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Earnings
Sea Limited (SE) Falls Short on Q2 EPS and Revenue Expectations
Sea Limited (NYSE: SE) reported robust financial results for Q2 2024, with total GAAP revenue reaching $3.8 billion, marking a 23% year-over-year increase.
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Sea Limited (NYSE: SE) reported its financial results for the second quarter of 2024. The company’s total GAAP revenue was $3.8 billion, a 23% increase year-over-year. The e-commerce segment, Shopee, saw a significant rise in gross orders and GMV, contributing to a 33.7% increase in GAAP revenue, which totaled $2.8 billion.
However, the firm reported EPS of $0.14, far below the expected $0.34. Additionally, the company’s net income for the quarter saw a significant decline year-over-year.
Sea Limited Fails EPS and Revenue Expectations in Q2
Comparing the current performance against expectations, Sea Limited failed both revenue and earnings per share (EPS) forecasts. Analysts had anticipated an EPS of $0.34 and revenue of $3.74 billion for the quarter. However, Sea Limited reported an EPS of $0.14, which, although lower than the expectation, was bolstered by a higher-than-expected revenue of $3.8 billion.
The company’s net income for the quarter was $79.9 million, a notable decrease from $331.0 million in the same period last year. Despite the lower net income, the robust revenue growth across its segments indicates strong operational performance. The e-commerce segment, in particular, outperformed expectations with a 30.4% increase in GAAP revenue, driven by a 29.1% year-over-year growth in GMV.
Sea Limited Revises Guidance for Remainder of 2024
Looking ahead, Sea Limited has revised its guidance for the remainder of 2024. Forrest Li, Chairman and CEO, expressed confidence in Shopee’s trajectory, expecting the e-commerce platform to become adjusted EBITDA positive from the third quarter. The company has also updated its guidance for Shopee’s full-year GMV growth to mid-20%.
This optimistic outlook is supported by the strong performance in the first half of the year and the continued momentum in key markets. Additionally, Garena’s Free Fire continues to show resilience with over 100 million daily active players, reinforcing its status as an evergreen franchise. The digital financial services segment is also expected to maintain its growth trajectory, with consumer and SME loans principal outstanding increasing by 39.5% year-over-year to $3.5 billion.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
