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Sea Limited (SE) Q1 Earnings Miss Estimates, Revenues Increase Y/Y

Sea Limited SE recorded earnings of 15 cents per share in first-quarter 2023, which increased 114.4% year over year. However, the figure missed the Zacks Consensus Estimate by 76.6%.

Revenues of $3 billion increased 4.9% on a year-over-year basis. The consensus estimate was pegged at $3.28 billion.

The stock declined 17.74% to close at $72.45 on May 16, following the results. The company’s shares have been up 39.3% year to date, outperforming the Zacks Computer & Technology sector’s rise of 22.7%.

Top-Line Details

Digital entertainment revenues of $539.7 million declined 52.5% year over year.

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

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Free Fire remained one of the largest mobile games globally. The company observed positive user trends, with Free Fire achieving a new peak in monthly active users in the last eight months.

Quarterly active users (QAUs) reached 491.6 million compared with the year-ago quarter’s 615.9 million. Quarterly paying users of 37.6 million represented a paying user ratio of 7.7% in the first quarter compared with 10% for the same period in 2022.

Average bookings per user for the reported quarter were 90 cents compared with the year-ago quarter’s figure of $1.30. Bookings were $462.3 million in first-quarter 2023 compared with the year-ago quarter’s $800 million.

E-commerce and other services revenues were $2.26 billion, up 50.7% from the year-ago quarter’s levels.

Sales of goods declined 8.7% year over year to $241.8 million in the first quarter of 2023.

Digital financial services revenues jumped 74.9% year over year to $412.8 million.

Operating Details

Gross profit increased 21.1% year over year to $1.4 billion in first-quarter 2023.

Adjusted EBITDA was $507.2 million compared with an EBITDA loss of $509.9 million in the year-ago quarter.

Digital Entertainment adjusted EBITDA was $230.1 million compared with $431.4 million reported in the year-ago quarter.

E-commerce adjusted EBITDA was $207.7 million compared with a loss of $742.8 million reported in the year-ago quarter.

Digital Financial Services adjusted EBITDA was $98.9 million compared with a loss of $124.9 million reported in the year-ago quarter.

Balance Sheet

As of Mar 31, 2023, Sea had cash and cash equivalents of $6.08 billion compared with $6.03 billion as of Dec 31, 2022.

Zacks Rank & Upcoming Earnings to Watch

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

Some better-ranked stocks in the broader Zacks Computer and Technology sector that are scheduled to report their earnings soon are Okta OKTA, CrowdStrike CRWD and HP HPQ. Okta, CrowdStrike and HP have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Okta’s shares have underperformed the sector year to date, rising 14.3%. OKTA is scheduled to release first-quarter fiscal 2024 results on May 31.

CrowdStrike’s shares have outperformed the sector year to date, rising 27.3%. CRWD is scheduled to release first-quarter fiscal 2024 results on May 31.

HP shares have underperformed the sector year to date, rising 10.4%. HPQ is set to report second-quarter fiscal 2023 results on May 30.

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