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 November 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: November 12, 2024
Exhibit 99.1
Sea Limited Reports Third Quarter 2024 Results
Singapore, November 12,
2024 – Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results
for the third quarter ended September 30, 2024.
“I’m happy to report that it has been
another solid quarter. We are seeing high growth across all our three businesses,” said Forrest Li, Sea’s Chairman and Chief
Executive Officer.
Referring to the growth of our three businesses,
he said, “Shopee is on track to deliver our full year guidance of mid-twenties year-on-year GMV growth. SeaMoney’s loan book
grew by over 70% year-on-year this quarter, while maintaining a stable NPL ratio. And for Garena, we now expect Free Fire’s full
year bookings to grow over 30% year-on-year.”
On profitability, Mr. Li said, “I am
very proud that we also improved our profitability while getting back to high growth. This quarter, Shopee achieved positive adjusted
EBITDA, in both Asia and Brazil. As we continue to focus on delivering growth, we expect Shopee to remain profitable going forward.”
Third Quarter 2024 Highlights
| o | Total GAAP revenue was US$4.3 billion, up 30.8% year-on-year. |
| o | Total gross profit was US$1.9 billion, up 29.1% year-on-year. |
| o | Total net income was US$153.3 million, as compared to total net loss of US$(144.0) million for the third
quarter of 2023. |
| o | Total adjusted EBITDA1 was US$521.3 million, as compared
to US$35.3 million for the third quarter of 2023. |
| o | As of September 30, 2024, cash, cash equivalents, short-term investments, and other treasury investments2
were US$9.9 billion, representing a net increase of US$929.2 million from June 30, 2024. This included US$429.0 million of cash proceeds
received in the third quarter upon settlement of capped calls for the 1.00% convertible senior notes due 2024. |
| o | Gross orders totaled 2.8 billion for the quarter, increasing by 24.2% year-on-year. |
| o | GMV was US$25.1 billion for the quarter, increasing by 25.2% year-on-year. |
| o | GAAP revenue was US$3.2 billion, up 42.6% year-on-year. |
| o | GAAP revenue included US$2.8 billion of GAAP marketplace revenue, which consists of core marketplace revenue
and value-added services revenue and increased by 43.2% year-on-year. |
| · | Core marketplace revenue, mainly consisting of
transaction-based fees and advertising revenues, was up 49.3% year-on-year to US$2.0 billion. |
| · | Value-added services revenue, mainly consisting
of revenues related to logistics services, was up 29.4% year-on-year to US$767.2 million. |
| o | Adjusted EBITDA1 was US$34.4 million, as compared to US$(346.5) million for the third quarter
of 2023. |
| · | Asia markets recorded adjusted EBITDA of US$30.9
million, as compared to US$(306.2) million for the third quarter of 2023. |
| · | Other markets achieved positive adjusted EBITDA
of US$3.5 million, as compared to a loss of US$(40.3) million for the third quarter of 2023. |
| § | Digital Financial Services |
| o | GAAP revenue was US$615.7 million, up 38.0% year-on-year. |
| o | Adjusted EBITDA1 was US$187.9 million, up 13.4% year-on-year. |
| o | Digital financial services revenue and operating income are primarily attributed to the consumer and SME
credit business. As of September 30, 2024, consumer and SME loans principal outstanding was US$4.6 billion, up 73.2% year-on-year.
This consists of US$3.8 billion on-book and US$0.8 billion off-book loans principal outstanding3. |
| 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 outstanding3, was 1.2%, a slight improvement quarter-on-quarter. |
| o | Bookings4 were US$556.5 million, up 24.3% year-on-year. |
| o | GAAP revenue was US$497.8 million, as compared to US$592.2 million for the third quarter of 2023. |
| o | Adjusted EBITDA1 was US$314.4 million, up 34.4% year-on-year. |
| o | Adjusted EBITDA represented 56.5% of bookings for the third quarter of 2024, as compared to 52.2% for
the third quarter of 2023. |
| o | Quarterly active users were 628.5 million, up 15.5% year-on-year. |
| o | Quarterly paying users were 50.2 million, up 23.9% year-on-year. Paying user ratio was 8.0%, as compared
to 7.5% for the third quarter of 2023. |
| o | Average bookings per user were US$0.89, as compared to US$0.82 for the third quarter of 2023. |
1 For a discussion of the use of non-GAAP
financial measures, see “Non-GAAP Financial Measures”.
2 Other treasury investments
currently consist of group treasury related investments, such as available-for-sale sovereign bonds and corporate bonds, classified
as part of long-term investments and securities purchased under agreements to resell relating to our banking operations.
3 Off-book
loans principal outstanding mainly refers to channeling arrangements, which is lending by other financial institutions on our platform.
4 GAAP
revenue for the digital entertainment segment plus change in digital entertainment deferred revenue. This operating metric is used as
an approximation of cash spent by our users in the applicable period that is attributable to our digital entertainment segment.
Unaudited Summary of Financial Results
(Amounts are expressed in thousands of US dollars “$” except
for per share data)
| | |
For the Three Months
ended September 30, | | |
| |
| | |
2023 | | |
2024 | | |
YOY% | |
| | |
$ | | |
$ | | |
| |
| Revenue | |
| | | |
| | | |
| | |
| Service revenue | |
| | | |
| | | |
| | |
| Digital Entertainment | |
| 592,153 | | |
| 497,847 | | |
| (15.9 | )% |
| E-commerce and other services | |
| 2,417,036 | | |
| 3,412,362 | | |
| 41.2 | % |
| Sales of goods | |
| 300,979 | | |
| 418,024 | | |
| 38.9 | % |
| | |
| 3,310,168 | | |
| 4,328,233 | | |
| 30.8 | % |
| | |
| | | |
| | | |
| | |
| Cost of revenue | |
| | | |
| | | |
| | |
| Cost of service | |
| | | |
| | | |
| | |
| Digital Entertainment | |
| (177,086 | ) | |
| (156,043 | ) | |
| (11.9 | )% |
| E-commerce and other services | |
| (1,403,975 | ) | |
| (1,927,288 | ) | |
| 37.3 | % |
| Cost of goods sold | |
| (287,815 | ) | |
| (383,841 | ) | |
| 33.4 | % |
| | |
| (1,868,876 | ) | |
| (2,467,172 | ) | |
| 32.0 | % |
| Gross profit | |
| 1,441,292 | | |
| 1,861,061 | | |
| 29.1 | % |
| Other operating income | |
| 46,614 | | |
| 40,647 | | |
| (12.8 | )% |
| Sales and marketing expenses | |
| (918,046 | ) | |
| (878,557 | ) | |
| (4.3 | )% |
| General and administrative expenses | |
| (273,575 | ) | |
| (306,755 | ) | |
| 12.1 | % |
| Provision for credit losses | |
| (143,514 | ) | |
| (211,991 | ) | |
| 47.7 | % |
| Research and development expenses | |
| (280,511 | ) | |
| (301,990 | ) | |
| 7.7 | % |
| Total operating expenses | |
| (1,569,032 | ) | |
| (1,658,646 | ) | |
| 5.7 | % |
| Operating (loss) income | |
| (127,740 | ) | |
| 202,415 | | |
| (258.5 | )% |
| Non-operating income, net | |
| 45,875 | | |
| 49,536 | | |
| 8.0 | % |
| Income tax expense | |
| (61,676 | ) | |
| (92,598 | ) | |
| 50.1 | % |
| Share of results of equity investees | |
| (437 | ) | |
| (6,029 | ) | |
| 1,279.6 | % |
| Net (loss) income | |
| (143,978 | ) | |
| 153,324 | | |
| (206.5 | )% |
| (Loss) Earnings per share attributable to Sea Limited’s ordinary shareholders: | |
| | | |
| | | |
| | |
| Basic | |
| (0.26 | ) | |
| 0.26 | | |
| (200.0 | )% |
| Diluted | |
| (0.26 | ) | |
| 0.24 | | |
| (192.3 | )% |
| Change in deferred revenue of Digital Entertainment | |
| (144,253 | ) | |
| 58,670 | | |
| (140.7 | )% |
| Adjusted EBITDA for Digital Entertainment (1) | |
| 233,998 | | |
| 314,428 | | |
| 34.4 | % |
| Adjusted EBITDA for E-commerce (1) | |
| (346,495 | ) | |
| 34,446 | | |
| (109.9 | )% |
| Adjusted EBITDA for Digital Financial Services (1) | |
| 165,731 | | |
| 187,927 | | |
| 13.4 | % |
| Adjusted EBITDA for Other Services (1) | |
| (8,771 | ) | |
| (8,555 | ) | |
| (2.5 | )% |
| Unallocated expenses (2) | |
| (9,179 | ) | |
| (6,909 | ) | |
| (24.7 | )% |
| Total adjusted EBITDA (1) | |
| 35,284 | | |
| 521,337 | | |
| 1,377.5 | % |
(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 September 30, 2024 Compared to Three
Months Ended September 30, 2023
Revenue
Our total GAAP revenue
increased by 30.8% to US$4.3 billion in the third quarter of 2024 from US$3.3 billion in the third quarter of 2023.
| · | Digital Entertainment: GAAP revenue was US$497.8 million in
the third quarter of 2024 compared to US$592.2 million in the third quarter of 2023. Despite the increase in bookings during the third
quarter of 2024, the decrease in GAAP revenue was primarily due to a bigger portion of the revenue being deferred into future period as
users’ average lifespan increased from our efforts in user engagement. |
| · | E-commerce and other services: GAAP revenue increased by 41.2%
to US$3.4 billion in the third quarter of 2024 from US$2.4 billion in the third 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 38.9% to US$418.0 million in the third quarter of 2024
from US$301.0 million in the third quarter of 2023. |
Cost of Revenue
Our total cost of revenue was US$2.5 billion in
the third quarter of 2024, as compared to US$1.9 billion in the third quarter of 2023.
| · | Digital Entertainment: Cost of revenue decreased by 11.9%
to US$156.0 million in the third quarter of 2024 from US$177.1 million in the third quarter of 2023. |
| · | E-commerce and other services: Cost of revenue for our e-commerce
and other services segment combined was US$1.9 billion in the third quarter of 2024, as compared to US$1.4 billion in the third
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 33.4%
to US$383.8 million in the third quarter of 2024 from US$287.8 million in the third quarter of 2023. |
Other Operating Income
Our other operating income was US$40.6 million
and US$46.6 million in the third 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 decreased
by 4.3% to US$878.6 million in the third quarter of 2024 from US$918.0 million in the third quarter of 2023. The table below sets forth
breakdown of the sales and marketing expenses of our major reporting segments. Amounts are expressed in thousands of US dollars (“$”).
| | |
For the Three Months
ended September 30, | | |
| |
| | |
2023 | | |
2024 | | |
YOY% | |
| | |
$ | | |
$ | | |
| |
| Sales and Marketing Expenses | |
| | | |
| | | |
| | |
| E-commerce | |
| 861,540 | | |
| 763,340 | | |
| (11.4 | )% |
| Digital Financial Services | |
| 25,152 | | |
| 65,632 | | |
| 160.9 | % |
| Digital Entertainment | |
| 24,712 | | |
| 26,583 | | |
| 7.6 | % |
General and Administrative Expenses
Our general and
administrative expenses increased by 12.1% to US$306.8 million in the third quarter of 2024 from US$273.6 million in the third
quarter of 2023.
Provision for Credit Losses
Our provision for
credit losses increased by 47.7% to US$212.0 million in the third quarter of 2024 from US$143.5 million in the third quarter of
2023.
Research and Development Expenses
Our research and
development expenses increased by 7.7% to US$302.0 million in the third quarter of 2024 from US$280.5 million in the third 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$49.5 million in the third quarter of 2024, as compared to a net
non-operating income of US$45.9 million in the third quarter of 2023. The non-operating income in the third quarter of 2024 was primarily
due to interest income of US$93.3 million and foreign exchange gain of US$27.6 million, partially offset by investment losses of US$64.2
million recognized.
Income Tax Expense
We had a net income
tax expense of US$92.6 million and US$61.7 million in the third quarter of 2024 and 2023, respectively.
Net Income or Loss
As a result of the
foregoing, we had net income of US$153.3 million in the third quarter of 2024, as compared to net loss of US$144.0 million in the
third quarter of 2023.
Basic and Diluted Earnings or Loss Per Share
Attributable to Sea Limited’s Ordinary Shareholders
Basic earnings per
share attributable to Sea Limited’s ordinary shareholders was US$0.26 in the third quarter of 2024, compared to basic loss
per share attributable to Sea Limited’s ordinary shareholders of US$(0.26) in the third quarter of 2023.
Diluted earnings
per share attributable to Sea Limited’s ordinary shareholders was US$0.24 in the third quarter of 2024, compared to diluted
loss per share attributable to Sea Limited’s ordinary shareholders of US$(0.26) in the third quarter of 2023.
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 November 12,
2024
8:30 PM Singapore
/ Hong Kong Time on November 12, 2024 |
| |
|
| Webcast link: |
https://events.q4inc.com/attendee/114734356 |
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 September 30, 2024 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Operating (loss) income | |
| (36,818 | ) | |
| 173,942 | | |
| 262,402 | | |
| (11,001 | ) | |
| (186,110 | ) | |
| 202,415 | |
| Net effect of changes in deferred revenue and its related cost | |
| - | | |
| - | | |
| 46,712 | | |
| - | | |
| - | | |
| 46,712 | |
| Depreciation and Amortization | |
| 71,264 | | |
| 13,985 | | |
| 5,314 | | |
| 2,446 | | |
| - | | |
| 93,009 | |
| Share-based compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| 179,201 | | |
| 179,201 | |
| Adjusted EBITDA | |
| 34,446 | | |
| 187,927 | | |
| 314,428 | | |
| (8,555 | ) | |
| (6,909 | ) | |
| 521,337 | |
| | |
For the Three Months ended September 30, 2023 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Operating (loss) income | |
| (428,183 | ) | |
| 150,470 | | |
| 345,760 | | |
| (11,704 | ) | |
| (184,083 | ) | |
| (127,740 | ) |
| Net effect of changes in deferred revenue and its related cost | |
| - | | |
| - | | |
| (119,058 | ) | |
| - | | |
| - | | |
| (119,058 | ) |
| Depreciation and Amortization | |
| 81,688 | | |
| 15,261 | | |
| 7,296 | | |
| 2,933 | | |
| - | | |
| 107,178 | |
| Share-based compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| 174,904 | | |
| 174,904 | |
| Adjusted EBITDA | |
| (346,495 | ) | |
| 165,731 | | |
| 233,998 | | |
| (8,771 | ) | |
| (9,179 | ) | |
| 35,284 | |
(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 Nine Months
ended September 30, | |
| | |
2023 | | |
2024 | |
| | |
$ | | |
| |
| Revenue | |
| | | |
| | |
| Service revenue | |
| | | |
| | |
| Digital Entertainment | |
| 1,661,236 | | |
| 1,391,525 | |
| E-commerce and other services | |
| 6,999,109 | | |
| 9,391,099 | |
| Sales of goods | |
| 786,587 | | |
| 1,086,806 | |
| | |
| | | |
| | |
| Total revenue | |
| 9,446,932 | | |
| 11,869,430 | |
| | |
| | | |
| | |
| Cost of revenue | |
| | | |
| | |
| Cost of service | |
| | | |
| | |
| Digital Entertainment | |
| (511,121 | ) | |
| (451,521 | ) |
| E-commerce and other services | |
| (3,908,825 | ) | |
| (5,407,157 | ) |
| Cost of goods sold | |
| (718,126 | ) | |
| (1,011,124 | ) |
| | |
| | | |
| | |
| Total cost of revenue | |
| (5,138,072 | ) | |
| (6,869,802 | ) |
| | |
| | | |
| | |
| Gross profit | |
| 4,308,860 | | |
| 4,999,628 | |
| | |
| | | |
| | |
| Operating income (expenses) | |
| | | |
| | |
| Other operating income | |
| 162,497 | | |
| 127,187 | |
| Sales and marketing expenses | |
| (1,811,790 | ) | |
| (2,422,960 | ) |
| General and administrative expenses | |
| (902,121 | ) | |
| (901,447 | ) |
| Provision for credit losses | |
| (473,954 | ) | |
| (541,173 | ) |
| Research and development expenses | |
| (884,320 | ) | |
| (904,834 | ) |
| Impairment of goodwill | |
| (117,875 | ) | |
| - | |
| | |
| | | |
| | |
| Total operating expenses | |
| (4,027,563 | ) | |
| (4,643,227 | ) |
| | |
| | | |
| | |
| Operating income | |
| 281,297 | | |
| 356,401 | |
| Interest income | |
| 240,361 | | |
| 271,847 | |
| Interest expense | |
| (30,946 | ) | |
| (29,060 | ) |
| Investment loss, net | |
| (45,377 | ) | |
| (189,543 | ) |
| Net gain on debt extinguishment | |
| - | | |
| 34,415 | |
| Foreign exchange gain | |
| 11,924 | | |
| 750 | |
| | |
| | | |
| | |
| Income before income tax and share of results of equity investees | |
| 457,259 | | |
| 444,810 | |
| Income tax expense | |
| (185,786 | ) | |
| (231,970 | ) |
| Share of results of equity investees | |
| 2,824 | | |
| (2,605 | ) |
| | |
| | | |
| | |
| Net income | |
| 274,297 | | |
| 210,235 | |
| | |
| | | |
| | |
| Net income attributable to non-controlling interests | |
| (13,831 | ) | |
| (3,222 | ) |
| | |
| | | |
| | |
| Net income attributable to Sea Limited’s ordinary shareholders | |
| 260,466 | | |
| 207,013 | |
| | |
| | | |
| | |
| Earnings per share: | |
| | | |
| | |
| Basic | |
| 0.46 | | |
| 0.36 | |
| Diluted | |
| 0.44 | | |
| 0.34 | |
| | |
| | | |
| | |
| Weighted average shares used in earnings per share computation: | |
| | | |
| | |
| Basic | |
| 565,630,521 | | |
| 573,260,590 | |
| Diluted | |
| 597,718,238 | | |
| 602,720,046 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
Amounts expressed
in thousands of US dollars (“$”)
| | |
As of
December 31, | | |
As of
September 30, | |
| | |
2023 | | |
2024 | |
| | |
$ | | |
$ | |
| ASSETS | |
| | | |
| | |
| Current assets | |
| | | |
| | |
| Cash and cash equivalents | |
| 2,811,056 | | |
| 2,538,749 | |
| Restricted cash | |
| 1,410,365 | | |
| 1,700,187 | |
| Accounts receivable, net of allowance for credit losses of $9,351 and $5,996, as of December 31, 2023 and September 30, 2024 respectively | |
| 262,716 | | |
| 280,579 | |
| Prepaid expenses and other assets | |
| 1,861,842 | | |
| 1,512,206 | |
| Loans receivable, net of allowance for credit losses of $319,463 and $417,258, as of December 31, 2023 and September 30, 2024 respectively | |
| 2,464,662 | | |
| 3,640,809 | |
| Inventories, net | |
| 125,395 | | |
| 200,712 | |
| Short-term investments | |
| 2,547,644 | | |
| 5,374,539 | |
| Amounts due from related parties | |
| 290,254 | | |
| 306,414 | |
| Total current assets | |
| 11,773,934 | | |
| 15,554,195 | |
| | |
| | | |
| | |
| Non-current assets | |
| | | |
| | |
| Property and equipment, net | |
| 1,207,698 | | |
| 1,167,249 | |
| Operating lease right-of-use assets, net | |
| 1,015,982 | | |
| 1,160,416 | |
| Intangible assets, net | |
| 50,821 | | |
| 30,845 | |
| Long-term investments | |
| 4,262,562 | | |
| 2,974,637 | |
| Prepaid expenses and other assets | |
| 87,705 | | |
| 118,706 | |
| Loans receivable, net of allowance for credit losses of $2,105 and $4,034, as of December 31, 2023 and September 30, 2024 respectively | |
| 20,551 | | |
| 63,202 | |
| Restricted cash | |
| 22,236 | | |
| 27,316 | |
| Deferred tax assets | |
| 328,961 | | |
| 481,358 | |
| Goodwill | |
| 112,782 | | |
| 113,766 | |
| Total non-current assets | |
| 7,109,298 | | |
| 6,137,495 | |
| Total assets | |
| 18,883,232 | | |
| 21,691,690 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
Amounts expressed
in thousands of US dollars (“$”)
| | |
As of
December 31, | | |
As of
September 30, | |
| | |
2023 | | |
2024 | |
| | |
$ | | |
$ | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable | |
| 342,547 | | |
| 274,771 | |
| Accrued expenses and other payables | |
| 1,834,807 | | |
| 2,148,427 | |
| Deposits payable | |
| 1,706,299 | | |
| 2,401,011 | |
| Escrow payables and advances from customers | |
| 2,199,464 | | |
| 2,402,361 | |
| Amounts due to related parties | |
| 64,081 | | |
| 164,910 | |
| Borrowings | |
| 146,661 | | |
| 142,742 | |
| Operating lease liabilities | |
| 290,788 | | |
| 315,512 | |
| Convertible notes | |
| 151,764 | | |
| 151,996 | |
| Deferred revenue | |
| 1,208,892 | | |
| 1,480,959 | |
| Income tax payable | |
| 223,638 | | |
| 106,730 | |
| Total current liabilities | |
| 8,168,941 | | |
| 9,589,419 | |
| | |
| | | |
| | |
| Non-current liabilities | |
| | | |
| | |
| Accrued expenses and other payables | |
| 79,257 | | |
| 86,822 | |
| Borrowings | |
| 119,323 | | |
| 177,424 | |
| Operating lease liabilities | |
| 789,514 | | |
| 895,710 | |
| Deferred revenue | |
| 72,587 | | |
| 98,068 | |
| Convertible notes | |
| 2,949,785 | | |
| 2,720,243 | |
| Deferred tax liabilities | |
| 133 | | |
| 268 | |
| Unrecognized tax benefits | |
| 6,107 | | |
| 95,157 | |
| Total non-current liabilities | |
| 4,016,706 | | |
| 4,073,692 | |
| Total liabilities | |
| 12,185,647 | | |
| 13,663,111 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
Amounts expressed
in thousands of US dollars (“$”)
| | |
As of
December 31, | | |
As of
September 30, | |
| | |
2023 | | |
2024 | |
| | |
$ | | |
$ | |
| Shareholders’ equity | |
| | | |
| | |
| Class A Ordinary shares | |
| 262 | | |
| 266 | |
| Class B Ordinary shares | |
| 23 | | |
| 23 | |
| Additional paid-in capital | |
| 15,283,870 | | |
| 16,266,340 | |
| Accumulated other comprehensive (loss) income | |
| (108,000 | ) | |
| 25,090 | |
| Statutory reserves | |
| 16,981 | | |
| 17,021 | |
| Accumulated deficit | |
| (8,599,306 | ) | |
| (8,392,333 | ) |
| | |
| | | |
| | |
| Total Sea Limited shareholders’ equity | |
| 6,593,830 | | |
| 7,916,407 | |
| Non-controlling interests | |
| 103,755 | | |
| 112,172 | |
| Total shareholders’ equity | |
| 6,697,585 | | |
| 8,028,579 | |
| Total liabilities and shareholders’ equity | |
| 18,883,232 | | |
| 21,691,690 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts expressed
in thousands of US dollars (“$”)
| | |
For the Nine Months ended
September 30, | |
| | |
2023 | | |
2024 | |
| | |
$ | | |
| |
| Net cash generated from operating activities | |
| 1,800,855 | | |
| 2,256,438 | |
| Net cash used in investing activities | |
| (4,755,908 | ) | |
| (3,279,780 | ) |
| Net cash generated from financing activities | |
| 182,626 | | |
| 984,283 | |
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | |
| (76,281 | ) | |
| 61,654 | |
| Net (decrease) increase in cash, cash equivalents and restricted cash | |
| (2,848,708 | ) | |
| 22,595 | |
| 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 | |
| 4,761,676 | | |
| 4,266,252 | |
Net cash used in investing activities amounted
to US$3,280 million for the nine months ended September 30, 2024. This was primarily attributable to increase in loans receivable
of our credit business of US$1,598 million, net placement of US$1,405 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$229 million to
support the existing operations. Net cash generated from financing activities amounted to US$984 million for the nine months ended September 30,
2024. This was primarily attributable to an increase in bank deposits of US$692 million, settlement of capped calls of US$429 million
as well as net proceeds from other funding sources related to credit business of US$43 million, offset by the cash used in repurchase
of convertible notes of US$199 million.
UNAUDITED SEGMENT INFORMATION
The Company has
three reportable segments, namely e-commerce, digital financial services and digital entertainment. The Chief Operating Decision Maker
(“CODM”) reviews the performance of each segment based on revenue and certain key operating metrics of the operations and
uses these results for the purposes of allocating resources to and evaluating the financial performance of each segment. Amounts
are expressed in thousands of US dollars (“$”).
| | |
For the Three Months ended September 30, 2024 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Revenue | |
| 3,183,558 | | |
| 615,711 | | |
| 497,847 | | |
| 31,117 | | |
| - | | |
| 4,328,233 | |
| Operating (loss) income | |
| (36,818 | ) | |
| 173,942 | | |
| 262,402 | | |
| (11,001 | ) | |
| (186,110 | ) | |
| 202,415 | |
| Non-operating income, net | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 49,536 | |
| Income tax expense | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (92,598 | ) |
| Share of results of equity investees | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (6,029 | ) |
| Net income | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 153,324 | |
| | |
For the Three Months ended September 30, 2023 | |
| | |
E-
commerce | | |
Digital
Financial
Services | | |
Digital
Entertainment | | |
Other
Services(1) | | |
Unallocated
expenses(2) | | |
Consolidated | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Revenue | |
| 2,231,954 | | |
| 446,249 | | |
| 592,153 | | |
| 39,812 | | |
| - | | |
| 3,310,168 | |
| Operating (loss) income | |
| (428,183 | ) | |
| 150,470 | | |
| 345,760 | | |
| (11,704 | ) | |
| (184,083 | ) | |
| (127,740 | ) |
| Non-operating income, net | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 45,875 | |
| Income tax expense | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (61,676 | ) |
| Share of results of equity investees | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (437 | ) |
| Net loss | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (143,978 | ) |
(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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