Sea Limited (SE) Q3 Earnings call transcript Nov 12, 2024

In the third quarter of 2024, Sea Limited, the leading digital entertainment, e-commerce, and digital financial services company, reported solid results, signaling a successful quarter across all three of its businesses: Shopee, SeaMoney, and Garena. Forrest Li, Sea's Chief Executive Officer, highlighted the company's strong growth and profitability while addressing key themes and trends during the earnings call.

E-commerce Growth and Market Leadership

Shopee, Sea's e-commerce platform, continues to showcase impressive growth, with a mid-20 year-on-year GMV growth expected for the full year. This growth is attributed to a combination of factors, including competitive pricing and a wide range of products. The platform's market leadership in Asia is underscored by its strong user growth, with an average monthly active buyers increase of over 20% year-on-year. Shopee's success is further demonstrated by its positive adjusted EBITDA in both Asia and Brazil, indicating a focus on delivering sustainable growth.

Digital Financial Services Expansion

SeaMoney, Sea's digital financial services segment, has also seen significant growth, with a loan book that grew by over 70% year-on-year in the third quarter. This growth is driven by the high demand for credit lending in the underserved market, with Shopee's large user base providing an efficient platform for user acquisition and risk underwriting. The company's diversified funding sources, such as asset-backed lending products and digital banks, have enabled SeaMoney to scale up its credit business in a profitable manner.

Digital Entertainment's Strong Performance

Garena, Sea's digital entertainment business, has also reported strong growth, with total bookings increasing by over 24% year-on-year. Free Fire, Garena's flagship mobile game, remains one of the largest in the world, with over 100 million daily active users. The company's strategic collaborations with YouTube and other gaming platforms have contributed to its success in Indonesia and other markets, highlighting its ability to leverage local trends to connect with users.

Looking Ahead

Forrest Li expressed optimism about Sea's future prospects, particularly in the e-commerce sector, where there is still room for significant growth in Southeast Asia. The company's focus on improving service quality and expanding its content ecosystem, including its live streaming capabilities, is expected to drive further growth. In the digital financial services segment, Sea aims to address the underserved demand for financial services in its markets, leveraging its large user base and innovative products.

Conclusion

Sea Limited's strong performance across all three businesses underscores its ability to adapt to changing market dynamics and capitalize on growth opportunities. The company's focus on user-centric approaches, innovative products, and strategic partnerships positions it well for continued success in the digital economy. With a solid foundation for growth and a clear path forward, Sea Limited is poised to continue its trajectory of delivering value to its stakeholders.