Shopee’s surge pushes Sea Group’s revenue to $2.3b in Q2

Sea Group, Singapore’s largest homegrown internet company, said it has more than doubled its total GAAP revenue in the second quarter of 2021 to US$2.3 billion, boosted by the upbeat performance of its ecommerce unit, Shopee.

Photo credit: Sea Group

Shopee posted a 160.7% year-on-year growth in its GAAP revenue to stand at US$1.2 billion. Its Malaysian unit also turned profitable on an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) basis before allocation of the headquarter’s common expenses. This is the second Shopee market after Taiwan to hit this milestone.

As a result, Sea lifted its full-year revenue guidance for Shopee in the range of US$4.7 billion to US$4.9 billion, an increase of 121.5% from 2020 at the midpoint of the revised guidance.

It also updated its guidance for its digital entertainment business Garena, where it expects bookings between US$4.5 billion and US$4.7 billion, up from an earlier estimate of US$4.3 billion to US$4.7 billion.

Garena’s bookings shot up by 64% to hit US$1.2 billion in Q2 this year from the same quarter in 2020. Its mobile shooting game Free Fire also hit a record high of over 150 million daily active users in the same period.

This pushed Sea’s GAAP revenue to grow by 158.6% during the quarter. The company also posted nearly a fourfold increase in its gross profit for the quarter at US$930.9 million.

However, its net loss widened by 10.2% to US$433.6 million, compared to US$393.5 million in the second quarter a year ago.

See also: Sea Group sees blistering growth, hints at bolder vision for Free Fire

“We had a net income tax expense of US$75.2 million and US$27.8 million in the second quarter of 2021 and 2020 respectively, ” the company said in a statement. It attributed the income tax expense to corporate income tax and withholding tax expenses incurred by Garena.

In addition, the company said it has seen “strong growth” in the adoption of SeaMoney’s offerings as total payment volume for its mobile wallet exceeded US$4.1 billion in the second quarter of 2021. This is a jump of about 150% from the previous year.

Sea has also recorded conversions worth over US$423.3 million in aggregate principal amount of its convertible notes, which are estimated to result in more than US$14.4 million in savings for future interest payments.