Good morning and good evening to all and welcome to the Sea Limited Third Quarter 2026 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's 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 the number one on your telephone keypad. If you would like to withdraw your question, press the star 1 again For operator assistance throughout the call, please press star 0 And finally, I would like to advise all participants that this call is being recorded Thank you I'd now like to welcome Mr. Elson Choi to begin the conference Please go ahead

Hello everyone and welcome to CEE's 2026 Third Quarter Earnings Conference Call. I'm Elson from CEE's Investor Relations Team. On this call, we may make forward-looking statements which are inherently subject to risk 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 gap disclosures. For a discussion of the use of non-gap financial measures and reconciliation with the closest gap measures, please refer to the section on non-gap financial measures in our press release. I have with me C's Chairman and Chief Executive Officer, Forrest Lee, President Chris Pong, and Chief Financial Officer Tony Ho. Our management will share strategy and business updates, operating highlights, and financial performance for the third 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.

Hello, everyone, and thank you for joining today's call. Our strong momentum from the first half of the year has continued into the third quarter. We achieved a new record high of $8.6 billion in revenue, up 43% year-on-year, and over $930 million in adjusted EBITDA, up 29% year-on-year. We are pleased with this solid performance and will continue to focus on executing our priorities with discipline. With that, let me take you through each business' performance. Starting with Shopee. Shopee delivered another strong quarter, again achieving new record highs in both top and bottom line metrics. GMB rose 23% and gross orders rose 26% year on year. Revenues reached new highs and adjusted EBITDA reached $269 million, making this our most profitable quarter ever. The acceleration in new user growth we saw in the second quarter have continued into the third. We engaged and reengaged a broad range of users through both online and offline campaigns, brought our content to more social and video platforms, and widened our service options, especially in delivery, to serve different user needs. With these efforts, new average monthly active buyers grew more than 50%, and the total average monthly active buyers increased by 20% year-on-year. Monetization has also continued to do well. Driven by ads, sellers are responding well to the greater value they see in our AI-driven ad solutions. Ad paying sellers rose more than 35%, while average ad spend per seller increased around 13% year-on-year. and Revenue grew more than 55% and our asset rate improved by over 80 basis points year on year. Our operational priorities to enhance service quality, price competitiveness and discovery remain consistent and continue to be driven by our efforts in logistics, Shopee VIP and our content ecosystem. Each made good progress this quarter. Logistics. We expanded our delivery options to serve a wider range of buyer needs, from instant and same-day delivery to low-cost services. Our instant delivery service can now deliver as quickly as one hour. This has expanded our addressable market by unlocking new spending scenarios where speed matters most. These tend to be high-frequency categories. such as the groceries and the pharmaceutical items, boosting our overall purchase frequency. In Indonesia, orders using these services more than doubled year on year, with cost per order declining year on year. Retailers here have embraced the service. We now have more than 12,000 offline stores on our Eastern platform and growing. Adoption is also growing in Thailand, We are distant and the same-day delivery rate now accounts for nearly 15% of orders in Greater Bangkok. We will continue to grow this service in areas where demand is high and the unit economics make sense. At the same time, we have continued to expand lower-cost delivery services to ensure that all users continue to have affordable, convenient options on Shopee. In the third quarter, higher self-collection order penetration reached more than 30% in Singapore and more than 15% in Malaysia. In Indonesia, our economical shipping option has gained strong adoption and now accounts for more than half of total orders. Its cost per order is more than 20% lower than the platform average in the market. This initiative allows us to offer free shipping at a lower minimum spend. giving our buyers the flexibility to choose between cost and speed and letting us serve a broader range of buyers' needs. We have also continued to scale fulfillment quickly. Sellers have responded well to our fulfillment offerings as we help them take on the complexity of storing, packing, and shipping. This represents significant efficiency gains for them, especially during peak campaign periods where orders may be several times higher than normal. With our services, sellers can fill their businesses more easily without having to increase their own warehouse space for staff size. In the third quarter, fulfilled order volumes accelerated to around 25% quarter on quarter. Unit economics for our fulfilled by Shopee service improved sequentially in Asia and receive further room to gain efficiency through higher warehouse utilization and automation. Fulfillment also drives synergies with delivery, enabling us to deliver more packages more quickly. The number of parcels delivered by the next day or sooner grew over 60% year on year, more than twice as fast as our overall order growth. Second, Shopee VIP is growing fast. Membership across markets exceeded 21 million at the end of September, up more than 40% quarter-on-quarter, and the members contributed close to 25% of Shopee's overall GMB. The program is demonstrating stickiness, with monthly retention around 80%. Members show a consistent double-digit percentage uplift in spend, on average, after subscribing. and with more sellers and partners investing alongside us in membership benefits. The program's unique economics improved sequentially. We have also continued to enhance the program's value proposition through new subscription tiers with more benefits. In September, we introduced the Shopee VIP Plus in Indonesia, Thailand and the Philippines, a higher subscription tier that combines core member benefits with the Netflix subscription. Third, our content ecosystem continues to make discovery more engaging. Orders from live streaming and short-form video grew more than 45% year-on-year and accounted for more than 25% of physical goods ordered in Southeast Asia. Unit economics also improved sequentially. Beyond our app, our affiliate program remains an effective and growing channel to bring new buyers to Shopee from other platforms. In the third quarter, orders driven by YouTube content more than doubled year on year, as Shopee affiliate orders generated by Facebook linked creators grew more than 90% sequentially. On Instagram, more than 4 million reels have been tagged with Shopee products since we launched the partnership in April. with the number growing more than four times quarter on quarter. Shopee is also one of the early connector partners for Meta's Muse AI Personal Assistant that has just launched in Singapore. Users will be able to research and compare products on Shopee through Muse, helping them make purchase decisions tailored to their preferences. The partnership is still at an early stage, but we see potential for it. to become a solid additional channel for buyer acquisition and incremental GMV growth over time. Brazil remained our fastest growing market, and we again grew faster than the broader market in the third quarter. Logistics improvements underpinned this growth. We continued to widen the range of faster delivery options we offer across the country, with average buyer waiting time improving 12% year on year. We have branched into air delivery, cutting delivery time to the north and the northeast region significantly. In greater Sao Paulo, around 40% of parcels now arrive by the next day and nearly 60% within two days. Our new instant delivery service there, Shopee Turbo, already delivers in under four hours from more than 7,000 partner stores. Stronger delivery capabilities have enabled us to onboard more sellers to fulfillment. For example, we rolled out an in-house delivery service for bulky items such as the large appliances and furniture. Combined with our strong service reputation and reliable cross-nation coverage, this has made more large item sellers willing to fulfill with us. Across the country, fulfillment order volume more than doubled year on year. These service quality improvements have helped drive stronger growth in higher value categories. More upmarket buyers are joining Shopee and existing buyers are shopping across more categories with us. Automotive and home improvement categories were more than 80% year-on-year and more brand sellers have come on board. GFB from Shopee more sellers was up nearly two and a half times from a year ago. and Shopee Mall orders carried an average busty size almost three times the platform average. Looking ahead, we see a lot of headroom to grow in this exciting market. In summary, Shopee delivered another quarter of strong growth while generating the highest quarterly profit we have ever achieved. Our strategies have proven effective at strengthening our fundamentals, giving us a growing buyer base, stronger monetization and improving unit economics. We still see a long runway of opportunity ahead and we will keep executing with the discipline to capture it. We remain on track to deliver GMB growth of around 25% and an adjusted EBITDA of $1 billion for the full year of 2026. Next, moving to money. Money has grown well beyond its origins as a payment infrastructure Our internal business needs. Today, it has evolved into a financial services business across mobile wallet, credit, digital banking, and more. Money has shown consistent strong growth and has been profitable for the last three fiscal years. We believe money has reached the scale and the maturity to extend itself and would benefit from becoming more independent. Today, Money is already one of the largest unsecured consumer lending companies in Southeast Asia, serving nearly 44 million active credit users with a loan book of over $12 billion. Increasingly, Money's growth is coming from beyond Shopee, and it is building direct relationships with users through standalone apps across Southeast Asia and Brazil. Personal cash loans and off-Shopee loans made up around 60% Our ambition is to keep growing money into a full financial ecosystem with inclusion at its heart, serving users across their lifecycle needs from unsecured loans to secured lending, insurance, wealth management, and more. We believe a standalone listing would give money the dedicated capital base it needs to build this ecosystem and let it invest for growth while managing risk with discipline. I want to be clear about what does not change. Money and Shopee will continue to work closely together as they do today. Money will remain a key payment and credit partner for Shopee and Shopee will remain a key platform for money to reach users. Insights from our businesses will continue to empower money growth. We hope to leave the money at the right time in the next one to three years, taking into consideration factors such as market conditions, microenvironment, and regulatory requirements. We will approach this carefully, working closely with our stakeholders in each market. Throughout, we aim to deliver value for our shareholders. I'm very excited about what lies ahead. With that, let me take you through money's performance this quarter. Money delivered another quarter of healthy growth. Our notebook grew around 60% year-on-year to $12.6 billion at the end of September. Unique economics are healthy and we continue to invest where we see a clear path to attractive long-term returns. We continue to expand our credit business on three fronts. acquiring new users, deepening our relationship with existing users, and expanding our credit use cases. Our user base continues to grow rapidly in the third quarter. We added nearly 6 million first-time borrowers, bringing active credit users to nearly 44 million, up around 28% year-on-year. As the borrowers build longer credit histories with us, we can progressively offer them higher limits. and more products. Average loan outstanding per user grew 23% in the third quarter year-on-year, and over 40% of our active credit users were using two or more of our credit products at the end of September. Estee Lauder is becoming an everyday way to pay both online and offline in many of our markets. Our off-Shopee Estee Lauder portfolio More than doubled year-on-year to nearly 25% of our entire SPLater portfolio at the end of September. In Malaysia, its share is nearly 40%. In Thailand, the Shopee Pay Unlimited card allows SPLater users to accept their approved SPLater credit limit wherever MasterCard is accepted. Monthly transacting users of the card in September grew more than 60% compared to a quarter ago. We are rolling the card out at a pace set by risk performance and we plan to bring it to Malaysia later this year. Risk management remains our top priority as we continue to grow our loan book. Our 90-day NPL ratio was 1.3% at the end of September. The modest uptick primarily reflects an evolving credit environment especially in Thailand and Brazil, as well as market and product mix, including faster growth in Brazil and off-shopping at Thalacor. Our underwriting is highly responsive to market conditions. We proactively adjusted our underwriting criteria and credit limit management for selected customer segments at early signs of softness. to maintain disciplined growth and optimize risk-adjusted returns. We are staying close to the data and will keep adjusting as needed so our loan book growth stays healthy and sustainable. In summary, money-delivered healthy growth while staying disciplined in how we manage risk and how we invest. Our credit playbook remains consistent. Start small, prove the economics, let's scale. We are reaching more users, keeping new relationships with existing ones, and extending credit into more everyday spending scenarios, both on and off Shopee. Many of our initiatives are still in the early stages, and we are making good progress capturing the large underserved opportunities across our markets. Next, turning to Garena. Karina delivered a solid third quarter with bookings continuing to grow from the high base set last year. Profitability also improved. Free Fire anchored this performance with a strong bookings growth and the rate of valor continued its strong momentum from its 10th year anniversary celebrations. In January last year, we released our smash hit IP collaboration, Naruto Shippuden Chapter 1. This year, by popular demand, we brought it back with upgraded gameplay and fresh rewards rebuilt around top fan-requested content. Our players loved the original campaign's most iconic moment, when the animated giant night-tailed fox descended on the battlefield as a threat that everyone had to survive. To build on it, we brought in one of the most important powers from the Naruto universe, the Shuriken. This iconic ability, the enemy's most powerful characters use to control the knife-tailed folks. Heroes could use it to make the giant creature attack their opponents, bringing the excitement of the moment to a new level. We also expanded the map with places fans had asked to explore, like the ninja school where the main characters first trained. We continued to pay close attention to details, including small but important elements, like the screen where a young Naruto sat alone in the original anime that gave players an extra boost for the rest of the game. Our careful authenticity has resonated with the players and the industry alike. Content around our Naruto-Shapton collaboration has generated more than 6.5 billion views on social media today. This quarter, we were also honored that our Naruto-Shapton Chapter 2 collaboration won the award for Best Use of IP or License at the 2026 Pocket Gamer Mobile Games Awards. Beyond Free Fire, Parade of Valor is celebrating its 10th anniversary this year. It's the end of one single event. We are making the entire year a celebration with a series of in-game content releases and our biggest ever real-world event. We hosted AOB's biggest ever offline celebrations with a concert at Taiwan's largest indoor venue, The Taipei Dome, the first-ever gaming event to be held there. Around 30,000 fans came to see K-pop and local artists, many of whom had previously collaborated with us on music for AOV. We also transformed the parts of Taipei into an AOV-themed city, collaborating with the metro stations and 7-Elevens, putting on anniversary exhibitions and holding a light show at the iconic Taipei 101. The campaign went viral, becoming the number one trending topic on social media in Taiwan. Ten years in, AOA is still winning over new generations of players and deepening its bonds with long-time fans. With this strong engagement, we believe that, just like Free Fire, AOA will continue to be an evergreen game. In summary, Greta's performance this quarter showcases our ability to keep successful games fresh Listen closely to our players and build lasting relationships with them. We will remain focused on delivering engaging experiences and strengthening our franchises for the long term. In addition to our three existing business segments, we have always been exploring and experimenting with new businesses. The most recent of these is C Cloud, as we announced recently. As AI has taken off, we have built up meaningful capabilities over the past two years across the instructor, model, and agentic application layers, and our own businesses have benefited significantly from them. cCloud looks to bring these capabilities to other organizations across all three layers. Today, there is a lot of focus on compute prices and cyclical margins, and having enough compute certainly matters. But we believe the ultimate price lies elsewhere. The cost of tokens is falling rapidly and structurally, and as it does, AI becomes affordable for far more organizations and far more use cases. The real opportunity is to build a significant business around the long-term decline in token prices, helping organizations to have much broader AI adoption. We see much of the lasting value in the layers above bare-metal capacity. Once it's running AI efficiently, getting more out of every GPU through vector utilization, faster deployment, and linear operations, which we have mastered for our own businesses. The other, and the more important over time, is the agents, software, and orchestration that some organizations put AI to work, running models reliably and securely, adapting them to their own data and languages, keeping that data close to home, and moving to newer and more cost-efficient models, including open models, as they emerge without having to rebuild each time. Many organizations want this, but few have the specialist teams to build it themselves. That is where we intend to focus. and it is not theoretical for us. It is what we have had to do for our own businesses running AI at scale in areas such as fraud detection, customer service and content generation under real commercial pressure and in many cases, in highly regulated environments. We see this as an opportunity to turn our AI capabilities today across the central overseas into a perfect center. We are already making this investment for our own businesses. By serving external customers on top of that existing base, we can spread our fixed costs across more users and earn attractive incremental returns on capital. This is consistent with how we have entered new businesses throughout our history, like money beginning as a payment infrastructure, serving our own platforms before going into a business serving customers well beyond them. We are setting up eCloud as a full-gold startup so that it can stay nimble and respond quickly to market demand. Our focus is the software and customer relationships, not owning large amounts of physical capacity. Where customers need dedicated computing capacity, we will only pursue opportunities with clear customer commitments and attractive returns. We will mainly look to partners and customer prepayments to fund the physical infrastructure. As a result, we do not expect cCloud to have a significant impact on our financials for now. It is still early and we will update investors on any meaningful developments. We also want to give an update on our share repurchase program. As of today, we have almost fully completed our $1 billion share repurchase program announced a year ago. We are pleased to announce that we plan to buy back and additional $1 billion worth of shares. In conclusion, we have delivered another strong quarter. Our three businesses have all expanded their addressable opportunity and strengthened their competitive position. Unit economics continue to improve across many of our initiatives, a testament to our financial discipline and operational efficiency. Our promise momentum across the first three quarters gives us greater confidence for the rest of the year. As always, we greatly appreciate your trust and support. With that, I invite Tony to discuss our financials.

Thank you, Forrest, and thanks to everyone for joining the call. We'll see overall, total gap revenue increased 43% year-on-year to $8.6 billion in the third quarter of 2026. This was primarily driven by growth in Shopee and money. Our total adjusted EBITDA was up by 29% year-on-year to $931 million in the third quarter of 2026. On Shopee, growth orders increased 26% year-on-year to $4.5 billion in the third quarter of 2026, and GMB increased by 23% year-on-year to $39.7 billion in the third quarter of 2026. Our third quarter GAAP revenue of $6.1 billion included GAAP marketplace revenue of $5.3 billion at 41% year-on-year and GAAP product revenue of $0.7 billion. Within GAAP marketplace revenue, core marketplace revenue mainly consisting of transaction-based fees and advertising revenues was $4.6 billion, up 51% year-on-year. Value-added services revenue, mainly consisting of revenues related to logistics services, was $0.7 billion. Shopee-adjusted EBITDA was up by 45% year-on-year to $269 million in the third quarter of 2026. Money gap revenue was up by 64% year-on-year to $1.6 billion in the third quarter of 2026. Adjusted EBITDA was up by 15% year-on-year to $298 million in the third quarter of 2026. As of the end of September, our consumer and SME loans principal outstanding reached $12.6 billion, up 60% year-on-year. This consists of $11.2 billion on-book and $1.3 billion off-book loans, principal outstanding. Non-performing loans passed due by more than 90 days as a percentage of total consumer and SME loans was 1.3% at the end of the quarter. Verena bookings grew 6% year-on-year to $890 million. Gap revenue was up by 29% year-on-year to $840 million. The growth was primarily due to the increase in our active user base and deeper ping user penetration. Garena adjusted EBITDA was up by 46% year-on-year to $458 million. Returning to our consolidated numbers, We recognized a net non-operating income of $123 million in the third quarter of 2026, compared to a net non-operating income of $61 million in the third quarter of 2025. We had a net income tax expense of $280 million in the third quarter of 2026. compared to net income tax expense of $161 million in the third quarter of 2025. As a result, net income was up by 34% year-on-year to $502 million. 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. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. 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 addressed. At this time, we will pause momentarily to assemble our roster. Your first question comes from the line of Alicia Yap with Citigroup. Your line is open, please go ahead.

Thank you. Good evening, management. Congrats on the solid set of results. Thanks for the email questions. Two questions. First, I wanted to ask on C-Cloud. So I see plans to invest in cloud and AI infrastructure. How should investors think about the expected return profile for these investments? What are the key use cases or demand drivers that give you confidence that ZCloud can become a meaningful business over time? Second question, money. Money has reached a meaningful scale with over 12 billion in loans outstanding, 44 million active credit users, and also an increasingly diversified business beyond the shopping ecosystem. As you look ahead, what milestones do you believe are still needed before money can be viewed as a standalone financial platform? And strategically, how do you think about the benefits of keeping money integrated within C versus creating a more independent segment over time? Thank you.

Thank you, Alicia. For the C Cloud, Business, as I just mentioned in my remark, this is a very pretty new initiative and this is at a very, very early stage. So we're always thinking what is the potential new business opportunities we may have opportunities during the AI era. And continually and increasingly, we believe eventually because of this new technology, Both the consumers and organizations across the whole world, and especially in our region as well, will go through the AI transformation. And every organization needs to build up certain AI capabilities, including across all the layers, including the compute capacity, and including the models, and also how to use the model, how to deploy the model, and many more. Although this is a very, very challenge, we put a lot of effort, we're also very excited about the impact it can be made. So in my remark, I mentioned specifically several cases like fraud detection, customer service, content generation. So this is a benefit to our business significantly on a daily basis. And we have a strong Thank you very much. The aspiration is to really externalize what we already have and build as the internal capabilities and resources, but become a new business to serve external customers. And we also believe adoption will be accelerated because the model is getting better and better, and the agent can do more and more things. and also the token costs will be continuing to go down. So this will make the entire kind of this AI demand more affordable and more accessible and in an accelerated pace. So that is kind of the big picture we are looking at and we think the demand will be huge and this is just at a very, very early stage. So we want to get into this Thank you very much. Thank you. all fit into the game and we start to get first-hand experience. Also, I'm sure the learning will be very, very quick, right? And we really have kind of a real business working on that. So we feel in the past, although this is very early, like in the past few months, we have gained a lot of insight and learning about the potential opportunities we have. I think we're going to keep investors updated. And at the same time, because of this is a very new and it is a very dynamic situation and opportunity. We want to make sure I will be very, very frugal in terms of the capital expenditure, in terms of the cash flow spending. I think whatever the opportunity we are looking at, the top down we just shared, we believe in the big potential ahead of us. But like a bottom up, when we look at each potential, each project, each customer, Each potential deal will very much kind of discipline in terms of what is the return we're looking at, what is the mean to us financially. I don't think at this moment we have a very, very clear as a business what will be the return on investment will look like. We believe this will be very, very good. But again, so we also want to stay humble. There's a lot of things we don't know what we don't know. But all time up for each project will keep the financial discipline very, very seriously. We want to make sure every project we work on will be generated attractive return for us and minimize our potential financial risk if there's any. So I think that is the overall thinking we have for the C cloud businesses. It's still at the formation stage. It's a very, very different profile compared to the Three existing businesses we have. It will take us a decade to build up the three existing businesses to today's stage. I think the C-Cloud will be really, really a long-term bet, right? And this is one of the bets we have in the AI times. We are very excited about it. And we'll keep our investors and our shareholders updated if there's any major development on that front. And for your question about the money IPO, again, this is a very, very exciting project. It always has been our aspiration to build money into a standalone financial services business. And we believe money has the potential to be one of the best in the world in the fintech businesses. I think we're on the right track now. And now we feel comfortable I think it's reached a stage and skill can be sustainable itself. I think being listing standalone will give more room and more flexibility for money to continue to grow. In the past, money has been benefited hugely being part of the seed and being part of the integrated system. I think that is a A very, very critical success factor for money like in the past. But I think like moving forward, we expect the money will continually grow. And it's not only rely on the sea ecosystem, but really have the courage and have the flexibility and have the room to grow out of it. And meanwhile, please don't get it wrong. I think whatever the, as I shared in my remark, whatever the The benefits and being together with the C and with Shopee in the past will be still there, right? And as I mentioned, there will be still very, very integrated, tight collaborations between Shopee and money, right? And there's a huge synergy. We'll definitely not give it away. And also at the same time, I think like whatever from the seed perspective, Thank you very much. and there's a lot of things when we start to take off the process, there will be a lot of learnings and there will be different ways of doing that and the pros and the cons. I think at the same time, we're going to keep all the shareholders and investors updated along the journey as well.

Your next question comes from the line of Divya Kathiyal with Morgan Stanley. Your line is open.

Thank you very much. My first question is on Shopee and really when does the monetization actually start flowing through profitability? So we saw that despite the strong growth in take rates and advertising, margins are still flat quarter on quarter at about 68 basis points. Could you elaborate what absorbed these monetization gains specifically and which investments should start delivering some sort of operating leverage next year? If you could also comment on the profitability runway difference between ASEAN and Brazil, as well as between content or ecosystem versus shells. So that's my first question on Shopee profitability. My second question is just on agentic AI in Shopee. You are an early connector partner for Muse, as you mentioned. If product discovery moves to an internal agent, how do the economics of a Shopee order change, particularly the advertising revenue and the contribution profits? Do you actually retain the customer relationship and data? And if you could also comment on how Migu is performing on adoption and conversion, and how do you see its role in Shopee as the agentic AI going forward? Thanks.

On the Shopee side, for the monetization that you mentioned, we do see better monetization over the quarters. As you pointed out, our EBITDA also remains relatively stable. from the quarter to quarter. I think overall the thinking we have is that we still see there is quite a lot of growth potential in both South Asia and Brazil market. In fact, if you look at our growth rate, we grow 23 cents plus this year, this quarter. If you look at the growth without the forex impact, we grow more than 26%. and others. So we still see a lot of potential in our market and we would like to grow e-commerce penetration further in both South Asia and Brazil markets. At the same time, as far as mentioned in the opening remarks that we commit to have our EBITDA more than one billion this year. I think we still hold that as our standard. We expect Going forward, my station will also be better, primarily from the ad side, less from the fixed commission side. And part of that will flow to the bottom line EBITDA improvement over time. And part of that might go to the investment to grow our market further as well. Between Brazil and South Asia, I don't think there's a particular difference in terms of trends between the two regions. I think both Brazil and South Asia are relatively stable if you look at it from a quarter-to-quarter perspective. For content side, content for us comprise of, let's say, both the videos and live streams. Our content ecosystem has been growing year to year and quarter to quarter. At the same time, our profitability also grows better for content as well. If you look at contribution margin perspective, our content part of business has been profitable already for this quarter, which is a very good milestone for us to achieve. Coming to the second question on the agentic AI, We actually partner with a range of partners, starting from Cheche BT, and now, as you mentioned, the MUSE. At this point in time, all the checkout and seller relationships and buyer relationships happened within the shopping platform, and we didn't see a meaningful impact to our economics for the near future. At the same time, I would like to point out that we've worked with many platforms as affiliate partners as well. For example, we've been working very closely with both YouTube and Meta for Facebook and Instagram as affiliate partners, which was similar to the fashion we've worked with, platform like Muse. and affiliate partners we've been generating a sizable new user to our platform, generating a sizable traffic to our platform and it's been part of our unitonomics in the past years. So we don't see this will dramatically change the picture when we work with MUSE or LGBTs.

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

Yeah, hi. Thanks a lot and congratulations on a good set of numbers. Two questions. Firstly, on Shopee, when do you think the peak investments would pass, you know, considering the ongoing investment in Shopee VIP, instant delivery, fulfillment, And did I hear correctly that content ecosystem is now EBITDA positive? Or if not, then how much is the drag on profitability? And can you also share what's the progress on fulfillment both in Asia and Brazil? Second question on cCloud, you know, you have explained in detail your aspirations. But can I check if you have secured any enterprise contracts already? and just to clarify, would you invest in data center and GPUs or would it be Capex Lite where you will leave these assets and any guardrails that you have put on maximum capital investment over the next two to three years in this segment would be great. Thank you.

Yeah. I think we'll be investing in the shopping battery and fulfillment and also the other initiatives like the instant delivery, et cetera, across our country. It's a bit hard to argue when is the peak investment as we roll out this program in different countries, different markets, at different time frames. So if you look at our early countries that we started, let's say, some of the programs, it does pass the peak investment, but there are some other countries later. So the mix of the country and the pace of it has a lot of impact in terms of the pace of the investment. But in any case, as I shared earlier in the previous answers, we do see the bottom line, essentially the EBITDA will continue to improve year over year, which includes all the investment to this program. So we manage it. within sort of how much takeaway we can take and how much investment we can make while growing the ecosystem and the user base. For content ecosystem, which includes video and live stream, I think it's a bit hard to split a particular segment to the EBITDA levels because there are many shared costs below that. I think for us, we look at sort of variable cost or contribution margins to our platform The content platform does have a positive contribution margin. Essentially what we're saying is if we grow content business more in our platforms, we'll have more profit rather than less profit for our businesses. The fulfillment penetration, I think the overall fulfillment has been growing quite a lot year over year. We started this in South Asia earlier than Brazil. So in reality, the penetration in South Asia will have a slightly higher percentage as overall platform than Brazil. But we do believe that the penetration will further grow in both Brazil and South Asia. The other thing that we spend a lot of time on is to optimize the cost to fulfill, which is very important for us. We're seeing a meaningful reduction in both South Asia and Brazil for our cost to fulfill for our fulfillment businesses. Part of that contributes by the scale that we've been built over time. Part of that contribution by better automation, which is a very important tool for us to reduce the cost of use compared to many of our sellers. Part of that also comes from how to optimize the way we work with the sellers, the way we inbound, the product selection we have, how long we keep the product in our local payment centers, et cetera. I think all those contribute to The growth of fulfillment while improving the economic fulfillment over time.

Kirish, for cCloud, for your question, as you know, this is just at the very, very beginning of the business. At this moment, we haven't secured any enterprise contracts. And for the investment in the data center and the GPUs, Let me put it this way. We definitely probably will invest in the GPUs and the primary for our own use. So regardless if there is a cloud business or not, like how the business will progress down the road, we are going to invest into GPUs and the primary for all the internal use cases. And in the data centers, So we will see how the opportunity look like. In general, we are not interested kind of like to invest in the data centers, but we may spend the money to build data centers for our own use cases, primarily for our uses. For example, for our financial services business for money, right? And based on regulations, a lot of data need to stay in Singapore. So for those cases, we'll evaluate the options in terms of build up our own data centers. And because this is a very, very clear usage and a very, very clear use case versus leasing the data center capacity. So I would say we're going to be open-minded on that part. Again, I would say this has nothing to do with the C cloud business. In general, from C perspective, we'll keep those options open. And in terms of the guardrail on capital investment here, as I mentioned, we'll be very, very cautious. And the good thing is it's different from the consumer business. You have to spend a huge amount of money Thank you. Thank you very much. deal by deal driven at least at the beginning stage and with very very specific like a target in terms of the customers in terms of the projection of the revenue and like what is the timeline for that and what is the potential investment we put in so I think it's a I think we are going to have a guardrail we want to as I mentioned in the in the in the remark we're only pursued opportunity with a clear Like a clear customer commitment and a clear return profile, right? And we're going to make the case by case of judgment if that return is good enough for us or not. We don't have to pursue the opportunities if we don't like the return profile. And at the same time, we're going to try all the ways to minimize the impact on our own financials and especially the cash flow, the balance sheet. I think there's a lot of ways to work with the potential partners, right? And a lot of things can be worked with through the customer prepayment, right? But the speed rate is going to, we're going to minimize our own financial impact. Yeah.

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

Hi, good evening. Thanks, management, for taking my question. I also have two questions. The first question is also on the seed trial business. Given that we have talked about it's a project-by-project basis and we also look into the return profile, I just want to get some color from management strategic perspective. If we look at three years or five years down the road, in terms of our business mix or our profit mix, how significant is CE Cloud to our overall business? Would that become another very meaningful business? like three to five years down the road. That's my first question. And then my second question is back to Shopee business outlook. Given that we are seeing the macro is very dynamic, fuel price and other macro uncertainties, how should we think about our GMV outlook or growth rate going down the road and are we actually expecting like a meaningful slowdown or a gradual slowdown given all these headwinds? Thank you.

Thank you, Thomas. Yeah, for seed cloud and strategically and in the big picture, we are very, very bullish. We are very optimistic as I shared. And so number one, we believe AI, this is the... It's a fantastic technology. This will make huge impact for every single organization, every single business. Every organization, every single business will need to right away figure out their own strategy and the action plans, executions, how to make that the transformation and how to make them relevant in the AI era. So if you look from that perspective, the demand is huge. And the second thing we bet on is the AI adoption across all the industries will be accelerated and it's mainly because of the model is getting better and the agent can do more things and can really make impact in the workflow and in the day-to-day use cases. and at the same time, the token cost and the token price is going down rapidly. So this is the things we, this will give us the conviction and the opportunity could be huge. And by the end of this, this will happen in three years or five years. As I said, it depends. I don't have a very, very clear view and things go very, very fast in this industry, right? And so to be honest, I don't have the exact kind of and many more. We want to build this business not only for three years or five years. We want to become a sustainable business, become a part of our businesses permanently. So that's the aspiration. And of course, we only do this if we do believe this will be generate a very, very meaningful, very, very sizable revenue and perfect for us down the road.

On the shopping growth, first of all, we don't see a big shopping GMT growth rate slowdown yet. As we shared earlier in Q3, we do see A meaningful growth, similar growth rate compared to last quarter from a year-to-year perspective if we take away the year forex impact. You are right that there are many macro factors like fuel price, et cetera, impacting the consumptions. Overall, we see that although we have noticed some more value-seeking behaviors, in our market due to all this macro environment, but the general overall demand has relatively resistant. But again, I would like to reiterate that our competitive advantage will differentiate us from the peers, even in the macro situation that we are in right now. Given that we built our platform around Longtail products and also the pricing in our platform is a lot more competitive compared to other platforms online or compared to the alternative offline as well. On top of that, a large part of our are driven by the people have the needs to purchase rather than people have the impulse buying. All those make us, put us in a more resistant position on the growth for our e-commerce in our market. I think we will continue to We monitor our market very closely for any changes, but again, given all the things we mentioned above and also the e-commerce penetration are still relatively low compared to many other markets, we still believe that that is a big runway for us to grow our e-commerce in the regions.

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

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

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