Prepared remarks
Good morning and good evening to all, and welcome to the Sea Limited Second Quarter 2026 Results Conference Call. And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Mr. KC Ong to begin the conference. Please go ahead.
Hello everyone, and welcome to Sea's 2026 Second Quarter Earnings Conference Call. I am KC from Sea's Investor Relations team. On this call, 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. Also, this call includes the discussion of certain non-GAAP financial measures such as adjusted EBITDA. We believe these measures can enhance our investors' understanding of the actual cash flows of our major businesses when used as a complement to our 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 Chief Executive Officer, Forrest Li; President, Chris Feng; and Chief Financial Officer, Tony Hou. Our management will share strategy and business updates, operating highlights and financial performance for the second quarter of 2026. This will be followed by a Q&A session in which we welcome any questions you have. With that, let me turn the call over to Forrest.
Hello everyone, and thank you for joining today's call. Our strong momentum from the first quarter has continued into the second. Sea generated $7.8 billion in revenue, up 48% year-on-year, and over $917 million in adjusted EBITDA. Our investments have enabled Shopee and Monee to continue to strengthen our market leadership while improving our user penetration. Many of our initiatives' unit economics continue to improve, a testament to our strong financial discipline and operational efficiency. We will continue to invest prudently in serving more users and serving them better, broadening our foundation for profitable growth into the future. With that, let me take you through each business' performance. Starting with Shopee. Shopee continued its strong momentum into the second quarter. GMV grew 28% year-on-year, marking eight consecutive quarters of sequential growth, and we again achieved new highs in gross order volume and revenue. We generated an adjusted EBITDA of more than $250 million during the second quarter. Our improving operational efficiency and growing scale have strengthened our unique economics. We can now profitably serve a wider range of users, enabling us to lean further into user acquisition. We have engaged and reengaged several user groups through brand awareness campaigns, expanding our content channels and broadening our logistics offerings to cater to different preferences. This drove remarkable new buyer growth in the second quarter. Average monthly new active buyers grew more than 35% year-on-year, a significant acceleration from previous quarters. Average monthly active buyers increased 18% year-on-year and overall buyer engagement also continued to improve with purchase frequency increasing by 8% year-on-year. Our monetization strengthened further in the second quarter. Ad revenue was up more than 70% and ad take rate improved by over 90 basis points year-on-year. We continued to make advertising simpler and smarter for sellers. For example, pairing ads with vouchers that are personalized to buyers to increase purchase conversion and improve the efficiency of sellers' ad spend. Ad adoption and spend continued to improve across our seller base. The number of ad-paying sellers rose around 45%, while average ad spend per seller increased more than 15% year-on-year. Our operational priorities remain consistent: improving price competitiveness, service quality and our content ecosystem. To keep strengthening our execution across these priorities, we continued to deepen our structural moats across logistics, ShopeeVIP and content. Strong logistics capabilities continue to be a key contributor to Shopee's reputation for excellent service. We continue to make delivery faster and more reliable across a wider product assortment in the second quarter. Instant and same-day delivery gained strong traction as we captured more instant purchases. Our instant service initiative can now deliver in as fast as 1 hour in urban areas. We continue to expand our presence in high-frequency categories such as groceries and pharmacy items to serve our buyers better. Other volumes using instant delivery rates grew around 80% year-on-year initially, while cost per order fell by around 20%, driven by economies of scale and efficiency gains. Beyond delivery, we also made good progress in fulfillment with other volumes up more than 20% quarter-on-quarter. Fulfillment benefits both sides of our marketplace. Sellers offload operational complexity and scale more efficiently while buyers enjoy faster, more reliable delivery. In some markets, more than 60% of our fulfilled parcels arrive the next day, meaningfully higher than the platform average. The gains are especially noticeable in places where geography makes delivery challenging. For example, in Mindanao, a mountainous region in the Philippines, fulfillment has reduced buyer waiting time by 1 to 3 days; buyers can feel the difference. Sellers who converted to fulfillment saw more than a 20% uplift in orders on average in Southeast Asia. Second, our ShopeeVIP program continued to scale strongly. Now live across Asia and Brazil, total membership exceeded 15 million at the end of June, up 25% from the previous quarter. Across Asia, VIP members contributed 24% of GMV in the quarter. Average monthly retention remained strong at around 80% and members continue to show higher engagement, spending meaningfully more after subscribing. In Brazil, early adoption has been encouraging since our April launch with membership already surpassing 1 million. Beyond buyers, we are seeing encouraging support among both Shopee sellers and external partners for our ShopeeVIP program. We have brought the number of benefits across travel, dining and entertainment, improving the program's value proposition. More sellers and partners have come on board to co-fund benefits, demonstrating the value they see in engaging our ShopeeVIP buyer base. This has helped improve the program's unique economics in Asia. Third, we have continued to improve our content ecosystem to make product discovery more engaging. Orders from live streaming and short-form video grew more than 50% year-on-year, accounting for more than 25% of physical goods orders in Southeast Asia. Unit economics also improved sequentially as we further optimize our marketing spend. We have deepened our relationships with YouTube and Meta to drive order growth. Shopee affiliate orders generated by linked creators on Facebook increased by more than 85% quarter-on-quarter, with Facebook Reels proving to be a very popular channel to drive purchases. We have now extended our Instagram collaboration to all eight of our core markets, and we are seeing promising early results from Indonesia, the first market where we launched the partnership. I'm particularly happy with our progress in Brazil, which remains our fastest-scaling market in the second quarter. We once again outpaced the broader market on GMV growth supported by increases in active buyers, purchase frequency and average basket size. We continue to invest in and optimize our end-to-end logistics capabilities, expanding our network while ramping up utilization. We improved the delivery speed, reducing average buyer waiting time by 15% year-on-year and doubled our penetration of fulfillment orders year-on-year. These logistics improvements are also supporting our expansion upmarket. We onboarded nearly 500 new official brands during the quarter, while GMV from Shopee Mall sellers more than doubled year-on-year. We still see significant headroom for growth in Brazil, and we will continue to invest in this market in a disciplined and profitable manner. I'm pleased that Shopee has delivered a strong first half of 2026. With this solid momentum we are optimistic that Shopee will achieve the milestone of $1 billion in adjusted EBITDA for the full year. Next, moving to Monee. Monee delivered another great quarter with continued strong growth in both revenue and adjusted EBITDA. Credit remained the primary driver of growth. Our loan book reached $11.1 billion at the end of June, up 52% year-on-year. Asset quality remained stable with our 90-day NPL ratio at 1.0%. The Philippines has become our feed market with a loan book exceeding $1 billion. We continue to expand our credit business on three fronts: acquiring new users; deepening our relationships with existing users; and expanding our credit use cases. One key enabler of our credit business growth has been the ongoing advances we have made in our credit risk capabilities. Our latest risk models are pretrained on our broad set of behavioral and transactional data across our ecosystem using transformer architecture similar to those powering today's large language models. The model learns from the full sequence of the users' actions over time, capturing richer context around how customers interact with our platform. Recent enhancements to our underwriting models have helped lead approval rates by around 10% when compared to previous models while maintaining a similar level of risk. This further reinforces the scale of our ecosystem as a durable advantage. To further strengthen this capability, we are also drawing on more external data sources to better assess users who are newer to our ecosystem. For instance, through partnerships with local mobile operators in Indonesia and Open Finance data in Brazil. We have also used AI to build tools to efficiently verify a diverse range of user-submitted income documents across markets, languages and formats. Review time reduced by around 95% while maintaining a very high level of accuracy, letting us respond to credit limit requests from users almost instantly. Supported by this improvement in risk underwriting, we have been pushing harder on new user acquisition. We have found that many users begin using SPayLater for convenience and subsequently generate more value through repeat transactions, installment conversion and adoption of our other credit products. So we have broadened the rollout of 1-month interest-free SPayLater loans, giving users the option to either settle their balances within the month or easily convert purchases into interest-bearing installments. Similarly, we have been more widely offering promotional interest rates for first-time personal cash loans. Taken together, these efforts contributed to strong new user growth during the quarter. We added around 5.3 million unique first-time borrowers and our active credit users grew around 34% year-on-year to over 40 million at the end of the quarter. We also saw deeper user engagement; average loans outstanding per user grew around 20% year-on-year. Shopee SPayLater has continued to scale well, driven by integration with national QR payment infrastructure and continued merchant onboarding. By the end of the quarter, Shopee accounted for over 20% of our total SPayLater portfolio, with this figure as high as 35% in some markets. In Thailand, we are testing a new product: the ShopeePay Unlimited Card. It lets users pay with their SPayLater balance at any merchant that accepts our payments, further expanding SPayLater use cases. The stand-alone ShopeePay app remains a key pillar of our strategy to grow Monee beyond Shopee, serving as a one-stop platform for user payments, credit, insurance and broader financial needs. In the second quarter, monthly transacting users on the app more than doubled. The ShopeePay app is currently live in Indonesia, Thailand, Malaysia and Vietnam, and we will launch a similar stand-alone app in Brazil soon. In summary, Monee delivered another strong quarter with broad-based growth across our products and markets; the advances in our risk capabilities are compounding. Each improvement helps us serve more users, serve them better and reach further beyond Shopee. We are still at the early stage of growth. Only a fraction of the users across our ecosystem are using Monee's financial products today and the credit penetration remains low across our markets. This gives us great confidence in Monee's long-term growth and earnings potential. Next, turning to Garena. Garena delivered another strong quarter with bookings growing 15% year-on-year with profitability remaining healthy and growing well year-on-year. Free Fire anchored this strong performance; now in its ninth year, it is still expanding its reach and scale globally, continuing to draw in over 100 million average daily active users. Free Fire's longevity comes from a single discipline: we keep the experience fresh with new gameplay and content and we make it feel both local to the communities who play it and enjoyable for a global audience. A great example this quarter was Undersea Mystery, an ocean-themed campaign inspired by Songkran, Thailand's water festival. We integrated the theme in the map itself, creating a gateway into a new undersea realm. This extended battleground gave players a fresh territory to explore and fight over and the opportunity to hunt for powerful gear hidden in the hydro zone and fishing ponds across the map. This continued reinvention of the core gameplay keeps players engaged over time. We also rode the World Cup wave to build excitement and engagement with our players. Our Fire Kickoff campaign wove football into the map itself, turning part of it into a football field. Eliminated players were sent to a one-on-one football showdown for a chance at rejoining the match. And the new football form that players turned into allowed them to speed across the map and pull off surprise plays. The campaign also resonated well beyond games; the original campaign song, 'Booyah Olé,' became a standard organic driver of social engagement, generating over 350 million social media views. I'm also very excited about what lies ahead for our portfolio. We announced two mobile games, both built on strong globally recognized IP. Palworld Online is an open-world multiplayer survival adventure game developed by Pocketpair; Garena will publish it under license from Pocketpair. Monster Hunter Outlanders is a survival hunting action game developed by Tencent based on Capcom's iconic franchise. Taken together, these titles show how Garena is expanding into new genres, strengthening our development and publishing capabilities and deepening our relationships with top global partners. In summary, Garena delivered another strong quarter. Free Fire is still proving itself as an evergreen franchise, and we continue to work towards diversifying our portfolio. We remain committed to delivering the high-quality experiences our players know us for. In conclusion, this quarter's strong results underscore both our financial discipline and the strength of our business. This promising momentum gives us greater confidence for the rest of the year. With that, I invite Tony to discuss our financials.
Thank you, Forrest, and thanks to everyone for joining the call. For Sea overall, total GAAP revenue increased 48% year-on-year to $7.8 billion in the second quarter of 2026. This was primarily driven by growth in Shopee and Monee. Our total adjusted EBITDA was up by 11% year-on-year to $917 million in the second quarter of 2026. On Shopee, gross orders increased 27% year-on-year to $4.2 billion in the second quarter of 2026, and GMV increased by 28% year-on-year to $38.3 billion in the second quarter of 2026. Our second quarter GAAP revenue of $5.6 billion included GAAP marketplace revenue of $4.9 billion, up 49% year-on-year, and GAAP product revenue of $0.7 billion. Within GAAP marketplace revenue, core marketplace revenue, mainly consisting of transaction-based fees and advertising revenues, was $4.3 billion, up 66% year-on-year. Value-added services revenue, mainly consisting of revenues related to logistic services, was $0.7 billion. Shopee adjusted EBITDA was up by 12% year-on-year to $255 million in the second quarter of 2026. Non-GAAP revenue was up by 59% year-on-year to $1.4 billion in the second quarter of 2026. Adjusted EBITDA was up by 13% year-on-year to $288 million in the second quarter of 2026. As of the end of June, our consumer and SME loans principal outstanding reached $11.1 billion, up 62% year-on-year. This consists of $10 billion on book and $1.1 billion off-book loans principal outstanding. Nonperforming loans past due by more than 90 days as a percentage of total consumer and SME loans was 1% at the end of the quarter. Garena bookings grew 15% year-on-year to $764 million. GAAP revenue was up by 34% year-on-year to $747 million. The growth was primarily due to the increase in our active user base and deeper paying user penetration. Garena adjusted EBITDA was up by 17% year-on-year to $430 million. Returning to our consolidated numbers. We recognized a net nonoperating income of $66 million in the second quarter of 2026 compared to a net nonoperating income of $83 million in the second quarter of 2025. We had a net income tax expense of $251 million in the second quarter of 2026 compared to net income tax expense of $144 million in the second quarter of 2025. As a result, net income was up by 11% year-on-year to $458 million.
Thank you, Forrest and Tony. We are now ready to open the call to questions. Operator?
Questions and answers
Our first question comes from Piyush Choudhary with HSBC.
Congratulations, management, on a great set of results. Two questions. Firstly, on Shopee, your investments are delivering results on the growth, so can you talk a little bit about the outlook for GMV growth? And are we behind peak investments as margins have improved sequentially? Are unit economics improving across VIP and content? And should we expect Shopee margins to improve? Or could there be volatility in the second half due to seasonality? That is the first question. Secondly, can you give us an update on AI initiatives? Last time you mentioned an AI shopping assistant for buyers; how have the pilots been? And for sellers on your platform, what initiatives have you taken and what benefits have you observed?
I will take this question. If you look at the Shopee outlook for GMV growth, we still see quite good growth in Q2 as we shared in the opening. We still see the trend continuing in the coming quarter. The growth has been doing well across our markets in South Asia, Taiwan and also Brazil. If we look forward for the full year, we remain well on track and confident of achieving our full-year growth outlook of around 25%. And that said, we want to make sure that we also anticipate the potential foreign exchange headwind as well. As you can observe, many of our markets have weaker currencies against the U.S. dollar. Q3 and Q4 also have a higher GMV base. But again, we still believe that we are able to achieve the guidance we gave before of around 25%. In terms of investment we are doing for the initiatives that we shared before on VIP, on fulfillment, on our logistics, etc., in general, we see our unit economics have been improving quarter-on-quarter. For our content businesses, which we shared that we did invest in for a period of time, the unit economics have reached a level that is as good as the platform already. The new initiatives, although we're still in the investment phase, in general we do see a positive trend on the economic improvement. Also, in general, what we are doing is less CapEx-heavy investment. Even with fulfillment, we usually take a CapEx-light approach that we don't own the fulfillment centers. We usually rent the place with relatively light CapEx to enable the growth there. In terms of margins, I think we shared our full-year ambition of achieving $1 billion in adjusted EBITDA. For the AI initiatives, we have been doing quite a lot of work over the past few quarters, both on the buyer and seller side, as you mentioned. We are launching the IM assistant for sellers in quite a few markets. Essentially, instead of the seller talking to key account managers, there is a digital IM that they can talk to, which can help them to answer many questions or provide analyses they want to do with their shops. This is also 24/7 available, compared to a key account manager who is not available 24/7. That's just one example among many. On the buyer side, we spend a lot of effort on both helping ads have better conversions, which reflects in our ad take rate improvement over time, but also general conversion for our search recommendations. We have been rolling out our new GR algorithm, a generative algorithm for recommendation and search, which gives us a meaningful improvement on the conversion rate that we observed. We're also doing pilot work on AIGC for content. Our platforms can generate a lot more AI-created content now, which can be used to do personalized targeting for our buyers to improve conversion as well, and many other projects that we are doing. I'm just sharing with you the highlights off the top of my head.
Your next question comes from the line of Alicia Yap with Citigroup.
Congratulations on the strong set of results. I wanted to follow up a little bit on the e-commerce Shopee question. Can management elaborate on the outperformance this quarter and also the profitability trend for Brazil, Taiwan and Southeast Asia and the latest competitive landscape there? And then on your guidance: you mentioned 25% is unchanged for the GMV growth, so in the case that GMV were to further exceed the guided growth rate, does that suggest further upside on the EBITDA for the second half? And then lastly, on the fulfillment investment cycle: where are we in the time frame? Are we getting closer to what we wanted to invest, or are we still in the early stage of the investment cycle for the fulfillment centers?
Across the markets, we see relatively good performance, both on growth and profitability, but it's not just a single market trend; it's relatively consistent across markets. Regarding the competitive situations, we observe the competitive situation to be relatively stable at this point in time and we are able to maintain our market share. In certain markets, we are able to gain market share as well over the quarters, such as South Asia and Taiwan. For Brazil, we also observed that our growth is well above the market growth levels. We believe we're growing faster than our close competitors there as well. Regarding the balance between growth and EBITDA, it's always a question of what's the best balance between growth and EBITDA, and I don't think there's a simple answer. We always consider how much we can optimize internally, how fast the market is growing, and, of course, the competitive landscape to do this balancing. At this point in time, we have been seeing the competitive situation as relatively stable. So the main driver of how the balancing works will lie in how we see the market growth rate for the rest of the year and how much we can improve our efficiency internally. For fulfillment, we believe there's still quite a lot of room for us to improve and further penetrate the fulfillment business. Right now, in South Asia, Brazil and Taiwan, we are still ramping up fulfillment sizes. For example, we shared that our fulfillment grew more than 20% quarter-on-quarter. In quite a few markets, it's already double-digit as a percentage of our business. But still, if you compare the size of our fulfillment operations with some other players in the market, especially in Brazil, or compared with the sizes of peers in other markets, we are still much smaller. With the benefits we see from fulfillment—reducing delivery times, enhancing buyer conversion and reducing sellers' operational effort—we believe this is a good investment for our platform. As I shared earlier, our fulfillment economics have been improving quarter-on-quarter, driven by cost structure optimization; it is a learning process and it takes time to optimize operations. As we grow the scale and more sellers join fulfillment, we achieve better scale advantages. More buyers recognizing fulfillment offerings also improves economics over time. Another important point is we are doing more integration between fulfillment and logistics to reduce frictions in how items in our warehouses move across the value chain. This allows us to realize cost synergies by running both warehousing and logistics together. All these elements help us to build the fulfillment business and gain advantage for the overall platform. We run fulfillment in a relatively light CapEx fashion; we don't own the land or the warehouses. When we start a new fulfillment center, we take relatively light CapEx to enable it. We are experimenting more with automation in fulfillment centers, which reduces running costs, but that's still in the early stage. We will share more as we scale further.
Your next question comes from Divya Kothiyal with Morgan Stanley.
My first question is on the e-commerce side. We've noticed that both Shopee and other platforms have raised commissions in several ASEAN markets this year. Could you talk about how much more upside you think there is for take rates? And can you confirm if ASEAN e-commerce is now profitable? Is that something that has specifically driven the guidance upgrade for e-commerce overall for this year? My second question is on fintech. Where do you expect Monee's margins to stabilize? We did see sales and marketing expenses continue to rise. When should we expect Monee's EBITDA growth to reaccelerate to healthier levels? And could you talk about any guardrails we should be mindful of in terms of NPLs and provisioning, especially as you're acquiring new users?
When we look at take rate, we consider multiple angles. One is how much of the take rate is being reinvested to grow the ecosystem, which is very important for us. Second, we look at our price competitiveness on the platform—after the take rate, do we still maintain price leadership compared to other platforms? Third, we look at e-commerce prices on our platform versus offline pricing. Fourth, we look at what it means for sellers' profitability. We put all these things together when considering take rate. From what we observed so far, we have a very healthy ecosystem even with increases in take rate. The reason is that we reinvest a large part of the take rate into ecosystem growth, and we are able to help sellers operate online more efficiently over time. Our price is still very competitive not only compared to other marketplaces in our markets, but also compared to offline alternatives. Going forward, we still see opportunities to increase our take rate, not only from commission but also from paid ads as we penetrate ads more over time. You could argue that the pace of fixed commission increases may be less than before, but there is still room to increase overall take rate by helping sellers operate more efficiently, reinvesting in the ecosystem to grow conversion potential, and monetizing through ads. Regarding Monee margins, if you look at individual countries and products, EBITDA relative to outstanding balances has been relatively consistent and our NPLs have been relatively stable. Shifts in overall retail asset ROA are primarily driven by mix—by product, country and segment. For example, countries that grew more recently may have different ROAs. Some off-Shopee SPL lending growth, which is meaningful (more than 20% of total SPL), naturally has slightly lower ROA compared to on-Shopee SPLs. We have also been penetrating more into prime segments, which naturally have slightly lower interest rates. All those mix changes are intentional, and we view this positively rather than negatively. Our guardrail is simple: we want to maintain stable NPLs for each segment, product and country. When we grow new segments, new products or new countries, we ensure they bring positive returns on assets. As a consequence, our absolute EBITDA and absolute profit from Monee have been growing quarter-on-quarter.
Your next question comes from John Choi with Daiwa.
Congrats on a very strong quarter. I want to focus a bit on Shopee's advertising take rate. I think Forrest mentioned in his prepared remarks that ad take rate was up by more than 90 basis points. How much further upside do we see? Advertisers seem more keen to take up more ads; what AI technologies are you implementing to further improve ad take rate and how much more room do you see? My second question is on Monee, particularly for Brazil. I saw in the slides you're going to launch a standalone app in Brazil. What will be the strategy? Should we expect something similar to the Southeast Asia market?
On ad growth, we see pretty good growth, as we shared. There are a few things helping ad growth. One example is smart vouchers, where we combine a personalized voucher for a buyer together with ads to enhance sellers' ad traffic and increase purchase conversion. Another example is our Shop GMV Max smart diagnosis tools—AI-powered reports and tools that help sellers analyze how they can achieve better return on ad spend. This leverages AI capability to analyze ad performance and drive improvements. We also have in-depth insights for Brand Max. This feature allows sellers to view the number of shoppers at each stage of their purchase journey and how shoppers move between stages, giving them a robust, algorithm-driven branding solution to capture buyers across their lifecycle. In addition, there are fundamental improvements in ad algorithms for better intent matching—this is where AI-based algorithms like our GR algorithm help in matching. We are also using AI to create better personalized content presentation for users when they see ads. All of this combined helps improve our ad take rate. In the coming quarters, we still see meaningful potential to increase the ad take rate, given that many tools and algorithms we are implementing are still in progress and we can optimize further. For Brazil on the Monee side, we believe Monee has big potential in Brazil. We have seen very good growth in Brazil for our lending business in the past two quarters. We are launching an app similar to the ShopeePay app in Brazil with a CFI license, which allows us to offer services comparable to Mercado Pago and other players in Brazil. Brazil is a large market for financial services; with our e-commerce user base, e-commerce data, and proven credit scoring algorithms—customized for Brazil—we believe we can broaden product offerings over time. There are many low-hanging fruits we can capture by structuring the right products and integrating the right data into our platforms for better credit scoring. With the license we acquired, we have the regulatory capability to participate meaningfully in that market.
Your next question comes from Navin Killa with UBS.
Two questions from me. Firstly, on e-commerce: we've seen margins stabilize over the last couple of quarters after inching down late last year. I want to understand, relative to your medium-term aspiration of 2% to 3% EBITDA margin, the path, time frame and how you get there. Secondly, on Monee: you mentioned the average loan size is up some 20-odd percent compared to last year. As loan ticket sizes increase, does credit risk also increase? Can you help us understand the typical time frame or duration of these loans to get a better sense of how credit risk is being managed with a larger loan book per customer?
We still believe that a 2% to 3% EBITDA margin is within our reach. In fact, some of our markets are already well above that. The balance between growth and profitability is dynamic; we will capture market growth potential while optimizing monetization. The path from where we are to 2%–3% is relatively straightforward: part of it will come from maturing initiatives so we no longer need to invest as much; part will come from cost structure improvements, especially in logistics and fulfillment; and part will come from better take rates from ads or other forms of monetization. If you put those elements together, we are not too far from that target and we are already seeing it in some markets. Regarding the increase in outstanding per user, part of that is because we are reaching more prime segment users who naturally take bigger ticket sizes, and part is country expansion where average ticket sizes may be higher. Within a country, within a segment and within a product, we see stable credit risk. We have not observed a correlation between higher outstanding per user and higher credit risk within comparable segments. Loan durations vary by product and country: some loans can be as long as 18 months, some 12 months, etc. Longer tenors tend to be for specific products like motorcycle financing. We manage credit risk by product, country and segment and keep guardrails to maintain stable NPLs.
Your next question comes from Jiong Shao with Barclays.
Please let me add my congrats as well. I have two follow-up questions around e-commerce. The first is that you talked about full-year 2026 EBITDA being over $1 billion. That would suggest a higher EBITDA for the second half than the first half, which is different from last year. Could you talk about the drivers behind that this year compared to last year? Does that also imply that your margins may be better in the second half than the first half as well? My second question is back to Brazil. One of your key competitors in Brazil talked about momentum they are seeing by lowering some take rates and lowering the free shipping threshold, but that hasn't stopped you from growing very fast. Could you talk about your profitability outlook in Brazil in the coming quarters and years?
As you pointed out, our goal of more than $1 billion EBITDA this year does imply that our absolute EBITDA for the second half will be higher than the first half. Partly, this is due to overall GMV growth—our second-half GMV base will be higher than the first half. Part of it also comes from continued progress on the initiatives we discussed. E-commerce is a business where we adjust pace and monetization based on multiple parameters: how we optimize internally, overall business growth in each country and competitive dynamics. For Brazil, your observation is correct: we still see that our growth is well above the market in the country. Looking at price competitiveness, we remain very competitive even after changes by competitors. For e-commerce, the fundamentals still hold: price competitiveness of our assortment, completeness of assortment, cost to serve and user experience all contribute to our growth advantage. We believe Brazil has a long runway for e-commerce growth, and we aim to grow in Brazil in a profitable fashion while outpacing the market in the coming quarters.
Your next question comes from the line of Ranjan Sharma with JPMorgan.
Two questions from my side. Firstly, on gaming: you discussed new publishing rights. Can you help us understand which geographies they cover? And earlier in the year we discussed a possible Naruto collaboration coming back—can you remind us when that's going to be? Second question is on fintech: we noticed provisions for credit losses have increased quite a bit this quarter. What trends are you seeing in delinquencies and how does that affect your loan growth going forward?
Ranjan, thank you. For the new published games we mentioned this quarter: Palworld Online is a title developed by Pocketpair; Garena will publish it globally under license from Pocketpair, and we plan to launch it market by market gradually, with a global publishing opportunity. Monster Hunter Outlanders is developed by Tencent in collaboration with Capcom's IP; our target markets include Southeast Asia, Latin America, Taiwan, and potentially the Middle East and additional markets, with launch planned this year. Regarding Naruto or other IP collaborations: we continue to work with partners on high-quality collaborations and will provide timing updates as launch plans firm up.
On the provisions, the increase is primarily driven by loan mix. There are two components contributing to higher provisions: one is off-Shopee SPL and the second is Brazil loan outstanding. Although Brazil has delivered very good ROA, it is a higher-interest, higher-risk market, so a higher mix of these two components contributes to the higher provision level you see.
This concludes our question-and-answer session. I would like to turn the conference call back over to Mr. KC Ong for any closing remarks.
Thank you all for joining today's call. We look forward to speaking to all of you again next quarter.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.