Sea Limited

Good morning and good evening to all and welcome to the C Limited fourth quarter and full year 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your questions, please press star and then one again. For operator assistance throughout the call, please press star and zero. And finally, I would like to advise all participants that this call is being recorded. Thank you. I would now like to welcome Mr. Elson Choi to begin the conference. Please go ahead, sir.

Hello, everyone, and welcome to CEE's 2025 Fourth Quarter and Full-Year Earnings Conference call. I'm Elson from CEE's Investor Relations team. On this call, we may make forward-looking statements which are entirely 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 disclosure. For the discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures, please refer to the section on non-GAAP financial measures in our press release. I have with me C-Chairman and Chief Executive Officer, Forrest Lee, President Chris Fung, and Chief Financial Officer Tony Ho. Our management will share strategy and business updates, operating highlights, and financial performance for the fourth quarter and full year of 2025. 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.

Hello everyone, and thank you for joining today's call. 2025 has been a great year for SEED. We generated a record $23 billion in revenue, representing 36% year-on-year growth, and acceleration from 2024. At the same time, we improved our bottom-line profits. Our full-year net income reached $1.6 billion, and adjusted EBITDA reached $3.4 billion. representing a 260% and 75% year-on-year increase, respectively. All our businesses scaled well in 2025, exceeding our initial growth expectations. This broad-based and robust growth is healthy and sustainable, underpinned by the growing scale of users that we serve. In 2025, Shopee served around 400 million active buyers and 20 million sellers, achieving $127 billion in GMB. Money gained over 20 million unique first-time borrowers and grew its loan book beyond $9 billion, while maintaining stable risk. And Garena connected with over 100 million players on average every day throughout the year, generating almost $3 billion in bookings. We were successful in 2025 because we chose the right set of strategies and we executed them well. 2026 will be a continuation of this approach. Our strategies will be consistent and execution remains key. We will double down on operational excellence and work towards delivering another year of strong growth and healthy profits. With that, let me take you through each business' performance. First, starting with Shopee. Shopee achieved another record second quarter with new highs in GMV, gross order volume, and revenue. Our full-year GMV grew 27% year-on-year alongside significant profit improvements. We generated a full-year adjusted EBITDA of over $818 million in 2025. Our strong GMV growth was driven by tangible improvements we made for both buyers and sellers. We made product discovery easier, broadened our assortment of offerings at competitive prices, and widened access to fast, reliable shipping. We also improved our monetization further in the fourth quarter. Ad paying sellers increased by more than 20%, and their average ad spend increased by more than 45% year on year. As a result, Ad revenue grew over 70% and ad take rate increased by more than 80 basis points year on year. The strong side of 2025 results is a validation of the effectiveness of our strategic choices for Shopee. We have shown our ability to enhance monetization as demonstrated by our consistently improving take rate over the past two years. For the near term, We choose to prioritize growth while upholding financial discipline. For 2026, we aim to grow Shopee's annual GMB by around 25% year-on-year, with its full-year adjusted EBITDA no lower than 2025 in absolute dollars. We believe this is the right strategy to optimize Shopee's long-term profitability. Let me highlight a few areas where we are investing to further enhance our scale and market leadership. This includes our continued efforts into logistics, Shopee VIP membership program, and expansion of our content ecosystem. The objective is clear. We want to serve more users and engage them better. In 2025, Monthly active buyers and average monthly purchase frequency increased by 16% and 10%, respectively, compared to a year ago. In 2026, we will remain focused on executing these priorities well. It will benefit us with deeper structural modes that can further depreciate Shopee from its peers. First, logistics. Our logistics capabilities has become an increasingly important depreciator for Shopee. XPX Express now processes, on average, over 30 million puzzles every day, making it one of the largest e-commerce logistics solution providers in our market. In 2025, we improved speed and cost efficiency across our market, while customizing delivery options for different user needs. In dense urban areas, We scaled instant and same-day delivery for buyers who value speed and convenience. We expanded instant delivery into additional use cases, including partnering with local supermarkets and suppliers to deliver fresh groceries in Thailand in as little as one hour. Our faster delivery services reached a double-digit share of order volume in greater metropolitan areas such as Bangkok and Jakarta, by the end of 2025. Buyers using instant and same-day delivery also spend around 15% more on average after adoption. At the same time, we scale economical shipping to serve buyers seeking affordability. In Indonesia, orders using economical shipping more than doubled year on year in the fourth quarter. With our delivery capability well scaled, we started to roll out fulfillment service in various markets across 2025. We are seeing encouraging adoption trends from both buyers and sellers, with double-digit order penetration in some markets. In 2026, we plan to expand fulfillment further across all our markets and aim to double our fulfillment order penetration by the end of the year. Second, The Shopee VIP Membership Program. In 2025, we introduced this program to deepen engagement among our most active buyers. This paid program gives subscribers more generous free shipping entitlements, daily vouchers, and exclusive discounts. We have now rolled out Shopee VIP to all our Asian markets. Total subscribers surpassed 7 million at the end of the year, more than double the number from a quarter ago. Across every market where it has launched, the program has consistently produced double-digit spending uplifts by members after they join. In Indonesia, VIP members have been spending about 30-40% more than before joining. In some markets, VIP members already contributed more than 15% of total GMV in the first quarter. Building on Shopee VIP's success in Asia, we plan to launch it in Brazil in the coming months. Third, our content ecosystem. We strengthened our content and affiliate ecosystem in 2025, making discovery more engaging and supporting higher purchase conversions. We saw strong momentum in our partnership with YouTube, with orders driven by YouTube content more than tripling in the fourth quarter, year on year. Our collaboration with Meta has also scaled well since its launch in October. By the end of the year, more than 3 million affiliates had linked their Shopee and Facebook accounts. This partnership has extended our ecosystem coverage across multiple channels to the benefit of both our buyers and sellers. I would also like to highlight our strong achievements in Taiwan and Brazil. In Taiwan, GMV growth accelerated to double digits in 2025. Our wide product assortment, highly competitive pricing, and depreciated logistics have made us the clear e-commerce leader there. In particular, our large deal network of Shopee collection points including automated locker stores, has reinforced our popularity in Taiwan. It addresses Taiwanese buyers' desire for convenience while lowering our cost to serve, allowing us to offer free shipping at a much lower minimum spend. By the end of the year, our network had grown to over 2,800 locations. This last mile delivery model has contributed to broader user adoption and stronger repurchase behavior, while creating a structural mode that is difficult for any peer to replicate at scale. We still see much headroom to strengthen our market leadership and improve e-commerce penetration in Taiwan. Brazil was our fastest-growing market in 2025, delivering robust GMV growth and market share gain while remaining profitable. Mass market penetration improved thanks to our ability to offer free shipping at the lowest cost structure in the market. Up market penetration also improved as our fast, reliable delivery made us more attractive in higher value categories. In the first quarter, buyer rating time improved by around 1.5 days year-on-year. Over the same period, We onboarded more than 300 new brands to Shopee More, and Shopee More DMV more than doubled year on year. With these efforts, newer buyer cohorts are showing higher average spend levels. In 2026, we will accelerate the rollout of our fulfillment capability in Brazil. This will enable us to attract and serve even more sellers, especially in higher value categories. and keep improving our average basket size. Shopee delivered an exceptional 2025, setting new growth records every quarter. This has proven the effectiveness of our strategic choices. It has also validated the efforts we made across the year to constantly improve our execution capabilities. In 2026, we will remain consistent on both our strategies and our focus on high-quality execution. We believe our strong growth momentum and healthy profitability will continue into the year ahead. Next, moving to money. We are very proud of the progress money has made in both growth and profit, while maintaining a healthy risk profile. In 2025, money's annual revenue reached $3.8 billion representing 60% year-on-year growth, but adjusted EBITDA exceeded $1 billion, representing 43% year-on-year growth. Credit business remains our primary driver of growth and profit. In 2025, we blew our credit business in three ways, acquiring more new users, deepening engagement with existing users, and expanding credit use cases. First, We acquired many more new users by shifting from a whitelist-based approach to a broader all-can-apply approach. We progressively rolled this out across our market for both escalator and personal cash loans. New user cohorts scaled well with generally positive unique economics. In the fourth quarter, we added 5.8 million unique first-time borrowers our active credit users crossed 37 million at the end of the quarter, up more than 40% year-on-year. Second, we deepened our engagement with existing credit users. For borrowers with longer credit track records, we offered success to higher loan limits and longer tenure. To target more prime users, we introduced depreciated pricing and more product features such as first-month interest-free loans. By the end of the fourth quarter, average loan outstanding per user was around $240, a 27% increase year-on-year. Third, we expanded credit use cases beyond Shopee into more consumer-spend scenarios, making us penetrate a much larger addressable market. Off-Shopee as pay later has evolved from a nascent offering into a meaningful contributor to our overall loan portfolio. By the end of 2025, Offshopee SPLater loans grew over 300% year-on-year, accounting for over 15% of our total SPLater portfolio. In Malaysia, close to 30% of SPLater usage was already Offshopee. Our success with OffShopee SPayLater has been driven by the close attention we pay to user experience. We took great efforts to ensure that SPayLater could be activated in seconds and used seamlessly for in-store purchases. We integrated SPayLater with national QR payment systems across key markets, making it much easier for consumers to use in day-to-day purchases. We also expanded the use of SPLater into higher-ticket offline categories, such as electronics and two-wheeler. We are encouraged by the early traction we are seeing with off-shopping SPLater and see substantial headroom to expand its use cases. Our credit business expansion in 2025 was made possible by improvements in our risk underwriting capabilities. This improvement tapped on our rich ecosystem data and advancement in AI. Over the year, we made good progress training our risk models to better understand and map how user behavior evolves over time. We are better able to assess individual repayment capacity alongside evolving market risk, and dynamically adjust the credit limit as needed. Enhancing our model's precision and performance enabled us to scale rapidly in 2035 while still maintaining a stable risk profile. Our 90-day NPL ratio held steady at 1.1% as of the end of the fourth quarter. Looking ahead, I'm incredibly excited about money's growth potential. Many of our initiatives are still in the early stage with huge opportunities we have yet to capture. We are also making good progress growing our products and services beyond credit, from digital banking to insurance and more. We believe money will be a significant long-term profit contributor for us. Next, turning to Garena. 2025 was a blockbuster year for Garena. Bookings grew 37% year on year, and adjusted EBITDA grew 38% year on year. Free Fire expanded its reach and scale globally. And we saw solid momentum across our broader portfolio from Arena of Valor to new titles such as Delta Force and EA Sports FC Mobile. Free Fire's journey over the last eight years has been truly special. It is remarkable for a franchise of its vintage to still be growing so fast. Free Fire has now achieved two consecutive years of booking growth exceeding 30%, with 2025 bookings nearly double the level reported in 2023. Even at this massive scale, average daily active users in 2025 continued to grow year on year. Free bus success is driven by our ability to consistently deliver high-impact experiences that bring communities together. 2025 was a defining year in this regard, showcasing our excellent execution across a full spectrum of major in-game and real-world initiatives. We delivered a content-packed year. In Q1, we launched Naruto Shipton Chapter 1. In Q2, we released our 8th anniversary map, Solora. And in Q3, we launched the Sweet Game Collaboration, and the Naruto Shipton Chapter 2. This blockbuster year was the product of more than two years of intense preparation, collaboration, and game development. We started working on the Naruto Shipton project in 2023, when the global game industry was struggling with the post-pandemic headwind. We knew this project required a long development timeline, In that difficult time, the easier path would have been to focus on smaller, shorter-term wins. But we were convinced that this was the right thing to do and remained committed to the long-term vision we had for the project. Our conviction, patience, and hard work have been hugely rewarded with the collaboration's resounding success. Garena's culture of always prioritizing what is best for our players even through hard times, has sustained Free Fire's popularity and relevance, making it an evergreen game. 2025 was also a big year for our esports ecosystem. The Free Fire World Series Global Finals held in Jakarta in November marked a historical moment for the franchise. More than 600,000 players competed worldwide across one or two qualifiers, regional leagues, and global finals. This earned Free Fire the Guinness World Records title for the largest mobile team-based esports tournament. Over the past eight years, we have built Free Fire into more than just a game. It is now a global franchise spanning gameplay, social engagement, and real-world experiences. This approach has deepened the game's emotional connection with players and continues to fuel its organic growth. We are already laying the groundwork for Free Fire's next phase, including preparation for its landmark 10th anniversary in 2027. Beyond Free Fire, EA Sports FC Mobile has delivered a strong early performance. Since its launch in October, it has become the most downloaded mobile game in Vietnam, according to Sensor Tower. We hosted FC Pro Festival 2025, a flagship esports and fan event in Ho Chi Minh City. The event was incredibly popular, reaching 18 million viewers online. To build excitement for the event, we brought in global football icons Luis Figo and Ricardo Caca to play with local footballers and influencers in a friendly match. Our success with this game demonstrates our ability to localize the global franchise through deep engagement with fan communities on the ground. We look forward to further strengthening our long-standing partnership with EA. We are very proud of Garena's sustained success across three parts, our long-standing published game, and the exciting new titles we have added to our portfolio. Garena is entering 2026 with strong momentum. We will keep delivering high-quality content and experiences to our global gaming community. As we enter 2026, we see exciting opportunities across our businesses and markets. Our excellent performance in 2025 has strengthened our conviction in our operational strategy. We will double down on executing these strategies with excellence in the year ahead. As always, we greatly appreciate your trust and support along the way. We look forward to delivering another strong year. With that, I invite Tony to discuss our financials.