Q2 2020 Sea Ltd Earnings Call
[music].
Good morning, and good evening.
Okay, Let's see limited second quarter 2020 results conference call all participants will be in listen only mode.
If you need assistance. Please there's no conference I've satisfied passing this sarkouhi followed by anybody else out.
After todays presentation, there will be an opportunity to ask question.
Please note. This event is being recorded I would now like to turn the conference over 10, there's yen Jeanne Wong. Please go ahead.
Thank you operator, you can do more I am wondering well. These 2027 core earnings conference call again, well see school Chief Corporate Officer.
And he left to remind you that we may make forward looking statements, which are inherently subject to that and I.
I may not be realized in the future well here [laughter], stating specialty.
Oh this.
Discussion I'm sure enough, yeah financial measures such as adjusted revenues adjusted EBITDA and net loss excluding share based compensation changes in fair value that 20 cents uncomfortableness.
We believe these measures can you can tell investors notwithstanding the after cash flows towers major businesses I use that complements our guests associates for discussion of the use of non-GAAP financial measures and vaccination with a silicon GAAP measures. Please it's actually the section all non-GAAP financial measures no absolutely.
Uh-huh here with me see Chairman and Chief Executive Officer, Philosophy, and Chief Financial Officer Telephone question, Tony will shift I mean business update operating highlights financial performance for the quarter. This will be fall back you unnamed session, which we welcome, especially if you have with that let me turn the call for two forest.
Thank you, yes you.
Hello, everyone and thank you Oh wait for joining todays call.
Over the last appeal messy.
He has continued to work hard to suppose local consumer and the smoke businesses during the challenging time.
At every level up to visit our key.
This does their efforts to help our communities to benefit from the digital night vision of the economy.
We also focused on contributing to economic recovery of course, our market dual wherein locally initiatives as well as government led efforts.
Against this backdrop.
The two share that's easy to reporting very strong results for the second quarter.
We also enjoyed a set of reaching growth across all three of the key Taylor our repeatedly.
As we noted last quarter, we have been weak missing a per phone structural shoes to digital night vision across our market.
Given that.
Restriction of being Houston or leases in money market, we continue to see strong user growth and the deepening of user engagement across our platforms.
This is well aligned with our view is that the structural shift to digital night vision will be long lasting.
We further believe that's we are very well positioned to capture the accelerated growth opportunities created by the rapid expansion of the digital economy.
This is also reflected in our very strong results for the second quarter.
Let me highlight a few key performance metrics for the quarter.
On the group level I'm, particularly pleased to note.
We recorded positive adjusted EBITDA of $7.7 million.
Our quarterly adjusted revenue grew 93% year on year to reached 1.3 billion dollar.
Gross profit grew by 106% year on year to reach $200.8 million.
We believe the strong topline growth and the continued bottom line improvement demonstrate our ability to deploy our pepto in a highly effective and efficient manner.
It also speaks to the fundamental strength of our business model, which allow us to phone our record growth substantially through cash generated from operations.
Let me talk about each of our business line, starting with digital entertainment.
Fair enough had another excellent quarter and achieved several historical high.
We reached more people than ever before.
With close to half a billion active users around the globe playing to relocate during the quarter.
Not represent an increase of 61% year on year.
As we rolled out more new content ever to entertain and engage our users are paying user ratio improved further turkey, 10%.
Our quarterly paying user number grew at a very strong rate of 91% year on year to reached 49.9 million.
As a result of the strong user and the paying user growth.
Adjusted revenue for the quarter reached 716.2 million dollar.
Up 52% year on year.
Our adjusted EBITDA margin also reached a new record high of 61%.
I want to highlight in particular, the very strong performance of brief bar.
It continues to set new records user growth and engagement.
Yes.
Group, our recently issued a new record high in terms of peaks daily active user of more than 100 million.
According to have any in the second quarter preferred continues to be the top grossing game in both Latin America, and southeast Asia across both style Ed and enjoy.
Thanks to brief our enduring global appeal. It also ramp at the third most to download indicating worldwide across iOS and Android in the quarter.
A key driver of a brief our success is our ability to create captive waiting content.
They are global user community.
For example, we have observed that user enjoying the unique create succeed and the story line, we deploy for each our preferred elite past season.
We're not the most popular elite path concepts of the last few months it was ramping to operating.
This was the reboot of rampage, one of the best to receive income pays off last year.
For this year Rampage event, we introduced the new will report directly mode, which pool grid popular with our user.
We're excited to see deposit user sentiment around the return of rampage.
We believe that recurring you once with new creative content such as these helped to build user affinity with our game and the sustained long term user engagement.
We're also partnering with other global IP holder to create memorable content experiences for our user.
For example in July we announced a partnership with lastly for special Endgame crossover with this global could show money high.
Four days, we have worked with net leased to create a money high occupancy ingoting take over which is expected to be launched in September.
User will be able to enjoy a new game mall inspired by the bulk of monetized.
And the come purchased working more those an offer to iconic upbeat in the TV series it.
To further enhance user engagement, we have successfully migrated already sports activity online over the last a few method.
For example in recent months it will help large scale is fortiva in both Asia and Latin America.
In June we held a brief our Asia, most dark units featuring both professional players and the popular online you Blizzard from India, Indonesia, Thailand, and novena competing across several tournament.
We have already others.
We hosted an online import he was in Latin America coat frequency County, featuring the top team from our probably on the Brazil, and the Latin America server.
We continue to this goal momentum user engagements entering into the third quarter evil as many of our market east their restriction announcements recently.
He is back in July Gretna feed a new record high in monthly adjusted revenue.
Great for our wholesale either new rep for the monthly paying users in the same amount.
Which more than doubled year on year.
Looking ahead, we remain 40 culture focused on bringing innovative content and enjoyable experiences to our users.
We are confident that high quality and highly engaging content will strengthen their engagement and affinity with our game.
This will continue to beat a key driver of greener long term success.
Now, let's turn to shop.
We reported accelerated growth across key metric and each of our market as more consumer and a seller turn to shockey at their go to shopping and setting destination.
Last quarter, we spoke about the rapidly changing needs of consumers and the seller in our region, who are embracing E commerce as an unprecedented pace.
We also discussed the efforts, we were making too quickly adapt and steel on our services to address this evolving needs.
Our very strong results for the second quarter further demonstrates the 10 deepening penetration of E commerce, and our ability to capture this growth.
In the second quarter, we recorded a seller rebased growth in force order.
Which increased by 150% year on year to reached 600, and a $15.9 million.
Compared to 111% in the first quarter.
Moreover, order for shopping mall increased at the HEALOS faster pace of more than 210% year on year as more and more global and local brand partner Lisa to cater to the are increasing and evolving demands for online solution.
Indonesia, our largest the market our year on year growth rate in terms of older further accelerated.
We reported over 250 million order for the market in the second quarter or a daily average of over 2.8 million orders.
Craze of over 130% year on year.
We also sold 70, because really accelerated year on year growth in GMB.
We succeeded $80 billion.
This represents a year on year growth rate of 100 under 10% compared to 274% in the fourth quarter.
According to App any in the second quarter shopping continues to run occurred across southeast Asia by download monthly active user and the total time is ongoing.
Indonesia shop extended it leaves and the once again rest of birth in the shopping kind of rate by download monthly active user and the total timing.
Android.
In terms of monetization as adjusted revenue grew by 100, an 88% year on year to raised 500 and the $10.6 million.
Im pleased to note that our monetization rate have largely recovered to pre pandemic levels.
Adjusted revenue as a percentage of the total TMB increased to 6.4% from 5.1% for the previous quarter.
Adjusted marketplace revenue as the percentage of total GMB was 4.7% in the second quarter of 2020 compared to 3.8% in the fourth quarter.
Meanwhile, we drove further improvement in operating efficiency, even as we significantly scaled up our operation.
Adjusted EBITDA loss per order decreased by 51% year on year to 50 cents.
Compared to one dollar and a one cents for the second quarter of 2019 and assisted us in the fourth quarter.
Well, we gradually ramped up monetization we continues to provide strong supposed to our seller communities most affected by the condemning to fee relief and other financial and operational assistance.
In many of our market, we have launched ports buildup supposed program for local SMB seller during the quarter.
Operating financial and the marketing days to help them reached new audiences.
We have also devoted significant effort to create more opportunities for local entrepreneurs and a small businesses to grow their present online.
In Thailand. For example, we have partnered with the government to debello and their goal all training and support program targeting farmer.
Our program a two reached 1.5 million farmers in the coming year to enable them to start and build their business our shopping.
Similarly in Malaysia, we organized a special online sales by the table for deal ring producer to ensure they could get their food to consumers well fresh.
These are all part of our commitment to driving economic recovery in our local communities.
In terms of engagement with our consumer.
In the second quarter, we continued to time, the highly social user experience that sharpie loan pool.
Our lives streaming feature is growing in popularity and we are expanding the types of content that we offer to our user.
For example in late June we partnered with the other neither of pay call. The multiple pillar creditable of pay pop music to stream. They are hugely popular annual concert series it exclusively on shopping.
At the same time, we're expanding our ability to supposed in need of stellar and the breadth across the region.
In July we partner with Google to launch a new service called Google ads, which shocking.
This integration enable Brent I'll shockey to create Google shopping ads directly in the Shopkeep Brent suites.
We also enhance our apps shopping feed.
With a new feature called Shockey stories.
This allows brands and it's better to create and the share short form video content with the report our shockey.
In summary, the very strong results for the second quarter are underpinned by two key driver.
First.
Ecommerce penetration continues to deepen across the market and the demographics.
This momentum continues into the third quarter dealer at most of our market has emerged from locked out.
Second.
Our strong market leadership, and our ability to adapt quickly and effectively shockey, capturing and we believe well continue to capture outside proportion of the growth opportunity.
With that in mind, we will continue to focus on investing with deficiency in the long term growth of shocking to further strengthening our market leadership.
We continue to firmly believe that this will lead to much greater return over the long run.
Finally, our digital financial services business seem money also enjoying further accelerated growth in the second quarter.
But celebrating digitalization is driving increased the need for quick and the convenient online and the contact lease payment option.
As well as other additional financial services.
We further believe that's the money is being an ideal conditions to capture a significant portion proportion of lab growth opportunity.
The money spoken continues to be leveraging of these strategic leadership position is some of the largest the use cases for digital payment E Commerce and the digital entertainment.
We believe impressive growth in the second quarter underlines the strength of this strategy.
Our mobile wallet total payment orders increased to more than $1.6 billion for the second quarter.
Compared to more than $1 billion in the first quarter.
Quarterly paying users for our mobile wireless services grew by about 50% quarter over quarter to more than 16 million.
In particular, we are encouraged to see more shop user embracing the east and the convenience of our mobile wallet.
In the month of July Indonesia.
Our mobile wallets services were used to pay for more than 45% of course order on the shockey platform.
As we scale up the theme money business.
We are applying the same would rigorous discipline and focus on efficiency that is the hallmark of these business.
Even as we recorded a huge jump in user numbers and the TV for the quarter.
Our adjusted EBITDA loss for the segment remained relatively flat quarter on quarter.
We see significant growth ahead in the digital payment and additional financial services segment, driven by the rapid expansion of the digital economy in our region.
Our results for the quarter clearly demonstrates that the same money is in the greatest addition to address the need of user across the region.
We will continue to reinvest efficiently is fueling our desimone business to solidify our leadership position across our market.
To conclude.
We are moving into the second half of 2020 firing on all cylinders.
Each of our businesses it successfully adapting to capture the immediate growth opportunity in front of us.
Each of those is also ideally position for the long term with a significant runway ahead.
We source of 10, and the growing user engagement across our platform.
The second quarter and beyond.
And as these EBIDTA for their confidence that the rapid shift to digital lifestyle. In fact, a permanent and that you reversible change that will drive significant growth opportunity foresee over the long run.
We're very focused on maximizing this opportunity and we'll continue to invest in products and services that were winning the park and the mine of our users.
With that I want you might pony to discuss our financials.
Thank you for us and thanks to everyone for joining the call.
We have included detailed quarterly financial schedules together with that responding management analysis in today's press release as far as has caused some of our financial highlights. So I will focus my comments on the other key financial metrics.
Foresee overall total adjusted revenue grew by 33% year on year to $1.3 billion.
Which was mainly driven by the growth of our digital entertainment business.
Especially our self developed games feedback and our continuous monetization efforts and our E commerce.
Corridors.
62% year on year growth in initial entertainment adjusted revenue to $716.2 million was primarily driven by the increase of our active user base and deepened paying user penance penetration and in particular.
Continuing success of our self developed games.
Digital entertainment adjusted EBITDA was $436.2 million, an increase of 65% year on year, mainly due to strong topline growth and ourselves about us game accounting or increased share of revenue.
Our E Commerce adjusted revenue of $510.6 million included adjusted market trading revenue of $378.7 million.
Up 175% year on year.
Adjusted product revenue of $131.9 million up 233% year on year.
That is strong results demonstrated the deepening penetration of E commerce, and our ability to capture is accelerating growth opportunities created by the rapid expansion of than digital economy.
E Commerce adjusted EBITDA loss was $305.5 million as we continue our investment to fully capture the market opportunity in the region.
We will continue to invest prudently and drive high quality growth by serving the users' needs better in Laura.
Digital financial services adjusted revenue was $11.9 million.
An increase of 328% year on year from $2.8 million in the second quarter of 2000 and Nike.
Adjusted EBITDA loss was $110.1 million in the second quarter of 2020.
Pat to a loss of $18.1 million in the same period of 2019.
It was primarily due to our continued efforts to defend the integration of our mall audit services with our shopping platform across different markets.
We have also in expanding the suite of online and offline third party use cases and partnerships.
Returning to our consolidated numbers.
We recognized a net non operating income of $7.6 million in the second quarter, both 2000, and twentys compared to a net non operating loss of $29.2 million in the second quarter 2000 and tightening.
Not operating gain in the second quarter of 2020 was primarily due to as gain from the sale of okay controlling equity stake and re measurement of our remaining stake in an operating entity in our other services segment.
Partially offset by higher interest expenses.
The revenue from the entity is post all contributed to a large portion of that revenue over other services segment in the past and the S&P is no longer consolidated falling such disposal.
Our non-GAAP operating loss in the second quarter of 2019 was primarily due to a fascinating loss of $31.8 million arising from the fair value accounting treatment for the 2017 convertible notes.
We had a net income tax expense of $27.8 million in a second quarter of 2020, which was primarily due to recording tax and corporate income tax recognized in our digital entertainment business.
As a result net loss excluding share based compensation and changes in fair value of the 2017 convertible notes were $317.7 million in the second quarter of 2020.
As compared to $215.1 million for the same period in 2019.
With that let me turn the call back creating.
Thank you plan to Tony we're now ready to open the call for questions.
We will now begin the question and answer session to ask a question you May Press Star then one and you touched on style if youre using a speakerphone. Please pick up your handset before passing the key.
John from the question Keith Please press Star then cans.
In the interests 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 cute again after your first question how Seneca.
The first question comes from Thomas Chong of Jefferies. Please go ahead.
Hi, I could give or take now friends management for taking my questions and congratulations on a very strong sets off result.
My question is about our end Neil.
Our full year outlook, given the fact that outperformance is so strong in the first top how should we think about the full year online games revenue well as well as the E commerce revenue growth.
And my second question is about.
Our.
At the competitive landscape in online shopping upping your comment about any change in terms of that trend.
That we would anticipate in the second half and next year. Thank you.
Yes.
Thank you.
In terms of all full year outlook.
Any side.
You can see from our Passikoff things.
Very strong momentum first in terms of active use that cadence there.
And all the time sale gains.
And with that saying they are continue.
Ed.
14.4 dollars. So we continue to see such growth across all its defense Agency Southeast Asia, Latin America, as well as frontier market, where we have a style footprints in yen.
That fell to four Allah active user base as well as pays to think our sustained FTP. Therefore, we believe we will continue to benefit from the tailwind.
800 stepped up Steepening decide nation.
Well as people looking for entertainment online joined US much of this testing requirements.
In the middle to pandemic.
Jay situation, Bobby Oh, yes countries.
And.
At this stage itself Backslash guilty point exact number comes up we guidance yes.
We are very.
Confident of outperformance.
Now, let us will show Atlanta intends to help us.
Exact number we will look to the call back later, when we have more information.
And we mentioned for July I'll pay is that for me by has doubled again.
Yes, and I also a historical high in terms of adjusted revenue, while our aim business.
For the check that positive and we.
We will consist of the goals.
Yes.
Yes that you comment settlements.
Yes, we are seeing their strong tailwinds as we expand our market leadership each market. We are in Arlington selflessly, telling it will be GMB in order.
Back to use their time sense frequency.
Automat checks, we've seen very high gloss fleets and this is a continuing into the third quarter.
As you know in most of our market or social justice stabilized strict lockdown happen nested in the middle for second quarter.
By the listing of such assets movement restriction, we continue to see that John mentioned and E. Commerce adoption and added to also for for example, we took the plan movie online. We mentioned so it has more than 200% yeah, we will see.
Yes, Tom.
Shutting off.
We also see other professional sellers, increasing their sales online and increasing move their entire.
Onto our platform and we are the go to platform flush selfishness well inside our region.
And that also goes to the competitive landscape.
Okay.
I think that being quite clear founder past.
Performance and.
No we are gaining market share and.
The.
Penetration is ongoing at the market Cmax and leader, but taking a disproportionate share aftermarket growth.
And that is also meant that our synergy to further defunding Monotype nation.
And during this period of time as we mentioned before and that we will continue to gradually ramp up monetization over time and should we be doing that.
Same time, where any of the need to our celledge and healthy new sellers on board our platform.
So there you.
You can keep on the patch enough that we are gaining market share in terms of both our gross out to all I can collect.
Thank you.
Yes.
As a reminder, please limit yourself to two question.
Next question comes from Yang Joanne Kyle of Goldman Sachs. Please go ahead.
Yes.
Hey, how are you seeing congrats on the results.
Firstly gaming can management provide some color on free fires contribution to total revenues.
And also what the need distraction in India for second quarter.
Alongside any comments or data points, you can share around new games.
Such as fit because she looks like we just launched since <unk>.
And secondly on E. Commerce, you talk about JMP group remaining strong quarter can you elaborate a little bit more surely there must be some deceleration girls as of slings gradually coming back is that sort of fair to say that ended the call sort of breakdown. The typically for us its second quarter, how much was from value added services Commission advertising.
Thank you.
Thank you assay.
We definitely very strong will be fire can speak to the vegetables, they'll give you said over all it is largely driven by ceasefire across there Michael.
I don't see said specifically right now.
Overall, we continue to see.
Being that the began to gain our portfolio.
Ben.
It is a.
Cashel climbing simulation game, we recently license.
We anticipate.
Our balance sheet team to expand our portfolio aim to into some of the casual diners as well then there's some seminary. So we don't have too much to share I think assessment always at this site as we continue to diversify our portfolio.
Thanks.
Sharpie, well I think.
If you look at our market.
Market by market analysis, I think that that share in Q1 before.
We depends of course, some market, where it's more affected by social distancing, who own Austrian locked out or longer period of lockdown PC more accelerate growth compared to market that some less effective.
So for example, if the market like this and if things where you see is diligence of cases and lead position of stricter locked down even see.
So as well.
Going into Q3.
Patrick you killed.
In some other market sustained title.
That is that much high level compared to.
Q1, sorry preacher period that actually applied to most of our market.
And gain market like Taiwan, and Vietnam, where.
Yeah, so far there hasn't been a medication for they post the actual Peoria and very limited lockdown.
In fact, it has always been more modern they get but even in the market like Taiwan, where.
There will never.
It's not about the paces and it was never eight locked down this year, we see high tenant well meaningfully heightened growth compared to last year again speak to.
Hey, I'll affinity and operational plan organizational strength in navigating a pandemic situation on capturing the gross or the comps with us and locked down and same time shells that end market, where it's less affected by locked out given our market leadership.
We continue to enjoy it sounds like well well ahead of the general market growth rates and tax refund of market share. This goes back to the strength of our business model as well.
Yeah any comments please.
Thanks Me right now in Q2, I think it's consistent with our path.
Quarter, such as most of our take rate or adjusted revenue came from the high margin streams of revenue, including commission handling fee. So at the advertisements.
Got it thank you.
Okay.
The next question interim Alicia Yap of Citigroup. Please go ahead.
Hi, Thank you I'm, good evening Forest, Tony entering and management team congratulations on the strong set of results and thanks for taking my questions have.
A couple of questions on the the Shafi basis, So I Wonder if management. If you wanted to highlight two to three key points.
That you have learned and try the most changers in terms of user behavior on the casing category frequency or even the merchants attitude and also the category mix in terms of the GMB contribution.
Sure right post coffee was previously you anticipate that income for the mix and then second questions one or two asks about the change also.
The accounting reporting.
Matt that you highlight in the press release, so can you elaborate a little bit the reason for to change and also the timing a wide range, we wait a little bit until or.
No the 2020 on the full year results and we have a change and also is that implying the full year revenue guidance that you previously provided.
Rather neal basis that is no longer badly.
We should not be reference to thank you.
Thank you Alicia.
He talked about shopping user behavior I.
I think we see very strong momentum on more fun.
One is active buyers on for active seller number.
Yes, actually Quincy and Tom sense have been increasing Oh wait company tends to affect frequency as well we reported one at four times and.
Oh, well see what is five times, a month and on average in some of the market.
In Asia getting close to six times, a month and this is sustaining into.
Even after the locked out here.
In terms of categories that we reported for Q1 that we saw.
Strong.
So to income stuff hygiene related product, that's all I suppose and living calling up would shift also related to working from home.
The climate, we continue to see that in large part of up to two.
And Oh, let's get to a bit back to normal that in Q3 with he sees Offseason movement restriction, we start to see fashion to pick up again.
So therefore, I think that in terms of categorical testing flextronics plus defense, so called Cagley separately.
In terms of the adjusted revenue reporting that we don't that making this change is that in connection with that so I'm wondering what the view that the seasonal filers enter with what we would see two questions on FCC one mid to late.
Into.
Mdna session I will say, we're fortunate to add some color I'm operating cash so defenses and other too we have provided supplemental information to the FCC and the other one it's regarding the recording of adjusted revenue in our industry.
We have also.
We mentioned in the earnings these Ah determines that we will not be reporting adjusted revenue was asking that meant he said well be using bookings, which is again GAAP revenue plus changes in does that mean asset also making matching.
And going forward, so that should that change does guidance doesn't kick off what is being scepter segments and he testified E commerce and other settlement Oh, we will also not Netflix adjusted revenue and he said well just to reporting GAAP revenue for the full year guidance.
Well E Commerce, we will continue to provide that are still incentive net off so that you can use that to add back to the GAAP revenue. Let me comment the other segments, it's actually call my sentiment to compare against the full year guidance. Adjusted revenue. This was the seeking a win.
One round of other stuff and I think there was any that CMS data science okay.
The response letter of correspondence with FCC will come off tightening about month time, then we should expect to see.
In September.
The next question in terms, how you show three and HSBC. Please go ahead.
Hi, congratulations to the management of cushion.
Firstly your adjusted marketplace revenue as a percentage of GMB has increased to 4.7%. This quarter can you elaborate what drove the increase and the medium term outlook for the thing.
And secondly on the logistics.
Third party logistics, a bottleneck for growth and what's your long term strategy or whatever it is choppy looking to invest in its own.
It's not just three thank you.
Thank you for the question.
So not just the bad news wells.
Again, mainly driven by I'll ask permission that does advertisements.
And also a function, which as we make component so democracy adjusted revenue HM stuff or.
Commission also given that there would probably also cross border.
Side as well as does the increase you mentioned some shopping mall I was more plan joining oh, we continue to see positive trend and we see that also see more usage more sellers newsy all advertisement program.
Unfulfilled that shopping program to serve their biased better joined a does that.
Thank you mentioned that also helped attract the closely hire a statement I am sorry, and so we will isn't as conventional thinking into gradually ramp up monetization all the time.
The PPL.
I think so given the economic situation. So from seems very strong performance by Allison <unk> partners across different walk it didn't make it a huge effort.
Close collaboration with us to demographics as many packages as possible to I will use it as shown in the heightened well have our order on in Q2 and to enjoy right into the two suites and and I think this is a is basically a demonstration of our.
Trends, oh that relationship with them and.
In terms of operational network I want to.
I don't confuse work across different parts, we T. Atlas.
Market on a small enough amenity capacity was only assessed nobody team.
We will continue to provide was subject to all five despite a movement deficiency.
Your next question is from John Blackledge of Cowen. Please go ahead.
Great. Thanks, two questions first on choppy despite the huge accelerating growth. This quarter, you still showed a negative 17% incremental EBITDA margins, albeit it was much less than than the two Q 19, a negative EBITDA.
Margins just curious what are the key investment striving does the negative leverage and then on C. money can you frame the longer term opportunity for the C money business in the mobile wallet users rose 50% year over year, just discuss how you're driving the strong user growth. Thank you.
Sure.
That's a ecommerce we continue to invest he is well and if you look at all on EBITDA loss or there. That's the flash dropping from a dollar a year goal to 60 cents last quarter I anticipate that order this quarter and therefore, we think we're gaining efficiency content.
Gaining efficiencies actually investing their rapid growth of shockey, a same time, he deepening monetization overtime and we always said we believe eight the this model is very clear and said that you know who's about all a major marketplace ecommerce players.
Well that Ah Ah profitability model for marketing and almost it's a very strong yeah.
And especially for strong market leader and therefore, we are investing the long term goal solstice.
Segment to continue to strengthen our market leadership us to Bill's people competitive moat as well as to maximize our long term profitability.
So Oh, hey money.
So we mention to showing very strong flows.
During this period as well action.
You know we have the largest at all then he said and natural used cases that allow us to not only filter mobile wallet with efficiency, but also to drive other initial financial services.
Across the different market a with the strong so I used to affinity the data and a justification for use cases have I stated. This does vary some synergies between our suite core businesses that were enjoying and therefore driving very fast adoption of the money.
A lot it a small asset in terms of of course of paying users where he we will continue to fly. The we'll just see money primarily through our own March and Oh data use cases that to intensify mountains attention. We think that's definitely.
There they are given that that this demand for to show paving and she'll financial services its huge in our market given the under a banking population and on the penetration of traditional financial services, where we can do have a clear.
Looking to me it use technology.
Promote a set of financial services settlement to sell more population no market and there is very natural standpoint on current pandemic just wanted to sell it makes it a says that the penetration of to show financial services animal mobile on it for everybody.
People all the for alternative ways of people think online as well as compound it seems a message.
The next question is from Ranjan Sharma of JP Morgan. Please go ahead.
Hi, good evening, Thank you for the presentation.
Congratulations on the result.
Well no questions from my could firstly Oh piccolos.
I'm talking about the competitive environment, what we understand is the.
So I'll go so he'll Peter.
Oh, My God business on a strong putting in terms of isn't copper girl competing in the market.
So she can chose quotes around potential emitted into space and how you would approach and potential opportunities.
Secondly.
You should a bit about seed money.
Well, maybe can also compared to others.
Fintech companies, especially offerings from our though.
To put ups and the reason and how are you in how you are different.
So it sounds like war, what is wondered reduction for see Monday was Olivia the ups and I'll be glad to see extended periods or.
There's a marketing and losses foresee money. Thank you.
Sure.
In terms of a competitive landscape I think were in a very strong position that they were flowing.
Faster and faster.
Quote unquote, Ethan and we also a sort of strengthening our market leadership position and actually have demonstrated with self funding Oh well.
In the E Commerce now if you look at a certain other competitors, who are well, you'll see money and dealt with dependent on external funding for it and when the market share I can see why it could be very difficult or two fold.
So I think this is put us in that it even stronger competitive position all along the open minded about all possibility I'm confused to assess the competitive landscape carefully and to focus on stressing our home automation to somebody else sellers and buyers Center I think this is up.
That up and it took a long time for us in growing our marketplace.
And he himself or you're still financial services and I see money I think you'll see but ER stress.
I would say competitive trends in the necessity.
Very much.
And perhaps the largest online.
Which is the ecommerce that's wants to show entertainment.
Especially on the E commerce sites, but it's not only see this also closeness to people's lives and purchase behavior or doesn't allow us to happen like a mom data just built more financial services Oh digital payments.
We think that he was not seem all and anymore or kind of services you would like to supply a comprehensive suite of services all used to.
For the more auction online and this is a threat we have in Philly and second.
Oh, we are able to sell again self funds Oh inflows in seed money at the test. He would have been very focused on investment efficiency and scaling with right amount investments like time, and black market condition and maximizing.
Never actually have owned a use cases and he is the set us apart a super happy that the concept of you know it. It's a comes I think we're talking about but I think there lot of execution of details it's not about nothing everything together, one app and just hoping to use the with Samsung also.
But you need to make sure.
The only use experienced operational and business model perspective, everything makes sense together and can actually trying to squeeze synergies across different functionality and that's what we have very much focused.
The next question is from for room and beyond.
Credit Suisse. Please go ahead.
Hi, Thanks for the opportunity and.
That's a little bit typically a month or two question for me.
Okay.
Give some color on the field marketing spend that they've been doing this quarter. So for how the qualitative Ken has been on shipping subsidies, how much is doing on guidance emotion and discretionary spending that'd be helpful.
Secondly on a difficult financial services. If you look good so you mentioned about.
Total payment transaction is 1.6 billion, which is around 20% golfer.
Who E commerce via before this quarter.
Looks like most places in Indonesia. So.
Okay. So Dennis is offload.
Payment business, it's just pretty much strong in Thailand, and Vietnam. So just wanted to understand how to think of fall save money has been because it infrastructure ways that was little baby markets for you too.
Doing well, but looks like Indonesia say look they come along so just wanted to understand how do you how youre looking at this segment.
Last if I could speaking on got to get it mix. If you can give more color.
How much is also do you know.
Losses of some of the.
Got to give you since you have been stronger fashion or how you couldn't do you see was you can think.
Sure. Thank you.
Sure.
Sales and marketing that caught me college.
Okay.
Discretionary spending a it's already the spigot component fossil Q2, and he sat so we think increasingly efficient should be subsidy a wildfire potentially joint that is increasingly being funded.
By please shut down on a full glass is half with sellers. That's all that we think boxes yeah.
And Oh, we also did take advantage of Ah Ah you know the airtime.
During the social locked down where more used to oh watching TV all.
Any kinda online to do more of a spend marketing and it's also a in line with other Ramadan season in Indonesia, and Malaysia, and yes, wanting more bombs that a friend discretion grandstanding again, it's it that is how do you discretionary anchor Verifone parents.
Period.
[laughter] Ah, yes that.
So I think that Indonesia, being done, but country, where we rolled it out and income sounds like inflation with that they're shopping platform and we also have.
And working on had been on that side, although market, we see the overtime strong adoption or any other markets as well as you well, which I think that's the strategy as well as operational that's helpful and you should be tailored for each market and so will you know it sounds like the demo.
They did a in terms of ours. He is on ecommerce business. This is actually a lot less stress is too high.
Hi, localized operations I saw it Oh, the design, though the product Oh, each markets and we'll continue to do that because it to see some cool contribution from all the other markets as well in addition to.
Yes, so terribly Matt fourth quarter as Tom mentioned I'm here. He told the 60 and fall home and living in hiking product I saw s. FMCG products during the quarter.
HM.
Which is probably explain to find a social.
I'm not down rule.
Thanks, Hi, so fashion and the health and beauty set to Oh, we excel and they are going into the quarter and Ah many of the locked down home setting E.
Continued strength in other categories as well so FSC still remains a very small part of our Headingley me I'll, let me kind of when they haven't changed that much.
This concludes our question and answer session I would like to turn the conference back over to move yen Jane Wong for closing remarks.
Thank you everybody for joining today's call the for what you're speaking to you all again next quarter. These take care.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.