Sea Limited Q3 Earnings Miss Estimates, Shares Rise on Revenue Growth

Core Insights - Sea Limited (SE) reported adjusted earnings of 54 cents per share for Q3 2024, missing the Zacks Consensus Estimate by 8.47% and showing a significant increase from 6 cents in the same quarter last year [1] - The company’s revenues reached $4.3 billion, a year-over-year increase of 30.8%, surpassing the Zacks Consensus Estimate by 3.59% [2] Financial Performance - Digital Entertainment revenues were $497.8 million, reflecting a year-over-year decline of 15.9%, while quarterly active users increased by 15.5% to 628.5 million [3] - Total bookings in the Garena segment reached $556.5 million, marking a 24.3% year-over-year increase, driven by Free Fire [4] - E-commerce revenues totaled $3.4 billion, up 41.2% year over year, with gross orders rising 24.2% and GMV growing 25.2% [4] - Digital Financial Services revenues increased by 38% year over year to $615.7 million, supported by a loan book growth to $4.6 billion, up 73.2% [5] Operating Metrics - Gross profit increased by 29.1% year over year to $1.86 billion, with adjusted EBITDA reaching $521.3 million compared to $35.3 million in the previous year [7] - Digital Entertainment's adjusted EBITDA was $314.4 million, up 34.4% from $234 million in the year-ago quarter [7] - E-commerce adjusted EBITDA improved to $34.4 million from a loss of $346.5 million in the previous year [7] - Digital Financial Services adjusted EBITDA reached $187.9 million, a 13.4% increase from $165.7 million [8] Balance Sheet and Cash Flow - As of September 30, 2024, Sea Limited had cash and cash equivalents of $2.54 billion, a slight decrease from $2.64 billion as of June 30, 2024 [9] - The company generated $1.17 million in cash from operating activities in the reported quarter, up from $0.62 million in the previous quarter [9] Stock Performance - Following the Q3 2024 results, Sea Limited's shares jumped 10.46% to close at $107.65, with a year-to-date increase of 164.7%, significantly outperforming the Zacks Computer and Technology sector's rise of 29.5% [2]