Sea Group Q2 net loss widens 77%

Sea Group’s net loss widened 77% from a year ago to US$569.8 million in the second quarter of 2022, while its expenses climbed 52.3%.

This net loss figure excludes non-cash components such as share-based compensation and impairment of goodwill.

The Singapore-based company’s cash and cash equivalents decreased 18% from the first quarter of 2022. Sea Group said that amid macro uncertainty, it would continue to prioritize profitability and cash flow management.

Sea Group CEO Forrest Li / Image credit: Timmy Loen

The Southeast Asian tech giant recorded US$2.9 billion in total GAAP revenue in the June quarter, up 29% from last year. Meanwhile, its gross profits grew 17.1% to US$1.1 billion.

However, its earnings were flat on a quarter-on-quarter basis.

During the June quarter, the gains were mainly driven by its ecommerce arm, Shopee, while its digital entertainment unit Garena’s performance was tepid. “Shopee’s unit economics improved significantly driven by gains in both monetization and efficiency across our markets, even as we sustained a healthy growth rate against tough comparisons,” Forrest Li, Sea’s chairman and CEO, said in a statement.

The company said it would suspend forecasts for ecommerce GAAP revenue in 2022 to better capture the long-term growth opportunities in its markets.

Sea Group said Garena’s sluggish performance was due to the dip in bookings after Covid-19. The gaming vertical’s number of quarterly active users also went down from 725.2 million last year to 619.3 million this year.

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However, the firm’s digital financial services brought in US$279 million in quarterly revenue, up 214.4% from last year, seeing a growth in the number of SeaMoney users and greater synergies between Shopee and SeaMoney.

“As we navigate the current environment of increased macro uncertainty with that same nimble and decisive approach, we believe it is vital to be thoughtful, prudent, and disciplined,” said Li.