Sea Limited, the Singapore-based internet and e-commerce giant, reported impressive second-quarter 2024 results, exceeding analyst expectations for revenue growth. The company’s total revenue surged 23.0% year-over-year to $3.81 billion, surpassing the consensus estimate of $3.72 billion.
Despite exceeding revenue estimates, Sea Limited’s earnings per share (EPS) came in at $0.14, falling short of the $0.15 consensus estimate. This marked a decline from $0.54 in the same period last year. The stock price initially dipped after the earnings announcement but recovered during pre-market trading.
The company’s Digital Entertainment segment, which includes its popular Garena gaming platform, saw a 17.7% year-over-year decrease in revenue to $435.56 million. However, bookings within the segment improved to $536.8 million, reflecting a 21.1% year-over-year increase.
E-commerce and other services revenue, primarily driven by Shopee, continued to show strong growth, surging 30.4% year-over-year to $3.03 billion. Core marketplace revenue, a key indicator of Shopee’s performance, grew a robust 41.4% to $1.8 billion. The company also reported a 29.1% year-over-year increase in Gross Merchandise Value (GMV) to $23.3 billion.
Sea Limited’s Digital Financial Services segment, which includes its mobile wallet and payment solutions, also performed well, generating $519.3 million in revenue, a 21.4% year-over-year increase.
Looking ahead, Sea Limited expressed confidence in Shopee’s future profitability. Forrest Li, Sea’s Chairman and Chief Executive Officer, stated, “With the strong results delivered in the first half and our outlook for the rest of the year, we expect that Shopee will become adjusted EBITDA positive from the third quarter. We are also revising up our guidance for Shopee’s 2024 full year GMV growth to mid-20%.”
This optimistic outlook is supported by Shopee’s recent strategy of increasing commissions charged to merchants in key markets. Bloomberg reports that Shopee has raised its take rates, which are fees charged on merchant sales, by about 33.33% since the beginning of 2024. These commission increases, implemented twice in 2024 across many Southeast Asian markets, aim to improve Shopee’s bottom line.
Sea Limited’s strong performance in the second quarter, coupled with Shopee’s anticipated profitability, suggests that the company remains well-positioned for continued growth in the dynamic e-commerce landscape.
