Image source: The Motley Fool.

DATE

Tuesday, May 12, 2026 at 7:30 a.m. ET

CALL PARTICIPANTS

• Chris Feng, Group President
• Forrest Li, Chairman of the Board, Group Chief Executive Officer
• Rebecca Lee, Investor Relations
• Tony Hou, Chief Financial Officer, Director

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

• Revenue -- $7.1 billion, up 47% year-on-year, driven by Shopee and SeaMoney.
• Adjusted EBITDA -- $1 billion, a 9% increase year-on-year, reaching the highest level to date.
• Shopee GMV -- $37.3 billion, growing 30% year-on-year, with gross orders up 29% during the same period.
• Shopee Adjusted EBITDA -- $223 million, reflecting increased investment in delivery fulfillment, Shopee VIP, and user acquisition compared to $464 million the previous year.
• Shopee Ad Revenue -- Up 80% year-on-year, while ad take rate increased by more than 90 basis points among paying sellers; average ad spend per seller rose approximately 35%.
• VIP Membership -- Exceeded 10 million subscribers across Asia, up over 40% quarter-on-quarter, with retention above 80% and contributing about 20% of GMV.
• Shopee Instant Delivery -- Order volumes grew over 35%, and cost per order declined around 20% year-on-year; approximately 7,000 offline stores onboarded for instant services by March-end.
• Shopee Fulfillment Orders -- Increased around 25% sequentially, with over one-third of Asian parcels delivered within the next day in March.
• Brazil E-Commerce -- Fastest growing Shopee market; Shopee Mall sellers’ GMV more than doubled year-on-year, now representing circa 15% of Brazilian GMV.
• AI Operational Impact -- AI-enabled initiatives led to a 14% improvement in purchase conversion rates, and around 80% of customer queries managed by chat bots, cutting customer service costs per contact by around 30% year-on-year.
• SeaMoney Loan Book -- Consumer and SME loans outstanding reached $9.9 billion, up 71% year-on-year, with active credit users rising 35% to over 38 million and average loan per user up 25% to about $250.
• Brazil Fintech -- Local loan book surpassed $1 billion, marking over 250% year-on-year growth; SPayLater now approximately 10% of Shopee Brazil GMV.
• Nonperforming Loans -- 90-day nonperforming loan ratio held stable at 1.1%.
• Money Adjusted EBITDA -- $275 million, a 14% year-on-year rise, while revenue climbed 58% to $1.2 billion.
• Garena Bookings -- Grew 20% year-on-year to $931 million, with adjusted EBITDA up 25% to $574 million and GAAP revenue rising 41% to $697 million.
• Free Fire Collaboration -- Jujutsu Kaisen partnership generated over 700 million official content views.
• Ramadan Campaign -- Achieved global social media impressions exceeding 120 billion, a 70% increase compared to the prior year’s Ramadan campaign.
• Net Income -- $438 million, up 7% year-on-year.

SUMMARY

Sea Limited (SE +5.21%) detailed substantial revenue growth and expanding profitability in the first quarter, reporting record levels across its e-commerce, fintech, and gaming divisions. Management outlined deliberate investment in key areas, with Shopee amplifying logistics capabilities through new fulfillment centers and AI integration while rolling out its VIP subscription in Brazil. SeaMoney’s lending portfolio diversification included notable traction in both On-Shopee and Off-Shopee scenarios, with Off-Shopee loans now comprising about 20% of the portfolio. Garena’s strong bookings were anchored by global IP collaborations and new content strategies, with evidence of sustainable user engagement and regional monetization improvements.

• Hou Tianyu stated, "Brazil does grow slightly faster than Southern Asia, but I think it's probably not only driven by the Brazil side," highlighting a broad-based growth contribution.
• An increase in Shopee’s e-commerce take rates was largely plowed back into growth levers such as fulfillment network and VIP membership, per Hou Tianyu.
• Hou Tianyu commented, "Now it's less than half of the business already. And even if you compare with the -- On-Shopee versus Off-Shopee, the percentage of escalated Off-Shopee is about 20% already as a total as balance On-Shopee and Off-Shopee, which is a significant milestone for us. This proves that we are not only be able to drive our expeditor in general lending in the Shopee ecosystem, but also we successfully drive this in the Off-Shopee ecosystem," indicating a strategic shift in SeaMoney’s loan origination sources.
• According to Forrest Li, Arena of Valor’s best ever quarter is not a one-off, with investments in content expected to drive further year-long growth.
• AI-powered solutions have enhanced both platform-side efficiency and seller tools, contributing to cost control and seller profitability without material adverse reaction to commission changes.
• Management maintained guidance for Shopee’s annual GMV growth of approximately 25%, with full-year adjusted EBITDA not expected to fall below 2025 levels in absolute terms.
• Shopee’s Q1 performance was favorably impacted by seasonal factors, but management cautioned that projecting the remainder of the year requires ongoing monitoring of market trends.

INDUSTRY GLOSSARY

• GMV (Gross Merchandise Value): Total value of all goods sold through the e-commerce platform during a certain period, before deductions like returns or discounts.
• SPayLater: Sea Limited’s installment and credit product for consumers, allowing deferred payments on Shopee and with other partners.
• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for significant non-cash or one-time items as specified by management.
• Take Rate: Percentage of transaction value captured by the platform through fees, commissions, or monetization activities.
• Off-Shopee: Lending or fintech activity generated outside the Shopee e-commerce ecosystem, including external partners and offline channels.

Full Conference Call Transcript

Rebecca Lee: Hello, everyone, and welcome to Sea's 2026 first-quarter earnings conference call. I am Rebecca from Sea's Investor Relations team. On this call, we may make forward-looking statements, which are inherently subject to risks and uncertainties and may not be realized in the future for various reasons as stated in our press release. Also, this call includes the discussion of certain non-GAAP financial measures, such as adjusted EBITDA. We believe these measures can enhance our investors' understanding of the actual cash flows of our major businesses when used as a complement to our GAAP disclosures. For a discussion of the use of non-GAAP financial measures and reconciliations with the closest GAAP measures, please refer to the section on non-GAAP financial measures in our press release. I have with me Sea's Chairman and Chief Executive Officer, Forrest Li; President, Chris Feng; and Chief Financial Officer, Tony Hou.

Our management will share strategy and business updates, operating highlights, and financial performance for the first quarter of 2026. This will be followed by a Q&A session in which we welcome any questions you have.
With that, let me turn the call over to Forrest.

Forrest Li: Hello, everyone, and thank you for joining today's call. We have had a strong start to the year. In the first quarter, we generated over $7 billion of revenue, representing 47% year-on-year growth. Adjusted EBITDA exceeded $1 billion for the first time. As we have shared before, 2026 is a year where we are leaning into growth investments to deepen our competitive moat, while maintaining financial discipline. Our strong revenue growth reflects the effectiveness of these investments, and we are already seeing unit economics start to improve for some of these initiatives. We believe this is the right approach to maximize long-term value, giving the significant runway for growth still ahead of us in our markets. With that, let me take you through each business's performance, starting with Shopee.

Shopee delivered another record-setting quarter, achieving new highs in GMV, gross order volume, and revenue. GMV grew 30% year-on-year in the first quarter. At the same time, we maintained financial discipline, generating an adjusted EBITDA of over $220 million.

Our monetization strengthened further in the first quarter. Ad revenue grew 80%, and ad take rate increased by more than 90 basis points year-on-year. Ad paying sellers and their average ad spend both increased by around 35% year-on-year, reflecting the strong value sellers see in our ad offerings.
Our results validate the operational priorities we have laid out for Shopee, improving price competitiveness, service quality, and our content ecosystem. Our strong execution across these priorities drove user acquisition and engagement in the first quarter.

Average monthly active buyers increased 16% year-on-year, and the buyer purchase frequency grew around 12% year-on-year.

We continue to deepen our structural moat across logistics, Shopee VIP, and content. First, logistics continues to be one of our most important differentiators. SPX Express remains one of the largest e-commerce logistics solution providers in our markets. We have developed strong capabilities to dynamically optimize for speed, cost, and user preference. In the first quarter, we continued to scale delivery options serving different consumer demands while maintaining cost leadership. We have seen strong adoption of our instant and same-day delivery services. With greater economies of scale, we are seeing lower delivery costs per order for these faster services compared to last year.

For example, in Indonesia, our instant delivery service can deliver orders in as little as two hours in urban areas. Order volumes for this service grew over 35% in the first quarter, with cost per order reducing by around 20% year-on-year. Scaling this service has enabled us to extend our product assortment into higher frequency categories. We expanded partnerships with major convenience stores and pharmacy chains such as Indomaret. At the end of March, we had around 7,000 offline stores available on our instant services. This has shifted more offline purchasing behavior online and into the Shopee ecosystem. Buyers using instant delivery enjoy greater convenience, and we are seeing such buyers spending more with better retention on Shopee.

Beyond delivery, we are increasing our focus on fulfillment as a natural extension of our logistics capability. We are making good progress. In the first quarter, fulfillment order volumes grew by around 25% sequentially. Fulfillment allows for faster and more reliable delivery, while enabling sellers to operate and scale more efficiently on our platform. We already see this happening with our fulfillment orders consistently delivering faster than the platform average.
In Asia, over one-third of parcels fulfilled by us were delivered within the next day in March, much higher than the platform average. The combination of fulfillment with our extensive delivery network allows us to drive significant improvements in both service quality and cost efficiency. For example, in Taiwan, our collection point network expanded to over 3,100 locations at the end of the fourth quarter, nearly 50% more locations compared to just a year ago. We leveraged our growing fulfillment capability to scale initiatives such as shipping directly to lockers without additional packaging, improving speed while reducing cost. With this effort, average buyer waiting time improved 12% in the first quarter year-on-year. We recorded double-digit GMV growth year-on-year in the first quarter in Taiwan, deepening e-commerce penetration and strengthening our market leadership there.

Second, our Shopee VIP program. This subscription-based membership program continues to gain strong traction and drive user engagement. By the end of March, total subscribers across our Asian markets surpassed 10 million, up more than 40% from the previous quarter, with strong program retention averaging above 80%. Across all markets, our Shopee VIP members have consistently demonstrated double-digit spending uplift after subscribing by as much as 30% to 40% in some markets. Shopee VIP members now contribute around 20% of GMV across Asia. Building on this success, we have rolled out our Shopee VIP program in Brazil in April.

Third, our content ecosystem continues to grow healthily. In the first quarter, orders from live-streaming and short-form video grew more than 50% year-on-year. These orders accounted for more than 25% of total physical goods orders in Southeast Asia. To further strengthen our content ecosystem, we continue to deepen our content partnerships.

Orders driven by YouTube more than doubled year-on-year. Our collaboration with Meta is scaling well with over 4.5 million affiliates across our markets, up nearly 30% quarter-on-quarter. In Indonesia, we have extended our Meta collaboration to enable seamless product promotion and checkout not just on Facebook but also on Instagram.

I would also like to highlight our strong performance in Brazil and the growing role AI is playing in our business. Brazil was our fastest-growing market in the first quarter, while continuing to be profitable. We continue to outpace the market on GMV growth, driven by increases in active buyers, purchase frequency, and average basket size. This strong performance was supported by solid fundamentals, including a wide product assortment at competitive prices and our structural logistics cost advantage.

We also made steady progress strengthening our presence in the upmarket segment, enabled by our strong logistics capability. We continued to improve delivery time by more than one day in the first quarter compared to last year. We opened three new fulfillment centers, bringing our total to five. These efforts allowed us to onboard more merchants, especially to Shopee Mall, supporting stronger spending among buyers.

In the first quarter, GMV from Shopee Mall sellers more than doubled year-on-year and now contributes around 15% of GMV. We remain confident in Brazil's long-term growth potential and in our ability to further strengthen our competitive position in this market.

On to AI. We have taken a practical results-oriented approach, embedding AI into our operations to drive better outcomes for our users and greater efficiency across our platform. It is already making a meaningful impact. AI-powered enhancements to our search and recommendation algorithms have led to better product discovery. Our AI-generated content tools are helping sellers create more compelling product listings.
These efforts supported a 14% improvement in purchase conversion rate year-on-year in the first quarter. And AI-driven personalization and targeting helped contribute to the strong year-on-year ad revenue growth we saw this quarter.
On the cost side, around 80% of customer queries are now handled by our AI chatbots. AI usage helped reduce customer service cost per contact by around 30% year-on-year, while maintaining high satisfaction rates. Looking ahead, we are exploring agentic AI experiences. For buyers, we are testing an AI shopping assist that leverages purchase history and preferences to deliver personalized recommendations and optimized savings. For sellers, we are building an AI agent that acts as a virtual business advisor, providing diagnostic and actionable insight on shop performance. Both are in early stages with plans to roll them out more widely over time.

In summary, Shopee has had a great start to 2026, delivering strong growth while maintaining financial discipline. We are being deliberate about where we invest in delivery, fulfilment, our Shopee VIP membership program, and user acquisition. We are already seeing some improvement in unit economics, and we expect this to continue over time. Looking ahead, we are confident in the strength of our Shopee ecosystem and our ability to execute our strategies. We are on track to deliver our 2026 guidance to grow Shopee's annual GMV by around 25% year-on-year, with full-year adjusted EBITDA no lower than 2025 in absolute dollar terms.

Next, moving to Monee. Monee also had a strong start to the year with robust year-on-year growth across both revenue and adjusted EBITDA. Credit continues to be the primary driver of our growth. Our loan book reached $9.9 billion at the end of March, an increase of more than 70% year-on-year while maintaining stable asset quality. We continue to expand the credit business along three fronts.

First, by deepening existing user relationships, offering them more credit as we get to know them and their repayment behavior better. Second, by acquiring new users, especially in segments with better risk scores and greater affluence. These users tend to have better repayment behavior and higher borrowing capacity. Our campaigns to attract such new users with competitive pricing, higher limits, and longer tenure are showing early signs of success. And third, by expanding our credit use cases beyond Shopee, an important runway for future growth.

We are making good headway with off-Shopee expansion. More users are progressing from on-Shopee SPayLater to off-Shopee SPayLater and personal cash loan. Following strong momentum in Malaysia, we are also seeing good traction in some other markets. Off-Shopee SPayLater loans in Thailand and Indonesia exceeded 20% of the SPayLater portfolio at the end of the quarter. Notably, we are seeing strong growth in higher-value categories such as electronics and two-wheeler in Indonesia, where installment credit played a meaningful role in enabling such purchases. Taken together, these efforts resulted in strong growth in both user numbers and loan outstanding per user.

In the first quarter, we added 4.9 million first-time borrowers. Our active credit users crossed 38 million at the end of the quarter, an increase of more than 35% year-on-year, and average loan outstanding per user grew to around $250 at the end of the quarter, 25% higher year-on-year. Brazil has become our fourth market to cross $1 billion in loan book size, growing over 250% year-on-year. The strong growth momentum was supported by a localized product we introduced last year, a combined SPayLater and cash loan limit that aligns well with how Brazilian consumers utilize credit. This led to strong user growth with higher repeat usage, where the average loan outstanding per user more than doubled compared to last year.

SPayLater penetration on Shopee is around 10% of GMV in Brazil, well below our more mature market, indicating substantial headroom for growth. We also obtained the SCFI license in Brazil during the quarter, allowing us to broaden the scope of financial services we can offer. We are still in the early stages of scaling this business in Brazil with a strong foundation in place to support future growth.

Risk management remains our top priority. Our 90-day NPL ratio remained stable at 1.1% at the end of the quarter. This reflects the strength of our underwriting capabilities and the disciplined way we expand across users and markets. Our deep understanding of our markets and borrowers allows us to respond quickly to macro changes. Our loans typically have short tenures, and we can adapt our product access, credit limits, and tenures in real-time. These attributes enable us to adjust our risk appetite and optimize our asset quality as we scale.

In summary, Monee continues to grow healthily. Expansion into more user segments, off-Shopee use cases, and early markets like Brazil are giving us a much larger addressable opportunity across our portfolio. We remain confident that Monee will be a significant long-term profit contributor for Sea.

Next, turning to Garena. Garena had a stellar start to 2026, delivering its best quarter since 2021. Bookings were up 20%, and adjusted EBITDA grew 25% year on year. This performance was driven by the continued strength of Free Fire alongside the record contribution from Arena of Valor. In January, Free Fire launched a major collaboration with the popular anime Jujutsu Kaisen. As with our previous collaboration, we invested significant effort in bringing core elements of the anime into gameplay. We transformed the parts of the map into settings from the Jujutsu High School and introduced a "Cursed Energy" resource that players could collect to activate special character abilities.

For instance, Gojo's Unlimited Void, one of the highest-level techniques from the anime, allowed players to draw their opponent into a separate domain for a one-on-one fight. Players resonate strongly with the campaign's attention to detail and authentic visual effects. This collaboration generated over 700 million official content views, making this one of our most successful IP partnerships to date. Taken together with the highly successful Naruto Shippuden collaboration last year, we have demonstrated our ability to consistently execute high-impact partnerships with global IP owners.

We are also evolving how we scale our content globally. One of Free Fire's longstanding strengths is our ability to hyper-localize the game for players. This year, we have challenged ourselves to both localize and globalize some of this content, making it highly resonant for target markets and also enjoyable for everyone else. A good example from the first quarter is our Ramadan campaign. In past years, this campaign was only launched in Ramadan observant markets. This year, we scaled it into a global event under a Lost Treasure theme. Players from markets celebrating Ramadan recognized this as a festive event catering to them, while players from other markets saw it as a desert-themed campaign that was new, interesting, and fun to play.

During matches, players could find treasure maps triggering team-based missions, guiding them to hidden treasure locations. This highly interactive campaign resonated strongly across markets. Global social media platform impressions exceeded 120 billion, up around 70% compared to last year's Ramadan campaign. The strong response we got to this campaign shows our growing capability to take culturally rooted events from local markets and expand them into globally resonant content.

Globalizing campaigns let us pool resources, elevate content quality, and deliver more frequent and distinctive experiences to our players. Beyond Free Fire, Arena of Valor delivered record-high quarterly bookings in the first quarter in its 10th year of operation. The sustained success of both games demonstrates our unique ability to operate games well across genres, in multiple markets, and over long periods of time. Garena has started 2026 with great momentum. We will remain focused on delivering fresh experiences and building the long-term value of our game portfolio.

In conclusion, we have started 2026 well, with each business expanding its addressable opportunity while strengthening its competitive position. Meanwhile, across our ecosystems, we see the AI era creating significant opportunities for a company like ours with established scale, rich cross-vertical data, and deep local expertise. We are investing deliberately to capture the growth runway ahead, and we are confident of continuing to deliver robust topline growth while improving our adjusted EBITDA year on year.
With that, I invite Tony to discuss our financials.

Tony Hou: Thank you, Forrest, and thanks to everyone for joining the call. For Sea overall, total GAAP revenue increased 47% year on year to $7.1 billion in the first quarter of 2026. This was primarily driven by growth in Shopee and Monee. Our total adjusted EBITDA was up by 9% year on year to $1 billion in the first quarter of 2026.

On Shopee, gross orders increased 29% year-on-year to $4 billion in the first quarter of 2026, and GMV increased by 30% year-on-year to $37.3 billion in the first quarter of 2026. Our first-quarter GAAP revenue of $5.1 billion included GAAP marketplace revenue of $4.5 billion, up 44% year on year, and GAAP product revenue of $0.6 billion. Within GAAP marketplace revenue, core marketplace revenue, mainly consisting of transaction-based fees and advertising revenues, was $3.8 billion, up 61% year on year. Value-added services revenue, mainly consisting of revenues related to logistics services, was $0.7 billion.


Shopee adjusted EBITDA was $223 million in the first quarter of 2026, compared to an adjusted EBITDA of $264 million in the first quarter of 2025. This year-on-year change primarily reflects our increased investments in delivery, fulfillment, our Shopee VIP membership program, and user acquisition, partially offset by higher monetization.

Monee GAAP revenue was up by 58% year-on-year to $1.2 billion in the first quarter of 2026. Adjusted EBITDA was up by 14% year-on-year to $275 million in the first quarter of 2026. As of the end of March, our consumer and SME loans principal outstanding reached $9.9 billion, up 71% year-on-year. This consists of $8.8 billion on-book and $1.1 billion off-book loan principal outstanding. Non-performing loans, past due by more than 90 days as a percentage of total consumer and SME loans, was 1.1% at the end of the quarter.

Garena bookings grew 20% year on year to $931 million. GAAP revenue was up by 41% year on year to $697 million. The growth was primarily due to the increase in our active user base and deeper paying user penetration. Garena adjusted EBITDA was up by 25% year on year to $574 million.

Returning to our consolidated numbers. We recognized a net non-operating income of $62 million in the first quarter of 2026 compared to a net non-operating income of $89 million in the first quarter of 2025. We had a net income tax expense of $214 million in the first quarter of 2026 compared to net income tax expense of $136 million in the first quarter of 2025. As a result, net income was up by 7% year-on-year to $438 million.

Rebecca Lee: Thank you, Forrest and Tony. We are now ready to open the call to questions. Operator?

Questions And Answers
Operator: We will now begin the question-and-answer session. (Operator Instructions) In the interest of time, we will take a maximum of two questions at a time from each caller. If you wish to ask more questions, please request to join the question queue again after your first questions have been answered. (Operator Instructions)
Your first question comes from the line of Alicia Yap of Citigroup. Your line is open.

Q - Alicia Yap: Hi, good evening, management. Thanks for taking my questions. Congratulations on the strong results. I have two questions. First of all, on e-commerce. So looking at your 30% GMV growth, 29% order growth seems to be suggesting is a decent increase in the ASP. So could management share what you have observed during this past quarter? So how much of the strength of the GMV is attributed to your deeper penetration in the higher-end user and higher ASP product in Brazil? Obviously, followed your strategic expansion in your warehouse fulfillment, and how much of that is -- could be attributed to the higher stickiness of your VIP members across the Southeast Asia regions, and also Taiwan?


And then following up on that is that despite delivering the 30% GMV growth, management still maintained a full-year GMV growth of 25%. So is that because of the higher base of the second half of 2025, or is it management being conservative in light of the macro uncertainty? So any colors management could share or elaborate would be helpful.

And then a second very quick one is on your gaming. Very strong booking growth. So do you expect this strong rebound of Arena of Valor could set the tone for the continued strength and rebound of the game for the rest of this year or is it just more a one-off due to the seasonality and promotion? Thank you.

A - Chris Feng: On the growth for Shopee, we see a combination of growth from both Brazil and Southeast Asia. Overall, Brazil does grow slightly faster than Southeast Asia, but I think it's probably not only driven by the Brazil side. I think, as you already pointed out, we try to have more fulfillment businesses in Brazil. We also have more sellers joining us in Brazil, which contributes to high-end user segment attractiveness.

The Shopee VIP has been driving quite a lot of growth in Asia as well, as Forrest mentioned in the opening. For the GMV guidance, Q1 has Ramadan, and also both -- and also Chinese New Year fall into the quarter. We see very good seasonality attributed to part of the growth. We also see that many of the initiatives we implemented from last year, including the VIPs, including the instant deliveries, including the AI-enabled product discovery that we rolled out to our platform, all this contribute to a better growth than we expected in Q1.
As of the future guidance, I think we will observe how the market evolves. It's a bit early to sort of forecast the full year at this stage. We will communicate with the market as we see better indications from the growth trend in the market.

A - Forrest Li: Regarding Garena, we are very encouraged by Arena of Valor's performance this quarter. It delivered record-high bookings in Q1 in its 10th year of operation, which really speaks to the enduring appeal of the game and our team's ability to keep the experience fresh and engaging for players. This is not a one-off. We have been making deliberate investments in content updates and community engagement that are driving real results. With a content-packed year to celebrate the game's 10th anniversary, we expect 2026 to be a record year for Arena of Valor.

That said, Q1 is indeed a seasonally stronger quarter for gaming, benefiting from the Lunar New Year, which is a key engagement period. So we are mindful of that when looking at the sequential trend. As you know, gaming performance can also vary from quarter to quarter depending on the timing of content release, IP collaborations, and the seasonal events. But the underlying health of the franchise in terms of user engagement and the paying user penetration give us confidence. We remain confident in delivering strong year-on-year bookings growth for Garena for the full year, and Arena of Valor reaching new highs in its 10th year, give us even stronger conviction that we can do the same with Free Fire over the long run.

Operator: Your next question comes from the line of Divya Kothiyal of Morgan Stanley. Your line is open.

Q - Divya Kothiyal: Thank you very much. My first question is on Brazil. So the growth in Brazil has been clearly very strong for Shopee. But how should we think about the margin cadence there for this year, especially since we are seeing the market leader has dialed up their own investments in the market? Brazil has been profitable this quarter, but would love to hear your thoughts on how you're thinking about Brazil's profitability when you give the full-year guidance for e-commerce EBITDA targets. Also, are there any early learnings from the loan book ramp-up in Brazil, and how different is -- are the returns versus ASEAN? So that's my first question on Brazil.

My second question is on e-commerce take rates. We're seeing e-commerce take rates have risen very consistently this quarter, especially in ASEAN. I would like to hear your perspective on how much of these increases are being reinvested back into seller rebates or consumer incentives. And are you seeing ASEAN e-commerce margins actually improve?


Also, given the rise in cost inflation, there has been some pushback by sellers in markets like Thailand about these hikes, but are you broadly seeing these increases being well-accepted by sellers, or are we kind of reaching a cap on commissions, per se? Thank you.

A - Chris Feng: In terms of the Brazil growth, we see -- as you rightly pointed out, we see very strong growth in Brazil. If you look at Q1, we grew well ahead of the market growth in the market, which enabled us to gain better market shares, which in turn gave us better scale to drive down our cost to serve in the market.
The -- we have been profitable in Brazil for the last few consecutive quarters. I don't foresee any change towards that at this point in time. We will still continue to grow healthily in Brazil, likely with the profitable margins as we see right now.
But again, while saying that, we do commit to investing in Brazil, especially for the few areas we mentioned, like the fulfillment network that we are building. We are further expanding our same-day delivery in Brazil. We are also launching the -- we also have the VIP program in Brazil as well. I think all those will be rolled out in Brazil over time to drive further growth.

In terms of the loan book in Brazil, we've imroved very well in Brazil on the loan side. We actually have more than $1 billion outstanding in Brazil already, which is very high growth year to year if you look at last year's Q1. I think the key driver for us is to localize the product. We didn't take the -- Asian products, didn't take to Brazil. We localize the product. For example, we have a single flexible limit that the user can draw on across the SPayLater and the personal cash loans based on what they need.

We also spend our effort on localizing the data sources, not only from the Shopee data, but we also draw data from the open banking networks in Brazil, which give us a pretty good impact in terms of the risk profiles. I think that's part of the reason that we see better risk in Brazil, which enables us to expand more user pools while maintaining the profit profile in the market. Overall, we are still in the very early days of the market penetration in Brazil for the lending businesses. If you compare our sizes versus some of our peers in the market for financial services, there's a huge room ahead of us in terms of growing the businesses in Brazil.

In terms of the e-commerce take rate, I think the simpler way to look at this was we just increased part of the take rate. We also have our EBITDA margin relatively similar to previous quarters. So a big part of that will be reinvested into the market to drive the growth. Again, the area we invest in, the few areas mentioned, the fulfillment network we're building, the VIP programs, et cetera. But generally, we see that in most of the markets, we see good margins quarter over quarter for our -- for our ASEAN markets.

On the seller commission reactions from the market, the most important thing for us is to look at how the seller commissions impact the pricing. We look at the impact of commission increase on pricing compared to the peers in the online market, and we also compare with -- the pricing compared with the offline market. Pricing is one of the most important things for us as we mentioned over time, we still see a very price competitiveness in our platforms. I think going forward, I think we will still look at the dynamics and decide what's the best way to manage the commission part. But again, I think the most important thing is we're able to deliver profit to the sellers.

The profit is depending on number one is how much commission we're taking. Number two is how much cost they're running in our platform. Number three was the volume we're driving for them on our platforms. With slightly higher commissions, we spend a lot of effort on reducing the cost of running businesses on our platform. For example, we offer an AI-powered chatbot for the sellers so they can do customer service with their buyers automatically without hiring more customer service agents. For example, we help them diagnose their businesses a lot easier with our AI-powered agents in our seller centers, et cetera. And at the same time, as we always share that with still fast growth in our market, seller has a bigger pie to draw from. So all this contributes to a healthy ecosystem when we look at the seller commission part.

Operator: Your next question comes from the line of Navin Killa of UBS. Your line is open.

Q - Navin Killa: Hi. Thank you for the opportunity, and congrats on the strong results. I had a couple of questions. So if I look at your e-commerce, I guess, absolute EBITDA in Q1 this year compared to Q1 last year, there's obviously a moderate decline. I just wanted to understand if you could help us kind of get a better sense of where this decline is coming from geographically, if it's split between, let's say, Brazil, Taiwan, and Southeast Asia? And also, as things, hopefully improve over the next couple of years, how will the split of that be in terms of the magnitude of growth in EBITDA coming from each of the regions?
And secondly, on fintech. Again, the margins have obviously been inching down. Is there a steady-state number that we should be looking at and a timeframe over which you can get there?

A - Chris Feng: First of all, let's start with the e-commerce side. I think you are actually right on that slightly lower EBITDA year-to-year. I think the other way to look at this was that if you look at last quarter in Q4 2025, we do see a slight increase on the EBITDA from Q4 last year to Q1 this year. I think there are many reasons driving the dynamics here. Last year was the first year that Ramadan falls into Q1, which is a different seasonality that we had for many, many years. I think there was some adjustment that we have to learn from. How does this seasonality impact the businesses? I think we have better sense this year compared to last year.

I think part of the reason also because we launched a bunch of initiatives to further drive the growth this year, as we shared across the call. And some of that started from the latter part of last year, which continued to Q1 this year. For this near term in 2026, I think we share with our guidance, we expect pretty good GMV growth of 25% with the bottom line EBITDA at least not worse than last year. I think we will see how this evolves over the quarters.

In terms of the medium to long term, we still maintain our judgment that we believe that 2% to 3% EBITDA margin is something we target to achieve. In terms of the fintech, the fintech margin, one thing we look at very closely is our absolute return. When we grow our loan outstanding, we would like to make sure that additional loan will bring a positive EBITDA in absolute terms. We do recognize that the EBITDA, if you compare it with the outstanding as a ratio, it might fluctuate. Eventually, it might go down a bit over time, if you look at over the quarters, I think largely driven by the mix of different countries and different products. Our earliest to market, for example, like Indonesia, Philippines, does have a higher ROA compared to the market that's coming a bit later to the portfolio, if you look at, let's say, Thailand or Malaysia, Vietnam, et cetera. So this drives, if you look at the ratios, slightly lower ROA as time goes.

I think at this point in time, the business is really early. We see a huge potential in front of us, especially if you look at some of the new market growth. Even when you look at Thailand, Malaysia, or the Brazil, we talked about, there is a big potential ahead of us. And if you -- just now we talked about Brazil, if you compare our outstanding compared to the peers' outstanding, there's a huge room for us. There we also try to develop the non-Shopee ecosystems. For example, I the -- think Forrest mentioned the cell phone stores, the two-wheel stores. I think all these are pretty dynamic. I think a bit too early to guide a steady state number at this stage, as it's pretty much impacted by the country and product mix.

Operator: Your next question comes from the line of Jiong Shao of Barclays. Your line is open.

Q - Jiong Shao: Thank you very much for taking my questions. I have two as well, if I may. I'm going to just ask one at a time. Firstly, would you be able to just talk about the potential impact from higher fuel prices? I know the conflict in Middle East started in March. You probably did not see too much of an impact in Q1, but if the oil price stay at the current level for longer, how would that affect your cost? Would you be able to pass on some of the costs to either the sellers or consumers? Any comments would be helpful. Then I have a second question.

A - Chris Feng: Yeah, it's clearly something we look at very closely in terms of the oil price impact to our businesses. I think there are a few degrees of impact when we look at this. The first degree of impact is just absolute oil price. It does impact our operational cost. The -- I think the good thing is that we leverage quite a lot of the subsidies from the government in our countries, where It help us to absorb the cost increase in many countries, especially the last mile delivery, which is the largest part of our -- the delivery cost.

We also work closely with our partners, like, for example, our linehaul partners, our airline partners, to manage the cost together. So all in all, if you look at actual cost, it does have an impact in our cost, but we believe we can manage it within the guidance that we're giving out. And also in terms of timing, you're actually right that in Q2, we probably see more impact than Q1 in terms of cost. I think that's the first degree of impact. I think the second degree of impact is potentially this might impact the --essentially the spending power in some of the countries if they have to spend more money on the gas stations.

I think generally we're seeing a moderate impact in our platform. I think the most important reason for that is our platform is actually -- is the cheapest platform you can find the products that people essentially needed. So when people are looking for savings, actually, they look at us more. Our platform is also a more essential product platform rather than something that people buy a luxury product from, or discretionary spending are less expensive in our platform compared to, let's say, offline spending, et cetera. All this help us to shield the impact from -- the second-degree impact that we are seeing.

Q - Jiong Shao: Okay, great. Very helpful. Thank you for that. My second question is about your fulfillment buildout. You talked about adding three fulfillment centers, I think in Q1, in Brazil. Could you talk about some of your perhaps like near-term targets and long-term targets? For example, as you know, one of your peers in Brazil is adding, I think, over a dozen FCs this year in Brazil. So if you can share some of your thoughts, both near-term and long-term?
And on top of that, the pace of the investment, and is that you adding, let's say, some fulfillment centers this year and then next year take a pause to absorb some of the capacity, then perhaps add more after that? So just help us understand the pace when you build out your fulfillment infrastructure from relatively a low base from timing-wise compared to -- low base compared to competitors, obviously? And any sort of a timetable for getting returns of this investment? Thank you so much.

A - Chris Feng: So, on the fulfilment businesses, I think especially for Brazil, I think that you referred to, we do have our expectations on growing more percent of businesses from fulfilment as we build out. Since we started relatively not too long time ago, we are still in the early stage of building out the fulfilment businesses. I think the -- typically, we actually don't overbuild too much. So the -- our capacity utilization in our fulfilment center is relatively high. And I think the core reason for that is we are able to predict how much of the volume for fulfilment well ahead of the time. Then we build our fulfillment center according to the timetables. So it's probably unlikely that we're going to build a lot this year, and we stop next year, then while waiting for the fulfillment center to be fulfilled, then we built again. I think it's more going to be a continuous process while we are building the fulfillment center. And ultimately, we would like to have our fulfillment center at the overall size bigger than our close competitors in the market in terms of absolute volumes. But I think it would take a few years to get there, given we just started later.

In terms of the retail investment, the -- if you look at individual fulfillment centers, typically the infrastructure, the CapEx, is actually not that high as we don't own the fulfillment center itself. We typically rent a fulfillment center. The CapEx essentially is to make sure the fulfillment center is well-equipped. So if you look at that particular part of investment, the return on investment is pretty fast. It is not that long in terms of the time. The other part of investment we're doing for the fulfillment businesses is more move the seller to be part of the fulfillment center. And move the buyer and advocate the buyer to understand the fulfillment businesses that we have. So that's part of the ongoing investment we used to drive business growth.

Operator: Your next question comes from the line of Ranjan Sharma of JPMorgan. Your line is open.

Q - Ranjan Sharma: Hi, good evening and thank you for the presentation and congratulations on the results. Three quick questions from my side. Firstly, how do you see the economics of the VIP program? Will you consider optimizing the value offered to consumers or the subscription price charged to the customer?
The second question is: given the momentum on Free Fire and Arena of Valor and the content coming in the coming periods, how should we think about the growth of the gross bookings this year?

Last question is can you help us understand how you evaluate the intrinsic value of Sea? We know you have $1 billion buyback, but you have only executed $170 million or so despite the stock price reaching $78 at some point. So would help to understand, like, how you're thinking about the buyback going forward? Thank you.

A - Chris Feng: On the VIP program, I think there are two parts of the offering that we are providing to the market. Part of the offering is the Shopee offering. For example, in some markets, if you join the VIP, you can get free shipping, et cetera. Part of that is what our partners offer to our users. One of the key things we are working on is to expand our partner pools so we can strongly offer the benefits to our users. For example, the ChatGPT program that we offer to our users, which is very well accepted and liked. There are quite a few other partners we are going to announce actually not too far away. We're working on the system integration, et cetera. So all this will -- all these partner offerings will help us in terms of the unit economics over time.

But the -- and also for the pricing, we'll continue to look at the pricing. There's a potential to have a different tiering as well for the pricing, depending on how the market reactions and how the economics look at for different segment of users, and also depending on who we have partnered with, et cetera. But at this point in time, we were still going to invest a bit more on the VIP program, given that the retention we see on the user base and also the uplift of the activities from the VIP users. But eventually, we do see VIP program can be an even more profitable program compared to the non-VIP program, giving the stickiness of the users, giving the ability for us to bring the benefits to our partners.

Operator: Your next question comes from the line of Ellie Jiang of Macquarie. Your line is open.

A - Forrest Li: Sorry, there's another. Yeah. So for the gross booking for Garena for the rest of the year, at this moment, we remain very, very confident, and we think this year we have a very strong growth, and we remain the guidance we gave during the last time earnings call.

And for the -- in terms of your question of the buyback considerations as we shared in our earnings release, and we have actively bought back our shares since last -- like since last November, and we're going to continually doing so. And as we shared, we remain very confident about our three vertical businesses and also the strong growth potential of our market. So that's the key underlying considerations when we buy back our shares.

Operator: My apologies, Ellie Jiang. Your line is now open.

Q - Ellie Jiang: Great. Thank you so much, management, for taking my questions. I've got two. One is a follow-up on the prior question on Shopee VIP. Just wanted to have a better understanding of the current progress of the VIP members. Because clearly, you guys have been making pretty good progress on penetrating into many of the core operating markets, and seems like it has reflected positively on both user frequency as well as for the ticket size. So going forward, what would be the key KPIs? Would it be that the percentage of penetrations in several key markets be over certain percentage of their total MAUs, or would it be certain GMV thresholds that you guys will be monitoring? Just want to get an understanding of kind of that investment kind of reflection sort of in the next several quarters? So that's the first part of the question.
The second would be on Monee. So can management shed some light on the actual breakdown of the business, including, for example, the country mix, also on-Shopee and off-Shopee percentage points? Ultimately, the latest quarter of 71% year-over-year increase in consumer and SME loan principal outstanding was very impressive, especially given that you guys can control the loan quality at a very high level. So can you talk about kind of the key factors in the upcoming years? What will be the key triggers to continuously contribute to such strong growth momentum for the loan book as well as for the revenue? Well, thank you.

A - Chris Feng: On Shopee VIP, I think there are key -- there are a few key numbers we look at. For example, the penetration of our GMVs, the retention of our users, and also the unit economics for this part of the program. I think there are a few things that are actually quite important for us to look at.
I think the other key thing we look at is how many partners that we have in the VIP program, as I shared just now. It's important for us to make sure that we bring benefit to our users, not only for Shopee, but also for our partners as well. We started Shopee VIP in Indonesia first. I think we see very good progress there, as I think -- as we roll out to more countries, we see -- essentially learn more from the early countries and roll out similar learnings to other countries.
For the Monee businesses, as I shared earlier, we started first in the early countries like Indonesia, et cetera, but the newer countries like Thailand, Malaysia, or Brazil, have kind of -- especially because they are later countries, they grow faster compared to the older countries in a way. So the share between the countries was dynamically adjust because of the timing of the rollout of our product. I don't think we give a precise country mix to the market.
In terms of the on-Shopee and off-Shopee. The on-Shopee, essentially the SPayLater on-Shopee, was the majority when we started with, and now it's less than half of the business already. And even if you compare with the SPayLater on-Shopee versus off-Shopee, the percentage of SPayLater off-Shopee is about 20% already as a total SPayLater on-Shopee and off-Shopee, which is a significant milestone for us. This proves that we're not only being able to drive our SPayLater, or in general, lending in the Shopee ecosystem, but also we successfully drive this in the off-Shopee ecosystem. And in fact, we see higher growth in the off-Shopee ecosystem versus the on-Shopee part of the businesses.

The key factor driving the growth are, again, the three elements. One is, within our current user base, we still see a possibility to drive more credit adoption. And this will come with more product rollouts to this group of users and better credit assessment as we accumulate more data over time. And also deeper integration with Shopee and expanding of our non-Shopee scenarios for this group of users. I think essentially, even within the same user base, we see a huge room for us to deepen the credit penetration.

The second one is essentially to expand the new scenarios beyond what we have right now, where the user can spend their credit limit on. This is including, you know, for example, we partner with more online merchants who can accept SPayLater, partner with more merchants offline so they can accept SPayLater as well. Even for our -- in some of our markets where credit card is big -- slightly bigger, we roll out a debit card system leveraging on SPayLater credit limit so they can use our SPayLater credit through a card network as well. So all this will expand the pool -- addressable market pool for our user base.

I think the third thing is for us to continue to expand to new user segments. I think that's very important for us as well. I believe Forrest mentioned in the opening too, that as we started more from a subprime market segment, when we accumulate more risk data and also better our risk models, and -- we are able to expand to a more prime user segment, with slightly different products in various markets. This user might have a slightly lower ROA, but this gives us a bigger outstanding pool for us. I think all this will drive the growth of our lending businesses in the coming years across our markets.

Operator: This concludes our Q&A session. I would now like to turn the conference back over to Ms. Rebecca Lee for any closing remarks.

A - Rebecca Lee: Thank you all for joining today's call. We look forward to speaking to all of you again next quarter.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Editor’s note: This transcript has been updated.