Sea’s Q1 results a ‘strong start’ to 2024

Sea Group delivered a strong set of results for the first quarter of 2024, with improvements in both its top and bottom line.

Overall revenue rose to US$3.7 billion, up 23% from Q1 2023. While adjusted EBITDA was down 21% year on year at US$401 million, it was 3.2x higher than in the previous quarter.

Similarly, the group swung to a net loss of US$23 million for the quarter compared to US$87 million in profit a year ago, but improved from Q4 2023’s US$112 million loss.

“We have a clear roadmap for profitable growth,” said Forrest Li, Sea Group’s CEO and founder. He added that the results were a “strong start to 2024,” with the company “well on track” to meet its full-year guidance.

Sea Group CEO Forrest Li / Photo credit: Sea Group

Investors had sent Sea Group’s shares up by 17% in the trading sessions following the release of its 2023 full year results earlier this year, in response to the company’s positive outlook for growth at Shopee.

Indeed, much of the momentum behind the positive results this quarter came from the ecommerce arm, which saw gross merchandise value jump 36% year on year to US$23.6 billion for Q1 2024.

This helped drive Shopee’s GAAP revenue to US$2.7 billion, up 33% from Q1 2023. Meanwhile, adjusted losses of US$22 million in the quarter were a fraction of Q4 2023’s US$225 million, although worse than the adjusted earnings profit of US$208 million from a year earlier.

Bookings at gaming unit Garena came in at US$512 million, 11% higher than a year ago. However, GAAP revenue of US$458 million was down 15% year on year and 10% worse than the previous quarter.

Gaming companies tend to emphasize the importance of bookings, which are a non-GAAP metric, as they represent the actual value of purchases made during the quarter. On the other hand, under accounting rules, revenues depend on assumptions such as the estimated lifetime of a player.

Meanwhile, Garena’s adjusted EBITDA for the quarter stood at US$292 million, a year-on-year increase of 27%.

Finally, revenue at SeaMoney, the company’s financial services division, came in at US$499 million for Q1 2024, up 21% year on year. Its adjusted earnings of US$149 million were 50% more than the same year-ago period.

Initial reaction to the results appears to be positive, with investors sending Sea’s shares up by over 6% in pre-market trading.

See also: Sea Group’s financial health in 7 charts