Sea Ltd's Stock Tanks Post Q4 Results; Warns On Near Term Headwinds Impacting Digital Entertainment Business

Sea Ltd SE reported fourth-quarter FY21 revenue growth of 105.7% year-on-year to $3.22 billion, beating the consensus of $2.91 billion.

Digital Entertainment revenue increased 104.1% Y/Y to $1.4 billion, and bookings rose 6.8% Y/Y to $1.1 billion. The segment adjusted EBITDA was $602.6 million, compared to $663.5 million a year ago.

Quarterly paying users grew by 5.6%, and quarterly active users increased 7.1% Y/Y. Average bookings per user were in line at $1.7.

E-commerce revenue increased 89.4% Y/Y to $1.6 billion. The segment adjusted EBITDA loss was $(877.7) million versus $(427.5) million a year back.

Marketplace revenue grew 103.5% Y/Y, and product revenue rose 48.1% Y/Y. Gross orders rose 90.1% Y/Y. Gross merchandise value increased 52.7% Y/Y.

Digital Financial Services revenue grew 711.1% Y/Y to $197.5 million.

The mobile wallet total payment volume rose 70.1% Y/Y to over $5 billion.

EPS loss of $(0.88) missed the consensus loss of $(0.59). Sea Ltd held $10.8 billion in cash and equivalents.

"And while there are some headwinds impacting our digital entertainment business in the near term, we continue to remain extremely focused on developing Garena's global platform, which we see as a key strategic asset in the long run," said Forrest Li, Sea's Chairman and Group CEO.

Outlook: Sea expects FY22 bookings for digital entertainment to be $2.9 billion - $3.1 billion. It sees FY22 e-commerce revenue of $8.9 billion - $9.1 billion and digital financial services of $1.1 billion - $1.3 billion. 

Price Action: SE shares traded lower by 9.48% at $131.80 in the premarket session on the last check Tuesday.