--- title: "SE (Trans): Shopee GMV to grow at least 25% in 2026; Garena bookings to sustain strong growth" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40690006.md" description: "Below is Dolphin Research's Trans of $Sea(SE.US) FY26Q1 earnings call. For our earnings review, see 'SEA: SE Asia's mini Tencent roars back'. 1) Shareholder returns: The company authorized a $1bn buyback. Since Nov last year, it has repurchased approx. $170mn, and management intends to keep executing. 2) Outlook: Reiterated the FY26 guidance for Shopee GMV. Growth is projected at ~25% YoY..." datetime: "2026-05-12T15:48:03.000Z" locales: - [en](https://longbridge.com/en/topics/40690006.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40690006.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40690006.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # SE (Trans): Shopee GMV to grow at least 25% in 2026; Garena bookings to sustain strong growth **Dolphin Research compiled the following**$Sea(SE.US) **FY26Q1 earnings call transcript. For our take on the print, see** [**SEA: Southeast Asia’s mini-Tencent is back**](https://longbridge.com/en/topics/40689846)**.** **I. Key results recap** 1\. **Capital return**: The BOD authorized a $1bn buyback. Since Nov last year, the company has executed approx. $170mn. Management intends to keep buying back shares. **2\. Guidance**: Reiterated 2026 full-year Shopee GMV growth of ~25% YoY, and full-year Adj. EBITDA not below 2025 in absolute terms. Garena keeps its guide for strong YoY growth in full-year bookings. 3\. **Group performance**: Q1 revenue of $7.1bn (+47% YoY). Adj. EBITDA topped $1.0bn for the first time (+9% YoY), with net income at $438mn (+7% YoY). 4\. **Shopee margin pressure**: Q1 Adj. EBITDA was $223mn vs. $464mn a year ago. Heavier spend on fulfillment, VIP membership and user acquisition weighed on profitability. Mid-to-long term EBITDA margin target remains 2%-3%. 5\. **SeaMoney loan book ramp**: Ending loans reached $9.9bn (+71% YoY), with 90+ day NPL steady at 1.1%. Brazil’s loan book topped $1.0bn (+250% YoY). **II. Call details** **2.1 Management highlights** **1) Shopee e‑commerce** a. Q1 GMV rose 30% YoY to $37.3bn, with total orders up 29% YoY to 4.0bn and revenue at $5.1bn. Core marketplace services revenue was $3.8bn (+61% YoY). **Ad revenue grew ~80% YoY and ad take rate expanded by over 90bps**. **Avg. ad spend per paying seller increased ~35% YoY.** **b. MAU buyers grew 16% YoY, and purchase frequency increased ~12% YoY.** Engagement remained solid across core markets. Category expansion and better discovery supported repeat purchases. c. **Logistics**: SPX Express continued to refine on-demand and same-day delivery. In Indonesia, on-demand delivery now reaches urban areas within 2 hours. **Q1 order volume rose \>35%, while unit cost fell ~20% YoY**. Partnerships with Indomaret and pharmacies brought ~7,000 offline stores into the on-demand network by end-Mar. Fulfillment orders grew ~25% QoQ, with over one-third of Asia parcels arriving next day. In Taiwan, pick-up point coverage exceeded 3,100 (+~50% YoY). Avg. buyer delivery time improved 12% YoY. d. **Shopee VIP**: Subscribers in Asia topped 10mn (+\>40% QoQ) with retention above 80%. Post-subscription spending rose 30%-40%, contributing ~20% of Asia GMV. The program launched in Brazil in Apr. e. **Content ecosystem**: Orders from live-streaming and short videos increased \>50% YoY, now \>25% of Southeast Asia physical-goods orders. YouTube-driven orders doubled YoY. The Meta partnership now covers \>4.5mn affiliates (+~30% QoQ), and in Indonesia expanded to Instagram for product promo and checkout. f. **Brazil**: Fastest-growing and still profitable in Q1, with gains in active buyers, frequency, and AOV. Delivery time improved by over one day YoY, and three new FCs were added (five in total). Shopping Mall sellers’ GMV more than doubled YoY, contributing ~15%. g. **AI adoption**: Improved search and recommendation lifted conversion by 14% YoY. About 80% of CS inquiries are handled by chatbots, cutting per-contact costs ~30% YoY. AI shopping assistant and seller AI advisor are in testing. **2) SeaMoney fintech** a. Loan book reached $9.9bn (+71% YoY), with $8.8bn on-balance-sheet and $1.1bn off-balance-sheet. **Q1 added 4.9mn first-time borrowers, and active credit users exceeded 38mn (+35% YoY)**. Avg. loan per user was ~$250 (+25% YoY). b. Three growth vectors: deepen penetration among existing users, acquire higher-quality new cohorts, and **expand beyond Shopee**. **In Thailand and Indonesia, Off-Shopee SPayLater now exceeds 20% of the SPayLater portfolio.** c. Brazil’s loan book surpassed $1.0bn (+250% YoY). Localized products, such as a unified flexible line blending SPayLater and cash loans, drove strong user growth. Avg. loan per user more than doubled YoY. SPayLater penetration on Shopee Brazil GMV is ~10%, far below mature markets, implying ample runway. The SPayLater license was obtained during the quarter. d. 90+ day NPL rate remained stable at 1.1%. **3) Garena digital entertainment** a. Q1 bookings were $931mn (+20% YoY), revenue $697mn (+41% YoY), and Adj. EBITDA $574mn (+25% YoY). This was the best quarter since 2021. b. Free Fire’s Jan collaboration with Jujutsu Kaisen generated \>700mn official content views, one of its most successful IP tie-ups. Ramadan went global via the ‘Lost Treasury’ theme, with \>120bn social impressions (+~70% YoY). c. Arena of Valor achieved record quarterly bookings in its 10th year. Management expects 2026 to be a record year for Arena of Valor. **2.2 Q&A** **Q: Shopee GMV grew 30% and orders 29% in Q1. What drove the ASP uplift, and how much came from Brazil’s premiumization vs. Asia’s VIP program?** A: Growth was broad-based across Brazil and Southeast Asia. **Brazil grew slightly faster than SEA, but the quarter was not solely Brazil-driven**. In Brazil, **scaling fulfillment and onboarding more sellers attracted higher-end users**. In Asia, **VIP made a meaningful contribution**, as noted earlier. **Q: With Q1 GMV up 30%, why keep full-year GMV growth guidance at ~25%? Is it a high base in 2H or macro uncertainty?** A: Q1 benefited from seasonal factors such as Ramadan and Lunar New Year, and last year’s initiatives (VIP, on-demand delivery, and AI-led discovery) collectively helped beat expectations. **It is still early to revise the full-year view; we will update when the underlying market trend is clearer.** **Q: Are Arena of Valor’s record bookings sustainable, or were they a one-off driven by seasonality and promotions?** A: We are very encouraged by Arena of Valor. Achieving record bookings in its 10th year underscores the title’s longevity and our team’s ability to keep content fresh. This is not a one-off; we have been steadily investing in content updates and community operations, and results are showing. This year marks the 10th anniversary with a rich content slate, and we expect 2026 to be a record year. Seasonality did help in Q1 with the Lunar New Year peak, and quarterly performance will vary with content and collaboration cadence. **But on the fundamentals of engagement and payer penetration, we are confident Garena can deliver strong full-year bookings growth**. Arena of Valor’s performance in year ten also strengthens our confidence in Free Fire’s long-term trajectory. **Q: How should we think about Brazil e‑commerce margins, especially as competitors step up investments? How is Brazil considered within the full-year EBITDA guide?** A: Brazil significantly outgrew the market in Q1, which drove share gains and scale benefits in service costs. **Brazil has been profitable for several quarters, and we do not expect that trend to change**. We will keep investing in healthy growth while maintaining current profitability. Investments will continue in fulfillment build-out, same-day delivery expansion, and the VIP program. These are core to reinforcing our position. **Q: Any early learnings from Brazil’s lending business, and how do returns compare with ASEAN?** A: **Brazil’s loan book has exceeded $1.0bn** with very strong YoY growth. Localization is key — we did not simply transplant Asia’s products but created local offerings, such as a unified flexible line allowing users to switch between SPayLater and personal cash loans. We also leverage local data sources like open banking, on top of Shopee’s transaction data, which improves risk modeling. This has supported sound risk performance, enabling us to scale the user base while staying profitable. Overall, our financial services presence in Brazil is still at an early stage of penetration. Compared with local peers, our scale has substantial headroom to grow. **Q: ASEAN take rate keeps rising. How much is being reinvested into seller and consumer incentives? Are ASEAN e‑commerce margins improving, and are sellers in markets like Thailand resisting commission hikes?** A: In short, **we did lift take rate, but EBITDA margin was roughly flat QoQ, implying most of the incremental economics were reinvested to drive growth**. **Key uses include fulfillment network build-out and the VIP program**. Across most ASEAN markets, we still saw solid QoQ margin performance. **On seller commissions, the key is how pricing is affected**. **Our platform remains highly price-competitive vs. online and offline peers**. We will calibrate commissions to market dynamics. What matters most is seller profitability, which depends on commission levels, operating costs on our platform, and the volume we deliver. While commissions ticked up, we are working to lower sellers’ operating costs — e.g., AI chatbots to automate buyer inquiries and AI-driven diagnostics in Seller Center. With the market still growing fast, sellers get a larger pie and the ecosystem stays healthy. **Q: E‑commerce EBITDA declined YoY in Q1. Can you break down the drag across Brazil, Taiwan, and SEA? How will regional contributions shape EBITDA over the next few years?** A: EBITDA was slightly lower YoY, but sequentially it improved from Q4 2025 to Q1 2026. There are a few drivers: last year was the first time Ramadan fell in Q1 and we adjusted our pacing, and this year’s cost control was better. We also kicked off several growth initiatives in Q1, some continuing from 2H last year. Near term, **we guide to ~25% growth in 2026 with full-year EBITDA not below last year, and we remain committed to a 2%-3% EBITDA margin over the mid-to-long term**. **Q: Fintech margins keep trending down. Is there a steady-state level and timeline?** A: Our focus is that each incremental loan adds positive absolute EBITDA. **We recognize EBITDA-to-loan ratio (ROA) may drift lower over time due to country and product mix**. Early markets like Indonesia have higher ROA, while later additions such as Thailand and Malaysia are lower. The business is still early with sizable runway in new markets. In Brazil, our loan book is still small vs. local peers, and we are expanding off-Shopee use cases like telco stores and two-wheeler dealers. It is too early to pin down a steady-state number given the mix effects. **Q: What is the potential impact of higher oil prices on costs and consumer demand?** A: We monitor this closely. There are two areas of impact. First is direct operating costs; the good news is we utilize fuel subsidies in many countries to absorb increases, particularly in last-mile, which is the largest cost component. We also work closely with line-haul and airline partners to share costs. While there is an impact, we believe it can be managed within our current guide. Q2 will likely see a larger effect than Q1. The second impact is on consumer spending power in some countries. We have observed only mild effects on our platform because our proposition is the lowest price for daily necessities. When consumers need to save, they shop more with us. Our mix also has lower discretionary exposure vs. offline, which helps cushion this second-order effect. **Q: What are the near- and long-term goals for Brazil FC build-out, the investment cadence, and payback timing?** A: We are still in the early stages in Brazil given our late start. Our principle is to avoid overbuilding by keeping utilization relatively high, as we can forecast fulfillment orders well and build to schedule. So we do not expect a boom-bust build cycle, but rather a steady, continuous build. **Our long-term goal is to process more absolute volume than key competitors, which will take years from a late start**. Because we lease facilities and focus capex on equipment, single-site payback is quite fast. We also keep investing to onboard sellers into FCs and educate buyers about the service. These efforts support adoption and throughput. **Q: How is the VIP unit economics trending? Will you tweak benefits or pricing?** A: **VIP benefits come from two sources: Shopee-native perks (e.g., free shipping in some markets) and partner perks**. We are actively expanding our partner roster, with several new partners to be announced soon, and system integration underway. More partner benefits should improve unit economics. On pricing, **we may introduce tiered pricing depending on market response**, user segment needs and partner resources. Given high retention and engagement uplift among VIPs, we will keep investing for now. Ultimately, we believe VIP will be more profitable than non-VIP, thanks to higher stickiness and the value partners can deliver to users. **Q: How do you see Garena’s full-year bookings growth?** A: We remain confident Garena will deliver strong growth this year. Our prior guidance is maintained. **Q: Buyback execution seems slow (~$170mn of the $1bn authorization). With the stock once at $78, how do you assess intrinsic value and the pace ahead?** A: As disclosed, we have been actively repurchasing since Nov and will continue. Our conviction in the strong growth potential of our three business segments and markets underpins the buyback decision. **Q: With VIP tracking well, what are the key KPIs? Is it MAU penetration in core markets or a GMV threshold?** A: **We track GMV penetration, user retention, and unit economics**. Another key KPI is the number of VIP partners to ensure we deliver rich benefits from both Shopee and third parties. We have learned a lot from early-launch markets and are leveraging those learnings as we roll out to others. As we scale to more countries, we keep iterating and optimizing. **Q: Can you share SeaMoney’s mix by country and on/off-Shopee, and the key drivers behind the 71% loan-book growth?** A: By country, early markets like Indonesia started first, while later markets such as Thailand, Malaysia and Brazil are growing faster due to late-mover advantages. We are not providing precise country splits. On vs. off-Shopee, on-platform used to dominate but is now less than half. Off-Shopee accounts for ~20% of the total book, an important milestone, and it is growing faster than on-platform. **Three growth drivers ahead**: deeper penetration within existing cohorts through more products, better credit assessment, tighter Shopee integration and off-Shopee expansion. **Second, broaden use cases by adding more online and offline merchants for SPayLater acceptance**, and in some credit card markets, launch debit cards linked to credit lines. **Third, expand into new user segments**, moving from subprime toward more prime users — ROA may be lower, but the loan pool is larger. These three levers will drive loan growth across markets over the next few years. **Risk disclosure and disclaimer:**[**Dolphin Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [SE.US](https://longbridge.com/en/quote/SE.US.md) - [SEA.US](https://longbridge.com/en/quote/SEA.US.md)