Sea Limited: Q2 2024 Highlights

Sea Limited, a leading consumer internet company based in Singapore, continues to show impressive growth in the second quarter of 2024 (Q2 FY24). Founded in 2009, the company operates three major business units: Garena (digital entertainment), Shopee (e-commerce), and SeaMoney (digital financial services). Sea Limited’s diversified business model and global presence, spanning Southeast Asia, Taiwan, and Latin America, have allowed it to navigate economic shifts effectively while maintaining a focus on innovation and expansion.

Company Overview and Strategic Goals

Sea Limited’s goals are centered around expanding its presence in key markets and enhancing its digital ecosystems. The company prioritizes building a user-centric experience across its three major business verticals:

• Garena: Specializes in online games, serving millions of users worldwide. In Q2 2024, Garena continued to strengthen its hold on the gaming market, particularly with the release of its 7th-anniversary campaign for Free Fire, one of the most popular battle royale games globally.
• Shopee: A dominant force in the e-commerce market across Southeast Asia and Taiwan, Shopee also expanded into Latin America, where it has found significant traction.
• SeaMoney: Sea’s digital financial services arm has grown rapidly, offering a range of payment and credit solutions across Southeast Asia, and more recently, Brazil. In Q2 2024, SeaMoney recorded significant achievements in expanding its customer base, particularly in credit services.

The company’s overarching principle is to empower consumers and small businesses with access to digital services that enhance their economic opportunities.

Key Achievements in Q2 FY24

Sea Limited reported several important milestones in Q2 2024. The most notable achievement was SeaMoney’s continued growth, with over 4 million first-time borrowers using its credit products—an increase of more than double compared to the previous year. In Indonesia, SeaMoney partnered with over 1,000 merchants for its SPayLater service, focusing on mobile phone loans, becoming the first player in the market to offer instant credit approval at this scale.

Financial Performance by Business Segments

In Q2 2024, Sea Limited achieved a total revenue of $3,806.868 million USD, reflecting a 1.94% increase compared to Q1 FY24 and a 22.97% increase compared to Q2 FY23. Here’s a breakdown of the revenue by business segment:

• E-commerce (Shopee): Contributed 74.11% of the total revenue, amounting to $2,821.269 million USD. Shopee’s dominance in the e-commerce market continues to drive Sea Limited’s overall financial growth.
• Digital Financial Services (SeaMoney): Accounted for 13.64%, with a revenue of $519.338 million USD. The growth in SeaMoney’s credit services played a significant role in this segment’s performance.
• Digital Entertainment (Garena): Made up 11.44% of the revenue, totaling $435.559 million USD. Despite competition in the gaming industry, Garena’s Free Fire remains a cornerstone of the company’s digital entertainment offerings.
• Other Services: Represented a smaller portion of the business, contributing 0.81% with $30.702 million USD in revenue.

Equity and Liabilities Overview

As of June 30, 2024, Sea Limited’s total equity stood at $6,966.277 million USD, a 2.92% increase from March 31, 2024, and 5.23% higher compared to June 30, 2023. The company’s total liabilities as of June 30, 2024, were $12,603.743 million USD, a 2.25% increase from Q1 2024 and a 14.25% increase from the same period in 2023. This reflects the company’s growing obligations as it expands its operations, particularly in the e-commerce and digital financial services sectors.

Stock Performance and Share Data

Sea Limited is publicly traded on the New York Stock Exchange under the ticker symbol SE. During Q2 2024, the company’s stock price fluctuated between $51.70 USD and $76.60 USD. The stock opened at $53.95 USD on April 1, 2024, and closed at $71.42 USD on June 28, 2024. As of June 30, 2024, the company had 571,968,378 basic weighted average shares and 599,898,424 diluted weighted average shares outstanding. Importantly, Sea Limited has never declared or paid cash dividends, emphasizing its focus on reinvesting profits into growth.

Comparison to Q2 FY23

When comparing Q2 2024 to Q2 2023, Sea Limited has shown significant growth in revenue, rising by 22.97%. The company’s emphasis on expanding its digital financial services and e-commerce businesses has been a major driver of this increase. The number of first-time borrowers in its credit products, the success of Free Fire, and Shopee’s expanding presence in Latin America contributed to this improved performance.

Final Thoughts

Sea Limited continues to solidify its position as a leader in digital services across Southeast Asia and beyond. With strategic growth in digital financial services and e-commerce, coupled with robust performance in the gaming sector, the company is poised for continued expansion. While its liabilities have increased alongside this growth, the strong revenue gains reflect Sea’s ability to adapt and thrive in a competitive global market.