Good morning and good evening. Welcome to the Sea Limited Q2 2022 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ms. Minj u Song. Please go ahead. Thank you, Jason. Hello everyone, and welcome to Sea's 2022 Q2 earnings conference call. I'm Min ju Song from Sea's Group Chief Corporate Officer's office. Before we continue, I would like to remind you that we may make forward-looking statements which are inherently subject to risks and uncertainties and may not be realized in the future for various reasons as stated in our press release. This call includes a discussion of certain non-GAAP financial measures such as adjusted EBITDA and net loss excluding share-based compensation and impairment of goodwill. We believe these measures can enhance our investors' understanding of the actual cash flows of our major businesses when used as a complement to our GAAP disclosures. For a discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures, please refer to the section on non-GAAP financial measures in our press release. I have with me Sea's Chairman and Group Chief Executive Officer, Forrest Li, Group Chief Financial Officer, Tianyu Hou, and Group Chief Corporate Officer, Yanjun Wang. Our management will share strategy and business updates, operating highlights, and financial performance for the Q2 of 2022. 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 all for joining us today. I'm going to start with an update on our plan to further focus on efficiency and strengthening our ecosystem for long-term profitability and competitiveness. I will also share a few highlights across our businesses as we made steady progress towards these objectives. During the pandemic lockdowns, we rapidly scaled our businesses to answer to the fast-rising market demand for online consumption and services. As a result, we significantly expanded our businesses and total addressable markets and strengthened our market leadership while improving growth efficiency. We were able to achieve these results by focusing on doing the right thing at the right time in setting our direction and being agile and adaptable in our execution. Now, we are in an environment of increased macro-uncertainty with rising inflation, rising interest rates, local currency depreciations against the US dollar, and ongoing reopening trends. In this environment, being agile and adaptable is even more crucial to the long-term success of our business. We believe the right thing to do at this unprecedented time is to focus even more on self-sufficiency, long-term profitability, and defensibility in our business operations. Our results for the Q2 demonstrate the early success of these efforts. Because of our strong execution in the quarter, Shopee's unique economics improved significantly, driven by efficiency gains across our markets. In particular, adjusted EBITDA loss per order before allocation of HQ costs in our Asia markets combined was less than $0.01, and we are on track to achieving positive adjusted EBITDA before HQ cost allocation in this region. At the same time, Shopee continued to grow at healthy rates despite the tough year-over-year comparisons, with GAAP revenue up 51% year-over-year or 56% year-over-year adjusting for currency fluctuations. For Garena, quarterly active users were stable quarter-over-quarter. This positive outcome was a result of our efforts around user retention to serve our large games community through more engaging experiences. We will continue to focus on user engagement around our existing franchises, especially Free Fire. Indeed, we are encouraged by Free Fire retaining its top-ranking position as the highest-scoring mobile game in Southeast Asia and Latin America during the quarter based on data.ai. Synergies between Shopee and SeaMoney also expanded as we continue to cross-sell more financial products and services to our underserved user base across more markets. Close to 40% of Shopee's quarterly active buyers in Southeast Asia used the SeaMoney products or services during the quarter. SeaMoney's revenue has enjoyed strong growth, and its adjusted EBITDA loss has also continued to narrow during the quarter. With the solid performance across our businesses, group GAAP revenue was $2.9 billion, up 29% year-on-year in the Q2, while profit grew 17% from last year to reach $1.1 billion for the quarter. Let's now discuss each business segment, beginning with e-commerce. Shopee continues to appeal to more buyers and sellers across our markets, as evidenced by continued leadership in active user and engagement metrics as well as record operational and financial metrics. In the Q2, Shopee's GAAP revenue grew 51% year-on-year to reach $1.7 billion, driven by GAAP marketplace revenue growing close to 62% over the same period. Gross orders were $2 billion, up 42% from last year, and GMV grew 27% year-on-year to reach $19 billion. The currency fluctuations negatively impacted both GAAP revenue and GMV year-on-year growth rates by more than four percentage points. We also saw further improvements in monetization during the quarter as we delivered more value to our sellers. Across the board, sellers are investing more with us to pursue growth on our platform. These efforts continue to translate into positive financial results. For the period, GAAP marketplace revenue as a percentage of total GMV increased both year-over-year and quarter-over-quarter to reach 7.7%. The increase was mainly driven by increases from high-margin value streams like transaction-based fees and advertising, which underscores the success of our platform in driving greater economics for our sellers. As a result, there was strong flow-through to the bottom line with the better monetization contributing directly towards better profitability. In the Q2, gross profits for Shopee grew by close to 85% year-over-year, and the gross margins continued to improve sequentially from the last quarter. Shopee's overall adjusted EBITDA loss also improved sequentially by 13% quarter-over-quarter. Moreover, in Southeast Asia and Taiwan, adjusted EBITDA loss per order before allocation of HQ costs for the quarter was less than $0.01, which shows that we are well on track towards achieving positive adjusted EBITDA before HQ cost allocation in our Asia markets combined. In Brazil, Shopee is also driving greater efficiencies while growing revenue rapidly. The adjusted EBITDA loss per order before allocation of HQ costs there was $1.42, improving quarter-over-quarter. At the same time, GAAP revenue in the market grew more than 270% year-on-year. We are also optimizing spend around our HQ costs. During the quarter, total HQ costs for Shopee increased by $28 million quarter-over-quarter, driven by an increase in research and development staff and server hosting costs as we expanded our technological capabilities and service offerings. This represents a deceleration in cost increases compared to the last quarter. While we will continue to invest to enhance our products, we have been able to strengthen our teams significantly in the past period and plan to be prudent in further expanding the teams. Meanwhile, Shopee continued to achieve top rankings globally and in our region. In the Q2, Shopee ranked first in the shopping category globally by total time spent in app and second by average monthly active users on Google Play, according to data.ai. We also remained as the top-ranked app in the shopping category by average monthly active users and total time spent in app in each of Southeast Asia, Indonesia, and Taiwan. In Brazil, we further strengthened our leading position with Shopee ranking first by average monthly active users in the Q2, while continuing to rank first by total time spent in app for the shopping category during the quarter. Besides engaging consumers, we are also working closely to support our sellers. We continue to empower our merchants through education and training, in addition to providing them better tools and services. This remains a key area of focus for us. Across the Shopee seller platform, resources including our Shopee University and the master classes have been especially helpful to the local entrepreneurs and MSMEs. We are also growing our brand partners on Shopee Mall through closer collaboration to enable greater engagement with their customers. Staying close to and collaborating with our sellers has enabled Shopee to grow and thrive together with them. For example, in Brazil, we estimate that Shopee has become the main source of income for over 300,000 local entrepreneurs and has brought 430,000 new digital entrepreneurs to e-commerce. This has been partly driven by our investment behind training our Brazilian sellers, with more than 60,000 sellers attending classes at the Shopee Education Center. Now, I would like to discuss our decision to suspend the full-year revenue guidance for Shopee, driven by the highly volatile and unpredictable macro-environment. As shared earlier, while we think the right thing to do during the pandemic lockdown was to prioritize growth with improving efficiency, we think the right thing to do in this time of continuing heightened macro-volatility is to prioritize efficiency and self-sufficiency. As we have always maintained, we think about managing our businesses as more like marathons rather than sprints. Adjusting our pace to match the moment is therefore highly important. Our ability to navigate changing times will help us win this long race ultimately, given our strategic shifts coupled with the various micro-factors that are hard to predict, as mentioned before. We believe this is prudent to maximize our focus on efficiency across our business rather than overcommitting, which we believe would be ill-advised at this time of uncertainty. As such, we are suspending the full-year guidance for Shopee, which we last provided in May. Even though we have stopped providing guidance, our focus for the rest of the year remains very clear, which is to continue to improve efficiency by both deepening monetization and optimizing our cost structure. We will be more tightly managing our operating expenses, such as marketing costs and logistics costs, while also gradually increasing monetization across various income streams with a focus on the high-margin ones. More importantly, I want to emphasize that the current micro-volatility does not affect our highly positive long-term outlook for our region. Current micro-uncertainties do not change the fact that our markets remain some of the areas with the highest long-term growth potential in the world, with positive demographic features and deepening digitalization. The current micro-uncertainties also do not change our demonstrated track record in capturing some of the largest opportunities across the consumer internet industry in our market. We believe our strong market leadership position will continue to allow us to disproportionately benefit from the long-term industry growth, and our strategic decisions and operational focuses today are all directed at best positioning us to capture these long-term opportunities. Turning to digital entertainment. In the Q2, Garena's GAAP revenue was $900 million, and the bookings were $717 million. Free Fire remained the most downloaded mobile game globally during the Q2 based on data.ai. It was also the highest-growing mobile game in Southeast Asia and Latin America during the quarter, maintaining this leading position for 12 consecutive quarters. It is encouraging to see that Free Fire continued to perform well within the mobile game industry. Moreover, Free Fire showed some early signs of active user stabilization, with quarterly active users reaching 619 million compared to 616 million in the Q4. We continue to focus on investing in user engagement around the Free Fire franchise and platform, ensuring a consistent cycle of fresh and new content for our communities. As an example, we celebrated Ramadan with our local communities in the Q2. During Ramadan, we worked with local celebrities, introduced more themed items, and hosted a number of community gatherings. These highly localized efforts allowed us to better engage our local users and enjoy strong monetization during the Ramadan season. New content we introduced in the form of game modes has also helped to diversify the experiences that our gamers can enjoy on the Free Fire platform. Alongside the Battle Royale mode, we are increasingly seeing solid, long-lasting retention and engagement around other game modes like Clash Squad, which is a 4v4 game mode, and Lone Wolf, which is a 1v1 or 2v2 game mode. Besides being highly engaging and social experiences, these game modes are also shorter and more fast-paced, which are preferred by some gamers, especially as time available for entertainment is more fragmented with reopening. While short-term gaming industry trends remain relatively uncertain due to reopening trends as well as the potential impact from micro-volatility, we are highly confident in the long-term structural tailwinds of the segment. We expect this to be even more apparent across our markets, where we are well-positioned and the growth runway for digital entertainment is substantial. We also expect this to support the long-term sustained lifespan of our existing franchises and platforms. Lastly, our digital financial services business. In the Q2, the synergies between both Shopee and SeaMoney continued to expand, driving revenue and value across the ecosystem. SeaMoney's GAAP revenue for the quarter was $279 million, an increase of 214% year-over-year. Quarterly active users across our SeaMoney products and services reached close to 53 million, growing 53% from last year. Our mobile wallet total payment volume also grew healthily at 36% year-over-year to reach $5.7 billion during the quarter. With the stronger adoption of our growing portfolio of financial products and services across our Shopee and SeaMoney ecosystem, we are driving greater efficiency across platforms. As such, SeaMoney's adjusted EBITDA loss continued to improve quarter-over-quarter. A significant population in our market is still underserved around digital financial products and services, and we are well-positioned with our strong ecosystem to serve the largest segment of our market through the direct relationships and insights we have accrued. At the same time, we are working closely with our partners and other local stakeholders to build a healthy and sustainable environment for the long term. In closing, as we navigate an increasingly uncertain market environment, the need for us to be more thoughtful, prudent, and disciplined has only grown. While we have ample resources to achieve self-sufficiency as a business, we are nevertheless rapidly prioritizing profitability and cash flow management. In this current volatile environment, we believe our focus on these areas will be key in setting the businesses up for long-term sustained success. We are also confident that our ability to execute to achieve our objectives during this period will be further supported by our scale, leadership positions, and proven business models. We have articulated clear commitments and are well on track to achieving them. We also continue to be highly optimistic about the long-term potential of the opportunities and the markets we are addressing. With that, I will invite Tianyu to discuss our financials. Thank you, Forrest, and thanks to everyone for joining the call. We have included detailed financial schedules together with the corresponding management analysis in today's press release, and Forrest has discussed some of our financial highlights. I will focus my comments on the other relevant metrics. For Sea overall, total GAAP revenue increased 29% year-over-year to $2.9 billion. This was mainly driven by the growth in our e-commerce and the digital financial services businesses. As we continue to leverage the synergies across our platforms. On e-commerce, our Q2 GAAP revenue of $1.7 billion included GAAP marketplace revenue of $1.5 billion, up 62% year-over-year, and GAAP product revenue of $0.3 billion, up 14% year-over-year. E-commerce adjusted EBITDA loss was $648 million. Adjusted EBITDA loss per order was $0.033 compared to $0.041 for the Q2 of 2021 as we further improved our growth efficiency and unit economics. Digital entertainment bookings were $0.7 billion, and GAAP revenue was $0.9 billion for the Q2 of 2022. Adjusted EBITDA was $334 million. The slowdown compared to the Q2 of 2021 was mainly due to moderation of user base and user trends post-COVID. Digital financial services GAAP revenue was $279 million, an increase of 214% year-over-year from $89 million in the Q2 of 2021. The growth was primarily due to the growing adoption of our financial products and services. Adjusted EBITDA loss was $112 million compared to $155 million for the Q2 of 2021 as we further improved on our growth efficiency. In the Q2 of 2022, we recorded an impairment of goodwill of $177 million. The goodwill impairment was primarily due to the change in carrying amount of goodwill associated with our prior acquisitions, mainly driven by the lower valuations amid the market uncertainties. We recognized a net non-operating loss of $33 million in the Q2 of 2022 compared to a net non-operating loss of $25 million in the Q2 of 2021. The non-operating loss in the Q2 of 2022 was primarily due to investment losses recognized amid lower valuations in the broader market. We had a net income tax expense of $65 million in the Q2 of 2022, which was primarily due to corporate income tax and withholding tax recognized in our digital entertainment business. As a result, net loss, including share-based compensation and impairment of goodwill, was $570 million in the Q2 of 2022 as compared to $321 million for the same period in 2021. Net cash used in investing activities in the Q2 of 2022 was primarily attributable to an increase in loans receivables and purchase of property and equipment to support the growth of our businesses. At the end of the Q2 of 2022, we had $7.8 billion of cash equivalents, and short-term investments on our balance sheet. With that, let me turn the call to Minju Song. Thank you, Forrest and Tianyu. We are now ready to open the call for questions. Operator. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. 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'll pause momentarily to assemble our roster. Our first question comes from Pang Vittayaamnuaykoon from Goldman Sachs. Please go ahead. Thank you very much for the opportunity. Two questions for me. Firstly, on e-commerce, can I please clarify on the suspension of guidance? What are management currently seeing that leads to the decision? Is the outlook that we are facing right now really that cloudy? At this point in time, we understand that macro has become very challenging, but at least up until middle of August, is there any colors you can provide in terms of how Shopee has been doing so far for the quarter of 2022? Second question is related to Shopee's and their break-even. Is there any update on your break-even post-headquarter target for Shopee, ASEAN, and Taiwan? Right now, ASEAN and Taiwan break-even is in sight, but headquarter costs still increase on a quarter-on-quarter basis. Can we understand what drives this increase in headquarters costs, and when can we actually expect to see this improve going forward? Thank you, Pang. Regarding the guidance, we just want to clarify this is a proactive decision from the management to continue to shift our strategies, and we want to be very upfront and open to the market about it. If you look at our Q2 results, you already start to see that our actual losses for Shopee have been narrowing, not just on a unit economic basis, but also on a total at a Shopee group level basis, including all the costs considered. At the same time, we still achieved significant growth at 40%, more than 40% per order. I think that it's important that, as we shared earlier, that given the macro uncertainties, and our goal is to achieve ultimate success in the long run for the consumer internet segment in our markets, we think that pace ourselves well and manage the business prudently in accordance with the macro environment is very important. A nimble execution adaptability has really helped us in achieving great success through the COVID period as well. Now is a time for us to manage in a different direction, and we want to communicate proactively to the market about this different direction. Now, of course, it doesn't mean that we think the market immediately are deteriorating or we see anything that's significantly negative. It is more of a proactive communication to the market about management strategies to focus on efficiency, focus on the overall strength and health of the ecosystem, and focus on continuing to tighten our operations. That has been in our operations since earlier this year, and we want to continue in that trend. Of course, to put things in context, as we also shared, our long-term view about the markets has not changed, and we remain very positive about the long-term growth opportunities across all these consumer internet segments that we currently have leadership in our markets. We're doing this to best position us to really capture these opportunities even better along the way. To also put this into context, currently, we have strong market leadership across various segments. Also, based on the historical results so far, our market leadership has continued to widen the gap with our peers. In that case, we have ample resources as well as a very strong position to manage the shift in our strategies and position us really well for the long run. In terms of the break-even target for the Asia markets post-HQ costs, we previously shared that we expect that to happen by next year. There's no change to our expectation on that. Of course, we continue to manage the costs, and we do expect that we'll try to move closer to that target over time. As you can see, pre-HQ costs, we almost achieved the target given the per-order loss is less than $0.01 in Asia. HQ cost-wise, although there's still increase quarter-over-quarter, the pace of increase has slowed. As we shared in the earnings, this is mostly related to R&D as well as server costs. Now, of course, the growth of R&D and servers will also be commensurate with the overall growth of the business. As we continue to manage the growth, we also very much focus on efficiency in terms of the operation and also overall growth. We do expect that to continue to progress in a positive direction for us. Our next question comes from Alicia Yap from Citigroup. Please go ahead. Hi. Good evening, management. Thanks for taking my questions. I wanted to follow up on the e-commerce guidance suspensions. Can management i think because in the past few years, management has proven very diligent on providing good insight into your forecast. I wonder, is these challenges mainly on consumer? Is that the frequency of the spending or the ASP where the consumer become more cautious on spending on the big-ticket items that affect some of these uncertainties in the forecast? Or is it because of the spending willingness from the smaller merchants that you are seeing that create the difficulty on forecasting your revenue? This is the first question on e-commerce. Very quickly on gaming.. Just wondering, with that new game's launch, what should we expect in terms of the Free Fire franchise to trend going forward? Would that be more stable, or would that be also potentially growing the paying ratio with the existing user base that can actually support the growth booking going forward? Thank you. Yes, thanks, Alicia. I think what we're trying to say here is that for us, the reason we are suspending the guidance now is mainly because from a management of the business perspective, we will see the top-line growth more as an output at this stage, not as a target. What is a target now is going to be increasingly efficiency improvement and long-term health and strength and profitability of the platform. That's why I want to put things into perspective. Even though we don't put as a target, naturally, we will continue to see growth. Overall, the market conditions, there are headwinds with, as we mentioned, inflation and reopening, tough comps against last year, especially given that we have supercharged growth. In fact, Shopee has achieved 10 quarters of triple-digit growth in the past 20 quarters since we're public. I think that is probably a historical record for any business, also given the emerging market that we are in with underdeveloped infrastructure and all the work we have to put in to grow a highly complex e-commerce business across so many markets. We have no problem. We don't have to prove that we can execute growth. That has been very well established as a very strong track record and also got us here as a strong leader and continue to extend our leadership even despite all the headwinds that everybody's experienced in the market. However, we are saying that as a prudent business management perspective, we think now the direction needs to shift, and we want to proactively communicate the shift of that direction to the market, to our stakeholders. That's what we are saying here. Now, in terms of Free Fire trends, so as you can tell, given the size of Free Fire, our Q2 results on the digital entertainment segment is also largely driven by Free Fire. On the active user side, we saw some stabilization "quarter on quarter" compared to last quarter. Of course, we're not making any forward projection here regarding user trends and also pay user trends or bookings because, as you can tell, this is hard to predict for the gaming industry as a whole. Also to put things into perspective, of course, the inflation and also the opening up since COVID and, again, the tough comp against last year, in particular, the outstanding performance of Free Fire throughout the year, does make the comparison look tough for us and does affect gamer consumption and engagement naturally. It's not particularly on Free Fire or on Garena. It's on the industry. Free Fire maintained its top ranking in terms of global downloads, in terms of growth in our key markets in Southeast Asia and Latin America t hat seems to be more of an industry-driven and macro-driven kind of impact on the game. On the other hand, we also see some other franchises in our current game portfolio f or example, Arena of Valor performed very stable, quite a stable performance, and even in some quarters, we saw improvement i t's also another game that we have been running for many years. It's not necessarily true that given the headwinds or given the lifespan of the game, that we definitely will see continuing downward trends. I think part of it is also dependent on our own efforts and ability to continue to manage that. That's what the team is focused on. In the past quarter, I think the team has done different things in terms of esports activities, engagement, new content, new game modes, more user-friendly packages, and game sizing in various aspects, tried to continue to improve and retain our users and engage with our users better. I think the trends you are seeing is really given the tough comp and the macro environment against us. On the other hand, we are also making a lot of efforts in this regard. We see our game as a very important long-term franchise for us. As i said, we think that online virtual consumption is going to be increasingly important for the younger generations t hat's where we are betting in terms of the long-term future of the company as well. Our next question comes from Piyush Choudhary from HSBC Singapore. Please go ahead. Yeah. Hi. Good evening to the management t hanks a lot for the opportunity t wo questions. Firstly, can you talk a little bit about the outlook for the e-commerce industry GMV growth in your core markets in 2022 and 2023? Which markets are proving more resilient and which are showing signs of early weakness? Secondly, could you give us the breakdown of gross orders and GAAP revenue in Brazil? And what is the likely cost savings with your recent initiatives taken? Is it already reflected in Q2 or yet to come? Thank you. I think in terms of the industry GMV growth, there are a lot of research outstanding. I think, obviously, it's going to be slower, but also, it really depends on the various industry players and us and our peers, how we manage this growth. Among the various markets, we see that there are some markets, for example, like Malaysia and Singapore, that enjoyed spectacular growth during the previous years. There is a slowdown given a tough comp and also the opening up versus a period of strict lockdown. I think continuing to this year, of course, the tough comp is going to remain a fact. At the same time, we also see markets like Indonesia, Philippines, and Vietnam continue to enjoy relatively faster growth that also, in a way, sometimes is affected by the comp relative to in terms of opening up versus lockdown, the relative macro situations people are facing, the fiscal tools, the central banks, and the government in terms of interest rates and the fiscal tools the governments have been employing to manage the inflation and how they deploy those tools, whether it's on price cap or on coupons, and if it's on subsidies, how they channel the subsidies. All of this can affect overall consumption growth and where the consumption grows to, whether it's discretionary or necessities, whether it's physical consumption versus services, and also the e-commerce relative issue online versus offline. I think there are many factors that could affect growth i n general, the big picture, it's going to be slower compared to last year, and how much slower, I think, remains to be seen. Overall, we hope that we can continue to see resilience. Again, as we shared, from a management perspective, we think it's much more better to be disciplined and prudent and manage for macro uncertainty and be prepared for any negative events and situations as opposed to hoping for resilience and the market staying positive. In terms of the growth orders and GAAP revenues for Brazil, I think we disclosed the strong growth that Brazil is continuing to enjoy for us. We also, more importantly, continue to improve our unit economics in Brazil. Everything is very on track for us in Brazil. In terms of the group level, I think the cost initiatives, when we talk about the projections for the future in terms of EBITDA positive after HQ cost allocation for the Asian markets, we do take into account any initiatives that are visible to us at this point. Of course, we don't have a perfect prediction for the future. The next question comes from Thomas Chong from Jefferies. Please go ahead. Hi. Good evening. Thanks, management, for taking my questions. I would like to ask about the digital entertainment side. In particular, how we should think about the new games in the pipeline. We understand that we have different genres in development i just want to see how the progress is going s hould we expect any meaningful titles to be released in the second half or 2023? On that front, how we should think about the EBITDA margin for the digital entertainment business in coming quarters? Should we expect investments in driving the retention and engagement of Free Fire users to continue in 2022 or 2023? Thank you. Yeah i n terms of the game pipeline, we do have things in the pipeline, whether it's from our own self-development or published titles or our investee titles that we might publish later this year. As you know, we will announce it when they're officially launched. I think in the long run, our goal is to continue to diversify our portfolio in terms of genres and a mix of the esports and more casual type of games across the more diverse markets. The direction is the same. From a financial perspective, we don't think there will be anything that will have an immediate, meaningful, significant impact like that of Free Fire in the immediate future because, as you know, Free Fire is one of the largest mobile titles in the world. For any game that we launch, initially, our focus is more going to be user engagement and building up the momentum and also the user base and solidify that before we focus more on monetization e ven for Free Fire, it actually took the game quite a number of quarters, or I would say even more than a year, to gradually ramp up monetization and to develop into more full potential. That's our view i n terms of the EBITDA margin for digital entertainment in coming quarters, I think our EBITDA margin is still very much on the high end of the industry at more than 45%. Now, from quarter to quarter, as we shared before, there could be fluctuations depending on, for example, esports events and other campaigns f or example, the Q2, we had the World Series competition Free Fire. It also depends on launch timing for the new games. If we have new games, then there will be some sales and marketing investment to build up momentum based on publishing timing. Generally, I think even though there will be fluctuations, we do continue to expect our EBITDA margin will continue to remain on the high end compared to the industry range. The next question comes from Jiong Shao from Barclays. Please go ahead. Thank you very much for taking my questions i have two questions. I'd like to ask one at a time if that's okay. As the company focuses on sort of monetization and efficiency, cost control, any comments on your take rate expectation? I think in the past, you talked about increasing take rate about roughly 200 basis points this year. Should that still be our expectation or your expectation? Any comments would be super helpful. That's my first question. Thank you. Thank you, Jiong. I don't recall we gave any take rate guidance, right? On the whole, I think in terms of take rate, we do expect the take rate to gradually rise as we continue to deepen monetization through better services to our sellers and consumers and through growing the ecosystem as a whole. Okay. My apologies. I think maybe what I remember was that I think you might have talked about the increasing take rate this year is going to be similar to the increasing take rate last year, which was roughly 200 basis points, if I'm not mistaken. Maybe another way to just follow up on this, is there any change in your expectation for your take rate since now you sort of suspended the revenue guide? Is there any change in your expectation on the monetization specifically regarding to the take rate? I think, there can be many factors affecting the take rate. We won't be providing any specific guidance on the take rate. Suffice to say that there will be gradual increase over time. We don't set a specific target take rate for any particular year. When take rate rises, it can be also based on different income streams in terms of transaction-based fees. These are more like the take rate that we set. On the other hand, there are also take rates that the sellers adopt because, for example, we offer opt-in programs for sellers who join these programs by paying a higher take rate in getting more services and offerings in return. This will also increase our take rate. It is not something that is directly set by us, but it is more based on the seller adoption. There's also advertisement a gain, that is something based on adoption. There's also VAS. VAS take rate, in a way, also depends on the rollout of our logistics and in terms of how we manage logistics. There's also accounting-related changes that might affect the take rate. There are many different factors that affect it. I think, overall, we continue to focus on the unit economics improvement and overall platform ecosystem growth of our platform. Our next question comes from Ranjan Sharma from JP Morgan Singapore. Please go ahead. Hi. Good evening t hank you for the presentation. Two questions from my side f irstly, on the gaming guidance, I guess there's no change, if you can confirm that. Secondly, on your ad revenues, if you can, please give more color on how fast they're growing. If I look at it from a percentage of GMV perspective, where are we? Thank you. Thanks, Ranjan. In terms of game guidance, no change to it. In terms of ad revenue, we don't break that down. There is also a gradual upward trend on that front and t hat's also part of the reason that combined with the increase in transaction-based fees, that we see a continual increase in our high-margin revenue and the improvement on our margins overall for Shopee. The next question comes from John Choi from Daiwa. Please go ahead. Thank you for taking my question. The question's on your strategy shift more on efficiency improvement. Could management kind of elaborate on what are a few tangible examples that you could give us of how you're going to really try to improve efficiency and the margins? Is it going to be more by aggressive cutting? or from less spending in some of the strategic areas? A quick follow-up is on your Brazil strategy i know that we are growing very nicely here. How are you going to balance the growth opportunities and investments versus your new efficiency strategy going forward? Thank you. Yeah. Thanks, John. In terms of the efficiency raise, I think it's not as simple as, "Oh, we just cut," right? It is important to, one, is to focus on the overall efficiency of the ecosystem. For example, as we all know, logistics is a big part of the ecosystem cost. Whether it's borne by the sellers, by the buyers, or by the platform like us, it is one of the biggest cost components. There are many ways to continue to improve it. For example, we work even more closely with our 3PL partners and other agents and service providers to better route the delivery and better plan the delivery and also increase the density of delivery. There are many ways to improve the overall ecosystem efficiency. On the payment front, for example, we continue to improve adoption of our e-wallet and also increase other online payments adoption over time. That can also lower the payment costs and reduce the transaction friction. There are many things that we focus on the ecosystem side that we want to make sure that can be more efficient. In terms of the other cost management side, we continue to review various cost components and to see if there can be savings made during this process. I think it's actually a very good exercise a s we shared, we see this business as running a marathon. During this time, I think it's good to tighten our shoelaces, get water, and zip it up. That prepares us to run faster down the road. In terms of our growth in Brazil, in terms of balancing growth and efficiency, I think the big picture is still doing the right thing at the right time at the right place. For Brazil, we look at what is potentially a natural or reasonable growth rate for us and what is efficient growth for us w e always emphasize on efficiency in any growth region. Increasingly, given the micro trends, we will probably further focus on that and emphasize on that. Again, as i said, we're going to see growth rate as more output during this period of time and more focus on efficiency. That can allow us to eventually build a stronger, a more profitable platform there long term. Our next question comes from Varun Ahuja from Credit Suisse. Please go ahead. Yeah. Hi. Thanks for the opportunity. I've got three questions f irst, on the e-commerce, sorry to harp on it, guidance again. It's the change in strategy that you're talking about t he suspension in guidance is for this year? or from next year, do you think? you'll get back to giving guidance for the segment m ore importantly- -Are you going to change the metrics that you track internally? Is it going to be still revenue growth or EBITDA or any other metrics that you're going to focus on when you provide guidance? Any color on that front will be helpful. Secondly, on the Fintech side, if you can tell us how the digital bank initiatives are going across the various countries. If you look at the loan receivables on the balance sheet, it's around $2 billion. How much more loans that you're giving outside of this in collaboration with the digital banks? Any color that you can share, that will be good. Lastly, if you can give more color on the goodwill impairment, which segment of this investment relates to in e-commerce or logistics, gaming? How much is still left on the balance sheet of that investment? Thank you. Yeah. Thank you, Varun. In terms of the guidance suspension, we are suspending the guidance for this year. No decision has been made with anything regarding future guidance. In terms of the digital bank initiatives, as i shared before, we continue to focus on quality as opposed to growth for our bank initiatives. It's going to be a very long-term effort and al so, the bank is very much aware i t's a trust and reliability and integrity-driven business. It's very important to build a robust system for it. We're not focused on driving growth on that front t he same with our credit business, where we continue to build out models and provide needed services to our consumers in various markets and collaborating with third-party financial institutions in doing so. Again, we're not driving growth per se in that area. We're looking more for how to build a robust model that can withstand cycles and can be a long-term sustainable business model for us. In terms of the goodwill impairment, these are related to various past investments, not any specific segment-focused. As you know, given the micro-environment and the movements in the market of companies, valuations, and stock prices, we also think it's prudent for us to proactively manage and review our portfolio that we hold on the books to assess the overall impairments needed. So far, I think if you look at our balance sheet, there's still around $400 million. Of course, at this stage, we don't currently expect all of this needs to be written off. On the other hand, we'll continue to assess over the period. This concludes our question-and-answer session. I'd like to turn the conference back over to Min ju Song for any closing remarks. Thank you. Thank you all for joining today's call. We look forward to speaking to all of you again next quarter. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.