Sea’s second-quarter revenue growth fueled by e-commerce growth

Sea (NYSE:SE) the company’s shares were in the red before the open on Tuesday, despite second-quarter revenue exceeding estimates.

The Singapore-based company, which operates e-commerce platform Shopee, reported second-quarter revenue growth of about 23% year-over-year to $3.81 billion, beating estimates.

The company generated Internet income $79.9 million, compared to $331 million in the second quarter of 2023. Sea reported net losses in the previous three quarters. Analysts had estimated them at $60 million, according to report from Bloomberg News.

Forrest Li, chairman and CEO of Sea, said all three of the company’s businesses achieved strong growth and higher profitability.

On Shopee’s 2024 outlook, he said: “Given the strong performance delivered in the first half of the year and our outlook for the rest of the year, we expect Shopee to achieve adjusted EBITDA profit from the third quarter. We are also raising our full-year 2024 Shopee GMV growth guidance to the mid-20% range.”

Shopee faces competition in the Southeast Asian market from rivals like ByteDance’s (BDNCE) TikTok Shop and Alibaba’s (BABA) Lazada. Meanwhile, new competitors Shein and PDD’s (PDD) Temu are also targeting the region.

E-commerce revenue increased 33.7% year over year to $2.8 billion.

Gross merchandise value, or GMV, rose 29.1% year over year to $23.3 billion.

Meanwhile, digital entertainment revenue fell 17.7% year-over-year to $435.56 million.

On digital entertainment, Li said, “Garena had a strong quarter, with bookings increasing by over 20% year-on-year, mainly thanks to Free Fire.”

Garena is a developer Free Firemobile game. Li noted that throughout the second quarter, Free Fire had over 100 million active daily players.

As of June 30, Sea had cash, cash equivalents, short-term investments and other treasury investments of $9 billion, a net increase of $364.7 million compared to March 31.

Changes in the management:

Sea said CFO Tony Hou has resigned from his role as CFO. Hou will continue to serve as CFO. As of Aug. 12, Silvio Savarese and Jessica Tan were elected to the board as independent directors.

The company said Savarese currently serves as executive vice president and chief scientist at Salesforce Research, where he leads the AI ​​research group and shapes Salesforce’s scientific direction and long-term AI strategy.

Tan previously served as co-CEO and executive director of Ping An Group. Tan is a member of the board of directors of Ping An Bank Co.

Sea noted that following these changes, its seven-person board now has a majority of independent directors.

South-East -1.08% to $66.20 before the market open on August 13