Sea Limited Reports Second Quarter 2021 Results
Sea Limited (NYSE: SE) reported a 158.6% increase in total GAAP revenue to US$2.3 billion for Q2 2021, with gross profit up 363.5% to US$930.9 million. Digital entertainment bookings rose 64.8% to US$1.2 billion. However, adjusted EBITDA showed a loss of US$(24.1 million, contrasting with a profit of US$7.7 million in Q2 2020. The company anticipates increased digital entertainment bookings of US$4.5 billion to US$4.7 billion for the year, while e-commerce revenue guidance is raised to US$4.7 billion to US$4.9 billion.
- Total GAAP revenue increased by 158.6% to US$2.3 billion.
- Gross profit rose by 363.5% to US$930.9 million.
- Digital entertainment bookings increased by 64.8% to US$1.2 billion.
- Quarterly active users reached 725.2 million, a 45.1% increase.
- Quarterly paying users grew by 84.8% year-on-year to 92.2 million.
- Free Fire game reached over 1 billion downloads and ranked highly in multiple regions.
- Adjusted EBITDA showed a loss of US$(24.1) million compared to a profit of US$7.7 million in Q2 2020.
- E-commerce adjusted EBITDA loss increased to US$(579.8 million) from US$(313.7 million) year-on-year.
- Net loss increased to US$433.7 million from US$393.5 million in Q2 2020.
Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced its financial results for the second quarter ended June 30, 2021.
Second Quarter 2021 Highlights
-
Group
-
Total GAAP revenue was US
$2.3 billion , up158.6% year-on-year. -
Total gross profit was US
$930.9 million , up363.5% year-on-year. -
Total adjusted EBITDA1 was US
$(24.1) million compared to US$7.7 million for the second quarter of 2020.
-
Total GAAP revenue was US
-
Digital Entertainment
-
Bookings2 were US
$1.2 billion , up64.8% year-on-year. -
Adjusted EBITDA1 was US
$740.9 million , up69.8% year-on-year. -
Adjusted EBITDA represented
62.8% of bookings for the second quarter of 2021, compared to60.9% for the second quarter of 2020. -
GAAP revenue was US
$1.0 billion , up166.8% year-on-year. -
Quarterly active users (“QAUs”) reached 725.2 million, an increase of
45.1% year-on-year. -
Quarterly paying users grew by
84.8% year-on-year to 92.2 million, and represented12.7% of QAUs for the second quarter compared to10.0% for the same period in 2020. -
Average bookings per user were US
$1.6 , compared to US$1.4 for the second quarter of 2020. - Our self-developed global hit game, Free Fire, hit over 1 billion downloads on Google Play. Free Fire also ranked third globally by average monthly active users for mobile games on Google Play in the second quarter of 2021, according to App Annie3, and achieved a new record high of over 150 million peak daily active users in the quarter.
- Free Fire continued to be the highest grossing mobile game in Southeast Asia, Latin America and India for the second quarter of 2021, according to App Annie3. Free Fire has maintained this leading position for the past eight consecutive quarters in Southeast Asia and in Latin America, and three consecutive quarters in India.
- In the United States, Free Fire was also the highest grossing mobile battle royale game for two consecutive quarters, and was the second highest grossing mobile game on Google Play for the second quarter of 2021, according to App Annie3.
- In June, we launched Moonlight Blade Mobile, a massively multiplayer online role-playing game, in Taiwan, to further expand our portfolio of published titles across a diverse genre of games.
-
Our esports events continued to attract significant engagement in the second quarter. In May 2021, we successfully hosted Free Fire World Series 2021 Singapore, which recorded over 5.4 million peak concurrent online viewers.
-
Bookings2 were US
-
E-commerce
-
GAAP revenue was US
$1.2 billion , up160.7% year-on-year. -
GAAP revenue included US
$904.6 million of GAAP marketplace revenue4, up190.7% year-on-year, and US$250.6 million of GAAP product revenue5, up90.0% year-on-year. -
Gross orders totaled 1.4 billion, an increase of
127.4% year-on-year. -
Gross merchandise value (“GMV”) was US
$15.0 billion , an increase of87.5% year-on-year. -
Adjusted EBITDA1 was US
$(579.8) million compared to US$(313.7) million for the second quarter of 2020. Adjusted EBITDA loss per order decreased by19.6% year-on-year to US$0.41 , compared to US$0.51 for the second quarter of 2020. - In Malaysia, Shopee recorded positive quarterly adjusted EBITDA before allocation of the headquarters’ common expenses in the second quarter of 2021, making it the second market after Taiwan to pass this milestone.
- Shopee was the most downloaded app on Google Play and the second most downloaded app across the Google Play and iOS App Stores combined for the Shopping category globally in the second quarter of 2021, according to App Annie3. Shopee also ranked third by the total time spent in app in the Shopping category globally, according to App Annie3.
- In Southeast Asia overall, and in particular in Shopee’s largest market, Indonesia, as well as in Taiwan, Shopee continued to rank first in the Shopping category by average monthly active users and total time spent in app for the second quarter of 2021, according to App Annie3.
-
In Brazil, where Shopee was launched in late 2019, it ranked first in the Shopping category by downloads and total time spent in app, and ranked second by average monthly active users for the second quarter of 2021, according to App Annie3.
-
GAAP revenue was US
Digital Financial Services Update
We continued to see strong growth in the adoption of SeaMoney’s offerings. Our mobile wallet total payment volume exceeded US
Raising Guidance
We are raising the guidance for both digital entertainment and e-commerce for the full year of 2021.
We expect bookings for digital entertainment to be between US
Conversions of Convertible Notes
Since our last update as of May 10, 2021, up until July 31, 2021, there have been further conversions of more than US
As of July 31, 2021, we had 537,909,531 ordinary shares issued and outstanding, and approximately US
1 For definitions of total adjusted EBITDA and adjusted EBITDA for digital entertainment and e-commerce segments, please refer to the “Non-GAAP Financial Measures” section.
2 GAAP revenue for the digital entertainment segment plus change in digital entertainment deferred revenue. This operating metric is used as an approximation of cash spent by our users in the applicable period that is attributable to our digital entertainment segment.
3 Rankings data for App Annie is based on combined data from the Google Play and iOS App Stores, unless otherwise stated. Southeast Asia rankings are based on Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Latin America rankings are based on Argentina, Brazil, Chile, Colombia, Mexico, and Uruguay.
4 GAAP marketplace revenue mainly consists of transaction-based fees and advertising income and revenue generated from other value-added services.
5 GAAP product revenue mainly consists of revenue generated from direct sales.
Unaudited Summary of Financial Results
(Amounts are expressed in thousands of US dollars “$” except for per share data)
|
For the Three Months
|
|
|||||||
|
2020 |
2021 |
|
||||||
|
$ |
$ |
YOY% |
||||||
Revenue |
|
|
|
||||||
Service revenue |
|
|
|
||||||
Digital Entertainment |
383,946 |
|
1,024,267 |
|
166.8 |
% |
|||
E-commerce and other services |
364,719 |
|
999,658 |
|
174.1 |
% |
|||
Sales of goods |
133,369 |
|
256,623 |
|
92.4 |
% |
|||
|
882,034 |
|
2,280,548 |
|
158.6 |
% |
|||
|
|
|
|
||||||
Cost of revenue |
|
|
|
||||||
Cost of service |
|
|
|
||||||
Digital Entertainment |
(156,539 |
) |
(292,696 |
) |
87.0 |
% |
|||
E-commerce and other services |
(388,291 |
) |
(816,748 |
) |
110.3 |
% |
|||
Cost of goods sold |
(136,378 |
) |
(240,210 |
) |
76.1 |
% |
|||
|
(681,208 |
) |
(1,349,654 |
) |
98.1 |
% |
|||
Gross profit |
200,826 |
|
930,894 |
|
363.5 |
% |
|||
Other operating income |
32,609 |
|
72,007 |
|
120.8 |
% |
|||
Sales and marketing expenses |
(386,349 |
) |
(921,362 |
) |
138.5 |
% |
|||
General and administrative expenses |
(144,547 |
) |
(242,992 |
) |
68.1 |
% |
|||
Research and development expenses |
(75,347 |
) |
(172,563 |
) |
129.0 |
% |
|||
Total operating expenses |
(573,634 |
) |
(1,264,910 |
) |
120.5 |
% |
|||
Operating loss |
(372,808 |
) |
(334,016 |
) |
(10.4 |
)% |
|||
Non-operating income (loss), net |
7,612 |
|
(25,061 |
) |
(429.2 |
)% |
|||
Income tax expense |
(27,821 |
) |
(75,191 |
) |
170.3 |
% |
|||
Share of results of equity investees |
(518 |
) |
599 |
|
(215.6 |
)% |
|||
Net loss |
(393,535 |
) |
(433,669 |
) |
10.2 |
% |
|||
Net loss excluding share-based compensation (1) |
(317,665 |
) |
(321,184 |
) |
1.1 |
% |
|||
|
|
|
|
||||||
Basic and diluted loss per share based on
|
(0.68 |
) |
(0.61 |
) |
(10.3 |
)% |
|||
|
|
|
|
||||||
Change in deferred revenue of Digital Entertainment |
332,264 |
|
155,863 |
|
(53.1 |
)% |
|||
|
|
|
|
||||||
Adjusted EBITDA for Digital Entertainment (1) |
436,235 |
|
740,944 |
|
69.8 |
% |
|||
Adjusted EBITDA for E-commerce (1) |
(313,728 |
) |
(579,774 |
) |
84.8 |
% |
|||
Adjusted EBITDA for Digital Financial Services (1) |
(97,497 |
) |
(154,986 |
) |
59.0 |
% |
|||
Adjusted EBITDA for Other Services (1) |
(10,769 |
) |
(23,275 |
) |
116.1 |
% |
|||
Unallocated expenses (2) |
(6,503 |
) |
(7,020 |
) |
8.0 |
% |
|||
Total adjusted EBITDA (1) |
7,738 |
|
(24,111 |
) |
(411.6 |
)% |
|||
(1) For a discussion of the use of non-GAAP financial measures, see “Non-GAAP Financial Measures.”
(2) Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the Chief Operating Decision Maker (“CODM”) as part of segment performance.
Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020
Revenue
Our total GAAP revenue increased by
-
Digital Entertainment: GAAP revenue increased by
166.8% to US$1.0 billion in the second quarter of 2021 from US$383.9 million in the second quarter of 2020. This increase was primarily due to the increase in our active user base as well as the deepened paying user penetration, and in particular, the continued success of our self-developed game Free Fire.
-
E-commerce and other services: GAAP revenue increased by
174.1% to US$999.7 million in the second quarter of 2021 from US$364.7 million in the second quarter of 2020. This increase was primarily driven by the growth in the scale of our e-commerce marketplace, and increase in each of its revenue streams, including transaction-based fees, value-added services, and advertising, as we continue to better support our users’ needs with new features and programs.
-
Sales of goods: GAAP revenue increased by
92.4% to US$256.6 million in the second quarter of 2021 from US$133.4 million in the second quarter of 2020, primarily due to the increase in our product offerings.
Cost of Revenue
Our total cost of revenue increased by
-
Digital Entertainment: Cost of revenue increased by
87.0% to US$292.7 million in the second quarter of 2021 from US$156.5 million in the second quarter of 2020. The increase was largely in line with the increase in our digital entertainment revenue. Improvement in gross profit margins was largely due to higher revenue contribution from our self-developed game.
-
E-commerce and other services: Cost of revenue for our e-commerce and other services segment combined increased by
110.3% to US$816.7 million in the second quarter of 2021 from US$388.3 million in the second quarter of 2020. The increase was primarily due to higher costs of the logistics and other value-added services that we provide to our users, and other costs incurred, in each case driven by the growth of our e-commerce marketplace. Improvement in gross profit margins was mainly due to improvement in our marketplace take-rate and our cost efficiency as we continue to enhance our service offerings.
-
Cost of goods sold: Cost of goods sold increased by
76.1% to US$240.2 million in the second quarter of 2021 from US$136.4 million in the second quarter of 2020. The increase was largely in line with the increase in our revenue from sales of goods.
Other Operating Income
Our other operating income increased by
Sales and Marketing Expenses
Our total sales and marketing expenses increased by
|
For the Three Months
|
|
|||||
|
2020 |
|
2021 |
YOY% |
|||
Sales and Marketing Expenses |
$ |
|
$ |
|
|||
Digital Entertainment |
31,516 |
|
82,038 |
160.3 |
% |
||
E-commerce |
268,408 |
|
649,196 |
141.9 |
% |
||
Digital Financial Services |
82,409 |
|
166,270 |
101.8 |
% |
||
-
Digital Entertainment: Sales and marketing expenses increased by
160.3% to US$82.0 million in the second quarter of 2021 from US$31.5 million in the second quarter of 2020. The increase was primarily due to higher online marketing costs and esports event expenses as we continue to deepen the engagement with our gamers’ community.
-
E-commerce: Sales and marketing expenses increased by
141.9% to US$649.2 million in the second quarter of 2021 from US$268.4 million in the second quarter of 2020. The increase was primarily attributable to the ramping up of marketing incentives and online marketing efforts, especially during the holiday seasons, as we continue investing in capturing market opportunities in full.
-
Digital Financial Services: Sales and marketing expenses increased by
101.8% to US$166.3 million in the second quarter of 2021 from US$82.4 million in the second quarter of 2020. The increase was mainly due to our efforts to promote adoption of our mobile wallet services.
General and Administrative Expenses
Our general and administrative expenses increased by
Research and Development Expenses
Our research and development expenses increased by
Non-operating Income or Losses, Net
Non-operating income or losses mainly consist of interest income, interest expense, investment gain (loss) and foreign exchange gain (loss). We recorded a net non-operating loss of US
Income Tax Expense
We had a net income tax expense of US
Net Loss
As a result of the foregoing, we had net losses of US
Net Loss Excluding Share-based Compensation
Net loss excluding share-based compensation, was US
Basic and Diluted Loss Per Share Based on Net Loss Excluding Share-based Compensation Attributable to Sea Limited’s Ordinary Shareholders
Basic and diluted loss per share based on net loss excluding share-based compensation, was US
Webcast and Conference Call Information
The Company’s management will host a conference call today to review Sea’s business and financial performance.
Details of the conference call and webcast are as follows:
Date and time: |
7:30 AM U.S. Eastern Time on August 17, 2021 |
|
|
7:30 PM Singapore / Hong Kong Time on August 17, 2021 |
|
|
|
|
Webcast link: |
||
|
|
|
Dial in numbers: |
US Toll Free: 1-888-317-6003 Hong Kong: 800-963-976 |
|
|
International: 1-412-317-6061 Singapore: 800-120-5863 |
|
|
United Kingdom: 08-082-389-063 |
Passcode for Participants: 7854838
A replay of the conference call will be available at the Company’s investor relations website (www.sea.com/investor/home). An archived webcast will be available at the same link above.
About Sea Limited
Sea Limited (NYSE: SE) is a leading global consumer internet company founded in Singapore in 2009. Our mission is to better the lives of consumers and small businesses with technology. We operate three core businesses across digital entertainment, e-commerce, as well as digital payments and financial services, known as Garena, Shopee, and SeaMoney, respectively. Garena is a leading global online games developer and publisher. Shopee is the largest pan-regional e-commerce platform in Southeast Asia and Taiwan. SeaMoney is a leading digital payments and financial services provider in Southeast Asia.
Forward-Looking Statements
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “could,” “will,” “expect,” “anticipate,” “aim,” “future,” “intend,” “plan,” “believe,” “estimate,” “likely to,” “potential,” “confident,” “guidance,” and similar statements. Among other things, statements that are not historical facts, including statements about Sea’s beliefs and expectations, the business, financial and market outlook, and projections from its management in this announcement, as well as Sea’s strategic and operational plans, contain forward-looking statements. Sea may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases, and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Sea’s goals and strategies; its future business development, financial condition, financial results, and results of operations; the growth in, and market size of, the digital entertainment, e-commerce and digital financial services industries in the markets where it operates, including segments within those industries; expected changes in its revenue, costs or expenditures; its ability to continue to source, develop and offer new and attractive online games and to offer other engaging digital entertainment content; the growth of its digital entertainment, e-commerce and digital financial services businesses; its expectations regarding growth in its user base, level of engagement, and monetization; its ability to continue to develop new technologies and/or upgrade its existing technologies; its expectations regarding the use of proceeds from its financing activities, including its follow-on offerings and convertible notes offerings; growth and trends of its markets and competition in its industries; government policies and regulations relating to its industries; general economic and business conditions in its markets; and the impact of widespread health developments, including the COVID-19 pandemic, and the responses thereto (such as voluntary and in some cases, mandatory quarantines as well as shut downs and other restrictions on travel and commercial, social and other activities, and the availability of effective vaccines and treatments) which could, among other things, impact the business and manufacturing activities of its ecosystem participants, disrupt the global supply chain including those of its sellers on its platforms and merchant partners, and negatively affect consumer discretionary spending. Further information regarding these and other risks is included in Sea’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Sea undertakes no obligation to update any forward-looking statement, except as required under applicable law.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use the following non-GAAP financial measures to help evaluate our operating performance:
- “Net loss excluding share-based compensation” represents net loss before share-based compensation. This financial measure helps to identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that are included in net loss. The use of this measure has its limitations in that it does not include all items that impact the net loss or income for the period, and share-based compensation are significant expenses.
- “Net loss excluding share-based compensation attributable to Sea Limited’s ordinary shareholders” represents net loss attributable to Sea Limited’s ordinary shareholders before share-based compensation. This financial measure helps to identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that are included in net loss. The use of this measure has its limitations in that it does not include all items that impact the net loss or income for the period, and share-based compensation are significant expenses.
- “Basic and diluted loss per share based on net loss excluding share-based compensation attributable to Sea Limited’s ordinary shareholders” represents net loss excluding share-based compensation attributable to Sea Limited’s ordinary shareholders divided by the weighted average number of shares outstanding during the period.
- “Adjusted EBITDA” for our digital entertainment segment represents operating income (loss) before share-based compensation plus (a) depreciation and amortization expenses, and (b) the net effect of changes in deferred revenue and its related cost for our digital entertainment segment. We believe that the segment adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.
- “Adjusted EBITDA” for our e-commerce segment, digital financial services segment and other services segment represents operating income (loss) before share-based compensation plus depreciation and amortization expenses. We believe that the segment adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.
- “Total adjusted EBITDA” represents the sum of adjusted EBITDA of all our segments combined, plus unallocated expenses. We believe that the total adjusted EBITDA helps to identify underlying trends in our operating results, enhancing their understanding of the past performance and future prospects.
These non-GAAP financial measures have limitations as analytical tools. None of the above financial measures should be considered in isolation or construed as an alternative to revenue, net loss/income, or any other measure of performance or as an indicator of our operating performance. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to Sea’s data. We compensate for these limitations by reconciling the non-GAAP financial measures to their nearest U.S. GAAP financial measures, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on any single financial measure.
The tables below present selected financial information of our reporting segments, the non-GAAP financial measures that are most directly comparable to GAAP financial measures, and the related reconciliations between the financial measures. Amounts are expressed in thousands of US dollars (“$”) except for number of shares & per share data.
|
For the Three Months ended June 30, 2021 |
||||||||||||||||
|
Digital
|
E-
|
Digital
|
Other
|
Unallocated
|
Consolidated |
|||||||||||
|
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||
Operating income (loss) |
597,713 |
(627,509 |
) |
(159,821 |
) |
(24,894 |
) |
(119,505 |
) |
(334,016 |
) |
||||||
Net effect of changes in deferred
|
135,262 |
- |
|
- |
|
- |
|
- |
|
135,262 |
|
||||||
Depreciation and Amortization |
7,969 |
47,735 |
|
4,835 |
|
1,619 |
|
- |
|
62,158 |
|
||||||
Share-based compensation |
- |
- |
|
- |
|
- |
|
112,485 |
|
112,485 |
|
||||||
Adjusted EBITDA(3) |
740,944 |
(579,774 |
) |
(154,986 |
) |
(23,275 |
) |
(7,020 |
) |
(24,111 |
) |
||||||
|
|||||||||||||||||
|
For the Three Months ended June 30, 2020 |
||||||||||||||||
|
Digital
|
E-
|
Digital
|
Other
|
Unallocated
|
Consolidated |
|||||||||||
|
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||
Operating income (loss) |
167,027 |
(344,842 |
) |
(99,227 |
) |
(13,393 |
) |
(82,373 |
) |
(372,808 |
) |
||||||
Net effect of changes in deferred
|
262,966 |
- |
|
- |
|
- |
|
- |
|
262,966 |
|
||||||
Depreciation and Amortization |
6,242 |
31,114 |
|
1,730 |
|
2,624 |
|
- |
|
41,710 |
|
||||||
Share-based compensation |
- |
- |
|
- |
|
- |
|
75,870 |
|
75,870 |
|
||||||
Adjusted EBITDA(3) |
436,235 |
(313,728 |
) |
(97,497 |
) |
(10,769 |
) |
(6,503 |
) |
7,738 |
|
||||||
(1) A combination of multiple business activities that does not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.
(2) Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.
(3) Intersegment sales incentives are not included in the adjusted EBITDA calculation for e-commerce, digital financial services and other services segments.
|
For the Three Months
|
|||||
|
2020 |
2021 |
||||
|
$ |
$ |
||||
|
|
|
||||
Net loss |
(393,535 |
) |
(433,669 |
) |
||
Share-based compensation |
75,870 |
|
112,485 |
|
||
Net loss excluding share-based compensation |
(317,665 |
) |
(321,184 |
) |
||
|
|
|
||||
Net loss attributable to non-controlling interests |
574 |
|
227 |
|
||
Net loss excluding share-based compensation attributable
|
(317,091 |
) |
(320,957 |
) |
||
|
|
|
||||
Weighted average shares used in loss per share computation: |
|
|
||||
Basic and diluted |
466,495,859 |
|
523,247,645 |
|
||
|
|
|
||||
Basic and diluted loss per share based on net loss excluding
|
(0.68 |
) |
(0.61 |
) |
||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
||||||
Amounts expressed in thousands of US dollars (“$”) except for number of shares & per share data |
||||||
|
For the Six Months
|
|||||
|
2020 |
2021 |
||||
|
$ |
$ |
||||
Revenue |
|
|
||||
Service revenue |
|
|
||||
Digital Entertainment |
753,629 |
|
1,805,602 |
|
||
E-commerce and other services |
631,264 |
|
1,772,040 |
|
||
Sales of goods |
212,061 |
|
466,550 |
|
||
|
|
|
||||
Total revenue |
1,596,954 |
|
4,044,192 |
|
||
|
|
|
||||
Cost of revenue |
|
|
||||
Cost of service |
|
|
||||
Digital Entertainment |
(299,231 |
) |
(540,936 |
) |
||
E-commerce and other services |
(673,815 |
) |
(1,491,286 |
) |
||
Cost of goods sold |
(216,282 |
) |
(435,667 |
) |
||
|
|
|
||||
Total cost of revenue |
(1,189,328 |
) |
(2,467,889 |
) |
||
|
|
|
||||
Gross profit |
407,626 |
|
1,576,303 |
|
||
|
|
|
||||
Operating income (expenses): |
|
|
||||
Other operating income |
57,925 |
|
147,095 |
|
||
Sales and marketing expenses |
(694,665 |
) |
(1,600,284 |
) |
||
General and administrative expenses |
(271,480 |
) |
(491,850 |
) |
||
Research and development expenses |
(139,933 |
) |
(313,693 |
) |
||
|
|
|
||||
Total operating expenses |
(1,048,153 |
) |
(2,258,732 |
) |
||
|
|
|
||||
|
|
|
||||
Operating loss |
(640,527 |
) |
(682,429 |
) |
||
Interest income |
15,206 |
|
14,969 |
|
||
Interest expense |
(67,927 |
) |
(49,606 |
) |
||
Investment gain (loss), net |
58,968 |
|
(19,770 |
) |
||
Changes in fair value of convertible notes |
(87 |
) |
– |
|
||
Foreign exchange gain |
12,687 |
|
6,094 |
|
||
|
|
|
||||
Loss before income tax and share of results of equity investees |
(621,680 |
) |
(730,742 |
) |
||
Income tax expense |
(51,058 |
) |
(126,216 |
) |
||
Share of results of equity investees |
(1,588 |
) |
1,198 |
|
||
|
|
|
||||
Net loss |
(674,326 |
) |
(855,760 |
) |
||
|
|
|
||||
Net profit attributable to non-controlling interests |
(148 |
) |
(372 |
) |
||
|
|
|
||||
Net loss attributable to Sea Limited’s ordinary shareholders |
(674,474 |
) |
(856,132 |
) |
||
|
|
|
||||
Loss per share: |
|
|
||||
Basic and diluted |
(1.45 |
) |
(1.65 |
) |
||
|
|
|
||||
Weighted average shares used in loss per share computation: |
464,344,956 |
|
519,037,660 |
|
||
Basic and diluted |
|
|
||||
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
Amounts expressed in thousands of US dollars (“$”) |
||||
|
As of
|
As of
|
||
|
2020 |
2021 |
||
|
$ |
$ |
||
ASSETS |
|
|
||
Current assets |
|
|
||
Cash and cash equivalents |
6,166,880 |
4,645,383 |
||
Restricted cash |
859,192 |
1,328,060 |
||
Accounts receivable, net of allowance for credit losses of
|
362,999 |
382,662 |
||
Prepaid expenses and other assets |
1,054,229 |
1,202,889 |
||
Loans receivable, net of allowance for credit losses of
|
285,937 |
762,485 |
||
Inventories, net |
64,219 |
99,477 |
||
Short-term investments |
126,099 |
962,141 |
||
Amounts due from related parties |
19,449 |
14,001 |
||
Total current assets |
8,939,004 |
9,397,098 |
||
|
|
|
||
Non-current assets |
|
|
||
Property and equipment, net |
386,401 |
442,122 |
||
Operating lease right-of-use assets, net |
234,555 |
388,073 |
||
Intangible assets, net |
39,773 |
42,137 |
||
Long-term investments |
190,482 |
286,372 |
||
Prepaid expenses and other assets |
204,804 |
301,104 |
||
Loans receivable, net of allowance for credit losses of
|
117,149 |
45,488 |
||
Restricted cash |
27,321 |
29,457 |
||
Deferred tax assets |
99,904 |
114,862 |
||
Goodwill |
216,278 |
476,334 |
||
Total non-current assets |
1,516,667 |
2,125,949 |
||
Total assets |
10,455,671 |
11,523,047 |
||
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
Amounts expressed in thousands of US dollars (“$”) |
||||
|
As of
|
|
As of
|
|
|
2020 |
2021 |
||
|
$ |
$ |
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
||
Current liabilities |
|
|
||
Accounts payable |
121,637 |
179,551 |
||
Accrued expenses and other payables |
2,033,461 |
2,670,816 |
||
Advances from customers |
161,379 |
206,383 |
||
Amounts due to related parties |
42,613 |
60,017 |
||
Operating lease liabilities |
74,506 |
113,544 |
||
Deferred revenue |
2,150,165 |
2,538,838 |
||
Income tax payable |
52,306 |
114,448 |
||
Total current liabilities |
4,636,067 |
5,883,597 |
||
|
|
|
||
Non-current liabilities |
|
|
||
Accrued expenses and other payables |
36,159 |
61,036 |
||
Operating lease liabilities |
177,870 |
299,476 |
||
Deferred revenue |
343,297 |
396,138 |
||
Convertible notes |
1,840,406 |
1,282,496 |
||
Deferred tax liabilities |
1,526 |
1,272 |
||
Unrecognized tax benefits |
107 |
107 |
||
Total non-current liabilities |
2,399,365 |
2,040,525 |
||
Total liabilities |
7,035,432 |
7,924,122 |
||
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
Amounts expressed in thousands of US dollars (“$”) |
||||||
|
As of
|
As of
|
||||
|
2020 |
2021 |
||||
|
$ |
$ |
||||
Shareholders’ equity |
|
|
||||
Class A Ordinary shares |
179 |
|
190 |
|
||
Class B Ordinary shares |
76 |
|
76 |
|
||
Additional paid-in capital |
8,526,571 |
|
9,587,617 |
|
||
Accumulated other comprehensive income (loss) |
4,681 |
|
(22,989 |
) |
||
Statutory reserves |
2,363 |
|
1,766 |
|
||
Accumulated deficit |
(5,150,958 |
) |
(6,006,493 |
) |
||
|
|
|
||||
Total Sea Limited shareholders’ equity |
3,382,912 |
|
3,560,167 |
|
||
Non-controlling interests |
37,327 |
|
38,758 |
|
||
Total shareholders’ equity |
3,420,239 |
|
3,598,925 |
|
||
Total liabilities and shareholders’ equity |
10,455,671 |
|
11,523,047 |
|
||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
Amounts expressed in thousands of US dollars (“$”) |
||||||
|
For the Six Months ended
|
|||||
|
2020 |
2021 |
||||
|
$ |
$ |
||||
Net cash generated from operating activities |
74,446 |
|
450,726 |
|
||
Net cash used in investing activities |
(310,812 |
) |
(1,649,827 |
) |
||
Net cash generated from financing activities |
786,837 |
|
180,358 |
|
||
Effect of foreign exchange rate changes on cash, cash
|
8,695 |
|
(31,750 |
) |
||
Net increase (decrease) in cash, cash equivalents and restricted
|
559,166 |
|
(1,050,493 |
) |
||
Cash, cash equivalents and restricted cash at beginning of the
|
3,570,578 |
|
7,053,393 |
|
||
|
|
|
||||
Cash, cash equivalents and restricted cash at end of the period |
4,129,744 |
|
6,002,900 |
|
||
|
|
|
||||
UNAUDITED SEGMENT INFORMATION
The Company has three reportable segments, namely digital entertainment, e-commerce and digital financial services. The Chief Operating Decision Maker (“CODM”) reviews the performance of each segment based on revenue and certain key operating metrics of the operations and uses these results for the purposes of allocating resources to and evaluating the financial performance of each segment. Amounts are expressed in thousands of US dollars (“$”).
|
For the Three Months ended June 30, 2021 |
||||||||||||||||
|
Digital
|
E-
|
Digital
|
Other
|
Unallocated
|
Consolidated |
|||||||||||
|
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||
Revenue |
1,024,267 |
1,155,193 |
|
88,737 |
|
12,351 |
|
- |
|
2,280,548 |
|
||||||
Operating income (loss) |
597,713 |
(627,509 |
) |
(159,821 |
) |
(24,894 |
) |
(119,505 |
) |
(334,016 |
) |
||||||
Non-operating loss, net |
|
|
|
|
|
(25,061 |
) |
||||||||||
Income tax expense |
|
|
|
|
|
(75,191 |
) |
||||||||||
Share of results of equity investees |
|
|
|
|
|
599 |
|
||||||||||
Net loss |
|
|
|
|
|
(433,669 |
) |
||||||||||
|
For the Three Months ended June 30, 2020 |
||||||||||||||||
|
Digital
|
E-
|
Digital
|
Other
|
Unallocated
|
Consolidated |
|||||||||||
|
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||
Revenue |
383,946 |
443,035 |
|
11,687 |
|
43,366 |
|
- |
|
882,034 |
|
||||||
Operating income (loss) |
167,027 |
(344,842 |
) |
(99,227 |
) |
(13,393 |
) |
(82,373 |
) |
(372,808 |
) |
||||||
Non-operating income, net |
|
|
|
|
|
7,612 |
|
||||||||||
Income tax expense |
|
|
|
|
|
(27,821 |
) |
||||||||||
Share of results of equity investees |
|
|
|
|
|
(518 |
) |
||||||||||
Net loss |
|
|
|
|
|
(393,535 |
) |
||||||||||
(1) A combination of multiple business activities that does not meet the quantitative thresholds to qualify as reportable segments are grouped together as “Other Services”.
(2) Unallocated expenses are mainly related to share-based compensation and general and corporate administrative costs such as professional fees and other miscellaneous items that are not allocated to segments. These expenses are excluded from segment results as they are not reviewed by the CODM as part of segment performance.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210817005461/en/
FAQ
What were Sea Limited's Q2 2021 financial results?
How did Sea Limited's gross profit change in Q2 2021?
What is Sea Limited's guidance for digital entertainment bookings in 2021?
What is the adjusted EBITDA loss reported by Sea Limited for Q2 2021?
How many active users did Sea Limited report for Q2 2021?
