Sea Group lifts full-year revenue guidance for Shopee to $5.2b

Sea Group, Singapore’s largest homegrown internet company, has raised its annual revenue guidance for Shopee to a range of US$5 billion to US$5.2 billion, its second hike this year. It previously expected the ecommerce arm’s topline to come in between US$4.7 billion and US$4.9 billion for the fiscal year 2021.

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The company said its total GAAP revenue more than doubled in the third quarter of 2021 to US$2.7 billion, year-on-year, boosted by Shopee’s strong performance. Last year, Sea brought in US$1.2 billion in revenue during the same period.

The company has also appointed Shopee CEO Chris Feng as the group’s president, effective January 1, 2022. He will work closely with group CEO Forrest Li, focus on Sea’s long-term strategic initiatives, and operate Sea’s Shopee and SeaMoney businesses.

The company’s soaring revenue was mainly driven by the growth in the scale of its ecommerce marketplace, coupled with an increase in revenue from value-added services.

Shopee reported a 168% year-on-year growth in revenue, which stood at US$1.3 billion for the quarter. Transaction-based fees and advertising income also contributed to the surge in the company’s income.

However, growth in Garena, the company’s digital entertainment unit, has been slowing as its quarterly active users grew only 0.5% to hit the 729 million mark in the quarter. Sea’s paying users also rose 1.1% to 93.2 million.

Free Fire Max, a new premium version of its popular game, could help boost the company’s revenue per user as it caters to gamers with high-end phones.

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Meanwhile, the company’s quarterly net loss widened by 34.3% to US$571 million, compared with US$425.3 million last year. Sea also swung to a loss of US$165.5 million in terms of adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), compared with a profit of US$120.4 million a year earlier.