UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2024
Commission File Number: 001-38237
Sea Limited
1 Fusionopolis Place, #17-10, Galaxis
Singapore 138522
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
EXHIBIT INDEX
Exhibit 99.1 — Press Release
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
SEA LIMITED |
| |
|
| |
|
| |
By: |
/s/ Forrest Xiaodong Li |
| |
Name: |
Forrest Xiaodong Li |
| |
Title: |
Chairman and Chief Executive Officer |
Date: August 13, 2024
Exhibit 99.1
Sea Limited Reports Second Quarter 2024 Results
Singapore, August 13, 2024 –
Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results for the second quarter
ended June 30, 2024.
“I’m happy to report that it has
been a solid quarter for us, with our strong momentum from Q1 continuing into Q2. All three of our businesses have shown both strong
growth and higher profitability,” said Forrest Li, Sea’s Chairman and Chief Executive Officer.
On Shopee’s 2024 outlook, he said “With
the strong results delivered in the first half and our outlook for the rest of the year, we expect that Shopee will become adjusted EBITDA
positive from the third quarter. We are also revising up our guidance for Shopee’s 2024 full year GMV growth to mid-20%.”
On digital entertainment, Mr. Li said, “Garena
delivered a strong quarter, with more than 20% year-on-year growth in bookings, mainly contributed by Free Fire.” On Free Fire,
Mr. Li said, “I am very proud to share that, every single day throughout Q2, Free Fire had more than 100 million daily active
players. This reinforces our conviction that Free Fire is an evergreen franchise.”
Second Quarter 2024 Highlights
| o | Total GAAP revenue was US$3.8 billion,
up 23.0% year-on-year. |
| o | Total gross profit was US$1.6 billion,
up 9.2% year-on-year. |
| o | Total net income was US$79.9 million,
as compared to total net income of US$331.0 million for the second quarter of 2023. |
| o | Total adjusted EBITDA1 was
US$448.5 million, as compared to US$510.0 million for the second quarter of 2023. |
| o | As of June 30, 2024, cash, cash equivalents,
short-term investments, and other treasury investments2 were US$9.0 billion, representing
a net increase of US$364.7 million from March 31, 2024. |
| o | Gross orders totaled 2.5 billion for the
quarter, increasing by 40.3% year-on-year. |
| o | GMV was US$23.3 billion for the quarter,
increasing by 29.1% year-on-year. |
| o | GAAP revenue was US$2.8 billion, up 33.7%
year-on-year. |
| o | GAAP revenue included US$2.5 billion of
GAAP marketplace revenue, which consists of core marketplace revenue and value-added services
revenue and increased by 32.7% year-on-year. |
| · | Core
marketplace revenue, mainly consisting of transaction-based fees and advertising revenues,
was up 41.4% year-on-year to US$1.8 billion. |
| · | Value-added
services revenue, mainly consisting of revenues related to logistics services, was up 15.5%
year-on-year to US$722.3 million. |
| o | Adjusted EBITDA1 was US$(9.2)
million, as compared to US$150.3 million for the second quarter of 2023. |
| · | Asia
markets recorded adjusted EBITDA of US$3.8 million, as compared to US$204.1 million for the
second quarter of 2023. |
| · | Other
markets recorded adjusted EBITDA of US$(13.0) million, as compared to US$(53.7) million for
the second quarter of 2023. |
| · | In
Brazil, unit economics continued to improve, as we achieved positive contribution margin3
per order of US$0.09 for the quarter, as compared to a loss of US$(0.24) for the second
quarter of 2023. |
| § | Digital
Financial Services |
| o | GAAP revenue was US$519.3 million, up
21.4% year-on-year. |
| o | Adjusted EBITDA1 was US$164.7
million, up 20.2% year-on-year. |
| o | Digital financial services revenue and
operating income are primarily attributed to the consumer and SME credit business. As of
June 30, 2024, consumer and SME loans principal outstanding was US$3.5 billion, up 39.5%
year-on-year. This consists of US$2.9 billion on-book and US$0.7 billion off-book loans principal
outstanding4. |
| o | Non-performing loans past due by more
than 90 days as a percentage of consumer and SME loans principal outstanding, which includes
both on-book and off-book loans principal outstanding4, was 1.3%, a slight improvement
quarter-on-quarter. |
| o | Bookings5 were US$536.8 million,
up 21.1% year-on-year. |
| o | GAAP revenue was US$435.6 million, as
compared to US$529.4 million for the second quarter of 2023. |
| o | Adjusted EBITDA1 was US$302.8
million, up 26.5% year-on-year. |
| o | Adjusted EBITDA represented 56.4% of bookings
for the second quarter of 2024, as compared to 54.0% for the second quarter of 2023. |
| o | Quarterly active users were 648.0 million,
up 19.0% year-on-year. |
| o | Quarterly paying users were 52.5 million,
up 21.7% year-on-year. Paying user ratio was 8.1%, as compared to 7.9% for the second quarter
of 2023. |
| o | Average bookings per user were US$0.83,
as compared to US$0.81 for the second quarter of 2023. |
Changes in Board of Directors
With effect from August 12, 2024, Dr. Silvio
Savarese and Ms. Jessica Tan have been elected to Sea’s board of directors as independent directors. Mr. Tony Hou, who
is also serving as Sea’s Chief Financial Officer, has stepped down from the board at the same time, such that with effect of these
changes, our seven-member board now comprises a majority of independent directors. Tony will continue to serve as Sea’s Chief Financial
Officer.
Dr. Savarese currently serves as Executive
Vice President and Chief Scientist of Salesforce Research where he leads the AI Research organization and shapes Salesforce’s scientific
direction and long-term AI strategy. He has been in this position since April 2021. Dr. Savarese is also an adjunct professor
of Computer Science at Stanford University.
Ms. Tan previously served as the Group co-CEO
and Executive Director of Ping An Group. Ms. Tan is a member of the board of directors of Ping An Bank Co Ltd., listed on the Shenzhen
Stock Exchange, and is on the boards of the Central Provident Fund Board, the National Healthcare Group, and the Agency Integrated Care,
three non-profit organizations in Singapore. Ms. Tan is also a member of the advisory panel of the Monetary Authority of Singapore
and the World Bank Private Sector Investment Lab.
1 For a discussion of the use of non-GAAP
financial measures, see “Non-GAAP Financial Measures”.
2 Other treasury investments currently
consist of group treasury related investments, such as available-for-sale sovereign bonds and corporate bonds, classified as part of
long-term investments and securities purchased under agreements to resell relating to our banking operations.
3 Contribution margin refers to adjusted
EBITDA before allocation of HQ costs.
4 Off-book loans principal outstanding
mainly refers to channeling arrangements, which is lending by other financial institutions on our platform.
5 GAAP revenue for the digital entertainment
segment plus change in digital entertainment deferred revenue. This operating metric is used as an approximation of cash spent by our
users in the applicable period that is attributable to our digital entertainment segment.
Unaudited Summary of Financial Results
(Amounts are expressed in thousands of US dollars “$”
except for per share data)
| |
|
For the Three
Months
ended June 30, |
|
|
|
| |
|
2023 |
|
2024 |
|
|
|
| |
|
$ |
|
$ |
|
YOY% |
|
| Revenue |
|
|
|
|
|
|
|
| Service revenue |
|
|
|
|
|
|
|
| Digital Entertainment |
|
529,397 |
|
435,559 |
|
(17.7 |
)% |
| E-commerce and other services |
|
2,322,496 |
|
3,028,717 |
|
30.4 |
% |
| Sales of goods |
|
243,767 |
|
342,592 |
|
40.5 |
% |
| |
|
3,095,660 |
|
3,806,868 |
|
23.0 |
% |
| Cost of revenue |
|
|
|
|
|
|
|
| Cost of service |
|
|
|
|
|
|
|
| Digital Entertainment |
|
(160,669 |
) |
(139,501 |
) |
(13.2 |
)% |
| E-commerce and other services |
|
(1,263,522 |
) |
(1,764,815 |
) |
39.7 |
% |
| Cost of goods sold |
|
(220,591 |
) |
(317,735 |
) |
44.0 |
% |
| |
|
(1,644,782 |
) |
(2,222,051 |
) |
35.1 |
% |
| Gross profit |
|
1,450,878 |
|
1,584,817 |
|
9.2 |
% |
| Other operating income |
|
58,003 |
|
42,563 |
|
(26.6 |
)% |
| Sales and marketing expenses |
|
(493,601 |
) |
(774,768 |
) |
57.0 |
% |
| General and administrative expenses |
|
(295,169 |
) |
(303,838 |
) |
2.9 |
% |
| Provision for credit losses |
|
(153,001 |
) |
(167,415 |
) |
9.4 |
% |
| Research and development expenses |
|
(283,297 |
) |
(298,465 |
) |
5.4 |
% |
| Total operating expenses |
|
(1,167,065 |
) |
(1,501,923 |
) |
28.7 |
% |
| Operating income |
|
283,813 |
|
82,894 |
|
(70.8 |
)% |
| Non-operating income, net |
|
107,565 |
|
56,414 |
|
(47.6 |
)% |
| Income tax expense |
|
(62,212 |
) |
(60,612 |
) |
(2.6 |
)% |
| Share of results of equity investees |
|
1,817 |
|
1,215 |
|
(33.1 |
)% |
| Net income |
|
330,983 |
|
79,911 |
|
(75.9 |
)% |
| Earnings per share attributable to Sea Limited’s ordinary
shareholders: |
|
|
|
|
|
|
|
| Basic |
|
0.57 |
|
0.14 |
|
(75.4 |
)% |
| Diluted |
|
0.54 |
|
0.14 |
|
(74.1 |
)% |
| Change in deferred revenue of Digital Entertainment |
|
(86,254 |
) |
101,258 |
|
(217.4 |
)% |
| Adjusted
EBITDA for Digital Entertainment (1) |
|
239,459 |
|
302,800 |
|
26.5 |
% |
| Adjusted
EBITDA for E-commerce (1) |
|
150,339 |
|
(9,180 |
) |
(106.1 |
)% |
| Adjusted
EBITDA for Digital Financial Services (1) |
|
136,961 |
|
164,678 |
|
20.2 |
% |
| Adjusted
EBITDA for Other Services (1) |
|
(7,189 |
) |
(5,958 |
) |
(17.1 |
)% |
| Unallocated
expenses (2) |
|
(9,549 |
) |
(3,867 |
) |
(59.5 |
)% |
| Total
adjusted EBITDA (1) |
|
510,021 |
|
448,473 |
|
(12.1 |
)% |
(1) For a discussion of the use
of non-GAAP financial measures, see “Non-GAAP Financial Measures”.
(2) Unallocated
expenses within total adjusted EBITDA are mainly related to general and corporate administrative costs such as professional fees and
other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed
by the Chief Operating Decision Maker (“CODM”) as part of segment performance.
Three Months Ended June 30, 2024 Compared to Three Months
Ended June 30, 2023
Revenue
Our total GAAP revenue increased by 23.0% to
US$3.8 billion in the second quarter of 2024 from US$3.1 billion in the second quarter of 2023.
| · | Digital
Entertainment: GAAP revenue was US$435.6 million in the second quarter of 2024 compared
to US$529.4 million in the second quarter of 2023. Despite the increase in bookings during
the second quarter of 2024, the decrease in GAAP revenue was primarily due to lower recognition
of accumulated deferred revenue due to lower bookings in previous quarters. |
| · | E-commerce
and other services: GAAP revenue increased by 30.4% to US$3.0 billion in the second quarter
of 2024 from US$2.3 billion in the second quarter of 2023, primarily driven by the GMV growth
of our e-commerce business and the growth of our credit business. |
| · | Sales
of goods: GAAP revenue increased by 40.5% to US$342.6 million in the second quarter of
2024 from US$243.8 million in the second quarter of 2023. |
Cost of Revenue
Our total cost of revenue was US$2.2 billion
in the second quarter of 2024, as compared to US$1.6 billion in the second quarter of 2023.
| · | Digital
Entertainment: Cost of revenue decreased by 13.2% to US$139.5 million in the second quarter
of 2024 from US$160.7 million in the second quarter of 2023. |
| · | E-commerce
and other services: Cost of revenue for our e-commerce and other services segment combined
was US$1.8 billion in the second quarter of 2024, as compared to US$1.3 billion in the second
quarter of 2023, primarily driven by an increase in logistics costs as orders volume grew. |
| · | Cost
of goods sold: Cost of goods sold increased by 44.0% to US$317.7 million in the second
quarter of 2024 from US$220.6 million in the second quarter of 2023. |
Other Operating Income
Our other operating income was US$42.6 million
and US$58.0 million in the second quarter of 2024 and 2023, respectively. Other operating income mainly consists of rebates from e-commerce
related logistics services providers.
Sales and Marketing Expenses
Our total sales and marketing expenses increased
by 57.0% to US$774.8 million in the second quarter of 2024 from US$493.6 million in the second quarter of 2023. The table below sets
forth breakdown of the sales and marketing expenses of our major reporting segments. Amounts are expressed in thousands of US dollars
(“$”).
| | |
For the Three Months
ended June 30, | | |
| |
| | |
2023 | | |
2024 | | |
YOY% | |
| Sales and Marketing Expenses | |
| $ | | |
| $ | | |
| | |
| E-commerce | |
| 431,979 | | |
| 672,944 | | |
| 55.8 | % |
| Digital Financial Services | |
| 19,207 | | |
| 54,950 | | |
| 186.1 | % |
| Digital Entertainment | |
| 26,636 | | |
| 27,069 | | |
| 1.6 | % |
General and Administrative Expenses
Our general and administrative expenses were
US$303.8 million, as compared to US$295.2 million in the second quarter of 2023, relatively flat year-on-year.
Provision for Credit Losses
Our provision for credit losses increased by
9.4% to US$167.4 million in the second quarter of 2024 from US$153.0 million in the second quarter of 2023.
Research and Development Expenses
Our research and development expenses increased
by 5.4% to US$298.5 million in the second quarter of 2024 from US$283.3 million in the second quarter of 2023.
Non-operating Income or Losses, Net
Non-operating income or losses mainly consist
of interest income, interest expense, investment gain (loss), foreign exchange gain (loss) and gain (loss) on debt extinguishment. We
recorded a net non-operating income of US$56.4 million in the second quarter of 2024, as compared to a net non-operating income of US$107.6
million in the second quarter of 2023. The non-operating income in the second quarter of 2024 was primarily due to interest income of
US$91.4 million, partially offset by foreign exchange loss of US$16.1 million and investment losses of US$14.1 million recognized.
Income Tax Expense
We had a net income tax expense of US$60.6 million
and US$62.2 million in the second quarter of 2024 and 2023, respectively.
Net Income
As a result of the foregoing, we had net income
of US$79.9 million in the second quarter of 2024, as compared to net income of US$331.0 million in the second quarter of 2023.
Basic and Diluted Earnings Per Share Attributable
to Sea Limited’s Ordinary Shareholders
Basic earnings per share attributable to Sea
Limited’s ordinary shareholders was US$0.14 and US$0.57 in the second quarter of 2024 and 2023, respectively.
Diluted earnings per share attributable to Sea
Limited’s ordinary shareholders was US$0.14 and US$0.54 in the second quarter of 2024 and 2023, respectively.
Webcast and Conference Call Information
The Company’s management will host a conference
call today to review Sea’s business and financial performance.
Details of the conference call and webcast are
as follows:
| Date and time: |
7:30 AM U.S. Eastern Time on August 13, 2024
7:30 PM Singapore / Hong Kong Time on August 13, 2024 |
| |
|
| Webcast link: |
https://events.q4inc.com/attendee/415790387 |
A replay of the conference call will be available
at the Company’s investor relations website (www.sea.com/investor/home). An archived webcast will be available at the same
link above.
For enquiries, please contact:
Investors / analysts: ir@sea.com
Media: media@sea.com
About Sea Limited
Sea Limited (NYSE: SE) is a leading global consumer
internet company founded in Singapore in 2009. Its mission is to better the lives of consumers and small businesses with technology.
Sea operates three core businesses across digital entertainment, e-commerce, as well as digital financial services, known as Garena,
Shopee and SeaMoney, respectively. Garena is a leading global online games developer and publisher. Shopee is the largest pan-regional
e-commerce platform in Southeast Asia and Taiwan and has a significant presence in Latin America. SeaMoney is a leading digital financial
services provider in Southeast Asia and is growing its presence in Brazil.
Forward-Looking Statements
This announcement contains forward-looking statements.
These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology such as “may,” “could,” “will,”
“expect,” “anticipate,” “aim,” “future,” “intend,” “plan,” “believe,”
“estimate,” “likely to,” “potential,” “confident,” “guidance,” and similar
statements. Among other things, statements that are not historical facts, including statements about Sea’s beliefs and expectations,
the business, financial and market outlook, and projections from its management in this announcement, as well as Sea’s strategic
and operational plans, contain forward-looking statements. Sea may also make written or oral forward-looking statements in its periodic
reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases,
and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Forward-looking statements
involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in
any forward-looking statement, including but not limited to the following: Sea’s goals and strategies; its future business development,
financial condition, financial results, and results of operations; the expected growth in, and market size of, the digital entertainment,
e-commerce and digital financial services industries in the markets where it operates, including segments within those industries; expected
changes or guidance in its revenue, costs or expenditures; its ability to continue to source, develop and offer new and attractive online
games and to offer other engaging digital entertainment content; the expected growth of its digital entertainment, e-commerce and digital
financial services businesses; its expectations regarding growth in its user base, level of engagement, and monetization; its ability
to continue to develop new technologies and/or upgrade its existing technologies; growth and trends of its markets and competition in
its industries; government policies and regulations relating to its industries, including the effects of any government orders or actions
on its businesses; general economic, political, social and business conditions in its markets; and the impact of widespread health developments.
Further information regarding these and other risks is included in Sea’s filings with the SEC. All information provided in this
press release and in the attachments is as of the date of this press release, and Sea undertakes no obligation to update any forward-looking
statement, except as required under applicable law.
Non-GAAP Financial Measures
To supplement our consolidated financial statements,
which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures to help evaluate our
operating performance:
| · | “Adjusted
EBITDA” for our digital entertainment segment represents operating income (loss) plus
(a) depreciation and amortization expenses, and (b) the net effect of changes in
deferred revenue and its related cost for our digital entertainment segment. We believe that
the segment adjusted EBITDA helps to identify underlying trends in our operating results,
enhancing their understanding of the past performance and future prospects. |
| · | “Adjusted
EBITDA” for our e-commerce segment, digital financial services segment and other services
segment represents operating income (loss) plus depreciation and amortization expenses. We
believe that the segment adjusted EBITDA helps to identify underlying trends in our operating
results, enhancing their understanding of the past performance and future prospects. |
| · | “Total
adjusted EBITDA” represents the sum of adjusted EBITDA of all our segments combined,
plus unallocated expenses. We believe that the total adjusted EBITDA helps to identify underlying
trends in our operating results, enhancing their understanding of the past performance and
future prospects. |
These non-GAAP financial measures have limitations
as analytical tools. None of the above financial measures should be considered in isolation or construed as an alternative to revenue,
net loss/income, or any other measure of performance or as an indicator of our operating performance. These non-GAAP financial measures
presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly
titled measures differently, limiting their usefulness as comparative measures to Sea’s data. We compensate for these limitations
by reconciling the non-GAAP financial measures to their nearest U.S. GAAP financial measures, all of which should be considered when
evaluating our performance. We encourage you to review our financial information in its entirety and not rely on any single financial
measure.
The tables below present selected financial information
of our reporting segments, the non-GAAP financial measures that are most directly comparable to GAAP financial measures, and the related
reconciliations between the financial measures. Amounts are expressed in thousands of US dollars (“$”) except for number of
shares & per share data.
| | |
For the Three Months ended June 30, 2024 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Operating (loss) income | |
| (84,762 | ) | |
| 151,261 | | |
| 210,078 | | |
| (9,003 | ) | |
| (184,680 | ) | |
| 82,894 | |
| Net effect of changes in deferred revenue and its related cost | |
| - | | |
| - | | |
| 86,546 | | |
| - | | |
| - | | |
| 86,546 | |
| Depreciation and Amortization | |
| 75,582 | | |
| 13,417 | | |
| 6,176 | | |
| 3,045 | | |
| - | | |
| 98,220 | |
| Share-based compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| 180,813 | | |
| 180,813 | |
| Adjusted EBITDA | |
| (9,180 | ) | |
| 164,678 | | |
| 302,800 | | |
| (5,958 | ) | |
| (3,867 | ) | |
| 448,473 | |
| | |
For the Three Months ended June 30, 2023 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
| $ | | |
| $ | | |
| $ | | |
| $ | | |
| $ | | |
| $ | |
| Operating income (loss) | |
| 65,550 | | |
| 120,966 | | |
| 296,457 | | |
| (10,034 | ) | |
| (189,126 | ) | |
| 283,813 | |
| Net effect of changes in deferred revenue and its related cost | |
| - | | |
| - | | |
| (65,360 | ) | |
| - | | |
| - | | |
| (65,360 | ) |
| Depreciation and Amortization | |
| 84,789 | | |
| 15,995 | | |
| 8,362 | | |
| 2,845 | | |
| - | | |
| 111,991 | |
| Share-based compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| 179,577 | | |
| 179,577 | |
| Adjusted EBITDA | |
| 150,339 | | |
| 136,961 | | |
| 239,459 | | |
| (7,189 | ) | |
| (9,549 | ) | |
| 510,021 | |
(1) A
combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped
together as “Other Services”.
(2) Unallocated
expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other
miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the
CODM as part of segment performance.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
Amounts
expressed in thousands of US dollars (“$”) except for number of shares & per share data
| | |
For the Six Months ended June 30, | |
| | |
2023 | | |
2024 | |
| | |
$ | | |
$ | |
| Revenue | |
| | | |
| | |
| Service revenue | |
| | | |
| | |
| Digital Entertainment | |
| 1,069,083 | | |
| 893,678 | |
| E-commerce and other services | |
| 4,582,073 | | |
| 5,978,737 | |
| Sales of goods | |
| 485,608 | | |
| 668,782 | |
| | |
| | | |
| | |
| Total revenue | |
| 6,136,764 | | |
| 7,541,197 | |
| | |
| | | |
| | |
| Cost of revenue | |
| | | |
| | |
| Cost of service | |
| | | |
| | |
| Digital Entertainment | |
| (334,035 | ) | |
| (295,478 | ) |
| E-commerce and other services | |
| (2,504,850 | ) | |
| (3,479,869 | ) |
| Cost of goods sold | |
| (430,311 | ) | |
| (627,283 | ) |
| | |
| | | |
| | |
| Total cost of revenue | |
| (3,269,196 | ) | |
| (4,402,630 | ) |
| | |
| | | |
| | |
| Gross profit | |
| 2,867,568 | | |
| 3,138,567 | |
| | |
| | | |
| | |
| Operating income (expenses) | |
| | | |
| | |
| Other operating income | |
| 115,883 | | |
| 86,540 | |
| Sales and marketing expenses | |
| (893,744 | ) | |
| (1,544,403 | ) |
| General and administrative expenses | |
| (628,546 | ) | |
| (594,692 | ) |
| Provision for credit losses | |
| (330,440 | ) | |
| (329,182 | ) |
| Research and development expenses | |
| (603,809 | ) | |
| (602,844 | ) |
| Impairment of goodwill | |
| (117,875 | ) | |
| – | |
| | |
| | | |
| | |
| Total operating expenses | |
| (2,458,531 | ) | |
| (2,984,581 | ) |
| | |
| | | |
| | |
| Operating income | |
| 409,037 | | |
| 153,986 | |
| Interest income | |
| 152,326 | | |
| 178,500 | |
| Interest expense | |
| (20,773 | ) | |
| (19,406 | ) |
| Investment loss, net | |
| (28,815 | ) | |
| (125,352 | ) |
| Net gain on debt extinguishment | |
| – | | |
| 32,009 | |
| Foreign exchange gain (loss) | |
| 27,349 | | |
| (26,878 | ) |
| | |
| | | |
| | |
| Income before income tax and share of results of equity investees | |
| 539,124 | | |
| 192,859 | |
| Income tax expense | |
| (124,110 | ) | |
| (139,372 | ) |
| Share of results of equity investees | |
| 3,261 | | |
| 3,424 | |
| | |
| | | |
| | |
| Net income | |
| 418,275 | | |
| 56,911 | |
| | |
| | | |
| | |
| Net (income) loss attributable to non-controlling interests | |
| (8,595 | ) | |
| 1,290 | |
| Net income attributable to Sea Limited’s ordinary shareholders | |
| 409,680 | | |
| 58,201 | |
| | |
| | | |
| | |
| Earnings per share: | |
| | | |
| | |
| Basic | |
| 0.73 | | |
| 0.10 | |
| Diluted | |
| 0.69 | | |
| 0.10 | |
| | |
| | | |
| | |
| Weighted average shares used in earnings per share computation: | |
| | | |
| | |
| Basic | |
| 564,261,877 | | |
| 571,968,378 | |
| Diluted | |
| 598,716,012 | | |
| 599,898,424 | |
UNAUDITED INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts
expressed in thousands of US dollars (“$”)
| | |
As of
December 31,
2023 | | |
As of
June 30,
2024 | |
| | |
$ | | |
$ | |
| ASSETS | |
| | | |
| | |
| Current assets | |
| | | |
| | |
| Cash and cash equivalents | |
| 2,811,056 | | |
| 2,646,488 | |
| Restricted cash | |
| 1,410,365 | | |
| 1,401,038 | |
| Accounts receivable, net of allowance for credit losses of $9,351 and $5,539, as of December 31, 2023 and June 30, 2024 respectively | |
| 262,716 | | |
| 249,543 | |
| Prepaid expenses and other assets | |
| 1,861,842 | | |
| 1,823,988 | |
| Loans receivable, net of allowance for credit losses of $319,463 and $327,378, as of December 31, 2023 and June 30, 2024 respectively | |
| 2,464,662 | | |
| 2,809,987 | |
| Inventories, net | |
| 125,395 | | |
| 157,523 | |
| Short-term investments | |
| 2,547,644 | | |
| 3,387,461 | |
| Amounts due from related parties | |
| 290,254 | | |
| 404,711 | |
| Total current assets | |
| 11,773,934 | | |
| 12,880,739 | |
| | |
| | | |
| | |
| Non-current assets | |
| | | |
| | |
| Property and equipment, net | |
| 1,207,698 | | |
| 1,081,414 | |
| Operating lease right-of-use assets, net | |
| 1,015,982 | | |
| 1,107,279 | |
| Intangible assets, net | |
| 50,821 | | |
| 35,692 | |
| Long-term investments | |
| 4,262,562 | | |
| 3,769,487 | |
| Prepaid expenses and other assets | |
| 87,705 | | |
| 108,400 | |
| Loans receivable, net of allowance for credit losses of $2,105 and $2,953, as of December 31, 2023 and June 30, 2024 respectively | |
| 20,551 | | |
| 51,129 | |
| Restricted cash | |
| 22,236 | | |
| 27,587 | |
| Deferred tax assets | |
| 328,961 | | |
| 401,922 | |
| Goodwill | |
| 112,782 | | |
| 106,371 | |
| Total non-current assets | |
| 7,109,298 | | |
| 6,689,281 | |
| Total assets | |
| 18,883,232 | | |
| 19,570,020 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
Amounts expressed
in thousands of US dollars (“$”)
| | |
As of
December 31,
2023 | | |
As of
June 30,
2024 | |
| | |
$ | | |
$ | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable | |
| 342,547 | | |
| 293,688 | |
| Accrued expenses and other payables | |
| 1,834,807 | | |
| 1,804,152 | |
| Deposits payable | |
| 1,706,299 | | |
| 2,144,679 | |
| Escrow payables and advances from customers | |
| 2,199,464 | | |
| 2,247,416 | |
| Amounts due to related parties | |
| 64,081 | | |
| 227,575 | |
| Borrowings | |
| 146,661 | | |
| 69,917 | |
| Operating lease liabilities | |
| 290,788 | | |
| 296,572 | |
| Convertible notes | |
| 151,764 | | |
| 151,919 | |
| Deferred revenue | |
| 1,208,892 | | |
| 1,298,430 | |
| Income tax payable | |
| 223,638 | | |
| 82,823 | |
| Total current liabilities | |
| 8,168,941 | | |
| 8,617,171 | |
| | |
| | | |
| | |
| Non-current liabilities | |
| | | |
| | |
| Accrued expenses and other payables | |
| 79,257 | | |
| 74,617 | |
| Borrowings | |
| 119,323 | | |
| 117,348 | |
| Operating lease liabilities | |
| 789,514 | | |
| 862,877 | |
| Deferred revenue | |
| 72,587 | | |
| 118,229 | |
| Convertible notes | |
| 2,949,785 | | |
| 2,743,936 | |
| Deferred tax liabilities | |
| 133 | | |
| 358 | |
| Unrecognized tax benefits | |
| 6,107 | | |
| 69,207 | |
| Total non-current liabilities | |
| 4,016,706 | | |
| 3,986,572 | |
| Total liabilities | |
| 12,185,647 | | |
| 12,603,743 | |
UNAUDITED INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts
expressed in thousands of US dollars (“$”)
| | |
As of
December 31,
2023 | | |
As of
June 30,
2024 | |
| | |
$ | | |
$ | |
| Shareholders’ equity | |
| | | |
| | |
| Class A Ordinary shares | |
| 262 | | |
| 264 | |
| Class B Ordinary shares | |
| 23 | | |
| 23 | |
| Additional paid-in capital | |
| 15,283,870 | | |
| 15,640,134 | |
| Accumulated other comprehensive loss | |
| (108,000 | ) | |
| (249,019 | ) |
| Statutory reserves | |
| 16,981 | | |
| 17,021 | |
| Accumulated deficit | |
| (8,599,306 | ) | |
| (8,541,145 | ) |
| Total Sea Limited shareholders’ equity | |
| 6,593,830 | | |
| 6,867,278 | |
| Non-controlling interests | |
| 103,755 | | |
| 98,999 | |
| Total shareholders’ equity | |
| 6,697,585 | | |
| 6,966,277 | |
| Total liabilities and shareholders’ equity | |
| 18,883,232 | | |
| 19,570,020 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts expressed
in thousands of US dollars (“$”)
| | |
For the Six Months ended June 30, | |
| | |
2023 | | |
2024 | |
| | |
$ | | |
$ | |
| Net cash generated from operating activities | |
| 1,201,016 | | |
| 1,086,362 | |
| Net cash used in investing activities | |
| (3,867,640 | ) | |
| (1,563,708 | ) |
| Net cash generated from financing activities | |
| 58,143 | | |
| 426,438 | |
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | |
| (22,114 | ) | |
| (117,636 | ) |
| Net decrease in cash, cash equivalents and restricted cash | |
| (2,630,595 | ) | |
| (168,544 | ) |
| Cash, cash equivalents and restricted cash at beginning of the period | |
| 7,610,384 | | |
| 4,243,657 | |
| Cash, cash equivalents and restricted cash at end of the period | |
| 4,979,789 | | |
| 4,075,113 | |
Net cash used in investing activities amounted
to US$1,564 million for the six months ended June 30, 2024. This was primarily attributable to increase in loans receivable of our
credit business of US$873 million, net placement of US$575 million in securities purchased under agreements to resell, time deposits and
liquid investment products, for better cash yield management and purchase of property and equipment of US$91 million to support the existing
operations. Net cash generated from financing activities amounted to US$426 million for the six months ended June 30, 2024. This
was primarily attributable to an increase in bank deposits of US$674 million, offset by the cash used in repurchase of convertible notes
of US$176 million as well as net repayment of our other funding sources related to the credit business of US$70 million.
UNAUDITED SEGMENT INFORMATION
The Company has three reportable segments, namely
e-commerce, digital financial services and digital entertainment. The Chief Operating Decision Maker (“CODM”) reviews the
performance of each segment based on revenue and certain key operating metrics of the operations and uses these results for the purposes
of allocating resources to and evaluating the financial performance of each segment. Amounts are expressed in thousands of US dollars
(“$”).
| | |
For the Three Months ended June 30, 2024 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Revenue | |
| 2,821,269 | | |
| 519,338 | | |
| 435,559 | | |
| 30,702 | | |
| - | | |
| 3,806,868 | |
| Operating (loss) income | |
| (84,762 | ) | |
| 151,261 | | |
| 210,078 | | |
| (9,003 | ) | |
| (184,680 | ) | |
| 82,894 | |
| Non-operating income, net | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 56,414 | |
| Income tax expense | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (60,612 | ) |
| Share of results of equity investees | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 1,215 | |
| Net income | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 79,911 | |
| | |
For the Three Months ended June 30, 2023 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Revenue | |
| 2,110,551 | | |
| 427,940 | | |
| 529,397 | | |
| 27,772 | | |
| - | | |
| 3,095,660 | |
| Operating income (loss) | |
| 65,550 | | |
| 120,966 | | |
| 296,457 | | |
| (10,034 | ) | |
| (189,126 | ) | |
| 283,813 | |
| Non-operating income, net | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 107,565 | |
| Income tax expense | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (62,212 | ) |
| Share of results of equity investees | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 1,817 | |
| Net income | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 330,983 | |
(1) A
combination of multiple business activities that do not meet the quantitative thresholds to qualify as reportable segments are grouped
together as “Other Services”.
(2) Unallocated
expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other
miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the
CODM as part of segment performance.
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