Earnings Call Transcript - SE Q4 2025

Operator, Operator

Good morning and good evening to everyone, and welcome to the Sea Limited Fourth Quarter and Full Year 2025 Results Conference Call. I would like to inform all participants that this call is being recorded. Thank you. Now, I would like to invite Mr. Elson Choi to start the conference. Please proceed, sir.

Elson Choi, Investor Relations

Hello, everyone, and welcome to Sea's 2025 Fourth Quarter and Full Year Earnings Conference Call. I'm Elson 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 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 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 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.

Forrest Li, CEO

Hello, everyone, and thank you for joining today's call. 2025 has been a great year for Sea. We generated a record $23 billion in revenue, representing 36% year-on-year growth, an acceleration from 2024. At the same time, we improved our bottom line profit. Our full year net income reached $1.6 billion and adjusted EBITDA reached $3.4 billion, representing a 260% and a 75% year-on-year increase, respectively. All our businesses scaled well in 2025, exceeding our initial growth expectations. This broad-based 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 GMV. Monee 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 profit. 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 improvement. We generated a full year adjusted EBITDA of over $880 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 set 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 GMV 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 15% 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 moats that can further differentiate Shopee from its peers. First, logistics. Our logistics capabilities have become an increasingly important differentiator for Shopee. SPX Express now processes on average over 30 million parcels 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 markets 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 scaled 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 uplift by members after they join. In Indonesia, VIP members have been spending about 30% to 40% more than before joining. In some markets, VIP members already contributed more than 15% of total GMV in the fourth 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 conversion. 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 differentiated logistics have made us the clear e-commerce leader there. In particular, our large-scale 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 has 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 moat that is difficult for any peers 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 gains while remaining profitable. Mass market penetration improved, thanks to our ability to offer free shipping at the lowest cost structure in the market. Upmarket penetration also improved as our fast, reliable delivery made us more attractive in higher-value categories. In the fourth quarter, buyer waiting time improved by around 1.5 days year-on-year. Over the same period, we onboarded more than 300 new brands to Shopping Mall, and Shopping Mall GMV 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 Monee. We are very proud of the progress Monee has made in both growth and profit while maintaining a healthy risk profile. In 2025, Monee's annual revenue reached $3.8 billion, representing 60% year-on-year growth. Adjusted EBITDA exceeded $1 billion, representing 43% year-on-year growth. Credit business remains our primary driver of growth and profit. In 2025, we grew 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 markets for both SPayLater Pay and personal cash loans. New user cohorts scaled well with generally positive unit 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 a longer credit track record. We offered access to higher loan limits and longer tenure. To target more prime users, we introduced differentiated 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, letting us penetrate a much larger addressable market. Off-Shopee SPayLater has evolved from a nascent offering into a meaningful contributor to our overall loan portfolio. By the end of 2025, off-Shopee SPayLater loans grew over 300% year-on-year, accounting for over 15% of our total SPayLater portfolio. In Malaysia, close to 30% of SPayLater usage was already off-Shopee. Our success with off-Shopee 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 SPayLater into higher ticket offline categories such as electronics and 2-wheelers. We are encouraged by the early traction we are seeing with off-Shopee SPayLater and see substantial headroom to expand its use cases. Our credit business expansion in 2025 was made possible by improvement 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 limits as needed. Enhancing our models precision and performance enabled us to scale rapidly in 2025, 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 Monee's growth potential. Many of our initiatives are still in early stages 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 Monee 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 this vintage to still be growing so fast. Free Fire has now achieved two consecutive years of bookings 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 Fire's 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 pack year. In Q1, we launched NARUTO SHIPPUDEN Chapter 1. In Q2, we released our eighth anniversary map, Solara. And in Q3, we launched the Squid Game collaboration and NARUTO SHIPPUDEN 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 SHIPPUDEN project in 2023 when the global game industry was struggling with the post-pandemic headwinds. 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 grassroots 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 Kaka 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 Free Fire, our long-standing published games, 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 strategies. 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.

Tony Hou, CFO

Thank you, Forrest, and thanks to everyone for joining the call. For Sea overall, total GAAP revenue increased 38% year-on-year to $6.9 billion in the fourth quarter of 2025 and 36% year-on-year to $22.9 billion for the full year of 2025. This was primarily driven by growth in Shopee and Monee. Our total adjusted EBITDA was up by 33% year-on-year to $787 million in the fourth quarter of 2025 and up by 75% year-on-year to $3.4 billion for the full year of 2025. On Shopee, gross orders increased 30% year-on-year to $4 billion in the fourth quarter of 2025 and GMV increased by 29% year-on-year to $36.7 billion in the fourth quarter of 2025. Our fourth quarter GAAP revenue of $5 billion included GAAP marketplace revenue of $4.3 billion, up 36% year-on-year, and GAAP product revenue of $0.6 billion. Within GAAP marketplace revenue, core marketplace revenue, mainly consisting of transactional fees and advertising revenues was $3.6 billion, up 50% year-on-year. Value-added services revenue, mainly consisting of revenues related to logistics services was $0.7 billion. For the full year of 2025, GAAP revenue of $17 billion included GAAP marketplace revenue of $15 billion, up 34% year-on-year and GAAP product revenue of $2 billion. Shopee adjusted EBITDA was up by 33% year-on-year to $202 million in the fourth quarter of 2025. Full year adjusted EBITDA was $881 million for 2025 compared to a full year adjusted EBITDA of $156 million for 2024. Monee GAAP revenue was up by 54% year-on-year to $1.1 billion in the fourth quarter and up by 60% year-on-year to $3.8 billion for the full year of 2025. Adjusted EBITDA was up by 25% year-on-year to $263 million in the fourth quarter of 2025 and up by 43% year-on-year to $1 billion for the full year of 2025. As of the end of December, our consumer and SME loans principal outstanding reached $9.2 billion, up 80% year-on-year. This consists of $8.2 billion on book and $1 billion of booked loans principal outstanding. Nonperforming 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 24% year-on-year to $672 million in the fourth quarter and grew 37% year-on-year to $2.9 billion for the full year of 2025. GAAP revenue was up by 35% year-on-year to $701 million in the fourth quarter and up by 26% year-on-year to $2.4 billion for the full year of 2025. The growth was primarily due to the increase in our active user base as well as the deepened paying user penetration. Garena adjusted EBITDA was up by 26% year-on-year to $364 million in the fourth quarter and up by 38% year-on-year to $1.7 billion for the full year of 2025. Returning to our consolidated numbers. We recognized a net nonoperating income of $62 million in the fourth quarter of 2025 compared to a net nonoperating income of $28 million in the fourth quarter of 2024. For the full year of 2025, nonoperating income was $296 million compared to nonoperating income of $117 million for the full year of 2024. We had a net income tax expense of $210 million for the fourth quarter of 2025 compared to net income tax expense of $89 million in the fourth quarter of 2024. For the full year, our net income tax expense was $651 million compared to $321 million for the full year of 2024. As a result, net income was up by 73% year-on-year to $411 million in the fourth quarter of 2025. For the full year, net income was $1.6 billion as compared to net income of $448 million for the full year of 2024.

Elson Choi, Investor Relations

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

Operator, Operator

Your first question comes from the line of Pang Vitt from Goldman Sachs.

Pang Vittayaamnuaykoon, Analyst

Two questions from me. The first question is on Shopee. Can you provide more details on how you plan to achieve the target growth in 2026 while maintaining at least flat year-on-year absolute EBITDA? What assumptions in specific are you making regarding the competitive landscape? And given the trajectory of lower year-on-year margin potentially, what are the key investment areas? And how long should we expect the investment to last? That's question number one. Question number two, this will be on Monee. The loan book grew very strongly, closing the year more than 80% year-on-year. Can you elaborate on the key drivers of this strong performance? Was this primarily driven by new products, new market pricing, or stronger demand? Or how should we think particularly about growth in this year, 2026? Likewise, how should we think about the EBITDA margin trend going forward as well for the segment?

Tony Hou, CFO

Starting with Shopee, as mentioned by Forrest, we are focusing on several growth investments. In South Asia, we have two main objectives: increasing the share of wallet among core users and expanding our buyer base. To enhance user experience, we are improving logistics, such as instant and same-day delivery, which will lead to faster and more reliable service throughout the year. Additionally, we're building a larger fulfillment network to reduce delivery times, especially in areas outside capital regions. We aim to increase the wallet share of our VIP programs by providing better services on our platforms and collaborating with various external partners like OpenAI and local businesses to offer more benefits to our VIP users. We've also initiated pricing strategies to remain competitive and invested in content offerings, which have seen over 20% growth, including partnerships with platforms like YouTube and Facebook. In terms of increasing the buyer base, we've improved our gross unit economics through higher take rates from advertising and commission efforts while reducing logistics and payment costs. This enables us to serve more users profitably and convert them to our platforms, thereby enhancing our monthly active users. In Brazil, our logistics network operates efficiently compared to competitors, allowing us to maintain profitability with lower basket sizes. We plan to focus on three key areas: improving delivery speeds, expanding our fulfillment network, and ensuring the right sellers for specific categories, which will help us reach high-end customers. In Taiwan, we have established a unique delivery network and are now focusing on building a fulfillment aspect to create an integrated operation that reduces costs and improves delivery speed compared to competitors. Overall, we understand that these investments have cycles, particularly with the fulfillment network, and while there will be periods of ramp-up, we are confident in the long-term benefits. For example, our Q4 EBITDA margins have improved year-over-year, and we grew faster than initially projected for our top line. Looking ahead to 2026, we aim for continued growth in profitability and believe the market potential is significant. We remain confident in our ability to drive business growth through strategies within our control. Regarding the competitive landscape, it appears stable across our markets, with no significant changes observed. On our Monee business, we are seeing growth driven by different phases of business rollouts across markets. For instance, Indonesia was our initial market for financial services, followed by expansions in Thailand and Malaysia. In Brazil, where we launched products later, we are also experiencing high growth. Key drivers include SPayLater, our consumption loans, and subsequent offerings like cash loans. We see room for growth in our on-Shopee offerings and have tailored products for higher income segments with varying terms and rates. Our off-platform lending is gaining traction, particularly in Malaysia, where it constitutes a substantial portion of our loan portfolio. Margin fluctuations may occur based on country and product mixes, but risk management remains stable, with close monitoring of our non-performing loans. We're adopting advanced AI technologies to refine our risk models, allowing us to responsibly grow our loan book and serve previously untapped users effectively.

Operator, Operator

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

Piyush Choudhary, Analyst

First question is on Shopee. You have elaborated on various investment buckets. Could you also elaborate on how long these investment cycles could last in the context of how we should think about margins for 2027? And what are the likely deliverables from your partnership with Google to deepen AI-powered solutions for Shopee? And second question is on Garena. Could you talk about the outlook for the booking growth in 2026, pipeline for any IP collaborations which you can share?

Tony Hou, CFO

For the investment cycle, each initiative and market has its own unique investment cycle, making it hard to generalize from a top-down perspective. However, as mentioned earlier, we aim for the total probability in absolute numbers for 2026 to exceed that of 2025. Regarding profitability levels, I believe that by the end of the year, they will not dip below Q4 2025 and should show growth over the years. While we are not providing guidance for FY 2027 yet, I think achieving a 2% to 3% EBITDA margin is realistic based on our current insights. It ultimately depends on how we balance our margin goals with the growth opportunities available to us, and so far, we have no concerns about that. Concerning our partnership with Google, we are still developing the product, and I expect it won't take long before we can share it. Our collaboration with Google has been ongoing for many years, covering areas like Google Shopping, Google Ads, and YouTube, and this is simply an extension of that partnership.

Forrest Li, CEO

Regarding the outlook for Garena, we still anticipate double-digit growth for 2026. We are very excited about the success of our collaboration with IPs such as NARUTO and plan to extend this collaboration, which should launch around Q3 according to our current timeline. Additionally, we are actively pursuing other potential IP partnerships. This year is significant for the FIFA World Cup, and we recognize the strong overlap between the global football community and our gamer community. Therefore, we will be running many football-related promotions during the World Cup.

Operator, Operator

Next question comes from the line of Alicia Yap of Citi.

Alicia Yap, Analyst

Two questions here. Number one, could management provide some insights into the retentions and also the renewal rates for your VIP member subscription program? Furthermore, if you can give us how does the VIP members influence the different purchasing frequencies and also the preferred product category? Are there any differences between the behavior in customer profiles across the different countries? And how does this affect your strategy? And then the second question is on AI. So I wanted to ask, given that can management share with us on your investment priority, how are you prioritizing your investment between e-commerce, Fintech, and AI amid the latest competitive environment, and also the importance of the AI initiative? If management can share how you are leveraging your synergies between your three core businesses to strengthen your competitive advantage and enhance your ecosystem value?

Tony Hou, CFO

The Shopee VIP program has experienced significant growth in recent months, with some countries seeing it account for over 15% of our total GMV from VIP members. We anticipate this figure could double or triple in the future. Retention rates have improved notably; for instance, in Indonesia, our renewal rate has increased from 40% to 70% due to better payment processes developed through collaboration with Monee. VIP members tend to purchase more frequently and spend 30% to 40% more than the average user. We customize our VIP offerings based on local market preferences, which is a key differentiator. Regarding our investment strategy, Monee is performing very well financially, and new user growth comes with a positive customer lifetime value. Each new initiative is yielding a positive return on investment. In e-commerce, particularly in AI, we're focusing on investments that will enhance our capabilities and improve returns. Initiatives like AI-driven search recommendations and advertising systems have led to increased ad revenues. We've also introduced a multimodal search feature, allowing users to search using images and descriptions, similar to advanced AI systems. We are investing in AI tools to support our sellers, such as an AI chatbot that can be customized to reduce manpower needs. Additionally, we provide sellers with tools to create product videos and descriptions, which have proved beneficial for our ecosystem. There's clear synergy between our e-commerce and financial services, with financial services using Shopee data to assess user risk. We see substantial opportunities to expand Monee's offerings within the Shopee user base, not just for credit, but also for banking, insurance, and payments. Our collaboration with gaming businesses further enhances payment processes and user acquisition strategies, highlighting the interconnectedness of our various operations.

Operator, Operator

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

Divya Kothiyal, Analyst

My first question is on the Brazil space. So could you comment if you expect GMV growth in Brazil to accelerate this year given all that we are doing on the fulfillment capability? And what kind of impact would that have on our AOVs? Are the AOVs still significantly lower or one-third of the market leader? And what kind of gap do you expect to be able to cover with this fulfillment uplift? Could you also comment on what the penetration levels for Shopee PayLater in Brazil are? And should that also see a significant uplift this year? So that's my first question on Brazil. And my second question is on the content ecosystem that you alluded to. Could you comment on where do you see the e-commerce content ecosystem plateauing in ASEAN specifically? And what are the unit economics now versus shelf e-commerce for us? And how is our market share trending in this?

Tony Hou, CFO

In Brazil, we expect a strong growth rate in 2025 and anticipate that this growth will carry on into 2026. While we don't provide specific guidance for individual countries regarding growth rates, we generally foresee positive growth in the market. We believe we will surpass the overall market growth in Brazil. Regarding Average Order Value (AOV), we expect it to increase over time. Although a gap between us and our competitors will remain, we are confident that we will gradually reduce this gap. As for the penetration of SPayLater in Brazil, it is still at a very early stage. We have seen significant growth, but the penetration levels are comparable to what we observed in our early markets, as we began operations in Brazil much later than in other countries. We expect the trend of SPayLater’s penetration in Brazil to continue in 2026, resembling what we've seen in other Asian markets. Concerning the content ecosystem, we do not believe it has reached a plateau on our platform. I cannot comment on other platforms, but we see potential for further growth in the upcoming quarters. The unit economics have been improving over the years, with some minor fluctuations month to month, but the overall trend is positive. We anticipate that the gap between the content ecosystem and non-content unit economics will diminish over time, leading to less difference in the future.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back to Mr. Elson Choi for any closing remarks.

Elson Choi, Investor Relations

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

Operator, Operator

Thank you for attending today's call. You may now disconnect. Goodbye.