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Shopee-owner Sea Exceeds Revenue Expectations in Q1 on E-commerce Success

Sea Ltd surpasses Q1 revenue estimates with strong performance from Shopee. Strategic initiatives, including exiting certain markets, contribute to the company's success. Net loss reported due to increased costs.

Sea Ltd surpasses Q1 revenue estimates with strong performance from Shopee. Strategic initiatives, including exiting certain markets, contribute to the company's success. Net loss reported due to increased costs


The strong performance of its e-commerce platform, Shopee, has driven this success, leading to a 7% increase in the company's U.S.-listed shares during premarket trading.


Shopee benefited from an early Ramadan, while Sea's digital entertainment business saw a boost from the popularity of the online multiplayer game Free Fire. As a result, Sea's total revenue for the quarter ended March 31 grew by 23% to US$3.73 billion, surpassing the average estimate of US$3.56 billion according to LSEG data.


CEO Forrest Li expressed his satisfaction with the company's performance, stating, "Our results in the first quarter have given us a strong start to 2024, and we are well on-track to deliver our full-year guidance."


Sea Ltd experienced significant growth in 2020 and 2021, driven by increased demand during the pandemic and expansion into new markets beyond Southeast Asia. However, the global economic slowdown prompted the company to streamline its operations and implement cost-cutting measures, including job cuts. These initiatives, such as exciting markets in India, Europe, and some Latin American countries, contributed to Sea's achievement of its first annual profit last year.


The e-commerce segment, Shopee, which is Sea's largest unit, saw a 33% increase in sales to US$2.7 billion in the March quarter, surpassing LSEG estimates of US$2.54 billion. Meanwhile, the digital entertainment business, which includes the gaming platform Garena, reported higher-than-expected bookings of US$512.1 million. However, the growth in the digital financial services unit fell short of expectations.


Despite the positive revenue results, Sea reported a net loss of US$23 million, compared to a profit of US$87.3 million in the same period last year. This loss can be attributed to a nearly 50% increase in costs. On an adjusted basis, the company reported a loss of 4 cents per share, missing analysts' average estimate of a 2-cent loss.

 
  • Sea Ltd surpasses Q1 revenue estimates with strong performance from Shopee

  • Strategic initiatives, including exiting certain markets, contribute to the company's success

  • Net loss reported due to increased costs


Source: REUTERS

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