Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced
its financial results for the fourth quarter and full year ended
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. “In 2023, we achieved profitability,
strengthened our market leadership for our e-commerce business,
grew our digital financial services business, and stabilized the
performance of our digital entertainment business. We have emerged
with a much stronger balance sheet with our cash position
increasing to 8.5 billion dollars as of the end of 2023,
demonstrating the discipline and prudence we have applied in our
investments over the past year. Looking ahead, we expect 2024 to be
another profitable year.”
“Despite an environment of intensified competition in Southeast
Asia, we believe Shopee had a meaningful gain in market share
between the start and the end of 2023. We are happy to have
solidified Shopee’s market share in the region, and we intend to
maintain our market share in 2024. We expect 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.”
“For SeaMoney, 2023 was the first year of positive profit,
primarily attributed to our consumer and SME credit business. In
2024, we will continue to invest in user acquisition for our credit
business, both on and off Shopee platform as we see significant
upside in our markets. As we scale, we will remain prudent on risk
management.”
“For Garena, I am happy to share that we are seeing improved
user acquisition and retention trends for Free Fire. In 2023, Free
Fire was the most downloaded mobile game globally according to
Sensor Tower. We are pleased that these positive trends are
continuing into 2024. In February, Free Fire achieved more than 100
million peak daily active users. It remains one of the largest
mobile games in the world. With this positive momentum, we
currently expect Free Fire to grow double-digits year-on-year for
both user base and bookings in 2024.”
“We are pleased to see positive trends in both growth and
profitability for all three of our businesses. Looking ahead, we
will continue to invest for the future with discipline and
focus.”
Fourth Quarter 2023 Highlights
- Group
- Total GAAP revenue was US$3.6 billion, up 4.8%
year-on-year.
- Total gross profit was US$1.5 billion, as compared to total
gross profit of US$1.7 billion for the fourth quarter of 2022.
- Total net loss was US$(111.6) million, as compared to total net
income of US$422.8 million for the fourth quarter of 2022.
- Total adjusted EBITDA1 was US$126.7 million, as compared to
US$495.7 million for the fourth quarter of 2022.
- As of December 31, 2023, cash, cash equivalents, short-term and
other treasury investments2 were US$8.5 billion, representing a net
increase3 of US$565.7 million from September 30, 2023.
- E-commerce
- GAAP revenue was US$2.6 billion, up 23.2% year-on-year.
- GAAP revenue included US$2.3 billion of GAAP marketplace
revenue, which consists of core marketplace revenue and value-added
services revenue and increased by 23.2% year-on-year.
- Core marketplace revenue, mainly consisting of
transaction-based fees and advertising revenues, was up 40.6%
year-on-year to US$1.6 billion as a result of platform growth and
improved monetization.
- Value-added services revenue, mainly consisting of revenues
related to logistics services, was down 5.3% year-on-year to
US$657.9 million as a result of higher revenue net-off against
shipping subsidies.
- Adjusted EBITDA1 was US$(225.3) million, as compared to
US$196.1 million for the fourth quarter of 2022 and US$(346.5)
million for the third quarter of 2023. Adjusted EBITDA improved
meaningfully quarter-on-quarter for both Asia and Other markets.
- Asia markets recorded adjusted EBITDA of US$(192.9) million in
the quarter, as compared to US$320.0 million for the fourth quarter
of 2022 and US$(306.2) million for the third quarter of 2023.
- Other markets recorded adjusted EBITDA of US$(32.4) million in
the quarter, as compared to US$(123.9) million for the fourth
quarter of 2022 and US$(40.3) million for the third quarter of
2023.
- In Brazil, unit economics continued to improve, with
contribution margin4 loss per order improving 88.9% year-on-year to
US$(0.05) for the quarter.
- Gross orders totaled 2.5 billion for the quarter, increasing by
46.0% year-on-year and 13.4% quarter-on-quarter.
- GMV was US$23.1 billion for the quarter, increasing by 28.6%
year-on-year and 15.3% quarter-on-quarter.
- Digital Financial Services
- GAAP revenue was US$472.4 million, up 24.3% year-on-year.
- Adjusted EBITDA1 was US$148.5 million, up 96.4%
year-on-year.
- Digital financial services revenue and operating income are
primarily attributed to the consumer and SME credit business. As of
December 31, 2023, consumer and SME loans principal outstanding was
US$3.1 billion, up 27.0% year-on-year. This consists of US$2.5
billion on-book and US$0.6 billion off-book loans principal
outstanding5.
- Non-performing loans past due by more than 90 days as a
percentage of consumer and SME loans on-book was 1.6%, stable
quarter-on-quarter.
- Digital Entertainment
- GAAP revenue was US$510.8 million, as compared to US$592.2
million for the previous quarter.
- Bookings6 were US$456.3 million, up 1.9%
quarter-on-quarter.
- Adjusted EBITDA1 was US$217.4 million, as compared to US$234.0
million for the previous quarter.
- Adjusted EBITDA represented 47.6% of bookings for the fourth
quarter of 2023, as compared to 52.2% for the previous
quarter.
- Quarterly active users were 528.7 million, as compared to 544.1
million for the previous quarter.
- Quarterly paying users were 39.7 million, as compared to 40.5
million for the previous quarter. Paying user ratio was 7.5%,
remaining stable quarter-on-quarter.
- Average bookings per user were US$0.86, up 4.8%
quarter-on-quarter.
Full Year 2023 Highlights
- Group
- Total GAAP revenue was US$13.1 billion, up 4.9%
year-on-year.
- Total gross profit was US$5.8 billion, up 12.5%
year-on-year.
- Total net income was US$162.7 million, as compared to total net
loss of US$(1.7) billion for the full year of 2022.
- Total adjusted EBITDA1 was US$1.2 billion, as compared to
US$(878.1) million for the full year of 2022.
- E-commerce
- GAAP revenue was US$9.0 billion, up 23.5% year-on-year.
- GAAP revenue included US$7.9 billion of GAAP marketplace
revenue, up 27.4% year-on-year.
- Adjusted EBITDA1 was US$(213.8) million, as compared to
US$(1.7) billion for the full year of 2022.
- Gross orders totaled 8.2 billion, up 8.8% year-on-year.
- GMV was US$78.5 billion, up 6.8% year-on-year.
- Digital Financial Services
- GAAP revenue was US$1.8 billion, up 44.0% year-on-year.
- Adjusted EBITDA1 was US$550.1 million, as compared to
US$(228.6) million for the full year of 2022.
- Digital Entertainment
- GAAP revenue was US$2.2 billion, as compared to US$3.9 billion
for the full year of 2022.
- Bookings6 were US$1.8 billion, as compared to US$2.8 billion
for the full year of 2022.
- Adjusted EBITDA1 was US$920.9 million, as compared to US$1.3
billion for the full year of 2022.
- Adjusted EBITDA represented 50.9% of bookings for the full year
of 2023, as compared to 47.7% for the full year of 2022.
1
For a discussion of the use of non-GAAP
financial measures, see “Non-GAAP Financial Measures”.
2
Other treasury investments currently
consist of group treasury related investments, such as
available-for-sale sovereign bonds and corporate bonds, classified
as part of long-term investments.
3
Includes proceeds of approximately US$370
million from lower securities purchased under agreements to resell
relating to our banking operations.
4
Contribution margin refers to adjusted
EBITDA before allocation of HQ costs.
5
Off-book loans principal outstanding
mainly refers to channeling arrangements, which is lending by other
financial institutions on our platform.
6
GAAP revenue for the digital entertainment
segment plus change in digital entertainment deferred revenue. This
operating metric is used as an approximation of cash spent by our
users in the applicable period that is attributable to our digital
entertainment segment.
Unaudited Summary of Financial
Results
(Amounts are expressed in thousands of US
dollars “$” except for per share data)
For the Three Months
ended December 31,
For the Full Year ended
December 31,
2022
2023
2022
2023
$
$
YOY%
$
$
YOY%
Revenue
Service revenue
Digital Entertainment
948,857
510,773
(46.2
)%
3,877,163
2,172,009
(44.0
)%
E-commerce and other services
2,231,133
2,771,267
24.2
%
7,463,173
9,770,376
30.9
%
Sales of goods
271,594
334,588
23.2
%
1,109,369
1,121,175
1.1
%
3,451,584
3,616,628
4.8
%
12,449,705
13,063,560
4.9
%
Cost of revenue
Cost of service
Digital Entertainment
(242,470
)
(161,360
)
(33.5
)%
(1,077,017
)
(672,481
)
(37.6
)%
E-commerce and other services
(1,282,174
)
(1,621,218
)
26.4
%
(5,194,065
)
(5,530,043
)
6.5
%
Cost of goods sold
(229,627
)
(309,263
)
34.7
%
(993,346
)
(1,027,389
)
3.4
%
(1,754,271
)
(2,091,841
)
19.2
%
(7,264,428
)
(7,229,913
)
(0.5
)%
Gross profit
1,697,313
1,524,787
(10.2
)%
5,185,277
5,833,647
12.5
%
Other operating income
68,453
58,524
(14.5
)%
279,184
221,021
(20.8
)%
Sales and marketing expenses
(473,620
)
(967,433
)
104.3
%
(3,269,223
)
(2,779,223
)
(15.0
)%
General and administrative expenses
(352,321
)
(232,603
)
(34.0
)%
(1,437,612
)
(1,134,724
)
(21.1
)%
Provision for credit losses
(175,103
)
(159,988
)
(8.6
)%
(513,690
)
(633,942
)
23.4
%
Research and development expenses
(244,195
)
(279,806
)
14.6
%
(1,376,501
)
(1,164,126
)
(15.4
)%
Impairment of goodwill
(177,663
)
-
-
(354,943
)
(117,875
)
(66.8
)%
Total operating expenses
(1,354,449
)
(1,581,306
)
16.7
%
(6,672,785
)
(5,608,869
)
(15.9
)%
Operating income (loss)
342,864
(56,519
)
(116.5
)%
(1,487,508
)
224,778
(115.1
)%
Non-operating income (loss), net
34,973
31,654
(9.5
)%
(13,025
)
207,616
(1,694.0
)%
Income tax credit (expense)
43,461
(76,894
)
(276.9
)%
(168,395
)
(262,680
)
56.0
%
Share of results of equity investees
1,540
(9,856
)
(740.0
)%
11,156
(7,032
)
(163.0
)%
Net income (loss)
422,838
(111,615
)
(126.4
)%
(1,657,772
)
162,682
(109.8
)%
Earnings (Loss) per share attributable to
Sea Limited’s ordinary shareholders:
Basic
0.76
(0.19
)
(125.0
)%
(2.96
)
0.27
(109.1
)%
Diluted
0.72
(0.19
)
(126.4
)%
(2.96
)
0.25
(108.4
)%
Change in deferred revenue of
Digital Entertainment
(405,262
)
(54,459
)
(86.6
)%
(1,125,294
)
(362,397
)
(67.8
)%
Adjusted EBITDA for Digital
Entertainment (1)
258,233
217,411
(15.8
)%
1,313,091
920,923
(29.9
)%
Adjusted EBITDA for E-commerce (1)
196,146
(225,332
)
(214.9
)%
(1,690,554
)
(213,774
)
(87.4
)%
Adjusted EBITDA for Digital
Financial Services
(1)
75,601
148,482
96.4
%
(228,560
)
550,112
(340.7
)%
Adjusted EBITDA for Other Services (1)
(25,437
)
(6,979
)
(72.6
)%
(239,149
)
(44,880
)
(81.2
)%
Unallocated expenses (2)
(8,887
)
(6,877
)
(22.6
)%
(32,962
)
(33,199
)
0.7
%
Total adjusted EBITDA (1)
495,656
126,705
(74.4
)%
(878,134
)
1,179,182
(234.3
)%
(1)
For a discussion of the use of non-GAAP
financial measures, see “Non-GAAP Financial Measures”.
(2)
Unallocated expenses within total adjusted
EBITDA are mainly related to general and corporate administrative
costs such as professional fees and other miscellaneous items that
are not allocated to segments. These expenses are excluded from
segment results as they are not reviewed by the Chief Operating
Decision Maker (“CODM”) as part of segment performance.
Three Months Ended December 31, 2023 Compared to Three Months
Ended December 31, 2022
Revenue
Our total GAAP revenue increased by 4.8% to US$3.6 billion in
the fourth quarter of 2023 from US$3.5 billion in the fourth
quarter of 2022.
- Digital Entertainment: GAAP revenue was US$510.8 million
compared to US$948.9 million in the fourth quarter of 2022,
primarily attributable to moderation in user monetization
year-on-year.
- E-commerce and other services: GAAP revenue increased by 24.2%
to US$2.8 billion in the fourth quarter of 2023 from US$2.2 billion
in the fourth quarter of 2022, primarily driven by the GMV growth
of our e-commerce business and the growth of our credit business
year-on-year.
- Sales of goods: GAAP revenue increased by 23.2% to US$334.6
million in the fourth quarter of 2023 from US$271.6 million in the
fourth quarter of 2022.
Cost of Revenue
Our total cost of revenue was US$2.1 billion in the fourth
quarter of 2023, as compared to US$1.8 billion in the fourth
quarter of 2022.
- Digital Entertainment: Cost of revenue decreased by 33.5% to
US$161.4 million in the fourth quarter of 2023 from US$242.5
million in the fourth quarter of 2022.
- E-commerce and other services: Cost of revenue for e-commerce
and other services segment combined was US$1.6 billion in the
fourth quarter of 2023, as compared to US$1.3 billion in the fourth
quarter of 2022, primarily driven by higher costs of logistics from
order growth.
- Cost of goods sold: Cost of goods sold increased by 34.7% to
US$309.3 million in the fourth quarter of 2023 from US$229.6
million in the fourth quarter of 2022.
Other Operating Income
Other operating income was US$58.5 million and US$68.5 million
in the fourth quarter of 2023 and 2022, respectively. Other
operating income mainly consists of rebates from e-commerce related
logistics services providers.
Sales and Marketing Expenses
Our total sales and marketing expenses increased by 104.3% to
US$967.4 million in the fourth quarter of 2023 from US$473.6
million in the fourth quarter of 2022. The table below sets forth
breakdown of the sales and marketing expenses of our major
reporting segments. Amounts are expressed in thousands of US
dollars (“$”).
For the Three Months
ended December 31,
2022
2023
YOY%
Sales and Marketing Expenses
$
$
Digital Entertainment
43,262
29,926
(30.8
)%
E-commerce
379,369
878,985
131.7
%
Digital Financial Services
29,918
51,927
73.6
%
General and Administrative Expenses
Our general and administrative expenses decreased by 34.0% to
US$232.6 million in the fourth quarter of 2023 from US$352.3
million in the fourth quarter of 2022.
Provision for Credit Losses
Our provision for credit losses decreased by 8.6% to US$160.0
million in the fourth quarter of 2023 from US$175.1 million in the
fourth quarter of 2022.
Research and Development Expenses
Our research and development expenses increased by 14.6% to
US$279.8 million in the fourth quarter of 2023 from US$244.2
million in the fourth quarter of 2022.
Impairment of Goodwill
We recorded nil impairment of goodwill in the fourth quarter of
2023, compared to US$177.7 million in the fourth quarter of
2022.
Non-operating Income or Losses, Net
Non-operating income or losses mainly consist of interest
income, interest expense, investment gain (loss), foreign exchange
gain (loss) and gain (loss) on debt extinguishment. We recorded a
net non-operating income of US$31.7 million in the fourth quarter
of 2023, as compared to a net non-operating income of US$35.0
million in the fourth quarter of 2022.
We recognized a gain on debt extinguishment of US$38.6 million
in the fourth quarter of 2023 as the Company repurchased US$244.5
million aggregate principal amount of the 0.25% convertible senior
notes due 2026 (the “2026 CB”), for a cash consideration of
US$204.6 million. As of December 31, 2023, approximately US$1.8
billion aggregate principal amount of the 2026 CB remained
outstanding.
Income Tax Expenses or Credit
We had a net income tax expense of US$76.9 million in the fourth
quarter of 2023, as compared to net income tax credit of US$43.5
million in the fourth quarter of 2022.
Net Loss or Income
As a result of the foregoing, we had net loss of US$(111.6)
million in the fourth quarter of 2023, as compared to net income of
US$422.8 million in the fourth quarter of 2022.
Basic and Diluted Loss or Earnings Per Share Attributable to
Sea Limited’s Ordinary Shareholders
Basic loss per share attributable to Sea Limited’s ordinary
shareholders was US$(0.19) in the fourth quarter of 2023, compared
to basic earnings per share attributable to Sea Limited’s ordinary
shareholders of US$0.76 in the fourth quarter of 2022.
Diluted loss per share attributable to Sea Limited’s ordinary
shareholders was US$(0.19) in the fourth quarter of 2023, compared
to diluted earnings per share attributable to Sea Limited’s
ordinary shareholders of US$0.72 in the fourth quarter of 2022.
Full Year Ended December 31, 2023 Compared to Full Year Ended
December 31, 2022
Revenue
Our total GAAP revenue increased by 4.9% to US$13.1 billion for
the full year ended December 31, 2023 from US$12.4 billion for the
full year ended December 31, 2022.
- Digital Entertainment: GAAP revenue was US$2.2 billion for the
full year ended December 31, 2023 from US$3.9 billion for the full
year ended December 31, 2022, primarily attributable to the
moderation in user engagement and monetization.
- E-commerce and other services: GAAP revenue increased by 30.9%
to US$9.8 billion for the full year ended December 31, 2023 from
US$7.5 billion for the full year ended December 31, 2022, primarily
driven by the improved monetization in our e-commerce business and
the growth of our credit business.
- Sales of goods: GAAP revenue was US$1.1 billion for the full
year ended December 31, 2023, relatively stable year-on-year.
Cost of Revenue
Our total cost of revenue was US$7.2 billion for the full year
ended December 31, 2023, as compared to US$7.3 billion for the full
year ended December 31, 2022.
- Digital Entertainment: Cost of revenue decreased by 37.6% to
US$672.5 million for the full year ended December 31, 2023 from
US$1.1 billion for the full year ended December 31, 2022.
- E-commerce and other services: Cost of revenue for our
e-commerce and other services segment combined increased by 6.5% to
US$5.5 billion for the full year ended December 31, 2023 from
US$5.2 billion for the full year ended December 31, 2022, primarily
driven by higher costs of logistics from order growth.
- Cost of goods sold: Cost of goods sold was US$1.0 billion for
the full year ended December 31, 2023.
Other Operating Income
Our other operating income was US$221.0 million for the full
year ended December 31, 2023 from US$279.2 million for the full
year ended December 31, 2022. Other operating income mainly
consists of rebates from e-commerce related logistics services
providers.
Sales and Marketing Expenses
Our total sales and marketing expenses decreased by 15.0% to
US$2.8 billion for the full year ended December 31, 2023 from
US$3.3 billion for the full year ended December 31, 2022. The table
below sets forth the breakdown of the sales and marketing expenses
of our major reporting segments. Amounts are expressed in thousands
of US dollars (“$”).
For the Full Year ended
December 31,
2022
2023
YOY%
Sales and Marketing Expenses
$
$
Digital Entertainment
268,061
104,721
(60.9
)%
E-commerce
2,328,636
2,510,693
7.8
%
Digital Financial Services
508,089
116,445
(77.1
)%
General and Administrative Expenses
Our general and administrative expenses decreased by 21.1% to
US$1.1 billion for the full year ended December 31, 2023 from
US$1.4 billion for the full year ended December 31, 2022.
Provision for Credit Losses
Our provision for credit losses increased by 23.4% to US$633.9
million for the full year ended December 31, 2023 from US$513.7
million for the full year ended December 31, 2022.
Research and Development Expenses
Our research and development expenses decreased by 15.4% to
US$1.2 billion for the full year ended December 31, 2023 from
US$1.4 billion for the full year ended December 31, 2022.
Impairment of Goodwill
We recorded an impairment of goodwill of US$117.9 million for
the full year ended December 31, 2023, as compared to US$354.9
million for the full year ended December 31, 2022.
Non-operating Income or Losses, Net
Non-operating income or losses mainly consist of interest
income, interest expense, investment gain (loss), and foreign
exchange gain (loss), and gain (loss) on debt extinguishment. We
recorded a net non-operating income of US$207.6 million for the
full year ended December 31, 2023, as compared to a net
non-operating loss of US$(13.0) million for the full year ended
December 31, 2022.
Income Tax Expense
We had a net income tax expense of US$262.7 million and US$168.4
million for the full year ended December 31, 2023 and 2022,
respectively.
Net Income or Loss
As a result of the foregoing, we had net income of US$162.7
million for the full year ended December 31, 2023, as compared to
net loss of US$(1.7) billion for the full year ended December 31,
2022.
Basic and Diluted Earnings or Loss Per Share Attributable to
Sea Limited’s Ordinary Shareholders
Basic earnings per share attributable to Sea Limited’s ordinary
shareholders was US$0.27 for the full year ended December 31, 2023,
as compared to basic loss per share attributable to Sea Limited’s
ordinary shareholders of US$(2.96) for the full year ended December
31, 2022.
Diluted earnings per share attributable to Sea Limited’s
ordinary shareholders was US$0.25 for the full year ended December
31, 2023, as compared to diluted loss per share attributable to Sea
Limited’s ordinary shareholders of US$(2.96) for the full year
ended December 31, 2022.
Webcast and Conference Call Information
The Company’s management will host a conference call today to
review Sea’s business and financial performance.
Details of the conference call and webcast are as follows:
Date and time:
7:30 AM U.S. Eastern Time on March 4, 2024
8:30 PM Singapore / Hong Kong Time on March 4, 2024
Webcast link:
https://events.q4inc.com/attendee/352581999
A replay of the conference call will be available at the
Company’s investor relations website (www.sea.com/investor/home).
An archived webcast will be available at the same link above.
About Sea Limited
Sea Limited (NYSE: SE) is a leading global consumer internet
company founded in Singapore in 2009. Its mission is to better the
lives of consumers and small businesses with technology. Sea
operates three core businesses across digital entertainment,
e-commerce, as well as digital financial services, known as Garena,
Shopee and SeaMoney, respectively. Garena is a leading global
online games developer and publisher. Shopee is the largest
pan-regional e-commerce platform in Southeast Asia and Taiwan and
has a significant presence in South America. SeaMoney is a leading
digital financial services provider in Southeast Asia and is
growing its presence in Brazil.
Forward-Looking Statements
This announcement contains forward-looking statements. These
statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
“may,” “could,” “will,” “expect,” “anticipate,” “aim,” “future,”
“intend,” “plan,” “believe,” “estimate,” “likely to,” “potential,”
“confident,” “guidance,” and similar statements. Among other
things, statements that are not historical facts, including
statements about Sea’s beliefs and expectations, the business,
financial and market outlook, and projections from its management
in this announcement, as well as Sea’s strategic and operational
plans, contain forward-looking statements. Sea may also make
written or oral forward-looking statements in its periodic reports
to the U.S. Securities and Exchange Commission (the “SEC”), in its
annual report to shareholders, in press releases, and other written
materials, and in oral statements made by its officers, directors,
or employees to third parties. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: Sea’s goals and strategies; its future business
development, financial condition, financial results, and results of
operations; the expected growth in, and market size of, the digital
entertainment, e-commerce and digital financial services industries
in the markets where it operates, including segments within those
industries; expected changes or guidance in its revenue, costs or
expenditures; its ability to continue to source, develop and offer
new and attractive online games and to offer other engaging digital
entertainment content; the expected growth of its digital
entertainment, e-commerce and digital financial services
businesses; its expectations regarding growth in its user base,
level of engagement, and monetization; its ability to continue to
develop new technologies and/or upgrade its existing technologies;
its expectations regarding the use of proceeds from its financing
activities, including its follow-on equity offerings and
convertible notes offerings; growth and trends of its markets and
competition in its industries; government policies and regulations
relating to its industries, including the effects of any government
orders or actions on its businesses; general economic, political,
social and business conditions in its markets; and the impact of
widespread health developments. Further information regarding these
and other risks is included in Sea’s filings with the SEC. All
information provided in this press release and in the attachments
is as of the date of this press release, and Sea undertakes no
obligation to update any forward-looking statement, except as
required under applicable law.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with U.S. GAAP, we use the
following non-GAAP financial measures to help evaluate our
operating performance:
- “Adjusted EBITDA” for our digital entertainment segment
represents operating income (loss) before impairment of goodwill
plus (a) depreciation and amortization expenses, and (b) the net
effect of changes in deferred revenue and its related cost for our
digital entertainment segment. We believe that the segment adjusted
EBITDA helps to identify underlying trends in our operating
results, enhancing their understanding of the past performance and
future prospects.
- “Adjusted EBITDA” for our e-commerce segment, digital financial
services segment and other services segment represents operating
income (loss) plus depreciation and amortization expenses. We
believe that the segment adjusted EBITDA helps to identify
underlying trends in our operating results, enhancing their
understanding of the past performance and future prospects.
- “Total adjusted EBITDA” represents the sum of adjusted EBITDA
of all our segments combined, plus unallocated expenses. We believe
that the total adjusted EBITDA helps to identify underlying trends
in our operating results, enhancing their understanding of the past
performance and future prospects.
These non-GAAP financial measures have limitations as analytical
tools. None of the above financial measures should be considered in
isolation or construed as an alternative to revenue, net
loss/income, or any other measure of performance or as an indicator
of our operating performance. These non-GAAP financial measures
presented here may not be comparable to similarly titled measures
presented by other companies. Other companies may calculate
similarly titled measures differently, limiting their usefulness as
comparative measures to Sea’s data. We compensate for these
limitations by reconciling the non-GAAP financial measures to their
nearest U.S. GAAP financial measures, all of which should be
considered when evaluating our performance. We encourage you to
review our financial information in its entirety and not rely on
any single financial measure.
The tables below present selected financial information of our
reporting segments, the non-GAAP financial measures that are most
directly comparable to GAAP financial measures, and the related
reconciliations between the financial measures. Amounts are
expressed in thousands of US dollars (“$”) except for number of
shares & per share data.
For the Three Months ended
December 31, 2023
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Operating income (loss)
261,060
(303,681
)
134,205
(9,558
)
(138,545
)
(56,519
)
Net effect of changes in deferred
revenue and its related cost
(49,925
)
-
-
-
-
(49,925
)
Depreciation and Amortization
6,276
78,349
14,277
2,579
-
101,481
Share-based compensation
-
-
-
-
131,668
131,668
Adjusted EBITDA
217,411
(225,332
)
148,482
(6,979
)
(6,877
)
126,705
For the Three Months ended
December 31, 2022
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Operating income (loss)
400,165
109,486
61,841
(28,714
)
(199,914
)
342,864
Net effect of changes in deferred
revenue and its related cost
(331,321
)
-
-
-
-
(331,321
)
Depreciation and Amortization
11,726
86,660
13,760
3,277
-
115,423
Share-based compensation
-
-
-
-
191,027
191,027
Impairment of goodwill
177,663
-
-
-
-
177,663
Adjusted EBITDA
258,233
196,146
75,601
(25,437
)
(8,887
)
495,656
(1)
A combination of multiple business
activities that does not meet the quantitative thresholds to
qualify as reportable segments are grouped together as “Other
Services”.
(2)
Unallocated expenses are mainly related to
share-based compensation, impairment of goodwill of prior
acquisitions that are not under our reportable segments, and
general and corporate administrative costs such as professional
fees and other miscellaneous items that are not allocated to
segments. These expenses are excluded from segment results as they
are not reviewed by the CODM as part of segment performance.
For the Full Year ended
December 31, 2023
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Operating income (loss)
1,177,871
(550,470
)
490,209
(56,728
)
(836,104
)
224,778
Net effect of changes in deferred
revenue and its related cost
(289,346
)
-
-
-
-
(289,346
)
Depreciation and Amortization
32,398
336,696
59,903
11,848
-
440,845
Share-based compensation
-
-
-
-
685,030
685,030
Impairment of goodwill
-
-
-
-
117,875
117,875
Adjusted EBITDA
920,923
(213,774
)
550,112
(44,880
)
(33,199
)
1,179,182
For the Full Year ended
December 31, 2022
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Operating income (loss)
1,971,416
(2,013,360
)
(277,264
)
(252,162
)
(916,138
)
(1,487,508
)
Net effect of changes in deferred
revenue and its related cost
(879,809
)
-
-
-
-
(879,809
)
Depreciation and Amortization
43,821
322,806
48,704
13,013
-
428,344
Share-based compensation
-
-
-
-
705,896
705,896
Impairment of goodwill
177,663
-
-
-
177,280
354,943
Adjusted EBITDA
1,313,091
(1,690,554
)
(228,560
)
(239,149
)
(32,962
)
(878,134
)
(1)
A combination of multiple business
activities that does not meet the quantitative thresholds to
qualify as reportable segments are grouped together as “Other
Services”.
(2)
Unallocated expenses are mainly related to
share-based compensation, impairment of goodwill of prior
acquisitions that are not under our reportable segments, and
general and corporate administrative costs such as professional
fees and other miscellaneous items that are not allocated to
segments. These expenses are excluded from segment results as they
are not reviewed by the CODM as part of segment performance.
UNAUDITED INTERIM CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
Amounts expressed in thousands of US
dollars (“$”) except for number of shares & per share
data
For the Three Months
ended December 31,
For the Year ended
December 31,
2022
2023
2022
2023
$
$
$
$
Revenue
Service revenue
Digital Entertainment
948,857
510,773
3,877,163
2,172,009
E-commerce and other services
2,231,133
2,771,267
7,463,173
9,770,376
Sales of goods
271,594
334,588
1,109,369
1,121,175
Total revenue
3,451,584
3,616,628
12,449,705
13,063,560
Cost of revenue
Cost of service
Digital Entertainment
(242,470
)
(161,360
)
(1,077,017
)
(672,481
)
E-commerce and other services
(1,282,174
)
(1,621,218
)
(5,194,065
)
(5,530,043
)
Cost of goods sold
(229,627
)
(309,263
)
(993,346
)
(1,027,389
)
Total cost of revenue
(1,754,271
)
(2,091,841
)
(7,264,428
)
(7,229,913
)
Gross profit
1,697,313
1,524,787
5,185,277
5,833,647
Operating income (expenses):
Other operating income
68,453
58,524
279,184
221,021
Sales and marketing expenses
(473,620
)
(967,433
)
(3,269,223
)
(2,779,223
)
General and administrative expenses
(352,321
)
(232,603
)
(1,437,612
)
(1,134,724
)
Provision for credit losses
(175,103
)
(159,988
)
(513,690
)
(633,942
)
Research and development expenses
(244,195
)
(279,806
)
(1,376,501
)
(1,164,126
)
Impairment of goodwill
(177,663
)
–
(354,943
)
(117,875
)
Total operating expenses
(1,354,449
)
(1,581,306
)
(6,672,785
)
(5,608,869
)
Operating income (loss)
342,864
(56,519
)
(1,487,508
)
224,778
Interest income
54,336
90,949
115,515
331,310
Interest expense
(10,809
)
(10,129
)
(45,396
)
(41,075
)
Investment loss, net
(123,004
)
(80,279
)
(207,331
)
(125,656
)
Net gain on debt extinguishment
199,697
38,550
199,697
38,550
Foreign exchange (loss) gain
(85,247
)
(7,437
)
(75,510
)
4,487
Income (Loss) before income tax and
share of results of equity investees
377,837
(24,865
)
(1,500,533
)
432,394
Income tax credit (expense)
43,461
(76,894
)
(168,395
)
(262,680
)
Share of results of equity investees
1,540
(9,856
)
11,156
(7,032
)
Net income (loss)
422,838
(111,615
)
(1,657,772
)
162,682
Net loss (income) attributable to non-
controlling interests
3,960
1,875
6,351
(11,956
)
Net income (loss) attributable to Sea
Limited’s ordinary shareholders
426,798
(109,740
)
(1,651,421
)
150,726
Earnings (Loss) per share:
Basic
0.76
(0.19
)
(2.96
)
0.27
Diluted
0.72
(0.19
)
(2.96
)
0.25
Weighted average shares used in earnings
(loss) per share computation:
Basic
560,326,301
569,527,667
558,119,948
566,612,815
Diluted
611,938,691
569,527,667
558,119,948
594,405,604
UNAUDITED INTERIM CONDENSED
CONSOLIDATED BALANCE SHEETS
Amounts expressed in thousands
of US dollars (“$”)
As of December 31,
2022
2023
$
$
ASSETS
Current assets
Cash and cash equivalents
6,029,859
2,811,056
Restricted cash
1,549,574
1,410,365
Accounts receivable, net of allowance for
credit losses of $12,818 and $9,351, as of
December 31, 2022 and 2023 respectively
268,814
262,716
Prepaid expenses and other assets
1,798,651
1,861,842
Loans receivable, net of allowance for
credit losses of $236,797 and $319,463, as of
December 31, 2022 and 2023 respectively
2,053,767
2,464,662
Inventories, net
109,668
125,395
Short-term investments
864,258
2,547,644
Amounts due from related parties
13,421
290,254
Total current assets
12,688,012
11,773,934
Non-current assets
Property and equipment, net
1,387,895
1,207,698
Operating lease right-of-use assets,
net
957,840
1,015,982
Intangible assets, net
65,019
50,821
Long-term investments
1,253,593
4,262,562
Prepaid expenses and other assets
135,616
87,705
Loans receivable, net of allowance for
credit losses of $2,022 and $2,105, as of
December 31, 2022 and 2023 respectively
21,663
20,551
Restricted cash
17,724
22,236
Deferred tax assets
245,226
328,961
Goodwill
230,208
112,782
Total non-current assets
4,314,784
7,109,298
Total assets
17,002,796
18,883,232
UNAUDITED INTERIM CONDENSED
CONSOLIDATED BALANCE SHEETS
Amounts expressed in thousands of US
dollars (“$”)
As of December 31,
2022
2023
$
$
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities
Accounts payable
258,648
342,547
Accrued expenses and other payables
1,396,613
1,834,807
Deposits payable
1,316,395
1,706,299
Escrow payables and advances from
customers
1,862,325
2,199,464
Amounts due to related parties
415
64,081
Borrowings
88,410
146,661
Operating lease liabilities
269,968
290,788
Convertible notes
31,237
151,764
Deferred revenue
1,535,083
1,208,892
Income tax payable
176,598
223,638
Total current liabilities
6,935,692
8,168,941
Non-current liabilities
Accrued expenses and other payables
87,072
79,257
Borrowings
–
119,323
Operating lease liabilities
756,818
789,514
Deferred revenue
63,566
72,587
Convertible notes
3,338,750
2,949,785
Deferred tax liabilities
9,967
133
Unrecognized tax benefits
107
6,107
Total non-current liabilities
4,256,280
4,016,706
Total liabilities
11,191,972
12,185,647
UNAUDITED INTERIM CONDENSED
CONSOLIDATED BALANCE SHEETS
Amounts expressed in thousands of US
dollars (“$”)
As of December 31,
2022
2023
$
$
Shareholders’ equity
Class A Ordinary shares
258
262
Class B Ordinary shares
23
23
Additional paid-in capital
14,559,690
15,283,870
Accumulated other comprehensive loss
(111,215
)
(108,000
)
Statutory reserves
12,490
16,981
Accumulated deficit
(8,745,541
)
(8,599,306
)
Total Sea Limited shareholders’
equity
5,715,705
6,593,830
Non-controlling interests
95,119
103,755
Total shareholders’ equity
5,810,824
6,697,585
Total liabilities and shareholders’
equity
17,002,796
18,883,232
UNAUDITED INTERIM CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts expressed in thousands of US
dollars (“$”)
For the Three Months ended
December 31,
For the Year ended
December 31,
2022
2023
2022
2023
$
$
$
$
Net cash generated from (used in)
operating activities
319,691
278,833
(1,055,692
)
2,079,688
Net cash generated from (used in)
investing activities
51,522
(1,048,554
)
(2,428,809
)
(5,804,462
)
Net cash (used in) generated from
financing activities
(513,711
)
183,385
400,256
366,011
Effect of foreign exchange rate changes
on cash, cash equivalents and
restricted cash
109,112
68,317
(143,511
)
(7,964
)
Net decrease in cash, cash equivalents
and restricted cash
(33,386
)
(518,019
)
(3,227,756
)
(3,366,727
)
Cash, cash equivalents and restricted
cash at beginning of the
period(1)
7,643,770
4,761,676
10,838,140
7,610,384
Cash, cash equivalents and restricted
cash at end of the period
7,610,384
4,243,657
7,610,384
4,243,657
(1)
As of December 31, 2022, cash and cash
equivalents of US$13,227 was included in assets held for sale
within prepaid expenses and other assets.
Net cash used in investing activities amounted to US$1,049
million for the three months ended December 31, 2023. This was
primarily attributable to net placement of US$528 million in
securities purchased under agreements to resell, time deposits and
liquid investment products, for better cash yield management,
increase in loans receivable of US$452 million and purchase of
property and equipment of US$65 million to support the existing
operations. Net cash generated from financing activities amounted
to US$183 million for the three months ended December 31, 2023.
This was primarily attributable to an increase in customer deposits
of US$317 million, as well as an increase in net proceeds from
borrowings of US$71 million, offset by the cash used in repurchase
of convertible notes of US$205 million.
Net cash used in investing activities amounted to US$5,804
million for the year ended December 31, 2023. This was primarily
attributable to net placement of US$4,507 million in securities
purchased under agreements to resell, time deposits and liquid
investment products, for better cash yield management, increase in
loans receivable of US$1,000 million and purchase of property and
equipment of US$242 million to support the existing operations. Net
cash generated from financing activities amounted to US$366 million
for the year ended December 31, 2023. This was primarily
attributable to an increase in customer deposits of US$389 million
as well an increase in net proceeds from borrowings of US$173
million, offset by the cash used in repurchase of convertible notes
of US$205 million.
UNAUDITED SEGMENT INFORMATION
The Company has three reportable segments, namely digital
entertainment, e-commerce and digital financial services. The Chief
Operating Decision Maker (“CODM”) reviews the performance of each
segment based on revenue and certain key operating metrics of the
operations and uses these results for the purposes of allocating
resources to and evaluating the financial performance of each
segment. Amounts are expressed in thousands of US dollars
(“$”).
For the Three Months ended
December 31, 2023
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Revenue
510,773
2,591,272
472,389
42,194
-
3,616,628
Operating income (loss)
261,060
(303,681
)
134,205
(9,558
)
(138,545
)
(56,519
)
Non-operating income, net
31,654
Income tax expense
(76,894
)
Share of results of equity investees
(9,856
)
Net loss
(111,615
)
For the Three Months ended
December 31, 2022
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Revenue
948,857
2,102,740
380,172
19,815
-
3,451,584
Operating income (loss)
400,165
109,486
61,841
(28,714
)
(199,914
)
342,864
Non-operating income, net
34,973
Income tax credit
43,461
Share of results of equity investees
1,540
Net income
422,838
(1)
A combination of multiple business
activities that does not meet the quantitative thresholds to
qualify as reportable segments are grouped together as “Other
Services”.
(2)
Unallocated expenses are mainly related to
share-based compensation, impairment of goodwill of prior
acquisitions that are not under our reportable segments, and
general and corporate administrative costs such as professional
fees and other miscellaneous items that are not allocated to
segments. These expenses are excluded from segment results as they
are not reviewed by the CODM as part of segment performance.
For the Year ended December
31, 2023
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Revenue
2,172,009
9,000,848
1,759,422
131,281
-
13,063,560
Operating income (loss)
1,177,871
(550,470
)
490,209
(56,728
)
(836,104
)
224,778
Non-operating income, net
207,616
Income tax expense
(262,680
)
Share of results of equity investees
(7,032
)
Net income
162,682
For the Year ended December
31, 2022
Digital Entertainment
E- commerce
Digital Financial Services
Other Services(1)
Unallocated expenses(2)
Consolidated
$
$
$
$
$
$
Revenue
3,877,163
7,288,677
1,221,996
61,869
-
12,449,705
Operating income (loss)
1,971,416
(2,013,360
)
(277,264
)
(252,162
)
(916,138
)
(1,487,508
)
Non-operating loss, net
(13,025
)
Income tax expense
(168,395
)
Share of results of equity investees
11,156
Net loss
(1,657,772
)
(1)
A combination of multiple business
activities that does not meet the quantitative thresholds to
qualify as reportable segments are grouped together as “Other
Services”.
(2)
Unallocated expenses are mainly related to
share-based compensation, impairment of goodwill of prior
acquisitions that are not under our reportable segments, and
general and corporate administrative costs such as professional
fees and other miscellaneous items that are not allocated to
segments. These expenses are excluded from segment results as they
are not reviewed by the CODM as part of segment performance.
View source
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For enquiries:
Investors / analysts: ir@sea.com Media: media@sea.com
Grafico Azioni Sea (NYSE:SE)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Sea (NYSE:SE)
Storico
Da Feb 2024 a Feb 2025
