item be example, the marketing us take higher second the segment. spending more size for sales? And more tools -- ad or merchants? does is from question ticket how to

according momentum remained So Free some momentum the really quarter-to-date. Fire third-party it quite is strong generating trackers seems like and to

for Need or that would well. visibility you potential kind we half can second coming what the financial as outlook? with Speed the the And partnered kind of the of So Tencent, for that the sustainability distribution from of comment on be second half contribution

Hou Tianyu

the On earlier, think think will we take built, start few we shared believe probably in we do the given quarters, quarters. next that the as wouldn't I ad public a take have years, foundation I rate, to benefit few gain I

basic is the think product there. I

adopt think optimize it different adopters, there's time for will have seller for also and to to take markets. it the different I to why it we sellers

giving we it the seller in platform and think the improve a more of I on comes platform, conversion can without also as use how both sacrificing product seller in a overall efficiency the more how a side from our efficient allocate upside rate. traffic ads the in the terms way,

optimize the to few essentially in technology that's few quarters, we're roll trying and the built think next and I in past the out quarters.

well, side, the retention new on happy very also the the have to some Free we on observed we and like of terms and -- made, Fire. decision we we what the right, it's It's of demonstrate in rate. done trend growth users, are by metrics past. like all the across And very like is such and as game the will monetization you have. have the continue overall This pretty kind the of this terms do right motivated This is are the and paying mentioned, like that. we in For we right as the ratios, existing as much focus user, we is user metrics in the --

very release unique very past and some successful around -- we new right, And have focused very, experience. some gameplay, and new new campaigns -- a user so the and in very, be the content gameplay like some X on the quarters, on content we'll [indiscernible] update,

kind There strong confidence and we'll pretty do several new of update on the have to those be will those So of we continue a result on big -- that. pipeline, already the in updates.

of it's are that, as continually a just not seeing like And every Free and we Fire it's evergreen franchise, platform. platform. more And a like top on

we share reach globally. on Fire users XXX million single as like we than it, is way like more about can the days, this So Free think every --

very scale. That So a large is sizable. that is very, very, very

so always you different and to experience a think consider the game different name game experience the type I like if in a the of you although log mode. Fire. Free game may Free it's into Fire, will is and always you game, like start [indiscernible] called But

gameplay it's a of Fire different experience platform combination within of kind So umbrella. the under X like Free X

explore So that well. we'll continually as

like personally have efficient, like we like the speed -- gamers longer-term to the initiatives very is on and AI the other both game the feel tools, how the very right, side, some on and use development focused production And right, I been about on side, excited very, how make and to improve for At time, to cost game production. enabled continue the more the the of to of production type like quality AI. we by same what the how explore new experience is the

So a the focus this been has of team.

other Fire various universe. base. creator, active are the building platform and like we reach experience a ecosystem, we building on about user within content, daily create to And million focused Like Free Fire to like third-party are are to game perspective platform tools And -- the Fire XXX have. building creation the with like game developers Free going the Free content within game the gradually, different work to hand, the within to to the it's related we not the on on only we continually

So the gamer -- At the only same monetization. this this kind the us, will offer engagement Free is continually Fire complete more I help user experience. the too, that on a and will of the time, not like make think

term from look growth but the game And little business, on know, the sometimes the Free the But have full related side. deliver longer a year you related the This right? both to So growth and we markets, asked. the holidays, of the for certain perspective, impact right remain bit a user side confident a very, of like has we to Fire school like like the monetization we for like year, is for as also like in confident rest to double-digit -- all as the certain [indiscernible] very game remain the the momentum. seasonality,

kind contribution. say are like on to we would work work in our update have we and get focused launched, tremendously market very revenue right, we game those like when the we them pipeline. feedback, get And we been to partners new user the very And will new sense and new internally, like games think be. it's and the could of the Tencent know EA still our in let comment, how very, early But on detailed big when see what more I the Fire. Free terms give games we potential the excited. of still on We with data And better the closely I

Operator

comes the line Morgan question from of Kothiyal Divya with Stanley. Your next

Divya Kothiyal

question competition the risk from is entry and was and e-commerce. your in seeing in I from their on of first just traction the do mean, months views Thailand, My on recent higher cross-border the you recent Philippines Malaysia the team given in become credible our TikTok especially think we this, a competitor adjusted planning for to could to way also this that this the EBITDA kind in guidance to And to respond third quarter? came geography? positive how are relation

ASEAN? seeing on And the of half slightly And seeing Or and tapering is given August, and first Brazil? from that half, can is comment my the tougher if any sort in that second question than from surprises the is July you more we on e-commerce GMV. Is there? it coming the second higher you're in trends based guidance are

Hou Tianyu

businesses will I players, in achieved to a have mean, refer I respect CP and coming of Tmall's we lot to generally, probably past for you the indoor Asia. the For Tmall either. think with

market probably impact is However, business the I but think farm, from if our [indiscernible] limited our I probably see. to what we rather will monitor, from think

One is is X by in our a our for part businesses reasons. CP I of nature market. think smaller

and fact, rather cross-border as transaction the market selling, to efficiency right? reasons domestic If offers. cost a mentioned, that's the selling of landscape market domestic a to to Thailand, There how better than you Philippines, involved look contribute happen Malaysia course. e-commerce majority the the be many like the But for are structure at e-commerce that that, of

And one. this

existing carries advantage a is for market is price or in U.S. cross-border one compared to players. Second other European the strength entering pricing. that typically to players They the great TMO

very However, And compared was domestically where costs higher cost open the essentially Chinese market you actually our them. shop, environment a competitive very for competitive pricing to their that a person probably a domestically much cost actually a much our And operating to take time. advantage for person. more a to China, cheaper sellers are while. warehouse in the also being Philippines we in mainly It a operate the because compare Philippine, our than is a China, pricing if landscape compared in is a pricing or in cheaper seller the we if mentioned, long you to in operating quite operating are a we better having developed you they or have operate to for Malaysia, compared cost quite market, a in probably market freight Thailand than

different pricing the many to actually, our our cross-border in very the to So marketplace, mark mentioned. competitive is externally compared fact should we you players contribute that reasons even

question give To think than are GMV the both I your guidance, around Brazil market. growth good which thought Asia market you in see when and better previous out we before we generally, second the guidance

Asia, still Just the as we in market relatively the total smaller it's are. to compared pure where scale, Brazil is as size

the would the market number influence So X dramatically. not

think we and better look both that before. at from have markets will Brazil a thought a improvement Asia growth guidance, when it imply will So what I we in meaningful

base to are quality from all that year, on the QX those improvement structures, last our improvement our risk the improvements that think to QX the new cost and which the core on better and growth compared and QX, from retention there a done the from also still far, we QX better to that -- platform, have drives which content and contribute thing you seeing to the and but on user coming QX we're as initiatives the pricing, on the And the guidance. improvement service QX higher leads I so QX QX, is side does our year sorry, have many last mentioned

Operator

from question Salgaonkar next line the Sachin Bank America. comes of Your of with

Sachin Salgaonkar

I Congrats good on of a set questions. numbers. have X

First X sense is we on revenue gets up, are up, your at and look On gaming, X on again, one gaming second e-commerce. that are bookings users down. your your but numbers, a when

an is last all-time couple we quarter quarters see down. We to are seeing where that trend high. margins for go happened What continues this of almost being the clearly, ARPU could at

least trend ahead margins levels? specific at to decline ARPU at a at improve we should to or going look want So continue where . this I continues and stay these understand, to is

Second a aggressive. new competitor, I understand just markets. of have which want where One, but competition on comments question, your double-click coupon, on we to rational, earlier is couple I a being Taiwan,

I second, So in know love market. X where increased thoughts in intensity players the the on market. to your And that had competitive overall would subsidies Indonesia, in of

guys specific to any response how And guys So are you subsidies? increased the from looking that? at you

Hou Tianyu

the for Thanks question.

the for you first about think revenue. the talking GAAP I question, were

GAAP the and bookings actually have the treatment, to future basically, because of defer both revenues So the quarters. Well, we improved, more Q-on-Q into year-over-year.

see the with the that's variations is side. in the So side typically why side, bookings the reverse we're still we GAAP revenue that on

we revenue might it ARPU, little from fluctuation a see big the for it's for see while well, what factoring this We be is average bit, market very stable, quarter. Q-o-Q but user So per relatively don't is coming the more mix.

Indonesia. I think landscape for Taiwan the competitive your in and on question

enjoy the But still the to relatively seriously. we think market is Taiwan, do I it impact we our business I stage some rather at a look and entrants, so do think Taiwan, dominant in market like new at position we you this see If small.

the to our network. competitors, SPL time your too us, specific without on Taiwan that through own our core And much are mean, I thing commenting of doing is, number we for thing shorten The course. core delivery one,

do with with cheaper, to more a coming delivery done That's [indiscernible] lot solution cases, one. We systems, own through the our in the deliveries a than expensive typically network, much cheaper are more probably is alternative aspect in much market. able we through a many which next-day XPL are

the is [indiscernible] not not delivery also side, their to fulfill the only sellers side, a the but to to way. orders, increase warehousing our efficiency side more only X further the the cost-effective side, supply it work of do Second with to in

more for Number we areas X that is increase further assortment be sellers to think enhanced. work those to their with can

will I these the profitability in help to maintaining our maintain think in market. competitiveness all market while things us the the

sort are players different thing be pay the subsidies on attention up different there fluctuations. We think doing in and the down you that For seasonal of will there market. Indonesia, I to mentioned. short-term And wouldn't

than think on different you trends changes if on see month-to-month pushing of didn't quarter-to-quarter let's we or medium-term specific sort trends. look or longer at I things rather look or any term that days. say, We ways longer at term, slightly least at specific

Operator

of next Jefferies. question Chong Thomas the with comes line from Your

Thomas Chong

our My first is question about business. DFS

loan I get Any think want would commented categories. color cash BNPL, Just to profile later. prepay demand our now, lot I to just be about the about with regard management for a and great. offshore some color different margin trend

how I ticket the think should tenure, management and think macro the cetera. are risk seeing globally, And on in uncertainties the size given about we particular, the the we et hand, other

the second overall more my about business. And is question

segments about mix to business longer-term become different good very momentum, in think we seeing a should long meaningful growth more profile? expect how Should our DFS the we term? Given are the revenue

Hou Tianyu

margin the on one, trends. First

If or stable. our products particular at particular has market look margin been in our you portfolio, relatively a

better turn, In profiles EBITDA put in will, our which fact, there product, a we our some ultimately. risk in for markets, see

that is I has have market X to that we that the thing newer probably we a want on do markets But growth. and topic share given different of this faster see speed many

If historical other Indonesia products markets and to track Thailand, first, Philippines, you Vietnam Malaysia, expand we in and Brazil. like our

typically, market. will has so you that than a latest the smaller market growth given see slightly the faster base, So the

think natural I the it's trend.

see the we in markets, quite in for are And past Thailand, saw growth of very good In in quarters. see in we also some happy new example, we Brazil, the we with growth. good fact, the very growth

impacting uncertainty, think our the are market. generally, macro On factors many there market I

from macro I COVID time, the then time. impact was think that COVID a big after

the X One in more of managing in most There fact, are I for year, environment, think stable that's us are the of important market terms for seeing since our environment. market. duration the the market lending is of we products. things a late last

X the size ticket you mentioned. Second is

is rather we duration, talking duration duration. in our just were months general, in a short So very few a about long a rather average, duration short By right? than

is compared also the lending smaller size side. to many other on ticket more ticket products, size our our And

give a the terms help market much both in and how be portfolio combination we kind will how how the the we we us environment. based pricing of can fine-tune collections of lending in to also So our lot more how for of agile portfolio, user of and portfolio we we on managed out, risk-based manage terms do do do how our bases in

comfortable are else is probably much where better than in we And that size. market unexpected we with we the our there even sense, market So see anyone that I environment we can in with quite think are. change, think are positioned I

businesses, that each mix each at the revenue the as look think our right? of you and long-term growth the X revenue them estimated of tailwinds, like like businesses, at And X of if the be like will have some of e-commerce growth, I moment, For potential right, this some driver GMV for well.

and to right, ad And could the continue the if also side, we shared at and penetration we on business, the deepen the rate well. the look be if on And but Shopee on we you trade mission driver work on Services that as if as depend a only Financial side, continually take and ecosystem.

the think, well. be, book loan with will grow the time, size total overall GMV I growth At as nicely the same Shopee

we we business and very, game very see shared right a found For momentum. and formula for earlier, growth that prefire again, strong the we right,

come up then going this mix at hard like. how think and point, certain the it it's like certain see changed go and look So businesses We don't out. down, I revenue to business

works, booking how in proxy terms of GAAP a as And we the certain in a right? like benchmark businesses we react like GAAP GAAP delay there but say to the revenue a growing Tony to purely use can. would we'll revenue, revenue reflect the of as why, like I so of general, as business the that's on much growth as to of how may because closer the be perspective game into each growth. the But just from mentioned, continually focused

maybe perspective, kind don't We the on of revenue revenue see business, -- services. But higher we GAAP growth like the percentage the our of game in for reflect. financial confidence because this have again, treatment of doesn't our contribution game purely, the yes. the that view, future is of from the From kind we business, of the

Operator

line the from Shao Barclays. comes of Jiong question next with Your

Jiong Shao

I One back follow-ups. on should take have of a rate. couple is the

your the in global opening peers advertising rate are increasing rate quite take a that go? it's global timing reach your to a is that raising be reasons remarks, term, is below And why the I talked even You comps, take [indiscernible], our rate structural take you the commission your matter peers? won't benchmark is the good years. global you're rate still you and comps wondering, bit of take In the below Amazons about are but commission eBays. any just commission your take there about guys the global quarters, of talked there not also your to and to close was longer sort seeing rate,

strong amazing, year booking booking, Free The second you a for growth, talked for quarter, follow-up double-digit Fire. previously, about quite this second you I was to is back growth the gaming which bit know the about booking have talked particular in

the last be XXXX of of assumption X the couple think why strengths the implied not, should growth the booking But low higher. X I seen sort for teens. If going reason expect given in have you the of not? particular was quarters, to the

Hou Tianyu

rate the take as next see few question, I the ad I think of potential mentioned, different we I is think growth For the rate, in markets. rather the course, And years. will base than take the in quarters for different

it's be different auto, in different numbers it might -- markets. So

the will at the market I On market. cetera. ads, Yes, commissions, I totality peers to on reason global long-term in at you our think the and EBITDA X% if at look think will the the guidance I the be this you that how X% look be rather we the would commission to that don't reflects mentioned. any of is I below et think

strong we productive. to right? have And focus just very, be just we this proved things game we And terms continuing. -- but guidance, It's right. continually we very booking right, want the are at Fire the the -- effort think I the momentum which In you to this past have for Yes, the want quarters. And with moment, strong momentum on see of year. done, the that booking, Free of do we rest for to X be cautious,

update will market, update investors we and trend, the timely this seeing continually we'll accordingly. our and we if And

Operator

Koh question-and-answer any the conference for I concludes back session. closing Mr. like remarks. to turn to This over M.C. would the

Miang Chuen Koh

today's Thank forward We you of joining for again to quarter. call. speaking you next look all all to

Operator

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

You may now disconnect.

Sea Limited (SE) 13 Aug 242024 Q2 Earnings call transcript