Sea(SE)2023-08-15 14:44Financial Data and Key Metrics Changes - Total GAAP revenue increased by 5% year-on-year to 510 million, compared to an adjusted EBITDA loss of 331 million in the second quarter of 2023, compared to a net loss of 2.1 billion, including GAAP marketplace revenue of 1.2 billion, up 38% year-on-year and 7% quarter-on-quarter [77] - Digital financial services GAAP revenue increased by 53% year-on-year to 137 million [7][75] Market Data and Key Metrics Changes - Gross orders in the second quarter grew by more than 10% quarter-on-quarter, driven by growth in active buyers and purchase frequency [3] - Contribution margin loss per order in Brazil improved by 83% year-on-year to reach $0.24 [7] - Non-performing loans past due by more than 90 days remained stable at around 2% of total gross loans receivable [75] Company Strategy and Development Direction - The company plans to reaccelerate investments in growth while maintaining cost leadership and improving user experience [3][56] - Focus on enhancing logistics operations and expanding delivery options to improve user experience and reduce costs [17][19] - Emphasis on leveraging synergies between Shopee and SeaMoney ecosystems to provide better access to financial services [4][5] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of local economies and consumption, indicating new growth opportunities in live streaming and video content [10][48] - The company aims to remain self-sufficient while investing in growth, closely monitoring market conditions [15][42] - Management highlighted the importance of maintaining a competitive moat through cost efficiency and user engagement [15][46] Other Important Information - The Shopee Affiliate Program saw over one million influencers registered, contributing to increased GMV and revenue [1][2] - The company has made significant progress in improving user engagement metrics, particularly through live streaming initiatives [18][19] - The bank app received high ratings, reflecting user satisfaction with the digital financial services offered [5] Q&A Session Summary Question: Comments on GMV take rate and e-commerce strategy - Management noted sequential growth in GMV and an uptick in advertisement spending, impacting core marketplace revenue positively [9] - The impact of shipping subsidies on VAS revenue was acknowledged, affecting overall take rates [9][58] Question: Outlook for e-commerce investments and potential cash burn - Management confirmed a focus on self-sufficiency while ramping up investments, with expectations of growth from these investments [15][42] Question: Insights on e-commerce growth opportunities in Asia and Brazil - Brazil remains a key growth market, with improvements in EBITDA loss per order noted [34] Question: Performance of Undawn and Free Fire - Management indicated positive trends in user engagement for Free Fire, with ongoing monitoring for long-term stabilization [83][85] Question: Strategies for fintech and digital bank initiatives - The fintech business is producing strong cash flow, with a focus on maximizing synergies between Shopee and SeaMoney [63]