Singapore's Sea Reports Mixed Bag Of Q2 Earnings, Expects Shopee To Become Adjusted EBITDA Positive From Q3

Sea Limited SE reported fiscal second-quarter 2024 revenue growth of 23.0% year-on-year to $3.81 billion, beating the analyst consensus estimate of $3.72 billion. 

EPS of $0.14, down from $0.54 Y/Y, missed the analyst consensus estimate of $0.15. The stock price slid after the print followed by a recovery in the premarket trading session.

Digital Entertainment revenue decreased 17.7% year over year to $435.56 million. Bookings improved to $536.8 million, up 21.1% year over year. 

The segment’s adjusted EBITDA was $302.8 million, up 26.5% Y/Y. Quarterly active users were 648.0 million, up 19% year over year. Average bookings per user were $0.83 versus $0.81 year over year.

E-commerce and other services revenue increased 30.4% Y/Y to $3.03 billion. Adjusted EBITDA for the segment overall was a $9.2 million loss versus $150.3 million a year back.

Core marketplace revenue grew 41.4% year over year to $1.8 billion. Gross orders rose 40.3% year over year. GMV was $23.3 billion, increasing by 29.1% year over year.

Digital Financial Services revenue grew 21.4% Y/Y to $519.3 million.

Sea Ltd held $9.0 billion in cash and equivalents as of June 30, 2024.

On Shopee’s 2024 outlook, Forrest Li, Sea’s Chairman and Chief Executive Officer, said, “With the strong results delivered in the first half and our outlook for the rest of the year, we expect that Shopee will become adjusted EBITDA positive from the third quarter. We are also revising up our guidance for Shopee’s 2024 full year GMV growth to mid-20%.”

Shopee increased the commissions it charged merchants in many core markets, also known as take rates, by about 33.33% since 2024 beginning to boost its bottom line, Bloomberg reports. It raised its commissions twice in 2024 for many of its core markets in Southeast Asia.

Price Action: SE shares traded higher by 3.10% at $69.00 premarket at the last check Tuesday.