Sea Limited's CEO Celebrates Strong Q1 Across Segments, Highlights E-commerce and Digital Entertainment Growth

Sea Limited SE reported fiscal first-quarter 2024 revenue growth of 22.8% year-on-year to $3.73 billion, beating the analyst consensus estimate of $3.56 billion. 

EPS loss of $(0.04), down from $0.15 Y/Y, missed the analyst consensus estimate of $(0.02). The stock price gained after the results in the premarket session.

Digital Entertainment revenue decreased 15.1% year over year to $458.12 million, primarily due to lower recognition of accumulated deferred revenue due to lower bookings in previous quarters. Bookings improved to $512.1 million, up 10.8% year over year. 

The segment’s adjusted EBITDA was $292.2 million, up 27% Y/Y.

Quarterly active users were 594.7 million, up 21% year over year. Average bookings per user were $0.86 versus $0.94 year over year.

E-commerce and other services revenue increased 32.9% Y/Y to $2.7 billion. Adjusted EBITDA for Shopee overall was $(21.7) million versus $207.7 million a year back.

Core marketplace revenue grew 47% year over year to $1.7 billion. Gross orders rose 56.8% year over year to $2.6 billion. GMV was $23.6 billion, increasing by 36.3% year over year.

Digital Financial Services revenue grew 21% Y/Y to $499.4 million.

Sea Ltd held $8.6 billion in cash and equivalents as of March 31, 2024.

“I am pleased to share that we are kicking off 2024 with a strong quarter. All our three businesses have delivered strong growth with an improved profit profile,” Chair and CEO Forrest Li said. On the e-commerce front, Mr Li said.

On digital financial services, Mr Li said, “SeaMoney has continued its strong growth momentum and profitability into 2024 while maintaining prudent risk management.” On digital entertainment, Mr Li said, “We are pleased to share that Garena is back to positive growth, led by Free Fire’s strong performance across markets.” 

Outlook: Li said, “We have a clear roadmap for profitable growth. Our results in the first quarter have given us a strong start to 2024, and we are well on-track to deliver our full-year guidance.” 

During fiscal fourth quarter 2023 results in March, Sea said it expects Shopee’s full-year GMV growth to be in the high teens range and its adjusted EBITDA to turn positive in the second half of this year.

Sea stock plunged 27% in the last 12 months. Investors can gain exposure to the stock via FMQQ The Next Frontier Internet & Ecommerce ETF FMQQ and Fidelity Disruptive Communications ETF FDCF.

SE shares went up as much as 7% in the premarket session.

Price Action: SE shares traded lower by 1.29% at $63.67 at the last check Tuesday.