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$SE Q3 earnings call recap:
(STOP ASKING ME IF I SLEPT THROUGH MY ALARM, DO U HAVE NO FAITH IN ME i'm slow at typing
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(STOP ASKING ME IF I SLEPT THROUGH MY ALARM, DO U HAVE NO FAITH IN ME i'm slow at typing
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:) TLDR - nothing too eventful, stock is mostly flat.
Total GAAP rev was $1.2 billion, up 99% YoY (close to expectations)
EPS -0.69 vs expected -0.55
Adj EBITDA $120.4mm (positive due to Garena)
they raised full year 2020 guidance for Shopee and Garena
Total GAAP rev was $1.2 billion, up 99% YoY (close to expectations)
EPS -0.69 vs expected -0.55
Adj EBITDA $120.4mm (positive due to Garena)
they raised full year 2020 guidance for Shopee and Garena
Garena (mostly Free Fire):
- bookings was $944.7mm, up 110% YoY
- GAAP revenue was $618.7mm
- QAU was 572.4mm, up 78% YoY
- QPU was 65.3mm, up 124% YoY
- bookings was $944.7mm, up 110% YoY
- GAAP revenue was $618.7mm
- QAU was 572.4mm, up 78% YoY
- QPU was 65.3mm, up 124% YoY
Shopee:
- GAAP revenue was $618.7mm, up 173% YoY
- Gross orders was 741.6mm, up 131% YoY
- GMV was $9.3 bil, up 103% YoY
- GAAP revenue was $618.7mm, up 173% YoY
- Gross orders was 741.6mm, up 131% YoY
- GMV was $9.3 bil, up 103% YoY
SeaMoney:
- $2.1 bil in TPV
- 17.8mm QPU of the mobile wallet
- in Oct 2020, more than 30% (!!!!) of TOTAL gross orders on Shopee were paid for using mobile wallet
- $2.1 bil in TPV
- 17.8mm QPU of the mobile wallet
- in Oct 2020, more than 30% (!!!!) of TOTAL gross orders on Shopee were paid for using mobile wallet
$SE continues to tell a story of balancing Garena's strong revenue + positive EBITDA with the larger potential upside of making investments to expand Shopee and SeaMoney
Garena's rev + increase in QPA was probably the biggest "surprise" today. Free Fire was the highest grossing mobile game in LATAM + SEA.
As usual, $SE mgmt attributed Garena's strong performance to their ability to create localized content and experiences (ex: playable characters based on specific local celebrities).
IMO, creating localized content like this is one of the most important areas of development bc it is indicative of Free Fire becoming less of a game and more of a platform.
In line with this idea, mgmt also talked about how they introduced more social and community features -
In line with this idea, mgmt also talked about how they introduced more social and community features -
for example: within Free Fire, they released a space where players can meet + hang out socially. 1 in 4 players spent time there every day on average (!!).
IMO, this is pretty amazing - a sign of a digital future with monetization opps that we might not fully understand yet $SE
IMO, this is pretty amazing - a sign of a digital future with monetization opps that we might not fully understand yet $SE
also noteworthy:
the launch of Fantasy Town, a farming sim game that also has a lot of local content (ex: Indonesian landmarks). "Weâre not focused on monetization per se for these games, but more on understanding our users' preferences with respect to different types of games."
the launch of Fantasy Town, a farming sim game that also has a lot of local content (ex: Indonesian landmarks). "Weâre not focused on monetization per se for these games, but more on understanding our users' preferences with respect to different types of games."
With respect to Shopee/ecomm, $SE reported strong growth overall. the app was (again) number 1 in SEA for downloads, MAU, and time spent on Android (App Annie).
On a global level, it was second most downloaded app in shopping.
On a global level, it was second most downloaded app in shopping.
$SE mgmt continued to relay the importance of investing in Shopee + SeaMoney NOW as COVID presents a "golden time" to drive growth: "[monetization] comes very naturally. If you look at it, we didnât even try that hard, it just comes naturally when the business scales."
one of the most interesting parts of the $SE call was that Shopee Live recorded 48mm hours watched in Q3, and sellers have continued to use it to drive user engagement
This is important bc it distinguishes Shopee from some of the more traditional ecomm players out there
This is important bc it distinguishes Shopee from some of the more traditional ecomm players out there
Personally, I think these more thoughtful social product features (both within Shopee and within Garena) are what's going to give them a lasting competitive edge going forward, even though they currently seem somewhat insignificant
when asked about Shopee increase in revenue, mgmt alluded to this being driven by "high margin" items: txn-based fees and ads
they also mentioned value-added services (ex: less sophisticated sellers can pay higher fees to have Shopee manage the ad bidding + banner placement)
they also mentioned value-added services (ex: less sophisticated sellers can pay higher fees to have Shopee manage the ad bidding + banner placement)
with respect to the staying power of any bumps in growth attributed mostly to COVID, $SE mgmt again said they're seeing stickiness of digital economy adoption in places where covid restrictions have been lifted (although they didn't provide a ton of specifics here)
SeaMoney is still a tiny business, but it is seeing impressive early growth. i'm *fairly certain* $SE has only previously reported "paid for on Shopee with wallet" numbers for Indo, so it is cool that today they reported high penetration numbers for TOTAL orders
anyways that's all! happy to be a long-term investor in this biz and looking forward to listening to future earnings calls 
also important - great catch @EMparadigmshift ! https://twitter.com/EMparadigmshift/status/1328690490133209089?s=20
