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Sea Limited (SE) Incurs Loss in Q2, Revenues Increase Y/Y

·4-min read

Sea Limited SE incurred a loss of $1.03 per share in second-quarter 2022, wider than the year-ago quarter’s reported loss of 61 cents. The figure missed the Zacks Consensus Estimate by 11.96%.

Revenues of $2.94 billion increased 29% on a year-over-year basis. The consensus estimate was pegged at $3 billion.

Sea shares were down 13.94% to close at $77.43 on Aug 16, following the results. The company’s shares have been down 65.4% year to date, underperforming the Zacks Computer & Technology sector’s decline of 42.7%.

Top-Line Details

Digital entertainment revenues of $900.3 million declined 12.1% year over year.

According to data.ai, Free Fire continued to be the highest-grossing mobile game in Southeast Asia and Latin America for the second quarter of 2022. Free Fire also remained the most downloaded mobile game globally.

Sea Limited Sponsored ADR Price, Consensus and EPS Surprise

Sea Limited Sponsored ADR Price, Consensus and EPS Surprise
Sea Limited Sponsored ADR Price, Consensus and EPS Surprise

Sea Limited Sponsored ADR price-consensus-eps-surprise-chart | Sea Limited Sponsored ADR Quote

 

Quarterly active users (QAUs) reached 619.3 million compared with the year-ago quarter’s 725.2 million. Quarterly paying users of 56.1 million represented a paying user ratio of 9.1% for the second quarter compared with 12.7% for the same period in 2021.

Average bookings per user for the reported quarter were $1.20 compared with the year-ago quarter’s figure of $1.60. Bookings were $717.4 billion in second-quarter 2022 compared with the year-ago quarter’s $1.2 billion.

E-commerce and other services revenues were $1.76 billion, up 75.6% from the year-ago quarter.

Gross orders for the quarter under review totaled 2 billion, up 41.6% year over year. Gross merchandise value was $19 billion, up 27.2% year over year (31.4% on a constant currency basis).

Finally, sales of goods soared 26.1% year over year to $264.8 million in the second quarter of 2022.

Digital financial services revenues jumped 214.5% year over year to $279 million.

SeaMoney products and services’ QAUs reached 52.7 million, up 53.3% year over year. Mobile wallet total payment volume for the second quarter surpassed $5.7 billion, up 35.7% year over year.

Operating Details

Gross profit increased 17.1% year over year to $1.09 billion in second-quarter 2022.

Adjusted EBITDA loss was $506.3 million compared with an EBITDA loss of $24.1 million in the year-ago quarter.

Digital Entertainment adjusted EBITDA was $333.6 million compared with $740.9 million reported in the year-ago quarter.

E-commerce adjusted EBITDA loss was $648.1 million compared with a loss of $579.8 million reported in the year-ago quarter. E-commerce adjusted EBITDA loss per order was 33 cents compared with 41 cents reported in the year-ago quarter.

Digital Financial Services adjusted EBITDA loss was $111.5 million compared with a loss of $155 million reported in the year-ago quarter.

Balance Sheet

As of Jun 30, 2022, Sea had cash and cash equivalents of $6.49 billion compared with $9.07 billion as of Mar 31, 2022.

Zacks Rank & Upcoming Earnings to Watch

Sea Limited currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader Zacks Computer and Technology sector that are scheduled to report their earnings soon are Intuit INTU, Keysight KEYS and Hewlett Packard HPE. While both Intuit and Keysight have a Zacks Rank #2 (Buy), Hewlett Packard sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuit’s shares have underperformed the sector year to date, declining 24.2%.

INTU is scheduled to release fourth-quarter fiscal 2022 results on Aug 23.

Keysight’s shares have outperformed the sector year to date, declining 17.4%.

KEYS is scheduled to release third-quarter fiscal 2022 results on Aug 17.

Hewlett Packard shares have outperformed the sector year to date, declining 5.2%.

HPE is set to report third-quarter fiscal 2022 results on Aug 30.


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