Sea Limited
SE
incurred a fourth-quarter 2021 loss of 88 cents per share, wider than the year-ago quarter’s reported loss of 87 cents. The figure beat the Zacks Consensus Estimate by 6.38%.
Revenues of $1.57 billion jumped 105.7% on a year-over-year basis but lagged the consensus mark by 6.5%.
The year-over-year upside in revenues can be attributed to growth in its digital entertainment business, especially the self-developed game —
Free Fire
— and continued monetization efforts in its e-commerce business.
Sea’s shares are down 43.4% year to date, underperforming the Zacks
Internet Software
industry’s decline of 27.8% and the
Computer & Technology
sector’s fall of 12.8%.
Sea Limited Sponsored ADR Price, Consensus and EPS Surprise
Sea Limited Sponsored ADR price-consensus-eps-surprise-chart
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Sea Limited Sponsored ADR Quote
Top-Line Details
Digital entertainment revenues of $1.42 billion surged 104.1% year over year. This was primarily driven by continued quarterly active-user growth and further deepening of paying-user penetration, driven by the consistently strong performance of Free Fire.
Quarterly Active Users (QAUs) reached 654 million, up 7.1% year over year. Quarterly paying users of 77.2 million climbed 5.6% year over year, reflecting 11.8% of QAUs in the fourth quarter.
Average bookings per user for the reported quarter were $1.70 unchanged year over year. Bookings increased 6.8% year over year to $1.1 billion.
E-commerce and other services revenues were $1.48 billion, up 125.8% from the year-ago quarter.
E-commerce revenues included $1.2 billion of marketplace revenues, up 151.4% year over year. Marketplace revenues primarily consist of transaction-based fees as well as advertising income and revenues generated from other value-added services.
Product revenues, which primarily consist of revenues generated from direct sales, surged 48.1% year over year to $0.3 billion.
Gross orders for the quarter under review totaled 2 billion, up 90.1% year over year. Gross merchandise value was $18.2 billion, up 52.7% year over year.
Finally, sales of goods soared 49.8% year over year to $324.4 million in the fourth quarter of 2021.
Digital financial services revenues jumped 711.1% year over year to $197.5 million.
SeaMoney products and services QAUs reached 45.8 million, up 89.7% year over year. Mobile wallet total payment volume for the fourth quarter surpassed $5 billion, up 70.1% year over year.
Operating Details
Gross profit surged a whopping 145.6% year over year to $1.31 billion in fourth-quarter 2021.
Adjusted EBITDA loss was $492.1 million against EBITDA of $48.7 million in the year-ago quarter.
Digital Entertainment’s adjusted EBITDA was $602.6 million compared with $663.5 million reported in the year-ago quarter. Adjusted EBITDA represented 55.7% of bookings in the fourth quarter of 2021 compared with 65.5% in the fourth quarter of 2020.
E-commerce adjusted EBITDA loss was $877.7 million compared with a loss of $427.5 million reported in the fourth quarter of 2020.
Shopee’s adjusted EBITDA loss per order was 45 cents compared with 41 cents reported in the year-ago quarter.
Balance Sheet
As of Dec 31, 2021, Sea had cash and cash equivalents of $10.80 billion compared with $11.12 billion as of Sep 30, 2021.
Guidance
For 2022, e-commerce revenues are expected between $8.9 billion and $9.1 billion, suggesting 75.7% growth from 2021 at the midpoint of the guidance.
Bookings for digital entertainment are expected between $2.9 billion and $3.1 billion.
Sea expects digital financial services between $1.1 billion and $1.3 billion, calling for 155.4% growth over 2021 at the midpoint of the guidance.
Zacks Rank & Upcoming Earnings Releases to Watch
Sea currently carries a Zacks Rank #4 (Sell).
Investors interested in the Computer & Technology sector are eagerly awaiting earnings releases from players like
Asana
ASAN
,
Broadcom
AVGO
and
CrowdStrike
CRWD
. All the three stocks carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Asana is scheduled to release fourth-quarter fiscal 2022 results on Mar 9.
Broadcom is set to report first-quarter fiscal 2022 earnings on Mar 3.
CrowdStrike is set to release fourth-quarter fiscal 2022 results on Mar 9.
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