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| Name | Symbol | Market | Type |
|---|---|---|---|
| Sea Limited | NYSE:SE | NYSE | Depository Receipt |
| Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.15 | -0.13% | 111.32 | 859 | 11:50:02 |
From Oct 2024 to Dec 2024
Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results for the third quarter ended September 30, 2024.
“I’m happy to report that it has been another solid quarter. We are seeing high growth across all our three businesses,” said Forrest Li, Sea’s Chairman and Chief Executive Officer.
Referring to the growth of our three businesses, he said, “Shopee is on track to deliver our full year guidance of mid-twenties year-on-year GMV growth. SeaMoney’s loan book grew by over 70% year-on-year this quarter, while maintaining a stable NPL ratio. And for Garena, we now expect Free Fire’s full year bookings to grow over 30% year-on-year.”
On profitability, Mr. Li said, “I am very proud that we also improved our profitability while getting back to high growth. This quarter, Shopee achieved positive adjusted EBITDA, in both Asia and Brazil. As we continue to focus on delivering growth, we expect Shopee to remain profitable going forward.”
Third Quarter 2024 Highlights
1
For a discussion of the use of non-GAAP financial measures, see “Non-GAAP Financial Measures”.
2
Other treasury investments currently consist of group treasury related investments, such as available-for-sale sovereign bonds and corporate bonds, classified as part of long-term investments and securities purchased under agreements to resell relating to our banking operations.
3
Off-book loans principal outstanding mainly refers to channeling arrangements, which is lending by other financial institutions on our platform.
4
GAAP revenue for the digital entertainment segment plus change in digital entertainment deferred revenue. This operating metric is used as an approximation of cash spent by our users in the applicable period that is attributable to our digital entertainment segment.
Unaudited Summary of Financial Results
(Amounts are expressed in thousands of US dollars “$” except for per share data)
For the Three Months ended September 30,
2023
2024
$
$
YOY%
Revenue
Service revenue
Digital Entertainment
592,153
497,847
(15.9
%)
E-commerce and other services
2,417,036
3,412,362
41.2
%
Sales of goods
300,979
418,024
38.9
%
3,310,168
4,328,233
30.8
%
Cost of revenue
Cost of service
Digital Entertainment
(177,086
)
(156,043
)
(11.9
%)
E-commerce and other services
(1,403,975
)
(1,927,288
)
37.3
%
Cost of goods sold
(287,815
)
(383,841
)
33.4
%
(1,868,876
)
(2,467,172
)
32.0
%
Gross profit
1,441,292
1,861,061
29.1
%
Other operating income
46,614
40,647
(12.8
%)
Sales and marketing expenses
(918,046
)
(878,557
)
(4.3
%)
General and administrative expenses
(273,575
)
(306,755
)
12.1
%
Provision for credit losses
(143,514
)
(211,991
)
47.7
%
Research and development expenses
(280,511
)
(301,990
)
7.7
%
Total operating expenses
(1,569,032
)
(1,658,646
)
5.7
%
Operating (loss) income
(127,740
)
202,415
(258.5
%)
Non-operating income, net
45,875
49,536
8.0
%
Income tax expense
(61,676
)
(92,598
)
50.1
%
Share of results of equity investees
(437
)
(6,029
)
1,279.6
%
Net (loss) income
(143,978
)
153,324
(206.5
%)
(Loss) Earnings per share
attributable to Sea Limited’s ordinary shareholders:
Basic
(0.26
)
0.26
(200.0
%)
Diluted
(0.26
)
0.24
(192.3
%)
Change in deferred revenue of Digital Entertainment
(144,253
)
58,670
(140.7
%)
Adjusted EBITDA for Digital Entertainment (1)
233,998
314,428
34.4
%
Adjusted EBITDA for E-commerce (1)
(346,495
)
34,446
(109.9
%)
Adjusted EBITDA for Digital Financial Services (1)
165,731
187,927
13.4
%
Adjusted EBITDA for Other Services (1)
(8,771
)
(8,555
)
(2.5
%)
Unallocated expenses (2)
(9,179
)
(6,909
)
(24.7
%)
Total adjusted EBITDA (1)
35,284
521,337
1,377.5
%
(1)
For a discussion of the use of non-GAAP financial measures, see “Non-GAAP Financial Measures”.
(2)
Unallocated expenses within total adjusted EBITDA are mainly related to general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the Chief Operating Decision Maker (“CODM”) as part of segment performance.
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Revenue
Our total GAAP revenue increased by 30.8% to US$4.3 billion in the third quarter of 2024 from US$3.3 billion in the third quarter of 2023.
Cost of Revenue
Our total cost of revenue was US$2.5 billion in the third quarter of 2024, as compared to US$1.9 billion in the third quarter of 2023.
Other Operating Income
Our other operating income was US$40.6 million and US$46.6 million in the third quarter of 2024 and 2023, respectively. Other operating income mainly consists of rebates from e-commerce related logistics services providers.
Sales and Marketing Expenses
Our total sales and marketing expenses decreased by 4.3% to US$878.6 million in the third quarter of 2024 from US$918.0 million in the third quarter of 2023. The table below sets forth breakdown of the sales and marketing expenses of our major reporting segments. Amounts are expressed in thousands of US dollars (“$”).
For the Three Months ended September 30,
2023
2024
YOY%
Sales and Marketing Expenses
$
$
E-commerce
861,540
763,340
(11.4
%)
Digital Financial Services
25,152
65,632
160.9
%
Digital Entertainment
24,712
26,583
7.6
%
General and Administrative Expenses
Our general and administrative expenses increased by 12.1% to US$306.8 million in the third quarter of 2024 from US$273.6 million in the third quarter of 2023.
Provision for Credit Losses
Our provision for credit losses increased by 47.7% to US$212.0 million in the third quarter of 2024 from US$143.5 million in the third quarter of 2023.
Research and Development Expenses
Our research and development expenses increased by 7.7% to US$302.0 million in the third quarter of 2024 from US$280.5 million in the third quarter of 2023.
Non-operating Income or Losses, Net
Non-operating income or losses mainly consist of interest income, interest expense, investment gain (loss), foreign exchange gain (loss) and gain (loss) on debt extinguishment. We recorded a net non-operating income of US$49.5 million in the third quarter of 2024, as compared to a net non-operating income of US$45.9 million in the third quarter of 2023. The non-operating income in the third quarter of 2024 was primarily due to interest income of US$93.3 million and foreign exchange gain of US$27.6 million, partially offset by investment losses of US$64.2 million recognized.
Income Tax Expense
We had a net income tax expense of US$92.6 million and US$61.7 million in the third quarter of 2024 and 2023, respectively.
Net Income or Loss
As a result of the foregoing, we had net income of US$153.3 million in the third quarter of 2024, as compared to net loss of US$144.0 million in the third quarter of 2023.
Basic and Diluted Earnings or Loss Per Share Attributable to Sea Limited’s Ordinary Shareholders
Basic earnings per share attributable to Sea Limited’s ordinary shareholders was US$0.26 in the third quarter of 2024, compared to basic loss per share attributable to Sea Limited’s ordinary shareholders of US$(0.26) in the third quarter of 2023.
Diluted earnings per share attributable to Sea Limited’s ordinary shareholders was US$0.24 in the third quarter of 2024, compared to diluted loss per share attributable to Sea Limited’s ordinary shareholders of US$(0.26) in the third quarter of 2023.
Webcast and Conference Call Information
The Company’s management will host a conference call today to review Sea’s business and financial performance.
Details of the conference call and webcast are as follows:
Date and time:
7:30 AM U.S. Eastern Time on November 12, 2024
8:30 PM Singapore / Hong Kong Time on November 12, 2024
Webcast link:
https://events.q4inc.com/attendee/114734356
A replay of the conference call will be available at the Company’s investor relations website (www.sea.com/investor/home). An archived webcast will be available at the same link above.
About Sea Limited
Sea Limited (NYSE: SE) is a leading global consumer internet company founded in Singapore in 2009. Its mission is to better the lives of consumers and small businesses with technology. Sea operates three core businesses across digital entertainment, e-commerce, as well as digital financial services, known as Garena, Shopee and SeaMoney, respectively. Garena is a leading global online games developer and publisher. Shopee is the largest pan-regional e-commerce platform in Southeast Asia and Taiwan and has a significant presence in Latin America. SeaMoney is a leading digital financial services provider in Southeast Asia and is growing its presence in Brazil.
Forward-Looking Statements
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “could,” “will,” “expect,” “anticipate,” “aim,” “future,” “intend,” “plan,” “believe,” “estimate,” “likely to,” “potential,” “confident,” “guidance,” and similar statements. Among other things, statements that are not historical facts, including statements about Sea’s beliefs and expectations, the business, financial and market outlook, and projections from its management in this announcement, as well as Sea’s strategic and operational plans, contain forward-looking statements. Sea may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases, and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Sea’s goals and strategies; its future business development, financial condition, financial results, and results of operations; the expected growth in, and market size of, the digital entertainment, e-commerce and digital financial services industries in the markets where it operates, including segments within those industries; expected changes or guidance in its revenue, costs or expenditures; its ability to continue to source, develop and offer new and attractive online games and to offer other engaging digital entertainment content; the expected growth of its digital entertainment, e-commerce and digital financial services businesses; its expectations regarding growth in its user base, level of engagement, and monetization; its ability to continue to develop new technologies and/or upgrade its existing technologies; growth and trends of its markets and competition in its industries; government policies and regulations relating to its industries, including the effects of any government orders or actions on its businesses; general economic, political, social and business conditions in its markets; and the impact of widespread health developments. Further information regarding these and other risks is included in Sea’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Sea undertakes no obligation to update any forward-looking statement, except as required under applicable law.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures to help evaluate our operating performance:
These non-GAAP financial measures have limitations as analytical tools. None of the above financial measures should be considered in isolation or construed as an alternative to revenue, net loss/income, or any other measure of performance or as an indicator of our operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to Sea’s data. We compensate for these limitations by reconciling the non-GAAP financial measures to their nearest U.S. GAAP financial measures, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on any single financial measure.
The tables below present selected financial information of our reporting segments, the non-GAAP financial measures that are most directly comparable to GAAP financial measures, and the related reconciliations between the financial measures. Amounts are expressed in thousands of US dollars (“$”) except for number of shares & per share data.
For the Three Months ended September 30, 2024
E- commerce
Digital Financial Services
Digital Entertainment
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Operating (loss) income
(36,818
)
173,942
262,402
(11,001
)
(186,110
)
202,415
Net effect of changes in deferred
-
-
46,712
-
-
46,712
revenue and its related cost
Depreciation and Amortization
71,264
13,985
5,314
2,446
-
93,009
Share-based compensation
-
-
-
-
179,201
179,201
Adjusted EBITDA
34,446
187,927
314,428
(8,555
)
(6,909
)
521,337
For the Three Months ended September 30, 2023
E- commerce
Digital Financial Services
Digital Entertainment
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Operating (loss) income
(428,183
)
150,470
345,760
(11,704
)
(184,083
)
(127,740
)
Net effect of changes in deferred
-
-
(119,058
)
-
-
(119,058
)
revenue and its related cost
Depreciation and Amortization
81,688
15,261
7,296
2,933
-
107,178
Share-based compensation
-
-
-
-
174,904
174,904
Adjusted EBITDA
(346,495
)
165,731
233,998
(8,771
)
(9,179
)
35,284
(1)
A combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.
(2)
Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Amounts expressed in thousands of US dollars (“$”) except for number of shares & per share data
For the Nine Months
ended September 30,
2023
2024
$
Revenue
Service revenue
Digital Entertainment
1,661,236
1,391,525
E-commerce and other services
6,999,109
9,391,099
Sales of goods
786,587
1,086,806
Total revenue
9,446,932
11,869,430
Cost of revenue
Cost of service
Digital Entertainment
(511,121
)
(451,521
)
E-commerce and other services
(3,908,825
)
(5,407,157
)
Cost of goods sold
(718,126
)
(1,011,124
)
Total cost of revenue
(5,138,072
)
(6,869,802
)
Gross profit
4,308,860
4,999,628
Operating income (expenses)
Other operating income
162,497
127,187
Sales and marketing expenses
(1,811,790
)
(2,422,960
)
General and administrative expenses
(902,121
)
(901,447
)
Provision for credit losses
(473,954
)
(541,173
)
Research and development expenses
(884,320
)
(904,834
)
Impairment of goodwill
(117,875
)
-
Total operating expenses
(4,027,563
)
(4,643,227
)
Operating income
281,297
356,401
Interest income
240,361
271,847
Interest expense
(30,946
)
(29,060
)
Investment loss, net
(45,377
)
(189,543
)
Net gain on debt extinguishment
-
34,415
Foreign exchange gain
11,924
750
Income before income tax and share of results of equity investees
457,259
444,810
Income tax expense
(185,786
)
(231,970
)
Share of results of equity investees
2,824
(2,605
)
Net income
274,297
210,235
Net income attributable to non-controlling interests
(13,831
)
(3,222
)
Net income attributable to Sea Limited’s ordinary shareholders
260,466
207,013
Earnings per share:
Basic
0.46
0.36
Diluted
0.44
0.34
Weighted average shares used in earnings per share computation:
Basic
565,630,521
573,260,590
Diluted
597,718,238
602,720,046
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts expressed in thousands of US dollars (“$”)
As of December 31,
As of September 30,
2023
2024
$
$
ASSETS
Current assets
Cash and cash equivalents
2,811,056
2,538,749
Restricted cash
1,410,365
1,700,187
Accounts receivable, net of allowance for credit losses of
$9,351 and $5,996, as of December 31, 2023 and
September 30, 2024 respectively
262,716
280,579
Prepaid expenses and other assets
1,861,842
1,512,206
Loans receivable, net of allowance for credit losses of
$319,463 and $417,258, as of December 31, 2023 and
September 30, 2024 respectively
2,464,662
3,640,809
Inventories, net
125,395
200,712
Short-term investments
2,547,644
5,374,539
Amounts due from related parties
290,254
306,414
Total current assets
11,773,934
15,554,195
Non-current assets
Property and equipment, net
1,207,698
1,167,249
Operating lease right-of-use assets, net
1,015,982
1,160,416
Intangible assets, net
50,821
30,845
Long-term investments
4,262,562
2,974,637
Prepaid expenses and other assets
87,705
118,706
Loans receivable, net of allowance for credit losses of
$2,105 and $4,034, as of December 31, 2023 and
September 30, 2024 respectively
20,551
63,202
Restricted cash
22,236
27,316
Deferred tax assets
328,961
481,358
Goodwill
112,782
113,766
Total non-current assets
7,109,298
6,137,495
Total assets
18,883,232
21,691,690
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts expressed in thousands of US dollars (“$”)
As of December 31,
As of September 30,
2023
2024
$
$
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
342,547
274,771
Accrued expenses and other payables
1,834,807
2,148,427
Deposits payable
1,706,299
2,401,011
Escrow payables and advances from customers
2,199,464
2,402,361
Amounts due to related parties
64,081
164,910
Borrowings
146,661
142,742
Operating lease liabilities
290,788
315,512
Convertible notes
151,764
151,996
Deferred revenue
1,208,892
1,480,959
Income tax payable
223,638
106,730
Total current liabilities
8,168,941
9,589,419
Non-current liabilities
Accrued expenses and other payables
79,257
86,822
Borrowings
119,323
177,424
Operating lease liabilities
789,514
895,710
Deferred revenue
72,587
98,068
Convertible notes
2,949,785
2,720,243
Deferred tax liabilities
133
268
Unrecognized tax benefits
6,107
95,157
Total non-current liabilities
4,016,706
4,073,692
Total liabilities
12,185,647
13,663,111
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts expressed in thousands of US dollars (“$”)
As of December 31,
As of September 30,
2023
2024
$
$
Shareholders’ equity
Class A Ordinary shares
262
266
Class B Ordinary shares
23
23
Additional paid-in capital
15,283,870
16,266,340
Accumulated other comprehensive (loss) income
(108,000
)
25,090
Statutory reserves
16,981
17,021
Accumulated deficit
(8,599,306
)
(8,392,333
)
Total Sea Limited shareholders’ equity
6,593,830
7,916,407
Non-controlling interests
103,755
112,172
Total shareholders’ equity
6,697,585
8,028,579
Total liabilities and shareholders’ equity
18,883,232
21,691,690
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts expressed in thousands of US dollars (“$”)
For the Nine Months ended September 30,
2023
2024
$
Net cash generated from operating activities
1,800,855
2,256,438
Net cash used in investing activities
(4,755,908
)
(3,279,780
)
Net cash generated from financing activities
182,626
984,283
Effect of foreign exchange rate changes on cash, cash
equivalents and restricted cash
(76,281
)
61,654
Net (decrease) increase in cash, cash equivalents and restricted
cash
(2,848,708
)
22,595
Cash, cash equivalents and restricted cash at beginning of the
period
7,610,384
4,243,657
Cash, cash equivalents and restricted cash at end of the period
4,761,676
4,266,252
Net cash used in investing activities amounted to US$3,280 million for the nine months ended September 30, 2024. This was primarily attributable to increase in loans receivable of our credit business of US$1,598 million, net placement of US$1,405 million in securities purchased under agreements to resell, time deposits and liquid investment products, for better cash yield management and purchase of property and equipment of US$229 million to support the existing operations. Net cash generated from financing activities amounted to US$984 million for the nine months ended September 30, 2024. This was primarily attributable to an increase in bank deposits of US$692 million, settlement of capped calls of US$429 million as well as net proceeds from other funding sources related to credit business of US$43 million, offset by the cash used in repurchase of convertible notes of US$199 million.
UNAUDITED SEGMENT INFORMATION
The Company has three reportable segments, namely e-commerce, digital financial services and digital entertainment. The Chief Operating Decision Maker (“CODM”) reviews the performance of each segment based on revenue and certain key operating metrics of the operations and uses these results for the purposes of allocating resources to and evaluating the financial performance of each segment. Amounts are expressed in thousands of US dollars (“$”).
For the Three Months ended September 30, 2024
E- commerce
Digital Financial Services
Digital Entertainment
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Revenue
3,183,558
615,711
497,847
31,117
-
4,328,233
Operating (loss) income
(36,818
)
173,942
262,402
(11,001
)
(186,110
)
202,415
Non-operating income, net
49,536
Income tax expense
(92,598
)
Share of results of equity investees
(6,029
)
Net income
153,324
For the Three Months ended September 30, 2023
E- commerce
Digital Financial Services
Digital Entertainment
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Revenue
2,231,954
446,249
592,153
39,812
-
3,310,168
Operating (loss) income
(428,183
)
150,470
345,760
(11,704
)
(184,083
)
(127,740
)
Non-operating income, net
45,875
Income tax expense
(61,676
)
Share of results of equity investees
(437
)
Net loss
(143,978
)
(1)
A combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.
(2)
Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241111850616/en/
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