Good morning, and good evening to all, and welcome to the Sea Limited Fourth Quarter and Full Year 2023 Results Conference Call. All lines have been muted to avoid any background noise. After the speakers’ comments, there will be a question-and-answer session. I want to inform all participants that this call is being recorded. Thank you. I’d now like to welcome Miss Minju Song to begin the conference. Please go ahead.

Thank you, and hello, everyone, and welcome to Sea’s 2023 fourth quarter and full year earnings conference call. I’m Minju Song, from Sea’s Chief Corporate Officer’s Office. Before we continue, I would like to remind you that 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 reconciliation 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, Chief Financial Officer, Tony Hou, and Chief Corporate Officer, Yanjun Wang. Our management will share strategy and business updates, operating highlights, and financial performance for the fourth quarter and full year of 2023. 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. I am happy to share that we have achieved our first full year of annual profit since our IPO. In 2023, we achieved profitability, strengthened our market leadership in our e-commerce business, grew our digital financial services business, and stabilized the performance of our digital entertainment business. We have emerged with a much stronger balance sheet with our cash position increasing to $8.5 billion as of the end of 2023, demonstrating the discipline and prudence we have applied in our investments over the past year. Looking ahead, we expect 2024 to be another profitable year. Let me recap our performance at the individual business level in 2023 and share the key strategic focus for each business in 2024. Starting with Shopee. First, Shopee’s investments since July last year have paid off. I am pleased to report that, despite an environment of intensified competition in Southeast Asia, we believe we had a meaningful gain in market share between the start and the end of 2023. We are happy to have solidified Shopee’s market share in the region, and we intend to maintain our market share in 2024. We expect Shopee’s full year GMV growth to be in the high-teens range and its adjusted EBITDA to turn positive in the second half of this year. To retain and strengthen our competitive advantage, Shopee’s three operational priorities in 2024 are improving service quality for buyers, enhancing the price competitiveness of our product listings, and strengthening our content ecosystem. On service quality for buyers, we will do more to optimize key aspects of the buyers’ experience such as delivery speed and consistency, return and refund processes, and customer service. These are areas we already excel in, and will continue to improve on. On keeping our product listings price competitive, we will continue to work more with sellers who have better upstream supply chain access, and provide more fulfillment, marketing, and shop management services to our sellers. On content, we will deepen and broaden engagement with creators, sellers and partners across the content ecosystem and better integrate live streaming and short-form video into the shopping experience. Let me now highlight some of Shopee’s achievements in the fourth quarter. During the quarter, Shopee delivered strong results with both top-line growth acceleration and bottom-line improvement. Shopee’s GMV and orders grew 29% and 46% year-on-year and 15% and 13% quarter-on-quarter, respectively, resulting in solid market share gains across our markets. Meanwhile, Shopee’s adjusted EBITDA loss improved by 35% sequentially. Adjusted EBITDA loss per order improved by 43% quarter-on-quarter. On logistics, we opened five new sorting centers and 385 new first and last mile hubs across our Asia markets and extended our logistics network further to improve our coverage. Through more automation, tighter planning, better routing and other operational improvements, our platform logistics cost per order in Asia decreased by 12% year-on-year in the fourth quarter. This was partly driven by our own logistics network cost per order decreasing by 20% from the same period last year. We are also seeing good progress made on delivery speed. In Indonesia, in December 2023, more than half of the orders from buyers in Java were delivered within two days. We will continue to improve logistics service quality in terms of both speed and consistency. At the same time, we are also expanding premium services such as next-day delivery and introducing new features. For example, we commenced return-on-spot services in Indonesia and Vietnam. This initiative has resulted in higher trust and increased purchase frequency from our buyers, particularly those who are new to Shopee. Our e-commerce logistics network is now one of the most extensive and efficient in our markets, and a strong competitive moat for us. We have rapidly ramped up live streaming e-commerce, which accounted for around 15% of our physical order volume in Southeast Asia last December. With the scale and leadership achieved, unit economics of the segment also improved meaningfully quarter-on-quarter. Shopee Brazil continued its strong performance in the fourth quarter. Its contribution margin loss per order improved by nearly 90% year-on-year. This was driven by improvements in both user monetization and cost efficiency. We believe we have achieved cost leadership in logistics through scale and operational efficiencies, which have been and will be key to our success in the market. Turning to our Digital Financial Services segment. SeaMoney has delivered a strong year in 2023, primarily attributed to our consumer and SME credit business. Our journey to build the credit business dates back to 2019. We initially started by introducing SPayLater consumption loans in response to Shopee buyers’ strong need for such services. Subsequently, we extended our offerings to cash loan services to both buyers and sellers on Shopee. This underscores our user-centric approach, and the unique advantage offered by the Shopee ecosystem for SeaMoney to quickly achieve critical scale and profitability. 2023 was the first year of positive profit for SeaMoney, with full year adjusted EBITDA of $550 million. As of December 31, 2023, our consumer and SME loans principal outstanding was $3.1 billion, a 27% increase year-on-year. $2.5 billion of that was on the book. Consumer and SME loans active users for the fourth quarter, defined as credit users with loans outstanding by the end of the quarter, was over 16 million, a 28% increase year-on-year. In 2024, we will continue to invest in user acquisition for our credit business, both on and off the Shopee platform as we see significant upside in our markets. As we scale, we will remain prudent on risk management. In addition to our credit business, SeaMoney is also growing our digital banking and insurance services to capture future business opportunities in the digital financial services segment. We expect SeaMoney to continue its robust growth in 2024. In digital entertainment, Garena has done well in enhancing and optimizing game experiences for its players. For instance, we have continuously introduced fresh and highly localized content to Free Fire. In the fourth quarter, we collaborated with Lamborghini to allow players to drive their cars in-game. We also recently announced our collaboration with JKT48, an idol group from Jakarta, as our Indonesian brand ambassador. These partnerships excite and delight our players and enable us to nurture our local communities. I am happy to share that we are seeing improved user acquisition and retention trends for Free Fire. In 2023, Free Fire was the most downloaded mobile game globally according to Sensor Tower. We are pleased that these positive trends are continuing into 2024. In February, Free Fire achieved more than 100 million peak daily active users. It remains one of the largest mobile games in the world. With this positive momentum, we currently expect Free Fire to grow double-digits year-on-year for both user base and bookings in 2024. To conclude, we are pleased to see positive trends in both growth and profitability for all three of our businesses. We will continue to invest for the future with discipline and focus. I would also like to take this opportunity to thank our employees, users, investors, and partners for your continued support throughout this journey. With that, I will invite Tony to discuss our financials.

Thank you, Forrest, and thanks to everyone for joining the call. For Sea overall, total GAAP revenue increased 5% year-on-year to $3.6 billion in the fourth quarter, and 5% year-on-year to $13.1 billion for the full year of 2023. This was primarily driven by the improved monetization in our e-commerce and digital financial services businesses. Our total adjusted EBITDA was $127 million in the fourth quarter of 2023, compared to an adjusted EBITDA of $496 million in the fourth quarter of 2022. For the full year of 2023, our total adjusted EBITDA was $1.2 billion, compared to an adjusted EBITDA loss of $878 million for the full year of 2022. On e-commerce, our fourth-quarter GAAP revenue of $2.6 billion included GAAP marketplace revenue of $2.3 billion, up 23% year-on-year, and GAAP product revenue of $0.3 billion. Within GAAP marketplace revenue, core marketplace revenue, mainly consisting of transaction-based fees and advertising revenues was $1.6 billion, up 41% year-on-year as a result of platform growth and improved monetization. Value-added services revenue, mainly consisting of revenues related to logistics services, was $0.7 billion, down 5% year-on-year as a result of higher revenue net-off against shipping subsidies. For the full year of 2023, GAAP revenue of $9.0 billion included GAAP marketplace revenue of $7.9 billion, up 27% year-on-year, and GAAP product revenue of $1.1 billion. E-commerce adjusted EBITDA loss was $225 million in the fourth quarter of 2023, compared to an adjusted EBITDA of $196 million in the fourth quarter of 2022. 2023 full year adjusted EBITDA loss improved by 87% year-on-year to $214 million. For our Asia markets, we had an adjusted EBITDA loss of $193 million during the quarter, compared to an adjusted EBITDA of $320 million in the fourth quarter of 2022. In our other markets, the adjusted EBITDA loss was $32 million, narrowing meaningfully from last year, when losses were $124 million. Contribution margin loss per order in Brazil improved by nearly 90% year-on-year to reach negative $0.05. Digital financial services GAAP revenue was up by 24% year-on-year to $472 million in the fourth quarter and up by 44% year-on-year to $1.8 billion for the full year of 2023. Adjusted EBITDA was up by 96% year-on-year to $148 million in the fourth quarter of 2023 and up by 341% year-on-year to $550 million for the full year of 2023. Digital entertainment bookings were $456 million in the fourth quarter and $1.8 billion for the full year of 2023. GAAP revenue was $511 million in the fourth quarter and $2.2 billion for the full year of 2023. Adjusted EBITDA was $217 million in the fourth quarter and $921 million for the full year of 2023. Returning to our consolidated numbers, we recognized a net non-operating income of $32 million in the fourth quarter of 2023, compared to a net non-operating income of $35 million in the fourth quarter of 2022. For the full year, our non-operating income was $208 million, compared to a loss of $13 million for the full year of 2022. The improvement was mainly due to higher interest income for the full year of 2023, as compared to the full year of 2022. We had a net income tax expense of $77 million in the fourth quarter of 2023, compared to net income tax credit of $43 million in the fourth quarter of 2022. For the full year, our net income tax expense was $263 million, compared to $168 million for the full year of 2022. As a result, net loss was $112 million in the fourth quarter of 2023, as compared to net income of $423 million in the fourth quarter of 2022. For the full year, net income was $163 million, as compared to net loss of $1.7 billion for the full year of 2022. At the end of the fourth quarter of 2023, cash, cash equivalents, short-term and other treasury investments were $8.5 billion, representing a net increase of $566 million from the previous quarter. The increase includes proceeds of approximately $370 million from lower securities purchased under agreements to resell relating to our banking operations. From the first quarter of 2024 onwards, we will include this as part of other treasury investments as these are highly liquid marketable securities. With that, let me turn the call to Minju.

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

We will now begin the question-and-answer session. Your first question comes from Pang Vitt from Goldman Sachs. Your line is open.

Hi. Good morning, management team. Thank you very much for the opportunities, and congratulations for the solid set of results. Two questions from me. Firstly, on Shopee. Can you please provide a little bit more color on the guidance you gave out for 2024? What is the assumption behind in terms of competitive landscape and market share, especially in Indonesia? When it comes to high-teen growth, how do you plan to achieve this? And on the margin size, what gave you the confidence that we can go back to breakeven by the second half of this year? And what kind of EBITDA margin we can expect as well for Shopee to achieve in the near-term? That's question number one. Question number two related to SeaMoney. Can you provide some color on why EBITDA was weaker quarter-on-quarter? We noticed that you spend more on marketing this quarter. Should we expect this to be the new run rate? What kind of growth outlook can we expect for 2024 and can we still expect to see EBITDA growth here? Thank you.

Let me address the first question first. I think in terms of Shopee, we do believe that we are able to grow high-teens for the full year 2024 as we shared in the opening. Particularly for Indonesia, we do see Indonesia is a good market for us in Q4. And we believe that the trend, likely, the growth trend, will continue, similar to Q1 and in line with the other markets in the following quarters. If you look at the overall competitive landscape, we have seen a more stable competitive landscape in the past quarters. Again, we cannot control our competitors, but if you look at the past, we have been competing with a similar set of competitors for quite a while. Even with the most intensive competition during the past few quarters, we were able to gain market share while improving our unit economics. This has been contributed by a few factors. Number one is we are a clear market leader in the market. This translates to the economic scale benefitting us with better monetization capabilities and better cost efficiencies. If you look at the scale, we are in a much better position now compared to a year ago. We do believe that we have gained market share in Indonesia if you compare the beginning of the year or last year and now. The second factor is that we have a strong local leadership and operating team to execute on what we set out to do and also make the right judgments based on what we see in the market. I spend most of my time in Indonesia, as compared to all countries. Many of our management team, including myself, learned to speak Bahasa Indonesia over time to understand the market better. Number three is we have built infrastructure for the market over time. For example, our logistics coverage in Indonesia is larger than before. Our cost has reduced significantly over the past few quarters for shipping one order. Also, the quality has been improved. Most importantly, by having our own logistics in the market, we are enabling ourselves to offer differentiated services. If you follow the market closely, we have recently started the return-on-spot services for users, which received positive feedback, not only in Indonesia but also in Vietnam. We also started differentiated return services that allow users to ask for returns anytime during the shipping process. We can intercept orders even during shipping, which is not offered by any other competitor in the market so far. Additionally, we have our strong integration with our digital financial services business. This not only enables us to reduce transaction costs, for example, on the payment side but also allows us to tap into the cyclical potential by offering SPayLater to a broader segment that has not been seen in the market before. All of this helps us not only to reduce costs but also increase conversions in the market. We've been doing all of this in the past few quarters, and we do believe that across all dimensions, we're able to do better over this year. So even with whatever competitive landscape we are facing, we're able to outperform our competitors and be more efficient. That’s how we see the market so far and how this is going to evolve in the future. In terms of the margins, as we shared in the opening, we believe that overall, for Shopee, we will be able to breakeven in the second half of the year, while maintaining our current market share, including in Indonesia. As I mentioned earlier, we gained market shares compared to a year ago, and we are going to execute even better this year, giving the foundations we built last year. On top of what I mentioned just now, we are doing a couple of other things over the year. One is the price comparison; we believe we are the most price-competitive platform in the market, as you can benchmark externally. We are going to dig deeper into this further over the year, particularly for Indonesia, which is a key market for us. We will also drive service quality, which I mentioned earlier, not only in logistics but also in post-procurement processes like returns and customer service quality. All this will essentially put us in an even better position in the future. Not only maintaining our growth trajectories but also improving our EBITDA. Regarding the live stream we talked about in the past earnings call, we have seen quite fast growth in live stream this quarter as well. Across the region, we have about 15% of our orders coming from live stream, with a larger percentage coming from Indonesia. It is the first country we started live stream services. In some markets, we believe that we are probably the largest live stream platform. Not only in scale but while we are growing, we have significantly reduced the economics in the past few months and will continue to do so in Q1. This enables us to compete effectively with our competitors compared to a year ago. A year ago, we probably did not have this ecosystem; we had to invest to build this ecosystem. We now have a very different status compared to that situation. Now, turning to your second question regarding SeaMoney’s EBITDA for Q4. We should put this into perspective on the overall SeaMoney businesses. SeaMoney has seen its first positive results in 2023, and the trajectory has been doing well if you look at Q1, Q2, Q3, and now Q4. We have seen healthy margins in our SeaMoney businesses. In Q4, we leveraged our facilities and spent more to acquire new users on the platform, which will bring better possibilities in the long term. We measure our user acquisition costs very prudently. Every user acquired will bring positive profit over time. Thank you.

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

Hi. Thank you for the opportunity. Actually, I had a couple of questions. First, I just wanted to understand a little bit about competition in the e-commerce space, particularly in Indonesia. I suppose Q4 numbers might have benefited from the fact that TikTok was not in the market for a large part of the quarter. So since the relaunch of TikTok, and as we probably come close to the end of the trial period, have you seen the intensity from the combined TikTok and Tokopedia entity evolve in a different direction over the course of the quarter? So that's my question number one. And second question, I guess, given the strong cash balance and your expectation of positive profit for the full year for the group. How do we think about use and allocation of this cash going forward, potentially for buybacks and other use cases? Thank you.

For the first question, I think I shared quite a bit in the last answer as well. Generally, we compete with both competitors you mentioned for quite a long period of time. And you are right that it did benefit us in some extent in Q4, that TikTok wasn't operating for part of the quarter. However, I don't think that's the only reason for our performance in Q4; we have seen similar growth trends continue in Q1 as well, even as the landscape has changed. A typical e-commerce transaction, as we can see globally, is not necessarily a straightforward situation. The most important thing for us is to focus on what we are great at. As I mentioned earlier, our scale advantage, our local leadership and operating teams, our infrastructure built over time, and our integration with digital financial services all contribute to our competitive advantage in the past few quarters and will continue to in the coming quarters. As we shared, we expect good growth for Shopee this coming year in 2024 and in the coming quarters.

And regarding our cash balance, we think for a company of our size, it's prudent to maintain a strong cash balance. We are also very disciplined and focused in deploying our capital to capture future opportunities to maximize our long-term shareholder return. We do not rule out any options for using our cash balance in this regard.

Your next question comes from a line of Alicia from Citigroup. Your line is open.

Hi. Good evening, management. Thanks for taking my questions. Congrats on the solid result. I have two questions. First is that obviously with Ramadan coming, do you anticipate your competitors in Indonesia to further step up the spending? And in the event that your competitors in Indonesia are catching up on the market share, would you step up your spending that might actually prevent your EBITDA from regaining profitability in the second half of this year? Second question is, what are the main reasons for your confidence in growing Free Fire in double digits in bookings and users this year? What have you done or plan to do to regain your user traction and monetization? Thank you.

For the first question, Ramadan has started already in Indonesia. We are comfortable with our investments so far. Market share is dynamic, and it’s critical for us to maintain flexible leadership compared to our competitors to sustain our scale advantage. We are able to build up our long-term moat compared to competitors and compete efficiently in the market. As I shared earlier, even with the most intensive competition in the past few quarters, we have been able to reduce our costs while increasing market share. This indicates the moats we have over time, and we believe that we'll continue this in the future.

Regarding Free Fire, as we shared earlier, we're encouraged by the positive trends we have seen so far this year, in terms of active user base and monetization across our various markets. As a result, our current expectation is for the game to achieve double-digit year-on-year growth for both user base and bookings. As a self-developed game, Free Fire also enjoys better margins for us. In terms of what we have done and will do in the future, I think our focus has been quite consistent: it's on building a better user experience such as easy access to users, file download size, and data requirements, introducing more engaging content, and strengthening esports communities to develop the game into a strong evergreen franchise.

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

Yeah. Hi. Congratulations to the management team on a great set of results. First question is on Shopee. If I analyze your fourth-quarter GMV, that itself is implying around 18% year-on-year growth in 2024 GMV. So why does the company expect to grow only high-teens and not more than that? What is driving conservative guidance? And also for Shopee’s EBITDA, as you expect to turn profitable in the second half, would it mean that on a full-year basis, adjusted losses for Shopee would narrow year-on-year in ‘24? Secondly, on gaming, what led to fourth-quarter quarterly pay user decline despite strong seasonality? Does your outlook for Free Fire also imply console Garena will grow double-digits, and what's the margin outlook for Garena's business? Thank you.

In terms of the guidance we gave out, we believe that high-teens for the year is a reasonable estimate based on both the market growth rate and also the EBITDA goal we set to achieve. The most important thing is, with this goal, we're able to sustain our market leadership while building up competitive moats that we have built over the past years. Importantly, we are not chasing growth for growth's sake; we are trying to grow efficiently and prudently with long-term profitability in mind. Regarding the second question about whether full-year losses will narrow, we haven't given guidance on that, so we won't comment too much on it. Generally, our goal is to have Shopee breakeven in the second half of the year.

Regarding Free Fire, I think that quarter-on-quarter user fluctuation can result from many factors including seasonality and game launches within Garena or esports events. However, for Free Fire overall, we have shared earlier that we are very positive based on the trends we have seen so far. Therefore, we want to give the market some indication of what we also have seen. Regarding the rest of our portfolio, which comprises third-party games published by us, we will continue to work closely with our partners to bring more content to our game communities.

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

Hi, good evening. Thanks, management for taking my questions and congratulations on a strong set of results. My question is, first, on Shopee, given that we are looking for adjusted EBITDA to breakeven in the second half and we have built up our competitive moats. I just want to ask about the take rate trend for Shopee in 2024. How should we think about the advertising and commission trend? That's number one. And then number two on the fintech side, given the strong growth momentum that we are seeing, I just want to get some color in respect to our user acquisition strategies. What kind of channel are we getting new users other than the organic one? And how are we thinking about long-performing loans expectations as a percentage of our loan book? How is our technology or our data insights making it at a low level? Thank you.

On the first question regarding the take rate trend, we have been adjusting our commission rates continuously over the past few quarters. We are reviewing it every month to determine what makes sense for our user base. Overall, our goal is to ensure there's a healthy ecosystem that allows our sellers to operate with reasonable margins while supporting overall marketplace growth. We will likely see some adjustments on the commissions over the year, with specific changes for targeted categories and specific countries. Additionally, we believe there is substantial potential on the advertising side for take rates; compared to many global peers, we still have ample room to grow there. We have conducted multiple technical events in the past months that will be deployed and fine-tuned in the coming quarter to enable further growth in our advertising take rate. Regarding the second part on the SeaMoney user growth, the majority of our business is in the credit sector. We also have digital banking and insurance, but those are still in relatively early growth stages. We are working on a few tactics here. First, we aim to penetrate our Shopee ecosystem further with our Shopee PayLater offering. The penetration on our e-commerce platform still has room to grow—we started in Indonesia first and are expanding to other countries. Even in our earliest market, we still see potential to onboard more users. Secondly, there are users outside of our Shopee ecosystem that we can target for our digital finance platforms, which we just recently began exploring. The opportunities here are significant in a large country like Indonesia, where credit card penetration is low, allowing us to offer credit services to a broader mass market. This growth is supported by Shopee’s penetration in this segment. Thirdly, we can cross-sell additional financial products to our ShopeePay Later user base. We are able to efficiently credit-rate users through the data we gather from e-commerce transactions and build upon external data as well as performance data from users on our ShopeePay Later platform, which will enable us to offer many other credit products over time. For instance, we previously mentioned cash loans available to users, unlocking various use cases for credit usage. As we grow, the scale will likely help reduce the service costs, improving our overall economic model. In terms of non-performing loans, we have seen relative stability, as Tony shared in the opening remarks, due to our credit modeling team's expertise in utilizing data effectively.

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

Hi. Thank you for the opportunity. I have two questions. First question, if we could help get a bit more clarity on improving unit economics at live streaming. Can you give some color in terms of the difference between normal e-commerce and live streaming in terms of AOV, the margin perspective and also any thoughts on steady state EBITDA margin at live streaming? Second question, I also wanted to understand a bit more about Free Fire, specifically whether the expected launch in India is baked into the expectation of double-digit growth. Are there any specific markets driving your optimism regarding overall growth? Thank you.

In terms of unit economics for live streaming, it has improved cyclically in the past few months. Of course, at this point, comparing to the non-live streaming part, it has a lower economic performance simply because we just started, and it takes some investment to grow. However, we believe that over the long term, the profitability for live streaming won't differ significantly compared to what we see in other parts of our marketplace platform. Regarding the AOV, we began live streaming with a low average order value compared to the marketplace. However, as time progresses, it will convert, and now, in some markets, it is quite similar, with others showing slight variations. In some larger markets, we anticipate it will converge over time, and in smaller markets, we might see slight variations, though they won't be significant for our discussions. As for Free Fire, so far we have seen positive trends across different markets globally, and we currently do not have any material developments in India. We are still making changes to Free Fire to best accommodate our users' preferences locally, and we'll update the market when more material developments arise.

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

Thank you very much for taking my questions. My first question is about your growth trend in the near term. You have returned back to growth over 20% for the first time in the last year and a half. You changed your strategy a couple of times during that period. Usually, this kind of momentum doesn't change very quickly. Based on what you are seeing, could you talk about your near-term growth momentum right now in the first quarter? Should we expect similar growth to what you saw in Q4? My second question is about the mix between core marketplace and the VAS. I know you talked about how VAS has seen a decline due to shipping subsidies, but over the last few quarters, your core marketplace growth has been solid, while VAS growth has been relatively low and negative in Q4. Are there other reasons behind these significant differences in growth? If you added the subsidies back, would VAS growth reflect a similar trend to core marketplace growth? Thank you.

Regarding the near-term growth trends, we have indeed seen encouraging growth in Q1. You can probably see it from external data, although it is not very precise. However, we must account for the Ramadan season in Indonesia and the new year in several other markets. Hence, we maintain a conservative approach. Generally, we are content with what we observe in Q1 so far. Regarding the VAS versus core marketplace, I encourage you to monitor the core marketplace closely to measure our overall platform growth and monetization. The variance in VAS top-line growth is due to the accounting treatment that has a contra revenue effect caused by shipping subsidies. This impacts not only the bottom line but also the top line for that revenue segment, leading to the divergence in trends. Without those non-GAAP adjustments, the overall growth would align with platform growth.

Your next question comes from the line of Ranjan Sharma from JPMorgan, Singapore. Your line is open.

Hi. Good morning and thank you for the presentation. Two questions from my side. Firstly, for Chris on live streaming, is there any analysis being done on the impact of live streaming GMV as incentives are removed for buyers? The second question is for Forrest, if he's there. On Garena, still the discussion is around Free Fire, but are there any developments to move away from a single-title franchise to a more broader studio? Thank you.

For the live streams, yes, we do look at the impact of co-hosts on live streaming and are seeing good retention and repurchase rates. More importantly, we are seeing a high percentage of new users arriving via live streaming. This helps us reach segments that we might not have effectively targeted before, which aids in further marketplace growth over time. We are also observing that these new users are cross-purchasing from our long live stream platform as well, which are encouraging signs of improved unit economics in the past few months.

Regarding Garena, I want to clarify that Garena is not a single-franchise platform; we have multiple titles across different genres, including Battle Royale, MOBA, sports, casual, RPG, etc. The highly successful Free Fire franchise may overshadow other successful and enduring titles in our portfolio. Our global teams have robust operations and capabilities to build strong content pipelines, partnerships, and develop our global esports communities. Looking ahead, we remain committed to building our pipeline by expanding our portfolio and various types of content, incorporating more user-generated content, and deploying AI tools in building interactive experiences with our users. We are very excited about Garena's long-term prospects as a leading global game company.

Here our final question comes from the line of Elly Zhang from Macquarie. Your line is open.

Great. Thank you so much for taking my question. I just have kind of two questions on the e-commerce side. Just now, management, you talked about our price competitiveness. Just wondering how do we maintain this level of the supply chain sustainability and how do we see our merchants' general overlap compared to the other e-commerce apps in Indonesia? Also, in the slightly longer term, what is the end game for, I guess, overall e-commerce dynamics and how do we evaluate longer-term profitability level on the EBITDA side? Thank you.

Regarding price competitiveness, we are generally competitive in the market, as can be benchmarked from external numbers. Maintaining this level is essential, and sustainability can be achieved through several angles. Firstly, scale brings advantages; if the same seller sells 100 items, our platform, selling 10 on other platforms, provides better bargaining power in terms of pricing. Secondly, simplifying transactions for sellers allows them to be more successful on our platform. Identifying skills and right sellers through traffic allocation algorithms is also critical. It ensures that high-performance sellers with competitive pricing are rewarded with better traffic, enabling more sales at lower prices. This positive cycle benefits both buyers and sellers. Our long-term profitability outlook aligns with that seen in other major e-commerce platforms. The nature of retail margins in each market will vary slightly but overall, the dynamics and profitability levels should not differ much, and we expect that as the market leader, we'll likely achieve similar profitability levels as seen in other markets.

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

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