Sea (NYSE:SE) Beats Q2 Expectations, But Users Fall

E-commerce and gaming company Sea (NYSE:SE) announced better than expected results in Q2 CY2024, with revenue up 23% year-over-year to $3.81 billion. GAAP earnings were $0.14 per share, down from earnings of $0.54 per share in the same quarter last year.

Is it time to buy Sea? Find out by accessing our full research report, it’s free.

Highlights of the second quarter of calendar year 2024 at sea (SE):

Income: $3.81 billion vs. analyst estimates of $3.72 billion (2.4% more)
Adjusted EBITDA: $448.5 million vs. analyst estimates of $367.4 million (22.1% increase)
EPS: $0.14 vs. analysts’ expectations of $0.19 (27.2% miss)
Gross Margin (GAAP): 41.6%, compared to 46.9% in the same quarter last year
EBITDA margin: 11.8%, compared to 16.5% in the same quarter last year
Paid users: 52.5 million, down 1.73 billion year-on-year
Market capitalization: $38.43 billion

“I am pleased to report that it was a solid quarter for us, with our strong momentum from Q1 continuing into Q2. All three of our businesses delivered both strong growth and improved profitability,” said Forrest Li, president and CEO of Sea.

Founded in 2009 and publicly traded since 2017, Sea (NYSE:SE) began as a gaming platform before expanding into a range of services including e-commerce, digital payments and financial services across Southeast Asia.

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Sales growth

Sea’s revenue growth has been strong over the past three years, averaging 21.7% per year. This quarter, Sea beat analyst estimates and posted a respectable 23% year-over-year revenue growth.

Before the financial results were released, analysts had forecast sales growth of 17.3% over the next 12 months.

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Key takeaways from Sea’s second-quarter results

It was great to see Sea beat analysts’ expectations for revenue and adjusted EBITDA this quarter. Overall, it was a solid quarter. However, the market seemed to expect more, with shares falling 2.9% to $64.99 immediately following the report.

Sea may have a tough quarter, but does that really present an opportunity to invest now? When making such a decision, it is important to consider valuation, business characteristics, as well as what happened in the last quarter. We discussed this in our full research report, which you can read here, it is free.