Sea Limited’s 2025 Guidance: E-commerce GMV Expected to Grow by 20%

Sea Limited (NYSE: SE) reported a robust financial performance for the fourth quarter of 2024, showcasing significant growth across its core business segments. The company’s total GAAP revenue surged by 36.9% year-on-year, reaching $5.0 billion, a substantial increase from the previous year’s $3.6 billion. This growth was driven by strong performances in e-commerce, digital financial services, and digital entertainment, with each segment contributing to the overall positive outcome.

The e-commerce sector, led by Shopee, recorded a remarkable increase in gross merchandise value (GMV), which rose by 23.5% year-on-year to $28.6 billion. This was complemented by a 41.3% rise in GAAP revenue, totaling $3.7 billion for the quarter.

The digital financial services segment also showed impressive results, with a 55.2% increase in GAAP revenue, amounting to $733.3 million. The segment’s loan book grew by over 60%, reaching $5.1 billion, establishing Sea as a leading consumer lending entity in Southeast Asia. Digital entertainment, primarily driven by Garena, also experienced growth with bookings increasing by 19% year-on-year to $543.2 million. The segment’s GAAP revenue was $519.1 million, reflecting a modest increase from the previous year.

Overall, Sea Limited’s strategic focus on expanding its core businesses has translated into a strong financial performance for the fourth quarter, setting a positive tone for the upcoming year.

Sea Limited’s Fourth Quarter Results

Sea Limited’s fourth-quarter results surpassed market expectations, reflecting the company’s strategic execution and market positioning. The company reported adj. earnings per share (EPS) of $0.39 fell slightly short of the market’s anticipated EPS of $0.41 but it marks a significant turnaround from a loss per share of $0.19 in the same quarter of the previous year.

In terms of revenue, Sea Limited outperformed expectations by reporting $4.95 billion, exceeding the forecasted $4.62 billion. This outperformance was driven by the strong performance of its e-commerce and digital financial services segments. The e-commerce segment, in particular, showed a robust increase in both GMV and revenue, a testament to the company’s ability to capture market share and drive growth in key regions.

The digital financial services segment also played a crucial role in exceeding revenue expectations. With a significant increase in loan book size and revenue, Sea Limited has solidified its position as a major player in the digital financial services market in Southeast Asia. Overall, the company’s ability to surpass revenue expectations reflects its strong market presence and strategic focus on growth and profitability.

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Sea Limited Expects Shopee’s GMV to Grow by ~20% Over Next Year

Looking ahead, Sea Limited has provided optimistic guidance for 2025, anticipating continued growth across its core business segments. The company expects Shopee’s GMV to grow by approximately 20% for the full year, with a focus on improving profitability. This guidance is supported by the company’s strategic initiatives to enhance its e-commerce platform and expand its market reach in Asia and Latin America.

In the digital financial services segment, Sea Limited aims to accelerate its loan book growth at a pace faster than Shopee’s GMV growth rate. The company plans to enhance credit penetration both on and off Shopee, leveraging its strong market position and expanding its financial services offerings. This strategic focus is expected to drive significant growth in the segment, further solidifying Sea Limited’s position as a leading digital financial services provider in the region.

For digital entertainment, Sea Limited expects double-digit growth in user base and bookings for Garena. The company plans to scale its user base and broaden its content offerings, capitalizing on the success of Free Fire and other popular titles. This focus on content expansion and user engagement is expected to drive growth in the digital entertainment segment, contributing to the company’s overall growth trajectory in 2025.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.