Sea reported quarterly losses of $(0.88) per share which missed the analyst consensus estimate of $(0.59) by 49.15 percent. This is a 1.15 percent decrease over losses of $(0.87) per share from the same period last year. The company reported quarterly sales of $3.22 billion which beat the analyst consensus estimate of $2.91 billion by 10.72 percent. This is a 105.62 percent increase over sales of $1.57 billion the same period last year.
Sea shares fell more than 6% after reporting quarterly results.The stock had once previously risen more than 10%.
Sea Limited (NYSE: SE) today announced its financial results for the fourth quarter and full year ended December 31, 2021.
Fourth Quarter 2021 Highlights
Group
- Total GAAP revenue was US$3.2 billion, up 105.7% year-on-year.
- Total gross profit was US$1.3 billion, up 145.6% year-on-year.
- Total adjusted EBITDA1 was US$(492.1) million compared to US$48.7 million for the fourth quarter of 2020.
Digital Entertainment
- GAAP revenue was US$1.4 billion, up 104.1% year-on-year.
- Bookings2 were US$1.1 billion, up 6.8% year-on-year.
- Adjusted EBITDA1 was US$602.6 million, compared to US$663.5 million for the fourth quarter of 2020.
- Adjusted EBITDA represented 55.7% of bookings for the fourth quarter of 2021, compared to 65.5% for the fourth quarter of 2020.
- Quarterly active users (“QAUs”) reached 654.0 million, an increase of 7.1% yearon-year.
- Quarterly paying users grew by 5.6% year-on-year to 77.2 million and represented 11.8% of QAUs for the fourth quarter compared to 12.0% for the same period in 2020.
- Average bookings per user were US$1.7, in line with that for the fourth quarter of 2020.
- Our self-developed global hit game, Free Fire, continued to maintain top global rankings in user and grossing metrics. It remained the most downloaded mobile game globally for the fourth quarter and the full year of 2021, according to data.ai3 , previously known as App Annie, maintaining this leading position for a third consecutive year.
- Free Fire also ranked second globally by average monthly active users for all mobile games on Google Play in the fourth quarter and the full year of 2021, according to data.ai3.
- Free Fire continued to be the highest grossing mobile game in Southeast Asia and Latin America for the fourth quarter and the full year of 2021, according to data.ai3. Free Fire has maintained this leading position for the past ten consecutive quarters in Southeast Asia and in Latin America.
- In the United States, Free Fire was the highest grossing mobile battle royale game for four consecutive quarters for the fourth quarter and full year of 2021, according to data.ai3.
- Craftland, our recently introduced Free Fire map editor feature, gained strong traction since launch with the most popular maps being subscribed by close to 40 million users so far. They believe that the strong user reception to Craftland is a positive indicator of the result of our continued efforts to encourage user participation in content creation as They build Free Fire into an increasingly open platform and is well aligned with major emerging industry trends such as the metaverse.
- They are working on multiple prototype games across different stages through both self-development and publishing pipelines. In 2022 and beyond, They expect to expand our portfolio with more games across diverse genres such as multiplayer action, role-playing, sandbox and casual games.
E-commerce
- GAAP revenue was US$1.6 billion, up 89.4% year-on-year.
- GAAP revenue included US$1.3 billion of GAAP marketplace revenue4 , up 103.5% year-on-year, and US$0.3 billion of GAAP product revenue5 , up 48.1% year-on-year.
- Gross orders totaled 2.0 billion, an increase of 90.1% year-on-year.
- Gross merchandise value (“GMV”) was US$18.2 billion, an increase of 52.7% yearon-year.
- Adjusted EBITDA1 was US$(877.7) million compared to US$(427.5) million for the fourth quarter of 2020.
- In Southeast Asia and Taiwan, adjusted EBITDA loss per order before allocation of the headquarters’ common expenses was 15 cents, an improvement from 21 cents in the fourth quarter of 2020.
- They believe that, in line with the continued scaling of the platform and sustained improvement in unit economics, Shopee is currently on track to achieve positive adjusted EBITDA before allocation of the headquarters’ common expenses in Southeast Asia and Taiwan by this year.
- In Shopee’s other markets, unit economics also showed consistent improvement year-on-year.
- In Brazil, where Shopee was launched in late 2019, They have already achieved strong traction with meaningful commercialization and improving efficiency.
▪ In the fourth quarter, Shopee Brazil recorded more than 140 million gross orders, growing at close to 400% year-on-year, and more than US$70 million of GAAP revenue, up by around 326% year-on-year.
▪ Meanwhile, its adjusted EBITDA loss per order before allocation of the headquarters’ common expenses improved by more than 40% year-on-year to below US$2.
- For Shopee overall, adjusted EBITDA loss per order was US$0.45, compared to US$0.41 for the fourth quarter of 2020. This increase was attributable to the increasing contribution from the other markets which are at a much earlier stage of development, and therefore are both growing faster and incurring higher adjusted EBITDA loss per order than Southeast Asia and Taiwan.
- In Southeast Asia and in Taiwan respectively, Shopee continued to rank first in the Shopping category by average monthly active users and total time spent in app for the fourth quarter and for the full year of 2021, according to data.ai3.
- In Indonesia, where Shopee is the largest e-commerce platform, gross orders grew by around 88% year-on-year. Shopee also continued to rank first in the Shopping category by average monthly active users and total time spent in app for the fourth quarter and for the full year of 2021, according to data.ai3.
- Shopee Brazil continued to rank first in the Shopping category by downloads and total time spent in app and second by average monthly active users for the fourth quarter and for the full year of 2021, according to data.ai3.
- Globally, Shopee was the top ranked app in the Shopping category by downloads in the fourth quarter and for the full year of 2021, according to data.ai3 . In the same category, for Google Play, Shopee also ranked first globally by total time spent in app and second by average monthly active users in the fourth quarter and for the full year of 2021, according to data.ai3.
- Shopee is also building strong brand recognition across our communities. It was the top e-commerce brand in YouGov’s “Best Global Brands 2021” and ranked sixth overall.
Digital Financial Services
- GAAP revenue was US$197.5 million, up 711.1% year-on-year.
- Adjusted EBITDA was US$(149.8) million, compared to US$(171.3) million for the fourth quarter of 2020.
- While our SeaMoney business continues to enjoy very strong growth, They are also focused on continuing to improve growth efficiency and expect the segment to achieve positive cashflow by next year.
- Quarterly active users across our SeaMoney products and services reached 45.8 million, up 89.7% year-on-year.
- In Indonesia, which has the most comprehensive set of products and services among our markets, over 20% of the quarterly active users6 have used multiple SeaMoney products or services in the fourth quarter. They view this as a highly positive indicator of the strong efficiencies They can leverage in bringing new offerings to our large and fast-growing user base on the Shopee and SeaMoney platforms, which are both highly synergistic with one another and enjoy a strong flywheel effect in the scaling of each platform.
- Total payment volume (“TPV”) for the mobile wallet was US$5.0 billion, up 70.1% year-on-year.
- They also expanded various products offerings including credit services to consumers and merchants across more markets, started offering services in digital banking and insurtech in Indonesia and obtained a bank license in the Philippines.
Full Year 2021 Highlights
Group
o Total GAAP revenue was US$10.0 billion, up 127.5% year-on-year.
o Total gross profit was US$3.9 billion, up 188.8% year-on-year.
o Total adjusted EBITDA1 was US$(593.6) million compared to US$107.0 million for the full year of 2020.
Digital Entertainment
o GAAP revenue was US$4.3 billion, up 114.3% year-on-year.
o Bookings2 were US$4.6 billion, up 44.3% year-on-year.
o Adjusted EBITDA1 was US$2.8 billion, up 40.0% year-on-year.
o Adjusted EBITDA represented 60.4% of bookings for the full year of 2021, compared to 62.2% for the full year of 2020.
E-commerce
o GAAP revenue was US$5.1 billion, up 136.4% year-on-year.
o GAAP revenue included US$4.1 billion of GAAP marketplace revenue4 , up 155.8% year-on-year, and US$1.1 billion of GAAP product revenue5 , up 82.7% year-on-year.
o Gross orders totaled 6.1 billion, an increase of 116.5% year-on-year.
o GMV was US$62.5 billion, an increase of 76.8% year-on-year.
o Adjusted EBITDA1 was US$(2.6) billion compared to US$(1.3) billion for the full year of 2020.
o Adjusted EBITDA loss per order improved by 8.7% year-on-year to US$0.42, compared to US$0.46 for the full year of 2020.
Digital Financial Services
o GAAP revenue was US$469.8 million, up 672.8% year-on-year.
o Adjusted EBITDA1 was US$(616.9) million, compared to US$(511.1) million for the full year of 2020.
o TPV for the mobile wallet was US$17.2 billion, up 119.6% year-on-year
2022 Guidance
For the full year of 2022, we currently expect bookings for digital entertainment to be between US$2.9 billion and US$3.1 billion. With many economies reopening further in the fourth quarter and into this year, we have observed some moderation in online activities and fluctuations in user engagement. Moreover, due to unanticipated government actions, Free Fire is currently unavailable in the Google Play and iOS app stores in India. The guidance takes into consideration these headwind factors. The midpoint of the guidance of US$3.0 billion reflects our current expectations that our bookings for 2022 will be close to the level in 2020 while also considering the uncertainty in India.
They expect GAAP revenue for e-commerce to be between US$8.9 billion and US$9.1 billion. The midpoint of the guidance represents an increase of 75.7% from 2021.
They expect GAAP revenue for digital financial services to be between US$1.1 billion and US$1.3 billion. The midpoint of the guidance represents an increase of 155.4% from 2021.