Sea Limited Beats Q4 Revenue Expectations, Eyes Positive EBITDA for Shopee in Second Half

Sea Limited SE reported fourth-quarter fiscal 2023 revenue growth of 4.8% year-on-year to $3.62 billion, beating the consensus of $3.55 billion. 

EPS loss of $(0.19), down from $0.72 Y/Y, beat the consensus of $(0.25). The stock price climbed after the results.

Digital Entertainment revenue decreased 46.2% Y/Y to $510.77 million, and bookings improved to $456.3 million, up 1.9% quarter-on-quarter. The segment’s adjusted EBITDA was $217.4 million, compared to $234.0 million in the previous quarter.

Quarterly active users were 528.7 million, compared to 544.1 million in the prior quarter. Average bookings per user were $0.86, which increased 4.8% quarter-on-quarter.

E-commerce and other services revenue increased 24.2% Y/Y to $2.77 billion. Adjusted EBITDA for Shopee overall was $(225.3) million versus $196.1 million a year back.

Core marketplace revenue grew 40.6% Y/Y. Gross orders rose 46.0% Y/Y and 13.4% quarter-on-quarter. 

Digital Financial Services revenue grew 24.3% Y/Y to $472.4 million.

Sea Ltd held $8.5 billion in cash and equivalents as of December 31, 2023.

“I am happy to share that we have achieved our first full year of annual profit since our IPO,” said Forrest Li, Sea’s Chairman and Chief Executive Officer. 

Outlook: Sea 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.

Investors can gain exposure to the stock via FMQQ The Next Frontier Internet & Ecommerce ETF FMQQ, and Fidelity Disruptive Communications ETF FDCF.

Price Action: SE shares traded higher by 7.23% at $54.74 on the last check Monday.

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